Exhibit 10(a)

EXECUTION VERSION

 

 

 

ASSET PURCHASE AGREEMENT

by and among

ODESSA-ECTOR POWER PARTNERS, L.P.,

LA FRONTERA HOLDINGS, LLC,

and

VISTRA OPERATIONS COMPANY LLC,

as Buyer Guarantor (solely for purposes of Section 10.14),

and

KOCH RESOURCES, LLC,

as Seller Guarantor (solely for purposes of Section 10.15),

and

KOCH AG & ENERGY SOLUTIONS, LLC

(solely for purposes of Section 5.13)

 

 

Dated July 5, 2017

 

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          Page  

ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION

     1  

SECTION 1.01

   Definitions      1  

SECTION 1.02

   Rules of Construction      1  

ARTICLE 2 PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

     2  

SECTION 2.01

   Purchase of Assets and Assumption of Liabilities      2  

SECTION 2.02

   Acquired Assets      2  

SECTION 2.03

   Excluded Assets      4  

SECTION 2.04

   Assumption of Liabilities      5  

SECTION 2.05

   Retained Liabilities      5  

SECTION 2.06

   Consent of Third Parties      5  

SECTION 2.07

   Purchase Price      6  

SECTION 2.08

   Closing      7  

SECTION 2.09

   Closing Deliveries      7  

SECTION 2.10

   Post-Closing Adjustment      8  

SECTION 2.11

   Earnout      9  

SECTION 2.12

   Tax Treatment      10  

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER

     11  

SECTION 3.01

   Organization and Existence      11  

SECTION 3.02

   Authorization      11  

SECTION 3.03

   Governmental Consents; Litigation      11  

SECTION 3.04

   Noncontravention      12  

SECTION 3.05

   Capitalization and Subsidiaries      12  

SECTION 3.06

   Brokers      12  

SECTION 3.07

   Financial Statements; Absence of Changes; No Undisclosed Liabilities      12
 

SECTION 3.08

   Litigation      13  

SECTION 3.09

   Compliance with Laws and Permits      13  

SECTION 3.10

   Contracts      14  

SECTION 3.11

   Ownership of Assets      16  

SECTION 3.12

   Employee Matters.      18  

SECTION 3.13

   Environmental, Health and Safety Matters.      20  

SECTION 3.14

   Taxes      21  

SECTION 3.15

   Intercompany Obligations      22  

SECTION 3.16

   Insurance      22  

SECTION 3.17

   Regulatory Status      22  

SECTION 3.18

   Exclusive Representations and Warranties      22  

 

-i-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

          Page  

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER

     23  

SECTION 4.01

   Organization and Existence      23  

SECTION 4.02

   Authorization      23  

SECTION 4.03

   Governmental Consents      23  

SECTION 4.04

   Noncontravention      23  

SECTION 4.05

   Litigation      24  

SECTION 4.06

   Brokers      24  

SECTION 4.07

   Available Funds; Source of Funds      24  

SECTION 4.08

   Investigation      24  

SECTION 4.09

   Disclaimer Regarding Projections      24  

SECTION 4.10

   Ownership in ERCOT      25  

SECTION 4.11

   Exclusive Representations or Warranties      25  

ARTICLE 5 COVENANTS

     25  

SECTION 5.01

   Information Pending Closing      25  

SECTION 5.02

   Conduct of Business Pending the Closing      26  

SECTION 5.03

   Tax Matters      29  

SECTION 5.04

   Confidentiality; Publicity.      31  

SECTION 5.05

   Post-Closing Books and Records      32  

SECTION 5.06

   Expenses      32  

SECTION 5.07

   Employee Matters; Continuing Employees      32  

SECTION 5.08

   Further Actions      36  

SECTION 5.09

   Post-Closing Cooperation      39  

SECTION 5.10

   Risk of Loss      39  

SECTION 5.11

   No Solicitation; Alternative Transactions      40  

SECTION 5.12

   Schedule Update      40  

SECTION 5.13

   Non-Solicitation; Confidentiality.      41  

SECTION 5.14

   Release      42  

SECTION 5.15

   Transition Services.      43  

SECTION 5.16

   Post-Closing Collections and Payments      44  

SECTION 5.17

   Seller Guarantees      45  

SECTION 5.18

   Post-Closing Use of Name; MBM Materials.      45  

SECTION 5.19

   Additional Documentation      46  

SECTION 5.20

   Insurance.      46  

SECTION 5.21

   Amendment to Spread Strike Schedule      47  

SECTION 5.22

   Firm Transportation Capacity Release      47  

ARTICLE 6 CONDITIONS TO CLOSING

     48  

SECTION 6.01

   Conditions to Each Party’s Obligations      48  

SECTION 6.02

   Conditions to Obligation of Buyer      48  

SECTION 6.03

   Conditions to Obligation of Seller      50  

SECTION 6.04

   Frustration of Closing Conditions      50  

 

-ii-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

          Page  

ARTICLE 7 SURVIVAL AND RELEASE

     51  

SECTION 7.01

   Survival of Certain Representations and Warranties      51  

SECTION 7.02

   “As Is” Sale; Release      51  

SECTION 7.03

   Certain Limitations      52  

ARTICLE 8 INDEMNIFICATION

     52  

SECTION 8.01

   Indemnification by Seller      52  

SECTION 8.02

   Indemnification by Buyer      53  

SECTION 8.03

   Indemnification Procedures      54  

SECTION 8.04

   Indemnification Generally      55  

SECTION 8.05

   Setoff Permitted      56  

ARTICLE 9 TERMINATION

     57  

SECTION 9.01

   Termination      57  

SECTION 9.02

   Effect of Termination      57  

ARTICLE 10 MISCELLANEOUS

     58  

SECTION 10.01

   Notices      58  

SECTION 10.02

   Severability      59  

SECTION 10.03

   Counterparts      59  

SECTION 10.04

   Amendments and Waivers      60  

SECTION 10.05

   Entire Agreement; No Third Party Beneficiaries      60  

SECTION 10.06

   Governing Law      60  

SECTION 10.07

   Specific Performance      60  

SECTION 10.08

   Jurisdiction; Service of Process; Waiver of Jury Trial      60  

SECTION 10.09

   Assignment      61  

SECTION 10.10

   Headings      61  

SECTION 10.11

   Schedules and Exhibits      61  

SECTION 10.12

   Bulk Sales Laws      62  

SECTION 10.13

   Conflict of Interest; Privilege.      62  

SECTION 10.14

   Buyer Guaranty.      63  

SECTION 10.15

   Seller Guaranty      64  

 

Exhibits

     Exhibit A    Defined Terms Exhibit B    Form of Bill of Sale Exhibit C-1   
Form of Real Property Deed Exhibit C-2    Form of Excluded Easements Deed

 

-iii-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

     Page Exhibit D    Form of Assignment and Assumption Agreement Exhibit E   
Form of Monthly Earnout Statement Exhibit F    Form of FIRPTA Certificate
Exhibit G    Form of License Agreement Schedules    Schedule A    Buyer
Disclosure Letter Schedule B    Seller Disclosure Letter Schedule C    Purchase
Price Methodology Schedule D    Illustrative Gas Cost Calculation Schedule E   
Illustrative Monthly Earnout Amount Calculation Schedule F    Illustrative Power
Price Calculation Schedule G    Monthly Spread Strike

 

-iv-

--------------------------------------------------------------------------------

This ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of July 5, 2017 and
is by and among Odessa-Ector Power Partners, L.P., a Delaware limited
partnership (“Seller”), La Frontera Holdings, LLC, a Delaware limited liability
company (“Buyer”), solely for purposes of Section 10.14, Vistra Operations
Company LLC, a Delaware limited liability company (“Buyer Guarantor”), solely
for purposes of Section 10.15, Koch Resources, LLC, a Delaware limited liability
company (“Seller Guarantor”), and, solely for purposes of Section 5.13, Koch
Ag & Energy Solutions, LLC, a Delaware limited liability company (“Koch Ag”).
Each of Seller and Buyer is, individually, a “Party,” and, collectively, the
“Parties.”

RECITALS

WHEREAS, Seller owns and operates an approximately one thousand (1,000) megawatt
combined cycle, combustion turbine power plant located in Odessa, Texas (the
“Facility”);

WHEREAS, the Parties desire to enter into a transaction pursuant to which Buyer
will (a) acquire from Seller the Acquired Assets and (b) assume the Assumed
Liabilities; and

WHEREAS, the Parties desire to make certain representations, warranties,
covenants and agreements in connection with the transactions contemplated
hereby.

NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS AND RULES OF CONSTRUCTION

SECTION 1.01 Definitions. Capitalized terms used in this Agreement shall have
the meanings ascribed to them in this Agreement or in Exhibit A hereto.

SECTION 1.02 Rules of Construction.

(a) Unless the context otherwise requires, references in this Agreement to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement.

(b) If a term is defined as one part of speech (such as a noun), it shall have a
corresponding meaning when used as another part of speech (such as a verb).
Terms defined in the singular have the corresponding meanings in the plural, and
vice versa. Unless the context of this Agreement clearly requires otherwise,
words importing the masculine gender shall include the feminine and neutral
genders and vice versa. The term “includes” or “including” shall mean
“including, without limitation.” The words “hereof,” “hereto,” “hereby,”
“herein,” “hereunder” and words of similar import, when used in this Agreement,
shall refer to this Agreement as a whole and not to any particular section or
article in which such words appear. The word “or” shall not be exclusive.

--------------------------------------------------------------------------------

(c) Whenever this Agreement refers to a number of days, such number shall refer
to calendar days unless Business Days are specified. Whenever any action must be
taken hereunder on or by a day that is not a Business Day, then such action may
be validly taken on or by the next day that is a Business Day.

(d) The Parties acknowledge that each Party and its attorney has reviewed this
Agreement and that any rule of construction to the effect that any ambiguities
are to be resolved against the drafting Party, or any similar rule operating
against the drafter of an agreement, shall not be applicable to the construction
or interpretation of this Agreement.

(e) The captions in this Agreement are for convenience only and shall not be
considered a part of or affect the construction or interpretation of any
provision of this Agreement.

(f) All accounting terms used herein and not expressly defined herein shall have
the meanings given to them under GAAP.

(g) The term “written” as used herein shall include both physical and electronic
formats.

ARTICLE 2

PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

SECTION 2.01 Purchase of Assets and Assumption of Liabilities. At the Closing,
Buyer shall purchase, and Seller shall sell, transfer, assign and convey to
Buyer all of Seller’s right, title and interest in and to the Acquired Assets,
free and clear of all Liens (other than Permitted Liens), in exchange for (a) an
amount in cash equal to the Purchase Price as set forth in, and determined in
accordance with, Section 2.07(a), and (b) the assumption by Buyer, and the
agreement by Buyer to pay, discharge and perform when due, all of the Assumed
Liabilities, in each case upon the terms and subject to the conditions set forth
herein.

SECTION 2.02 Acquired Assets. The “Acquired Assets” include all assets (other
than the Excluded Assets) of Seller, wherever such assets are situated and of
whatever kind or nature, real or personal, tangible or intangible, as the same
may exist as of the Closing, including:

(a) all accounts or notes receivable held by Seller from (i) third parties or
(ii) Koch Energy Services, LLC (“KES”) with respect to KES’ or its Affiliates’
services as the Seller’s qualified scheduling entity (the receivable described
in clause (ii), the “QSE Receivable”) and, in either case, any security, claim,
remedy or other right related to any of the foregoing;

(b) the Facility;

(c) all Real Property (including Seller’s interest in and to the Easements and
all improvements located on the Real Property);

 

2

--------------------------------------------------------------------------------

(d) all personal property and interests therein, including all machinery,
equipment, materials, supplies, furniture, spare parts and inventory (including
the capital spares and inventory listed on Section 2.02(d) of the Seller
Disclosure Letter) and including any prepayments and any applicable warranties
against manufacturers or vendors relating thereto or to the Facility (including
all items of personal property due under any such warranties);

(e) all Contracts of Seller, including those listed on Section 2.02(e) of the
Seller Disclosure Letter, but excluding those included as Excluded Assets;

(f) all Permits or applications for Permits to the extent assignable by Law
(including upon request or application to a Governmental Entity or which will
pass to Buyer as successor in title to the Acquired Assets by operation of Law),
including those listed on Section 2.02(f) of the Seller Disclosure Letter;

(g) all Air Emission Allowances owned by Seller;

(h) all of Seller’s claims, causes of action, defenses and rights of offset or
counterclaim against third parties relating to any Acquired Asset or any Assumed
Liability, whether received as a payment or credit against future liabilities,
including condemnation awards and cash payments under warranties to the extent
such payments relate to Acquired Assets or Assumed Liabilities;

(i) all insurance benefits to the extent relating to claims arising out of
events that occurred prior to the Closing and associated with the Acquired
Assets or Assumed Liabilities, including such rights and proceeds receivable or
hereafter received under any Insurance Policy;

(j) other than the Seller Marks, the MBM Materials and the Intellectual Property
and Information included as an Excluded Asset, all Intellectual Property
exclusively used or held for use in connection with the operation of the
Facility, including all Intellectual Property listed on Section 3.11(f) of the
Seller Disclosure Letter;

(k) all owned vehicles, including those listed on Section 2.02(k) of the Seller
Disclosure Letter, and any vehicles acquired by Seller after the date of this
Agreement and prior to Closing in replacement thereof;

(l) copies of all books and records primarily relating to the ownership or
operation of the Facility, other than any books and records relating to Excluded
Assets or Retained Liabilities, including those referenced in Section 2.03(a)
and Section 2.03(c);

(m) all goodwill associated with the Facility or the Acquired Assets;

(n) all personnel files for each Continuing Employee to the extent transfer of
the same complies with applicable Law; and

(o) all other assets set forth on Section 2.02(o) of the Seller Disclosure
Letter.

 

3

--------------------------------------------------------------------------------

SECTION 2.03 Excluded Assets. Notwithstanding anything to the contrary, Seller
shall retain all of its rights, title and interests in and to, and shall not be
deemed to, sell, transfer, assign, convey or deliver to Buyer the following
(“Excluded Assets”):

(a) all (i) Organizational Documents, minute books, and stock registers and
other books and records of Seller as pertain to the ownership, organization or
existence of Seller, and (ii) other books and records of Seller, including
copies of all books and records (including Tax Returns and materials related to
Taxes with respect to Seller) relating to its ownership and/or operation of
Seller and its business prior to Closing;

(b) other than the QSE Receivable, all rights, Contracts and Liabilities between
Seller, on the one hand, and any of its Affiliates, on the other hand, including
those set forth on Section 2.03(b) of the Seller Disclosure Letter;

(c) all personnel files for any employee that is not a Continuing Employee;

(d) all bank accounts of Seller and all Cash Equivalents, whether held therein
or otherwise;

(e) all Seller Benefit Plans;

(f) all rights of Seller under this Agreement, the Confidentiality Agreement and
the Ancillary Agreements;

(g) all Tax assets of Seller and the Acquired Assets, whether current or
deferred, including all claims, rights, interests and proceeds with respect to
state or local Tax refunds that relate or are attributable to periods (or
portions thereof) ending on or prior to the Closing Date and the right to pursue
appeals thereof, but excluding any prepaid Property Taxes with respect to the
Acquired Assets that relate to or are attributable to periods (or portions
thereof) beginning after the Closing Date to the extent included in the
calculation of the Closing Date Net Working Capital Amount or otherwise taken
into account in the calculation of the final Purchase Price;

(h) all Insurance Policies and all insurance benefits to the extent not included
as an Acquired Asset as contemplated by Section 2.02(i);

(i) all Contracts related to Commodity Hedges, including those set forth on
Section 2.03(i) of the Seller Disclosure Letter;

(j) all (i) Information to the extent related to the Excluded Assets and
Retained Liabilities and (ii) Privileged Information, and, in each case, all
Privileges related thereto;

(k) (i) all Intellectual Property of Seller or any of its Affiliates that is not
exclusively used or held for use in the operation of the Facility, (ii) all
Seller Marks and all rights thereto and (iii) all posters, pamphlets, stickers,
training material, templates, models, instructions, audio and/or visual
recordings, guidelines, printed and electronic materials, and other works of
authorship regarding or referencing Seller’s or its Affiliates’ management
philosophy referred to as “Market Based Management” or “MBM” (“MBM Materials”),
in each case together with (A) all copies and tangible embodiments thereof (in
whatever form or medium), and (B) any past, present or future claims or causes
of actions arising out of or related to any infringement, dilution,
misappropriation or other violation of the foregoing;

 

4

--------------------------------------------------------------------------------

(l) subject to Section 5.17, the financial assurances provided with respect to
Seller’s T-4 permit with the Texas Railroad Commission and similar financial
assurances (the “Financial Assurances”); and

(m) Contracts set forth on Section 2.03(m) of the Seller Disclosure Schedule.

SECTION 2.04 Assumption of Liabilities. The “Assumed Liabilities” are all of the
Liabilities of Seller, or any of its predecessors in interest, of any kind,
character or description whatsoever, other than the Retained Liabilities.

SECTION 2.05 Retained Liabilities. Seller shall retain, and Buyer shall not
assume pursuant to this Agreement or the transactions contemplated hereby, the
following Liabilities (“Retained Liabilities”):

(a) all Seller Transaction Expenses;

(b) all Liabilities arising in connection with, or relating to, (i) Taxes of
Seller, its Affiliates or any of its predecessors in interest (other than any
Transfer Taxes imposed on or with respect to the transactions contemplated by
this Agreement or Taxes that relate to the Acquired Assets or the Assumed
Liabilities for taxable periods (or portions thereof) beginning after the
Closing Date), (ii) Taxes that relate to the Acquired Assets or the Assumed
Liabilities for taxable periods (or portions thereof) ending on or before the
Closing Date, or (iii) payments under any Tax allocation, sharing or similar
agreement (whether oral or written) of Seller, its Affiliates or any of its
predecessors in interest, in each case, except to the extent included in the
calculation of the Closing Date Net Working Capital Amount or otherwise taken
into account in the calculation of the Purchase Price;

(c) except for accounts payable arising prior to the Closing and taken into
account in the calculation of the Closing Date Net Working Capital Amount with
respect to gas supply arrangements and QSE services arrangements with KES
pursuant to the Master Service Agreement, among Koch Ag, Koch Energy Holdings,
LLC, and KES, as supplier, and Seller, as customer, dated November 1, 2016
(which such accounts payable are Assumed Liabilities), all Liabilities to the
extent relating to the Excluded Assets; and

(d) all Liabilities under the Seller Benefit Plans and all other employment and
employee benefits-related Liabilities of Seller, in each case except as
otherwise specifically provided in Section 5.07.

SECTION 2.06 Consent of Third Parties. Notwithstanding anything to the contrary
in this Agreement or any Ancillary Agreement, neither this Agreement nor any
Ancillary Agreement shall constitute an agreement to assign, assume or transfer
any Permit, Contract, or any claim, right, benefit or obligation arising
thereunder or resulting therefrom, if the assignment or transfer thereof or the
attempt to make an assignment or transfer thereof without the Consent of a third
party would constitute a breach thereof or materially and adversely affect the
rights or obligations of Buyer thereunder. Any transfer or assignment to

 

5

--------------------------------------------------------------------------------

Buyer by Seller of any interest, or assumption by Buyer of any obligation, under
any such Permit or Contract that requires the Consent of a third party to make
any assignment or transfer thereof shall be made subject to such Consent being
obtained. Unless agreed otherwise by the Parties, in the event any such Consent
is not obtained prior to the Closing Date, subject to Section 5.08, the Parties
shall use their reasonable best efforts to obtain any such Consent on or after
the Closing Date until such time as such Consent has been obtained, and Seller
will reasonably cooperate with Buyer in any lawful arrangement reasonably
requested by Buyer to provide that Buyer shall receive the interest of Seller,
in the benefits under any such Permit or Contract, including sublicensing,
subcontracting or performance by Seller as agent; provided, however, that Buyer
shall undertake to pay or satisfy the corresponding Liabilities for the
enjoyment of such benefit to the extent Buyer would have been responsible
therefor hereunder if such Consent had been obtained prior to the Closing Date.
Buyer shall pay and discharge any and all reasonable and documented
out-of-pocket costs of Seller in connection with its cooperation with Buyer
pursuant to this Section 2.06, including any and all payments made by Seller or
any of its Affiliates to obtain any such Consents; provided, that, Buyer shall
not be obligated to reimburse Seller with respect to costs or payments of Seller
or its Affiliates incurred in connection with its cooperation or obtaining any
such Consents under this Section 2.06 in excess of $100,000 in the aggregate
unless Buyer shall have provided prior written consent with respect to such
costs or expenses.

SECTION 2.07 Purchase Price.

(a) For and in consideration of the Acquired Assets, in addition to the
assumption by Buyer of the Assumed Liabilities, Buyer agrees to pay to Seller an
amount equal to the sum of: (i) the sum of (A) $350,000,000 (the “Base Purchase
Price”), plus (B) the Closing Date Net Working Capital Amount, minus (C) the
Closing Date Net Indebtedness Amount, and plus (D) the Capital Spare and
Inventory Amount (the sum of the amounts described in the immediately preceding
clauses (A) through (D), the “Closing Purchase Price”); plus (ii) the Earnout
Amount after the Closing, as adjusted pursuant to Section 2.11 (the sum of the
amounts described in the immediately preceding clauses (i) and (ii), being
referred to herein as the “Purchase Price”). The Closing Purchase Price and all
components thereof shall be calculated in accordance with the definitions
thereof and, to the extent applicable, the methodology set forth on Schedule C.

(b) Not less than three (3) Business Days prior to the Closing Date, Seller
shall deliver to Buyer a written notice setting forth (i) its good faith
calculations of the Estimated Net Working Capital Amount, the Estimated Net
Indebtedness Amount and the Estimated Closing Date Payment, together with
reasonable supporting information and calculations, in each case, in accordance
with the definitions thereof and, to the extent applicable, the methodology set
forth on Schedule C, and (ii) wire transfer instructions for payment of the
Estimated Closing Date Payment.

(c) At the Closing, Buyer shall pay or cause to be paid to Seller an amount
equal to the Estimated Closing Date Payment by wire transfer of immediately
available funds to the account of Seller as delivered pursuant to
Section 2.07(b).

 

6

--------------------------------------------------------------------------------

SECTION 2.08 Closing. The closing of the purchase and sale of the Acquired
Assets and the assumption of the Assumed Liabilities (the “Closing”) shall take
place at the offices of Seller, 4111 E. 37th Street North, Wichita, KS 67220, at
10:00 a.m., Wichita time, on the date that is the third (3rd) Business Day
following the satisfaction or waiver of the conditions set forth in Article 6
(other than those conditions that by their nature are to be satisfied at the
Closing but subject to the satisfaction of such conditions at the Closing), or
at such other time, date and place as may be mutually agreed upon in writing by
the Parties (the date on which the Closing actually occurs being referred to as
the “Closing Date”).

SECTION 2.09 Closing Deliveries. At the Closing:

(a) Seller shall deliver, or cause to be delivered, to Buyer or its designees:

(i) a bill of sale in substantially the form attached hereto as Exhibit B (the
“Bill of Sale”) conveying to Buyer title to the Acquired Assets not otherwise
addressed in this Section 2.09;

(ii) a duly executed deed to the Real Property (other than the Excluded
Easements) substantially in the form attached hereto as Exhibit C-1 (the “Real
Property Deed”), duly executed by Seller, and a duly executed quitclaim deed to
the Excluded Easements substantially in the form attached hereto as Exhibit C-2
(the “Excluded Easements Deed”), duly executed by Seller;

(iii) an assignment and assumption agreement in substantially the form attached
hereto as Exhibit D (the “Assignment and Assumption Agreement”), pursuant to
which (A) Seller shall assign to Buyer all of Seller’s right, title and interest
in, to and under the Contracts included as Acquired Assets and (B) Buyer shall
assume all Liabilities under such Contracts and all other Assumed Liabilities;

(iv) a certificate in the form of Exhibit F, duly completed and executed by
Seller (or by Seller’s owner that is regarded for federal income tax purposes,
as applicable) and satisfying the requirements of Treasury Regulation
Section 1.1445-2(b)(2);

(v) a duly completed and executed IRS Form W-9 from Seller (or from Seller’s
owner that is regarded for federal income tax purposes, as applicable); and

(vi) such other agreements, documents, instruments and writings as are required
to be delivered by Seller at or prior to the Closing pursuant to Section 6.02.

(b) Buyer shall make, or cause to be made, the payment required to be made by it
pursuant to Section 2.07(c) and deliver, or cause to be delivered, to Seller
(i) the Real Property Deed, the Excluded Easements Deed and the Assignment and
Assumption Agreement, each duly executed by Buyer and (ii) such other
agreements, documents, instruments and writings as are required to be delivered
by Buyer at or prior to the Closing Date pursuant to the terms of Section 6.03.

 

7

--------------------------------------------------------------------------------

SECTION 2.10 Post-Closing Adjustment.

(a) After the Closing Date, Buyer and Seller shall cooperate with each other and
provide each other with such access to the books, records and relevant employees
of the other as they may reasonably request in connection with the matters
addressed in this Section 2.10; provided, however, that none of Seller or any of
its Affiliates will be required to grant access or make available its Tax
Returns (except for Tax Returns for Property Taxes to the extent related to the
Acquired Assets) for any purpose, including in connection with any proceeding or
other dispute pursuant to this Section 2.10. Within sixty (60) days after the
Closing Date, Buyer shall deliver to Seller a statement (the “Buyer’s
Statement”) setting forth its calculation of the Closing Date Net Working
Capital Amount, the Closing Date Net Indebtedness Amount and the resulting
Closing Purchase Price, together with reasonable supporting information and
calculations.

(b) If Seller objects to any matter set forth on Buyer’s Statement, then it
shall provide Buyer written notice thereof within thirty (30) days after
receiving the Buyer’s Statement; provided, that Seller and Buyer shall be deemed
to have agreed upon all items and amounts that are not disputed by Seller in
such written notice. If Buyer and Seller are unable to agree on any matter set
forth on Buyer’s Statement disputed by Seller in accordance with this
Section 2.10(b), within one hundred and twenty (120) days after the Closing
Date, the Parties shall refer such dispute to a division of KPMG LLP that does
not currently provide services to any Party or, if such division of KPMG LLP
declines to act as provided in this Section 2.10(b), a firm of independent
public accountants, mutually acceptable to Buyer and Seller (KPMG LLP or such
agreed independent public accountants, as applicable, the “Independent
Accountants”), and the Parties shall cause such firm to make a final and binding
determination as to only those matters in dispute with respect to this
Section 2.10(b) on a timely basis, and, in any event, within thirty (30) days
following its appointment, and shall cause such firm promptly to notify the
Parties in writing of its resolution. In making such determination, such firm
shall (i) limit its review to matters specifically set forth in Seller’s dispute
notice delivered pursuant to this Section 2.10(b) as disputed items (other than
matters subsequently resolved), (ii) limit its review to whether the calculation
of any such item is in accordance with this Article 2, and (iii) not assign to
any such disputed item a value higher than or lower than the values set forth in
the Buyer’s Statement or such dispute notice. The Parties shall not authorize
the Independent Accountants to modify or amend any term or provision of this
Agreement or modify items previously agreed among the Parties. Each of Seller
and Buyer shall be liable for and pay one-half of the fees and other costs
charged by the Independent Accountants. If Seller does not object to any matter
set forth on Buyer’s Statement within the time period and in the manner set
forth in the first sentence of this Section 2.10(b) or if Seller accepts the
Closing Date Net Working Capital Amount, the Closing Date Net Indebtedness
Amount, and the resulting Closing Purchase Price set forth on Buyer’s Statement,
then such Closing Date Net Working Capital Amount, Closing Date Net Indebtedness
Amount and Closing Purchase Price shall become final, binding and non-appealable
upon the Parties for all purposes hereunder.

(c) If the Closing Purchase Price, as finally determined as provided in
Section 2.10(b) (as agreed between Buyer and Seller or as determined by the
Independent Accountants), (i) exceeds the Estimated Closing Date Payment, then
Buyer shall pay or cause to be paid to Seller an amount equal to the amount of
such excess, within five (5) Business Days after such amounts are agreed or
determined pursuant to Section 2.10(b), by wire transfer of immediately
available funds to an account designated by Seller, or (ii) is less than the
Estimated Closing Date Payment, then Seller shall pay Buyer (or its designee as
designated in writing by Buyer) an amount equal to the amount of any such
shortfall, within five (5) Business Days after such amounts are agreed or
determined pursuant to Section 2.10(b), by wire transfer of immediately
available funds to an account designated by Buyer, or (iii) is equal to the
Estimated Closing Date Payment, then no payment shall be made pursuant to this
Section 2.10.

 

8

--------------------------------------------------------------------------------

(d) The Parties agree that the provisions of this Section 2.10 and the dispute
resolution process contemplated hereby are intended solely to adjust for changes
in the Closing Purchase Price (as finally determined in Section 2.10(b)) as
compared to the Estimated Closing Date Payment.

SECTION 2.11 Earnout.

(a) Until the fifth (5th) anniversary of the Closing, no later than the tenth
(10th) day of each calendar month, Buyer shall pay to Seller an amount in cash
to the account set forth on Section 2.11(a) of the Seller Disclosure Letter (or
to such other account as may be specified by Seller from time to time) (the
“Designated Account”) equal to the Monthly Earnout Amount for the immediately
preceding calendar month. For the avoidance of doubt, the Monthly Earnout Amount
is independent of any performance at the Facility and shall be due and payable
regardless of the operating capacity, operating condition or actual operation of
the Facility, or the actual purchase of natural gas or sale of power by the
Facility.

(b) Concurrently with, or prior to, each payment described in Section 2.11(a),
Buyer shall deliver to Seller its good faith calculation of the Monthly Earnout
Amount for the immediately preceding month, which such calculation shall be
presented in the form attached as Exhibit E (each, a “Monthly Earnout
Statement”). If Seller objects to any matter set forth in the Monthly Earnout
Statement, then it shall provide Buyer written notice thereof (an “Objection
Notice”) within ten (10) days after receipt thereof; provided, that Seller and
Buyer shall be deemed to have agreed upon all items and amounts in the Monthly
Earnout Statement that are not disputed by Seller in such written notice. If
Buyer and Seller are unable to agree on any matter set forth in such Objection
Notice in accordance with this Section 2.11(b) within thirty (30) days after
delivery of such Objection Notice, the Parties shall submit such dispute to the
Independent Accountants, shall cause such firm to make a final and binding
determination as to only those matters in dispute on a timely basis, and, in any
event, within thirty (30) days following its appointment, and shall cause such
firm promptly to notify the Parties in writing of its resolution. In making such
determination, such firm shall (i) limit its review to matters specifically set
forth in such Objection Notice as disputed items (other than matters
subsequently resolved), and (ii) not assign to any such disputed item a value
higher than or lower than the values set forth in the Monthly Earnout Statement
or such Objection Notice. The Parties shall not authorize the Independent
Accountants to modify or amend any term or provision of this Agreement or modify
items previously agreed among the Parties. Each of Seller and Buyer shall be
liable for and pay one-half of the fees and other costs charged by the
Independent Accountants in connection with any dispute under this
Section 2.11(b). If (A) Seller does not object to any amounts set forth in a
Monthly Earnout Statement within the time period and in the manner set forth in
the first sentence of this Section 2.11(b), (B) Seller consents in writing to
any of the amounts set forth therein, (C) any amounts are agreed to in writing
by the Parties or (D) the Independent Accountants have made a final and binding
determination of any amounts in accordance with this Section 2.11(b), then such
amounts shall become final, binding and non-appealable upon the Parties for all
purposes hereunder.

 

9

--------------------------------------------------------------------------------

(c) If ERCOT posts any correction to any Day-Ahead Market price, the Parties
shall adjust the Monthly Earnout Amount for any calendar month affected by such
correction. If any such correction results in an increase in any Monthly Earnout
Amount, Buyer shall pay to Seller an amount equal to such increase (i) before
the Monthly Earnout Amount for such amount is paid, by increasing such Monthly
Earnout Amount when paid or (ii) after the Monthly Earnout Amount for such
amount is paid, by payment in cash by Buyer to Seller to the Designated Account
simultaneously with the next succeeding Monthly Earnout Amount or, if there are
no further Monthly Earnout Amounts due, within ten (10) Business Days after such
correction is posted. If any such correction results in a decrease in any
Monthly Earnout Amount (A) before the Monthly Earnout Amount for such month is
paid, Buyer shall decrease the payment to Seller by an amount equal to such
decrease or (B) after the Monthly Earnout Amount for such month is paid, (1) to
the extent the amount of such decrease is less than or equal to the next
succeeding Monthly Earnout Amount, Buyer shall reduce the next succeeding
Monthly Earnout Amount by an amount equal to such decrease, (2) to the extent
the amount of such decrease is more than the next succeeding Monthly Earnout
Amount, Buyer shall reduce the next succeeding Monthly Earnout Amount to zero
and Seller shall pay to Buyer an amount equal to the excess of such decrease
over such Monthly Earnout Amount within ten (10) Business Days after such
correction is posted, or (3) if there are no further Monthly Earnout Amounts
due, Seller shall pay to Buyer an amount equal to such decrease within ten
(10) Business Days after such correction is posted.

(d) If the Permian Gas Index, the Waha Gas Index or the Odessa Market Price
(each, an “Index”) is temporarily unavailable for any reason, including the
unavailability of the specified service or publication reporting such Index,
then the Parties shall use good faith efforts to find a suitable replacement
index for such temporary period. If any Index is unavailable for a period of one
hundred and eighty (180) consecutive days or more or ceases to be published,
then the Parties shall cooperate in good faith to promptly select a suitable
replacement publication or reference price that is generally accepted in the
energy industry. If the Parties are unable to agree on a replacement
publication(s) or reference price within a thirty (30)-day period, then either
Party may refer the matter to the Independent Accountants on terms that the
Independent Accountants shall provide a substitute market publication(s) or
reference price or a combination thereof to be the new Index for calculation of
the Gas Cost or Power Price, as applicable.

(e) Notwithstanding anything to the contrary contained in this Agreement, Seller
shall be permitted to transfer its rights and obligations pursuant to this
Section 2.11, so long as such transfer complies with applicable Law.

SECTION 2.12 Tax Treatment. The Parties agree to report the transactions on all
applicable federal and state Income Tax Returns consistent with the final
Allocation determined pursuant to Section 5.03(e), taking into account (solely
for such purposes) as purchase price on a “closed transaction” method the
risk-adjusted present value of any payments to be made by Buyer to Seller
pursuant to Section 2.11. To the extent any payment made by Buyer pursuant to
Section 2.11 exceeds or was not otherwise taken into account in determining such
present value, such payment shall be treated as additional consideration for
federal income and other applicable Tax purposes.

 

10

--------------------------------------------------------------------------------

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer, as of the date hereof and as of
the Closing Date, as follows:

SECTION 3.01 Organization and Existence. Seller is a limited partnership,
organized under the laws of Delaware. Seller is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization. Seller
is duly qualified or licensed to do business in each other jurisdiction where
the actions required to be performed by it hereunder makes such qualification or
licensing necessary, except in those jurisdictions where the failure to be so
qualified or licensed would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

SECTION 3.02 Authorization. Seller has all requisite power and authority to
enter into this Agreement and the Ancillary Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements, and the
consummation by Seller of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary limited partnership action on the part of
Seller. This Agreement has been, and on the Closing Date the Ancillary
Agreements will be, duly executed and delivered by Seller. This Agreement
constitutes, and each Ancillary Agreement when executed and delivered by Seller
shall constitute, (assuming the due execution and delivery by each other Party)
a valid and legally binding obligation of Seller, enforceable against Seller in
accordance with its terms, subject in all respects to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws
relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).

SECTION 3.03 Governmental Consents; Litigation. No consent, approval, license,
permit, order or authorization (each, a “Consent”) of, or registration,
declaration or filing (each, a “Filing”) with, any Governmental Entity is
required to be obtained or made by Seller which has not been obtained or made by
Seller in connection with the execution and delivery of this Agreement and the
Ancillary Agreements by Seller and the consummation by Seller of the
transactions contemplated hereby and thereby, other than (a) the Seller’s
Required Consents set forth in Section 3.03 of the Seller Disclosure Letter and
(b) the Consents and Filings the failure of which to obtain or make would not be
(i) material to the ownership or operation of the Facility, or (ii) materially
adverse to the ability of Seller to consummate the transactions contemplated
hereunder or thereunder. No legal action, suit, arbitration, governmental
investigation or other legal, judicial or administrative proceeding is pending
or, to the Knowledge of Seller, threatened, against Seller or any of its
Affiliates relating to Seller or any of its Affiliates, in each case, that
(a) challenges the validity or enforceability of Seller’s obligations under this
Agreement, (b) would be materially adverse to the ability of Seller to perform
its obligations hereunder or to consummate the transactions contemplated
hereunder, or (c) would be material to the ownership or operation of the
Facility.

 

11

--------------------------------------------------------------------------------

SECTION 3.04 Noncontravention. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by Seller does not, and, subject to
Seller obtaining the Seller’s Required Consents, the consummation by Seller of
the transactions contemplated hereby and thereby will not (a) contravene,
violate or result in any breach of (with or without notice or lapse of time, or
both) any provision of (i) the Organizational Documents of Seller, (ii) except
for matters set forth in Section 3.04 of the Seller Disclosure Letter, any
Material Contract or Permit to which Seller is a party or by which any of the
Acquired Assets are bound, or result in the termination or acceleration thereof,
or entitle any party to terminate or cancel any such Material Contract or
Permit, or entitle any party to accelerate any obligation or indebtedness
thereunder, or give any party thereunder any increased, additional, accelerated
or guaranteed rights or entitlements, or give any party the right to Consent
thereunder, or (iii) any Law or Order to which Seller is subject or by which any
Acquired Asset is bound or affected, or (b) result in the imposition or creation
of any Lien upon, or with respect to, any material Acquired Assets; except, in
the case of clauses (a)(ii), (a)(iii) or (b), as would not, individually or in
the aggregate, (1) be material to the ownership or operation of the Facility or
(2) reasonably be expected to result in a material adverse effect on Seller’s
ability to perform its obligations hereunder or thereunder or to consummate the
transactions contemplated hereunder or thereunder.

SECTION 3.05 Capitalization and Subsidiaries.

(a) The equity interests of Seller are wholly owned by Odessa Power Holdings,
LLC and Odessa-Ector Power I, LLC.

(b) Seller has no Subsidiaries.

SECTION 3.06 Brokers. Except as set forth in Section 3.06 of the Seller
Disclosure Letter, none of Seller or any of its Affiliates has any Liability or
obligation to pay fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.

SECTION 3.07 Financial Statements; Absence of Changes; No Undisclosed
Liabilities.

(a) Section 3.07(a) of the Seller Disclosure Letter sets forth the unaudited
balance sheet, together with related statements of operations and cash flow, for
Seller as of and for the years ending December 31, 2014, 2015 and 2016, and the
unaudited statement of operations and cash flow for the three-month period
ending March 31, 2017 (the “Financial Statements”). The Financial Statements
have been prepared in accordance with GAAP consistently applied (other than
normal recurring year-end adjustments and the absence of footnotes) and from the
books and records of Seller, on a consistent basis and fairly present in all
material respects, the financial position and consolidated results of operations
of Seller, as of the date thereof or for the period set forth therein. Seller
does not maintain off-the-books accounts.

(b) Except as set forth in Section 3.07(b) of the Seller Disclosure Letter,
since March 31, 2017, (i) the Facility has been operated in accordance with the
ordinary course of business consistent with past practices in all material
respects, and (ii) there has not been any Effect relating to Seller, the
Acquired Assets or the ownership or operation of the Facility that, individually
or in the aggregate, resulted in, or would reasonably be expected to result in,
a Material Adverse Effect.

 

12

--------------------------------------------------------------------------------

(c) Except for Liabilities disclosed in Section 3.07(c) of the Seller Disclosure
Letter, for Seller Transaction Expenses and for Liabilities included as a
current Liability in the calculation of Closing Date Net Working Capital or
included in the calculation of the Closing Date Net Indebtedness Amount, Seller
has no Liabilities that would be required to be reflected in, reserved against
or otherwise disclosed on a balance sheet (including any footnotes thereto)
prepared in accordance with GAAP consistently applied and which (i) are not
reflected or reserved against in the Balance Sheet or (ii) are in excess of
$500,000, individually, or $1,000,000, in the aggregate.

(d) As of the date hereof, except as set forth in Section 3.07(d) of the Seller
Disclosure Letter, and as of the Closing, Seller has no outstanding
Indebtedness.

SECTION 3.08 Litigation. Except as disclosed in Section 3.08 of the Seller
Disclosure Letter, (a) there are no Claims pending or, to the Knowledge of
Seller, threatened, against or otherwise affecting any Acquired Assets or
Assumed Liabilities (or pending or, to the Knowledge of Seller, threatened,
against any officer of Seller, in each case, with respect to their respective
business activities on behalf of Seller), or to which Seller is otherwise a
party, that is or would be (i) material to the ownership or operation of the
Facility or (ii) materially adverse to the ability of Seller to consummate the
transactions contemplated by this Agreement or any Ancillary Agreement, and
(b) (i) there are no outstanding Orders binding on Seller or any of the Acquired
Assets, including any Order that is material to the ownership or operation of
the Facility or which limits or restricts Seller’s ability to perform its
obligations hereunder or to consummate the transactions contemplated hereunder,
or which, following the consummation of the transactions contemplated in this
Agreement, would reasonably be expected to limit or restrict the ability of
Buyer or its Affiliates to (A) own and operate the Facility, (B) compete in any
business or with any Person or in any geographic area, (C) sell, supply or
distribute any service or product, or (D) acquire any property (tangible or
intangible), and (ii) Seller is not in breach or violation of any Order.
Notwithstanding anything herein to the contrary, the provisions of this
Section 3.08 shall not apply or relate to any matters addressed by Section 3.13,
including any matters related to Environmental, Health and Safety Laws or EHS
Permits.

SECTION 3.09 Compliance with Laws and Permits.

(a) Except as set forth on Section 3.09(a) of the Seller Disclosure Letter or as
would not be material to the ownership or operation of the Facility, (i) Seller
is and since December 20, 2013 has been, in compliance with all applicable Laws,
and (ii) since December 20, 2013, Seller has not received any written notice of,
been charged with, or received a request for information or other notice from a
Governmental Entity or member(s) of its staff regarding the violation or
potential violation of any Laws.

(b) Seller has obtained and is not, and since December 20, 2013 has not been, in
violation of the terms of any permits, certificates, licenses, registrations,
franchises, writs, variances, waivers, exemptions, orders or other
authorizations of all Governmental Entities (collectively, “Permits”) necessary
for or used in the operation of the Facility, and all such

 

13

--------------------------------------------------------------------------------

Permits are in full force and effect and are final and non-appealable (and are
listed on Section 3.09(b) of the Seller Disclosure Letter), and no Claim to
revoke, limit or modify any of such Permits has been served upon Seller, or is
pending or, to the Knowledge of Seller, threatened. To the Knowledge of Seller,
(i) Seller is not under investigation with respect to the violation of any Laws,
and (ii) there are no facts or circumstances which would reasonably be expected
to form the basis for any such violation or investigation, in each case, an
adverse ruling with respect to which would reasonably be expected to (A) result
in any criminal penalty, criminal fine or other criminal liability, in each
case, constituting a felony or (B) be material to the ownership or operation of
the Facility.

(c) Since December 20, 2013 and except where the failure to be, or to have been,
in compliance with such Laws would not be material to the ownership or operation
of the Facility, neither Seller nor, to Seller’s Knowledge, any officer,
director, employee, agent, representative or intermediary of Seller, in each
case, acting on behalf of Seller, has used funds to make, directly or
indirectly, any unlawful contribution, gift, bribe or forgiveness of all or part
of a debt, payoff, kickback or other unlawful payment or any facilitation
payment to or at the direction of any Government Authority in violation of any
applicable Anti-Corruption Law.

