Document:

Exhibit
10.1

 

EMPLOYMENT AGREEMENT

BETWEEN

MICHAEL THOMAS BENNETT AND SPIRIT FINANCE CORPORATION

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”),
dated as of April 5, 2005 (“Effective Date”), is by and between SPIRIT FINANCE CORPORATION, a Maryland corporation (the “Company”),
and Michael Thomas Bennett (the “Executive”):

 

W I T
N E S S E T H :

 

WHEREAS, the Company wishes to employ the Executive in
the capacities and on the terms and conditions set forth below, and the
Executive has agreed to such employment in the capacities and on the terms and
conditions set forth below.

 

NOW, THEREFORE, the Company and the Executive, in
consideration of the respective covenants set forth below, hereby agree as
follows:

 

Section
1.  Employment.

 

(a)                                  Positions.  The Executive shall be employed by the
Company during the Term (defined below) as its Senior Vice President -
Operations.

 

(b)                                 Duties.  The Executive’s principal employment duties
and responsibilities shall be those duties and responsibilities customary for
the position of Senior Vice President - Operations and such other executive
duties and responsibilities as the Chief Operating Officer or Board of
Directors of the Company (the “Board”) shall from time to time reasonably assign
to the Executive.  These duties and responsibilities
shall include, but are not limited to, supervising all business and legal
issues associated with financings provided or obtained by the Company, working
with the Company’s outside legal counsel, primary responsibility for compliance
matters pursuant to agreements of the Company and under federal and state
laws.  At the Company’s recommendation
and upon approval of the Board, the Executive shall also be a voting member of
the Company’s investment committee and a control person required to file
reports under Section 16 of the Securities Exchange Act of 1934, as
amended.  The Executive shall report
directly to Christopher H. Volk, President and Chief Operating Officer of the
Company or his successor.

 

(c)                                  Extent of Services.  Except for illnesses and vacation periods,
the Executive shall devote substantially all of his business time and attention
and his best efforts to the performance of his duties and responsibilities
under this Agreement.  Notwithstanding
the foregoing, Executive (i) may make any investment where he is not
obligated or required to, and shall not in fact, devote any substantial managerial
efforts; (ii) may participate in charitable, academic or community
activities, and in trade or professional organizations; or (iii) may hold
directorships in other companies consistent with the Company’s conflict of
interest policies and corporate governance guidelines as in effect from time to
time (the activities in clauses (i) through (iii) above are collectively
referred to herein as the “Excluded Businesses”); provided that none of the
Excluded

 

 

Businesses individually
or in the aggregate interfere with the performance of the Executive’s duties
under this Agreement.

 

Section
2.  Term.  This Agreement shall be effective as of the
Effective Date and the Executive shall commence employment on April 18, 2005
(the “Commencement Date”).  This
Agreement shall continue in full force and effect until December 15, 2006 and
shall be automatically extended for an additional one-year period thereafter, unless
either party terminates this Agreement not later than 60 days prior to December
15, 2006 by providing written notice to the other party of such party’s intent
not to renew, or it is sooner terminated pursuant to Section 7.  For purposes of this Agreement, “Term” shall
mean the actual duration of the Executive’s employment hereunder, taking into
account any extensions pursuant to this Section 2 or early termination of
employment pursuant to Section 7.

 

Section
3.  Base Salary.  Commencing on the Commencement Date, the
Company shall pay the Executive a base salary annually (the “Base Salary”),
which shall be payable in periodic installments according to the Company’s
normal payroll practices.  The initial
Base Salary shall be $225,000.  The Board or the Compensation
Committee of the Board (the “Compensation Committee”) shall review the Base
Salary at least once a year to determine whether the Base Salary should be
increased effective January 1 of any year during the Term; provided,
however, that on January 1 of each year during the Term the initial Base
Salary shall be increased by a minimum positive amount equal to the Base Salary
in effect on January 1 of the prior year multiplied by the percentage
increase in the Consumer Price Index for such year.  The amount of the increase shall be
determined before March 31 of each year and shall be retroactive to January 1.  The Base Salary, including any increases,
shall not be decreased during the Term.  For
purposes of this Agreement, the term “Base Salary” shall mean the amount
established and adjusted from time to time pursuant to this Section 3.

 

Section
4.  Annual Incentive Bonus.  The Executive shall be entitled to receive an
annual cash Incentive Bonus for each fiscal year during the Term of this
Agreement consistent with a bonus policy adopted by the Compensation Committee
(the “Bonus Policy”).  If the Executive
or the Company, as the case may be, satisfies the threshold performance
criteria contained in such Bonus Policy for a fiscal year, he shall receive an
annual Incentive Bonus equal to at least 25% of the Executive’s Base Salary.  If the Executive or the Company, as the case
may be, satisfies the target performance criteria contained in the Bonus Policy
for a fiscal year, he shall receive an annual Incentive Bonus equal to at least
50% of the Executive’s Base Salary.  If
the Executive or the Company, as the case may be, satisfies the maximum target
performance criteria contained in the Bonus Policy for a fiscal year, he shall
receive an annual Incentive Bonus equal to 90% of the Executive’s Base Salary
(the “Maximum Target Bonus”).  If the
Executive or the Company, as the case may be, fails to satisfy the threshold performance
criteria contained in the Bonus Policy for a fiscal year, the Compensation Committee
may determine whether any Incentive Bonus shall be payable to the Executive for
that year.  The Bonus Policy shall
contain both individual and Company goals established by the Compensation
Committee.  The Board or the Compensation
Committee shall review the Bonus Policy at least once a year to determine
whether the Maximum Target Bonus should be increased effective January 1
of any year during the Term, or whether any additional changes should be made
to the Bonus Policy effective January 1 of any year.  The annual Incentive Bonus, if any, shall be
paid to the Executive no later than 30 days after the date the Compensation
Committee determines

 

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whether the criteria in
the Bonus Policy for such fiscal year were satisfied and determined the amount
of the actual bonus.  For purposes of
this Agreement, the term “Incentive Bonus” shall mean the amount established
pursuant to this Section 4.

 

Section
5.  Stock Based Awards.  The Company has established the 2003 Stock
Option and Incentive Plan (the “Stock Option Plan”).  Pursuant to the recommendation of the
President and senior management of the Company, the Company shall grant the
Executive Restricted Share Grants (the “Initial Restricted Share Grant”) of
20,000 restricted shares in July 2005, subject to formal approval by the
Compensation Committee.  The Common
Shares covered by the Initial Restricted Share Grant shall vest in five equal
annual installments of 4,000 shares commencing January 20, 2006 and each year
thereafter; provided that 50% of such shares shall vest if the Executive is
employed by the Company at the time of vesting and the remaining shares shall
vest based upon performance goals of the Company as determined by the
Compensation Committee; and provided further, however, that the Executive will
be 100% vested in the Initial Restricted Share Grant upon (i) a Change of
Control, as defined herein; (ii) a termination by the Company without
Cause, as defined herein; (iii) a termination by the Executive for Good
Reason, as defined herein; (iv) his death; or (v) his becoming
Permanently Disabled, as defined herein. 
The Executive will forfeit all unvested Initial Restricted Share Grant
shares if he is terminated for Cause or he terminates his employment hereunder
for other than Good Reason.  The
Executive shall be eligible to receive future Restricted Share Grants as
determined by the Compensation Committee.