(d) Notwithstanding anything herein to the contrary, the provisions of this
Section 3.09 shall not apply or relate to any matters addressed by Section 3.13,
including any matters related to Environmental, Health and Safety Laws or EHS
Permits.

SECTION 3.10 Contracts.

(a) Section 3.10(a) of the Seller Disclosure Letter sets forth a list of the
following Contracts in effect on the date of this Agreement to which Seller is a
party or under which Seller has outstanding obligations or Liabilities or by
which the Facility or any Acquired Assets are bound:

(i) Contracts, including any service agreement or parts supply agreement,
(A) reasonably expected to require future payments or which resulted in payments
during the fiscal year ended December 31, 2016, in each case, in excess of
$250,000 per annum, or (B) requiring performance by any party more than one
(1) year from the date hereof, other than those that, with respect to (B), can
be terminated by Seller upon not more than thirty (30) days’ notice for a cost
of less than $150,000;

(ii) Contracts for the purchase, sale or delivery of energy, capacity or
ancillary services, whether at wholesale or retail;

(iii) Contracts for the purchase, sale or discharge of natural gas, or the
conversion of natural gas into electricity;

(iv) Contracts for the purchase, sale, treatment, processing or discharge of
water or related wastes;

(v) Contracts for the transportation of natural gas or transmission of
electricity, including fuel transportation service agreements and pipeline and
related facilities operations agreements;

 

14

--------------------------------------------------------------------------------

(vi) Contracts for the future sale or lease of any Acquired Assets (other than
for the sale of inventory in the ordinary course of business consistent with
past practice) with a value in excess of $250,000 or otherwise material to the
ownership or operation of the Facility;

(vii) pipeline or electricity transmission interconnection agreements;

(viii) any operations agreement, maintenance agreement or management agreement
with an Affiliate of Seller;

(ix) Contracts with respect to which Buyer will be required to assume the
guaranty obligations or Indebtedness of Seller or any Affiliate of Seller upon
the Closing or thereafter;

(x) any outstanding loan agreements, indentures, guarantee agreements, letters
of credit, mortgages, promissory notes or other documents relating to (A) the
borrowing, creation, incurrence, assumption or guarantee of money or other
Indebtedness by Seller, (B) the grant or imposition of any Lien on any Acquired
Assets to secure any such Indebtedness, or (C) the extension of credit by Seller
to any other Person, in each case, in an amount in excess of $1,000,000 in the
aggregate;

(xi) any outstanding futures, swap, collar, put, call, floor, cap, option or
other similar Contracts, including those that are intended to benefit from or
reduce or eliminate the risk of fluctuations in interest rates or the price of
commodities, including electric power (in any form, including energy, capacity
or ancillary services, whether at wholesale or retail), gas or securities;

(xii) Contracts with a Governmental Entity;

(xiii) the Easements;

(xiv) Contracts that (A) contain any “take or pay” provisions or arrangements,
or (B) require Seller to purchase or sell a stated portion of its or any third
party’s requirements or outputs;

(xv) Contracts establishing any joint venture, partnership, strategic alliance,
sharing of profits or proprietary information or other collaboration or
otherwise relating to the acquisition by Seller of any operating business or
material assets or the capital stock of any other Person;

(xvi) Contracts that contain any covenant (including a covenant not to compete
or a non-solicitation covenant) that limits or purports to limit the ability of
Seller, or which, following the consummation of the transactions contemplated
hereby, would purport to restrict the ability of Buyer or its Affiliates, to
(A) compete in any business or with any Person or in any geographic area,
(B) sell, supply or distribute any service or product or otherwise freely engage
in business anywhere in the world, or (C) solicit or hire any Person as an
employee;

 

15

--------------------------------------------------------------------------------

(xvii) Contracts pursuant to which any warranty in favor of Seller has been
granted and remains in effect with respect to services furnished or goods used
or held for use in connection with the Facility having a value in excess of
$1,000,000; and

(xviii) Contracts containing any power of attorney of Seller to any other Person
or of any other Person to Seller or any obligation to act as guarantor, surety,
co-signor, endorser (other than for purposes of collection in the ordinary
course of business consistent with past practice), co-maker or indemnitor in
respect of any performance obligation of any Person.

The foregoing Contracts are collectively referred to as the “Material
Contracts”.

(b) Buyer has been provided with true, correct and complete copies of all
Material Contracts (other than those that are Excluded Assets), including all
amendments, modifications or supplements thereto.

(c) Each Material Contract (other than a Material Contract that will terminate
or expire by its terms prior to Closing) constitutes the legal, valid and
binding obligation of Seller and, to the Knowledge of Seller, the other parties
thereto, and is in full force and effect in all material respects. Neither
Seller nor, to the Knowledge of Seller, any counterparty to any Material
Contract, is in breach, violation or default (or would be in breach, violation
or default but for the existence of a cure period) of or under, and no event has
occurred that would, but for the existence of a cure period, constitute a
breach, violation of default of or under any Material Contract that would give
the other party thereto the right to terminate or cancel such Material Contract.
Neither Seller nor any other party to any Material Contract has exercised any
termination rights with respect to any Material Contract, and no such party has
given written notice of any significant dispute with respect to any Material
Contract.

(d) Section 3.10(d) of the Seller Disclosure Letter sets forth a list of all
Seller Guarantees outstanding as of the date of this Agreement.

SECTION 3.11 Ownership of Assets.

(a) Except as set forth in Section 3.11(a)(i) of the Seller Disclosure Letter,
Seller has (i) good and indefeasible fee simple title to that certain real
property described in Section 3.11(a)(ii) of the Seller Disclosure Letter (the
“Owned Real Property”), (ii) good, marketable title to all material personal
property used or held for use in connection with its business or owned by it,
(iii) such consents, easements, rights of way, permits or license interests
described on Section 3.11(a)(iii) of the Seller Disclosure Letter (the “Easement
Real Property” and, together with the Owned Real Property, the “Real Property”),
pursuant to consent, easement, right of way, permit and license documents
described on such Letter (collectively, the “Easements”), and (iv) good and, to
the extent applicable, indefeasible title to all material buildings, structures,
improvements and fixtures owned by Seller that are used or intended to be used
in, or otherwise related to, Seller’s business and located on, under, over or
within the Real Property and to all other Acquired Assets, in each case, free
and clear of all Liens other than (A) such imperfections of title, easements,
encumbrances, restrictions and other Liens (1) set forth on Section 3.11(a)(iv)
of the Seller Disclosure Letter or (2) set forth in Schedule B, Items A, E and J

 

16

--------------------------------------------------------------------------------

of that certain Commitment for Title Insurance, issued June 30, 2017, by
Fidelity National Title Insurance Company, as Commitment Number FAH17004911, or
(3) which do not and would not reasonably be expected to, in the aggregate,
materially interfere with the ownership of the Facility or Seller’s or Buyer’s
ability to operate the Facility as currently operated or utilize the Real
Property for its intended purpose, or (B) materialmen’s, mechanics’, carriers’,
workmen’s, warehousemen’s, repairmen’s and other like Liens arising in the
ordinary course of business consistent with past practice which (1) are not, in
the aggregate, material to the ownership or operation of the Facility and
(2) relate to amounts not yet delinquent or being contested in good faith (and
for which adequate reserves are maintained to the extent required by GAAP),
(C) Liens for Taxes which are not yet due and payable or are being contested in
good faith (and for which adequate reserves are maintained to the extent
required by GAAP), (D) zoning, entitlement and other land use and environmental
regulations promulgated by any Governmental Entity which are not violated by the
current use or occupancy of such Real Property or the operation of the Facility
as currently operated, and (E) those matters that were disclosed by the ALTA
Survey, dated October 4, 2011, by LCA as job number 2011-005-056 (the Liens
referenced in clauses (A) through (E) hereof, the “Permitted Liens”).

(b) Except as set forth in Section 3.11(b) of the Seller Disclosure Letter,
(i) none of Seller’s interests in any Real Property is subject to or encumbered
by any purchase option, right of first refusal or other contractual right or
obligation of Seller to sell, assign or dispose of any interests in the Real
Property and (ii) Seller has not leased or otherwise granted to any Person the
right to use or occupy the Real Property or any portion thereof. Seller does not
lease or sublease or otherwise use or occupy pursuant to any lease or sublease
or similar agreement, any real property.

(c) Notwithstanding anything contained herein to the contrary, Seller makes none
of the representations or warranties contained in this Section 3.11 with respect
to (i) that certain Pipeline Easement and Right of Way, recorded in Volume 1510,
page 52, (ii) that certain Pipeline Easement and Right of Way, recorded in
Volume 1510, page 61, and (iii) that certain Pipeline Easement and Right of Way,
recorded in Volume 1510, Page 66 (collectively, the “Excluded Easements”).

(d) Except as set forth in Section 3.11(d) of the Seller Disclosure Letter and
except for the Excluded Assets and the Seller Guarantees, the Acquired Assets
include all assets, Permits, properties and rights that are necessary and
sufficient for Buyer to conduct, in all material respects, the business and
operations of the Facility from and after the Closing Date in the ordinary
course of business and in the manner conducted by Seller since January 1, 2017.

(e) As of the date hereof, the material tangible personal property of Seller is
in good operating condition, maintenance and repair (subject to normal wear and
tear), and is suitable for the purposes for which it is presently used. The
inventory and capital spares listed in Section 2.02(d) of the Seller Disclosure
Letter are located at the Facility, except (x) for items in transit to or from a
supplier or out for repair or (y) as used in the operation of the Facility after
the date hereof.

 

17

--------------------------------------------------------------------------------

(f) Section 3.11(f) of the Seller Disclosure Letter sets forth all material
Intellectual Property that is necessary for, and all material Intellectual
Property used by, Seller (in each case, other than software) in the operation of
the Facility (collectively, the “Seller Intellectual Property”). Except as set
forth in Section 3.11(f) of the Seller Disclosure Letter, Seller possesses all
right, title and interest in and to, or has the continuing right to use, sell
and license pursuant to a valid and enforceable agreement, in each case, free
and clear of all Liens (other than Permitted Liens), all Seller Intellectual
Property. Seller Intellectual Property does not infringe, misappropriate or
otherwise conflict with, and since December 20, 2013, Seller Intellectual
Property has not, infringed, misappropriated, or otherwise conflicted with any
Intellectual Property rights of any third parties, except as would not be
material to the ownership or operation of the Facility or the Acquired Assets.
With respect to any Seller Intellectual Property that is licensed from any third
party, (a) Seller is not in material breach of or default under any such
license, nor, to the Knowledge of Seller, is any other party to any such license
in material breach thereof or default thereunder, nor, in either case, has it
been given written notice thereof and (b) no party to any such license has
exercised or given written notice with respect to any termination rights with
respect thereto.

SECTION 3.12 Employee Matters.

(a) Section 3.12(a) of the Seller Disclosure Letter contains a list, as of the
date of this Agreement, of each material Seller Benefit Plan. With respect to
each material Seller Benefit Plan, Seller has made available to Buyer (i) true
and complete copies of the most recent plan documents and any other material
related documents, including all amendments thereto, (ii) the two (2) most
recent annual reports on Form 5500 and schedules thereto, required to be filed
with the IRS with respect thereto, (iii) written summaries of any Seller Benefit
Plan not in writing and all related trust documents, (iv) the most recent
determination or opinion letter from the IRS for each Seller Benefit Plan (where
required), and (v) any summaries or communications to employees describing the
terms of a Seller Benefit Plan, including the most recent summary plan
descriptions, summary of benefits and coverage and summaries of material
modifications for the Seller Benefit Plans. Each Seller Benefit Plan has been
administered in all material respects in accordance with its terms and in
compliance in all material respects with the applicable provisions of ERISA, the
Code and all other Laws applicable to employee benefit matters. Each Seller
Benefit Plan that is intended to be qualified within the meaning of
Section 401(a) of the Code has received a favorable determination or opinion
letter as to its qualification, a copy of which has been made available to
Buyer. To the Knowledge of Seller, there are no facts or circumstances that
would be reasonably likely to adversely affect the qualified status for any such
Seller Benefit Plan.

(b) To the Knowledge of Seller, there are no pending proceedings, including
audits or investigations by the IRS or the Department of Labor, which have been
asserted or instituted against any Seller Benefit Plan, the assets of any such
plan, Seller or any of its ERISA Affiliates or the plan administration or any
fiduciary of a Seller Benefit Plan with respect to the operation of such plan
and there are no facts or circumstances that would reasonably be expected to
form the basis for any such proceeding.

(c) There does not exist, nor do any circumstances exist that could reasonably
be expected to result in, any Controlled Group Liability after the Closing of
Buyer or any of its Affiliates. Except as set forth in Section 3.12(c) of the
Seller Disclosure Letter, no Seller Benefit Plan provides subsidized health,
medical or other welfare benefits after retirement or other termination of
employment to any Plant Employee (other than continuation coverage required
under Section 4980B(f) of the Code).

 

18

--------------------------------------------------------------------------------

(d) Seller has not entered into (or agreed to enter into) any Contract with any
officer or director in connection with or in contemplation of the transactions
contemplated hereby.

(e) Except as set forth in Section 3.12(e) of the Seller Disclosure Letter, none
of the execution, delivery or performance of this Agreement or the consummation
of the transactions contemplated hereby (alone or in combination with any other
event, including any termination of employment on or following the Closing) will
(i) entitle any Plant Employee to any compensation or benefit, (ii) accelerate
the time of payment or vesting, or trigger any payment or funding, of any
compensation or benefits or trigger any other material obligation under any
Seller Benefit Plan, (iii) result in any breach or violation of, or default
under, or limit any rights to amend, modify or terminate, any Seller Benefit
Plan, or (iv) result in the payment of any “excess parachute payment” (as
defined in Section 280G(b)(1) of the Code).

(f) Neither Seller nor any of its Affiliates is a party to any collective
bargaining agreement with any labor union representing the Plant Employees. No
union certification or decertification proceeding has been filed and, to the
Knowledge of Seller, no union authorization card campaign or other union
organizing activity has been conducted relating to the Plant Employees since
December 20, 2013. Except as set forth in Section 3.12(f) of the Seller
Disclosure Letter, since December 20, 2013, there have been no strikes, lockouts
or other labor stoppages involving the Plant Employees, nor, to the Knowledge of
Seller, are any strikes, lockouts or other labor stoppages pending or
threatened. Seller and its Affiliates have complied in all material respects
with all Laws respecting labor, employment, immigration, fair employment
practices, terms and conditions of employment, workers’ compensation,
occupational safety, plant closings and mass layoffs, wages and hours (including
wage and hour classifications), equal employment opportunity, nondiscrimination,
whistleblowing, employment and reemployment rights of members of the uniformed
services and classification of workers as employees or independent contractors,
in each case with respect to the Plant Employees, and to the extent that any
Laws are applicable, any independent contractors of Seller.

(g) Seller has separately delivered to Buyer a list describing the (i) name,
(ii) service date, (iii) position, (iv) rate of pay, (v) target bonus and actual
bonus paid for 2016, (vi) leave or disability status, (vii) full or part-time
status and (viii) exempt or non-exempt status of each Plant Employee as of the
date hereof. Seller has separately delivered to Buyer a list of all independent
contractors and all “leased employees” (as such term is defined in
Section 414(n) of the Code) of Seller that provides for each such person the
hourly pay rate or other compensatory arrangement for such person and the amount
paid by Seller to such person in 2016. Seller shall update such lists from time
to time and as of the Closing Date.

(h) No Seller Benefit Plan is a “nonqualified deferred compensation plan” (as
defined in Section 409A(d)(1) of the Code). Seller is not required to reimburse
any Person for any Tax arising under Section 409A or 4999 of the Code.

 

19

--------------------------------------------------------------------------------

SECTION 3.13 Environmental, Health and Safety Matters.

(a) Except as disclosed in Section 3.13 of the Seller Disclosure Letter or as
would not reasonably be expected to have a Material Adverse Effect:

(i) Seller is, and since December 20, 2013 has been, in compliance with all
applicable Environmental, Health and Safety Laws;

(ii) there are no Claims pending or, to the Knowledge of Seller, threatened
against or relating to the business of Seller alleging any violation of, or
liability under, any Environmental, Health and Safety Laws, and Seller has paid
or otherwise satisfied any fines, penalties, or other Liabilities previously
assessed against them under any Environmental, Health and Safety Laws;

(iii) Seller is not subject to any Order requiring the investigation or cleanup
of any Hazardous Substance at any real property or facility currently or
formerly owned or operated by Seller (including, for the avoidance of doubt, the
Facility), or any other real property or facility;

(iv) there is not now, and since December 20, 2013 there has not been, any
Hazardous Substance (A) used, generated, treated, stored, transported, disposed
of, Released, or handled on any currently or formerly owned or leased property
associated with the business except in full compliance with Environmental,
Health and Safety Laws, or (B) otherwise existing on, under, about, or emanating
from or to, any currently or formerly owned or leased property associated with
the business except in full compliance with, and as would not reasonably be
expected to result in any Liability under, all applicable Environmental, Health
and Safety Laws;

(v) Seller has obtained and is not, and since December 20, 2013 has not been, in
violation in of the terms of any EHS Permits necessary for or used in the
operation of the Facility, all such EHS Permits are in full force and effect and
are final and non-appealable (and are listed on Section 3.13 of the Seller
Disclosure Letter), and no Claim to revoke, limit or modify any of such EHS
Permits has been served upon Seller, or is pending or, to the Knowledge of
Seller, threatened, and to the extent required to maintain the effectiveness of
such EHS Permits or continued operation of the Facility, Seller has filed all
timely applications for re-issuance or renewal of such EHS Permits; and

(vi) to the Knowledge of Seller, no facts, circumstances or conditions exist
with respect to any property or Person by or to which Seller arranged for the
transportation, recycling, reclamation, storage, disposal, treatment, recovery
of energy from or other management of Hazardous Substances, that would
reasonably be expected to result in a violation of any Environmental, Health and
Safety Law or result in any Liability under any Environmental, Health and Safety
Law.

 

20

--------------------------------------------------------------------------------

(b) Buyer has been provided with, or has been provided access to, copies, in the
possession or control of Seller, of the following records as requested by Buyer:

(i) all active EHS Permits listed on Section 3.13 of the Seller Disclosure
Letter and other material documents exchanged with any Governmental Entity
relating thereto or pursuant to any other Environmental, Health and Safety Law,
in each case related to Seller or the Facility;

(ii) all Phase I or Phase II environmental site assessments or similar studies
or analyses related to the Facility or Real Property;

(iii) all correspondence with the Railroad Commission of Texas or member(s) of
its staff regarding the 2017 Safety Evaluation with respect to the Real
Property;

(iv) all correspondence with the Railroad Commission of Texas regarding the
abandoned well on the Real Property;

(v) all open and unresolved notices of violation, or notices of alleged
noncompliance, or notices with respect to any Claim concerning potential
noncompliance with Environmental, Health and Safety Law, in each case, with
respect to the Facility;

(vi) all documentation in the possession or control of Seller relating to the
cleanup or remediation of the Tartan Textiles site, including the well plugging
report and municipal settings designation associated with the Tartan Textiles
site;

(vii) all correspondence with the Texas Commission on Environmental Quality or
member(s) of its staff regarding the sodium hypochlorite spills at the Facility
in 2013 and 2016; and

(viii) all OSHA logs with respect to the Facility.

(c) Notwithstanding any provision of this Agreement to the contrary, the
representations and warranties in this Section 3.13 are the sole and exclusive
representations relating to environmental matters, including compliance with any
Environmental, Health and Safety Law or EHS Permits or the use, generation,
treatment, storage, disposal, release or handling of Hazardous Substances.

SECTION 3.14 Taxes.

(a) Except as set forth in Section 3.14(a) of the Seller Disclosure Letter, from
and after December 20, 2013, or, to the Knowledge of Seller (provided, that, for
purposes of this Section 3.14(a), the Knowledge of Seller shall not require any
inquiry), prior to December 20, 2013, (i) with respect to the Acquired Assets,
all material Tax Returns other than Income Tax Returns required to be filed by
Seller have been filed when due in accordance with applicable Law, (ii) all
Taxes due and payable with respect to such material Tax Returns (whether or not
such Taxes were shown as due and payable on such Tax Returns) have been paid
within the time required by Law, (iii) there is no action, suit, proceeding,
investigation, audit or claim now pending or threatened in writing relating to
Taxes with respect to the Acquired Assets, (iv) there are no outstanding
agreements extending or waiving the statutory period of limitation applicable to
any claim for, or the period for the collection or assessment of, Taxes with
respect to the

 

21

--------------------------------------------------------------------------------

Acquired Assets, (v) Seller has timely and properly collected, withheld and
remitted to the Taxing Authority to whom such payment is due all material
amounts required to be collected or withheld by it for the payment of material
Taxes with respect to the Acquired Assets, (vi) there are no Liens for any Taxes
upon the Acquired Assets other than for Taxes not yet due, and (vii) none of the
Acquired Assets are “tax-exempt use property” within the meaning of
Section 168(h) of the Code, are “tax-exempt bond financed property” within the
meaning of Section 168(g) of the Code, secure any debt the interest of which is
tax-exempt under Section 103(a) of the Code or are subject to a “section 467
rental agreement” within the meaning of Section 467 of the Code.

(b) Notwithstanding any provision in this Agreement to the contrary,
(i) Section 3.12 and this Section 3.14 contain all of the representations and
warranties by Seller regarding Taxes, and (ii) no breach or inaccuracy of any
representation or warranty in this Section 3.14 (other than any representation
or warranty in Section 3.14(a)(vii)) shall entitle the Indemnified Buyer
Entities to be indemnified for Indemnifiable Losses arising from Taxes imposed
with respect to any taxable period (or portion thereof) commencing after the
Closing Date.

SECTION 3.15 Intercompany Obligations. Except as set forth on Section 3.15 of
the Seller Disclosure Letter, (a) no Affiliate of Seller (i) has any interest in
any Acquired Asset, (ii) has any payable, receivable or other intercompany
account owing to or from Seller, or (iii) has any Claim against Seller, and
(b) there are no obligations, commitments, Contracts or other Liabilities
between Seller, on the one hand, and any Affiliate of Seller, on the other hand.

SECTION 3.16 Insurance. Section 3.16 of the Seller Disclosure Letter sets forth
a list, as of the date hereof, of all material insurance policies providing
coverage to the Facility with respect to which Seller is a named insured or
otherwise the beneficiary of coverage (collectively, the “Insurance Policies”).
To the Knowledge of Seller, such Insurance Policies are in full force and effect
on the date of hereof and all premiums due on such Insurance Policies as of the
date hereof have been paid. As of the date hereof, no written notice of
cancellation, non-renewal, disallowance or reduction in coverage or claim or
termination, nor any written notice of breach or default under any Insurance
Policy, has been received by Seller or any Affiliate thereof, and, to the
Knowledge of Seller, no such action has been threatened.

SECTION 3.17 Regulatory Status. Seller is a registered power generation company
with the PUCT, a registered resource entity at ERCOT, and a registered pipeline
operator with the Railroad Commission of Texas. Seller is not a “public
utility,” “gas utility,” or “common carrier” within the meaning of the Texas
Natural Resources Code or the Texas Utilities Code. Seller is an “exempt
wholesale generator” within the meaning of the Public Utility Holding Company
Act of 2005 (“PUHCA”) and therefore is not subject to regulation as a
“public-utility company” or “public utility holding company” under PUHCA and
those regulations promulgated thereunder by FERC.

SECTION 3.18 Exclusive Representations and Warranties. Except for the
representations and warranties contained in this Article 3, neither Seller nor
any other Person on Seller’s behalf makes any express or implied representation
or warranty with respect to Seller, the Acquired Assets, the Assumed
Liabilities, the Facility or the transactions contemplated by this Agreement,
and Seller disclaims any other representations or warranties and any reliance
thereon, whether made by Seller or any other Person.

 

22

--------------------------------------------------------------------------------

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller, as of the date hereof and as of
the Closing Date, as follows:

SECTION 4.01 Organization and Existence. Buyer is a limited liability company,
organized under the laws of Delaware. Buyer is duly organized, validly existing
and in good standing under the laws of its jurisdiction of formation. Buyer is
duly qualified or licensed to do business in each other jurisdiction where the
actions required to be performed by it hereunder makes such qualification or
licensing necessary, except in those jurisdictions where the failure to be so
qualified or licensed would not reasonably be expected to result in a material
adverse effect on Buyer’s ability to perform its obligations hereunder or to
consummate the transactions contemplated hereby.

SECTION 4.02 Authorization. Buyer has all requisite power and authority to enter
into this Agreement and the Ancillary Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Buyer of this Agreement and the Ancillary Agreements, and the
consummation by Buyer of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary action on the part of Buyer. This
Agreement has been, and on the Closing Date the Ancillary Agreements will be,
duly executed and delivered by Buyer. This Agreement constitutes, and each
Ancillary Agreement when executed and delivered by Buyer shall constitute,
(assuming the due execution and delivery by each other Party) a valid and
legally binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, subject in all respects to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws
relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).

SECTION 4.03 Governmental Consents. No Consent of or Filing with any
Governmental Entity is required to be obtained or made by Buyer in connection
with the execution and delivery of this Agreement and the Ancillary Agreements
to be delivered hereunder by Buyer and the consummation by Buyer of the
transactions contemplated hereby and thereby, other than (a) the Buyer’s
Required Consents set forth on Section 4.03 of the Buyer Disclosure Letter and
(b) the Consents and Filings the failure of which to obtain or make would not be
material to Buyer’s ability to perform its obligations hereunder or thereunder
or to consummate the transactions contemplated hereunder or thereunder.

SECTION 4.04 Noncontravention. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by Buyer does not, and, subject to
obtaining Buyer’s Required Consents, the consummation by Buyer of the
transactions contemplated hereby and thereby will not contravene or violate any
provision of (a) the Organizational Documents of Buyer, (b) any mortgage, lease,
franchise, license, permit, agreement or other instrument to which Buyer is a
party or by which Buyer is bound, or result in the termination or acceleration
thereof, or entitle any party to accelerate any obligation or indebtedness
thereunder, or (c) any Law or Order to which Buyer is subject or by which any
property or asset of Buyer is bound or

 

23

--------------------------------------------------------------------------------

affected; except, in the case of clauses (b) and (c), as would not, individually
or in the aggregate, reasonably be expected to result in a material adverse
effect on Buyer’s ability to perform its obligations hereunder or thereunder or
to consummate the transactions contemplated hereunder or thereunder.

SECTION 4.05 Litigation. There are no Claims pending or, to Buyer’s Knowledge,
threatened, against or otherwise relating to Buyer or any of its Affiliates
before any Governmental Entity or any arbitrator, (a) that challenge the
validity or enforceability of Buyer’s obligations under this Agreement or
(b) that seek to prevent or delay, or that otherwise would, individually or in
the aggregate, reasonably be expected to result in a material adverse effect on
Buyer’s ability to perform its obligations hereunder or thereunder or to
consummate the transactions contemplated hereunder or thereunder.

SECTION 4.06 Brokers. None of Buyer or any of its Affiliates has any liability
or obligation to pay fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which Seller or
its Affiliates would reasonably be expected to become liable or obliged.

SECTION 4.07 Available Funds; Source of Funds. At the Closing, Buyer will have
sufficient cash or other sources of immediately available funds to pay in cash
the Purchase Price in accordance with Article 2 and for all other actions
necessary for Buyer to consummate the transactions contemplated in this
Agreement. Buyer represents and warrants that all funds paid to Seller shall not
have been derived from, or constitute, either directly or indirectly, the
proceeds of any criminal activity under the anti-money laundering laws of the
United States.

SECTION 4.08 Investigation. Buyer is a sophisticated entity, knowledgeable about
the industry in which Seller operates and experienced in investments in such
businesses so as to be capable of evaluating the merits and risk of its
investment, and is able to bear the economic risk associated with the purchase
of the Acquired Assets and assumption of the Assumed Liabilities. Buyer (either
alone or together with its advisors) has independently conducted its own
analysis and made the decision to enter into this Agreement.

SECTION 4.09 Disclaimer Regarding Projections. Buyer may be in possession of
certain projections and other forecasts regarding Seller, the Acquired Assets,
the Assumed Liabilities and the Facility, including projected financial
statements, cash flow items and other data of Seller and the Facility and
certain business plan information of Seller and the Facility. Buyer acknowledges
that there are substantial uncertainties inherent in attempting to make such
projections and other forecasts and plans and accordingly are not relying on
them, that Buyer is familiar with such uncertainties, that Buyer is taking full
responsibility for making its own evaluation of the adequacy and accuracy of all
projections and other forecasts and plans so furnished to it, and Buyer shall
not have any claim against anyone with respect thereto. Accordingly, Buyer
acknowledges that, without limiting the generality of Section 4.10, neither
Seller nor any of its Affiliates, Representatives, agents or advisors has made
any representation or warranty with respect to such projections and other
forecasts and plans.

 

24

--------------------------------------------------------------------------------

SECTION 4.10 Ownership in ERCOT. As of the date of this Agreement, Buyer and its
Affiliates own and control installed generating capacity in ERCOT in an amount
that does not exceed the twenty percent (20%) limitation set forth in
Section 39.154 of PURA (the “Generating Capacity Threshold”).

SECTION 4.11 Exclusive Representations or Warranties. Buyer acknowledges that
except for the representations and warranties contained in Article 3, neither
Seller nor any other Person on its behalf, makes any express or implied
representation or warranty with respect to Seller, the Acquired Assets, the
Assumed Liabilities, the Facility or the transactions contemplated by this
Agreement, and Buyer disclaims reliance on any other representations or
warranties, whether made by Seller or any of its Affiliates or Representatives.

ARTICLE 5

COVENANTS

SECTION 5.01 Information Pending Closing. From the date of this Agreement
through the Closing, Seller shall provide Buyer and its Representatives with
information and documents as to Seller and its material operations, including
the Facilities, the Acquired Assets and the Assumed Liabilities, as reasonably
requested by Buyer and to the extent such information is readily available to
Seller or can be obtained by Seller without any material interference with the
business or operations of Seller. Until the Closing, as soon as reasonably
practicable after the end of each calendar month, and to the extent that Seller
or any of its Affiliates has historically prepared such financial information
for internal purposes, Seller shall deliver to Buyer an unaudited consolidated
balance sheet as of the end of such month, together with related consolidated
statement of operations and cash flow for Seller for the period beginning on
January 1 of such year and ending on the last day of such month, in each case
prepared consistent with the Financial Statements. Notwithstanding the
foregoing, Seller shall not be required to provide any information which
(a) Seller reasonably believes it is prohibited from providing to Buyer by
reason of applicable Law, which Seller reasonably believes the disclosure of
which will waive the attorney/client privilege, or which Seller is required to
keep confidential or prevent access to by reason of any Contract with a third
party (provided, that Seller shall use commercially reasonable efforts to obtain
any such Consent to be permitted to provide the requested information or
otherwise provide the requested information in a manner that would not be
prohibited or would not result in a waiver of attorney/client privilege,
including by providing it in summary or redacted form) or (b) relates to
competitively sensitive information that Seller’s counsel reasonably determines
to be impermissible under federal or state antitrust Laws. Notwithstanding
anything contained herein, from the date of this Agreement through the Closing,
Buyer shall not be permitted to contact Seller’s employees (including any Plant
Employees), vendors, customers or suppliers in connection with the transactions
contemplated hereby without receiving prior written authorization from Seller,
which such authorization shall not be unreasonably withheld, conditioned or
delayed. For the avoidance of doubt, all information provided by Seller pursuant
to this Section 5.01 shall be subject to the Confidentiality Agreement.

 

25

--------------------------------------------------------------------------------

SECTION 5.02 Conduct of Business Pending the Closing.

(a) Subject to Section 5.02(c), from the date of this Agreement through the
Closing (the “Interim Period”), Seller shall (i) operate its business in the
ordinary course of business consistent with past practices and in compliance in
all material respects with applicable Laws and (ii) use commercially reasonable
efforts to (A) preserve, maintain and protect the business operations, assets,
properties, organization (including Continuing Employees) and goodwill of
Seller, (B) maintain its existing Permits and Air Emission Allowances, and
(C) maintain all material relationships with customers, suppliers, Governmental
Entities and other Persons having business relationships with Seller.

(b) Without limiting the foregoing, except as otherwise contemplated by this
Agreement or set forth in Section 5.02(b) of the Seller Disclosure Letter or as
consented to in writing by Buyer, which consent shall not be unreasonably
withheld, conditioned or delayed solely with respect to clauses (viii),
(xiii) and (xv), during the Interim Period, Seller shall not, and shall (in the
case of clause (xv)) cause its applicable Affiliates not to, directly or
indirectly, do the following:

(i) sell, transfer, convey, abandon, lease, license, cancel or otherwise dispose
of any Real Property or any other assets other than (A) in the ordinary course
of business consistent with past practice and in an amount not in excess of
$250,000, in the aggregate or (B) the sale of electricity in the ordinary course
of business consistent with past practice;

(ii) merge or consolidate with any other Person, acquire all or substantially
all of the assets or business of any other Person, or enter into any joint
venture, partnership or similar venture with any other Person with respect to
the Facility, the Acquired Assets or the Assumed Liabilities;

(iii) enter into, terminate, materially amend, grant any waiver of any material
term under, grant any material consent with respect to, or fail to comply in any
material respect with, any Material Contract, Easement or Contract that would be
a Material Contract or Easement if in existence on the date hereof;

(iv) (A) issue, grant any options, warrants, calls, subscriptions or other
rights for, phantom stock rights, stock appreciation rights, reserve or
authorize for issuance, pledge or otherwise encumber, deliver, redeem or sell,
or enter into any arrangement to do any of the foregoing, with respect to any of
its respective equity interests, (B) liquidate, dissolve or otherwise wind up
its business or operations or (C) materially amend or materially modify its
Organizational Documents, in each case that would result in Odessa Power
Holdings, LLC, Odessa-Ector Power I, LLC or their respective Affiliates from
being unable to deliver 100% of Seller’s equity capital to a potential buyer of
such equity capital at the Closing;

(v) purchase any equity securities of, or make any other investment in, any
Person;

(vi) (A) except as required by changes in applicable Law or changes in GAAP,
change any accounting method, principle or policy, (B) make any material change
in its cash management practices, (C) make any material write-down in the value
of its inventory outside the ordinary course of business consistent with past
practice, or (D) make any material write-off of any accounts receivable outside
the ordinary course of business consistent with past practice;

 

26

--------------------------------------------------------------------------------

(vii) effect any recapitalization, reclassification or other change in its
capitalization that would result in Odessa Power Holdings, LLC, Odessa-Ector
Power I, LLC or their respective Affiliates being unable to deliver 100% of
Seller’s equity capital to a potential buyer of such equity capital at the
Closing;

(viii) acquire any material assets other than (A) in the ordinary course of
business consistent with past practice in an amount not in excess of $250,000,
in the aggregate or (B) gas or other fuel in the ordinary course of business
consistent with past practice;

(ix) engage in any new line of business, or introduce any material change with
respect to the operation of Seller’s business, including the Facility and the
Acquired Assets;

(x) create, incur or assume any Indebtedness (other than Indebtedness incurred
in the ordinary course of business consistent with past practice that is
included in the calculation of the Closing Date Net Working Capital or for which
Buyer will not have any liability after the Closing);

(xi) settle any Claim or compromise or settle any liability, in each case,
(A) in an amount in excess of $250,000, (B) that restricts or limits or seeks to
restrict or limit Seller’s activities in connection with the conduct or
operations of its business or the ownership or operations of the Facility, or
that would reasonably be expected to limit the conduct of the business of Buyer
or its Affiliates including, from and after the Closing, the ownership or
operations of the Facility, or (C) that is otherwise material to the business of
Seller or the ownership or operations of the Facility;

(xii) cancel or materially change coverage under any Insurance Policy;

(xiii) with respect to the Acquired Assets, (A) consent to any extension or
waiver of the statute of limitations with respect to Taxes, (B) adopt, rescind
or change (1) any method of Tax accounting, (2) any election relating to Taxes
or (3) any annual Tax accounting period, (C) except as required by Law, enter
into any closing agreement with respect to any Tax that would (1) result in
aggregate Tax Liability to Seller exceeding $750,000 with respect to taxable
periods ending on or before the Closing Date, or (2) be binding on Buyer,
(D) except as may be required by Law, make any change to any of its methods of
reporting income or deductions for Tax purposes from those employed in the
preparation of its most recently filed Tax Returns, or (E) obtain any Tax
ruling, or take any affirmative action to surrender any right to claim a Tax
refund, offset or other reduction in Tax liability, in each of clauses
(A)-(E) of this Section 5.02(b)(xiii), except to the extent that such action
would not adversely affect Buyer following the Closing;

(xiv) (A) enter into any Contract with a labor union regarding representation of
the Plant Employees or (B) enter into any labor or collective bargaining
agreement or, through negotiation or otherwise, make any commitment or incur any
Liability to any labor organization;

 

27

--------------------------------------------------------------------------------

(xv) except (A) to the extent required by applicable Law or (B) to the extent
required by any Seller Benefit Plan as in effect on the date of this Agreement,
(1) increase the compensation or benefits of or pay any bonus to any Plant
Employee or individual independent contractor of Seller, (2) grant any
severance, change of control, retention, termination or similar compensation or
benefits to any Plant Employee or individual independent contractor of Seller,
(3) amend, adopt, enter into or terminate any collective bargaining agreement
covering Plant Employees, (4) amend, adopt, enter into or terminate, or
otherwise increase the coverage or benefits available under, a Seller Benefit
Plan that is intended to only affect Plant Employees, (5) take any action to
accelerate the vesting or payment of any compensation or benefit to any Plant
Employee, or individual independent contractor of Seller, (6) transfer any Plant
Employee to any of Seller’s Affiliates or transfer any employee of any of
Seller’s Affiliates to Seller, (7) grant any unusual or extraordinary bonus or
benefit to any Plant Employee or other current or former employee or individual
independent contractor of Seller, (8) enter into any employment, deferred
compensation, severance, special pay, consulting, non-competition or similar
Contract with any Plant Employee or individual independent contractor of Seller
(or amend any such Contract), (9) change the number of Persons employed by
Seller or (10) hire or terminate the employment of any Plant Employee other than
any hirings or terminations in the ordinary course of business consistent with
past practice of employees who are not executive officers;

(xvi) create or dissolve any Subsidiary;

(xvii) (A) subject any material Acquired Assets to any Lien, other than
Permitted Liens or (B) discharge or satisfy any material Lien or pay any
material Liability, other than current Liabilities paid in the ordinary course
of business consistent with past practice;

(xviii) sell or enter into any contract to sell any Air Emission Allowance; or

(xix) agree or commit to do any of the foregoing.

(c) Notwithstanding Section 5.02(a), Seller may take commercially reasonable
actions (whether or not permitted by Section 5.02(a)) in accordance with Good
Utility Practices and applicable Laws with respect to emergency situations or to
comply with applicable Law.

(d) On or prior to Closing, Seller shall cause all obligations, Contracts or
other Liabilities between Seller or any of its Affiliates with respect to the
ownership or operation of the Facility, the Acquired Assets or the Assumed
Liabilities (other than those set forth on Section 5.02(d) of the Seller
Disclosure Letter) to be terminated.

(e) Nothing contained in this Section 5.02 is intended to give Buyer the right
to control or direct the operations of Seller, the Acquired Assets, the Assumed
Liabilities or the Facility prior to the Closing.

 

28

--------------------------------------------------------------------------------

SECTION 5.03 Tax Matters.

(a) Tax Returns. Seller shall prepare and timely file or shall cause to be
prepared and timely filed all Tax Returns required to be filed by Seller related
to the Facility or the Acquired Assets, and Buyer shall prepare or cause to be
prepared and shall file all Tax Returns required to be filed by Buyer related to
the Facility or the Acquired Assets.

(b) Tax Contests. Buyer shall promptly notify Seller in writing upon receiving
notice from a Taxing Authority after the Closing of any audit, assessment,
litigation, contest or other proceeding relating to Taxes (a “Tax Contest”) for
which Seller would reasonably be expected to be liable under Article 8 or any
other provision of this Agreement or under Law, including Taxes for any
Pre-Closing Period or Straddle Period, and shall promptly deliver to Seller
copies of all correspondence received from a Taxing Authority in connection with
any such Tax Contest. Seller shall have the right to control the conduct of any
Tax Contest relating solely to Taxes for which Seller (or their direct or
indirect equity owners) would be responsible, including pursuant to Article 8;
provided, that Buyer, at its own expense, shall be entitled to participate in
the conduct of any such Tax Contest, Seller shall keep Buyer reasonably informed
regarding developments in such Tax Contest and Seller shall not settle any such
Tax Contest that would be binding on Buyer or that involves any Taxes for which
Buyer would be responsible (whether under Article 8 or under applicable Law)
without Buyer’s prior written consent, not to be unreasonably withheld,
conditioned or delayed. Buyer shall control the conduct of any other Tax Contest
with respect to the Facility or the Acquired Assets; provided, that if Seller
would reasonably be expected to be responsible for a portion of the Taxes that
would result from such Tax Contest, then Seller, at its own expense, shall be
entitled to participate in the conduct of any such Tax Contest, Buyer shall keep
Seller reasonably informed regarding developments in such Tax Contest and Buyer
shall not settle any such Tax Contest without Seller’s prior written consent,
not to be unreasonably withheld, conditioned or delayed. To the extent of any
conflict between Section 8.03 and this Section 5.03(b), the provisions of this
Section 5.03(b) shall control.

(c) Cooperation. Subject to the other provisions of this Section 5.03, Buyer and
Seller shall cooperate fully, and shall cause their respective Affiliates to
cooperate fully, as and to the extent reasonably requested by any Party, in
connection with the preparation and filing of Tax Returns and any Tax Contest or
other proceeding with respect to such Tax Returns or with respect to Taxes
relating to the Acquired Assets. Such cooperation shall include the retention
and (upon a Party’s request) the provision of records and information which are
reasonably relevant to any such Tax Return, Tax Contest or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. The requesting
Party shall reimburse the cooperating Parties for all reasonable costs and
documented, out-of-pocket expenses incurred by such cooperating Parties.

(d) Transfer Taxes. Except as otherwise required by Law, Buyer shall file all
Tax Returns required to be filed in respect of Transfer Taxes imposed on or with
respect to the transactions contemplated by this Agreement and pay all Transfer
Taxes owing with respect to such returns. The Parties shall cooperate with each
other in connection with the filing of any Tax Returns relating to Transfer
Taxes, including joining in the execution of any such Tax Return or

 

29

--------------------------------------------------------------------------------

other documentation where necessary. Buyer and Seller shall, upon request of the
other Party, use their commercially reasonable efforts to obtain any certificate
or other document from any person as may be necessary to mitigate, reduce or
eliminate any Transfer Tax, including by qualifying for the occasional sale
exemption or any other exemption available under applicable Law. Buyer and
Seller intend that the transaction contemplated by this Agreement will qualify
as an “occasional sale” for Texas sales tax purposes, and will be exempt from
such tax pursuant to Texas Tax Code Section 151.304. On or prior to the Closing
Date, Seller shall provide Buyer with a duly executed Texas Comptroller Form
01-917, Statement of Occasional Sale, with respect to such transaction. If
required by Law to file or pay any Transfer Tax described in this
Section 5.03(d), Seller shall timely pay such Transfer Tax and provide to Buyer
copies of all such filed Tax Returns relating to Transfer Taxes and reasonable
evidence that all such Transfer Taxes have been timely paid. Buyer shall
reimburse Seller for the payment of such Transfer Taxes within ten (10) days of
its receipt of such reasonable evidence.

(e) Purchase Price Allocation. Not later than sixty (60) Business Days after the
final determination of Purchase Price pursuant to Section 2.10(b), Buyer shall
prepare and deliver to Seller an allocation schedule, in the form set forth in
Section 5.03(e) of the Buyer Disclosure Letter, setting forth Buyer’s
determination of the allocation of the Purchase Price and assumed (or deemed
assumed) obligations to the extent properly taken into account under the Code
among the Assumed Assets that complies with Section 1060 of the Code and the
Treasury Regulations promulgated thereunder (the “Allocation”). Seller and Buyer
shall work in good faith to resolve any disputes relating to the Allocation
within thirty (30) days. If Seller and Buyer are unable to resolve any such
dispute, such dispute shall be resolved promptly by the Independent Accountants,
the costs of which shall be borne equally by Seller and Buyer. Seller and Buyer
shall use commercially reasonable efforts to update the Allocation in a manner
consistent with Section 1060 of the Code following any adjustment to the
allocable Purchase Price or any other amounts constituting consideration for
federal Income Tax purposes pursuant to this Agreement. Seller and Buyer shall,
and shall cause their respective Affiliates to, report consistently with the
Allocation in all Tax Returns, including on Form 8594, and none of the Parties
shall take any position in any Tax Return that is inconsistent with the
Allocation, as adjusted, in each case, unless required to do so by a final
determination as defined in Section 1313 of the Code or with the written consent
of the other Parties, which shall not be unreasonably withheld, conditioned or
delayed. Each of Seller and Buyer agrees to promptly advise the other regarding
the existence of any Tax audit, controversy or litigation related to the
Allocation; provided, that nothing in this Section 5.03 shall require any of the
Parties to litigate before any court, or prevent any of the Parties from
settling in good faith, any proposed deficiency or adjustment by any Taxing
Authority challenging the Allocation.

(f) Withholding. Buyer shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code, or any provision of state, local or foreign Law. If Buyer determines
that any deduction or withholding is required in respect of a payment pursuant
to this Agreement, Buyer shall use its commercially reasonable efforts to
provide notice to Seller at least four (4) Business Days prior to the date on
which such payment is to be made, with a written explanation substantiating the
requirement to withhold. To the extent amounts are deducted or withheld in
accordance with this Section 5.03(f) and remitted to the applicable Taxing
Authority, such amounts shall be treated for purposes of this Agreement as
having been paid to the Person in respect of which the deduction or withholding
was made.

 

30

--------------------------------------------------------------------------------

(g) Parties’ Tax Returns. Notwithstanding anything to the contrary herein
(including Section 5.03(c) and Section 5.09), neither Buyer nor its Affiliates
shall have the right at any time to examine the Tax Returns, Tax work papers,
financial statements or books and records of Seller or any of its Affiliates
(other than the non-Income Tax Returns of Seller), and neither Seller nor its
Affiliates shall have the right at any time to examine the Tax Returns, Tax work
papers, financial statements or books and records of Buyer or any of its
Affiliates (other than the non-Income Tax Returns of Buyer), in each case,
including in connection with any Third Party Claim, Tax Contest, Claim or other
dispute (whether among the Parties or involving third parties) or otherwise.

(h) Apportionment. For purposes of this Agreement, Liability for any Taxes of
Seller with respect to any Straddle Period shall be apportioned to Seller for
any Pre-Closing Period and to Buyer thereafter. Liability for Property Taxes
with respect to any Straddle Period shall be apportioned to the Pre-Closing
Period on a per diem basis. Liability for Taxes other than Property Taxes for
the Pre-Closing Period shall be deemed equal to the amount which would be
payable during the Pre-Closing Period if the relevant taxable period took into
account only the Pre-Closing Period on an “interim closing of the books” method
similar to that described in the Treasury Regulations promulgated under
Section 706 of the Code.

SECTION 5.04 Confidentiality; Publicity.

(a) Buyer acknowledges that the information being provided to it in connection
with this Agreement and the consummation of the transactions contemplated hereby
is subject to the terms of a confidentiality agreement, dated as of December 2,
2016, between Vista Energy Corp. and Koch Energy Holdings, LLC (the
“Confidentiality Agreement”), the terms of which are incorporated herein by
reference. Effective upon, and only upon, the Closing, the Confidentiality
Agreement shall (i) terminate with respect to information relating solely to the
Acquired Assets, the Assumed Liabilities and the Facility and
(ii) notwithstanding anything in the Confidentiality Agreement to the contrary,
the obligations of Vista Energy Corp and its Affiliates, including Buyer, under
paragraph 6 of the Confidentiality Agreement shall be deemed to survive and be
in full force and effect (other than in respect of Continuing Employees) until
the date that is two (2) years after the Closing Date; provided, however, that
Buyer acknowledges that any and all other information provided to it by Seller,
any Affiliate of Seller or any Representative of Seller shall remain subject to
the terms and conditions of the Confidentiality Agreement after the Closing
Date.

(b) None of Seller, Buyer or any of their respective Affiliates or
Representatives shall make any public announcement or issue any public
communication (including announcements or communications to Plant Employees and
interviews with the media) regarding this Agreement or the transactions
contemplated hereby, or any matter related to the foregoing, without first
obtaining the prior consent of Seller or Buyer, as applicable (which consent
shall not be unreasonably withheld), except if such announcement or other
communication is (i) required by applicable Law or legal process (including
rules of any national securities exchange), in which case Seller or Buyer, as
applicable, shall use their best effort to coordinate or communicate such

 

31

--------------------------------------------------------------------------------

announcement or communication with Seller or Buyer, as applicable, prior to
announcement or issuance (ii) consistent with previous releases, public
disclosures or public statements made jointly by the Parties (or individually,
if approved by the other Party) or (iii) made by a Party or its Affiliates to
their respective Affiliates or Representatives, provided that (A) they are
advised of the confidential nature thereof and agree to hold such information in
confidence in accordance with the applicable provisions of this Agreement (and
such Party shall be liable for all non-permitted disclosures by its Affiliates
or Representatives) and (B) nothing herein shall permit a Party, and no Party
shall be permitted, to disclose or disseminate this Agreement to any Person
other than their respective Affiliates and (on a need to know basis)
professional advisors and such Affiliates’ directors, officers or employees.

SECTION 5.05 Post-Closing Books and Records. Buyer shall retain, for at least
seven (7) years after the Closing Date, all books, records and other documents
pertaining to the Facility, the Acquired Assets and Assumed Liabilities that
relate to the period prior to the Closing Date, except for Tax Returns and
supporting documentation relating to the Facility, the Acquired Assets and
Assumed Liabilities which shall be retained until sixty (60) days after the date
required by applicable Law, and to make the same available after the Closing
Date for inspection and copying by Seller, at Seller’s cost and expense and
during regular business hours without significant disruption to the Facility and
upon reasonable request and upon reasonable advance notice. If Buyer wishes to
destroy such books, records and other documents during such period, Buyer shall
give notice of such proposed destruction to Seller, and upon notice from Seller
received within ninety (90) days of its notice of destruction, at Seller’s sole
cost and expense, transfer such books and records to Seller or its designated
Affiliate at Seller’s expense.

SECTION 5.06 Expenses. Except as otherwise provided in this Agreement, including
the provisions of Section 9.02(a), whether or not the Closing takes place, 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, including any fees, expenses or other payments incurred or owed by
a Party to any brokers, financial or legal advisors or comparable other persons
retained or employed by such Party in connection with the transactions
contemplated by this Agreement.

SECTION 5.07 Employee Matters; Continuing Employees.

(a) Continuing Employees. At least five (5) Business Days prior to the Closing,
Buyer shall deliver, in writing, an offer of employment (on terms and conditions
consistent with this Section 5.07) to all then current Plant Employees to
commence such employment immediately after the Closing, other than any Plant
Employees who have been identified as Affected Employees pursuant to clause
(a) of such definition as of such time); provided, that each such offer shall be
subject to the applicable Plant Employee’s continued employment with Seller
until immediately prior to the Closing and to Buyer’s customary
pre-employment/post-offer procedures and qualifications; provided further that,
with respect to each Plant Employee who is not actively employed as of
immediately prior to the Closing due to a leave of absence (each, an “Inactive
Plant Employee”), any such offer shall (i) be contingent on (A) such Plant
Employee presenting himself or herself to Buyer for active employment during the
six-month period immediately following the Closing (or such longer period as
specified by applicable Law), and presenting reasonable evidence to Buyer of
such readiness for active employment and

 

32

--------------------------------------------------------------------------------

(B) the circumstances being such that Seller would have been required to
re-employ or continue to employ such Plant Employee in accordance with
applicable Law and its applicable policies, practices and procedures in effect
on the date hereof, if the transactions contemplated by this Agreement had not
occurred, and (ii) be effective on the date that such Plant Employee presents
himself or herself to Buyer for active employment. Seller will provide Buyer
with a then-current list of Inactive Plant Employees within five (5) Business
Days prior to the Closing Date indicating the last potential date of return. For
all purposes of the remainder of this Section 5.07, with respect to any Inactive
Plant Employee, the date that such Inactive Plant Employee commences employment
with Buyer or the time of such commencement of employment shall be substituted
for the terms “Closing Date” or “Closing”, respectively, wherever such term
appears. Each such offer of employment shall be consistent with the obligations
of Buyer set forth in this Section 5.07. Such individuals who accept such offer
by the Closing Date are hereinafter referred to as the “Continuing Employees.”
Effective as of the Closing, Seller shall terminate the employment of each Plant
Employee who satisfies Buyer’s pre-employment/post-offer procedures and
qualifications (other than any Plant Employee who has been identified as an
Affected Employee pursuant to clause (a) of such definition).

(b) Seller Benefit Plans. As of the Closing Date, in no event shall any
Continuing Employee be entitled to accrue any benefits under any Seller Benefit
Plan with respect to services rendered or compensation paid on or after the
Closing Date. From and after the Closing Date, Seller and its Affiliates shall
retain sponsorship of all the Seller Benefit Plans and shall retain and hold
Buyer harmless and indemnify Buyer with respect to all commitments, Liabilities
and obligations thereunder, whether arising before, on or after the Closing, and
neither Buyer nor any of its Affiliates shall have any responsibility for any
such Seller Benefit Plans or commitments, Liabilities or obligations. Effective
as of the Closing Date, Seller shall cause the account balances of the
Continuing Employees in each Seller Benefit Plan that is a 401(k) plan and the
benefits of the Continuing Employees in each Seller Benefit Plan that is a
defined benefit pension plan or a nonqualified retirement plan to be fully
vested.

(c) Continuation of Compensation and Benefits. For a one (1)-year period
following the Closing, Buyer shall provide, or shall cause to be provided,
compensation (including salary, cash bonus, commissions and other incentives)
and benefits to each Continuing Employee that are substantially comparable, in
the aggregate, to the compensation and benefits provided to similarly situated
employees of Buyer during such period; provided that the annual base pay
provided to each Continuing Employee during such one (1)-year period shall be no
less than the annual base pay provided by Seller to such Continuing Employee
immediately prior to the Closing. Neither Buyer nor any of its Affiliates shall
have any responsibility for any bonuses or incentive payments payable under the
Seller Benefit Plans or payable with respect to any period prior to the Closing.

(d) Severance. Without limiting the foregoing provisions of this Section 5.07,
for a one (1)-year period following the Closing, for any termination of
employment by Buyer other than for cause (as determined in Buyer’s reasonable
discretion), Buyer shall provide, or shall cause to be provided, severance
benefits to each Continuing Employee that include at least two weeks of base pay
for every year of service with Seller (or any Affiliate thereof) and any
respective predecessor, subject to a maximum of fifty-two (52) weeks of base pay
per Continuing Employee.

 

33

--------------------------------------------------------------------------------

(e) Benefit Continuation for Continuing Employees. Buyer shall waive or cause to
be waived all limitations as to preexisting conditions or waiting periods with
respect to participation and coverage requirements applicable to each Continuing
Employee under any employee benefit plans, programs and policies of Buyer or any
Affiliate thereof in which Continuing Employees participate (or are eligible to
participate) that are “welfare benefit plans” (as defined in Section 3(1) of
ERISA) to the same extent that such conditions and waiting periods were
satisfied or waived under the comparable Seller Benefit Plan immediately prior
to the Closing. In addition, Buyer shall provide or cause to be provided each
Continuing Employee with credit for any copayments and deductibles paid during
the plan year commencing immediately prior to the Closing Date in satisfying any
applicable copayments, deductibles or other out-of-pocket requirements under any
such welfare benefit plans for such plan year, subject to the provision by
Seller or Seller’s insurance carrier to Buyer of valid evidence of such amounts
in the format requested by Buyer.

(f) Service Credit for Continuing Employees. Buyer shall provide, or cause to be
provided, to each Continuing Employee credit for all service prior to the
Closing Date, to the same extent as such service was credited under the
comparable Seller Benefit Plan, for all purposes under Buyer’s severance and
paid time off plans. Notwithstanding the foregoing, such service shall not be
recognized to the extent that it results in the duplication of benefits. For the
avoidance of doubt, the Continuing Employees shall not receive credit for
service prior to the Closing Date for purposes of any of Buyer’s pension or
retiree welfare plans.

(g) Responsibility for Welfare Plan Claims. With respect to each Continuing
Employee (including any beneficiary or the dependent thereof), Seller shall
retain all Liabilities and obligations for any medical, dental, health, accident
or disability claim to the extent that such Liability or obligation relates to
claims incurred (whether or not reported or paid) prior to the Closing Date and
Buyer and its Affiliates shall be liable for any such claim incurred on or
following the Closing Date. For purposes of this Section 5.07(g), a claim shall
be deemed to be incurred when (i) with respect to medical, dental and health
related benefits, the medical, dental or health related services giving rise to
such claim are performed, (ii) with respect to disability and workmen’s
compensation benefits, the injury, sickness or other event giving rise to the
claim for such benefits occurs, and (iii) with respect to accident or life
insurance, the accident or death occurs.

(h) Workforce Matters. Buyer shall pay or cause to be paid at the Closing to
Seller an amount equal to the aggregate severance costs for (i) any Affected
Employee under clause (a) of the definition thereof and (ii) any other Plant
Employee to whom Buyer and its Affiliates fail to offer employment, including as
a result of such employee’s failure to satisfy Buyer’s customary pre-employment
qualifications and procedures, in each case whose employment is terminated by
Seller as of the Closing; provided that, in the case of clauses (i) and (ii),
the amount of severance costs payable by Buyer per employee shall be equal to
two weeks’ base pay for each year of such employee’s service, subject to a
maximum of 52 weeks’ base pay per employee. For the avoidance of doubt, no
severance payments will be made to (A) any Plant Employee who rejects an offer
of employment made by Buyer in accordance with this Section 5.07 or (B) any
Inactive Plant Employee who does not receive an offer of employment because any
of the contingencies for such offer described in Section 5.07(a)(i) are not
satisfied.

 

34

--------------------------------------------------------------------------------

(i) COBRA Liabilities. Seller shall be responsible for providing notices and
coverage under COBRA to any Plant Employee (and his or her qualified
beneficiaries) as to whom a “qualifying event” (as defined in Section 4980B of
the Code) has occurred on or prior to the Closing Date (including qualifying
events that occur in connection with the transactions contemplated by this
Agreement). Buyer shall be responsible for providing notices and coverage under
COBRA to any Continuing Employee (and his or her qualified beneficiaries) whose
“qualifying event” occurs after the Closing Date.

(j) WARN Act. Buyer shall be responsible and assume all liability for all
notices or payments due to any Affected Employees under the WARN Act, or to any
Plant Employee who becomes entitled to receive notice as required under the WARN
Act on account of the aggregation of “employment losses” (as defined in the WARN
Act) that occur prior to the Closing with “employment losses” that occur
following the Closing, and all notices, payments, fines or assessments due to
any Governmental Entity, pursuant to any applicable Law with respect to the
employment, discharge or layoff of employees by Buyer or its Affiliates after
the Closing Date, including the WARN Act. Seller shall be responsible for and
shall indemnify Buyer with respect to all such notices, payments, fines or
assessments due to any Plant Employees other than Affected Employees under the
WARN Act or any such other applicable Law that are triggered solely by the
actions of Seller prior to the Closing. As of the Closing, Seller shall provide
to Buyer a list of any “employment losses” experienced by any Plant Employees
during the ninety (90)-day period prior to the Closing. Such list shall include,
with respect to each such Plant Employee, the date of the employment loss and
the applicable site of employment.

(k) Vacation. Seller shall pay to each Continuing Employee all amounts in
respect of vacation days and other paid time off accrued but not taken by such
Continuing Employee on or prior to the Closing. Buyer shall have no obligation
to honor such accrued vacation days or paid time off after the Closing.
Following the Closing, the Continuing Employees’ eligibility for vacation and
other paid time off shall be determined under Buyer’s vacation and paid time off
policies.

(l) Employment Tax Reporting Responsibility. Seller and Buyer hereby agree to
follow the standard procedure for employment tax reporting as provided in
Section 4 of Rev. Proc. 2004-53, I.R.B. 2004-35. Accordingly, Seller shall have
employment tax reporting responsibilities for the wages and other compensation
it pays to Plant Employees and Buyer shall have employment tax reporting
responsibilities for the wages and other compensation it pays to Plant
Employees.

(m) Third-Party Rights. The provisions of this Section 5.07 are for the sole
benefit of the parties to this Agreement and nothing herein, expressed or
implied, is intended or shall be construed to confer upon or give to any person
(including, for the avoidance of doubt, any Plant Employee), other than the
parties hereto and their respective permitted successors and assigns, any legal
or equitable or other rights or remedies under or by reason of any provision of
this Agreement. Nothing contained herein, express or implied: (i) shall be
construed to establish, amend, or modify any benefit plan, program, agreement or
arrangement, (ii) shall alter or limit the ability of Seller, Buyer or any of
their respective Affiliates to amend, modify or terminate any benefit plan,
program, agreement or arrangement, or (iii) is intended to confer upon any
current or former employee any right to employment or continued employment for
any period of time by reason of this Agreement, or any right to a particular
term or condition of employment.

 

35

--------------------------------------------------------------------------------

SECTION 5.08 Further Actions.

(a) Subject to the terms and conditions of this Agreement, each Party agrees to
use commercially reasonable efforts (except where a different efforts standard
is specifically contemplated by this Agreement, in which case such different
standard shall apply) to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement in an expeditious
manner and to cause any of the conditions to such Party’s obligations to
consummate the transactions contemplated hereby in Article 6 to be satisfied.

(b) The Parties will use their respective commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to obtain the Required Consents, any
approvals or waivers of parties to Contracts with Seller, and any Filings or
Consents with or from any Governmental Entity, including by (i) as soon as
practicable (and in any event within five (5) Business Days following the date
of this Agreement) making all notices or filings necessary to obtain the
Consents listed in Sections 6.02(e) and 6.02(f) of the Buyer Disclosure Letter,
(ii)(A) preparing and filing as soon as practicable (and in any event, for the
HSR Act, within five (5) Business Days following the date of this Agreement) all
other such Filings or Consents with or from any Governmental Entity or other
Person that are required to be filed or obtained prior to Closing in order to
consummate the transactions contemplated hereby, (B) assuring that all such
Filings are in material compliance with the requirements of applicable
regulatory laws, and (C) subject to applicable legal limitations making
available to the other Party such information as the other Party may reasonably
request in order to complete the Filings or to respond to information requests
by any relevant Governmental Entity or members of its staff, (iii) subject to
applicable legal limitations and the instructions of any Governmental Entity or
members of its staff, keeping each other apprised of the status of matters
relating to the completion of the transactions contemplated thereby, including
but not limited to promptly furnishing the other with copies of notices or other
communications, filings or correspondence between the Parties, or any of their
respective subsidiaries, and any Person or Governmental Entity (or members of
their respective staffs) with respect to the transactions, (iv) responding to
and complying with, as promptly as reasonably practicable, any request for
information or documentary material regarding the transactions from any relevant
Governmental Entity or members of its staff (including responding to any “second
request” for additional information or documentary material under the HSR Act as
promptly as reasonably practicable), (v) using their respective commercially
reasonable efforts to ensure the prompt expiration or termination of any
applicable waiting period and clearance or approval by any relevant Governmental
Entity, including defense against, and the resolution of, any objections or
challenges, in court or otherwise, by any relevant Governmental Entity
preventing consummation of the transactions, (vi) using their respective
commercially reasonable efforts to take all actions necessary to cause all
conditions set forth in Article 6 to be satisfied as soon as practicable,
(vii) executing and delivering any additional instruments necessary to fully
carry out the purposes of this Agreement, and (viii) using their respective
commercially reasonable efforts to take, or cause to be taken, all other actions
and do, or cause to be done, all other things advisable to consummate and make
effective the transactions contemplated hereby. Prior to

 

36

--------------------------------------------------------------------------------

communicating any information to any Person or Governmental Entity (or members
of their respective staffs) in oral or written form, each party shall permit
counsel for the other party a reasonable opportunity to review and provide
comments thereon, and consider in good faith the views of the other party in
connection with, any proposed communication to any Person or Governmental Entity
(or members of their respective staffs) to the extent permitted by Law. Each of
Buyer and Seller agrees not to participate in any meeting or discussion, either
in person or by telephone, with any Person or Governmental Entity (or members of
their respective staffs) in connection with the proposed transaction unless it
consults with the other party in advance and, to the extent not prohibited by
such Governmental Entity or by Law, gives the other party the opportunity to
attend and participate where appropriate and advisable under the circumstances.

(c) Notwithstanding anything in this Agreement to the contrary, Buyer shall
contest, at its cost and expense, any challenge to this Agreement by any
Governmental Entity, including contesting through a litigation proceeding
initiated by the U.S. Department of Justice, the Federal Trade Commission, or
the PUCT to enjoin the transactions contemplated hereby, and Buyer shall control
all aspects of said litigation for the Parties, provided that, except as set
forth in Section 5.08(d) with respect to any Subsequent Transaction and
Subsequent Transaction Plan, Buyer shall afford Seller with reasonable advance
written notice of any such contest or litigation, an opportunity to participate
in the development and formulation of the legal strategy of such contest or
litigation, an opportunity to participate in all associated proceedings, and
Buyer shall consider in good faith Seller’s views and opinions in all material
respects related to such matters (provided that, Buyer shall retain full
discretion and authority with respect to the aspects of any such litigation).

(d) Except as expressly set forth in this Section 5.08(d), Buyer and its
Affiliates shall have no obligation hereunder to commit to any divestitures,
licenses, hold separate or similar arrangements, conduct of business
restrictions or other actions or non-actions with respect to their respective
assets and businesses (or with respect to the Facility, Acquired Assets or
Assumed Liabilities) as a condition to obtaining the Consents required to be
obtained from any Governmental Entity. If, prior to the Closing, Buyer or any of
its Affiliates enters into any agreement or similar arrangement in which Buyer
and/or any Affiliate would acquire, directly or indirectly, one or more other
power generation facilities in ERCOT (a “Subsequent Transaction”) such that
Buyer and its Affiliates would own and control installed generating capacity in
ERCOT in an amount that exceeds the Generating Capacity Threshold upon the
closing of such Subsequent Transaction (when taking into consideration the
transaction contemplated by this Agreement), then within twenty (20) Business
Days from the entry into a definitive agreement related to such Subsequent
Transaction, Buyer and its Affiliates shall propose, and promptly seek approval
of, a plan, commitment or arrangement that would reduce Buyer’s and its
Affiliates’ installed generating capacity in ERCOT below the Generating Capacity
Threshold (a “Subsequent Transaction Plan”), that would permit (i) Buyer and its
Affiliates to close on such Subsequent Transaction and (ii) the transaction
contemplated by this Agreement to be consummated in the manner contemplated by
this Agreement, without any modification to the terms or conditions of this
Agreement. Upon the approval or acceptance of such Subsequent Transaction Plan
by the PUCT, Buyer and its Affiliates shall implement and comply with such plan
as promptly as reasonably practicable. Buyer shall keep Seller reasonably
informed of the status of the preparation, submission and implementation of any
Subsequent Transaction Plan. Buyer and its Affiliates shall be deemed to have
satisfied the covenants and agreements contained in this Section 5.08(d) for all
purposes (including for purposes of Article 8) upon the Closing.

 

37

--------------------------------------------------------------------------------

(e) Nothing in this Agreement shall require Seller or any of its Affiliates to
incur any expense or Liability (other than costs and expenses of Seller’s
attorneys and other advisors), enter into any new commitment or agreement or
agree to any modification to any contractual arrangement to obtain the Required
Consents or any approvals or waivers of parties to Contracts with Seller and,
subject to Section 2.06 (with respect to seeking any Consent other than a
Required Consent or any other Consent, approval or waiver from a Governmental
Entity), all out-of-pocket costs and expenses (other than costs and expenses of
Seller’s attorneys and other advisors) associated with obtaining any such
Required Consents or approvals or waivers, including any Consent or waiver fees,
if any, that may be required or payable, shall be paid solely by Buyer.

(f) Each Party shall (i) promptly inform the other Party of any communication
made to, or received by such Party from, any Governmental Entity or members of
its staff regarding any of the transactions contemplated hereby, (ii) respond as
promptly as reasonably practicable to any inquiries or requests for additional
information and documentary material received from any Governmental Entity or
members of its staff, (iii) except as required by applicable Law, and except
with written consent of the other Party, not enter into any agreement with any
Governmental Entity agreeing not to consummate the transactions contemplated by
this Agreement, and (iv) promptly inform the other Party of any communication
made to, or received by such Party from, any Governmental Entity or members of
its staff regarding any Environmental, Health and Safety Law.

(g) Subject to the compliance of the Parties with this Section 5.08, neither
Party shall have any liability whatsoever to the other Party arising out of or
relating to the failure to obtain any Consents or make any Filings, or because
of the termination of, or default under, any Contract, in each case to the
extent such Consents, Filings or Contracts are listed on Section 3.03 of the
Seller Disclosure Letter or Section 4.03 of the Buyer Disclosure Letter.

(h) Subject to the terms and conditions of this Agreement, upon the request of
either Seller or Buyer, each of the Parties will do, execute, acknowledge and
deliver all such further acts, assurances, deeds, assignments, transfers,
conveyances and other instruments and papers as may be reasonably required or
appropriate to carry out the transactions contemplated by this Agreement.

(i) The Parties will cooperate and negotiate in good faith to agree to the terms
of a confirmation to the existing ISDA Master Agreement between KES and Luminant
Energy Company LLC, dated July 21, 2015 (the “Gas Supply Agreement”) within
thirty (30) days following the date of this Agreement. For the avoidance of
doubt, the failure of the Parties to enter into the Gas Supply Agreement shall
not affect the Parties’ conditions set forth in Sections 6.02(a) or 6.03(a).

 

38

--------------------------------------------------------------------------------

SECTION 5.09 Post-Closing Cooperation. After Closing, upon prior reasonable
written request, each Party shall use commercially reasonable efforts to
cooperate with each other in furnishing records, information, oral or written
testimony, oral or written attestations and certifications, and other assistance
in connection with transition matters, any required post-Closing filings with
Governmental Entities, and any inquiries or proceedings involving Seller, but
excluding any proceedings arising from disputes among the Parties. Each such
requesting Party shall reimburse such cooperating Party for any reasonable
out-of-pocket expenses paid or incurred by such cooperating Party as a result of
any such requested cooperation.

SECTION 5.10 Risk of Loss. Buyer shall solely bear the risk of loss with respect
to the Acquired Assets for any event or occurrence after the Closing. Except as
otherwise provided in this Section 5.10, during the Interim Period all risk of
loss or damage to the property or assets of Seller shall, as between Buyer and
Seller, be borne by Seller. If during the Interim Period the property or assets
of Seller are damaged by fire, equipment breakage or other casualty (each such
event, an “Event of Loss”), or are taken by a Governmental Entity by exercise of
the power of eminent domain (each, a “Taking”), then the following provisions of
this Section 5.10 shall apply:

(a) Following the occurrence of (i) any one or more Events of Loss, if the
aggregate costs to restore, repair or replace the property or assets of Seller
subject to such Event of Loss to a condition reasonably comparable to their
prior condition, plus the amount of any lost profits reasonably expected to
accrue after Closing as a result of such Event of Loss, such amount pursuant to
this clause (i) to be determined by an independent third party appraiser
mutually selected by the Parties (collectively, “Restoration Costs”) and
(ii) any one or more Takings, if the value of the property subject to such
Taking plus the amount of any lost profits reasonably expected to accrue after
Closing as a direct result of such Taking, less any condemnation award received
by Buyer (provided, that any such condemnation award is made available to
Buyer), such amount pursuant to this clause (ii) to be determined by an
independent third party appraiser mutually selected by the Parties
(collectively, the “Condemnation Value”), is, in the aggregate, less than or
equal to $3,500,000, there shall be no effect on the transactions contemplated
hereby.

(b) Subject to the termination right of Buyer and Seller set forth in clause
(d) below, upon the occurrence of any one or more Events of Loss or Takings
involving aggregate Restoration Costs and Condemnation Value in excess of
$3,500,000 (a “Major Loss”), Seller shall have, in the case of a Major Loss
relating solely to one or more Events of Loss, the option, exercised by notice
to Buyer, to restore, repair or replace the damaged assets or properties prior
to Closing to a condition reasonably comparable to their prior condition. If
Seller elects to so restore, repair or replace the assets or properties relating
to a Major Loss, which election shall be made by notice to Buyer prior to the
Closing Date and as soon as practicable following the occurrence of the Major
Loss, Seller will complete or cause to be completed the repair, replacement or
restoration of the damaged assets or property prior to the Closing and the
Closing Date shall be postponed for the amount of time reasonably necessary to
complete the restoration, repair or replacement of such property or assets as
reasonably agreed among Buyer and Seller to allow for the restoration, repair or
replacement of such assets or properties, provided, that in no event shall such
postponement extend beyond the Outside Date). If Seller elects not to cause the
restoration, repair or replacement of the property or assets affected by a Major
Loss, or such Major Loss is the result in whole or in part of one or more
Takings or is otherwise not capable of being restored, repaired or replaced, the
provisions of Section 5.10(c) will apply.

 

39

--------------------------------------------------------------------------------

(c) Subject to the termination right of Buyer and Seller set forth in clause
(d) below, in the event that Seller elects not to cause the restoration, repair
or replacement of a Major Loss, or in the event that Seller, having elected to
cause repair, replacement or restoration of the Major Loss, fails to cause its
completion within the period of time agreed upon by the Parties pursuant to
Section 5.10(b) (subject to extension for up to ninety (90) days for causes
beyond Seller’s control), or in the event that a Major Loss is the result in
whole or in part of one or more Takings or is otherwise not capable of being
restored, repaired or replaced, then the Parties shall, within thirty (30) days
following Seller’s election not to cause the restoration, repair or replacement,
failure to complete, or the occurrence of such Major Loss, as the case may be,
adjust the Base Purchase Price by the aggregate Restoration Cost and
Condemnation Value related thereto, as mitigated by any repair, replacement or
restoration work actually completed by Seller on the assets or properties being
sold to Buyer, and proceed to Closing. To assist Buyer in its evaluation of any
and all Events of Loss, Seller shall provide Buyer such access to the properties
and assets and such information as Buyer may reasonably request in connection
therewith.

(d) In the event that the aggregate Restoration Costs and Condemnation Value
with respect to one or more Events of Loss and/or Takings equals an amount in
excess of $35,000,000, then either Buyer or Seller shall have the right to
terminate this Agreement.

SECTION 5.11 No Solicitation; Alternative Transactions. From the date hereof
until the earlier of (a) the termination of this Agreement pursuant to Article 9
and (b) the Closing Date, Seller shall not, and Seller’s Affiliates,
Representatives and agents will not, directly or indirectly, (i) encourage,
solicit, participate in or initiate discussions or negotiations with, provide
any information to, or otherwise cooperate in any way with, assist or
participate in, facilitate or encourage any Person or group (other than any
Affiliate, associate or designee of Buyer) concerning any proposal for the sale,
merger, combination, joint venture, recapitalization or other transaction
involving all or any part of the equity, business or properties of Seller (each,
a “Competing Transaction”), other than providing information to Buyer, its
Affiliates and their respective Representatives in connection with the
transaction contemplated hereby in accordance with the terms hereof or
(ii) enter into any Contract or agreement in principle (whether or not legally
binding) relating to any Competing Transaction. Seller shall immediately cease
and cause to be terminated any and all existing activities, discussions,
negotiations or other communications between or among Seller and its officers,
directors, employees, agents, advisors, partners, representatives, Affiliates or
other intermediaries and any third parties (other than Buyer and its
representatives) conducted heretofore with respect to any Competing Transaction.

SECTION 5.12 Schedule Update. From time to time prior to the Closing, Seller
may, at its option, supplement or amend and deliver updates to the Seller
Disclosure Letter (each a “Letter Update”), that are necessary to complete or
correct any information in such Seller Disclosure Letter, or in any
representation or warranty of Seller, that has been rendered inaccurate or
incomplete due to any change, event, effect or occurrence since the date of this
Agreement. Notwithstanding the foregoing, no Schedule Update shall qualify any
representations, warranties, covenants or agreements of Seller for any purpose
hereunder, affect any remedy available to any Indemnified Buyer Entity hereunder
(including indemnification pursuant to Article 8 or the right to specific
performance hereunder) or affect the determination of whether the conditions to
Closing have been satisfied.

 

40

--------------------------------------------------------------------------------

SECTION 5.13 Non-Solicitation; Confidentiality.

(a) For a period from the date hereof to the second (2nd) anniversary of the
Closing Date, Seller shall not, and Koch Ag and its Subsidiaries shall not, and
their respective directors, officers and employees shall not cause, solicit,
induce or encourage any Continuing Employees to leave such employment or hire,
employ or otherwise engage any such individual (other than by means of general
advertising of employment).

(b) For a period of three (3) years following the Closing, Koch Ag and its
Subsidiaries and Seller shall not, and their respective directors, officers and
employees shall not directly or indirectly, disclose or divulge any information
of the Facility, the Acquired Assets or the Assumed Liabilities; provided, that
the foregoing restriction shall not apply to information (i) which becomes
available to Koch Ag, any of its Subsidiaries, Seller or any of their respective
directors, officers and employees from a third-party source or (ii) which is in
the public domain or enters into the public domain without breach of this
Agreement by Koch Ag, any of its Subsidiaries, Seller or any of their respective
directors, officers and employees. Notwithstanding the foregoing, (1) the
obligations of confidentiality under this Section 5.13(b) shall not (A) limit
Koch Ag’s and its Subsidiaries’ use or disclosure of residuals resulting from
the ownership or operation of the Facility or the Acquired Assets and
(B) restrict the trading activities of Koch Ag or its Subsidiaries and (2) in
the event Koch Ag and its Subsidiaries, Seller or any of their respective
Affiliates or any of such person’s directors, officers and employees is
requested or required (by oral questions, interrogatories, requests for
information or documents in a legal proceeding, subpoena or other similar
process) to disclose information of the Facility, the Acquired Assets or the
Assumed Liabilities; (i) Seller shall promptly notify Buyer in writing unless
prohibited by Law or legal process, which notification shall include the nature
of such legal requirement and the extent of the required disclosure, and will
use its commercially reasonable efforts to cooperate with Buyer, at Buyer’s
expense, to preserve, to the extent possible, the confidentiality of such
information and (ii) in the absence of a protective order or other remedy or the
receipt of a waiver by Buyer, Seller is legally required to disclose such
information, Seller may, without liability hereunder, disclose to such Person or
tribunal only that portion of the information which Seller has determined in
good faith is legally required to be disclosed, provided that Seller uses its
reasonable best efforts to preserve the confidentiality of the information. The
term “residuals” means non-specific information in non-tangible form, which is
retained in the unaided memory of a person who has had access to the Seller’s
information.

(c) The covenants and undertakings contained in this Section 5.13 relate to
matters which are of a special, unique and extraordinary character and a
violation of any of the terms of this Section 5.13 will cause irreparable injury
to Buyer, the amount of which will be impossible to estimate or determine and
which cannot be adequately compensated. Accordingly, the remedy at law for any
breach of this Section 5.13 will be inadequate. Therefore, Buyer will be
entitled to an injunction, restraining order or other equitable relief from any
court of competent jurisdiction in the event of any breach of this Section 5.13
without the necessity of proving actual damages or posting any bond whatsoever.
The rights and remedies provided by this Section 5.13 are cumulative and in
addition to any other rights and remedies which Buyer may have hereunder or at
law or in equity. If Buyer were to seek damages for any breach of this
Section 5.13, the portion of the Purchase Price which is allocated by the
Parties to the foregoing covenant shall not be considered a measure of or limit
on such damages.

 

41

--------------------------------------------------------------------------------

(d) The Parties agree that, if any court of competent jurisdiction in a final
non-appealable judgment determines that a specified time period, a specified
business limitation or any other relevant feature of this Section 5.13 is
unreasonable, arbitrary or against public policy, then a lesser time period,
business limitation or other relevant feature which is determined by such court
to be reasonable, not arbitrary and not against public policy may be enforced
against the applicable party.

SECTION 5.14 Release. Upon and subject to the Closing, the Parties undertake as
follows:

(a) Seller Release. Seller, on behalf of itself and its Affiliates, successors,
assigns, heirs, executors, legatees, administrators, beneficiaries,
representatives and agents (the “Seller Releasing Parties”), fully, finally and
irrevocably releases, acquits and forever discharges Buyer, its Affiliates,
officers, directors, predecessors, successors and assigns, and the
beneficiaries, heirs, executors, personal or legal representatives, insurers and
attorneys of any of them (collectively, the “Buyer Released Parties”), from any
and all commitments, Claims, promises, agreements, debts, damages, Liabilities,
obligations, costs and expenses of every kind and nature whatsoever, whether
arising from any Contract or in tort, known or unknown, past, present or future,
at law or in equity, contingent or otherwise (collectively, a “Potential
Claim”), that such Seller Releasing Parties, or any of them, had, has or may
have had at any time in the past until and including the Closing or that may
arise in the future, against the Buyer Released Parties, or any of them, for or
by reason of any matter, cause or thing whatsoever occurring at any time at or
prior to the Closing with respect to the ownership or operation of the Facility,
the Acquired Assets or the Assumed Liabilities (collectively, the “Buyer
Released Matters”), except that the Buyer Released Matters do not include, and
nothing in this Section 5.14 shall affect or be construed as a waiver or release
by Seller Releasing Parties of, any Potential Claim by any of the Seller
Releasing Parties arising from or relating to (i) the payment of the Purchase
Price and any payments resulting from the Purchase Price adjustment pursuant to
Section 2.10 on and subject to the terms and conditions hereof, and any
Indemnifiable Losses payable by Buyer pursuant to Article 8, (ii) Seller’s right
to defend (including through a counterclaim) any claim of indemnification
asserted against Seller or (iii) the performance by Buyer of any of its
obligations under this Agreement.

(b) No Transfer of Potential Claims. Seller represents and warrants to Buyer and
the other Buyer Released Parties that it has not conveyed, pledged, transferred,
hypothecated, or in any manner encumbered or assigned, to any other Person any
of the Potential Claims for any Buyer Released Matter.

(c) Release Not Considered an Admission. Each Party acknowledges and agrees that
neither this Agreement nor the furnishing of the consideration for the release
given under this Section 5.14 and Section 7.02(b) will be deemed or construed at
any time to be an admission by any Party or any Seller Released Party or any
Buyer Released Party of any improper or unlawful conduct.

 

42

--------------------------------------------------------------------------------

(d) Waiver of Unknown Claims. Seller expressly acknowledges that this
Section 5.14 is intended to include in its effect all claims with respect to the
Buyer Released Matters that it does not know or suspect to exist in its favor as
of the date hereof, and that this Agreement contemplates the extinguishment of
any such claim or claims. With respect to any and all Potential Claims for any
Buyer Released Matter, Seller expressly waives and relinquishes, and the other
Seller Releasing Parties shall be deemed to have expressly waived and
relinquished, any and all provisions, rights and benefits conferred by any Law
of any jurisdiction or principle of common law that provides that a general
release does not extend to claims that are unknown or unsuspected to the
releasor at the time the releaser executes the release. Seller acknowledges that
the inclusion of such unknown Potential Claims herein was separately bargained
for and was a key element of this Section 5.14. Seller acknowledges, and the
other Seller Releasing Parties shall be deemed to have acknowledged, that they
may hereafter discover facts which are different from or in addition to those
that they may now know or believe to be true with respect to any and all
Potential Claims herein released and agree that all such unknown Potential
Claims are nonetheless released and that this Section 5.14 shall be and remain
effective in all respects even if such different or additional facts are
subsequently discovered.

(e) Covenant Not to Sue. Seller hereby irrevocably covenants to refrain from,
and to cause all Seller Releasing Parties controlled by it to refrain from,
asserting any Potential Claim, or commencing, instituting or causing to be
commenced, any action of any kind against any of the Buyer Released Parties, in
any forum whatsoever (including any administrative agency), that arises out of,
relates in any way to, or is based upon, any of the Buyer Released Matters.

(f) Sufficiency of Consideration. Seller acknowledges and agrees that the
Purchase Price paid pursuant hereto in respect of the Acquired Assets and the
covenants of Buyer has provided good and sufficient consideration for every
promise, duty, release, obligation, agreement and right contained herein,
including this Section 5.14.

(g) Basis of Defense; Attorneys’ Fees. This Section 5.14 may be pleaded by the
Buyer Released Parties as a full and complete defense and may be used as the
basis for an injunction against any action at law or equity instituted or
maintained against them in violation of this Section 5.14. In the event any
Potential Claim is brought or maintained by Seller or any Seller Releasing
Parties against the Buyer Released Parties in violation of this Section 5.14,
Seller shall be responsible for all costs and expenses, including reasonable
attorneys’ fees, incurred by the Buyer Released Parties in defending same.

SECTION 5.15 Transition Services.

(a) Seller shall cause its Affiliates to provide to Buyer for the sixty (60) day
period immediately following the Closing Date all or the portion of the
transition services listed on Section 5.15 of the Seller Disclosure Letter that
are reasonably requested in writing (providing reasonable detail) from Buyer to
Seller as soon as reasonably practicable following the date of this Agreement
(but in any event at least ten (10) Business Days prior to the Closing) except
that Seller shall have no obligation to cause its Affiliates to provide any such
services that were not requested in writing from Buyer to Seller at least ten
(10) Business Days prior to the Closing (the services referred to in this
sentence being the “Transition Services”). Seller shall cause its Affiliates to
perform any Transition Services provided hereunder in substantially the same

 

43

--------------------------------------------------------------------------------

quality and manner as the same or comparable services were provided by an
Affiliate of Seller to Seller during the three (3)-month period preceding the
Closing; provided, however, that notwithstanding anything to the contrary in
this Agreement, except for the provisions of Section 5.16(b)(i), which shall
govern over anything in this sentence, (A) none of Seller or its Affiliates
shall have any liability to Buyer or its Affiliates for any acts or omissions of
Seller or its Affiliates in connection with this Section 5.15 and the Transition
Services; (B) Buyer shall indemnify and hold harmless Seller and its Affiliates
from and against any and all Indemnifiable Losses relating to the Transition
Services except to the extent such Indemnifiable Losses were caused by the gross
negligence or willful misconduct of Seller or any of its Affiliates; and (C) the
exclusive remedy of Buyer and its Affiliates against Seller or any of its
Affiliates for breach of this Section 5.15 or otherwise relating to the
Transition Services shall be limited to termination (effective upon thirty
(30) days’ prior written notice) of the affected Transition Service and, in the
case of Seller’s or its Affiliates’ gross negligence or willful misconduct,
monetary damages (but in no event exceeding the amount paid to Seller for such
Transition Services under Section 5.15(b)).