 

Section
6.  Benefits.

 

(a)                                  Vacation.  The Executive shall be entitled to three weeks
of vacation each full calendar year in accordance with the Company’s policies
and procedures related to vacation time.

 

(b)                                 Sick and Personal Days.  The Executive shall be entitled to sick and
personal days on an as needed basis in accordance with the Company’s policies,
procedures and limits related to sick and personal time.

 

(c)                                  Employee Benefits.

 

(i)                                     Participation in Employee Benefit Plans.  The Executive and his spouse and eligible
dependents, if any, and their respective designated beneficiaries where applicable,
will be eligible for and entitled to participate in any Company sponsored
employee benefit plans, including but not limited to benefits such as group
health, dental, accident, disability insurance, group life insurance and a 401(k)
plan, as such benefits may be offered from time to time pursuant to the terms
of such benefit plans, on a basis no less favorable than that applicable to any
other executive of the Company.

 

(ii)                                  Disability Insurance. 
The Company shall maintain, at its cost, supplemental renewable long-term
disability insurance consistent with the policies of the Company unless determined
in good faith by the Compensation Committee to be unreasonable in cost.

 

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(d)                                 Other Benefits.

 

(i)                                     Annual Physical.  The
Company shall provide, at its cost, a medical examination for the Executive on
an annual basis by a licensed physician in the Scottsdale or Phoenix, Arizona
area selected by the Executive.

 

(ii)                                  Directors and Officers Insurance.  During the Term and the period that begins on
the effective date of termination under Section 7 and ends on December 15, 2007,
the Executive shall be entitled to director and officer insurance coverage for his
acts and omissions while an officer and director of the Company on a basis no
less favorable to him than the coverage provided to any other current officers
and directors during the time the Executive is a director or officer, provided,
however, that all insurance policies providing such director and officer
coverage shall provide coverage for any claim made related to any time the
Executive was a director or officer of the Company or any subsidiary, except
for any period prior to the date of this Agreement for which no coverage need
be provided or any period after which customary tail coverage shall lapse.

 

(iii)                               Life Insurance.  The
Company may purchase on the life of the Executive key man life insurance with
the Company as the beneficiary of the death benefit as the Company deems
appropriate.

 

(iv)                              Expenses, Office and Secretarial Support.  The Executive shall be entitled to
reimbursement of all reasonable expenses, in accordance with the Company’s
policy as in effect from time to time and on a basis no less favorable than
that applicable to any other executive of the Company, including, without
limitation, telephone, reasonable travel and reasonable entertainment expenses
incurred by the Executive in connection with the business of the Company,
promptly upon the presentation by the Executive of appropriate documentation.  The Executive shall also be entitled to
appropriate office space, administrative support, and such other facilities and
services as are reasonably suitable to the Executive’s positions and adequate
for the performance of the Executive’s duties.

 

Section
7.  Termination.  The employment of the Executive by the
Company pursuant to this Agreement shall terminate upon the occurrence of any
of the following:

 

(a)                                  Death or Permanent Disability.  Immediately upon death or Permanent
Disability of the Executive.  As used in
this Agreement, “Permanent Disability” shall have the same meaning as such term
has under any Company Long Term Disability Plan.  If the Company has no Long Term Disability
Plan, “Permanent Disability” shall mean an inability due to a physical or
mental impairment to perform the material services contemplated under this
Agreement for a period of six months, whether or not consecutive, during
any 365-day period.  A determination of
Permanent Disability shall be made by a physician satisfactory to both the
Executive and the Company; provided that if the Executive and the Company do
not agree on a physician, the Executive and the Company shall each select a
physician and these two together shall select a third physician, whose
determination as to Permanent Disability shall be binding on all parties.

 

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The appointment of one or
more individuals to carry out the offices or duties of the Executive during a
period of the Executive’s inability to perform such duties pending a
determination of Permanent Disability shall not be considered a breach of this
Agreement by the Company.

 

(b)                                 For Cause.  At the election of the Company and subject to
the provisions of this Section 7(b), immediately upon written notice by
the Company to the Executive of his termination for Cause.  For purposes of this Agreement, “Cause” for
termination shall be deemed to exist solely in the event of (i) the
conviction of the Executive of, or the entry of a plea of guilty or
nolo contendere by the Executive to, a felony (not including a conviction,
plea of guilty or nolo contendere arising solely under a statutory provision
imposing criminal liability upon the Executive on a strict liability basis due
to the position held by the Executive, so long as any act or omission of the
Executive with respect to such matter was not taken or omitted in contravention
of any applicable policy or directive of the Board); (ii) a breach of his
duty of loyalty which has a material adverse effect upon the Company;
(iii) a failure to perform or adhere to duties that are consistent with
the terms of this Agreement, or the Company’s reasonable and customary
guidelines of employment or reasonable and customary corporate governance
guidelines or policies, including, without limitation, any business code of
ethics adopted by the Board, or to follow the lawful directives of the Board
(provided such directives are consistent with the terms of this Agreement),
which, in any such case, continues for 30 days after written notice from
the Board to the Executive; (iv) negligence or misconduct in the
performance of the Executive’s duties which has a material adverse effect upon
the Company; or (v) a material breach of this Agreement by the Executive that
continues for 30 days after written notice from the Board to the Executive.  For purposes of this Section 7(b), no
act, or failure to act, on the Executive’s part will be deemed “negligence” or “misconduct”
unless done, or omitted to be done, by the Executive not in good faith and
without a reasonable belief that the Executive’s act, or failure to act, was in
the best interest of the Company.  The
parties agree that in order to terminate the Executive pursuant to clauses (ii),
(iv) and (v) hereof, a determination shall be made by a majority of the
independent members of the Board.

 

(c)                                  Without Cause; Without Good Reason.  At the election of the Company, without
Cause, and at the election of the Executive, without Good Reason, in either
case upon 30 days’ prior written notice to the Executive or the Company,
as the case may be.