(b) Buyer, upon not less than fifteen (15) days’ written notice to Seller, at
any time and from time to time may, as of the date set forth in such notice
(which may not precede the end of such fifteen (15)-day period without Seller’s
approval), reduce or terminate its right to receive (and Seller’s associated
obligations to provide or cause the provision of) any or all of the applicable
Transition Services. Buyer shall reimburse Seller for the reasonable costs or
expenses actually incurred by or on behalf of Seller or its Affiliates
attributable to the provision of Transition Services, including the costs of all
compensation and benefits and employment Taxes on such compensation and
benefits, any reasonable allocations of overhead expenses of Seller and its
Affiliates and any retention payments required to retain employees who provide
Transition Services (such costs and expenses, the “Direct Costs”). No later than
the fifteenth (15th) Business Day after the end of each calendar month during
which Seller or its Affiliates provided Transition Services, beginning with the
calendar month immediately following the Closing, Seller shall submit an invoice
to Buyer for the Direct Costs incurred during such calendar month. If the
Closing occurs on a day other than the last day of a month, the invoice for the
first (1st) month shall be only for those Transition Services provided from such
date until the end of the month in which the Closing took place. Buyer shall pay
or cause to be paid each such invoice it receives within fifteen (15) days after
its receipt thereof.

SECTION 5.16 Post-Closing Collections and Payments. From and after the Closing,
(a) Buyer will (i) remit to Seller any payment that Buyer or any of Buyer’s
Affiliates receives or collects in respect of any Excluded Asset and
(ii) reimburse Seller for any payment Seller or any of Seller’s Affiliates makes
to a third-party in payment of an Assumed Liability and (b) Seller will
(i) remit to Buyer any payment or settlement that Seller or any of Seller’s
Affiliates receives or collects on any note or receivable that constitutes, or
any sale of energy or capacity in the wholesale electric market from, an
Acquired Asset including any payment or settlement made for Transition Services
under Section 5.15 and (ii) reimburse Buyer for any payment Buyer or any of
Buyer’s Affiliates makes to a third-party in payment of a Retained Liability.
Each Party will provide the other Party with reasonable detail regarding any
such payments. Any remittance or reimbursement required to be made by a Party
pursuant to this Section 5.16 will be (x) made net of any outstanding remittance
or reimbursement owed to such Party pursuant to this Section 5.16 and (y) made
promptly, and in any event not later than the fifteenth (15th) day of the
calendar month immediately following the calendar month in which the payment
giving rise to such remittance or reimbursement, as applicable, was received or
made.

 

44

--------------------------------------------------------------------------------

SECTION 5.17 Seller Guarantees. At or prior to the Closing, Buyer will use
commercially reasonable efforts to obtain from the respective beneficiary, in
form and substance reasonably satisfactory to Seller and effective as of the
Closing, valid and binding written releases of Seller and any of its Affiliates,
as applicable, from any Liability, whether arising before, on or after the
Closing Date, under the Seller Guarantees set forth on Section 5.17 of the
Seller Disclosure Letter, by providing substitute guarantees by Buyer or an
Affiliate of Buyer approved by the applicable counterparty and containing terms
that are as favorable to the counterparty as the terms of the applicable Seller
Guarantee and by furnishing letters of credit, instituting escrow arrangements,
posting surety or performance bonds or making other arrangements as the
counterparty may reasonably request; provided, however, if Buyer is unable to
obtain the valid and binding written release of Seller under any such Seller
Guarantees, then (i) Buyer shall indemnify Seller or its Affiliate, as
applicable, with respect to any claim for damages resulting from or attributable
to such unreleased Seller Guarantee and to provide to Seller or its Affiliate,
as applicable, security reasonably acceptable to Seller to provide immediate
support in respect of such indemnity obligation and (ii) Buyer shall use its
commercially reasonable efforts, from and after the Closing, to obtain from the
respective beneficiary, in form and substance reasonably satisfactory to Seller
and effective as of the Closing, valid and binding written releases of Seller
and any of its Affiliates under any such Seller Guarantee. Buyer will use its
commercially reasonable efforts to provide to any such beneficiary all financial
and other information regarding Buyer or its Affiliates as may be reasonably
requested by such beneficiary to facilitate such substitute guarantees.
Notwithstanding anything to the contrary herein, the Parties acknowledge and
agree that until the date that is ninety (90) days after the Closing Date,
Seller and its Affiliates shall not terminate, obtain release of or otherwise
limit its Liability under any and all outstanding Seller Guarantees.

SECTION 5.18 Post-Closing Use of Name; MBM Materials.

(a) Buyer acknowledges and agrees that (i) it has no right, title or interest in
or to (A) the MBM Materials, or (B) the Seller Marks, including the Seller Marks
described on Section 5.18(a) of the Seller Disclosure Letter, as well as any
item generally described in the definition of “Seller Marks” that is confusingly
similar to any Seller Mark, (ii) it shall have no right to use the MBM Materials
or, except as otherwise expressly provided herein, the Seller Marks after the
Closing, and (iii) it shall otherwise cease to hold itself and the Facility out
as having any affiliation with Seller or any of its Affiliates. In furtherance
thereof, as promptly as practicable but in no event later than ninety (90) days
after the Closing Date, Buyer shall (A) remove, strike over or otherwise
obliterate all Seller Marks from all Acquired Assets, including any vehicles,
business cards, schedules, stationery, packaging materials, displays, signs,
promotional materials, manuals, forms, computer software, technical guidelines,
standards and procedures and other materials included in the Acquired Assets,
and (B) remove the name and contact information of the Seller or any of its
Affiliates with respect to any pipeline markers on or adjacent to the Real
Property. For the avoidance of doubt, Buyer and its Affiliates shall not be
deemed to have violated this Section 5.18(a) or to have infringed the rights of
Seller or its Affiliates by reason of the use of the Seller Marks in a
non-trademark manner for purposes of conveying to customers, suppliers or the
general public of the change in ownership of the Acquired Assets, or the
historical origins of the Facility.

 

45

--------------------------------------------------------------------------------

(b) The covenants and undertakings contained in this Section 5.18 relate to
matters which are of a special, unique and extraordinary character and a
violation of any of the terms of this Section 5.18 will cause irreparable injury
to Buyer, the amount of which will be impossible to estimate or determine and
which cannot be adequately compensated. Accordingly, the remedy at law for any
breach of this Section 5.18 will be inadequate. Therefore, Buyer will be
entitled to an injunction, restraining order or other equitable relief from any
court of competent jurisdiction in the event of any breach of this Section 5.18
without the necessity of proving actual damages or posting any bond whatsoever.
The rights and remedies provided by this Section 5.18 are cumulative and in
addition to any other rights and remedies which Buyer may have hereunder or at
law or in equity. If Buyer were to seek damages for any breach of this
Section 5.18, the portion of the Purchase Price which is allocated by the
Parties to the foregoing covenant shall not be considered a measure of or limit
on such damages.

SECTION 5.19 Additional Documentation. During the Interim Period, Seller shall
use its commercially reasonable efforts to provide such assistance (and to cause
its Affiliates and the respective personnel and advisors of each of the
foregoing to provide such assistance) reasonably requested by Buyer, including
by (a) providing reasonably requested information to Buyer, and its Affiliates
and its and their respective Representatives for use in preparing financial
statements (including audited financial statements for the fiscal years ended
December 31, 2014, December 31, 2015 and December 31, 2016 and unaudited interim
financial statements), including by making available the applicable personnel of
Seller and its Affiliates who were involved in the preparation of the Financial
Statements and their outside auditors to provide reasonable assistance and
information in connection therewith, (b) assisting Buyer (including by providing
Buyer and its Representatives reasonable access, during normal business hours
and upon reasonable advance notice to the Facility and the Real Property) in
obtaining a survey or surveys of the Real Property (in accordance with the 2016
Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys) at
Buyer’s sole cost and expense, and (c) assisting Buyer in obtaining a Title
Policy, at Buyer’s sole cost and expense including, if required by the
applicable title insurer, by delivering a certificate to such title insurer, in
form and substance reasonably acceptable to each of the Parties and the title
insurer.

SECTION 5.20 Insurance. Buyer shall be solely responsible for providing
insurance in respect of the Acquired Assets and for any claims made in
connection with any losses from and after the Closing. Without limiting the
rights of Buyer set forth elsewhere in this Agreement, if any claims are made or
damages, losses or liabilities occur prior to the Closing Date that relate to
any of the Acquired Assets, the Assumed Liabilities or the Facility, and such
claims, or the claims associated with such damages, losses or liabilities, may
be made against third-party insurance policies retained by Seller or any of its
Affiliates, then Seller shall use its commercially reasonable efforts, if so
requested by Buyer in writing, to ensure that after the Closing Date Buyer can
file, notice and otherwise continue to pursue such claims and recover proceeds
under the terms of such policies, provided, however, that Buyer will reimburse
Seller or its Affiliates, as applicable, for any reasonable and documented
out-of-pocket costs incurred by Seller or its Affiliates, including the payment
of applicable deductible and retention amounts, from and after the Closing as a
result of assisting Buyer in seeking insurance proceeds under a policy.

 

46

--------------------------------------------------------------------------------

SECTION 5.21 Amendment to Spread Strike Schedule. To the extent that the Closing
has not occurred prior to December 31, 2017, then prior to the Closing the
Parties shall cooperate in good faith to amend Schedule G so that such Schedule
includes a spread strike for each month through the month that contains the
fifth (5th) year anniversary of the Closing Date.

SECTION 5.22 Firm Transportation Capacity Release.

(a) The Parties will use their respective commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable (i) for Seller to release the full extent
of its firm gas transportation capacity rights under the Firm Transportation
Agreement to Buyer pursuant to a pre-arranged capacity release under the General
Terms and Conditions of EPNG’s FERC Gas Tariff for an initial period of
thirty-one (31) days beginning on the Closing Date whereby Buyer is designated
as the “Pre-Arranged Shipper,” as such term is defined in EPNG’s FERC Gas Tariff
(the “Short-Term Pre-Arranged Capacity Release”), and (ii) to secure the
agreement of EPNG, pursuant to Section 4.20(a) or Section 9.10(c) of the General
Terms and Conditions of EPNG’s FERC Gas Tariff, that Seller shall be relieved,
as of the effective date of Pre-Arranged Capacity Release, of any further
liability for payment of charges applicable to the capacity released under the
Firm Transportation Agreement. The terms of the Short-Term Pre-Arranged Capacity
Release will be the same as those terms contained in the Firm Transportation
Agreement, as applicable, so as to effectuate the release of the full extent of
the capacity rights held by Seller under the Firm Transportation Agreement for
such period and to permit the transfer of such capacity to Buyer. Seller shall
not conduct an open season or seek any bids from other potential shippers with
respect to the Short-Term Pre-Arranged Capacity Release. No later than one day
before the Closing Date, Seller shall deliver notice of the Short-Term
Pre-Arranged Capacity Release to EPNG’s Electronic Bulletin Board or EBB (as
such terms are defined in EPNG’s FERC Gas Tariff).

(b) During the term of the Short-Term Pre-Arranged Capacity Release, the Parties
will use their respective commercially reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable for Seller to release the full extent of its firm gas
transportation capacity rights under the Firm Transportation Agreement to Buyer
on a permanent basis pursuant to a pre-arranged capacity release under the
General Terms and Conditions of EPNG’s FERC Gas Tariff whereby Buyer is the
“Permanent Pre-Arranged Shipper,” as such term is defined in EPNG’s FERC Gas
Tariff (the “Pre-Arranged Capacity Release”). The terms of the Permanent
Pre-Arranged Capacity Release will be the same as those terms contained in the
Firm Transportation Agreement, as applicable, so as to effectuate the release of
all capacity rights held by Seller under the Firm Transportation Agreement and
to permit the transfer of such capacity to Buyer. Seller shall not seek bids to
compete with the non-rate provisions of Buyer’s pre-arranged bid and shall
conduct the shortest possible open season permitted under the General Terms and
Conditions of EPNG’s FERC Gas Tariff. Neither Seller nor any of its Affiliates
shall enter any bids into such open season. Seller shall deliver notice of the
Permanent Pre-Arranged Capacity Release to EPNG’s Electronic Bulletin Board or
EBB (as such terms are defined in EPNG’s FERC Gas Tariff) as soon as practicable
(and in any event within five (5) Business Days following the Closing Date) and
shall conduct the open season process for the Pre-Arranged Capacity Release as
soon as practicable thereafter, consistent with the General Terms and Conditions
of EPNG’s FERC Gas Tariff.

 

47

--------------------------------------------------------------------------------

(c) Buyer shall indemnify, defend and hold harmless Seller and its Affiliates
from and against any and all damages, losses or liabilities arising out of
(i) Seller’s agreement to structure its release of its firm gas transportation
capacity rights under the Firm Transportation Agreement to Buyer as a
Pre-Arranged Capacity Release subject to all of the terms and conditions of
Section 9 of the General Terms and Conditions of EPNG’s FERC Gas Tariff and
(ii) EPNG’s refusal to agree, as contemplated by Section 5.22(a)(ii), that
Seller shall be relieved of any further liability for payment of charges
applicable to the capacity released under the Firm Transportation Agreement.

ARTICLE 6

CONDITIONS TO CLOSING

SECTION 6.01 Conditions to Each Party’s Obligations. The obligation of each
Party to consummate the Closing is subject to the satisfaction (or waiver by
such Party) on or prior to the Closing of each of the following conditions:

(a) All of the Required Consents from Governmental Entities set forth on
Section 6.01(a) of the Buyer Disclosure Letter shall have been made, given or
obtained and shall be in full force and effect.

(b) No Order of any Governmental Entity or other Law preventing the transactions
contemplated hereby shall be in effect; provided, that the Party asserting this
condition shall have complied in all material respects with its obligations
under Section 5.08.

SECTION 6.02 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the Closing is subject to the satisfaction (or waiver by Buyer) on or
prior to the Closing Date of each of the following additional conditions:

(a) Seller shall have performed and satisfied in all material respects each of
its agreements and obligations set forth in this Agreement required to be
performed and satisfied by it at or prior to the Closing.

(b) Representations and Warranties of Seller.

(i) The representations and warranties of Seller contained in Article 3 (other
than the representations set forth in (A) Section 3.01 (Organization and
Existence), Section 3.02 (Authorization) and Section 3.06 (Brokers) (the “Seller
Specified Representations”), and (B) Section 3.07(b)(ii) (No Material Adverse
Effect)) shall be true and correct as of the Closing Date as though made on the
Closing Date (without regard to any express qualifier therein as to materiality
or Material Adverse Effect) except to the extent such representations and
warranties expressly relate to an earlier date (in which case they shall be true
and correct as of such earlier date) and except for such breaches that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;

 

48

--------------------------------------------------------------------------------

(ii) the Seller Specified Representations shall be true and correct as of the
Closing Date as though made on the Closing Date (without regard to any express
qualifier therein as to materiality or Material Adverse Effect), except to the
extent such representations and warranties expressly relate to an earlier date
(in which case they shall be true and correct as of such earlier date) and
except for such breaches that, in the aggregate, are not material; and

(iii) the representations and warranties of Seller set forth in
Section 3.07(b)(ii) (No Material Adverse Effect) shall be true and correct in
all respects as of the Closing Date as though made on the Closing Date.

(c) Seller shall have delivered to Buyer a certificate, dated as of the Closing
Date, executed on behalf of Seller by an authorized representative thereof,
certifying that the conditions specified in Section 6.02(a) and Section 6.02(b)
hereto have been fulfilled.

(d) Since the date hereof, there shall not have been or occurred a Material
Adverse Effect.

(e) The Consents listed in Section 6.02(e) of the Buyer Disclosure Letter shall
have been obtained.

(f) On or prior to the Closing, Seller shall have delivered or caused to be
delivered to Buyer a certificate executed by the secretary or an assistant
secretary of Seller, as applicable, dated as of the Closing Date, certifying
(i) the effectiveness of the resolutions of Seller’s general partner approving
execution and delivery of this Agreement and the documents and instruments
delivered hereunder and the transactions contemplated hereby and thereby and
(ii) the incumbency and signatures of each officers of Seller (or its general
partner) executing any such document or instrument.

(g) The Consents listed in Section 6.02(g) of the Buyer Disclosure Letter shall
have been obtained; provided, however, that (i) if at any time from and after
the date that is forty-five (45) days following the date of this Agreement,
Seller delivers to Buyer a copy of the License Agreement duly executed by
Seller, such Consents shall be deemed obtained for purposes of determining
whether the condition in this Section 6.02(g) has been satisfied, and (ii) if,
at any time after the date of this Agreement, Buyer delivers to Seller written
notice agreeing to waive the condition in this Section 6.02(g), Seller shall
promptly (but in no event later than two (2) Business Days after such notice)
deliver to Buyer a copy of the License Agreement duly executed by Seller and
such Consents shall be deemed obtained for purposes of determining whether the
condition in this Section 6.02(g) has been satisfied.

(h) Seller shall have delivered to Buyer the agreements, documents and
instruments required to be delivered by it pursuant to Section 2.09(a).

 

49

--------------------------------------------------------------------------------

SECTION 6.03 Conditions to Obligation of Seller. The obligation of Seller to
consummate the Closing is subject to the satisfaction (or waiver by Seller) on
or prior to the Closing Date of each of the following additional conditions:

(a) Buyer shall have performed and satisfied in all material respects each of
its agreements, and obligations set forth in this Agreement required to be
performed and satisfied by it at or prior to the Closing, including the receipt
by Seller of all amounts required to be paid by Buyer at the Closing under
Section 2.07.

(b) Representations and Warranties of Buyer.

(i) The representations and warranties of Buyer (other than the representations
set forth in Section 4.01 (Organization and Existence), Section 4.02
(Authorization) and Section 4.06 (Brokers) (the “Buyer Specified
Representations”)) contained in this Agreement shall be true and correct as of
the Closing Date as though made on the Closing Date (without regard to any
express qualifier therein as to materiality), except to the extent such
representations and warranties expressly relate to an earlier date (in which
case they shall be true and correct as of such earlier date) and except for such
breaches that would not reasonably be expected to result in a material adverse
effect on Buyer’s ability to perform its obligations hereunder or to consummate
the transactions contemplated hereby.

(ii) The Buyer Specified Representations shall be true and correct in all
respects as of the Closing Date as though made on the Closing Date (without
regard to any express qualifier therein as to materiality), except to the extent
such representations and warranties expressly relate to an earlier date (in
which case they shall be true and correct as of such earlier date) and except
for such breaches that, in the aggregate, are not material.

(c) Buyer shall have delivered to Seller a certificate, dated as of the Closing
Date, executed on behalf of Buyer by an authorized executive officer thereof,
certifying that the conditions specified in Section 6.03(a) and Section 6.03(b)
hereto have been fulfilled.

(d) Buyer shall have delivered to Seller the payments and the agreements,
documents and instruments required to be delivered by it pursuant to
Section 2.09(b).

SECTION 6.04 Frustration of Closing Conditions. Neither Buyer nor Seller may
rely on the failure of any condition set forth in this Article 6 to be satisfied
if such failure was caused by such Party’s failure to act in good faith or to
use its commercially reasonable efforts to cause the Closing to occur, as
required by Section 5.08.

 

50

--------------------------------------------------------------------------------

ARTICLE 7

SURVIVAL AND RELEASE

SECTION 7.01 Survival of Certain Representations and Warranties. The
representations, warranties, covenants and agreements of the Parties contained
in this Agreement (other than covenants and agreements which by their terms are
to be performed after Closing, which shall survive until the date that is ninety
(90) days after the last date that a Party is required to take any action or
refrain from taking any action in accordance therewith, it being understood that
the covenants set forth in Section 5.04 (Confidentiality; Publicity),
Section 5.06 (Expenses) and Section 5.09 (Post-Closing Cooperation) shall
survive indefinitely and the covenants set forth in Section 5.05 (Post-Closing
Books and Records; Financial Statements), Section 5.07 (Employee Matters),
Section 5.13 (Non-Solicitation) and Section 5.15 (Transition Services) shall
survive for the time period set forth therein, plus ninety (90) days), shall
survive for a period of nine (9) months after the Closing Date and there shall
be no liabilities or obligations with respect thereto from and after such date;
provided, that (a) the Seller Specified Representations shall survive for a
period of six (6) years after the Closing Date and (b) the representations and
warranties set forth in Section 3.14 shall survive for a period of ninety
(90) days following the expiration of the applicable statute of limitations;
provided, further, that any claim made or asserted by a Person (including
pursuant to Section 8.01(a)) within the applicable survival period shall
continue to survive with respect to such claim until such claim is finally
resolved and all obligations with respect thereto are fully satisfied.

SECTION 7.02 “As Is” Sale; Release.

(a) EXCEPT FOR THOSE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE
3, EXCEPT FOR THOSE ITEMS FOR WHICH BUYER IS EXPRESSLY INDEMNIFIED PURSUANT TO
SECTION 8.01(a), (I) THE FACILITY, THE ACQUIRED ASSETS AND ASSUMED LIABILITIES
ARE BEING SOLD, TRANSFERRED, ASSIGNED, CONVEYED AND ASSUMED “AS IS, WHERE IS,
WITH ALL FAULTS,” AND (II) BUYER ACKNOWLEDGES THAT IT HAS NOT RELIED ON, AND
SELLER EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR
NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE
FACILITY, ACQUIRED ASSETS AND ASSUMED LIABILITIES OR THE PROSPECTS (FINANCIAL OR
OTHERWISE), RISKS AND OTHER INCIDENTS OF SELLER, THE FACILITY, THE ACQUIRED
ASSETS AND ASSUMED LIABILITIES.

(b) Except for the obligations of Seller or any of its Affiliates under this
Agreement, the License Agreement and for Fraud, for and in consideration of the
Acquired Assets, effective as of the Closing, Buyer, on behalf of itself and its
Affiliates, successors, assigns, heirs, executors, legatees, administrators,
beneficiaries, representatives and agents (the “Buyer Releasing Parties”)
absolutely and unconditionally fully, finally and irrevocably releases, acquits
and forever discharges Seller and its Affiliates, each of their present and
former officers, directors, managers, and employees and each of their respective
heirs, executors, administrators, successors and assigns (collectively, the
“Seller Released Parties”), from any and all costs, expenses, damages, debts, or
any other obligations, Liabilities and Claims whatsoever, including Potential
Claims, whether known or unknown, both in law and in equity, in each case to the
extent arising out of or resulting from (i) the ownership or operation of the
Facility (including the use of any Seller Marks), the Acquired Assets or the
Assumed Liabilities, to the extent arising prior to the Closing or (ii) the use
of the Seller Marks by any Buyer Releasing Party from and after the Closing (all
of the foregoing, collectively, the “Seller Released Matters”). The provisions
of Section 5.14(b) through Section 5.14(g) shall apply mutatis mutandis to the
release of the Seller Released Matters in the immediately preceding sentence.

 

51

--------------------------------------------------------------------------------

SECTION 7.03 Certain Limitations. Notwithstanding anything in this Agreement to
the contrary:

(a) other than Seller Guarantor to the extent provided for in Section 10.15 or
Koch Ag to the extent provided in Section 5.13, no Representative, Affiliate of,
or direct or indirect equity owner in, Seller shall have any personal liability
to Buyer or any other Person as a result of the breach of any representation,
warranty, covenant, agreement or obligation of Seller in this Agreement, and
other than Buyer Guarantor to the extent provided for in Section 10.14, no
Representative, Affiliate of, or direct or indirect equity owner in, Buyer shall
have any personal liability to Seller or any other Person as a result of the
breach of any representation, warranty, covenant, agreement or obligation of
Buyer in this Agreement; and

(b) except to the extent specifically contemplated by Section 5.13, no Party
shall be liable under this Agreement, except in the case of Fraud, for
(i) punitive or exemplary damages or losses calculated by reference to any
multiple of (A) earnings or earnings before interest, tax, depreciation or
amortization or (B) other financial metric or (ii) special, consequential or
indirect damages or lost profits that are not the reasonably foreseeable result
of a breach of this Agreement, in each case, whether based on contract, tort,
strict liability, other Law or otherwise and whether or not arising from the
other Party’s sole, joint or concurrent negligence, strict liability or other
fault for any matter relating to this Agreement and the transactions
contemplated hereby; provided, however, that the foregoing shall not apply to
third-party claims for which any Party is obligated to indemnify another Person
hereunder.

ARTICLE 8

INDEMNIFICATION

SECTION 8.01 Indemnification by Seller.

(a) From and after the Closing, subject to the other provisions of this
Article 8, Seller agrees to indemnify Buyer and its officers, directors,
employees, agents, attorneys, representatives, assigns and Affiliates
(collectively, the “Indemnified Buyer Entities”) and to hold each of them
harmless from and against, any and all Indemnifiable Losses suffered, paid or
incurred by such Indemnified Buyer Entity and caused by any (i) breach of,
inaccuracy in, or the failure to be true and correct of any of the
representations and warranties made by Seller in Article 3 or in any certificate
delivered pursuant to this Agreement, (ii) breach of any of the covenants or
agreements of Seller contained in this Agreement, (iii) Taxes with respect to
the Acquired Assets for any Pre-Closing Period (excluding Transfer Taxes imposed
on or with respect to the transactions contemplated by this Agreement), other
than any Taxes to the extent the Indemnified Seller Entities are entitled to
indemnification from Buyer for such Taxes pursuant to Section 8.02(a)(ii) or
(iv) Retained Liabilities (excluding Indemnifiable Losses that are the subject
of Section 8.01(a)(iii)).

 

52

--------------------------------------------------------------------------------

(b) Notwithstanding anything to the contrary contained in this Section 8.01, the
Indemnified Buyer Entities shall be entitled to indemnification:

(i) with respect to any claim for indemnification pursuant to
Section 8.01(a)(i), only if the aggregate Indemnifiable Losses to all
Indemnified Buyer Entities with respect to all such claims exceeds $3,500,000
(the “Deductible”) whereupon (subject to the provisions of clauses (ii) and
(iii) below) Seller shall be obligated to pay in full all such amounts but only
to the extent such aggregate Indemnifiable Losses are in excess of the amount of
the Deductible; provided, that the Deductible shall not apply to any
indemnification obligation of Seller related to any breach of any of the Seller
Specified Representations;

(ii) with respect to any claim for indemnification pursuant to
Section 8.01(a)(i) and Section 8.01(a)(ii), only with respect to individual
items and aggregated items arising out of the same facts, events or
circumstances where the Indemnifiable Losses relating thereto are in excess of
$100,000 (provided, that any items less than such threshold, other than
aggregated items arising out of the same facts, events or circumstances, shall
not be aggregated for the purposes of the immediately preceding clause (i));
provided, that the foregoing shall not apply to any indemnification obligation
related to (x) any breach of any of the Seller Specified Representations; and

(iii) only if such claims are made on or before the expiration of the survival
period pursuant to Section 7.01 for the applicable representation, warranty,
covenant or agreement.

(c) Notwithstanding anything to the contrary contained in this Agreement, in no
event shall the Indemnified Buyer Entities be entitled to aggregate
Indemnifiable Losses (i) with respect to all claims for indemnification pursuant
to Section 8.01(a)(i) (other than any indemnification obligation related to the
Seller Specified Representations) and Section 8.01(a)(ii) in excess of
$35,000,000 (the “Cap”), or (ii) with respect to claims for indemnification
pursuant to Section 8.01(a)(i) (only with respect to the Seller Specified
Representations) and claims for indemnification pursuant to Section 8.01(a)(iii)
(when aggregated with all other Indemnifiable Losses of the Indemnified Buyer
Entities) in excess of the Base Purchase Price.

(d) This Section 8.01 is subject to the limitations set forth in
Section 7.03(b).

SECTION 8.02 Indemnification by Buyer.

(a) From and after the Closing Date, subject to the other provisions of this
Article 8, Buyer agrees to indemnify Seller and its officers, directors,
employees, agents, attorneys, representatives, assigns and Affiliates
(collectively, the “Indemnified Seller Entities”) and to hold each of them
harmless from and against, any and all Indemnifiable Losses suffered, paid or
incurred by any such Indemnified Seller Entity and caused by any (i) breach of,
inaccuracy in, or the failure to be true and correct of any of the
representations and warranties made by Buyer in Article 4, (ii) breach of any of
the covenants or agreements of Buyer contained in this Agreement or
(iii) Assumed Liability.

(b) Notwithstanding anything to the contrary contained in this Agreement (other
than any indemnification obligation related to the Assumed Liabilities), in no
event shall the Indemnified Seller Entities be entitled to aggregate
Indemnifiable Losses in excess of the Cap.

 

53

--------------------------------------------------------------------------------

(c) This Section 8.02 is subject to the limitations set forth in
Section 7.03(b).

SECTION 8.03 Indemnification Procedures.

(a) If an Indemnified Buyer Entity or an Indemnified Seller Entity (each, an
“Indemnified Entity”) believes that a claim, demand or other circumstance exists
that has given or may reasonably be expected to give rise to a right of
indemnification under this Article 8 (whether or not the amount of Indemnifiable
Losses relating thereto is then quantifiable), such Indemnified Entity shall
assert its claim for indemnification by giving written notice thereof (a “Claim
Notice”) to the party from which indemnification is sought (the “Indemnifying
Entity”) (i) if the event or occurrence giving rise to such claim for
indemnification is, or relates to, a claim, suit, action or proceeding brought
by a Person not a Party or affiliated with any such Party (a “Third Party”),
within twenty (20) Business Days following receipt of notice of such claim,
suit, action or proceeding by such Indemnified Entity, or (ii) if the event or
occurrence giving rise to such claim for indemnification is not, or does not
relate to, a claim, suit, action or proceeding brought by a Third Party, as
promptly as practicable after the discovery by the Indemnified Entity of the
circumstances giving rise to such claim for indemnity; provided, that in each
case in clauses (i) and (ii), that the failure to notify or delay in notifying
the Indemnifying Entity, as the case may be, will not relieve the Indemnifying
Entity of its obligations pursuant to this Article 8, except to the extent that
such Indemnifying Entity is materially prejudiced as a result thereof. Each
Claim Notice shall describe the claim and the basis of such claim in reasonable
detail.

(b) Upon receipt by an Indemnifying Entity of a Claim Notice in respect of an
action or claim described in Section 8.03(a)(i), the Indemnifying Entity shall
be entitled to: (i) assume and have sole control over the defense of such action
or claim at its sole cost and expense (subject to the last sentence of this
Section 8.03(b)) and with its own counsel if it gives written notice to the
Indemnified Entity of its intention to do so and acknowledges its unqualified
obligation to indemnify the Indemnified Entity as provided hereunder within
thirty (30) days of the receipt of such notice from the Indemnified Entity (or
sooner, if the nature of the Third Party Claim so requires); provided, that the
Indemnifying Entity’s retention of counsel shall be subject to the prior written
consent of the Indemnified Entity if such counsel creates a conflict of interest
under applicable standards of professional conduct and provided, further that
the Indemnifying Entity shall not be entitled to assume and have control over
such defense if such action or claim arises in connection with a criminal
proceeding (provided, that the Indemnifying Entity shall be entitled to
participate in such defense, with counsel reasonably acceptable to the
Indemnified Entity, at such Indemnifying Entity’s sole cost and expense); and
(ii) negotiate a settlement or compromise of such action or claim; provided,
that (A) such settlement or compromise shall include a full and unconditional
waiver and release by the Third Party of all Indemnified Entities (without any
cost or liability of any nature whatsoever to such Indemnified Entities) and
(B) any such settlement or compromise shall be permitted hereunder only with the
prior written consent of the Indemnified Entity, which consent shall not be
unreasonably withheld, conditioned or delayed. If, within thirty (30) days
following receipt from an Indemnified Entity of any Claim Notice with respect to
a Third Party action or claim (or sooner, if the nature of the Third Party Claim
so requires), the Indemnifying Entity (i) advises such Indemnified Entity in
writing that the Indemnifying Entity shall not elect to defend, settle or
compromise such action or claim, (ii) is not entitled to assume and control the
defense of such action or claims, or (iii) fails to make

 

54

--------------------------------------------------------------------------------

such an election in writing, then such Indemnified Entity may, at its option,
defend, settle or otherwise compromise or pay such action or claim; provided,
that any such settlement or compromise shall be permitted hereunder only with
the written consent of the Indemnifying Entity, which consent shall not be
unreasonably withheld, conditioned or delayed. Unless and until the Indemnifying
Entity makes an election in accordance with this Section 8.03(b) to defend,
settle or compromise such action or claim, all of the Indemnified Entity’s
reasonable costs and expenses arising out of the defense, settlement or
compromise of any such action or claim shall be Indemnifiable Losses subject to
indemnification hereunder to the extent provided herein. Each Indemnified Entity
shall make available to the Indemnifying Entity all information reasonably
available to such Indemnified Entity relating to such action or claim, except as
may be prohibited by applicable Law or necessary to protect any privilege. In
addition, the Parties shall render to each other such assistance as may
reasonably be requested in order to ensure the proper and adequate defense of
any such action or claim. The Party in charge of the defense shall keep the
other Parties fully and timely apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. If the Indemnifying
Entity elects to defend any such action or claim, then the Indemnified Entity
shall be entitled to participate in such defense (which participation rights
shall include the right to attend any meetings with a Third Party or hearings or
proceedings before any Governmental Entity to the extent they relate to such
claim and to receive promptly copies of all pleadings, notices and
communications related to such claim) with counsel reasonably acceptable to the
Indemnifying Entity, at such Indemnified Entity’s sole cost and expense except
if (i) a conflict of interest in relation to such action or claim exists between
the Indemnifying Entity and the Indemnified Entity in the reasonable judgment of
the Indemnified Entity or (ii) such action or claims seeks an injunction or
equitable relief against the Indemnified Entity. The Indemnifying Entity must
conduct its defense of any Third Party Claim described herein reasonably
actively and diligently in order to preserve its rights in this Section 8.03(b).
Notwithstanding anything to the contrary, Section 5.03(b) and not this
Section 8.03(b) shall govern the conduct of any Tax Contest.

SECTION 8.04 Indemnification Generally.

(a) The amount which the Indemnifying Entity is or may be required to pay to any
Indemnified Entity pursuant to this Article 8 shall be reduced (retroactively,
if necessary) by any insurance proceeds or other amounts actually recovered by
or on behalf of such Indemnified Entity related to the related Indemnifiable
Losses (net of any costs and expenses incurred in pursuing such claim (including
increases in insurance premiums as a result of such claims)). If an Indemnified
Entity shall have received the payment required by this Agreement from the
Indemnifying Entity in respect of Indemnifiable Losses (including any Purchase
Price adjustment with respect to the circumstances giving rise to such payment
under this Article 8) and shall subsequently receive insurance proceeds or other
amounts in respect of such Indemnifiable Losses, then such Indemnified Entity
shall promptly repay to the Indemnifying Entity a sum equal to the amount of
such insurance proceeds or other amounts actually received (net of any costs and
expenses incurred in pursuing such claim (including increases in insurance
premiums as a result of such claims)).

(b) In addition to the requirements of Section 8.04(a), each Indemnified Entity
shall be obligated in connection with any claim for indemnification under this
Article 8 to use all commercially reasonable efforts to mitigate Indemnifiable
Losses upon and after becoming aware of any event which would reasonably be
expected to give rise to such Indemnifiable Losses.

 

55

--------------------------------------------------------------------------------

(c) Except for the rights and remedies set forth in Section 2.10 (Post-Closing
Adjustment), Section 2.11 (Earnout), Section 5.13 (Non-Solicitation;
Confidentiality) and Section 10.07 (Specific Performance) and claims of, or
causes of action arising from Fraud: (i) the indemnification provided in this
Article 8 shall be the exclusive post-Closing remedy available to any Party with
respect to any breach of any representation, warranty, covenant or agreement in
this Agreement; and (ii) in furtherance of the foregoing, each of the Parties
and its Affiliates hereby waives, from and after the Closing, any and all
rights, claims and causes of action it may have against the other Party arising
under or based upon this Agreement or any certificate delivered in connection
herewith (except with respect to the rights and remedies set forth in this
Article 8).

(d) To the extent permitted by Law, any indemnity payment under this Agreement
shall be treated as an adjustment to the Purchase Price for Tax purposes.

(e) For purposes of determining the amount of any Indemnifiable Loss hereunder
(but not for the purpose of determining whether any breach has occurred or
whether any representation or warranty is inaccurate or is not true and
correct), the representations, warranties, covenants and agreements of the
Parties set forth in this Agreement or in any other document or instrument
delivered hereunder will be considered without regard to any materiality or
Material Adverse Effect qualification set forth therein.

(f) Neither Party will have any indemnification obligations relating to, and
none of the Indemnified Buyer Entities or the Indemnified Seller Entities will
be entitled to indemnification pursuant to this Article 8 for, any Indemnifiable
Losses to the extent that such Indemnifiable Losses were included, or should
have been included, in the calculation of the Closing Date Net Working Capital
Amount or the Closing Date Net Indebtedness Amount.

SECTION 8.05 Setoff Permitted. Notwithstanding anything to the contrary in this
Agreement, and without prejudice to any other right or remedy it has or may
have, Buyer may set off or recoup the amount of Indemnifiable Losses Seller or
any of its Affiliates is required to pay to Buyer or any of its Affiliates
pursuant to this Article 8 against any Liability of Buyer to Seller under
Section 2.11 (Earnout); provided, however, that (a) in no event shall Buyer have
any rights of set off under this Section 8.05 unless a final determination of
the amount of Indemnifiable Losses has been made and (b) any such setoff shall
be subject to the limitations and other provisions of this Article 8. A “final
determination” will exist when (i) the parties to the dispute have reached an
agreement in writing, or (ii) a Governmental Entity of competent jurisdiction
will have entered a final Order or rendered a final determination with respect
to disputes the parties have agreed to submit thereto.

 

56

--------------------------------------------------------------------------------

ARTICLE 9

TERMINATION

SECTION 9.01 Termination. This Agreement may be terminated:

(a) at any time prior to the Closing Date by mutual written agreement of Buyer
and Seller;

(b) by either Buyer or Seller if the Closing shall not have occurred on or prior
to the date that is the six (6) month anniversary of the date hereof (the
“Outside Date”); provided, that (i) so long as Buyer and/or any of its
Affiliates have not entered into a Subsequent Transaction, neither Seller nor
Buyer shall terminate this Agreement pursuant to this Section 9.01(b) until the
date that is the twelve (12) month anniversary of the date hereof if at the
Outside Date all of the conditions to Closing have been satisfied (or are
capable of being satisfied) other than the condition set forth in
Section 6.01(a) with respect to the expiration or termination of the waiting
period under the HSR Act and (ii) if Buyer and/or any of its Affiliates has
entered into a Subsequent Transaction, Buyer shall not terminate this Agreement
pursuant to this Section 9.01(b) until the date that is the twelve (12) month
anniversary of the date hereof if at the Outside Date all of the conditions to
Closing have been satisfied (or are capable of being satisfied) other than the
condition set forth in Section 6.01(a) with respect to the expiration or
termination of the waiting period under the HSR Act or the condition set forth
in Section 6.01(b) with respect to any Order by the PUCT or otherwise related to
the PUCT or PURA; and provided, further, that the right to terminate this
Agreement under this Section 9.01(b) shall not be available to any Party whose
failure to fulfill any obligation under this Agreement has been, directly or
indirectly, the cause of, or resulted in, the failure of the Closing to occur on
or before the Outside Date (as the same may be extended pursuant to clauses
(i) or (ii));

(c) by either Buyer or Seller by giving written notice to the other Party if any
Governmental Entity shall have issued an Order or taken any other action
permanently restraining, enjoining or otherwise prohibiting the consummation of
any of the transactions contemplated by this Agreement, and such order, decree
or ruling or other action shall not be subject to appeal or shall have become
final and non-appealable;

(d) by either Buyer or Seller by giving written notice to the other Party if
there has been a breach by such other Party of any representation, warranty or
covenant contained in this Agreement and, assuming Closing were to occur on the
day on which such written notice is provided pursuant to this Section 9.01(d),
such breach would result in the failure to satisfy one or more of the conditions
to Closing of the Party sending such notice (set forth in Section 6.02 or
Section 6.03, as applicable) and such breach is incapable of being cured or, if
of a character that is capable of being cured, is not cured by the breaching
Party within the earlier of (i) thirty (30) days of its receipt of such written
notice from the other Party or (ii) the number of days remaining prior to the
Outside Date; or

(e) by either Buyer or Seller pursuant to Section 5.10(d) by giving written
notice to the other Party.

SECTION 9.02 Effect of Termination.

(a) If this Agreement is terminated as permitted by Section 9.01(a) through (e),
such termination shall be without liability of any Party to the other Parties
for any breach of any representations, warranties, covenants or other agreements
under this Agreement prior to such termination, except to the extent set forth
in Section 9.02(c).

 

57

--------------------------------------------------------------------------------

(b) If this Agreement is terminated by either Party pursuant to Section 9.01,
written notice thereof shall forthwith be given to the other Party and the
transactions contemplated by this Agreement shall be terminated, without further
action by any Party, provided, that Buyer, at its option, shall either
(i) return all documents and other material received from Seller, its Affiliates
or their advisors or representatives relating to the Facility, the Acquired
Assets, the Assumed Liabilities and the transactions contemplated by this
Agreement, whether so obtained before or after the execution of this Agreement,
to Seller, or (ii) destroy all copies of the foregoing documents and materials,
and deliver a certificate to Seller confirming such destruction, and, in either
case, shall continue to treat all confidential information received by Buyer and
its Affiliates and their Representatives with respect to the Facility, the
Acquired Assets, the Assumed Liabilities in accordance with the Confidentiality
Agreement, which shall remain in full force and effect notwithstanding the
termination hereof.

(c) If this Agreement is terminated, this Agreement shall become null and void
and of no further force and effect, except for the following provisions which
shall survive such termination: Section 5.04(b) (Publicity); Section 5.06
(Expenses); Section 9.01 (Termination); this Section 9.02 (Effect of
Termination) and Article 10 (Miscellaneous). Nothing in this Section 9.02 shall
be deemed to release any Party from any Liability to the other Party for any
breach by such Party of the covenants and other agreements of this Agreement
occurring prior to such termination or to impair the right of any Party to
compel specific performance by any other Party of its obligations under this
Agreement.

ARTICLE 10

MISCELLANEOUS

SECTION 10.01 Notices. All notices, requests, consents, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been given (a) when delivered by hand (with written confirmation of
receipt), (b) when received by the addressee if sent by a nationally recognized
overnight courier (receipt requested) or (c) when sent, if sent by email (with
written confirmation of receipt). Such communications must be sent to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this
Section 10.01).

 

  (a) If to Buyer or Buyer Guarantor, to:

Vistra Energy

Energy Plaza

1601 Bryan Street, Suite 34-068

Dallas, TX 75201

Attention: Stephanie Zapata Moore

Email: stephanie.moore@vistraenergy.com

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

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Attention: David Kurzweil

Email: david.kurzweil@lw.com

 

58

--------------------------------------------------------------------------------

  (b) if to Seller or Koch Ag, to:

c/o Koch Ag & Energy Solutions, LLC

4111 East 37th Street North

Wichita, Kansas 67220

Attention: President

Email: steve.packebush@kochind.com

with a copy to:

Koch Companies Public Sector, LLC

4111 East 37th Street North

Wichita, Kansas 67220

Attention: Legal Department, Energy Services

Email: matt.ellis@kochps.com

 

  (c) if to Seller Guarantor, to:

Koch Resources, LLC

4111 East 37th Street North

Wichita, Kansas 67220

Attention: Legal Department

Email: scott.flucke@kochps.com

SECTION 10.02 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, to the extent valid or enforceable, such provision and (b) the remainder of
this Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.

SECTION 10.03 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall,
taken together, be considered one and the same agreement. Delivery of an
executed signature page of this Agreement by facsimile or other electronic image
scan transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.