 

(d)                                 For Good Reason.  At the election of the Executive, for Good
Reason.  For purposes of this Agreement, “Good
Reason” shall mean any of the following actions or omissions, provided the Executive
notifies the Company of his determination that Good Reason exists within 60 days
of the action or omission on which such determination is based:

 

(i)                                     a
material reduction of or adverse change in the Executive’s duties, titles,
responsibilities or reporting requirements, or the assignment to the Executive of
any duties, responsibilities or reporting requirements that are materially inconsistent
with his position as Senior Vice President - Operations, as the case may be;

 

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(ii)                                  a
reduction by the Company in the Executive’s annual Base Salary or Maximum
Target Bonus;

 

(iii)                               Executive
not being offered employee benefits or material fringe benefits, both in terms
of the amount of the benefit and the level of the Executive’s participation
therein, enjoyed by the Executive under the employee benefit and welfare plans
of the Company, including, without limitation, such benefits as group health,
dental, 401(k), accident, disability insurance or group life insurance, on the
same terms and conditions as other similar executives of the Company except as
is required by applicable law;

 

(iv)                              absent
the Executive’s prior written consent, the requirement by the Company that the
principal place of business at which the Executive performs his duties be
changed to a location that is outside of a 35-mile radius of Scottsdale, Arizona
(or a substantial increase in the amount of travel that the Executive is
required to do because of a relocation of the Company’s headquarters from
Scottsdale, Arizona).  The parties
acknowledge that for these purposes, Executive’s principal place of business
will be Scottsdale, Arizona;

 

(v)                                 any
failure by the Company to obtain from any successor to the Company an agreement
reasonably satisfactory to Executive to assume and perform this Agreement, as
contemplated by Section 17(e); or

 

(vi)                              a
breach by the Company of any provision of this Agreement that continues for a
period of 30 days after Executive provides written notice to the Company
of such breach.

 

Notwithstanding the
foregoing, in the event that Executive provides the Company with a notice of
termination stating Good Reason, the Company shall have 30 days thereafter in
which to cure or resolve the behavior otherwise constituting Good Reason.

 

Section
8.  Effects of Termination.

 

(a)                                  Termination By the Company Without Cause;
By the Executive for Good Reason.  If the employment of the Executive should
terminate by reason of termination by the Company for any reason other than
Cause, or by the Executive for Good Reason, then the Company shall pay all
compensation and benefits for the Executive as follows:

 

(i)                                     any
Base Salary, Incentive Bonus, expense reimbursements and all other compensation
related payments that are payable as of the date of his termination of
employment that are related to his period of employment preceding his
termination date, including pay in lieu of accrued, but unused, vacation;

 

(ii)                                  the
prorated amount of the Maximum Target Bonus for the year in which the
termination of employment occurs, pro rated for the portion of such year during
which the Executive was employed prior to the effective date of his

 

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termination and
subtracting all Incentive Bonus payments received by Executive during such year
that relate only to such year;

 

(iii)                               the
amount equal to one and one-half (1.5) times the sum of (A) Base Salary,
plus (B) his Maximum Target Bonus, at the rates in effect on the effective
date of his termination of employment.

 

The sum of the amount payable under clauses (ii)
and (iii) hereof is referred to herein as his “Severance Payment”;

 

(iv)                              the
Severance Payment shall be made in a single, lump sum cash payment no later
than 30 days after the effective date of the Executive’s termination of
employment.

 

(v)                                 the
Company shall allow the Executive to continue to participate during the 18
month period following termination (the “Severance Period”) in any and all of
the employee benefit and welfare plans and programs of the Company, excluding
any 401(k) plan, in which the Executive was entitled to participate
immediately prior to his termination, to the same extent and upon the same
terms as the Executive participated in such plans prior to his termination;
provided that the Executive’s continued participation is permissible pursuant
to the terms of such plans and otherwise practicable under the general terms
and provisions of such benefit plans and programs.  During the Severance Period, the Company
shall pay for the Executive’s continued participation in said employee benefit
and welfare plans, including, but not limited to, premiums for group health,
dental, accident, directors and officers insurance and group life insurance,
but excluding any 401(k) plan or disability insurance.  To the extent that continued participation is
neither permissible nor practicable, the Company shall take such actions as may
be necessary to provide the Executive with substantially comparable benefits
(without additional cost to the Executive, including any additional taxes)
outside the scope of such plans including, without limitation, reimbursing the
Executive for his costs in obtaining such coverage, such as COBRA premiums paid
by the Executive and/or his eligible dependents, provided such costs are consistent
with the policies of the Company unless such costs are determined in good faith
to be unreasonable by the Compensation Committee.  If the Executive engages in regular
employment after his termination of employment (whether as an executive or as a
self-employed person but excluding his management or operation of the Excluded
Businesses), any employee benefit and welfare benefits received by the
Executive in consideration of such employment which are the same type as the
employee benefit and welfare benefits provided by the Company will relieve the
Company of its obligation under this Section 8(a)(v) to provide such type
of benefits;

 

(vi)                              the
Executive’s stock options awarded under the Stock Option Plan (or any other or
successor plan) shall immediately become 100% vested and he shall have a two-year
period following the effective date of his termination of

 

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employment in which to
exercise his vested stock options, including those stock options that vested
upon his termination of employment; and

 

(vii)                           the
Executive’s restricted Common Shares awarded under the Stock Option Plan (or
any other or successor plan) shall immediately become 100% vested and all
restrictions shall lapse.

 

(b)                                 Termination on Death.  Upon a termination of employment due to the
Executive’s death, the Executive shall become 100% vested in his stock options
and restricted Common Shares awarded under the Stock Option Plan.  The Executive’s personal representative shall
have a one-year period following the Executive’s death in which to exercise his
vested stock options, including those stock options that vested on death.  The Company shall pay to the Executive’s
personal representative any Base Salary, Incentive Bonus, expense reimbursements
and all other compensation related payments that are payable as of his date of
death and that are related to his period of employment preceding his date of
death.  Within 60 days after the
Executive’s death, the Company shall pay to the Executive’s personal
representative the prorated amount of the Maximum Target Bonus for the year in which
the Executive’s death occurs, prorated for the portion of the year during which
the Executive was employed prior to his death, and subtracting out all Incentive
Bonus payments related to that year received by the Executive during such year.

 

(c)                                  Termination on Permanent Disability.  Upon a termination of employment due to the
Executive’s Permanent Disability, the Executive shall become 100% vested in his
stock options and restricted Common Shares awarded under the Stock Option
Plan.  The Executive or his
representative shall have a one-year period following the Executive becoming
Permanently Disabled in which to exercise his vested stock options, including
those stock options that vested on Permanent Disability.  The Company shall pay to the Executive any
Base Salary, Incentive Bonus, expense reimbursements and all other compensation
related payments that are payable as of his date of Permanent Disability and
that are related to his period of employment preceding his date of Permanent
Disability.  Within 60 days after
the Executive’s Permanent Disability, the Company shall pay to the Executive
the prorated amount of the Maximum Target Bonus for the year in which the
Executive’s Permanent Disability occurs, prorated for the portion of the year
during which the Executive was employed prior to his Permanent Disability, and
subtracting out all Incentive Bonus payments related to that year received by
the Executive during such year.

 

(d)                                 By the Company for Cause or By the
Executive Without Good Reason.  In the event that the Executive’s employment
is terminated by the Company for Cause or by the Executive without Good Reason,
the Company shall pay the Executive his Base Salary, Incentive Bonus, expense
reimbursements and all other compensation related payments that are payable as
of his termination of employment date and that are related to his period of
employment preceding his termination date. 
The Executive shall be entitled to exercise his vested stock options,
determined as of his termination date, pursuant to the terms of the option
grant.  All unvested options and unvested
restricted Common Shares shall be forfeited on his termination date.

 

8

 

(e)                                  Termination of Authority.  Immediately upon the Executive terminating or
being terminated from his employment with the Company for any reason,
notwithstanding anything else appearing in this Agreement or otherwise, the
Executive will stop serving the functions of his terminated or expired
positions, and shall be without any of the authority or responsibility for such
positions.  On request of the Board at
any time following his termination of employment for any reason, the Executive
shall resign from the Board if then a member. 
Upon termination of employment, the Executive shall also be entitled to
all benefits accrued and vested under any employee benefit plan of the Company.

 

(f)                                    Release.  Prior to the payment by the Company of the
Executive’s Severance Payment, the Company, as a condition to such payments,
shall request a customary release from the Executive with respect to all
potential claims the Executive may have against the Company related to the
Executive’s employment with the Company prior to the date of payment by the
Company of the Executive’s Severance Payment. 
If the Executive does not deliver such release, the Company shall not be
required to pay the Executive all or any portion of the Severance Payment;
provided, however, if the Executive shall bring legal action related to his
Employment, nothing in this subsection (f) shall prevent the Executive from
receiving the Severance Payment as an award in such legal action provided the
Executive gives such release at the time of payment of the award.

 

Section
9.  Change of Control.

 

(a)                                  Change of Control.  For purposes of this Agreement, a “Change of
Control” will be deemed to have taken place upon the occurrence of any of the
following events:

 

(i)                                     any
person, entity or affiliated group, excluding any employee benefit plan of the Company,
acquiring more than 50% of the then outstanding voting shares of the Company;

 

(ii)                                  the
consummation of any merger or consolidation of the Company into another
company, such that the holders of the voting shares of the Company immediately
prior to such merger or consolidation represent less than 50% of the combined voting
power of the securities of the surviving company or the parent of such
surviving company;

 

(iii)                               the
complete liquidation of the Company or the sale or disposition of all or
substantially all of the Company’s assets, such that after the transaction, the
holders of the voting shares of the Company immediately prior to the
transaction is less than 50% of the voting securities of the acquiror or the
parent of the acquiror; or

 

(iv)                              a
majority of the independent members of the Board of the Company votes in favor
of a decision that a Change of Control has occurred.

 

9

 

(b)                                 Certain Benefits Upon a Change of Control.  In the event of a Change of Control, the
Executive shall become 100% vested in the stock options and restricted Common
Shares awarded under the Stock Option Plan (or any other or successor plan) and
if the Executive voluntarily terminates his employment without Good Reason
after the Change of Control, then the Executive shall have a one-year period
following the Change of Control in which to exercise his vested stock options,
including those stock options that vested upon the Change of Control.

 

Section
10.  Excess Parachute Excise Tax.

 

(a)                                  If
it is determined (as hereafter provided) that any payment or distribution by
the Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Code by
reason of being “contingent on a change in ownership or control” of the
Company, within the meaning of Section 280G of the Code (or any successor
provision thereto) or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such excise tax (such tax or taxes,
together with any such interest and penalties, are hereafter collectively
referred to as the “Excise Tax”), then Executive shall be entitled to receive
an additional payment or payments (a “Gross-Up Payment”) in an amount such
that, after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax,
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.

 

(i)                                     Subject
to the provisions of this Section 10 hereof, all determinations required
to be made under this Section 10, including whether an Excise Tax is
payable by Executive and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment, shall be made by
the nationally recognized firm of certified public accountants (the “Accounting
Firm”) used by the Company prior to the Change of Control (or, if such
Accounting Firm shall be a nationally recognized firm of certified public
accountants, as selected by Executive). 
The Accounting Firm shall be directed by the Company or Executive to
submit its preliminary determination and detailed supporting calculations to
both the Company and Executive within 15 calendar days after the date of
termination of employment, if applicable, and any other such time or times as
may be requested by the Company or Executive. 
If the Accounting Firm determines that any Excise Tax is payable by
Executive, the Company shall pay the required Gross-Up Payment to, or for the
benefit of, Executive within five business days after receipt of such
determination and calculations.  If the
Accounting Firm determines that no Excise Tax is payable by Executive, it
shall, at the same time as it makes such determination, furnish Executive with
an opinion that he has substantial authority not to report any Excise Tax on
his/her federal, state, local income or other tax

 

10

 

return.  Any determination by the Accounting Firm as
to the amount of the Gross-Up Payment shall be binding upon the Company and
Executive absent a contrary determination by the Internal Revenue Service or a
court of competent jurisdiction; provided, however, that no such determination
shall eliminate or reduce the Company’s obligation to provide any Gross-Up
Payment that shall be due as a result of such contrary determination or the
Executive’s obligation to repay any amounts as a result of such contrary
determination.

 

(ii)                                  The
federal, state and local income or other tax returns filed by Executive (or any
filing made by a consolidated tax group which includes the Company) shall be
prepared and filed on a consistent basis with the determination of the
Accounting Firm with respect to the Excise Tax payable by Executive.  Executive shall make proper payment of the
amount of any Excise Tax, and at the request of the Company, provide to the
Company true and correct copies (with any amendments) of his/her federal income
tax return as filed with the Internal Revenue Service and corresponding state
and local tax returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by the Company,
evidencing such payment.

 

(b)                                 In
the event that the Internal Revenue Service claims that any payment or benefit
received under this Agreement constitutes as “excess parachute payment”, within
the meaning of Section 280G(b)(1) of the Code, Executive shall notify the
Company in writing of such claim.  Such
notification shall be given as soon as practicable but no later than 10
business days after Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid.  Executive
shall not pay such claim prior to the expiration of the 30 day period following
the date on which Executive gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due).  If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall (1) give the Company any information
reasonably requested by the Company relating to such claim; (2) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company and reasonably satisfactory to Executive; (3) cooperate
with the Company in good faith in order to effectively contest such claim; and
(4) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including, but not limited to, additional interest and
penalties and related legal, consulting or other similar fees) incurred in
connection with such contest and shall indemnify and hold Executive harmless,
on an after-tax basis, for and against any Excise Tax or other tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and any payment of costs and expenses.

 

(i)                                     The
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the tax

 

11

 

authority in respect of
such claim and may, at its sole option, either direct Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner,
and Executive agrees to prosecute such contest before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to Executive on an interest-free basis, and
shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax or other tax (including interest and penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that if Executive is required
to extend the statute of limitations to enable the Company to contest such
claim, Executive may limit this extension solely to such contested amount.  The Company’s control of the contest shall be
limited to issues with respect to which a corporate deduction would be
disallowed pursuant to Section 280G of the Code and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.  In addition, no position may be taken nor any
final resolution be agreed to by the Company without Executive’s consent if
such position or resolution could reasonably be expected to adversely affect
Executive (including adversely affecting any other tax position of Executive
unrelated to matters covered hereby).

 

(ii)                                  If,
after the receipt by Executive of any amount advanced by the Company in
connection with the contest of the Excise Tax claim, Executive becomes entitled
to receive any refund with respect to such claim, Executive shall promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto).

 

(c)                                  The
Company and Executive shall each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or
Executive, as the case may be, reasonably requested by the Accounting Firm, and
otherwise cooperate with the Accounting Firm in connection with the preparation
and issuance of the determination contemplated by this Section 10.