 

59

--------------------------------------------------------------------------------

SECTION 10.04 Amendments and Waivers. This Agreement may not be amended except
by an instrument in writing signed on behalf of Buyer and Seller. Each Party
may, by an instrument in writing signed on behalf of such Party, waive
compliance by any other Party with any term or provision of this Agreement that
such other Party was or is obligated to comply with or perform. No failure or
delay by any Party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. Except as otherwise provided herein, the rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

SECTION 10.05 Entire Agreement; No Third Party Beneficiaries. This Agreement,
together with the Ancillary Agreements and the Confidentiality Agreement
(together with the written agreements, Schedules and certificates referred to
herein or delivered pursuant hereto), constitute the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the Parties with respect to the subject matter hereof. Except as provided in
Section 5.14 or in Article 8, this Agreement is for the sole benefit of the
Parties and their permitted assigns and is not intended to confer upon any other
Person any rights or remedies hereunder.

SECTION 10.06 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic 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.

SECTION 10.07 Specific Performance. The Parties agree that irreparable damage
for which monetary damages, even if available, would not be an adequate remedy,
would occur in the event that the provisions of this Agreement were not
performed in accordance with its specific terms and that any remedy at law for
any breach of the provisions of this Agreement would be inadequate. Accordingly,
the Parties acknowledge and agree that each Party shall be entitled to an
injunction, specific performance or other equitable relief 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 10.08 Jurisdiction; Service of Process; Waiver of Jury Trial.

(a) The Parties agree that the appropriate, exclusive and convenient forum
(“Forum”) for any other disputes between any of the Parties hereto arising out
of or related to this Agreement or the transactions contemplated hereby is the
Court of Chancery in the City of Wilmington, New Castle County, Delaware except
where such court lacks subject matter jurisdiction. In such event, the Forum is
in the federal district court sitting in Wilmington, Delaware or, in the event
such federal district court lacks subject matter jurisdiction, then in the
Superior Court in the City of Wilmington, New Castle County, Delaware. Each of
the Parties hereto irrevocably submits to the jurisdiction of the Forum in
respect of any disputes arising out of or related to this Agreement or the
transactions contemplated hereby. The Parties further agree that the Parties
will not bring suit with respect to any disputes arising out of or related to
this Agreement or the transactions contemplated hereby in any court or
jurisdiction other than the Forum. The preceding sentence will not limit the
rights of the Parties to obtain execution of a

 

60

--------------------------------------------------------------------------------

judgment in any other jurisdiction. The Parties further agree, to the extent
permitted by Law, that a final and non-appealable judgment against a Party in
any proceeding contemplated in this Section 10.08 will be conclusive and may be
enforced in any other jurisdiction within or outside the United States by suit
on the judgment, a certified or exemplified copy of which will be conclusive
evidence of the fact and amount of such judgment.

(b) To the extent that any Party has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, each such Party hereby
irrevocably (i) waives such immunity in respect of its obligations with respect
to this Agreement and (ii) submits to the personal jurisdiction of the Forum.
Each of the Parties hereby consents to process being served by any Party in any
suit, action or proceeding by the delivery of a copy thereof in accordance with
the provisions of Section 10.01.

(c) EACH PARTY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING BETWEEN OR AMONG ANY OF THE PARTIES ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 10.09 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder shall be assigned by any of the Parties hereto without the
prior written consent of Seller, in the case of Buyer, and Buyer, in the case of
Seller; provided, that, (a) without such prior written consent, Seller may
assign this Agreement and any or all rights or obligations hereunder (including
Seller’s right to seek indemnification hereunder) to any Affiliate or Affiliates
of Seller so long as Seller and Seller Guarantor (subject to Section 10.15)
retain ultimate liability for all obligations of Seller pursuant to this
Agreement and (b) without such prior written consent, Buyer may assign this
Agreement and any or all rights or obligations hereunder (including Buyer’s
right to seek indemnification hereunder) to any Affiliate or Affiliates of Buyer
so long as Buyer and Buyer Guarantor (subject to Section 10.14) retain ultimate
liability for all obligations of Buyer pursuant to this Agreement. Upon any such
permitted assignment, the references in this Agreement to such Party shall also
apply to any such assignee unless the context otherwise requires. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the Parties and their respective successors and permitted
assigns. Any attempted assignment in violation of the terms of this
Section 10.09 shall be null and void, ab initio.

SECTION 10.10 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

SECTION 10.11 Schedules and Exhibits. Except as otherwise provided in this
Agreement, all Exhibits and Schedules referred to herein are intended to be and
hereby are made a part of this Agreement. Any disclosure in the Seller
Disclosure Letter or Buyer Disclosure Letter corresponding to and qualifying a
specific numbered paragraph or section hereof shall be deemed to correspond to
and qualify such numbered paragraph or section and any other numbered paragraph
or section with respect to which applicability of such disclosure is readily

 

61

--------------------------------------------------------------------------------

apparent on its face. Certain information set forth in the Schedules is included
solely for informational purposes, is not an admission of liability with respect
to the matters covered by the information, and may not be required to be
disclosed pursuant to this Agreement. The specification of any dollar amount in
the representations and warranties contained in this Agreement or the inclusion
of any specific item in the Schedules is not intended to imply that such amounts
(or higher or lower amounts) are or are not material.

SECTION 10.12 Bulk Sales Laws. Each Party hereby waives compliance by the
Parties with the provisions of the “bulk sales,” “bulk transfer” and similar
Laws set forth in Article 6 of the Uniform Commercial Code as it is in effect in
the states where the Acquired Assets are located and all other similar Laws of
any Governmental Entity other than bulk-transfer tax notice provisions.

SECTION 10.13 Conflict of Interest; Privilege.

(a) Conflict of Interest. If Seller so desires, and without the need for any
consent or waiver by Buyer, Jones Day is permitted to represent Seller or any of
its Affiliates after the Closing in connection with any matter, including any
matter related to the transactions contemplated by this Agreement or any
disagreement or dispute relating thereto.

(b) With respect to any attorney-client and work product privileges belonging to
a Party with respect to the Facility, the Acquired Assets or the Assumed
Liabilities (collectively, “Privileges”) for matters relating to the business
records, documents, communications or other information (collectively,
“Information”) of Seller or any of its Affiliates, including the Excluded Assets
and Retained Liabilities, to the extent prepared in connection with this
Agreement, the Confidentiality Agreement, or the transactions contemplated
hereby or thereby (“Acquisition Information”), Seller will have sole authority
to determine whether to assert or waive any Privileges, including the right to
assert any Privilege against Buyer and its Affiliates. Buyer and its Affiliates
will take no action without the prior written consent of Seller that would
reasonably be expected to result in any waiver of any such Privileges of Seller
relating to the Acquisition Information. After the Closing, Buyer will have sole
authority to determine whether to assert or waive any Privileges with respect to
Information relating to the Facility, the Acquired Assets and the Assumed
Liabilities other than the Acquisition Information, and Seller and its
Affiliates will take no action after the Closing without the prior written
consent of Buyer that would reasonably be expected to result in any waiver of
any such Privileges of Buyer. Notwithstanding the foregoing, Buyer will not
assert any Privileges related to (i) pre-Closing Information, advice or
communications relating to the Facility, the Acquired Assets or the Assumed
Liabilities against Seller or its Affiliates or (ii) Privileged Information to
the extent relating to the Excluded Assets or Retained Liabilities.

(c) The rights and obligations created by Section 10.13(b) and this
Section 10.13(c) will apply to all Information as to which Seller or any of its
Affiliates would be entitled to assert or has asserted a Privilege (the
“Privileged Information”). Upon receipt by Seller or its Affiliates, or Buyer or
its Affiliates, of, or any such Person becomes aware that a current or former
employee of such Person has received, any subpoena, discovery or other request
from any Person that actually or arguably calls for the production or disclosure
of Privileged Information of one or more of the other Parties, Buyer or Seller,
as the case may be, will promptly notify the

 

62

--------------------------------------------------------------------------------

other Party of the existence of the request and will provide such other Party a
reasonable opportunity to review the Privileged Information and to assert any
rights it may have under Section 10.13(b) or otherwise to prevent the production
or disclosure of any such Privileged Information. Seller’s transfer of any
Information to Buyer in accordance with this Agreement and Seller’s agreement to
permit Buyer to obtain Information existing prior to the Closing are made in
reliance on the Parties’ respective agreements to maintain the confidentiality
of such Information in accordance with the Confidentiality Agreement and
Section 5.04 and to take the steps provided herein for the preservation of all
Privileges that may belong to or be asserted by Seller or Buyer, as the case may
be, as set forth in this Section 10.13. The access to Information being granted
pursuant to this Agreement, including Sections 5.01, 5.05 and 5.19, and the
disclosure to Buyer or Seller of Privileged Information relating to the
Facility, the Acquired Assets and the Assumed Liabilities or any of other
business of Seller or its Affiliates pursuant to this Agreement in connection
with the transactions contemplated hereby will not be asserted by Buyer or
Seller to constitute, or otherwise be deemed, a waiver of any Privilege that has
been or may be asserted under Section 10.13(b), this Section 10.13(c) or
otherwise.

SECTION 10.14 Buyer Guaranty.

(a) Buyer Guarantor hereby unconditionally and irrevocably guarantees, as a
principal and not as a surety, to Seller the prompt and full performance and
payment of Buyer’s obligations under this Agreement (the “Buyer Obligations”),
and Seller hereby agrees and acknowledges that Buyer Guarantor is a signatory to
this Agreement solely for such purpose. Seller may seek remedies directly from
Buyer Guarantor with respect to the Buyer Obligations without first exhausting
its remedies against Buyer. The liability of Buyer Guarantor hereunder is, in
all cases, subject to all defenses, setoffs and counterclaims available to Buyer
with respect to performance or payment of the Buyer Obligations. Buyer Guarantor
waives presentment, demand and any other notice with respect to any of the Buyer
Obligations and any defenses that Buyer Guarantor may have with respect to any
of the Buyer Obligations other than as set forth in the immediately preceding
sentence. Notwithstanding anything to the contrary contained herein, the
guarantee set forth in this Section 10.14 shall terminate and be of no further
force or effect upon the earlier to occur of (i) the Closing and
(ii) termination of this Agreement pursuant to Section 9.01, except that the
obligations of Buyer Guarantor shall terminate thirty (30) days following the
termination of this Agreement pursuant to Section 9.01(d) (unless a Claim is
made hereunder prior to the end of such thirty (30) day period, in which case
the obligations pursuant to this Section 10.14 shall terminate upon the
resolution of such Claim).

(b) For purposes of Sections 10.01 through 10.10, Buyer Guarantor shall be
deemed to be a Party.

(c) Notwithstanding anything to the contrary contained herein, Buyer Guarantor’s
aggregate obligations pursuant to this Section 10.14 shall not exceed the
Purchase Price.

 

63

--------------------------------------------------------------------------------

SECTION 10.15 Seller Guaranty.

(a) Seller Guarantor hereby unconditionally and irrevocably guarantees, as a
principal and not as a surety, to Buyer the prompt and full payment of Seller’s
monetary obligations under this Agreement that are required to be paid by Seller
from and after the Closing (the “Seller Obligations”), and Buyer hereby agrees
and acknowledges that Seller Guarantor is a signatory to this Agreement solely
for such purpose. Buyer may seek remedies directly from Seller Guarantor with
respect to the Seller Obligations without first exhausting its remedies against
Seller. The liability of Seller Guarantor hereunder is, in all cases, subject to
all defenses, setoffs and counterclaims available to Seller with respect to
performance or payment of the Seller Obligations and limitations contained in
this Agreement. Seller Guarantor waives presentment, demand and any other notice
with respect to any of the Seller Obligations and any defenses that Seller
Guarantor may have with respect to any of the Seller Obligations other than as
set forth in the immediately preceding sentence. Notwithstanding anything to the
contrary contained herein, the guarantee set forth in this Section 10.15 shall
terminate and be of no further force or effect upon (i) with respect to the
indemnification obligations set forth in (A) Sections 8.01(a)(iii) and
8.01(a)(iv), the date that is thirty (30) days after the fourth
(4th) anniversary of the Closing Date or (B) with respect to a breach of the
covenant set forth in Section 5.13(a) (Non-Solicitation), the date that is
thirty (30) days after the second (2nd) anniversary of the Closing Date,
(ii) with respect to any indemnification obligations arising out of the breach
of any pre-Closing covenant or agreement of the Seller set forth herein, the
date that is nine (9) months after the Closing Date and (iii) with respect to
all representations, warranties and all other obligations of the Seller
hereunder, the earlier of (A) the date on which such representations, warranties
or other obligations of Seller no longer survive in accordance with Section 7.01
and (B) the second (2nd) anniversary of the Closing Date (unless, in each case,
a Claim is made hereunder prior to the end of such survival period, in which
case the obligations pursuant to this Section 10.15 shall terminate upon the
resolution of such Claim).

(b) For purposes of Sections 10.01 through 10.10, Seller Guarantor shall be
deemed to be a Party.

[SIGNATURE PAGES FOLLOW]

 

64

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
by their respective authorized representatives as of the day and year first
above written.

 

SELLER: Odessa-Ector Power Partners, L.P.

By:

  /s/ Kurt Kolbeck   Name: Kurt Kolbeck   Title: President SELLER GUARANTOR:
Koch Resources, LLC

By:

  /s/ Steven Packebush   Name: Steven Packebush   Title: Senior Vice President
Koch Ag & Energy Solutions, LLC

By:

  /s/ Steven Packebush   Name: Steven Packebush   Title: President

[Signature Page to Asset Purchase Agreement]

--------------------------------------------------------------------------------

BUYER: La Frontera Holdings, LLC

By:

  /s/ Sara Graziano   Name: Sara Graziano  

Title: Senior Vice President – Corporate

          Development & Strategy

BUYER GUARANTOR: Vistra Operations Company LLC

By:

  /s/ Sara Graziano   Name: Sara Graziano  

Title: Senior Vice President – Corporate

          Development & Strategy

[Signature Page to Asset Purchase Agreement]

--------------------------------------------------------------------------------

Exhibit A

Defined Terms

As used in the Agreement, the following terms have the following meanings:

“Affected Employee” means (a) each Plant Employee who is discharged by Seller
prior to the Closing at the request of Buyer and (b) each Plant Employee who was
an employee of Seller immediately prior to the Closing, became a Continuing
Employee and is subsequently discharged by Buyer (or one of its Affiliates)
after the Closing.

“Affiliate” with respect to any Person, means any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.

“Air Emission Allowance” means any air emission allowance or air emission
reduction or similar credit required to comply with applicable Environmental,
Health and Safety Laws in relation to the operation of the Facility.

“Ancillary Agreements” means all agreements and instruments executed and
delivered in accordance with this Agreement or in connection with the
consummation of the transactions contemplated by this Agreement, including the
Bill of Sale, the Real Property Deed, the Excluded Easements Deed, the
Assignment and Assumption Agreement and, to the extent executed and delivered by
Buyer and Seller, the License Agreement.

“Anti-Corruption Laws” means any applicable domestic or international Laws
relating to anti-bribery, anti-money laundering or anti-corruption (governmental
or commercial), including Laws that prohibit the corrupt payment, offer,
promise, or authorization of the payment or transfer of anything of value
(including gifts or entertainment), directly or indirectly, to any
representative of a foreign Governmental Authority or commercial entity to
obtain a business advantage, including the U.S. Foreign Corrupt Practices Act.

“Applicable Days” means, for any calendar month, all of the calendar days in
such month, except that (a) the Applicable Days for the calendar month in which
the Closing occurs means all of the calendar days in such calendar month
occurring on and after the Closing Date and (b) the Applicable Days for the
calendar month in which the fifth (5th) anniversary of the Closing occurs means
all of the calendar days in such calendar month occurring prior to (but not on)
the fifth (5th) anniversary of the Closing Date.

“Balance Sheet” means the unaudited balance sheet of Seller prepared in
accordance with GAAP as of April 30, 2017.

“Business Day” means any day other than a Saturday, Sunday or any day banks in
the State of New York are authorized or required to be closed.

“Buyer Disclosure Letter” means the letter attached hereto as Letter A.

“Buyer’s Required Consents” means the consents specified in Section 4.03 of the
Buyer Disclosure Letter.

 

A-1

--------------------------------------------------------------------------------

“Capital Spare and Inventory Amount” means an amount equal to $5,000,000.

“Cash Equivalents” means the sum of restricted and unrestricted cash, cash
equivalents and liquid investments of Seller, plus all deposited but uncleared
bank deposits and cash held by counterparties of Seller, and less all
outstanding checks and cash posted by counterparties of Seller.

“Claim” means any demand, claim, notice of a possible claim, action, legal
proceeding (whether at law or in equity), formal or informal investigation,
formal or informal request for information, charge, notice of violation, notice
of potential violation, complaint, Order, litigation, suit, cause of action,
audit, inspection, assessment, controversy or interference, cancellation,
opposition, re-examination, concurrent use, mediation, administrative
enforcement, arbitration or other hearing or proceeding by, before, or under the
direction or supervision of any court or other Governmental Entity or
arbitrator. In this definition, Governmental Entity includes the staff of the
Governmental Entity and the IMM and its staff.

“Closing Date Net Indebtedness Amount” means the Net Indebtedness Amount as of
12:01 a.m. Wichita time on the Closing Date.

“Closing Date Net Working Capital Amount” means, an amount, which may be
positive or negative, equal to the sum of (a) the Net Working Capital determined
as of 12:01 a.m. Wichita time on the Closing Date, in accordance with
Section 2.10(b) minus (b) the applicable Target Net Working Capital for the
fiscal quarter in which the Closing occurs.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and any comparable state or local Law.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Commodity Hedge” means any agreement with respect to any swap, forward, future,
cap, collar, hedge or derivative transaction or option (including heat rate call
options) or similar agreement involving, or settled by reference to, one or more
commodities (including natural gas or power).

“Contract” means any written or oral contract, lease, license, evidence of
indebtedness, mortgage, indenture, purchase order, note, bond, instrument,
sublease, binding bid, letter of credit, security agreement, commitment,
obligation, undertaking or other agreement, whether express or implied, that is
legally binding.

“control” (including its correlative meanings “controlled by” and “under common
control with”) means possession, directly or indirectly, of the power to direct
or cause the direction of management or policies of a Person (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).

“Controlled Group Liability” means any and all liabilities (a) under Title IV of
ERISA, (b) under Section 302, 303 or 4068(a) of ERISA, (c) under Section 412,
430, 4971 of the Code or (d) for violation of the continuation coverage
requirements of Sections 601 et seq. of ERISA and Section 4980B of the Code or
the group health requirements of Sections 701 et seq. of ERISA and Sections 9801
et seq. of the Code, in the case of each of the foregoing clauses (a) through
(d), with respect to Seller or any ERISA Affiliate.

 

A-2

--------------------------------------------------------------------------------

“Dollars” or “$” means the lawful currency of the United States of America.

“Earnout Amount” means an amount equal to the aggregate amount to be paid by
Buyer to Seller pursuant to Section 2.11.

“EHS Permits” means any permits, certificates, licenses, registrations,
franchises, writs, waivers, variances, exemptions, orders and other
authorizations of all Governmental Entities issued under any Environmental,
Health and Safety Law.

“Environmental, Health and Safety Law” means any applicable present and future
federal, state, tribal or local Law or valid and legally-binding Order, permit
or license of any Governmental Entity relating to (a) the protection,
preservation or restoration of the environment (including air, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource) or (b) the exposure to, or the
possession, presence, use, storage, generation, management, transportation,
emission, release, threatened release, abatement, removal, remediation,
treatment, or disposal of Hazardous Substances, including the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et
seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., the
Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Clean Air
Act, 33 U.S.C. § 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. §
2601 et seq., the Safe Drinking Water Act, 42 U.S.C. § 3001 et seq., the
Emergency Planning and Community Right-To-Know Act, 42 U.S.C. § 1101 et seq.,
the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., the Federal
Pipeline Safety Act, 49 U.S.C. § 60101 et seq., and any so-called “Super Fund”
or “Super Lien” law, including those administered by the Environmental
Protection Agency, the Occupations Safety and Health Administration, the
Pipeline and Hazardous Materials Transportation Administration, and any similar
federal, state, tribal and local Laws concerning the environment, industrial
hygiene, pipeline safety, hazardous materials transportation, chemical security
and anti-terrorism or public health or safety.

“EPNG” means El Paso Natural Gas Company, L.L.C.

“ERCOT” means the Electric Reliability Council of Texas or any successor
thereto, if applicable.

“ERCOT Protocols and Other Binding Documents” mean the documents adopted by
ERCOT, including any attachments or exhibits referenced therein, as amended from
time to time, that contain the scheduling, operating, planning, reliability, and
settlement (including registration) policies, rules, guidelines, procedures,
standards, and criteria of ERCOT. Other Binding Documents include the ERCOT
Market Guides. The version of the ERCOT Protocols or Other Binding Document in
effect at the time of the performance or non-performance of an action shall
govern with respect to that action.

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

 

A-3

--------------------------------------------------------------------------------

“ERISA Affiliate” means any trade or business (whether or not incorporated)
(a) under common control within the meaning of Section 4001(b)(1) of ERISA with
Seller or (b) which together with Seller is treated as a single employer under
Section 414(t) of the Code.

“Estimated Closing Date Payment” means an amount equal to the sum of (a) the
Base Purchase Price, plus (b) the Estimated Net Working Capital Amount, minus
(c) the Estimated Net Indebtedness Amount, and plus (d) the Capital Spare and
Inventory Amount.

“Estimated Net Indebtedness Amount” means Seller’s good faith estimate of the
Closing Date Net Indebtedness Amount, as set forth on the notice delivered by
Seller pursuant to Section 2.07(b).

“Estimated Net Working Capital Amount” means Seller’s good faith estimate of the
Closing Date Net Working Capital Amount, as set forth on the notice delivered by
Seller pursuant to Section 2.07(b).

“FERC” means the Federal Energy Regulatory Commission or any successor thereto.

“Firm Transportation Agreement” means that certain Transportation Service
Agreement (Firm), dated April 1, 2017, between EPNG and Seller.

“Fraud” means any knowing and intentional misrepresentation with such
misrepresentation being made with the intent to defraud, but not including
negligent misrepresentation.

“GAAP” means United States generally accepted accounting principles,
consistently applied.

“Gas Cost” means, for a particular calendar month, (a) (i) (A) (1) the simple
arithmetic mean of the Permian Gas Index for each Applicable Day of such month,
plus (2) $0.025, multiplied by (B) 0.73, plus (ii) (A) (1) the simple arithmetic
mean of the Waha Gas Index for each Applicable Day of such month, plus
(2) $0.075, multiplied by (B) 0.27, multiplied by (b) 7.1. The historical Gas
Cost for the month of May 2017, including the references to the applicable
underlying Indices, is attached hereto as Schedule D and provided for
illustrative purposes only.

“Good Utility Practices” means any of the practices, methods and acts engaged in
or approved by a significant portion of the electric generation industry during
the relevant time period, or any of the practices, methods and acts which, in
the exercise of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired result at
a reasonable cost consistent with good business practices, reliability, safety
and expedition.

“Governmental Entity” means any U.S. or foreign federal, state, provincial or
local governmental authority, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing, including any governmental, quasi-governmental or
non-governmental body administering, regulating, or having general oversight

 

A-4

--------------------------------------------------------------------------------

over gas, electricity, power or other energy-related markets such as FERC, the
North American Electric Reliability Corporation, ERCOT, Texas Reliability
Entity, Inc., Railroad Commission of Texas, or the PUCT. For the avoidance of
doubt and unless otherwise specified, Governmental Entity means an entity acting
in its official capacity and with any required quorum and does not include
members of the staff of such entity.

“Hazardous Substance” means any substance or material listed, defined,
classified or regulated as a pollutant, contaminant, hazardous material,
hazardous substance, toxic substance, hazardous, industrial, special or other
waste, or otherwise, under any applicable Environmental, Health and Safety Law,
including, petroleum, petroleum products, explosives, radioactive materials,
volatile organic compounds, semi-volatile organic compounds, pesticides,
polychlorinated biphenyls, and friable asbestos and asbestos-containing
materials.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

“IMM” means the Independent Market Monitor, as defined in the PUCT Rules.

“Income Tax” means (a) any Tax imposed on or measured by net income or profits
and (b) any franchise Taxes imposed under the Laws of the State of Texas.

“Income Tax Return” means a Tax Return in respect of Income Taxes.

“Indebtedness” means, with respect to any Person, the aggregate amount
(including the current portions thereof) of all (a) indebtedness for money
borrowed from others, purchase money obligations, obligations under installment
Contracts or conditional sale or title retention Contracts, capitalized lease
obligations, obligations to pay deferred purchase price of assets, services or
securities, obligations under any commodity, swap, derivative, currency,
interest rate or hedging Contract, indebtedness evidenced by any note, bond,
debenture or other debt security or instrument, and reimbursement obligations
for letters of credit or similar instruments that have been drawn, in each case
of such Person, (b) indebtedness of the type described in subsection (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
(c) interest, prepayment penalties, premiums, make-whole payments, expenses,
late charges, indemnities, breakage costs, bank overdrafts or other penalties or
fees relating to any of such indebtedness.

“Indemnifiable Losses” means any and all claims, injuries, lawsuits,
liabilities, losses, damages, deficiencies, demands, payments, judgments, fines,
interest, Taxes, obligations, penalties, costs and expenses, including the
reasonable fees and disbursements of counsel (including fees of attorneys and
paralegals, whether at the pre-trial, trial, or appellate level, or in
arbitration) and other professionals, or amounts paid in connection with any
assessments, judgments, awards or settlements, and all amounts reasonably paid
in investigation, defense, or settlement of any of the foregoing.

“Intellectual Property” means all intellectual property and proprietary rights
including, but not limited to: (a) all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, divisions, revisions, extensions and reexaminations
thereof; (b) all trademarks, service marks, trade dress, logos, slogans, brand

 

A-5

--------------------------------------------------------------------------------

names, trade names, internet domain names and corporate names, together with all
goodwill of the business connected with the use thereof and symbolized thereby,
and all applications and registrations in connection therewith; (c) all
copyrights and copyrightable works, and all applications and registrations in
connection therewith; (d) all mask works, industrial designs and protectable
designs, and all applications and registrations and renewals in connection
therewith; (e) all software and electronic data, databases and data collections
and all related documentation; and (f) all trade secrets, know-how, research and
development information, formulas, compositions, inventions, processes,
techniques, technical data, designs, drawings, specifications, financial,
marketing and business data, customer and supplier information, pricing and cost
information, and business and marketing plans and proposals.

“IRS” means the U.S. Internal Revenue Service.

“Knowledge” means, (a) in the case of Seller, the actual knowledge (after due
inquiry) of the individuals listed in Section 1.01 of the Seller Disclosure
Letter and (b) in the case of Buyer, the actual knowledge (after due inquiry) of
the individuals listed in Section 1.01 of the Buyer Disclosure Letter.

“Law” means, with respect to any Person, any domestic or foreign, federal,
state, provincial, tribal or local statute, law, ordinance, rule, binding
administrative interpretation, regulation, order, writ, injunction, directive,
judgment, decree or other lawful and binding requirement of any Governmental
Entity directly applicable to such Person or any of its respective properties or
assets, as amended from time to time. For the avoidance of doubt, Laws include
PUCT Rules, ERCOT Protocols and Other Binding Documents, Railroad Commission of
Texas Rules and Reliability Standards.

“Letters” means, collectively, Seller Disclosure Letter and Buyer Disclosure
Letter, and each is referred to as a “Letter.”

“Liability” means any Indebtedness, loss, damage, adverse claim, fine, penalty,
liability or obligation (whether direct or indirect, whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether matured or unmatured, whether determined or determinable,
whether disputed or undisputed, whether liquidated or unliquidated, whether due
or to become due and whether in contract, tort, strict liability or otherwise),
including any liability for Taxes.

“License Agreement” means that certain License Agreement, to be dated as of the
Closing Date, by and between Buyer and Seller, in the form attached hereto as
Exhibit G.

“Lien” means any mortgage, pledge, assessment, security interest, lien, adverse
claim, levy, easement, right of way, encroachment, or other similar encumbrance
or restriction, excluding any transfer restrictions in the Organizational
Documents of Seller which are not applicable to the transactions contemplated
hereby or any future transaction.

“Material Adverse Effect” means any change, event, condition, development,
circumstance, state of facts, factor, occurrence or effect (any such item, an
“Effect”) that, individually or in the aggregate with any one or more other
Effects, is or would reasonably expect to be (a) materially adverse to the
business, financial condition, assets, Liabilities or

 

A-6

--------------------------------------------------------------------------------

results of operations of the Facility, the Acquired Assets and the Assumed
Liabilities, (b) materially adverse to the operability of the Facility or
Seller’s business to produce power in the ordinary course of business consistent
with past practice, or (c) materially adverse to the ability of Seller to
consummate the transactions contemplated by this Agreement or any Ancillary
Agreement, provided, that, with respect to clause (a), none of the following
Effects, individually or in the aggregate, shall constitute or be taken into
account in determining whether a Material Adverse Effect has occurred or would
reasonably be expected to occur: any such change, event or effect resulting from
or arising out of (i) any changes generally affecting the industries in which
Seller operates (including the electric and natural gas generating, transmission
or distribution industries), whether international, national, regional, state,
provincial or local, (ii) changes in international, national, regional, state,
provincial or local wholesale or retail markets for electric power, natural gas
or other fuel supply or transportation or related products and operations,
including those due to actions by competitors and regulators, (iii) changes
after the date hereof in regulatory or political conditions applicable to
generation facilities, including acts of war or terrorist activities,
(iv) changes in electric transmission or distribution systems generally,
(v) changes in the markets for or costs of commodities or supplies, including
fuel, (vi) changes in the markets for or costs of electricity, generally,
(vii) Effects of weather, meteorological events or other natural disasters or
natural occurrences beyond the control of Seller, (viii) any change of Law or
regulatory policy, including any rate or tariff, (ix) changes or adverse
conditions in the financial, banking or securities markets, including those
relating to debt financing and, in each case, including any disruption thereof
and any decline in the price of any security or any market index, (x) the
announcement, execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby, (xi) any change after the date hereof in
accounting requirements or principles required by any Governmental Entity,
(xii) any labor strike, request for representation, organizing campaign, work
stoppage, slowdown or other labor dispute, (xiii) any new generating facilities
in the ERCOT region and their effect on pricing or transmission, and (xiv) any
actions expressly consented to in writing by Buyer; except, in the case of
clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (xi), (xii) and
(xiii) above, to the extent that any such Effect has a disproportionate effect
on the business, financial condition, assets, Liabilities or results of
operations of the Facility, relative to other natural gas-fired power plants in
the ERCOT region.

“Monthly Earnout Amount” means, for any calendar month, an amount equal to the
greater of (a) (i) the Spark Spread for such month, multiplied by (ii) 16,
multiplied by (iii) the number of Applicable Days in such month, multiplied by
(iv) 495 or (b) zero. Schedule E sets forth an example calculation of the
Monthly Earnout Amount for the month of May 2017, which is provided for
illustrative purposes only.

“Net Indebtedness Amount” means an amount, which may be a positive or a
negative, equal to the sum of (a) the aggregate outstanding Indebtedness of
Seller (other than any undrawn letters of credit, surety bonds and other credit
support) minus (b) the aggregate amount of Cash Equivalents of Seller that is
included as an Acquired Asset, in each case determined in accordance with the
policies, procedures and values set forth on Schedule C, which, for the
avoidance of doubt, is an illustrative calculation of the Net Indebtedness
Amount as of April 30, 2017; provided, however, that in no event shall the
calculation of the Net Indebtedness Amount include any amounts relating to any
amounts or items included in the calculation of Net Working Capital or Seller
Transaction Expenses.

 

A-7

--------------------------------------------------------------------------------

“Net Working Capital” means the net working capital of Seller determined in
accordance with the policies, procedures and values set forth on Schedule C (as
consistently applied in accordance with the past practices of Seller), which,
for the avoidance of doubt, is an illustrative calculation of Net Working
Capital as of April 30, 2017; provided, however, that in no event shall the
calculation of Net Working Capital include any amounts relating to (a) any
amounts or items included in the calculation of the Net Indebtedness Amount or
the Seller Transaction Expenses, (b) any undrawn letters of credit, surety bonds
and other credit support or the mark-to-market derivative assets or liabilities
with respect to the Commodity Hedges, or (c) any Tax assets or Tax liabilities.

“Odessa Market Price” means the simple arithmetic mean of the Day-Ahead Market
price for power for any particular day as reported by ERCOT for the OECCS_1 and
OECCS_2 nodes, taking into account any correction to any Day-Ahead Market price
for on-peak hours (i.e., each hour ending at 0700 through 2200 Central Time) for
any such day posted by ERCOT; provided, however, that if (a) the price for only
the OECCS_1 node or the OECCS_2 node is available for any particular day, such
price shall be used in place of the mean price with respect thereto for such
day, and (b) if the price for neither the OECCS_1 node nor the OECCS_2 node is
available for any particular day, the Day Ahead Market price for power for on
peak hours (i.e., each hour ending at 0700 through 2200 Central Time) for such
day, as reported by ERCOT for the nearest reasonably comparable node, taking
into account any correction to any Day Ahead Market price for any such day
posted by ERCOT, shall be used in place of the mean price with respect thereto
for such day.

“Order” means any judgment, writ, ruling, order, decree, preliminary or
permanent injunction, temporary or permanent restraining order, assessment or
arbitration award of any Governmental Entity or any arbitrator. For the
avoidance of doubt, only the lawful action by any required quorum of a
Governmental Entity or its board shall constitute an Order, and action by staff
of a Governmental Entity or action by the IMM or its staff shall not constitute
an Order.

“Organizational Documents” means, with respect to any Person, the articles or
certificate of incorporation or organization and by-laws, the limited
partnership agreement, the partnership agreement or the limited liability
company agreement, operating agreement or such other organizational documents of
such Person.

“Permian Gas Index” means, for each Applicable Day, the midpoint price for such
day as published by Platt’s Gas Daily publication for the El Paso, Permian
location.

“Person” means any individual, corporation, partnership, joint venture, trust,
association, organization, Governmental Entity or other entity.

“Plant Employee” means any current or former director, officer or employee
(including those on layoff, short-term disability, long-term disability or leave
of absence, whether paid or unpaid) of Seller.

“Power Price” means, for a particular calendar month, the simple arithmetic mean
of the Odessa Market Price for each Applicable Day of such month. The Power
Price for the month of May 2017, including the reference to the underlying
Index, is attached hereto as Schedule F and provided for illustrative purposes
only.

 

A-8

--------------------------------------------------------------------------------

“Pre-Closing Period” means any taxable period (or portion thereof) ending on or
before the Closing Date.

“Property Taxes” means all real property Taxes, personal property Taxes and
similar ad valorem Taxes.

“PUCT” means the Public Utility Commission of Texas.

“PUCT Rules” means the substantive rules of the PUCT as set forth in Title 16,
Chapter 25 of the Texas Administrative Code.

“PURA” means the Texas Public Utility Regulatory Act, TEX. UTIL. CODE §§ 11.001
et seq.

“Railroad Commission of Texas Rules” mean the substantive rules of the RRC set
forth in Title 16, Chapters 3, 8, and 18 of the Texas Administrative Code.

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, injecting, escaping,
leaching, dumping, or disposing.

“Reliability Standards” means the enforceable North American Electric
Reliability Corporation or Texas Reliability Entity, Inc. Reliability Standards
that have been approved by FERC.

“Representatives” means, as to any Person, the officers, directors, managers,
employees, counsel, accountants, financial advisers and consultants of such
Person.

“Required Consents” means, collectively, the Buyer’s Required Consents and
Seller’s Required Consents.

“Seller Benefit Plan” means (a) any “employee benefit plan” (as defined in
Section 3(3) of ERISA), (b) all specified fringe benefit plans as defined in
Section 6039(D) of the Code, (c) all cafeteria plans as defined in Section 125
of the Code, and (d) any other plan, program, policy, agreement or arrangement,
whether or not in writing, relating to compensation, employee benefits,
severance, change in control, retention, deferred compensation, equity,
employment, consulting, vacation, sick leave, paid time off, salary
continuation, disability, hospitalization, medical insurance, life insurance,
scholarship programs, incentive compensation or bonus compensation, in each case
that is sponsored, maintained or contributed to or required to be sponsored,
maintained or contributed to by, or otherwise covering Seller or, in the case of
a Seller Benefit Plan that is an agreement, with respect to which Seller is a
party.

“Seller Disclosure Letter” means the letter attached hereto as Schedule B.

 

A-9

--------------------------------------------------------------------------------

“Seller Guarantee” means any guarantee, letter of credit, bond, surety or other
credit support or assurance (including the Financial Assurances) provided by any
of Seller’s Affiliates in support of any obligations of Seller, the Facility or
any Acquired Assets.

“Seller Marks” means: (a) any and all of the following containing or comprising
the words or phrases “Koch”, and all rights arising out of or associated
therewith, in each case, in any jurisdiction in the world: trademarks; service
marks; certification marks; trade names; corporate names; logos; trade dress;
and other protectable indicia of source or origin, including unregistered and
common law rights in the foregoing; all translations, adaptations, derivations
and combinations of any of the foregoing; (b) all goodwill associated with each
of the foregoing; and (c) all registrations of and applications to register any
of the foregoing.

“Seller Transaction Expenses” means, without duplication of any amounts included
in the calculation of the Net Working Capital Amount or the Net Indebtedness
Amount, all expenses of Seller incurred in connection with the preparation,
execution and consummation of this Agreement and the Closing, including (a) all
brokerage commissions and all fees and disbursements of attorneys, accountants
and other professional advisors and service providers of Seller and (b) all cash
bonuses, change of control payments, retention bonuses, sale bonuses and similar
payments payable by Seller in connection with the transactions contemplated by
this Agreement, including the amounts payable under all phantom stock and
performance bonus Contracts and the employer portion of any employment, payroll,
social security, unemployment or withholding Taxes related to all such amounts;
provided, that “Seller Transaction Expenses” shall not include any of the costs
and expenses of Buyer or its Affiliates incurred in connection with the
transactions contemplated hereby.

“Seller’s Required Consents” means the consents specified in Section 3.03 of the
Seller Disclosure Letter.

“Spark Spread” means, for a particular calendar month, (a) the Power Price for
such month, minus (b) the Gas Cost for such month, minus (c) the spread strike
for such month as set forth on Schedule G.

“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 Person, any corporation, general or
limited partnership, limited liability company, joint venture or other entity in
which such Person (a) owns, directly or indirectly, fifty percent (50%) or more
of the outstanding voting securities, equity securities, profits interest or
capital interest, (b) is entitled to elect at least one-half of the board of
directors or similar governing body or (c) in the case of a limited partnership
or limited liability company, is a general partner or managing member and has
the power to direct the policies, management and affairs of such entity,
respectively.

“Target Net Working Capital” means, (i) if the Closing occurs between the date
hereof and September 30, 2017 or between July 1, 2018 and September 30, 2018,
$1,327,118.00, (ii) if the Closing occurs between October 1, 2017 and
December 31, 2017, -$2,248,026.00, (iii) if the Closing occurs between
January 1, 2018 and March 31, 2018, -$2,302,735.00, and (iv) if the Closing
occurs between April 1, 2018 and June 30, 2018, -$563,026.00.

 

A-10

--------------------------------------------------------------------------------

“Tax” or “Taxes” means any (a) United States federal, state, local or foreign
income, profits, gross receipts, gross margins, transfer, stamp, environmental,
registration, estimated, franchise, withholding, ad valorem, personal property
(tangible and intangible), employment, payroll, sales and use, social security,
disability, occupation, real property, severance, excise and other taxes,
charges, levies or other similar assessments imposed or collected by a Taxing
Authority, including any interest, penalty or addition thereto, (b) liability
for the payment of any amounts of the type described in clause (a) of this
sentence as a result of being a member of an affiliated, consolidated, combined,
unitary or aggregate group for any Taxable period pursuant to applicable Law,
and (c) liability for the payment of any amounts of the type described in
clauses (a) or (b) of this sentence as a result of being a transferee of or
successor to any person or as a result of any legal obligation to indemnify or
pay any other Person.

“Tax Returns” means any return, report or similar statement required to be filed
with a Taxing Authority with respect to any Taxes (including any attached
schedules), including any information return, claim for refund, amended return
and declaration of estimated Tax.

“Taxing Authority” means, with respect to any Tax, the Governmental Entity or
political subdivision thereof that imposes such Tax, and the agency (if any)
charged with the assessment or collection of such Tax for such entity or
subdivision.

“Title Policy” means a Texas Land Title Association owner policy insuring title
to the Real Property other than the Excluded Easements (and all improvements
thereon which constitute real property) as being vested in Buyer, subject only
to Permitted Liens.

“Transfer Taxes” means all transfer, real or personal property transfer, sales,
use, goods and services, permit, stock, value added, documentary, stamp duty,
excise, and conveyance Taxes and other similar Taxes, duties, fees or charges
(including interest, penalties and additions to Tax), but excluding any Income
Taxes.

“Treasury Regulations” means the regulations promulgated under the Code by the
U.S. Department of the Treasury.

“Waha Gas Index” means, for each Applicable Day, the midpoint price for such day
as published by Platt’s Gas Daily publication for the Waha location.

“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988,
as amended, and regulations promulgated thereunder, and any comparable state or
local Law.

Additional defined terms have the meanings ascribed to them in the Sections
specified below:

 

Defined Term

  

Section

Acquired Assets    Section 2.02 Acquisition Information    Section 10.13(b)
Agreement    Preamble

 

A-11

--------------------------------------------------------------------------------

Defined Term

  

Section

Allocation    Section 5.03(e) Assignment and Assumption Agreement    Section
2.09(a)(iii) Assumed Liabilities    Section 2.04 Base Purchase Price    Section
2.07(a) Bill of Sale    Section 2.09(a)(i) Buyer    Preamble Buyer Guarantor   
Preamble Buyer Obligations    Section 10.14(a) Buyer Released Matters    Section
5.14(a) Buyer Released Parties    Section 5.14(a) Buyer Releasing Parties   
Section 7.02 (b) Buyer Specified Representations    Section 6.03(b)(i) Buyer’s
Statement    Section 2.10(a) Cap    Section 8.01(c) Claim Notice    Section
8.03(a) Closing    Section 2.08 Closing Date    Section 2.08 Closing Purchase
Price    Section 2.07(a) Competing Transaction    Section 5.11(b)(i)
Condemnation Value    Section 5.10(a)(ii) Confidentiality Agreement    Section
5.04(a) Consent    Section 3.03 Continuing Employees    Section 5.07 Deductible
   Section 8.01(b)(i) Designated Account    Section 2.11(a) Direct Costs   
Section 5.15(b) Easement Real Property    Section 3.11(a)(iii) Easements   
Section 3.11(a)(iii) Effect    Definition of “Material Adverse Effect” Event of
Loss    Section 5.10 Excluded Assets    Section 2.03 Excluded Easements   
Section 3.11(c) Excluded Easements Deed    Section 2.09(a)(ii) Facility   
Recitals Filing    Section 3.03 Financial Assurances    Section 2.03(l)
Financial Statements    Section 3.07(a) Forum    Section 10.08(a) Gas Supply
Agreement    Section 5.08(i) Indemnified Buyer Entities    Section 8.01(a)
Indemnified Entity    Section 8.03(a) Indemnified Seller Entities    Section
8.02(a) Indemnifying Entity    Section 8.03(a) Independent Accountants   
Section 2.10(b) Index    Section 2.11(d)

 

A-12

--------------------------------------------------------------------------------

Defined Term

  

Section

Information    Section 10.13(b) Insurance Policies    Section 3.16 Interim
Period    Section 5.02(a) KES    Section 2.02(a) Major Loss    Section 5.10(b)
Material Contracts    Section 3.10(a) MBM Materials    Section 2.03(k) Monthly
Earnout Statement    Section 2.11(b) Objection Notice    Section 2.11(b) Outside
Date    Section 9.01(b) Owned Real Property    Section 3.11(a)(i) Party   
Preamble Permanent Pre-Arranged Shipper    Section 5.22(b) Permits    Section
3.09(b) Permitted Liens    Section 3.11(a)(iv) Pre-Arranged Capacity Release   
Section 5.22(b) Pre-Arranged Shipper    Section 5.22(a) Privileged Information
   Section 10.13(c) Privileges    Section 10.13(b) PUHCA    Section 3.17
Purchase Price    Section 2.07(a) QSE Receivable    Section 2.02(a) Real
Property    Section 3.11(a)(iii) Real Property Deed    Section 2.09(a)(ii)
Restoration Costs    Section 5.10(a)(i) Retained Liabilities    Section 2.05
Schedule Update    Section 5.12 Seller    Preamble Seller Guarantor    Preamble
Seller Intellectual Property    Section 3.11(f) Seller Obligations    Section
10.15(a) Seller Released Matters    Section 7.02(b) Seller Released Parties   
Section 7.02(b) Seller Releasing Parties    Section 5.14(a) Seller Specified
Representations    Section 6.01(b)(i) Short-Term Pre-Arranged Capacity Release
   Section 5.22(a) Spread Strike    Definition of “Spark Spread” Subsequent
Transaction    Section 5.08(b) Subsequent Transaction Plan    Section 5.08(b)
Taking    Section 5.10 Tax Contest    Section 5.03(b) Third Party    Section
8.03(a) Transition Services    Section 5.15(a)

 

A-13

--------------------------------------------------------------------------------

Exhibit B

Form of Bill of Sale

BILL OF SALE

This BILL OF SALE, dated as of [            ], 2017 (this “Bill of Sale”), is
executed and delivered by Odessa-Ector Power Partners, L.P., a Delaware limited
partnership (“Seller”), to La Frontera Holdings, LLC , a Delaware limited
liability company (“Buyer”).