 

(d)                                 The
fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by this Section 10 hereof
shall be borne by the Company.  If such
fees and expenses are initially advanced by Executive, the Company shall
reimburse Executive the full amount of such fees and expenses within five
business days after receipt from Executive of a statement therefor and
reasonable evidence of his payment thereof.

 

Section
11.  Confidential Information.  At any time during or after Executive’s
employment with the Company, Executive shall not, without the prior written
consent of the Company, use, divulge, disclose or make accessible to any other
person, firm, partnership, corporation or other entity any confidential or
proprietary information pertaining to the business of the Company or any of its
subsidiaries (“Confidential Information”), pursuant to the policies set forth
in the Company’s employee handbook and compliance manual, as amended from time

 

12

 

to time.  The Company acknowledges that prior to his
employment with the Company, the Executive has lawfully acquired extensive
knowledge of the industries and businesses in which the Company engages in
business and the Company’s customers, and that the provisions of this Section 11
are not intended to restrict the Executive’s use of such previously acquired
knowledge.  Upon termination of the
Executive’s employment with the Company for any reason, the Executive shall
return to the Company all Company property and all written Confidential
Information in the possession of the Executive.

 

In the event that the Executive receives a request or
is required (by deposition, interrogatory, request for documents, subpoena,
civil investigative demand or similar process) to disclose all or any part of
the Confidential Information, the Executive agrees to (a) promptly notify
the Company in writing of the existence, terms and circumstances surrounding
such request or requirement; (b) consult with the Company on the
advisability of taking legally available steps to resist or narrow such request
or requirement; and (c) assist the Company in seeking a protective order
or other appropriate remedy.  In the
event that such protective order or other remedy is not obtained or that the
Company waives compliance with the provisions hereof, the Executive shall not
be liable for such disclosure unless disclosure to any such tribunal was caused
by or resulted from a previous disclosure by the Executive not permitted by
this Agreement.

 

Section
12.  Noncompetition and Nonsolicitation.  During the Term and for a period of 12 calendar months after the termination of the Executive’s
employment (the “Non-compete Period”), the Executive shall not, directly or
indirectly, either as a principal, agent, employee, employer, stockholder,
partner or in any other capacity whatsoever: (a) engage or assist others
engaged, in whole or in part, in any business which is engaged in a business or
enterprise that is substantially similar to and in competition with the
business of the Company that the Company was engaged in, or a planned business
of the Company that had been proposed in writing to senior officers of the
Company or the Board and had not been rejected by the Company or the Board,
during the period of the Executive’s employment with the Company; or
(b) without the prior consent of the Board, employ or solicit the
employment of, or assist others in employing or soliciting the employment of,
any individual employed by the Company (other than the Executive’s personal
assistant or Executive’s secretary) at any time while the Executive was also so
employed; provided, however, that the provisions of this Section 12 shall
not apply in the event the Company materially breaches this Agreement.  For purposes of this Section 12, a business
shall be in competition with the Company only if a significant portion of its
business is to originate mortgage loans to or purchase real estate from and
lease such real estate back to operators of single-tenant retail, distribution
or service companies in the United States. 
Notwithstanding any other provision of this Agreement, in the event the
Executive’s employment is terminated “For Cause,” the Non-Compete Period shall
be 12 calendar months.

 

Nothing in this Section 12 shall impede, restrict
or otherwise interfere with the Executive’s management and operation of the
Excluded Businesses.  Further, nothing in
this Section 12 shall prohibit Executive from making any passive
investment in a public company, or where he is the owner of 5% or less of the
issued and outstanding voting securities of any entity, provided such ownership
does not result in his being obligated or required to devote any managerial
efforts.

 

13

 

The Executive agrees that the restraints imposed upon him
pursuant to this Section 12 are necessary for the reasonable and proper
protection of the Company and its subsidiaries and affiliates, and that each
and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area.  The
parties further agree that, in the event that any provision of this Section 12
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a geographic
area or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.

 

Section
13.  Intellectual Property.  During the Term, the Executive shall promptly
disclose to the Company or any successor or assign, and grant to the Company
and its successors and assigns without any separate remuneration or
compensation other than that received by him in the course of his employment, his
entire right, title and interest in and to any and all inventions,
developments, discoveries, models, or any other intellectual property of any
type or nature whatsoever developed solely during the Term (“Intellectual
Property”), whether developed by him during or after business hours, or alone
or in connection with others, that is in any way related to the business of the
Company, its successors or assigns.  This
provision shall not apply to books or articles authored by the Executive during
non-work hours, consistent with his obligations under this Agreement, so long
as such books or articles (a) are not funded in whole or in part by the
Company, (b) do not interfere with the performance of the Executive’s duties
under this Agreement, and (c) do not contain any Confidential Information
or Intellectual Property of the Company. 
The Executive agrees, at the Company’s expense, to take all steps
necessary or proper to vest title to all such Intellectual Property in the
Company, and cooperate fully and assist the Company in any litigation or other
proceedings involving any such Intellectual Property.

 

Section
14.  Disputes.

 

(a)                                  Equitable Relief.  The Executive acknowledges and agrees that
upon any breach by the Executive of his obligations under Section 11, 12
or 13 hereof, the Company will have no adequate remedy at law, and accordingly
will be entitled to specific performance and other appropriate injunctive and
equitable relief.

 

(b)                                 Arbitration.  Excluding only requests for equitable relief
by the Company under Section 14(a), in the event that there is any claim
or dispute arising out of or relating to this Agreement or the breach hereof,
and the parties hereto shall not have resolved such claim or  dispute within 60 days after written
notice from one party to the other setting forth the nature of such claim or
dispute, then such claim or dispute shall be settled if mutually agreed by
binding arbitration in Maricopa County, Arizona, in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association (“Rules”),
by an arbitrator mutually agreed upon by the parties hereto or, in the absence
of such agreement, by an arbitrator selected according to such Rules.  Notwithstanding the foregoing, if either the
Company or the Executive shall request, such mutually agreeable arbitration
shall be conducted by a panel of three arbitrators, one selected by the
Company, one selected by the Executive and the third selected by agreement of
the first two arbitrators, or, in the absence of such agreement, in accordance
with such Rules.  Judgment upon the award
rendered by such arbitrator(s) shall be

 

14

 

entered in any Court
having jurisdiction thereof upon the application of either party.  The parties agree to use their reasonable
best efforts to have such arbitration completed as soon as is reasonably
practicable.  Notwithstanding anything
herein to the contrary, except as provided in paragraph (c) below the
losing party shall pay the reasonable costs and expenses (including reasonable
attorney fees and expenses) of the prevailing party with respect to such
arbitration, except the Executive, if he is the losing party, shall not be
required to pay such expenses and costs if the claim relates to statutory
discrimination claims that he would not otherwise be required to pay if such
claim had been brought in a court of competent jurisdiction.

 

(c)                                  Legal Fees.  The Company shall pay or promptly reimburse
the Executive for the reasonable legal fees and expenses incurred by the
Executive in successfully enforcing or defending any right of the Executive
pursuant to this Agreement even if the Executive does not prevail on all issues;
provided, however, the Company shall have no obligation to reimburse the
Executive unless the amount recovered by the Executive from the Company is the
greater of (a) $10,000 or (b) 25% of the amount claimed by the Executive in any
demand letter, arbitration or judicial proceeding.

 

Section
15.  Indemnification.  The Company shall indemnify the Executive, to
the maximum extent permitted by applicable law and the governing instruments of
the Company, against all costs, charges and expenses incurred or sustained by
the Executive, including the cost of legal counsel selected and retained by the
Executive in connection with any action, suit or proceeding to which the
Executive may be made a party by reason of the Executive being or having been
an officer, director or employee of the Company.

 

Section
16.  Cooperation in Future Matters.  The Executive hereby agrees that for a period
of 12 months following his termination of employment he shall cooperate with
the Company’s reasonable requests relating to matters that pertain to the Executive’s
employment by the Company, including, without limitation, providing information
or limited consultation as to such matters, participating in legal proceedings,
investigations or audits on behalf of the Company, or otherwise making himself
reasonably available to the Company for other related purposes.  Any such cooperation shall be performed at
scheduled times taking into consideration the Executive’s other commitments,
and the Executive shall be compensated at a reasonable hourly or per diem rate
to be agreed upon by the parties to the extent such cooperation is required on
more than an occasional and limited basis. 
The Executive shall not be required to perform such cooperation to the
extent it conflicts with any requirements of exclusivity of services for
another employer or otherwise, nor in any manner that in the good faith belief
of the Executive would conflict with his rights under or ability to enforce
this Agreement.

 

Section
17.  General.

 

(a)                                  Notices.  All notices and other communications
hereunder shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally or if sent by overnight
courier or by certified mail, return receipt requested, postage prepaid or sent
by written telecommunication or facsimile, to the relevant address set forth
below, or to such other address as the recipient of such notice or

 

15

 

communication shall have
specified in writing to the other party hereto, in accordance with this Section 17(a).

 

to the Company:

 

Spirit Finance Corporation

14631 N. Scottsdale Road

Suite 200

Scottsdale, AZ 
85254 Facsimile:  (480) 606-0826

Attention:  President

 

to Executive, at his last residence shown on the
records of the Company.

 

Any such notice shall be effective (i) if
delivered personally, when received; (ii) if sent by overnight courier,
when receipted for; (iii) if mailed, five days after being mailed;
and (iv) on confirmed receipt if sent by written telecommunication or facsimile;
provided a copy of such communication is sent by regular mail, as described
above.

 

(b)                                 Severability.  If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired.

 

(c)                                  Waivers.  No delay or omission by either party hereto
in exercising any right, power or privilege hereunder shall impair such right,
power or privilege, nor shall any single or partial exercise of any such right,
power or privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege.

 

(d)                                 Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  In making proof of this Agreement, it shall
not be necessary to produce or account for more than one such counterpart.

 

(e)                                  Assigns.  This Agreement shall be binding upon and
inure to the benefit of the Company’s successors and the Executive’s personal
or legal representatives, executors, administrators, heirs, distributees,
devisees and legatees.  This Agreement
shall not be assignable by the Executive, it being understood and agreed that
this is a contract for the Executive’s personal services.  This Agreement shall not be assignable by the
Company except that the Company shall assign it in connection with a
transaction involving the succession by a third party to all or substantially
all of the Company’s business and/or assets (whether direct or indirect and
whether by purchase, merger, consolidation, liquidation or otherwise).  When assigned to a successor, the assignee
shall assume this Agreement and expressly agree to perform this Agreement in
the same manner and to the same extent as the Company would be required to
perform it in the absence of such an assignment.  For all purposes under this Agreement, the
term “Company” shall include any successor to the Company’s business and/or
assets that

 

16

 

executes and delivers the
assumption agreement described in the immediately preceding sentence or that
becomes bound by this Agreement by operation of law.

 

(f)                                    Entire Agreement.  This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter hereof
and may not be amended except by a written instrument hereafter signed by the
Executive and a duly authorized representative of the Board (other than the
Executive); provided, however, the parties acknowledge a letter dated March 30,
2005 to the Executive from the President of the Company regarding transitional
expenses and parking.

 

(g)                                 Governing Law.  This Agreement and the performance hereof
shall be construed and governed in accordance with the laws of the State of
Arizona, without giving effect to principles of conflicts of law. Each
of the parties hereto hereby irrevocably submits to the jurisdiction of any
state or federal court located in Phoenix or Scottsdale, Arizona in respect of
any suit, action or proceeding arising out of or relating to this Agreement,
and irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts.  Each of the parties hereto irrevocably
waives, to the fullest extent it may effectively do so under applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.

 

(h)                                 Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party.  The headings of sections of this Agreement
are for convenience of reference only and shall not affect its meaning or
construction.  Whenever any word is used
herein in one gender, it shall be construed to include the other gender, and
any word used in the singular shall be construed to include the plural in any
case in which it would apply and vice versa.

 

(i)                                     Payments and Exercise of Rights After
Death.  Any amounts
payable hereunder after the Executive’s death shall be paid to the Executive’s
designated beneficiary or beneficiaries, whether received as a designated
beneficiary or by will or the laws of descent and distribution.  The Executive may designate a beneficiary or
beneficiaries for all purposes of this Agreement, and may change at any time
such designation, by notice to the Company making specific reference to this
Agreement.  If no designated beneficiary
survives the Executive or the Executive fails to designate a beneficiary for
purposes of this Agreement prior to his death, all amounts thereafter due
hereunder shall be paid, as and when payable, to his spouse, if he survives the
Executive, and otherwise to his estate.

 

(j)                                     Consultation With Counsel.  The Executive acknowledges that he has had a
full and complete opportunity to consult with counsel or other advisers of his
own choosing concerning the terms, enforceability and implications of this
Agreement, and that the Company has not made any representations or warranties
to the Executive

 

17

 

concerning the terms,
enforceability and implications of this Agreement other than as are reflected
in this Agreement.

 

(k)                                  Withholding.  Any payments provided for in this Agreement
shall be paid after deduction for any applicable income tax withholding
required under federal, state or local law.

 

(l)                                     No Mitigation of Damages.  Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise after the termination
of his employment hereunder.

 

(m)                               Consumer Price Index.  For purposes of this Agreement, the term “CPI”
refers to the Consumer Price Index as published by the Bureau of Labor
Statistics of the United States Department of Labor, U.S. City Average,
All Items for Urban Wage Earners and Clerical Workers (1982-1984=100).  If the CPI is hereafter converted to a
different standard reference base or otherwise revised, the determination of
the CPI adjustment shall be made with the use of such conversion factor,
formula or table for converting the CPI, as may be published by the Bureau of
Labor Statistics, or, if the bureau shall no longer publish the same, then with
the use of such conversion factor, formula or table as may be published by an
agency of the United States, or failing such publication, by a nationally
recognized publisher of similar statistical information.

 

(n)                                 Survival.  The
provisions of Sections 8, 9, 10, 11, 12, 13, 14, 15 and 16 shall survive
the termination of this Agreement.