RECITALS

WHEREAS, Seller and Buyer entered into that certain Asset Purchase Agreement,
dated as of July 5, 2017 (the “Asset Purchase Agreement”), pursuant to which, at
the Closing, Seller has agreed to sell, convey, transfer, assign and deliver to
Buyer, and Buyer has agreed to purchase and assume from Seller, the Acquired
Assets, other than the Excluded Assets, for the consideration and upon the terms
set forth in the Asset Purchase Agreement;

WHEREAS, Buyer and Seller now desire to carry out the intent and purpose of the
Asset Purchase Agreement by, among other things, the execution and delivery of
this Bill of Sale; and

WHEREAS, capitalized terms used herein without definition shall have the
respective meanings set forth in the Asset Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and with the intent to be legally bound hereby, Seller agrees as
follows:

AGREEMENT

1. Transfer of Assets. On the terms and subject to the conditions set forth in
the Asset Purchase Agreement, Seller hereby sells, conveys, transfers, assigns
and delivers to Buyer, its successors and assigns all of Seller’s right, title
and interest in, to and under the Acquired Assets to have and to hold forever,
together with all rights and privileges thereto, and Buyer hereby purchases such
Acquired Assets and accepts such conveyance, transfer, assignment and delivery
from Seller.

2. Further Assurances. At the request of Buyer, Seller shall execute and
deliver, or cause to be executed and delivered, to Buyer such further
instruments and take such other actions as may be reasonably necessary to carry
out the transactions contemplated by this Bill of Sale.

3. Successors and Assigns. This Bill of Sale shall be binding upon Seller and
its successors and assigns.

4. Asset Purchase Agreement. This Bill of Sale is being executed and delivered
pursuant to Section 2.09(a)(i) of the Asset Purchase Agreement and is subject in
all respects to the terms and conditions of the Asset Purchase Agreement, and
all of the representations, warranties, covenants and agreements of the Seller
and Buyer contained therein, all of which shall survive the execution and
delivery of this Assignment Agreement in accordance with the terms of the Asset
Purchase Agreement. Nothing contained herein shall supersede, amend, alter or
modify (nor shall it be deemed or construed to supersede, amend, alter or
modify) any of the terms or conditions of the Asset Purchase Agreement in any
manner whatsoever. In the event of any conflict between the provisions of this
Bill of Sale and the provisions of the Asset Purchase Agreement, the provisions
of the Asset Purchase Agreement shall control and prevail.

 

B-1

--------------------------------------------------------------------------------

5. Parties in Interest. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, including their successors and permitted
assigns, and nothing in this Agreement, express or implied is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

6. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall, taken
together, be considered one and the same agreement. Delivery of an executed
signature page of this Agreement by facsimile or other electronic image scan
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.

7. Amendments and Waivers. This Agreement may not be amended except by an
instrument in writing signed on behalf of Buyer and Seller. Each Party may, by
an instrument in writing signed on behalf of such Party, waive compliance by any
other Party with any term or provision of this Agreement that such other Party
was or is obligated to comply with or perform. No failure or delay by any Party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Except as otherwise provided herein, the rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

8. Governing Law. This Bill of Sale shall be governed by and construed in
accordance with the domestic 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.

9. Jurisdiction; Service of Process; Waiver of Jury Trial.

(a) The Parties agree that the Forum for any other disputes between any of the
parties hereto arising out of or related to this Agreement or the transactions
contemplated hereby is the Court of Chancery in the City of Wilmington, New
Castle County, Delaware except where such court lacks subject matter
jurisdiction. In such event, the Forum is in the federal district court sitting
in Wilmington, Delaware or, in the event such federal district court lacks
subject matter jurisdiction, then in the Superior Court in the City of
Wilmington, New Castle County, Delaware. Each of the Parties hereto irrevocably
submits to the jurisdiction of the Forum in respect of any disputes arising out
of or related to this Agreement or the transactions contemplated hereby. The
Parties further agree that the Parties will not bring suit with respect to any
disputes arising out of or related to this Agreement or the transactions
contemplated hereby in any court or jurisdiction other than the Forum. The
preceding sentence will not limit the rights of the Parties to obtain execution
of a judgment in any other jurisdiction. The Parties further agree, to the
extent permitted by Law, that a final and non-appealable judgment against a
Party in any proceeding contemplated in this Section 8 will be conclusive and
may be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified or exemplified copy of which will be
conclusive evidence of the fact and amount of such judgment.

 

B-2

--------------------------------------------------------------------------------

(b) To the extent that any Party has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, each such Party hereby
irrevocably (i) waives such immunity in respect of its obligations with respect
to this Agreement and (ii) submits to the personal jurisdiction of the Forum.
Each of the Parties hereby consents to process being served by any Party in any
suit, action or proceeding by the delivery of a copy thereof in accordance with
the provisions of Section 10.01 of the Asset Purchase Agreement.

(c) EACH PARTY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING BETWEEN OR AMONG ANY OF THE PARTIES ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

[signature page follows]

 

B-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed as of the
date first written above.

 

ODESSA-ECTOR POWER PARTNERS, L.P. By:     Name: Title:

 

B-4

--------------------------------------------------------------------------------

Exhibit C-1

Form of Real Property Deed

{THE EXHIBITS ARE SUBJECT TO CHANGE BEFORE CLOSING IN CONNECTION WITH UPDATED
TITLE WORK AND ANY SURVEY.}

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR
STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT
TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE
PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

When recorded return to:

Republic Title of Texas, Inc.

2626 Howell Street

Dallas, Texas 75204

SPECIAL WARRANTY DEED

 

STATE OF TEXAS   §      §    KNOW ALL BY THESE PRESENTS: COUNTIES OF ECTOR AND
MIDLAND   §   

THAT ODESSA-ECTOR POWER PARTNERS, L.P., a Delaware limited partnership
(“Grantor”), for and in consideration of the sum of Ten and No/100 Dollars
($10.00) cash and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, paid by                     , a
                     (“Grantee”), whose address is                     , HAS
GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents DOES GRANT,
BARGAIN, SELL and CONVEY unto Grantee (i) all of that certain real property
situated in Ector County, Texas, described on Exhibit A attached hereto and made
a part hereof for all purposes (the “Land”), and all buildings, structures,
parking areas and other improvements located thereon, together with all related
rights and appurtenances, including but not limited to all right, title and
interest of Grantor in and to any land lying in the bed of any street, road,
highway or alley (whether opened or proposed) adjoining the Land, any water or
water rights benefiting the Land, any oil, gas and other minerals lying under
the Land, any easements benefiting the Land, and any strips and gores adjoining
the Land (the Land and all of such buildings, structures, parking areas and
other improvements and other rights and appurtenances being collectively
referred to herein as the “Fee Property”), together with (ii) all of Grantor’s
right, title and interest in, to and under (a) the easements described on
Exhibit B attached hereto and made a part hereof for all purposes (the “Easement
Property,” and together with the Fee Property, the “Property”) and (b) all
buildings, structures and other improvements located on the Easement Property.

 

C-1

--------------------------------------------------------------------------------

TO HAVE AND TO HOLD the Property unto Grantee, and Grantee’s successors and
assigns forever, and Grantor does hereby bind itself and its successors and
assigns to WARRANT and FOREVER DEFEND all and singular the Property unto Grantee
and Grantee’s successors and assigns, against every person whomsoever lawfully
claiming or to claim the same or any part thereof, by, through or under Grantor,
but not otherwise, subject only to the matters listed on Exhibit C attached
hereto and made a part hereof for all purposes.

[Signature on following page]

 

C-2

--------------------------------------------------------------------------------

EXECUTED to be effective as of the              day of             , 2017.

 

GRANTOR:

ODESSA-ECTOR POWER PARTNERS, L.P.,

a Delaware limited partnership

By:   Odessa-Ector Power I, LLC, a Delaware limited liability company, its
general partner   By:       Name:       Title:    

 

STATE OF ______________       §          §    COUNTY OF ____________       §   

This instrument was ACKNOWLEDGED before me on             , 2017, by
            ,              of Odessa-Ector Power I, LLC, a Delaware limited
liability company, general partner of Odessa-Ector Power Partners, L.P., a
Delaware limited partnership, on behalf of said limited partnership.

 

   

_____________________________________

 

       Notary Public – State of __________________  

My Commission Expires:

____________________

[seal]

[Signature Page of Deed]

 

C-3

--------------------------------------------------------------------------------

Exhibit A

Legal Description of Fee Property

FEE TRACTS

TRACT I:

Lot 1, Block 1, Odessa-Ector Power Partners Addition, an addition to the City of
Odessa, Ector County, Texas, being a 196.29 acre tract of land in Section 36,
Block 42, T-2-S, T & P RR. Co. Survey, Ector County, Texas, according to the map
or plat thereof of record in Cabinet A, Page 153-C, Plat Records, Ector County,
Texas, SAVE AND EXCEPT a 1.272 acre tract as recorded in Volume 2385, Page 906,
Official Public Records of Ector County, Texas.

Boundary being more fully described by metes and bounds as follows:

BEGINNING at (Y=10,640,094.50’ and X=1,680,134.39’) a 5/8” iron rod with a 2”
aluminum cap marked “LCA ODESSA TX” found at the southeast corner of D&S
Industrial Park Subdivision as recorded in Cabinet A, Page 37-A, Ector County
Plat Records and the northeast corner of Lot 1, Block 1, Odessa-Ector Power
Partners Addition as recorded in Cabinet A, Page 153-C, Ector County Plat
Records, also being the northeast corner of the south half of Section 36,
Block 42, T-2-S, T&P RR Co. Survey, Ector County, Texas, in the east line of
said Section 36, whence the northeast corner of said Section 36 bears North
14°13’58” West, a distance of 2,636.79 feet;

THENCE South 14°14’32” East, along the east line of said Section 36, the east
line of said Lot 1, Block 1, a distance of 1,796.28 feet, to a  1⁄2” iron rod
with plastic cap marked “JFL 2410” found at the northernmost southeast corner of
said Lot 1, Block 1, and the northeast corner of a 4.86 acre tract as recorded
in Volume 1509, Page 233 of the Ector County Deed Records, whence a 3” brass
disk found at the southeast corner of said Section 36 bears S 14°14’32” E, a
distance of 843.12 feet;

THENCE, South 77°15’37” West, along the north line of said 4.86 acre tract and a
south line of said Lot 1, Block 1, a distance of 720.96 feet to a 5/8” iron rod
with a  1⁄2” iron rod with plastic cap marked “JFL 2410” found at an ell corner
of said Lot 1, Block 1 and the northwest corner of said 4.86 acre tract;

THENCE, South 14°14’10” East, along an east line of said Lot 1, Block 1 and the
west line of said 4.86 acre tract, a distance of 293.44 feet to a  1⁄2” iron rod
with plastic cap marked “JFL 2410” found at the westernmost southeast corner of
said Lot 1, Block 1 and the southwest corner of said 4.86 acre tract, and also
being in the north line of that certain 20.9 acre tract as recorded in Volume
384, Page 472 of the said Ector County Deed Records;

THENCE, South 77°15’10” West, along the south line of said Lot 1, Block 1 and
the north line of said 20.9 acre tract, a distance of 2,276.42 feet to a 5/8”
iron rod with a 2” aluminum cap marked “LCA ODESSA TX” found at the southeast
corner of that certain 0.37 acre tract as recorded in Volume 408, Page 388 of
the said Ector County Deed Records, and being an ell corner of this tract;

 

A-1

--------------------------------------------------------------------------------

THENCE, North 12°47’31” West, along a west line of said Lot 1, Block 1, and the
east line of said 0.37 acre tract, a distance of 24.99 feet to a 5/8” iron rod
with a 2” aluminum cap marked “LCA ODESSA TX” found at an ell corner of this
tract and the northeast corner of said 0.37 acre tract;

THENCE, South 77°14’14” West, along a south line of said Lot 1, Block 1, and the
north line of said 0.37 acre tract, a distance of 631.32 feet to a 5/8” iron rod
with a 2” aluminum cap marked “GORRONDONA” found at the southeast corner of that
certain 1.272 acre tract as recorded in Volume 2385, Page 906 of said Ector
County Deed Records, and being an ell corner of this tract;

THENCE, North 13°36’11” West, along the east line of said 1.272 acre tract, a
distance of 341.31 feet to a 5/8” iron rod with a 2” aluminum cap marked
“GORRONDONA” found at the northeast corner of said 1.272 acre tract and an ell
corner to this tract;

THENCE, South 76°03’44” West, along the north line of said 1.272 acre tract, a
distance of 805.70 feet to a  1⁄2” iron rod found at the northwest corner of
said 1.272 acre tract and in the west line of said Lot 1, Block 1 and in the
east line of that certain 24.7 acre tract as recorded in Volume 520, Page 228 of
said Ector County Deed Records;

THENCE, North 14°15’58” West, along the east line of said 20.9 acre tract and
the west line of said Lot 1, Block 1, a distance of 1,299.97 feet to a 5/8” iron
rod with a 2” aluminum cap marked “LCA ODESSA TX” the westernmost northwest
corner of this tract and the northeast corner of said 24.7 acre tract, in the
southeastern right-of-way of Interstate Highway 20;

THENCE, North 44°17’12” East, along the northwesterly line of said Lot 1, Block
1 and the southeasterly right-of-way of said Interstate 20, a distance of 714.32
feet to a 5/8” iron rod with a 2” aluminum cap marked “LCA ODESSA TX” found at
the northernmost northwest corner of this tract and the southwest corner of said
D&S Industrial Park Subdivision;

THENCE, North 76°29’02” East, along the north line of said Lot 1, Block 1, and
the south line of said D&S Industrial Park Subdivision, a distance of 3,820.21
feet to the Point of Beginning, containing 195.02 surface acres.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.99985488 and a theta angle of -01°01’37” near the center of said Lot 1, Block
1. Acreage stated is average surface distance.

TRACT II:

Being a 4.86 acre tract of land in Section 36, Block 42, T-2-S, T & P RR Co.
Survey, Ector County, Texas; being the remainder of land out of a 201.14 acre
tract described in Deed dated January 1, 2000 recorded in Volume 1509, Page 233,
Official Public Records, Ector County, Texas, from William D. Pool a/k/a/
William Donald Pool to Odessa-Ector Power Partners, L.P.; LESS Lot 1, Block 1,
Odessa-Ector Power Partners Addition, an addition to the City of Odessa, Ector
County, Texas, according to the map or plat thereof of record in Cabinet A,
Page 153-C, Plat Records, Ector County, Texas.

 

A-2

--------------------------------------------------------------------------------

Boundary being more fully described by metes and bounds as follows:

BEGINNING at (Y=10,638,353.56’ and X=1,680,576.31’) a  1⁄2” iron rod with
plastic cap marked “JFL 2410” found at the most easterly southeast corner of Lot
1, Block 1, Odessa-Ector Power Partners Addition as recorded in Cabinet A, Page
153-C Ector County Plat Records and in the east line of said Section 36 also
being the northeast corner of this tract; whence a 3” brass disk found at the
southeast corner of said Section 36 bears S 14°14’32” E, a distance of 843.12
feet;

THENCE S 14°14’32” E with the east line of said Section 36, a distance of 293.35
feet to a  1⁄2” iron rod with plastic cap marked “JFL 2410” found at the
southeast corner of this tract;

THENCE S 77°15’10” W, a distance of 720.93 feet to a  1⁄2” iron rod with plastic
cap marked “JFL 2410” found at the most southerly southeast corner of said Lot
1, Block 1 and being the southwest corner of this tract;

THENCE N 14°14’10” W with an east line of said Lot 1, Block 1, a distance of
293.44 feet (Plat: 293.19 feet) to a  1⁄2” iron rod with plastic cap marked “JFL
2410” found at an interior ell corner of said Lot 1, Block 1 and being the
northwest corner of this tract;

THENCE N 77°15’37” E with a south line of said Lot 1, Block 1, a distance of
720.96 feet to the Point of Beginning, containing 4.86 acres of land.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.99985488 and a theta angle of -01°01’37” near the center of said Lot 1, Block
1. Acreage stated is average surface distance.

 

A-3

--------------------------------------------------------------------------------

Exhibit B

Description of Easement Property

EASEMENT TRACTS

TRACT 10, PARCEL B (GAS METER SITE):

Easement and Right-of-Way dated September 11, 1999 from William D. Pool to
Odessa-Ector Power Partners, L.P., filed for record on October 5, 1999 and
recorded in Volume 1492, Page 176, Ector County Deed Records, as corrected and
re-filed for record on February 17, 2000 and rerecorded in Volume 1514, Page
0633, Ector County Deed Records, being more fully described below:

Legal description of a 0.500 acre tract of land in Section 31, Block 41, T-2-S,
T&P R.R. Co. Survey, Ector County, Texas. Boundary being further described by
metes & bounds as follows:

Beginning at (Y=10,639,414.50’, X=1,685,743.66’) at  1⁄2” iron rod with plastic
cap set in the East line of said Section 31, and the West line of Section 32,
this block and being in the North line of a Tesco tract as recorded in Volume
384, Page 472, E.C.D.R. and being the Southeast corner of this tract, whence a
2” iron pipe found at the Southeast corner of said Section 31 bears
South 14°08’59” East, a distance of 549.92 feet;

Thence South 75°12’33” West with the North line of said Tesco tract, a distance
of 217.80 feet to a  1⁄2” iron rod with plastic cap marked “JFL2410” set at the
Southwest corner of this tract;

Thence North 14°08’59” West, at a distance of 25.00 feet pass a  1⁄2” iron rod
with plastic cap marked “JFL 2410” previously set on the centerline of a 50 foot
wide pipeline easement, continuing for a total distance of 99.99 feet to a  1⁄2”
iron rod with plastic cap marked “JFL2410” set at the Northwest corner of this
tract;

Thence North 75°12’33” East a distance of 217.80 feet to a  1⁄2” iron rod with
plastic cap marked “JFL2410” set in the East line of said Section 31 and being
the Northeast corner of this tract;

Thence South 14°08’59” East with the East line of said Section 31, a distance of
99.99 feet containing 21,780 square feet or 0.500 acres of land, more or less.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°00’46” near the center of this survey.

TRACT 10, PARCEL C (50-FOOT PIPELINE EASEMENT):

Pipeline Easement and Right-of-Way dated August 7, 1999 from William D. Pool to
Odessa-Ector Power Partners, L.P., filed for record on September 1, 1999 and
recorded in Volume 1486, Page 75, Ector County Deed Records; as corrected and
re-filed for record on February 17, 2000 and rerecorded in Volume 1514, Page
0626, Ector County Deed Records, being more fully described below:

Legal description of a 50 foot wide pipeline easement in Section 31, Block 41,
T-2-S, T&P RR Co. Survey, Ector County, Texas.

 

B-1

--------------------------------------------------------------------------------

Centerline being more particularly described as follows:

Beginning at (Y=10,638,093.34’, X=1,680,642.08’) a  1⁄2” iron rod with plastic
cap “JFL2410” set in the West line of said Section 31 and the East line of
Section 36, Block 42, T-2-S, and 25.00 feet North of the North line of a Tesco
tract as recorded in Volume 384, Page 472, E.C.D.R., whence a 3” Tesco aluminum
disk in concrete marked “31-36-37” found at the common corners of said Sections
31 and 36 bears South 14°13’58” East, a distance of 574.92 feet;

Thence North 75°12’33” East with said centerline and being 25 feet North of the
North line of said Tesco tract, a distance of 5052.30 feet to a  1⁄2” iron rod
with plastic cap marked “JFL2410” set in the West line of a 0.500 acre tract,
for the end of this description whence a 2” iron pipe found at the Southeast
corner of said Section 31 bears North 75°12’33” East, a distance of 217.80 feet
and South 14°08’59” East, a distance of 574.92 feet.

Centerline consists of 5053.05 linear (surface) feet or 306.25 rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’03” near the center of this survey.

TRACT 11-A AND TRACT 12, PARCELS A AND B:

Easement estate as created in Pipeline Easement and Right-of-Way dated
November 22, 1999 from Houston Endowment Inc. to Odessa-Ector Power Partners,
L.P., filed for record on January 3, 2000, and recorded in Volume 1506, Page
0684, Ector County Deed Records; Pipeline Easement and Right-of-Way dated
December 9, 1999 from Charlotte Parks Kimberlin Trust, to Odessa-Ector Power
Partners, L.P., filed for record on December 15, 1999 and recorded in Volume
1503, Page 0888, Ector County Deed Records; Pipeline Easement and Right-of-Way
dated November 29, 1999, from James E. Hibbert and Josephine Hibbert Barnard,
Independent Co-Executors of the Estate of R. E. Hibbert, Deceased, to
Odessa-Ector Power Partners, L.P., filed for record on January 5, 2000, and
recorded in Volume 1507, Page 0248, Ector County Deed Records; Pipeline Easement
and Right-of-Way dated effective November 30, 1999, from Harriett Ellen Parks
Bell Trust, Martha Ann Parks Trust and Roy Parks, Jr. Life Estate, to
Odessa-Ector Power Partners, L.P., filed for record on December 15, 1999, and
recorded in Volume 1503, Page 0900, Ector County Deed Records; and Pipeline
Easement and Right-of-way dated February 7, 2000 from Henry J. N. Taub to
Odessa-Ector Power Partners, L.P., filed for record on February 10, 2000 and
recorded in Volume 1513, Page 0533, Ector County Deed Records, being more fully
described below:

 

B-2

--------------------------------------------------------------------------------

Tract 11A (30-foot road easement):

Legal description of a 30 foot wide road easement in Sections 29, 32 and 33,
Block 41, T-2-S, T&P RR. Co. Survey, Ector and Midland Counties, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,649,338.32’, X=1,687,983.01’) a 3/8” spike set in the edge of
asphalt of the existing edge of Interstate 20 Frontage Road and the projected
centerline of an existing 30 foot wide caliche road, whence the Northeast corner
of said Section 29 bears North 14°06’27” West, a distance of 992.34 feet and
North 75°10’34” East, a distance of 720.25 feet;

Thence South 14°06’27” East with the centerline of said existing 30 foot wide
caliche road, a distance of 3711.74 feet to a 3/8” spike set at a point of
deflection of this centerline;

Thence South 27°09’10” East with the centerline of said existing 30 foot wide
caliche road, a distance of 140.05 feet to a 3/8” spike set at a point of
deflection of this centerline;

Thence South 41°26’02” East with the centerline of said existing 30 foot wide
caliche road, a distance of 407.26 feet to a 3/8” spike set at a point of
deflection of this centerline;

Thence South 14°08’57” East with the centerline of said existing 30 foot wide
caliche road at a distance of 77.64 feet cross the South line of said Section 29
and the North line of said Section 32, from this point the Southeast corner of
said Section 29 and the Northeast corner of said Section 32 bears North
75°07’52” East, a distance of 503.26 feet, continuing on for a total distance of
5351.07 feet to a 3/8” spike set at a point of intersection of said 30 foot wide
road and an existing 18 foot wide caliche road;

Thence North 75°17’32” East with the centerline of said existing 18 foot wide
caliche road at a distance of 505.53 feet cross the East line of said Section 32
and the West line of said Section 33, from this point the Southeast corner of
said Section 32 and the Southwest corner of said Section 33 bears South
14°10’26” East, a distance of 6.88 feet, continuing on for a total distance of
857.21 feet to a 3/8” spike set at a point of deflection of this centerline;

Thence North 14°54’28” West, a distance of 561.54 feet to a point in the South
line of a 0.50 acre tract previously surveyed by J. Stan Piper, R.P.L.S. #1974
on September 16-21, 1999 for the end of this description, whence the Southwest
corner of said Section 33 bears South 75°05’32” West, a distance of 344.50 feet
and South 14°10’26” East, a distance of 567.24 feet.

Centerline consists of 11,030.51 linear (surface) feet or 668.52 rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°00’26” near the center of this survey.

 

B-3

--------------------------------------------------------------------------------

Tract 12, Parcel A (gas meter site):

Plat and legal description of a 0.500 acre tract located in Section 33, Block
41, T-2-S, T&P RR. Co. Survey, Midland County, Texas.

Boundary being more particularly described by metes and bounds as follows:

Beginning at (Y=10,640,852.23’, X=1,691,108.89’) a  1⁄2” iron rod with a plastic
cap marked “PLS 1974” set at the Southwest corner of this tract in the North
boundary line of a 120 foot wide Texas Electric Service Company Easement
recorded in Volume 403, Page 285, Deed Records of Ector County, Texas, from
whence the Southwest corner of Section 33, Block 41, T-2-S, bears S 75°05’25” W
a distance of 235.60 feet and S 14°10’33” E a distance of 567.24 feet;

Thence N 14°54’35” W, a distance of 100.00 feet to a  1⁄2” iron rod with a
plastic cap marked “PLS 1974” set at the Northwest corner of this tract;

Thence N 75°05’25” E, a distance of 217.80 feet to a  1⁄2” iron rod with a
plastic cap marked “PLS 1974” set at the Northeast corner of this tract;

Thence S 14°54’35” E, a distance of 100.00 feet to a  1⁄2” iron rod with a
plastic cap marked “PLS 1974” set at the Southeast corner of this tract;

Thence S 75°05’25” W parallel and continuous with the North boundary line of
said 120 foot wide easement, a distance of 217.80 feet to the Place of
Beginning.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998577 and a theta angle of -01°00’51” near the center of this survey.

Tract 12, Parcel B (30-foot pipeline easement):

Plat and legal description of a 30 foot wide gas pipeline easement located in
Sections 32 and 33, Block 41, T-2-S, T&P R.R. Co. Survey, Ector and Midland
Counties, Texas.

Survey of centerline No. 1 being more particularly described as follows:

Beginning at (Y=10,639,437.71’, X=1,685,738.08’) a  1⁄2” iron rod with a plastic
cap marked “PLS 1974” set in the West boundary line of Section 32, Block 41,
T-2-S, from whence an old 2” iron pipe found at the Southwest corner of
Section 32, Block 41, T-2-S, bears S 14°09’08” E a distance of 573.69 feet, also
from said beginning point a copper weld marked “2” found under a fence on the
centerline of the Texas Electric Company line bears S 14°09’08” E a distance of
75.00 feet and S 75°05’25” W a distance of 5.00 feet;

Thence N 75°05’25” E with said survey of centerline parallel to the centerline
of T.U. Electric Easement, South boundary of this easement and North boundary of
said Electric Easement is contiguous, a distance of 199.93 feet to a  1⁄2” iron
rod with a plastic cap marked “PLS 1974” set in the West boundary line of State
Loop 338 and the end of this centerline description.

 

B-4

--------------------------------------------------------------------------------

Survey of centerline No. 2 being more particularly described as follows:

Beginning at (Y=10,639,540.61, X=1,686,124.56) a  1⁄2” iron rod with a plastic
cap marked “PLS 1974” set in the East boundary line of State Loop 338, from
whence an old 2” iron pipe found at the Southwest corner of Section 32, Block
41, T-2-S, bears S 75°05’25” W a distance of 399.95 feet and S 14°09’08” E a
distance of 573.69 feet;

Thence N 75°05’25” E with said survey of centerline parallel to the centerline
of T.U. Electric Easement, South boundary of this easement and North boundary of
said Electric Easement is contiguous, at 3867.41 feet pass the Midland and Ector
County line, at 4918.59 feet pass a point in the East boundary line of said
Section 32 and the West boundary line of said Section 33, from whence the common
South corner of said Sections bears S 14°10’33” E, a distance of 582.24 feet,
continuing for a total distance of 5154.00 feet to a  1⁄2” iron rod with a
plastic cap marked “PLS 1974” set in the West boundary line of a 0.50 acre tract
surveyed, from whence a  1⁄2” iron rod with plastic cap marked “PLS 1974” bears
S 14°54’35” E, a distance of 15.00 feet.

Centerline consists of 5353.93 linear feet or 324.48 rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998577 and a theta angle of -01°00’51” near the center of this survey.

TRACT 13, PARCEL A (PIPELINE EASEMENT):

Easement and Right-of-Way dated January 26, 2000, from TXU Electric Company to
Odessa-Ector Power Partners, L.P., filed for record on February 1, 2000 and
recorded in Volume 1511, Page 0573, and Ector County Deed Records, being more
fully described below:

Plat and legal description of a pipeline easement, in Section 36, Block 42,
T-2-S, T&P R.R. Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,637,072.99’, X=1,677,945.18’) a point in the South line of a
Tesco tract as recorded in Volume 575, Page 47, E.C.D.R., whence a 3” aluminum
disk stamped “Tesco 31-36-37” found at the Southeast corner of said Section 36
bears North 77°14’50” East, a distance of 2865.97 feet and South 14°13’58” East,
a distance of 174.90 feet;

Thence North 12°45’10” West, a distance of 374.86 feet to a point in the North
line of a Tesco tract as recorded in Volume 384, Page 472, E.C.D.R. and being
the end of this description, whence the said 3” aluminum disk found at the
Southeast corner of said Section 36 bears North 77°14’50” East, a distance of
2856.25 feet and South 14°13’58’ East, a distance of 549.88 feet.

 

B-5

--------------------------------------------------------------------------------

Centerline consists of 374.92 linear (surface) feet or 22.72 rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’34” near the center of this survey.

TRACT 13, PARCEL B (50-FOOT PIPELINE EASEMENT):

Pipeline Easement and Right-of-Way dated October 19, 1999 from William D. Pool
to Odessa-Ector Power Partners, L.P., filed for record on November 9, 1999 and
recorded in Volume 1498, Page 58, Ector County Deed Records, being more fully
described below:

Plat and legal description of a 50 foot wide pipeline easement, in Section 36,
Block 42, T-2-S, T&P RR Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,636,865.16’, X=1,677,992.22’) a point in the South line of
said Section 36, whence a 3” aluminum disk stamped “Tesco 31-36-37” found at the
Southeast corner of said Section 36 bears North 76°29’02” East, a distance of
2870.74 feet;

Thence North 12°45’10” West, a distance of 213.08 feet to a point in the South
line of a Tesco tract as recorded in Volume 575, Page 47, E.C.D.R. and being the
end of this description, whence the said 3” aluminum disk found at the Southeast
corner of said Section 36 bears North 77°14’50” East, a distance of 2865.97 feet
and South 14°13’58” East, a distance of 174.90 feet.

Centerline consists of 213.11 linear (surface) feet or 12.92 rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’34” near the center of this survey.

TRACT 15, PARCELS A, C, D, F AND H:

Easement dated February 4, 2000 from Huntsman Polymers Corporation to
Odessa-Ector Power Partners Services, L.P. (now known as Odessa-Ector Power
Partners, L.P.), filed for record on February 10, 2000 and recorded in Volume
1513, Page 0545, Ector County Deed Records, being more fully described below:

Tract 15, Parcel A (50-foot pipeline easement):

Plat and legal description of a 50 foot wide pipeline easement in Section 37,
Block 42, T-2-S, T&P RR. Co. Survey, Ector County, Texas.

 

B-6

--------------------------------------------------------------------------------

Centerline being more particularly described as follows:

Beginning at (Y=10,636,030.06’, X=1,680,387.22’) a point in the northwest line
of a Tesco tract as recorded in Volume 940, Page 178, E.C.D.R., whence a 3”
aluminum disk stamped ‘Tesco 31-36-37” found at the Northeast corner of said
Section 37, bears North 13°30’58” West, a distance of 1371.74 feet and North
76°29’02” East, a distance of 737.24 feet;

Thence North 18°39’30” East with said survey of centerline, a distance of 25.00
feet to a point of deflection of this centerline;

Thence North 71°20’30” West with said survey of centerline and 25 feet northwest
and parallel to the northwest line of said Tesco tract, a distance of 2536.30
feet to a point in the north line of said Section 37 and being the end of this
description, whence the said 3” aluminum disk found at the northeast corner of
said Section 37 bears North 76°29’02” East, a distance of 2870.74 feet.

Centerline consists of 2561.68 linear (surface) feet or 155.25 rods.

Bearings, distances, and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -1°01’26” near the center of this survey.

Tract 15, Parcel C (50-foot pipeline easement):

Plat and legal description of a 50 foot wide pipeline easement in Section 37,
Block 42, T-2-S, T&P RR Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,632,293.78’, X=1,681,602.11’) a point in the South line of
said Section 37, whence a railroad spike found at the Southeast corner of said
Section 37 bears North 76°20’30” East, a distance of 489.51 feet;

Thence North 15°38’03” West with said survey of centerline and 25 feet Westerly
and parallel to the West line of a Tesco tract as recorded in Volume 940, Page
178, E.C.D.R., a distance of 3421.00 feet to a point of deflection of this
centerline;

Thence North 71°20’30” West with said survey of centerline and 25 feet
southwesterly and parallel to the Southwest line of said Tesco tract, a distance
of 418.90 feet to a point of deflection of this centerline;

Thence North 18°39’30” East with said survey of centerline, a distance of 25.00
feet to a point in the Southwest line of said Tesco tract and being the end of
this description, whence a 3” aluminum disk stamped “Tesco 31-36-37” found at
the Northeast corner of said Section 37 bears North 13°30’58” West a distance of
1625.58 feet and North 76°29’02” East, a distance of 896.94 feet.

 

B-7

--------------------------------------------------------------------------------

Centerline consists of 3865.47 linear (surface) feet or 234.27 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’14” near the center of this survey.

Tract 15, Parcel D (20-foot general utility easement):

Plat and legal description of a 20 foot wide general utility easement in
Section 37, Block 42, T-2-S, T&P R.R. Co. Survey, Ector County, Texas

Centerline being more particularly described as follows:

Beginning (Y=10,636,851.95’, X=1,678,031.36’) a point in the centerline of a 50
foot wide pipeline easement previously surveyed on January 15, 2000, whence the
northeast corner of said Section 37 bears North 13°30’58” West, a distance of
22.00 feet and South 76°29’02” West, a distance of 2441.10 feet;

Thence South 76°29’02” West with said survey of centerline, a distance of 46.95
feet to a point in the northwest line of a Tesco tract as recorded in Volume
940, Page 178, Ector County Deed Records and being the end of this description,
whence the northwest corner of said Section 37 bears North 13°30’58” West, a
distance of 22.00 feet, and South 76°29’02” West, a distance of 2394.15 feet.

Consists of 46.96 linear (surface) feet or 2.84 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’33” near the center of this survey.

Tract 15, Parcel F (20-foot general utility easement):

Plat and legal description of a 20 foot wide general utility easement in section
37, Block 42, T-2-S, T&P R.R. Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,636,709.35’, X=1,677,438.12’) a point in the southwest line
of a Tesco tract as recorded in Volume 940, Page 178, Ector County Deed Records,
whence the northwest corner of said Section 37 bears North 13°30’58” West, a
distance of 22.00 feet and South 76°29’02” West, a distance of 1830.96 feet;

 

B-8

--------------------------------------------------------------------------------

Thence South 76°29’02” West with said survey of centerline, a distance of 717.37
feet to a point in the east line of a 4.56 acre Tesco tract as recorded in
Volume 384, Page 472, Ector County Deed Records and being the end of this
description, whence the northwest corner of said Section 37 bears North
13°30’58’ West, a distance of 22.00 feet and South 76°29’02” West, a distance of
1113.58 feet.

Centerline consists of 717.48 linear (surface) feet or 43.48 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’39” near the center of this survey.

Tract 15, Parcel H (20-foot general utility easement):

Plat and legal description of a 20 foot wide general utility easement in
Section 37, Block 42, T-2-S, T&P R.R. Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,636,524.16’, X=1,676,667.70’) a point in the west line of a
4.56 acre Tesco tract as recorded in Volume 384, Page 472, Ector County Deed
Records, whence the northwest corner of said Section 37 bears North 13°30’58”
West, a distance of 22.00 feet and South 76°29’02” West, a distance of 1038.60
feet;

Thence South 76°29’02” West with said survey of centerline, a distance of
1038.35 feet to a point in the west line of said Section 37 and being the end of
this description, whence the northwest corner of said Section 37 bears North
14°08’58” West, a distance of 22.00 feet.

Centerline consists of 1038.50 linear (surface) feet or 62.94 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’44” near the center of this survey.

TRACT 15, PARCELS B and E:

Easement and Right-of-Way dated January 26, 2000, from TXU Electric Company to
Odessa-Ector Power Partners, L.P., filed for record on February 1, 2000 and
recorded in Volume 1511, Page 566, Ector County Deed Records, being more fully
described below.

Tract 15, Parcel B (30-foot pipeline easement):

Plat and legal description of a pipeline easement, in Section 37, Block 42,
T-2-S, T&P HR Co. Survey, Ector County, Texas.

 

B-9

--------------------------------------------------------------------------------

Centerline being more particularly described as follows:

Beginning at (Y=10,635,745.92’, X=1,680,291.28’) a point in the southwest line
of a Tesco tract as recorded in Volume 940, Page 178, E.C.D.R. whence a 3”
aluminum disk stamped “TESCO 31-36-37” found at the Northeast corner of said
Section 37 bears North 13°30’58” West, a distance of 1625.58 feet, and North
76°29’02” East, a distance of 896.94 feet;

Thence North 18°39’30 East with said survey of centerline, a distance of 299.90
feet to a point in the northwest line of said Tesco tract and being the end of
this description, whence said 3” aluminum disk found at the northeast corner of
said Section 37 bears North 13°30’58” West, a distance of 1371.74 feet and North
76°29’02” East, a distance of 737.24 feet.

Centerline consists of 299.95 linear (surface) feet or 18.18 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’18” near the center of this survey.

Tract 15, Parcel E (20-foot general utility easement):

Plat and legal description of a general utility easement in Section 37, Block
42, T-2-S, T&P R.R. Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,362,840.97’, X=1,677,985.71’) a point in the northwest line
of Tesco tract as recorded in Volume 940, Page 178, Ector County Deed Records,
whence the northwest corner of said Section 37 bears North 13°30’58” West, a
distance of 22.00 feet and South 76°29’02” West, a distance of 2394.15 feet;

Thence South 76°29’02” West with said survey of centerline, a distance of 563.19
feet to a point in the Southwest line of said Tesco tract and being the end of
this description, whence the northwest corner of said Section 37 bears North
13°30’58” West, a distance of 22.00 feet, and South 76°29’02” West, a distance
1830.96 feet.

Centerline consists of 563.27 Linear (surface) feet or 34.14 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’35” near the center of this survey.

TRACT 15, PARCEL G (GENERAL UTILITY EASEMENT):

Easement and Right-of-Way dated January 26, 2000, from TXU Electric Company to
Odessa-Ector Power Partners, L.P., filed for record on February 1, 2000 and
recorded in Volume 1511, Page 560, Ector County Deed Records, being more fully
described below.

 

B-10

--------------------------------------------------------------------------------

Plat and legal description of a General Utility Easement in Section 37, Block
42, T-2-S, T&P R.R. Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,636,541.68’, X=1,676,740.62’) a point in the east line of a
4.56 acre Tesco tract as recorded in Volume 384, Page 472, Ector County Deed
Records, whence the northwest corner of said Section 37 bears North 13°30’58”
West, a distance of 22.00 feet and South 76°29’02” West, a distance of 1113.58
feet;

Thence South 76°29’02” West with said survey of centerline, a distance of 74.99
feet to a point in the west line of said 4.56 acre tract and being the end of
this description, whence the northwest corner of said Section 37 bears North
13°30’58” West, a distance of 22.00 feet and South 76°29’02” West, a distance of
1038.60 feet.

Centerline consists of 75.00 linear (surface) feet or 4.54 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’41” near the center of this survey.

TRACT 18, PARCEL A (30- FOOT PIPELINE EASEMENT):

Pipeline Easement dated December 16, 1999, from Equilon Enterprises LLC to
Odessa-Ector Power Partners, L.P., filed for record on January 21, 2000 and
recorded in Volume 1509, Page 0787, Ector County Deed Records, being more fully
described as follows:

Plat and legal description of a pipeline easement in the North half of
Section 48, Block 42, T-2-S, T&P RR Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,632,182.15’, X=1,681,660.07’) a point in the West line of a
Tesco tract as recorded in Volume 926, Page 744 E.C.D.R. and being 30 feet South
of an existing pipeline, whence a railroad spike found at the Northeast corner
of said Section 48 bears North 76°28’59” East, a distance of 460.71 feet and
North 14°11’56” West, a distance of 123.31 feet;

Thence South 76°28’59” West 30 feet south of and parallel to the said existing
pipeline, a distance of 4570.00 feet to a point of deflection;

Thence South 24°38’55” West, a distance of 654.00 feet to a point of deflection;

Thence South 11°08’51” East, a distance of 841.53 feet to a point in the West
line of said North half of Section 48 and being the end of this description,
whence a  1⁄2” GIP found at the Southwest corner of said North half of
Section 48 bears South 14°14’13” East, a distance of 1185.36 feet.

 

B-11

--------------------------------------------------------------------------------

Centerline consists of 6066.43 linear (surface) feet or 367.66 (surface) rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’28” near the center of this survey.

TRACT 18, PARCEL B (30-FOOT PIPELINE EASEMENT):

Pipeline Easement dated December 16, 1999, from Equilon Enterprises LLC to
Odessa-Ector Power Partners, L.P., filed for record on January 21, 2000 and
recorded in Volume 1509, Page 0794, Ector County Deed Records, being more fully
described as follows:

Plat and legal description of a 30 foot wide pipeline easement in the North half
of Section 48 Block 42, T-2-S, T&P RR Co. Survey, Ector County, Texas.

Centerline being more particularly described as follows:

Beginning at (Y=10,629,741.33’, X=1,682,324.80’) a point in the South line of
the North half of said Section 48, whence a  1⁄2” iron pipe found at the
Southeast corner of said North half of Section 48 bears North 76°21’03” East, a
distance of 414.98 feet;

Thence North 15°34’27” West, 15 feet West of the West line and parallel to a
Tesco tract as recorded in Volume 926, Page 744, E.C.D.R., a distance of 2652.41
feet to a point in the North line of said Section 48 and being the end of this
description, whence a railroad spike found at the Northeast corner of said
Section 48 bears North 76°20’30” East, a distance of 478.64 feet.

Centerline consists of 2652.80 linear (surface) feet or 160.78 rods.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.999851 and a theta angle of -01°01’09” near the center of this survey.