 

18

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.

 

 

	
   

  	
   

  	
  SPIRIT FINANCE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/
  Christopher H. Volk

  	
   

  
	
   

  	
   

  	
   

  	
  Christopher H.
  Volk, President and Chief

  Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MICHAEL THOMAS
  BENNETT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael Thomas Bennett

  	
   

  
	
   

  	
   

  	
  Michael Thomas
  Bennett

  

 

19Exhibit
10.1

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASE
  AND SALE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  

 

 

By and Among

 

Enterprise Products Operating L.P.

(Seller)

 

and

 

MarkWest Energy Partners, L.P.

(Buyer)

 

 

Covering the Acquisition of a

 

Fifty
Percent Membership Interest in

Starfish
Pipeline Company, LLC

(Acquired
Interest)

 

 

January 24,
2005

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Purchase
  and Sale

  	
   

  
	
   

  	
  (a)

  	
  Sale of Acquired Interest

  	
   

  
	
   

  	
  (b)

  	
  Purchase
  Price.

  	
   

  
	
   

  	
  (c)

  	
  The
  Closing

  	
   

  
	
   

  	
  (d)

  	
  Deliveries at the Closing

  	
   

  
	
   

  	
  (e)

  	
  Post-Closing Adjustment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Representations and Warranties Concerning
  the Transaction

  	
   

  
	
   

  	
  (a)

  	
  Representations and Warranties Concerning
  the Seller

  	
   

  
	
   

  	
  (b)

  	
  Representations and Warranties of the Buyer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and Warranties Concerning
  the Acquired Interest and the Starfish Companies

  	
   

  
	
   

  	
  (a)

  	
  Organization, Qualification, Company Power,
  Capitalization

  	
   

  
	
   

  	
  (b)

  	
  Noncontravention

  	
   

  
	
   

  	
  (c)

  	
  Brokers’
  Fees

  	
   

  
	
   

  	
  (d)

  	
  Title to Tangible Assets

  	
   

  
	
   

  	
  (e)

  	
  Financial
  Data.

  	
   

  
	
   

  	
  (f)

  	
  Material
  Change

  	
   

  
	
   

  	
  (g)

  	
  Legal
  Compliance

  	
   

  
	
   

  	
  (h)

  	
  Tax
  Matters

  	
   

  
	
   

  	
  (i)

  	
  Contracts

  	
   

  
	
   

  	
  (j)

  	
  Litigation

  	
   

  
	
   

  	
  (k)

  	
  Environmental Matters

  	
   

  
	
   

  	
  (l)

  	
  Permits

  	
   

  
	
   

  	
  (m)

  	
  Employee
  Matters

  	
   

  
	
   

  	
  (n)

  	
  Disclaimer of Representations and Warranties Concerning Personal
  Property, Equipment, and Fixtures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Pre-Closing Covenants

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  
	
   

  	
  (b)

  	
  Notices and Consents

  	
   

  
	
   

  	
  (c)

  	
  Full
  Access

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Post-Closing Covenants

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  
	
   

  	
  (b)

  	
  Litigation Support

  	
   

  
	
   

  	
  (c)

  	
  Delivery and Retention of Records

  	
   

  
	
   

  	
  (d)

  	
  Governmental Approvals

  	
   

  

 

i

 

	
  7.

  	
  Conditions to Obligation to Close

  	
   

  
	
   

  	
  (a)

  	
  Conditions to Obligation of the Buyer

  	
   

  
	
   

  	
  (b)

  	
  Conditions to Obligation of the Seller

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Remedies for Breaches of this Agreement

  	
   

  
	
   

  	
  (a)

  	
  Survival of Representations, Warranties and
  Certain Covenants

  	
   

  
	
   

  	
  (b)

  	
  Indemnification Provisions for Benefit of
  the Buyer

  	
   

  
	
   

  	
  (c)

  	
  Indemnification Provisions for Benefit of
  the Seller

  	
   

  
	
   

  	
  (d)

  	
  Matters Involving Third Parties

  	
   

  
	
   

  	
  (e)

  	
  Determination of Amount of Adverse
  Consequences

  	
   

  
	
   

  	
  (f)

  	
  Tax Treatment of Indemnity Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Tax Matters

  	
   

  
	
   

  	
  (a)

  	
  Post-Closing Tax Returns

  	
   

  
	
   

  	
  (b)

  	
  Pre-Closing Tax Returns

  	
   

  
	
   

  	
  (c)

  	
  Straddle
  Periods

  	
   

  
	
   

  	
  (d)

  	
  Claims
  for Refund

  	
   

  
	
   

  	
  (e)

  	
  Indemnification

  	
   

  
	
   

  	
  (f)

  	
  Cooperation on Tax Matters

  	
   

  
	
   

  	
  (g)

  	
  Certain
  Taxes

  	
   

  
	
   

  	
  (h)

  	
  Confidentiality

  	
   

  
	
   

  	
  (i)

  	
  Audits

  	
   

  
	
   

  	
  (j)

  	
  Control of Proceedings

  	
   

  
	
   

  	
  (k)

  	
  Powers of Attorney

  	
   

  
	
   

  	
  (l)

  	
  Remittance of Refunds

  	
   

  
	
   

  	
  (m)

  	
  Purchase Price Allocation

  	
   

  
	
   

  	
  (n)

  	
  Closing Tax Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Termination

  	
   

  
	
   

  	
  (a)

  	
  Termination of Agreement

  	
   

  
	
   

  	
  (b)

  	
  Effect of Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Miscellaneous

  	
   

  
	
   

  	
  (a)

  	
  Press Releases and Public Announcements

  	
   

  
	
   

  	
  (b)

  	
  No Third Party Beneficiaries

  	
   

  
	
   

  	
  (c)

  	
  Succession and Assignment

  	
   

  
	
   

  	
  (d)

  	
  Counterparts

  	
   

  
	
   

  	
  (e)

  	
  Headings

  	
   

  
	
   

  	
  (f)

  	
  Notices

  	
   

  
	
   

  	
  (g)

  	
  Governing
  Law

  	
   

  
	
   

  	
  (h)

  	
  Amendments and Waivers

  	
   

  
	
   

  	
  (i)

  	
  Severability

  	
   

  
	
   

  	
  (j)

  	
  Transaction Expenses

  	
   

  
	
   

  	
  (k)

  	
  Construction

  	
   

  
	
   

  	
  (l)

  	
  Incorporation of Exhibits and Schedules

  	
   

  
	
   

  	
  (m)

  	
  Entire
  Agreement

  	
   

  

 

ii

 

	
   

  	
  (n)

  	
  FTC
  Authorization

  	
   

  

 

	
  Exhibit
  A:

  	
  Form
  of Assignment of Membership Interest

  	
   

  
	
  Schedule 1(b):

  	
  Seller Knowledge

  	
   

  
	
  Schedule 1(c):

  	
  Buyer Knowledge

  	
   

  
	
  Schedule 3(a)(iii):

  	
  Contraventions Relating to Seller

  	
   

  
	