TRACT 24, PARCELS A, B AND C:

Right-of-Way Agreement dated November 30, 1999 from Cowden C. Ward, Jr. and
wife, Sherry Ward to Odessa-Ector Power Partners, L.P., filed for record on
December 22, 1999 and recorded in Volume 1505, Page 0075, Official Public
Records of Ector County, Texas; Right-of-Way Agreement dated November 30, 1999
from Gloria Hope Ward Youngblood to Odessa-Ector Power Partners, L.P., filed for
record on December 22, 1999 and recorded in Volume 1505, Page 0061, Official
Public Records of Ector County, Texas; Right-of-Way Agreement dated November 30,
1999 from C. Dwain Youngblood to Odessa-Ector Power Partners, L.P., filed for
record on December 22, 1999 and recorded in Volume 1505, Page 0089, Official
Public Records of Ector County, Texas; and Right-of-Way Agreement dated
November 30, 1999 from Double E. Business Trust to Odessa-Ector Power Partners,
L.P., filed for record on December 22, 1999, and

 

B-12

--------------------------------------------------------------------------------

recorded in Volume 1505, Page 0047, Official Public Records of Ector County,
Texas; as affected by Assignment and Assumption Agreement dated January 28,
2000, by and between Odessa-Ector Power Partners, L.P. and Odessa-Ector Power
Partners Services, L.P. (now known as Odessa-Ector Power Partners, L.P.)
recorded in Volume 1537, Page 887 of the Official Public Records of Ector
County, Texas, and as affected by Assignment and Assumption Agreements dated
February 4, 2000, by and between Odessa-Ector Power Partners, L.P. and
Odessa-Ector Power Partners Services, L.P. (now known as Odessa-Ector Power
Partners, L.P.), said assignments recorded in Volume 1512, Page 0941; Volume
1512, Page 0968; and Volume 1512, Page 0974, all of the Official Public Records
of Ector County, Texas, all as more fully described below:

Tract 24, Parcel A (30-foot pipeline easement):

Plat and legal description of a 30 foot wide right-of-way and pipeline easement
located in Sections 9 and 10, Block 42, T-3-S, T&P RR Co. Survey, Ector County,
Texas.

Survey of centerline being more particularly described as follows:

Beginning at (Y=10,612,089.00’, X=1,665,608.56’) a  1⁄2” iron rod with a plastic
cap marked “PLS 1974” set in the East boundary line of a 0.500 acre tract, from
whence the Southwest corner of said Section 9, Block 42, T-3-S bears S 14°38’21”
E, a distance of 16.25 feet and S 76°21’39” W, a distance of 584.83 feet;

Thence N 76°22’57” E with said survey of centerline, at 4692.57 feet pass a
point in the East boundary line of said Section 9 and the West boundary line of
said Section 10, from whence the position of a 4” iron pipe with collar, found
at the common South corners of Sections 9 and 10, bears S 14°10’31” E, a
distance of 14.47 feet, continuing with survey of centerline for a total
distance of 10,172.12 feet to a point in the East boundary line of said
Section 10 and the end of this centerline description, from whence a  1⁄2” iron
rod found at the Southeast corner of said Section 10 bears S 13°37’03” E, a
distance of 15.00 feet.

Consists of 10,172.12 linear feet or 616.49 rods and 7.01 acres.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998374 and a theta angle of -01°01’55” near the center of this survey.

Tract 24, Parcel B (gas meter site):

Plat and legal description of a 0.500 acre tract located in Section 9, Block 42,
T-3-S, T&P RR. Co. Survey, Ector County, Texas.

Boundary being more particularly described by metes and bounds as follows:

Beginning at (Y=10,612,023.15’, X=1,665,400.45’) a  1⁄2” iron rod with a plastic
cap marked “PLS 1974” set at the Southwest corner of this tract under a pasture
fence from whence the Southwest corner of said Section 9, Block 42, T-3-S, bears
S 13°38’21” E, a distance of 1.34 feet and S 76°21’39” W, a distance of 367.06
feet;

 

B-13

--------------------------------------------------------------------------------

Thence N 13°37’03” W, a distance of 100.00 feet to a  1⁄2” iron rod with a
plastic cap marked “PLS 1974” set at the Northwest corner of this tract;

Thence N 76°22’57” E, a distance of 217.80 feet to a  1⁄2” iron rod with a
plastic cap marked “PLS 1974” set at the Northeast corner of this tract;

Thence S 13°37’03” E, a distance of 100.00 feet to a  1⁄2” iron rod with a
plastic cap marked “PLS 1974” set at the Southeast corner of this tract;

Thence S 76°22’57” W along said pasture fence, a distance of 217.80 feet to the
Place of Beginning.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998577and a theta angle of -01°00’51” near the center of this survey.

Tract 24, Parcel C (30-foot roadway and access easement):

Plat and legal description of a 30 foot wide roadway and access easement located
in Section 9, Block 42, T-3-S, T&P RR. Co. Survey Ector County, Texas.

Survey of centerline being more particularly described as follows:

Beginning at (Y=10,511,968.13’, X=1,665,109.59’) a  1⁄2” iron rod with a plastic
cap marked “PLS 1974” set in the East boundary line of State Highway No. 385
from whence the Southwest corner of said Section 9, Block 42, T-3-S, bears S
14°28’10” E, a distance of 16.45 feet and S 76°21’39” W, a distance 71.67 feet;

Thence N 76°22’57” E with said survey of centerline, a distance of 295.64 feet
to a  1⁄2” iron rod with a plastic cap marked “PLS 1974” set in the West
boundary line of a 0.50 acre tract and the end of the centerline description,
from whence a  1⁄2” iron rod set under a pasture fence at the Southwest corner
of said 0.50 acre tract bears S 13°37’03” E, a distance of 15.00 feet.

Consists of 295.64 linear feet or 17.92 rods, and 0.20 acres.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998374 and a theta angle of -01°01’55” near the center of this survey.

 

B-14

--------------------------------------------------------------------------------

TRACT 26, PARCEL A (PIPELINE EASEMENT):

Easement of Right-of-Way dated January 26, 2000, from TXU Electric Company to
Odessa-Ector Power Partners Services, L.P. (now known as Odessa-Ector Power
Partners, L.P.), filed for record on February 1, 2000 and recorded in
Volume 1511, Page 0554, Deed Records of Ector County, Texas.

Plat and legal description of a pipeline easement located in the South half of
Section 48, Block 42, T-3-S, T&P RR. Co. Survey, Ector County, Texas.

Survey of centerline being more particularly described as follows:

Beginning at (Y=10,629,668.64’, X=1,682,343.13’) a point in the South boundary
line of the Texas Electric Service Company Tract, recorded in Volume 479, Page
137, Deed Records of Ector County, Texas, from whence a  1⁄2” iron pipe found at
the Southeast corner of said Section 48, Block 42, T-2-S, bears N 76°17’00” E, a
distance of 415.08 feet and S 14°10’58” E, a distance of 2574.99 feet;

Thence N 14°11’00” W with said survey of centerline, a distance of 75.00 feet to
a point in the North boundary line of the South Half of said Section 48 and the
end of this centerline description, from whence a  1⁄2” iron pipe, found at the
Northeast corner of said South Half of Section 48, bears N 76°17’00” E a
distance of 415.08 feet.

Consists of 75.00 linear feet or 4.54 rods and 0.05 acres.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998374 and a theta angle of -01°01’55” near the center of this survey.

TRACT 26, PARCELS B AND D:

Right-of-Way Agreement dated December 22, 1999, from Averitt Family Ltd. to
Odessa-Ector Power Partners, L.P., filed for record on January 21, 2000 and
recorded in Volume 1509, Page 0801, Official Public Records of Ector County,
Texas, as affected by Assignment and Assumption Agreement dated February 4,
2000, by and between Odessa-Ector Power Partners, L.P. and Odessa-Ector Power
Partners Services, L.P. (now known as Odessa-Ector Power Partners, L.P.),
recorded in Volume 1512, Page 0947, Official Public Records of Ector County,
Texas, being more fully described below:

Tract 26, Parcel B (30-foot right of way and pipeline easement):

Survey of centerline being more particularly described as follows:

Beginning at (Y=10,619,611.00’, X=1,674,216.91’) a point in the South boundary
line of said Section 2, Block 42, T-3-S, from whence a  1⁄2” iron rod found at
the Southwest corner of said Section 2, Block 42, T-3-S, bears S 76°27’00” W, a
distance of 15.00 feet;

 

B-15

--------------------------------------------------------------------------------

Thence N 14°03’43” W with said survey of centerline, a distance of 522.85 feet
to a  1⁄2” iron rod with a plastic cap marked “JFL 2410” set at a point of
deflection;

Thence N 45°03’41” E with said survey of centerline 5.00 feet Southeasterly of a
Southeast boundary line of the Texas Electric Service Company Easement recorded
in Volume 630, Page 228, Deed Records of Ector County, at 6370.53 feet pass the
East boundary line of said Section 2, continuing for a total distance of 6429.13
feet to a  1⁄2” iron rod with a plastic cap marked “PLS 1974” set at a point of
deflection;

Thence N 54°55’41” E with said survey of centerline 5.00 feet Southeasterly of a
Southeast boundary line of said Texas Electric Service Company Easement, at
3883.43 feet pass a point in the North boundary line of Section 1, from whence a
 1⁄2” iron pipe found at the Northeast corner of said Section 1 bears N
75°17’00” E, a distance of 1603.34 feet, continuing with said centerline a total
distance of 5155.13 feet to a  1⁄2” iron rod with a plastic cap marked
“PLS 1974” set at a point of deflection;

Thence N 14°11’00” W, with said survey of centerline, a distance of 2112.72 feet
to a point in the South boundary line of Texas Electric Service Tract recorded
in Volume 479, Page 137, Deed Records of Ector County and the end of this
centerline description, from whence a  1⁄2” iron pipe found at the Southeast
corner of the North part of Section 48 as described in Volume 460, Page 591,
Deed Records of Ector County, bears N 76°21’02” E, a distance of 415.08 feet and
N 14°10’58” W, a distance of 75.00 feet.

Consists of 14,219.83 linear feet or 861.81 rods and 9.80 acres.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998374 and a theta angle of -01°01’55” near the center of this survey.

Tract 26, Parcel D (30-foot right of way and pipeline easement):

Legal description of a 30 foot wide Right-of-Way and pipeline easement located
in Section 11, Block 42, T-3-S, T&P RR. Co. Survey, Ector County, Texas;

Boundary being further described by metes and bounds as follows:

Beginning at (Y=10,514,469.37’, X=1,575,498.40’) a  1⁄2” iron rod found at the
Southwest corner of said Section 11, Block 42, T-3-S and being the Southwest
corner of this tract:

Thence North 14°09’27” West with the West line of said Section 11, a distance of
5099.47 feet to a point in the South right of way fence of Loop 338 and being
the most Northwest corner of this tract;

Thence North 76°17’26” East with the said South right of way line of Loop 338, a
distance of 30.00 feet to a point for the Northeast corner of this tract;

 

B-16

--------------------------------------------------------------------------------

Thence South 14°09’27” East, being 30 feet Easterly and parallel to the West
line of said Section 11, a distance of 5099.52 feet to a point in the South line
of said Section 11 and being the Southeast corner of this tract;

Thence South 76°23’17” West with the said South line of Section 11, a distance
of 30.00 feet to the Point of Beginning containing 153,031 square feet or 3.51
acres of land more or less.

Bearings, distances and coordinates are relative to the Texas State Plane
Coordinate System, 1983 NAD, Central Zone, with a combined grid factor of
0.9998374 and a theta angle of -01°01’55” near the center of this survey.

 

B-17

--------------------------------------------------------------------------------

Exhibit C

Permitted Exceptions

 

A. Standby fees, taxes and assessments for 2017 and subsequent years.

 

B. The following restrictive covenants of record itemized below:

Document 2016-00019099, as corrected in Document 2017-00001512, recorded in the
Official Public Records of Ector County, Texas.

 

C. The following matters and all terms of the documents creating or offering
evidence of the matters:

AS TO ALL TRACTS:

 

  1. All encroachments, encumbrances, violations, variations, and adverse
circumstances affecting the title that would be disclosed by an accurate and
complete survey of the Property which do not and would not reasonably be
expected to, in the aggregate, materially interfere with the ownership or
operation of the Property.

 

  2. All leases, grants, exceptions or reservations of coal, lignite, oil, gas
and other minerals, together with all rights, privileges and immunities relating
thereto, appearing in the Public Records whether or not listed in this
Exhibit C.

AS TO THE FEE TRACTS (TRACT I AND TRACT II):

 

  3. 50’ drainage easement as shown on subdivision plat recorded in Cabinet A,
Page 153-C, Plat Records, Ector County, Texas.

 

  4. 20’ and 15’ water line easement as shown on subdivision plat recorded in
Cabinet A, Page 153-C, Plat Records, Ector County, Texas.

 

  5. General easement of ingress and egress for trash collection purposes as set
forth on subdivision plat recorded in Cabinet A, Page 153-C, Plat Records, Ector
County, Texas.

 

  6. Ten foot (10’) wide easement to TXU Electric Company recorded in
Volume 1528, Page 618, Official Public Records of Ector County, Texas.

 

  7. Power Line easement to TXU Electric Company recorded in Volume 1582,
Page 509, Official Public Records of Ector County, Texas.

 

  8. Thirty Foot (30’) wide pipeline easement to Texland Great Plains Water
Supply Ltd. recorded in Volume 1613, Page 316, Official Public Records of Ector
County, Texas.

 

C-1

--------------------------------------------------------------------------------

  9. Thirty Foot (30’) wide easement to Energas recorded in Volume 1621,
Page 125, Official Public Records of Ector County, Texas.

 

  10. Easement ranging from 20’ wide to 30’ wide to Navasota Odessa Energy
Partnership, LP recorded in Volume 2199, Page 210, Official Public Records of
Ector County, Texas.

 

  11. 15’ wide water line easement to City of Odessa recorded in Volume 1976,
Page 592, Official Public Records of Ector County, Texas.

 

  12. 30’ wide general utility easement to City of Odessa recorded in
Volume 2080, Page 791, Official Public Records of Ector County, Texas.

 

  13. 25’ wide gas pipeline easement to Odessa Fuels, LLC under Document Number
2010-00017526, Official Public Records of Ector County, Texas.

 

  14. Easement to State of Texas as shown by instrument recorded in Volume 428,
Page 155, Deed Records of Ector County, Texas.

 

  15. Forty-five foot (45’) pipeline easement to El Paso Natural Gas of record
in Volume 487, Page 305, Deed Records, Ector County, Texas and as shown on
subdivision plat recorded in Cabinet A, Page 153-C, Plat Records of Ector
County, Texas.

 

  16. Twenty foot (20’) sewer easement to City of Odessa of record in
Volume 255, Page 486, Deed Records, Ector County, Texas and as shown on
subdivision plat recorded in Cabinet A, Page 153-C, Plat Records of Ector
County, Texas.

 

  17. Twenty foot (20’) utility and drainage easement to City of Odessa recorded
in Volume 364, Page 289, Deed Records of Ector County, Texas and as shown on
subdivision plat recorded in Cabinet A, Page 153-C, Plat Records of Ector
County, Texas.

 

  18. Drainage Easements to City of Odessa of record in Volume 358, Page 564,
Deed Records of Ector County, Texas and as shown on subdivision plat recorded in
Cabinet A, Page 153-C, Plat Records of Ector County, Texas.

 

  19. All oil, gas and other minerals reserved in deed to Oso W. Pool recorded
in Volume 42, Page 421, Deed Records, Ector County, Texas.

 

  20. Oil and gas lease to Gulf Production Company recorded in Volume 23,
Page 77, Deed Records, Ector County, Texas.

 

  21. Oil, gas and mineral lease by and between Earl Allison and wife, Bessie
Fay Allison, and Lonnie C. Gaston recorded in Volume 995, Page 592, Deed
Records, Ector County, Texas.

 

C-2

--------------------------------------------------------------------------------

  22. Oil, gas and other minerals reserved in Deed to Giovanni Castelazo and
wife, Melina Castelazo, recorded in Volume 1002, Page 164, Deed Records, Ector
County, Texas.

 

  23. Ratification and Rental Division Order between Oso W. Pool and Lonnie C.
Gaston recorded in Volume 940, Page 529, Deed Records, Ector County, Texas.

 

  24. Oil, gas and mineral lease by and between Texas Commerce Bank, Independent
Executor and Trustee of the Estate of Helen A. Pool, Deceased, and Lonnie C.
Gaston recorded in Volume 940, Page 538, Deed Records, Ector County, Texas.

 

  25. Notice of Declaration of Covenants, Conditions and Restrictions recorded
in Volume 1267, Page 490, Deed Records, Ector County, Texas.

THE FOLLOWING AFFECT EASEMENT TRACT 11-A AND TRACT 12, PARCELS A AND B:

 

  26. Oil and Gas Lease recorded in Volume 140, Page 273, Deed Records, Ector
County, Texas. (Section 29, Block 41, T2S)

 

  27. Oil and Gas Lease recorded in Volume 139, Page 201, Deed Records, Ector
County, Texas. (Sections 32 and 33, Block 41, T2S)

 

  28. Telephone and Telegraph Line Easement granted by Roy Parks and JoJo Parks
to American Telephone & Telegraph, dated March 25, 1925, filed for record on
January 18, 1925 and recorded in Volume 19, Page 66, Deed Records, Ector County,
Texas. (Section 29, Block 41, T2S)

 

  29. Pipeline Easement granted by Houston Endowment Inc. and Sam Taub to
Texas-New Mexico Pipe Line, dated November 18, 1955, filed for record on
October 6, 1955 and recorded in Volume 267, Page 46, Deed Records, Ector County,
Texas. (Section 29, Block 41, T2S)

 

  30. 40 foot Pipeline Easement granted by Harriett P. Faudree, individually and
as guardian of the persons and estates of Martha Ann Parks, Charlotte Jane Parks
and Harriett Ellen Parks, joined by her husband Bill B. Faudree, to Texas New
Mexico Pipe Line, dated April 3, 1957, filed for record on May 17, 1957 and
recorded in Volume 283, Page 311, Deed Records, Ector County, Texas.
(Section 29, Block 41, T2S)

 

  31. Easement granted to Texas New Mexico Pipe Line, recorded in Volume 347,
Page 480, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  32. Easement granted to Texas New Mexico Pipe Line, recorded in Volume 351,
Page 500, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  33. Easement granted to Texas Electric Service Co., recorded in Volume 322,
Page 137, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

C-3

--------------------------------------------------------------------------------

  34. Easement granted to Texas Electric Service Co., recorded in Volume 322,
Page 68, Deed Records, Ector County, Texas. (Section 29, Block41, T2S)

 

  35. Easement granted to Texas Electric Service Co., recorded in Volume 388,
Page 104, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  36. Easement granted to Texas Electric Service Co., recorded in Volume 393,
Page 317, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  37. Easement granted to Texas Electric Service Co., recorded in Volume 577,
Page 159, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  38. Fifty foot pipeline easement granted to Texas Gulf Producing Co., recorded
in Volume 335, Page 195, Deed Records, Ector County, Texas. (Section 29, Block
41, T2S)

 

  39. Easement granted to Texas Gulf Producing Co., recorded in Volume 344
Page 540, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  40. Easement granted to Texas Gulf Producing Co., recorded in Volume 358,
Page 466, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  41. Easement granted to Texas Gulf Producing Co., recorded in Volume 358,
Page 473, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  42. Easement granted to Texas Gulf Producing Co., recorded in Volume 404,
Page 590, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  43. Easement granted to Texas Gulf Producing Co., recorded in Volume 404,
Page 592, Deed Records, Ector County, Texas. (Section 29, Block 41, T2 S)

 

  44. Easement granted to Texas Gulf Producing Co., recorded in Volume 439,
Page 201, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  45. Easement granted to Texas Gulf Producing Co., recorded in Volume 439,
Page 175, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  46. Twenty foot Pipeline Easement and Right-of-Way granted to Texas Gulf
Producing Co., recorded in Volume 462, Page 443, Deed Records, Ector County,
Texas. (Section 29, Block 41, T2S)

 

  47. Correction Easement and Right-of-Way granted to Texas Gulf Producing Co.,
recorded in Volume 472, Page 111, Deed Records, Ector County, Texas.
(Section 29, Block 41, T2S)

 

  48. Easement granted to Phillips Petroleum Co., recorded in Volume 376,
Page 239, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

C-4

--------------------------------------------------------------------------------

  49. Easement granted to Phillips Petroleum Co., recorded in Volume 376,
Page 254, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  50. Easement granted to Phillips Petroleum Co., recorded in Volume 384,
Page 258, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  51. Pipeline Right-of-Way Grant to Phillips Petroleum Co., recorded in
Volume 1433, Page 312, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  52. Easement granted to Phillips Petroleum Co., recorded in Volume 1433,
Page 317, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  53. Pipeline Easement and Right of Way granted by Houston Endowment Inc. to
Pioneer Natural Gas Company, dated June 29, 1967, filed for record on January 9,
1958 and recorded in Volume 540, Page 631, Deed Records, Ector County, Texas.
(Section 29, Block 41, T2S)

 

  54. Pipeline Easement and Right of Way granted by William B. Neely to Pioneer
Natural Gas Company, dated March 5, 1968, filed for record on April 19, 1968 and
recorded in Volume 546, Page 297, Deed Records, Ector County, Texas.
(Section 29, Block 41, T2S)

 

  55. Pipeline Easement and Right of Way granted by Harriett P. Faudree,
individually and as guardian of the person and estate of Harriett Ellen Parks, a
minor, joined by her husband Bill B. Faudree, to Pioneer Natural Gas Company,
dated March 6, 1968, filed for record on April 19, 1968 and recorded in
Volume 546, Page 300, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  56. Easement granted to Pioneer Natural Gas, recorded in Volume 659, Page 79,
Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  57. Easement granted to El Paso Products Pipe Line, recorded in Volume 450,
Page 489, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  58. Easement granted to El Paso Products Pipe Line, recorded in Volume 457,
Page 568, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  59. Easement granted to City of Odessa, recorded in Volume 784, Page 41, Deed
Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  60. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 283, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  61. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 287, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

C-5

--------------------------------------------------------------------------------

  62. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 292, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  63. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 302, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  64. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 307, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  65. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 312, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  66. Fifty foot wide Pipeline Right of Way granted by Houston Endowment Inc. to
Texaco Natural Gas Inc. as recorded in Volume 1309, Page 884, Deed Records,
Ector County, Texas. (Section 29, Block 41, T2S)

 

  67. Fifty foot wide Pipeline Right of Way granted by Charlotte Jane Parks
Kimberlin, as Manager of the Parks Ranch, to Texaco Natural Gas Inc., as
recorded in Volume 1309, Page 889, Deed Records, Ector County, Texas.
(Section 29, Block 41, T2S)

 

  68. Pipeline Right-of-Way Grant to Texaco Natural Gas Inc., recorded in
Volume 1309, Page 880, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  69. Pipeline right-of-way granted to Texaco Natural Gas Inc., recorded in
Volume 1309, Page 889, Deed Records, Ector County, Texas. (Section 29, Block 41,
T2S)

 

  70. Easement granted to Phillips Petroleum Co., recorded in Volume 1433,
Page 317, Deed Records, Ector County, Texas. (Section 29, Block 41, T2S)

 

  71. Pipeline Easement granted by Will F. Miller to Gulf Pipe Line Company and
Gulf Production Company, dated February 7, 1929, filed for record on
February 23, 1929 and recorded in Volume 27, Page 114, Deed Records, Ector
County, Texas. (Section 32, Block 41, T2S)

 

  72. Telephone and Telegraph Line Right-of-Way Agreement granted by Will F.
Miller to American Telephone & Telegraph Company, dated March 25, 1929, filed
for record on March 29, 1929 and recorded in Volume 27, Page 261, Deed Records,
Ector County, Texas. (Section 32, Block 41, T2S)

 

  73. Electric Line Easement and Right-of-Way granted to Texas Electric Service
Company, recorded in Volume 194, Page 251, Deed Records, Ector County, Texas.
(Section 32, Block 41, T2S)

 

C-6

--------------------------------------------------------------------------------

  74. Electric Line Easement and Right-of-way granted to Texas Electric Service
Company recorded in Volume 196, Page 151, Deed Records, Ector County, Texas.
(Section 32, Block 41, T2S)

 

  75. Electric line Easement and Right of Way granted by Harriett P. Faudree,
individually and as Guardian of Martha Ann Parks, Charlotte Jane Parks and
Harriett Ellen Parks, minors, joined by Bill B. Faudree, her husband, to Texas
Electric Service Company, dated November 29, 1961, filed for record on
February 26, 1962 and recorded in Volume 403, Page 285, Deed Records, Ector
County, Texas. (Section 32, Block 41, T2S)

 

  76. Easement granted to Texas Electric Service Company recorded in Volume 409,
Page 99, Deed Records, Ector County, Texas. (Section 32, Block 41, T2S)

 

  77. Easement and Right-of-Way granted to Texas Electric Service Company
recorded in Volume 551, Page 206, Deed Records, Ector County, Texas.
(Section 32, Block 41, T2S)

 

  78. Electric line Easement and Right of Way granted by Harriett P. Faudree,
Individually and as Guardian for the Estate of Harriett Ellen Parks, minor, and
Harriett P. Faudree and William B. Neely, as Trustees for Martha Ann Parks under
Trust Agreement dated March 20, 1967, and as Trustees for Charlotte Jane Parks
Kimberlin under Trust Agreement dated September 1, 1966, to Texas Electric
Service Company, dated April 1, 1968, filed for record on July 29, 1968 and
recorded in Volume 551, Page 214, Deed Records, Ector County, Texas. (Section
32, Block 41, T2S)

 

  79. Fifteen foot Pipeline Easement granted by Houston Endowment Inc. and Sam
Taub to Texas New Mexico Pipe Line, dated November 18, 1955, filed for record on
October 6, 1956 and recorded in Volume 267, Page 46, Deed Records, Ector County,
Texas. (Section 32, Block 41, T2S)

 

  80. 40 foot wide Pipeline Easement granted by Harriett P. Faudree,
individually and as guardian of the persons and estates of Martha Ann Parks,
Charlotte Jane Parks and Harriett Ellen Parks, joined by her husband Bill B.
Faudree, to Texas-New Mexico Pipe Line, dated April 3, 1957, filed for record on
May 17, 1957 and recorded in Volume 283, Page 311, Deed Records, Ector County,
Texas. (Section 32, Block 41, T2S)

 

  81. 50 foot wide Pipeline Easement granted by Harriett P. Faudree,
individually and as guardian of the estate of Martha Ann Parks, Charlotte Jane
Parks and Harriett Ellen Parks, minors, joined by her husband, Bill B. Faudree,
to Texas Gulf Producing Company, dated March 25, 1959, filed for record on
April 7, 1959 and recorded in Volume 335, Page 195, Deed Records, Ector County,
Texas. (Section 32, Block 41, T2S)

 

C-7

--------------------------------------------------------------------------------

  82. 50 foot Pipeline Easement and Right of Way granted by Harriett P. Faudree,
individually and as guardian of the estates of Martha Ann Parks, Charlotte Jane
Parks and Harriett Ellen Parks, minors, joined by Bill B. Faudree, her husband,
to Texas Gulf Producing Company, dated July 19, 1963, filed for record on
August 29, 1963 and recorded in Volume 439, Page 181, Deed Records, Ector
County, Texas. (Section 32, Block 41, T2S)

 

  83. Electric Pole Line Easement and Right of Way granted by Harriett P.
Faudree, individually and as guardian of the estates of Martha Ann Parks,
Charlotte Jane Parks and Harriett Ellen Parks, minors, joined by Bill B.
Faudree, her husband, to Texas Gulf Producing Company, dated July 19, 1963,
filed for record on August 29, 1963 and recorded in Volume 439, Page 183, Deed
Records, Ector County, Texas. (Section 32, Block 41, T2S)

 

  84. Twenty foot Pipeline Easement and Right of Way granted by Harriett P.
Faudree, individually and as guardian of the estates of Martha Ann Parks,
Charlotte Jane Parks and Harriett Ellen Parks, minors, joined by her husband,
Bill B. Faudree, to Texas Gulf Producing Company, a corporation, dated
August 13, 1954, filed for record on September 2, 1964 and recorded in
Volume 462, Page 443, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  85. 100’ Pipeline Easement and Right of Way granted by Harriett P. Faudree,
individually and as guardian of the estates of Martha Ann Parks, Charlotte Jane
Parks and Harriett Ellen Parks, minors, joined by her husband, Bill B. Faudree,
to Texas Gulf Producing Company, dated August 13, 1964, filed for record on
September 2, 1964 and recorded in Volume 462, Page 460, Deed Records, Ector
County, Texas. (Section 32, Block 41, T2S)

 

  86. Correction Easement and Right of Way granted by Harriett P. Faudree,
individually and as guardian of the estates of Martha Ann Parks, Charlotte Jane
Parks and Harriett Ellen Parks, minors, joined by her husband, Bill B. Faudree,
to Texas Gulf Producing Company, dated August 13, 1964, filed for record on
January 25, 1965 and recorded in Volume 472, Page 111, Deed Records, Ector
County, Texas. (Section 32, Block 41, T2S)

 

  87. Easement granted to El Paso Products Pipe Line, recorded in Volume 450,
Page 489, Deed Records, Ector County, Texas. (Section 32, Block 41, T2S)

 

  88. Easement granted to El Paso Products Pipe Line, recorded in Volume 457,
Page 568, Deed Records, Ector County, Texas. (Section 32, Block 41, T2S)

 

  89. Right-of-Way Easement granted to Pioneer Natural Gas Company, recorded in
Volume 540, Page 631, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  90. Pipeline Easement and Right-of-Way granted to Pioneer Natural Gas Company,
recorded in Volume 546, Page 297, Deed Records, Ector County, Texas.
(Section 32, Block 41, T2S)

 

C-8

--------------------------------------------------------------------------------

  91. Pipeline Easement and Right of Way granted by Harriett P. Faudree,
individually and as guardian of the person and estate of Harriett Ellen Parks, a
minor, joined herein by her husband, Bill B. Faudree, to Pioneer Natural Gas
Company, dated March 6, 1958, filed for record on April 19, 1968 and recorded in
Volume 546, Page 300, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  92. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 283, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  93. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 287, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  94. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 292, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  95. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 302, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  96. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 307, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  97. Water and Sewer Easement granted to City of Odessa, recorded in
Volume 784, Page 312, Deed Records, Ector County, Texas. (Section 32, Block 41,
T2S)

 

  98. Pipeline Easement and Right-of-Way granted by Will F. Miller to Gulf Pipe
Line Company, dated February 7, 1929, filed for record on February 23, 1929 and
recorded in Volume 27, Page 114, Deed Records, Ector County, Texas. (Section 33,
Block 41, T2S)

 

  99. Right-of-Way Agreement between Will F. Miller and American Telephone and
Telegraph, dated March 25, 1929, filed for record on March 29, 1929 and recorded
in Volume 27, Page 261, Deed Records, Ector County, Texas. (Section 33, Block
41, T2S)

 

  100. Electric Line Easement and Right-of-Way granted by Sam Taub and Houston
Endowment Inc. to Texas Electric Service Co., dated June 25, 1953, filed for
record on August 5, 1953 and recorded in Volume 194, Page 251, Deed Records,
Ector County, Texas. (Section 33, Block 41, T2S)

 

  101. Easement and Right-of-Way granted to Texas Electric Service Co., recorded
in Volume 403, Page 285, Deed Records, Ector County, Texas. (Section 33,
Block 41, T2S)

 

  102. Electric line Easement and Right of Way granted by Houston Endowment Inc.
and Ben Taub, individually and as Independent Executor of the Estate of Sam
Taub, deceased, and Rosa Taub Kahn and Sylvan Kahn to Texas Electric Service
Company, dated September 20, 1961, filed for record on May 21, 1962 and recorded
in Volume 409, Page 99, Deed Records, Ector County, Texas. (Section 33, Block
41, T2S)

 

C-9

--------------------------------------------------------------------------------

  103. Electric line Easement and Right of Way granted by Houston Endowment
Inc., Ben Taub, a single man, Rosa Taub Kahn, joined proforma by her husband,
Sylvan Kahn, Mary Taub Hibbert, joined proforma by her husband, R.E. Hibbert,
Joanna Taub Ross, joined pro forma by her husband, Jack S. Ross, and Mary
Hibbert Wright, joined proforma by her husband, John Hunter Wright, to Texas
Electric Service Company, dated April 9, 1968, filed for record on July 29, 1968
and recorded in Volume 551, Page 206, Deed Records, Ector County, Texas.
(Section 33, Block 41, T2S)

 

  104. Easement granted to Texas Electric Service Co., recorded in Volume 551,
Page 214, Deed Records, Ector County, Texas. (Section 33, Block 41, T2S)

 

  105. Pipeline Easement granted by Houston Endowment Inc. and Sam Taub to
Texas-New Mexico Pipe Line, dated November 18, 1955, filed for record on
October 6, 1956 and recorded in Volume 267, Page 46, Deed Records, Ector County,
Texas. (Section 33, Block 41, T2S)

 

  106. 40 foot wide Pipeline Easement granted by Harriett P. Faudree,
individually and as guardian of the persons and estates of Martha Ann Parks,
Charlotte Jane Parks and Harriett Ellen Parks, joined herein by her husband,
Bill B. Faudree, to Texas New Mexico Pipe Line, dated April 3, 1957, filed for
record on May 17, 1957 and recorded in Volume 283, Page 311, Deed Records, Ector
County, Texas. (Section 33, Block 41, T2S)

 

  107. Easement granted to Texas Gulf Producing Co., recorded in Volume 404,
Page 594, Deed Records, Ector County, Texas. (Section 33, Block 41, T2S)

 

  108. Easement granted to Texas Gulf Producing Co., recorded in Volume 404,
Page 598, Deed Records, Ector County, Texas. (Section 33, Block 41, T2S)

 

  109. Easement granted to Texas Gulf Producing Co., recorded in Volume 439,
Page 188, Deed Records, Ector County, Texas. (Section 33, Block 41, T2S)

 

  110. Easement granted to Texas Gulf Producing Co., recorded in Volume 439,
Page 175, Deed Records, Ector County, Texas. (Section 33, Block 41, T2S)

 

  111. Easement granted to Texas Gulf Producing Co., recorded in Volume 439,
Page 178, Deed Records, Ector County, Texas. (Section 33, Block 41, T2S)

 

  112. Easement and Right-of-Way granted to Texas Gulf Producing Co., recorded
in Volume 462, Page 460, Deed Records, Ector County, Texas. (Section 33,
Block 41, T2S)

 

C-10

--------------------------------------------------------------------------------

  113. Correction Easement and Right-of-Way granted to Texas Gulf Producing Co.,
recorded in Volume 472, Page 111, Deed Records, Ector County, Texas.
(Section 33, Block 41, T2S)

 

  114. Mineral Deed executed by Commerce Company to Houston Endowment Inc. dated
February 17, 1953, recorded in Volume 189, Page 511, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  115. Right of Way executed by Houston Endowment Inc. and Sam Taub to Texas
Electric Service Company, dated June 25, 1953, and recorded in Volume 197,
Page 337, Deed Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  116. Oil, Gas and Mineral Lease between S.D. Wimberly and wife, Mollie
Wimberly, Lessor, and Robert M. Payne, Lessee, dated February 3, 1948, and
recorded in Volume 100, Page 69, Deed Records, Midland County, Texas.
(Section 33, Block 41, T2S)

 

  117. Easement executed by Houston Endowment Inc. and Sam Taub to Texas-New
Mexico Pipe Line Co., dated November 18, 1955, recorded in Volume 261, Page 180,
Deed Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  118. Right of Way executed by Houston Endowment Inc. et al to Texas-New Mexico
Pipe Line Co., dated March 22, 1955, recorded in Volume 248, Page 492, Deed
Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  119. Easement executed by Harriett P. Faudree, et al to Texas-New Mexico Pipe
Line Co., dated April 3, 1957, recorded in Volume 271, Page 499, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  120. Assignment executed by Gulf Pipe Line Co. to Gulf Refining Company, dated
December 31, 1956, recorded in Volume 284, Page 374, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  121. Easement executed by Harriett P. Faudree et al to Texas Gulf Producing
Co. dated March 25, 1959, recorded in Volume 312, Page 405, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  122. Easement executed by Harriett P. Faudree et vir to Gulf Refining Company
dated December 5, 1960, recorded in Volume 351, Page 549, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  123. Easement executed by Harriett P. Faudree, et vir to Gulf Refining Co.
dated December 5, 1950, recorded in Volume 352, Page 584, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  124. Right of Way executed by Houston Endowment Inc. et al to Gulf Refining
Company dated November 1, 1950, recorded in Volume 356, Page 12, Deed Records
Midland County, Texas. (Section 33, Block 41, T2S)

 

C-11

--------------------------------------------------------------------------------

  125. Easement and Right of Way executed by Harriett P. Faudree et al to Texas
Electric Service Company dated November 29, 1961, recorded in Volume 374,
Page 396, Deed Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  126. Easement and Right of Way executed by Houston Endowment Inc. et al to
Texas Electric Service Company dated September 20, 1961, recorded in Volume 384,
Page 527, Deed Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  127. Easement and Right of Way executed by Harriett P. Faudree et al to Texas
Gulf Producing Co. dated July 19, 1953, recorded in Volume 411, Page 572, Deed
Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  128. Easement and Right of Way executed by Harriett P. Faudree to Texas Gulf
Producing Co. dated July 19, 1963, recorded in Volume 411, Page 576, Deed
Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  129. Easement and Right of Way executed by Harriett P. Faudree to Texas Gulf
Producing Co. dated July 19, 1963, recorded in Volume 411, Page 578, Deed
Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  130. Easement executed by Harriett P. Faudree et al to Texas Gulf Producing
Co. dated August 13, 1964, recorded in Volume 432, Page 476, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  131. Easement executed by Harriett P. Faudree et al to Texas Gulf Producing
Co. dated August 24, 1964, recorded in Volume 432, Page 494, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  132. Easement executed by Harriett P. Faudree et al to Texas Gulf Producing
Co. dated August 24, 1964, recorded in Volume 432, Page 496, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  133. Easement executed by Harriett P. Faudree et al to Texas Gulf Coast
Producing Co. dated August 24, 1954, recorded in Volume 432, Page 498, Deed
Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  134. Easement executed by Harriett P. Faudree et al to Texas Electric Service
Company dated April 1, 1968, recorded in Volume 502, Page 86, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  135. Easement executed by Houston Endowment Inc. to Texas Electric Service
Company dated April 9, 1968, recorded in Volume 502, Page 92, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  136. Notice of Lis Pendens executed by Santa Fe Pipeline Company v. Harriett
P. Faudree et al dated September 9, 1970, recorded in Volume 2, Page 242, Lis
Pendens Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

C-12

--------------------------------------------------------------------------------

  137. Right of Way Easement executed by Harriett P. Faudree et al to Santa Fe
Pipeline Company dated September 23, 1970, recorded in Volume 533, Page 514,
Deed Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  138. Easement executed by Houston Endowment Inc. et al to Santa Fe Pipeline
Company dated October 16, 1970, recorded in Volume 535, Page 328, Deed Records,
Midland County, Texas. (Section 33, Block 41, T2S)

 

  139. Easement executed by Harriett P. Faudree Roberts et al to City of Odessa
dated November 20, 1984, recorded in Volume 847, Page 77, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  140. Easement executed by Houston Endowment Inc. to City of Odessa dated
November 25, 1984, recorded in Volume 847, Page 81, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  141. Easement executed by Harriett P. Faudree et al to City of Odessa dated
November 20, 1984, recorded in Volume 847, Page 85, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  142. Easement executed by Harriett Faudree Roberts et al to City of Odessa
dated November 20, 1984, recorded in Volume 847, Page 89, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  143. Easement executed by Harriett Faudree Roberts et al to City of Odessa
dated November 20, 1984, recorded in Volume 847, Page 93, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  144. Easement executed by Harriett Faudree Roberts et al to City of Odessa
dated November 20, 1984, recorded in Volume 847, Page 97, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  145. Easement executed by Harriett Faudree Roberts et al to City of Odessa
dated November 20, 1994, recorded in Volume 847, Page 101, Deed Records, Midland
County, Texas. (Section 33, Block 41, T2S)

 

  146. Easement and Right of Way executed by Harriett P. Faudree et al to
Houston Endowment Inc. dated January 26, 1987, recorded in Volume 931, Page 685,
Deed Records, Midland County, Texas. (Section 33, Block 41, T2S)

 

  147. Oil and Gas Lease executed by Atlantic Richfield Co. to Charlotte P.
Kimberlin dated January 23, 1998, recorded in Volume 1543, Page 28, Official
Record, Midland County, Texas. (Section 33, Block 41, T2S)

 

  148. Non-Drilling Agreement executed by Tierra Del Este, LLC to Charlotte P.
Kimberlin, Trustee, dated October 15, 1998, recorded in Volume 1616, Page 253,
Official Record, Midland County, Texas. (Section 33, Block 41, T2S)

 

C-13

--------------------------------------------------------------------------------

  149. Non-Drilling Agreement executed by Tierra Del Este, LLC to Charlotte P.
Kimberlin, Trustee, dated October 15, 1998, recorded in Volume 1616, Page 263,
Official Records, Midland county, Texas. (Section 33, Block 41 T2S)

 

  150. Agreement to Amend Oil and Gas Lease executed by Atlantic Richfield Co.
and Charlotte Kimberlin dated April 10, 1998, recorded in Volume 1624, Page 292,
Official Records, Midland County, Texas. (Section 33, Block 41, T2S)

THE FOLLOWING AFFECT EASEMENT TRACT 10, PARCELS B AND C:

 

  151. Pipeline Easement and Right of Way granted by William D. Pool, a married
man dealing in his sole and separate property, to Odessa-Ector Power Partners,
L.P., dated August 7, 1999, filed for record on September 1, 1999 and recorded
in Volume 1486, Page 0075, Deed Records, Ector County, Texas. (Section 31,
Block 41, T2S)

 

  152. Pipeline Easement and Right of Way granted by William D. Pool, a married
man dealing in his sole and separate property to Odessa-Ector Power Partners,
L.P., dated August 6, 1999, filed for record on September 1, 1999 and recorded
in Volume 1486, Page 0081, Deed Records, Ector County, Texas. (Section 31,
Block 41, T2S)

 

  153. Telephone and Telegraph Line Easement granted by G.W. Vierling, Sr. and
Mary M. Vierling to American Telephone and Telegraph Company, dated March 11,
1929, filed for record on March 20, 1929 and recorded in Volume 27, Page 217,
Deed Records, Ector County, Texas. (Section 31, Block 41, T2S)

 

  154. Right-of-Way Agreement by and between G.W. Vierling, Sr. and Gulf
Production Company, dated March 28, 1929, filed for record on April 13, 1929 and
recorded in Volume 27, Page 309, Deed Records, Ector County, Texas. (Section 31,
Block 41, T2S)

 

  155. Electric Line Easement and Right of Way granted by Oso W. Pool to Texas
Electric Service Company, dated July 13, 1953, filed for record on July 31, 1953
and recorded in Volume 194, Page 78, Deed Records, Ector County, Texas. (Section
31, Block 41, T2S)

 

  156. Easement granted by to City of Odessa, recorded in Volume 255, Page 494,
Deed Records, Ector County, Texas. (Section 31, Block 41, T2S)

 

  157. Twenty foot Water and Sewer Easement granted by Oso W. Pool to City of
Odessa, a municipal corporation, dated January 8, 1979, filed for record on
January 11, 1979 and recorded in Volume 760, Page 353, Deed Records, Ector
County, Texas. (Section 31, Block 41, T2S)

 

  158. Electric Line Easement and Right of Way granted by Oso W. Pool and wife,
Helen A. Pool, to Texas Gulf Producing Company, dated December 5, 1960, filed
for record on December 15, 1960 and recorded in Volume 375, Page 200, Deed
Records, Ector County, Texas. (Section 31, Block 41, T2S)

 

C-14

--------------------------------------------------------------------------------

  159. Electric Line Easement and Right of Way granted by Oso W. Pool and wife,
Helen A. Pool, to Texas Gulf Producing Company, dated January 31, 1961, filed
for record on February 9, 1961 and recorded in Volume 379, Page 6, Deed Records,
Ector County, Texas. (Section 31, Block 41, T2S)

 

  160. Twenty foot Pipeline Easement granted by Oso W. Pool and wife, Helen A.
Pool, to Texas Gulf Producing Company, dated December 17, 1963, filed for record
on December 24, 1963 and recorded in Volume 445, Page 587, Deed Records, Ector
County, Texas. (Section 31, Block 41, T2S)

 

  161. Fifty foot Pipeline Easement granted by Oso W. Pool and wife, Helen A
Pool, to Texas Gulf Producing Company, dated December 17, 1963, filed for record
on December 24, 1963 and recorded in Volume 445, Page 589, Deed Records, Ector
County, Texas. (Section 31, Block 41, T2S)

 

  162. Sixty foot Pipeline and Powerline Easement granted by Oso W. Pool and
Helen Pool to El Paso Products Pipeline Company, dated February 28, 1963, filed
for record on March 19, 1953 and recorded in Volume 428, Page 23, Deed Records,
Ector County, Texas. (Section 31, Block 41, T2S)

 

  163. Forty-five foot Pipeline and Powerline Easement granted by Oso Pool and
Helen Pool to El Paso Natural Gas Products Company, dated October 20, 1964,
filed for record on August 3, 1965 and recorded in Volume 487, Page 305, Deed
Records, Ector County, Texas. (Section 31, Block 41, T2S)

 

  164. Easement granted to Texaco Natural Gas, recorded in Volume 1309,
Page 876, Deed Records, Ector County, Texas. (Section 31, Block 41, T2S)

 

  165. Easement granted to Texaco Natural Gas, recorded in Volume 1309,
Page 880, Deed Records, Ector County, Texas. (Section 31, Block 41, T2S)

 

  166. Fifty foot Right of Way Contract granted by William D. Pool to Phillips
Petroleum Company, dated October 21, 1998, filed for record on November 5, 1998
and recorded in Volume 1429, Page 553, Deed Records, Ector County, Texas.
(Section 31, Block 41, T2S)

 

  167. Fifty foot Right of Way Contract granted by John R. Pool to Phillips
Petroleum Company, dated October 23, 1998, filed for record on November 5, 1998
and recorded in Volume 1429, Page 549, Deed Records, Ector County, Texas.
(Section 31, Block 41, T2S)

 

  168. Pipeline Right of Way Grant by Deloris Pool Weinberger, sole and separate
property, to Texaco Natural Gas Inc., a Delaware corporation, dated July 10,
1996, filed for record on October 25, 1996 and recorded in Volume 1309,
Page 0876, Deed Records, Ector County, Texas. (Section 31, Block 41, T2S)

 

C-15

--------------------------------------------------------------------------------

  169. Pipeline Right-of-Way Grant to Texaco Natural Gas, recorded in
Volume 1309, Page 880, Deed Records, Ector County, Texas. (Section 31, Block 41,
T2S)

THE FOLLOWING EXCEPTIONS AFFECT EASEMENT TRACT 13, PARCEL B:

 

  170. Forty-five foot Pipeline and Powerline Easement granted by Oso Pool and
Helen Pool to El Paso Natural Gas Products Company, dated October 20, 1964,
filed for record on August 3, 1965 and recorded in Volume 487, Page 305, Deed
Records, Ector County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  171. Easement granted by Oso W. Pool to City of Odessa, dated March 22, 1960,
filed for record on March 30, 1960 and recorded in Volume 358, Page 564, Deed
Records, Ector county, Texas. (S/2 of Section 36, Block 42, T2S)

 

  172. Correction and Exchange of Easement granted by Oso W. Pool et ux Helen A.
Pool to City of Odessa, dated June 6, 1950, filed for record on June 29, 1960
and recorded in Volume 364, Page 289, Deed Records, Ector County, Texas. (S/2 of
Section 36, Block 42, T2S)

 

  173. Utility and Drainage Easement granted by Oso W. Pool and wife, Helen A.
Pool, to the City of Odessa, dated June 6, 1960, filed for record on June 29,
1960 and recorded in Volume 364, Page 288, Deed Records, Ector County, Texas.
(S/2 of Section 36, Block 42, T2S)

 

  174. Easement granted to State of Texas, recorded in Volume 428, Page 155,
Deed Records, Ector County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  175. General Utility Easement granted by Oso W. Pool to the City of Odessa,
dated June 9, 1972, filed for record on August 15, 1970 and recorded in
Volume 624, Page 490, Deed Records, Ector County, Texas. (S/2 of Section 36,
Block 42, T2S)

 

  176. Distribution Easement and Right of Way granted by Oso W. Pool to Texas
Electric Service Company, dated July 6, 1973, filed for record on September 20,
1973 and recorded in Volume 650, Page 679, Deed Records, Ector County, Texas.
(S/2 of Section 36, Block 42, T2S)

 

  177. Easement for Highway Purposes granted by Oso W. Pool and Helen A. Pool to
Ector County, State of Texas, dated August 1, 1978, filed for record on
August 1, 1978 and recorded in Volume 751, Page 213, Deed Records, Ector County,
Texas. (S/2 of Section 36, Block 42, T2S)

 

  178. Oil, gas and other minerals reserved in Deed to Texas Electric Service
Company recorded in Volume 253, Page 230, Deed Records, Ector County, Texas.
(S/2 of Section 36, Block 42, T2S)

 

  179. Easement granted to the State of Texas, recorded in Volume 255, Page 445,
Deed Records, Ector County, Texas. (S/2 of Section 36, Block 42, T2S)

 

C-16

--------------------------------------------------------------------------------

  180. Twenty (20) foot sewer easement to city of Odessa of record in
Volume 255, Page 486, Deed Records, Ector County, Texas. (S/2 of Section 36,
Block 42, T2S)

 

  181. Oil, gas and other minerals reserved in Deed from Oso Pool and wife,
Helen Pool, to Texas Electric Service Company, recorded in Volume 384, Page 472,
Deed Records, Ector County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  182. Oil, gas and other minerals reserved in Deed from Oso W. Pool and wife,
Helen Pool, to Texas Electric Service Company, dated March 15, 1962, filed for
record on May 11, 1962 and recorded in Volume 408, Page 388, Deed Records, Ector
County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  183. Easement granted to State of Texas, recorded in Volume 428, Page 155,
Deed Records, Ector County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  184. Oil, gas and other minerals reserved in Deed from Oso W. Pool et ux,
Helen Pool, to Texas Electric Service Company, dated February 23, 1965, filed
for record on February 23, 1965 and recorded in Volume 474, Page 327, Deed
Records, Ector County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  185. Oil, gas and other minerals reserved in Deed from Oso W. Pool and wife,
Helen A. Pool, to Texas Electric Service Company, dated January 20, 1967, filed
for record on January 23, 1967 and recorded in Volume 520, Page 228, Deed
Records, Ector County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  186. Oil, gas and other minerals reserved in Deed from Oso W. Pool and his
wife, Helen Pool, to Texas Electric Service company, filed for record on
November 24, 1969 and recorded in Volume 575, Page 47, Deed Records, Ector
County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  187. Oil, gas and other minerals reserved in Deed from Oso W. Pool to John R.
Pool and William Bryce Pool, dated August 22, 1981, filed for record on
October 28, 1981, and recorded in Volume 832, Page 655, Deed Records, Ector
County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  188. Oil, gas and other minerals reserved in Deed from Oso W. Pool to Texas
Electric Service Company, dated September 12, 1984, filed for record on
September 14, 1984 and recorded in Volume 911, Page 53, Deed Records, Ector
County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  189. Oil, gas and other minerals reserved in Correction of Deed from Oso W.
Pool to Texas Electric Service Company, a division of Texas Utilities Electric
Company, a corporation, dated October 15, 1984, filed for record on February 21,
1984 and recorded in Volume 921, Page 689, Deed Records, Ector County, Texas.
(S/2 of Section 36, Block 42, T2S)

 

C-17

--------------------------------------------------------------------------------

  190. Oil, gas and other minerals reserved in correction of Deed from Oso W.
Pool to Texas Electric Service Company, dated October 15, 1984, filed for record
on January 22, 1986 and recorded in Volume 945, Page 111, Deed Records, Ector
County, Texas. (S/2 of Section 36, Block 42, T2S)

 

  191. Easement granted to Texas Electric Service Company, recorded in
Volume 912, Page 565, Deed Records, Ector County, Texas. (S/2 of Section 36,
Block 42, T2S)

 

  192. Correction Warranty Deed from Oso W. Pool to Texas Electric Service
Company, dated October 10, 1984, filed for record on February 21, 1985 and
recorded in Volume 921, Page 686, Deed Records, Ector County, Texas. (S/2 of
Section 36, Block 42, T2S)

 

  193. Correction Warranty Deed from Oso W. Pool to Texas Electric Service
Company, dated October 10, 1984, filed for record on January 22, 1986, recorded
in Volume 945, Page 108, Deed Records, Ector County, Texas. (S/2 of Section 36,
Block 42, T2S)

THE FOLLOWING EXCEPTIONS AFFECT EASEMENT TRACT 15, PARCELS A, B AND C:

 

  194. Oil and Gas Lease recorded in Volume 171, Page 491, Deed Records, Ector
County, Texas, assigned to Gulf Oil Corp. in Volume 171, Page 495, Deed Records,
Ector County, Texas. (E/2 of Section 37, Block 42)

 

  195. Oil and Gas Leases recorded in Volume 992, Page 763 and Volume 992,
Page 784, Deed Records, Ector County, Texas, assigned to Cities Service Oil and
Gas recorded in Volume 997, Page 518 and Volume 997, Page 519, Deed Records,
Ector County, Texas. (E/2 of Section 37, Block 42)

 

  196. Minerals as reserved in Volume 476, Page 423, Deed Records, Ector County,
Texas. (E/2 of Section 37, Block 42)

 

  197. Right-of-Way to State of Texas recorded in Volume 255, Page 437, Deed
Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  198. Right-of-Way to State of Texas recorded in Volume 377, Page 205, Deed
Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  199. Right-of-Way to Shell Pipe Line Corp. recorded in Volume 486, Page 184,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  200. Right-of-Way to Shell Pipe Line Corp. recorded in Volume 486, Page 187,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  201. Right-of-Way to Shell Pipe Line Corp. recorded in Volume 490, Page 308,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

C-18

--------------------------------------------------------------------------------

  202. Right-of-Way to Shell Pipe Line Corp. recorded in Volume 490, Page 309,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  203. Right-of-Way to El Paso Natural Gas Products recorded in Volume 487,
Page 305, Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  204. Right-of-Way to Texas Electric Service Co. recorded in Volume 492,
Page 467, Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  205. Right-of-Way to Texas Electric Service Co. recorded in Volume 492,
Page 469, Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  206. Right-of-Way to Texas Electric Service Co. recorded in Volume 499,
Page 707, Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  207. Right-Of-Way to Santa Fe Pipe Line Co. recorded in Volume 599, Page 642,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  208. Easement to Texas Electric Service Company recorded in Volume 133,
Page 293, Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  209. Easement to Texas Electric Service Co. recorded in Volume 308, Page 447,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  210. Easement to Texas Electric Service Co. recorded in Volume 383, Page 4,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  211. Easement to Texas Electric Service Co. recorded in Volume 443, Page 324,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  212. Easement to Texas Electric Service Co. recorded in Volume 445, Page 270,
Deed Records, Ector county, Texas. (E/2 of Section 37, Block 42)

 

  213. Easement to Texas Electric Service Co. recorded in Volume 567, Page 150,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  214. Easement to Texas Electric Service Company recorded in Volume 561,
Page 297, Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  215. Easement to Texas Electric Service Co. recorded in Volume 672, Page 697,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  216. Easement to Texas Electric Service Company, recorded in Volume 731,
Page 192, Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  217. Easement to Gulf Refining Co. recorded in Volume 464, Page 480, Deed
Records, Ector County, Texas.

 

C-19

--------------------------------------------------------------------------------

  218. Easement to Odessa Natural Corporation recorded in Volume 702, Page 635,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  219. Easement to Texaco Natural Gas, Inc. recorded in Volume 1315, Page 663,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  220. Easement to Orrex Plastics Co. recorded in Volume 1386, Page 382, Deed
Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  221. Easement to Texas Utilities Electric recorded in Volume 1407, Page 548,
Deed Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  222. Easement to Shell Pipe Line Corp. recorded in Volume 1244, Page 416, Deed
Records, Ector County, Texas. (E/2 of Section 37, Block 42)

 

  223. Agreement between Oso W. Pool et al and El Paso Natural Gas Products that
El Paso Natural Gas Products is owner of N/2 except portions conveyed to State
of Texas recorded in Volume 476, Page 428, Deed Records of Ector County, Texas.
(E/2 of Section 37, Block 42)

 

  224. Waste Disposal Agreement between El Paso Products and Industrial Solid
Waste recorded in Volume 793, Page 306, Deed Records, Ector County, Texas. (E/2
of Section 37, Block 42)

 

  225. Industrial District Contract between City of Odessa and Rexene Corp.
recorded in Volume 1128, Page 319, Deed Records, Ector County, Texas. (E/2 of
Section 37, Block 42)

 

  226. Certificate of Remediation between Huntsman Polymers Corp. and Industrial
Solid Waste, recorded in Volume 1477, Page 995, Deed Records, Ector County,
Texas and refiled in Volume 1484, Page 407 to correct legal description. (E/2 of
Section 37, Block 42)

THE FOLLOWING EXCEPTIONS AFFECT EASEMENT TRACT 18 AND TRACT 26, PARCEL A:

 

  227. Oil, Gas and Mineral Lease granted to R.L. York recorded in Volume 214,
Page 373, Deed Records, Ector County, Texas. (NE/4 except N 40’, Section 48,
Block 42, T2S) (Tract 18 and Tract 26, Parcel A and part of Parcels B and C)

 

  228. Oil, Gas and Mineral Lease by and between Walter Fay Cowden Averitt, a
widow, and Bessye Cowden, a widow, to Clifton Wilderspin Ward, recorded in
Volume 449, Page 294, Deed Records, Ector County, Texas. (NE/4 except N 40’,
Section 48, Block 42, T2S) (Tract 18 and Tract 26, Parcel A and part of Parcels
Band C)

 

  229. Oil, Gas and Mineral Lease by and between Walter Fay Cowden Averitt, a
widow, and Bessye Cowden Ward, a widow, to General American Oil Company of
Texas, recorded in Volume 562, Page 141, Deed Records, Ector County, Texas.
(Tract 18 and Tract 26, Parcel A and part of Parcels B and C)

 

C-20

--------------------------------------------------------------------------------

  230. One-fourth of all of the oil, gas and other minerals conveyed to Bessye
C. Ward and Walter Fay C. Averitt and all other elements not considered a part
of the surface estate having been reserved in instrument recorded in Volume 98,
Page 290, Deed Records, Ector County, Texas. (Tract 18 and Tract 26, Parcel A
and part of Parcels B and C)

 

  231. One-fourth of all of the oil, gas and other minerals conveyed to Texas
Electric Service Company and all other elements not considered a part of the
surface estate having been reserved in instrument recorded in Volume 479,
Page 137, Deed Records, Ector County, Texas. (Tract 18 and Tract 26, Parcel A
and part of Parcels B and C)

 

  232. Easement and Right of Way to City of Odessa recorded in Volume 261,
Page 34, Deed Records, Ector County, Texas. (Tract 18 and Tract 25, Parcel A and
part of Parcels B and C)

 

  233. Pipeline Right of Way Easement to Morton Salt Company recorded in
Volume 278, Page 61, Deed Records, Ector County, Texas. (Tract 18 and Tract 26,
Parcels A and part of Parcels B and C)

 

  234. Easement and Right of Way Deed to Texas Electric Service Co. recorded in
Volume 284, Page 484, Deed Records, Ector County, Texas. (Tract 18 and Tract 26,
Parcel A and part of Parcels B and C)

 

  235. Easement and Right of Way Deed to Texas Electric Service Co. recorded in
Volume 923, Page 514, Deed Records, Ector County, Texas. (Tract 18 and Tract 26,
Parcel A and part of Parcels B and C)

 

  236. Right of Way Deed to Union Texas Petroleum recorded in Volume 522,
Page 304, Deed Records, Ector County, Texas. (Tract 18 and Tract 25, Parcel A
and part of Parcels B and C)

 

  237. Assignment of Pipeline Rights between El Paso Products Company and Odessa
Natural Corp. recorded in Volume 589, Page 368, Deed Records, Ector County,
Texas. (Tract 18 and Tract 26, Parcel A and part of Parcels B and C)

 

  238. Right of Way Grant by Shell Oil Company to Shell Pipeline Corp recorded
in Volume 1283, Page 916, Official Public Records, Ector County, Texas.
(Tract 18 and Tract 25, Parcel A and part of Parcels B and C)

 

  239. Oil, gas and other minerals reserved in Deed to the City of Odessa
recorded in Volume 130, Page 85, Deed Records, Ector County, Texas. (Tract 18
and Tract 25, Parcel A and part of Parcels B and C)

 

C-21

--------------------------------------------------------------------------------

  240. Pipeline Easement to the El Paso Natural Gas Products recorded in
Volume 266, Page 81, Deed Records, Ector County, Texas. (Tract 18 and Tract 26,
Parcel A and part of Parcels B and C)

 

  241. Pipeline Easement to the El Paso Natural Gas Products recorded in
Volume 285, Page 298, Deed Records, Ector County, Texas. (Tract 18 and Tract 26,
Parcel A and part of Parcels B and C)

 

  242. Easement and Right-of-Way by to the Texas Electric Service Co. recorded
in Volume 573, Page 117, Deed Records, Ector County, Texas. (Tract 18 and
Tract 26, Parcel A and part of Parcels B and C)

 

  243. Pipeline Easement by Shell Oil Company to the City of Odessa recorded in
Volume 1194, Page 945, Deed Records, Ector County, Texas. (Tract 18 and
Tract 26, Parcel A and part of Parcels B and C)

 

  244. Right-of-Way Agreement to American Telephone & Telegraph recorded in
Volume 27, Page 205, Deed Records, Ector County, Texas. (Tract 18 and Tract 26,
Parcel A and part of Parcels B and C)

 

  245. Telephone and Telegraph Line Easement to American Telephone & Telegraph
recorded in Volume 28, Page 552, Deed Records, Ector County, Texas. (Tract 18
and Tract 26, Parcel A and part of Parcels B and C)

 

  246. Affidavit re: Waste Disposal by Shell Oil Company to Public recorded in
Volume 705, Page 58, Deed Records, Ector County, Texas. (Tract 18 and Tract 26,
Parcel A and part of Parcels B and C)

THE FOLLOWING EXCEPTIONS AFFECT EASEMENT TRACT 24, PARCELS A, B AND C:

 

  247. Easement and Right of Way to Texas Electric Service Company recorded in
Volume 24, Page 3, Deed Records, Ector County, Texas. (Tract 24, Parcels A, B
and C)

 

  248. Right of Way Agreement to Texas Electric Service Company recorded in
Volume23, Page 463, Deed Records, Ector County, Texas. (Tract 24, Parcels A, B
and C)

 

  249. Easement and Right of Way to Texas Electric Service Company recorded in
Volume 133, Page 297, Deed Records, Ector County, Texas. (Tract 24, Parcels A, B
and C)

 

  250. Right of Way Deed to State of Texas recorded in Volume 67, Page 381, Deed
Records, Ector County, Texas. (Tract 24, Parcels A, B and C)

 

C-22

--------------------------------------------------------------------------------

  251. Sixty foot Pipeline Easement and Right-of-Way to El Paso Natural Gas
Company recorded in Volume 250, Page 420, Deed Records, Ector County, Texas.
(Tract 24, Parcels A, B and C)

 

  252. Easement and Right of Way for electric transmission and distribution line
to Texas Electric Service Company recorded in Volume 298, Page 280, Deed
Records, Ector County, Texas. (Tract 24, Parcels A, B and C)

 

  253. Easement and Right of Way for electric and distribution line to Texas
Electric Service Company recorded in Volume 23, Page 521, Deed Records, Ector
County, Texas. (Tract 24, Parcels A, B and C)

 

  254. Grant of Pipeline Easement to Mid-America Pipeline Company recorded in
Volume 368, Page 255, Deed Records, Ector County, Texas. (Tract 24 Parcels A, B
and C)

 

  255. Grant of Pipeline Easement to Mid-America Pipeline Company recorded in
Volume 369, Page 11, Deed Records, Ector County, Texas. (Tract 24, Parcels A, B
and C)

 

  256. Pipeline Easement and Right of Way to Pioneer Natural Gas Company
recorded in Volume 523, Page 465, Deed Records, Ector County, Texas. (Tract 24,
Parcels A, B and C)

 

  257. Easement and Right of Way to Texas Electric Service Company recorded in
Volume 630, Page 228, Deed Records, Ector County, Texas. (Tract 24, Parcels A, B
and C)

 

  258. Channel Easement to State of Texas recorded in Volume 67, Page 361, Deed
Records, Ector County, Texas. (Tract 24, Parcels A, B and C)

 

  259. Unitization Agreement—South Cowden Unit—Grayburg-San Padres Formation
recorded in Volume 467, Page 189, Deed Records, Ector County, Texas. (Tract 24,
Parcels A, B and C)

 

  260. Final Judgment by State of Texas et al vs. Jess C. Ward, Jr., et al
recorded in Volume 1178, Page 777, Official Public Records of Ector County,
Texas. (58.535 acres out of Sections 4, 9 and 10, Block 42, T3S) (Tract 24,
Parcels A, B and C)

THE FOLLOWING EXCEPTION AFFECTS EASEMENT TRACT 26:

 

  261. Right of Way Easement by Bessye Cowden Ward and Walter Fay Cowden Averitt
to Pioneer Natural Gas Company, recorded in Volume 523, Page 465, Deed Records,
Ector County, Texas. (Tract 26, Parcel D)

 

C-23

--------------------------------------------------------------------------------

THE FOLLOWING EXCEPTIONS AFFECT EASEMENT TRACT 11-A AND TRACT 12, PARCELS A AND
B:

 

  262. Rights or claims, if any, of Henry 3. N. Taub, owner of an undivided
1/60th interest in Fee Simple Title to Tract 0, Parcels 1, 2, 3 and 4; Tract
1—Parcel B; Tracts 2 & 3—Parcel A; Tract 6; Tract 11-A; and Tract 12—Parcels A &
B, Ector County, Texas.1

 

  263. Amended Easement and Right-of-Way from Houston Endowment Inc. to ONCOR
Electric Delivery Company filed on July 8, 2004, recorded in Volume 1852, Page
166, Official Public Records of Ector County, Texas, amending the easement
recorded in Volume 196, Page 251, Deed Records of Ector County, Texas.

 

  264. Gas Pipeline Easement and Right-of-Way from Harriett Ellen Parks Grantor
Trust and Houston Endowment Inc. to Navasota Odessa Energy Partnership, LP,
filed on September 20, 2006, recorded in Volume 2065, Page 272, Official Public
Records of Ector County, Texas as corrected by instrument filed on April 25,
2007, recorded in Volume 2128, Page 305, Official Public Records of Ector
County, Texas.

 

  265. Right-of-Way and Easement Agreement from Parks Ranch Family Joint
Venture, Houston Endowment, Inc. and Texas Land and Cattle II, Ltd, to Odessa
Fuels, LLC, filed on March 10, 2009, recorded in Volume 2323, Page 641, Official
Public Records of Ector County, Texas.

THE FOLLOWING EXCEPTIONS AFFECTS TRACT 13, PARCELS A AND B:

 

  266. Pipeline Easement and Right-of-Way from TXU Electric Delivery Company to
Navasota Energy filed on April 4, 2007, recorded in Volume 2122, Page 565,
Official Public Records of Ector County, Texas.

THE FOLLOWING EXCEPTION AFFECTS EASEMENT TRACT 15, PARCELS A, C, D, F AND H:

 

  267. Pipeline Easement from Huntsman Polymers Corporation to Navasota Odessa
Energy Partners, L. P. filed on January 11, 2007, recorded in Volume 2098,
Page 167, Official Public Records of Ector County, Texas.

THE FOLLOWING EXCEPTION AFFECTS EASEMENT TRACT 15, PARCELS B, E AND G:

 

  268. Pipeline easement from TXU Electric Delivery Company to Navasota Odessa
Energy Partners, L. P. filed on April 4, 2007, recorded in Volume 2122,
Page 565, Official Public Records of Ector County, Texas.

 

 

1  To be revised before Closing upon receipt of clarifying information from
title company.

 

C-24

--------------------------------------------------------------------------------

THE FOLLOWING EXCEPTION AFFECTS TRACT 18, PARCELS A AND B:

 

  269. Pipeline Easement from Equilon Enterprises dba Shell Oil Products US to
Magellan Pipeline Company, L.P. filed on October 18, 2004, recorded in
Volume 1878, Page 716, Official Public Records of Ector County, Texas.

THE FOLLOWING EXCEPTIONS AFFECT EASEMENT TRACT 26, PARCELS B AND D:

 

  270. Right-of Way and Easement from Averitt Family, Ltd. to DCP Midstream, LP
filed on March 30, 2009, recorded in Volume 2327, Page 923, Official Public
Records of Ector County, Texas.

 

  271. Right-of-Way and Easement from Averitt Family, Ltd. to DCP Midstream, LP
filed on January 12, 2010, recorded in Volume 2400, Page 491, Official Public
Records of Ector County, Texas.

AS TO ALL TRACTS:

 

  272. The following items as shown on the survey dated October 10, 2011
prepared by John F. Landgraf, RPLS No. 2410:

1) Loading dock encroaches onto 20’ storm sewer easement recorded under Clerk’s
File No. 255, Page 486.

2) a 40’x40’ Texland metering station in the southeast portion of the property
adjacent to easement granted in Volume 1613, Page 316

3) drill sites shown on the survey and identified as “Henry Resources” and “Lynn
Energy Madyson”

4) MET tower in middle of property

5) THO easement in northwest corner recorded under Volume 441, Page 203

 

  273. Pipeline right-of-way and easement to Navasota Odessa Energy Partners LP
as set forth in instrument recorded in Volume 2199, Page 204, Official Public
Records of Ector County, Texas.2

 

 

2  On confirmation that this affects Easement Tract 13, Parcel B, not all of the
tracts, this will be appropriately labeled (if applicable) before Closing.

 

C-25

--------------------------------------------------------------------------------

Exhibit C-2

Form of Excluded Easements Deed

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR
STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT
TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE
PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

When recorded return to:

Republic Title of Texas, Inc.

2626 Howell Street

Dallas, Texas 75204

QUITCLAIM DEED OF EASEMENT PROPERTY

 

STATE OF TEXAS    §       §    KNOW ALL BY THESE PRESENTS: COUNTY OF ECTOR    §
  

THAT ODESSA-ECTOR POWER PARTNERS, L.P., a Delaware limited partnership
(“Grantor”), for and in consideration of the sum of Ten and No/100 Dollars
($10.00) cash and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, paid by                         ,
a                                  (“Grantee”), whose address is
                                             , has QUITCLAIMED, and by these
presents does hereby QUITCLAIM, unto Grantee, all of Grantor’s right, title and
interest in and to the easement described on Exhibit A attached hereto and made
a part hereof for all purposes (the “Easement Property”).

TO HAVE AND TO HOLD all of Grantor’s right, title and interest in and to the
Easement Property unto Grantee, and Grantee’s successors and assigns, forever,
so that neither Grantor nor Grantor’s successors and assigns shall have, claim
or demand any right or title to the Easement Property or any party thereof.

Grantee, by its acceptance hereof, hereby assumes and agrees to pay all standby
fees, taxes and assessments on or against the Easement Property by any taxing
authority for the calendar year 2017 and subsequent years.

[Signature on following page]

 

C-2

--------------------------------------------------------------------------------

EXECUTED to be effective as of the              day of                     ,
2017.

 

GRANTOR:

 

ODESSA-ECTOR POWER PARTNERS, L.P., a Delaware limited partnership

 

By:   Odessa-Ector Power I, LLC, a Delaware limited liability company, its
general partner

        By:    

        Name:

   

        Title:

   

 

STATE OF                             §    § COUNTY OF                         §

This instrument was ACKNOWLEDGED before me on                     , 2017, by
                            ,                              of Odessa-Ector
Power I, LLC, a Delaware limited liability company, general partner of
Odessa-Ector Power Partners, L.P., a Delaware limited partnership, on behalf of
said limited partnership.

 

Notary Public – State of     

My Commission Expires:

 

 

[seal]

[Signature Page of Quitclaim Deed]

--------------------------------------------------------------------------------

Exhibit A

Easements

VOLUME 1510, PAGE 51 (as to 49.34% interest in the Easement Property)

Pipeline Easement and Right-of-Way dated December 27, 1999, from Sam F. Hurt,
Jr., Sam F. Hurt III, John Hurt and Tom Hurt to Odessa-Ector Power Partners,
L.P., recorded as Instrument 919 in Volume 1510, Page 52, of the Official Public
Records of Ector County, Texas.

VOLUME 1510, PAGE 61 (as to 1.33% interest in the Easement Property)

Pipeline Easement and Right-of-Way dated December 27, 1999, from James McNamara
to Odessa-Ector Power Partners, L.P., recorded as Instrument 920 in Volume 1510,
Page 61, of the Official Public Records of Ector County, Texas.

VOLUME 1510, PAGE 66 (as to 49.33% interest in the Easement Property)

Pipeline Easement and Right-of-Way dated December 27, 1999, from James R. Hurt,
Mary Helen Hurt, James R. Hurt, Jr., Joseph S. Hurt and Sally Bolton to
Odessa-Ector Power Partners, L.P., recorded as Instrument 921 in Volume 1510,
Page 66, of the Official Public Records of Ector County, Texas.

 

A-1

--------------------------------------------------------------------------------

Exhibit D

Form of Assignment and Assumption Agreement

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (this “Agreement”) is executed and
delivered as of [            ], 2017, between La Frontera Holdings, LLC, a
Delaware limited liability company (“Buyer”) and Odessa-Ector Power Partners,
L.P., a Delaware limited partnership (“Seller”).

RECITALS

WHEREAS, Seller and Buyer entered into that certain Asset Purchase Agreement,
dated as of July 5, 2017 (the “Asset Purchase Agreement”), pursuant to which
Seller agreed to, at the Closing, sell, convey, transfer, assign and deliver to
Buyer all of Seller’s right, title and interest in, to and under the Contracts
included as Acquired Assets (the “Assumed Contracts”), and Buyer agreed to, at
the Closing, assume all Liabilities under the Assumed Contracts and all other
Assumed Liabilities;

WHEREAS, Buyer and Seller now desire to carry out the intent and purpose of the
Asset Purchase Agreement by, among other things, the execution and delivery of
this Agreement; and

WHEREAS, capitalized terms used herein without definition shall have the
respective meanings set forth in the Asset Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and with the intent to be legally bound hereby, the Parties agree
as follows:

AGREEMENT

1. Assignment of Assumed Contracts. On the terms and subject to the conditions
set forth in the Asset Purchase Agreement, Seller hereby sells, conveys,
transfers, assigns and delivers to Buyer, and its successors and assigns, all of
Seller’s right, title and interest in, to and under the Assumed Contracts,
including those listed on Section 2.2(e) of the Seller Disclosure Letter, and
Buyer hereby accepts such sale, conveyance, transfer, assignment and delivery
from Seller.

2. Assumption of Assumed Liabilities. On the terms and subject to the conditions
set forth in the Asset Purchase Agreement, Buyer hereby assumes, accepts and
agrees to discharge or perform when due in accordance with their respective
terms and subject to the respective conditions thereof, the Liabilities under
the Assumed Contracts and all other Assumed Liabilities.

3. Asset Purchase Agreement. This Agreement is being executed and delivered
pursuant to and is subject in all respects to the terms and conditions of the
Asset Purchase Agreement, and all of the representations, warranties, covenants
and agreements of the Seller and Buyer contained therein, all of which shall
survive the execution and delivery of this Assignment Agreement in accordance
with the terms of the Asset Purchase Agreement. Nothing in this Agreement shall,
or shall be deemed to, defeat, limit, alter or impair, enhance or enlarge any
right, obligation, claim or remedy created by the Asset Purchase Agreement. In
the event of a conflict between this Agreement and the Asset Purchase Agreement,
the Asset Purchase Agreement shall control and prevail.

 

D-1

--------------------------------------------------------------------------------

4. Parties in Interest. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, including their successors and permitted
assigns, and nothing in this Agreement, express or implied is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

5. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall, taken
together, be considered one and the same agreement. Delivery of an executed
signature page of this Agreement by facsimile or other electronic image scan
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.

6. Amendments and Waivers. This Agreement may not be amended except by an
instrument in writing signed on behalf of Buyer and Seller. Each Party may, by
an instrument in writing signed on behalf of such Party, waive compliance by any
other Party with any term or provision of this Agreement that such other Party
was or is obligated to comply with or perform. No failure or delay by any Party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Except as otherwise provided herein, the rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

7. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic 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.

8. Jurisdiction; Service of Process; Waiver of Jury Trial.

(a) The Parties agree that the Forum for any other disputes between any of the
Parties hereto arising out of or related to this Agreement or the transactions
contemplated hereby is the Court of Chancery in the City of Wilmington, New
Castle County, Delaware except where such court lacks subject matter
jurisdiction. In such event, the Forum is in the federal district court sitting
in Wilmington, Delaware or, in the event such federal district court lacks
subject matter jurisdiction, then in the Superior Court in the City of
Wilmington, New Castle County, Delaware. Each of the Parties hereto irrevocably
submits to the jurisdiction of the Forum in respect of any disputes arising out
of or related to this Agreement or the transactions contemplated hereby. The
Parties further agree that the Parties will not bring suit with respect to any
disputes arising out of or related to this Agreement or the transactions
contemplated hereby in any court or jurisdiction other than the Forum. The
preceding sentence will not limit the rights of the Parties to obtain execution
of a judgment in any other jurisdiction. The Parties further agree, to the
extent permitted by Law, that a final and non-appealable judgment against a
Party in any proceeding contemplated in this Section 8 will be conclusive and
may be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified or exemplified copy of which will be
conclusive evidence of the fact and amount of such judgment.

 

D-2

--------------------------------------------------------------------------------

(b) To the extent that any Party has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, each such Party hereby
irrevocably (i) waives such immunity in respect of its obligations with respect
to this Agreement and (ii) submits to the personal jurisdiction of the Forum.
Each of the Parties hereby consents to process being served by any Party in any
suit, action or proceeding by the delivery of a copy thereof in accordance with
the provisions of Section 10.01 of the Asset Purchase Agreement.

(c) EACH PARTY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING BETWEEN OR AMONG ANY OF THE PARTIES ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

[signature page follows]

 

D-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed as of the date first written above.

 

ODESSA-ECTOR POWER PARTNERS, L.P. By:     Name: Title:

AGREED AND ACCEPTED:

 

LA FRONTERA HOLDINGS, LLC

By:     Name: Title:

[Signature Page to Assignment and Assumption Agreement]

--------------------------------------------------------------------------------

Exhibit G

Form of License Agreement

LICENSE AGREEMENT

This License Agreement (“Agreement”) is made and entered into effective as of
[            ], 2017 (the “Effective Date”) by and between Odessa-Ector Power
Partners, L.P., a Delaware limited partnership (“Licensor”) and La Frontera
Holdings, LLC, a Delaware limited liability company(“Licensee”). Licensee and
Licensor are sometimes hereinafter referred to collectively as the “Parties” and
singularly as a “Party”.

WHEREAS, Licensor and Licensee, among others, are parties to an Asset Purchase
Agreement, dated as of July 5, 2017 (the “APA”);

WHEREAS, pursuant to the APA, Licensor has acquired an approximately 1000
megawatt combined cycle, combustion turbine power plant located in Odessa, Texas
(the “Facility”);

WHEREAS, the Facility is benefitted by certain natural gas pipeline easements
upon which pipelines have been constructed so as to transport natural gas to the
Facility;

WHEREAS, although the APA contemplated the assignment of the aforementioned
easements to Licensee, some of such easements, as identified on Exhibit A
attached hereto (each, an “Easement” and, collectively, the “Easements”),
require the consent of the grantors thereof prior to the effective assignment of
such Easements to Licensee, which consent has not, as of the date hereof, been
obtained by the Parties; and

WHEREAS, the Parties wish to enter into this Agreement to permit Licensee to
benefit from the use of the Easements, without assuming legal or equitable title
therein or thereto, for the transmission of natural gas to the Facility until
such time as the grantors’ consent to the assignment of each Easement to
Licensee has been obtained.

NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained in this Agreement, the Parties agree as follows:

ARTICLE 1

LICENSE

Section 1.01 License Grant. The Parties acknowledge that Licensor is and shall
remain throughout the Term the holder of legal title in and to the Easements in
accordance with their terms. Pursuant to Section 2.06 of the APA, the Parties
have agreed to use their reasonable best efforts to obtain the consent of each
of the grantors of the Easements to the assignment thereof to Buyer, but as of
the date hereof, such consents have not been obtained. Accordingly, with respect
to each Easement, until such consent is obtained, Licensor hereby grants to
Licensee a perpetual, non-exclusive license and privilege to access, use and
otherwise enjoy the benefits of the Licensor’s rights under each Easement in
furtherance of Licensee’s ownership, operation, repair, maintenance, replacement
and removal of the pipelines for the provision of natural gas to the Facility,
all as contemplated by this Agreement and the APA, to the fullest extent such
rights may be exercised by any other licensee or invitee of Licensor under the
Easements (the “License”); provided, however, that the License shall only be
deemed to have been granted

 

G-1

--------------------------------------------------------------------------------

hereby if and to the extent the grant thereof does not (a) breach or otherwise
violate, or result in a default or event of default under, the Easements, or
(b) violate applicable law or legal requirements. With respect to any portion or
portions of the Easements to which the License cannot be granted pursuant to the
foregoing sentence, Licensor shall be deemed to have agreed to hold such portion
or portions of the Easements, and the rights and benefits of ownership thereof,
in trust for the benefit of Licensee until such time as the applicable consent
is obtained. Without limiting the foregoing, Licensee shall undertake to pay or
satisfy the corresponding Liabilities (as defined in the APA) for the use of
each Easement to the extent Licensee would have been responsible therefor if a
consent to assign any such Easement had been obtained and full legal and/or
equitable title in and to such Easement was assigned to Licensee. Further,
Licensee shall at all times comply with all of the terms and conditions set
forth in the Easements relating to the use thereof (as though it were the
grantee thereunder) and neither Party shall take any action to terminate any
Easement. Notwithstanding anything to the contrary contained herein, this
Agreement is not intended to and does not grant or create an easement, servitude
or other real property interest, but creates a license only, and Licensee
acknowledges that Licensee does not and shall not claim at any time any real
property interest or estate of any kind or extent whatsoever in the Easements by
virtue of this Agreement or Licensee’s use or occupancy of the Easements. In
connection with the foregoing, the Parties further acknowledge that in no event
shall the relationship between Licensor and Licensee be deemed to be a so-called
landlord-tenant relationship and that in no event shall Licensee be entitled to
avail itself of any rights afforded to tenants under the laws of the state in
which the Easements are located.

Section 1.02 Term. The License to Licensee shall continue as to each Easement
until such time as consent to assign any such Easement has been obtained and
Licensor’s full legal title in and to any such Easement has been assigned to
Licensee (the “Term”). If and only if the Parties have obtained the consent of
the grantor of any Easement to the assignment thereof to the Licensee (or, if
sooner, any unassigned Easement has expired by its terms) then this Agreement
and the License herein granted shall be terminated with respect to any such
Easement, without further action by any Party, but this Agreement shall in all
events remain in full force and effect until Licensor has obtained grantor
consent to the assignment of the last such Easement or the last such unassigned
Easement has expired by it terms.

ARTICLE 2

INSURANCE

Section 2.01 Licensee’s Insurance. At all times during the Term, Licensee shall,
at its sole cost and expense, use commercially reasonably efforts to maintain,
or cause to be maintained, in full force and effect a comprehensive public
liability insurance policy naming Licensor, as an additional insured, covering
death of or injury to persons or damage to property (with limits not less than
Five Million Dollars ($5,000,000) per occurrence) arising out of the use of the
Easements or the activities of Licensee or its employees, agents or invitees in
relation thereto. In addition, Licensee shall maintain its own insurance
covering the pipeline equipment and related assets, against any casualty (it
being understood that Licensor shall not be liable to Licensee in respect of any
of such pipeline equipment and related assets nor casualty thereto unless caused
by the gross negligence or willful misconduct of Licensor).

 

G-2

--------------------------------------------------------------------------------

ARTICLE 3

MISCELLANEOUS

Section 3.01 Waiver of Jury Trial. Each Party herein waives its respective right
to any jury trial with respect to any litigation arising under, or in connection
with, this Agreement.

Section 3.02 No Third Party Beneficiary. This Agreement shall not be construed
to create any third party beneficiary relationship in favor of anyone not a
party to this Agreement. In addition, the Parties waive and disclaim any third
party beneficiary status as to any of the contracts of the other Party.

Section 3.03 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas without regard to any principles
of conflicts of laws that would render such law inapplicable.

Section 3.04 Modifications. This Agreement constitutes the entire agreement
between the Parties, which shall not be modified except by writing signed by the
Parties. Neither Party has made any representations to the other except as
specifically set forth herein or in the APA.

Section 3.05 Recitals, Headings and Titles. The captions in this Agreement are
for the convenience of the Parties in the identification of the provisions
hereof and shall not constitute a part of the Agreement nor be considered
interpretive thereof.

Section 3.06 Assignment.

(a) This Agreement shall extend to and be binding upon the successors, assigns,
heirs, personal representatives and representatives in bankruptcy of the Parties
hereto. Neither Party shall sell, assign, or convey this Agreement or any
interest or part thereof without the prior written consent of the other, which
consent may not be unreasonably withheld.

(b) Licensor covenants and agrees that it shall not transfer, assign, encumber,
modify or terminate any Easement without the prior written consent of Licensee.

Section 3.07 Indemnification. Licensee acknowledges that Licensor is entering
into this Agreement as an accommodation to Licensee, and accordingly Licensee
shall indemnify Licensor from any damages, losses or claims arising from
performance or non-performance of this Agreement except for those resulting from
Licensor’s gross negligence or willful misconduct.

Section 3.08 Damages. In the event a Party breaches any provision of this
Agreement, the non-breaching Party shall be entitled to recover from the other
Party the direct actual damages, if any, suffered by the non-breaching Party as
a consequence of the other Party’s breach. Except as otherwise expressly
provided herein, no Party shall be liable under this Agreement, except in the
case of fraud, for (i) punitive or exemplary damages or losses calculated by
reference to any multiple of (A) earnings or earnings before interest, tax,
depreciation or amortization or (B) other financial metric or (ii) special,
consequential or indirect damages or lost profits that are not the reasonably
foreseeable result of a breach of this

 

G-3

--------------------------------------------------------------------------------

Agreement, in each case, whether based on contract, tort, strict liability,
other law or otherwise and whether or not arising from the other Party’s sole,
joint or concurrent negligence, strict liability or other fault for any matter
relating to this Agreement and the transactions contemplated hereby; provided,
however, that the foregoing shall not apply to third-party claims for which any
Party is obligated to indemnify another Person hereunder.

[Signature page follows]

 

G-4

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, by execution in duplicate originals, the Parties hereto have
caused this Agreement to be effective as of the day and year first above
written:

 

LICENSOR:

 

ODESSA-ECTOR POWER PARTNERS, L.P.

By:     Title: Date:

 

LICENSEE:

 

LA FRONTERA HOLDINGS, LLC

By:     Title:   Date:

 

G-5

--------------------------------------------------------------------------------

EXHIBIT A

Easements

[to be attached]