  Schedule 3(b)(iii):

  	
  Contraventions Relating to Buyer

  	
   

  
	
  Schedule 4(b):

  	
  Contraventions Relating to Acquired Interest and Starfish Companies

  	
   

  
	
  Schedule 4(d)(ii):

  	
  Encumbrances of Subject Assets

  	
   

  
	
  Schedule 4(e):

  	
  Financial Data

  	
   

  
	
  Schedule 4(f):

  	
  Material Changes

  	
   

  
	
  Schedule 4(h):

  	
  Tax Matters

  	
   

  
	
  Schedule 4(j):

  	
  Litigation

  	
   

  
	
  Schedule 4(k):

  	
  Environmental

  	
   

  
	
  Schedule 4(l):

  	
  Government Permits

  	
   

  

 

iii

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) dated as of January 21,
2005 is by and among Enterprise Products Operating L.P., a Delaware limited
partnership (the “Seller”), and MarkWest Energy Partners, L.P., a Delaware
limited partnership (the “Buyer”).  The
Seller and the Buyer are sometimes referred to collectively herein as the “Parties”
and individually as a “Party.”

RECITALS

 

WHEREAS, the Seller owns a 50% membership interest (the “Acquired Interest”)  in Starfish
Pipeline Company, LLC, a Delaware limited liability company (“Starfish”), which owns a 100% membership interest
in each of Stingray Pipeline Company, L.L.C., a Delaware limited liability
company (“Stingray”), West Cameron Dehydration Company, L.L.C., a Delaware
limited liability company (“West Cameron”), and Triton Gathering, L.L.C. (“Triton”
together with Starfish, Stingray and West Cameron, the “Starfish Companies”);

 

WHEREAS, Shell Gas Transmission, LLC (“Shell”), owns the other 50%
membership interest in Starfish and is the operator of Starfish and the
Starfish Companies; and

 

WHEREAS, this Agreement contemplates a transaction in which the Buyer
will purchase, and the Seller will sell, all of the Seller’s rights, title and
interests in and to the Acquired Interest in return for the consideration
specified herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:

 

1.                                       Definitions.

 

“Acquired Interest” has the meaning set forth in the Recitals.

 

“Adverse Consequences” means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and attorneys’ fees and expenses, but excluding
punitive (except as provided in Section 8 of this Agreement), exemplary,
special or consequential damages.

 

“Adverse Event” means any breach of any representation, warranty
or covenant of the Seller contained herein (other than the covenants in Section 2
and the representations and warranties in Sections 3(a)).

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.

 

“Agreement” has the meaning set forth in the preface.

 

 

“Assignment of Membership Interest” means the assignment of
membership interest substantially  in
the form of Exhibit A attached  hereto.

 

“Balance Sheet Date” has the meaning set forth in Section 4(e).

 

“Buyer” has the meaning set forth in the preface.

 

“Buyer Indemnitees” means, collectively, the Buyer and its
Affiliates and their officers (or persons performing similar functions),
directors (or persons performing similar functions), employees, agents and
representatives.

 

 “Closing” has the meaning
set forth in Section 2(c).

 

“Closing Date” has the meaning set forth in Section 2(c).

 

“Code” means the Internal Revenue Code of 1986, as amended, including rules and regulations issued pursuant thereto and judicial
and administrative determinations applicable thereto or
any successor Law.

 

“Commitment” means (a) options, warrants, convertible
securities, exchangeable securities, subscription rights, conversion rights,
exchange rights or other contracts that could require a Person to issue any of
its Equity Interests or to sell any Equity Interests it owns in another Person;
(b) any other securities convertible into, exchangeable or exercisable for, or
representing the right to subscribe for any Equity Interest of a Person or
owned by a Person; (c) statutory pre-emptive rights or pre-emptive rights granted
under a Person’s Organizational Documents; and (d) stock appreciation rights,
phantom stock, profit participation, or other similar rights with respect to a
Person.

 

“Confidentiality Agreement” means the Confidentiality Agreement
between the Seller and the Buyer dated September 3, 2004.

 

“Deductible Amount” means an aggregate amount equal to 1% of the
Purchase Price.

 

“Easements” has the meaning set forth in Section 4(d).

 

“Effective Time” has the
meaning set forth in Section 2(a).

 

“Encumbrance” means any
mortgage, pledge, lien, charge, security interest, charging  order, option,
right of first refusal, preferential purchase right, encroachment, reservation, Easement or other interest of similar nature.

 

“Environmental Law” or “Environmental Laws” has the meaning set
forth in Section 4(k).

 

“Equity Interest” means (a) with respect to a corporation, any
and all shares of capital stock and any Commitments with respect thereto, (b)
with respect to a partnership, limited liability company, trust or similar
Person, any and all units, interests or other partnership/limited liability

 

2

 

company interest, and any Commitments with
respect thereto, and (c) any other direct equity ownership or participation in
a Person.

 

“ERISA” means the Employee Retirement Income Security Act of
1974, as amended, all regulations and rules issued
thereunder, and all judicial or administrative determinations applicable
thereto.

 

“Financial Data” has the meaning set forth in Section 4(e).

 

“FTC” has the meaning set forth in Section 3(a)(ii)(A).

 

“FTC Order” means that certain ORDER TO HOLD
SEPARATE AND MAINTAIN ASSETS In The Matter
of Enterprise Products Partners L.P. et al, before the U.S. Federal
Trade Commission, docket number 041-0039.

 

“GAAP” means generally accepted accounting principles and practices in effect from time to time  in
the United States consistently applied throughout the periods involved.

 

“Governmental Authority” means the government of the  United States, any territory or possession of the United States, the District of
Columbia, any international, maritime, foreign government or body,
and any state, county, city or other political subdivision, agency, court or
instrumentality, thereof.

 

“Hazardous Substances” means all materials, substances and
wastes which are regulated under any Environmental Law or which may form the
basis for Liability under any Environmental Law.

 

“Indemnified Party” has the meaning set forth in Section 8(d).

 

“Indemnifying Party” has the meaning set forth in Section 8(d).

 

“Knowledge” means, in the case of the Seller, the knowledge the
individuals listed on Schedule 1(b) hereto have or should have had
pursuant to conducting prudent business practices of a non-operating 50%
interest in Starfish, considering and acknowledging (i) that the Seller has
never been the operator of any of the Starfish Companies or their assets and
(ii) the restrictions imposed by the FTC Order on Seller’s access to
information concerning Starfish and, in the case of the Buyer, the knowledge
the individuals listed on Schedule 1(c) hereto have or should have had
pursuant to conducting prudent business practices in the natural gas pipeline
industry.

 

“Laws” means any statute, code, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any applicable
Governmental Authority.

 

“Legal Right” means the legal authority and right (without risk
of Liability, criminal, civil or otherwise) (A) such that the contemplated
conduct would not, to the extent arising from, related to or in any way
connected with any of the Subject Assets, including, without limitation, any
contracts, agreements or arrangements related thereto, constitute a violation,
termination or breach of, or require any payment or termination under, any
contract or agreement, applicable Law,

 

3

 

fiduciary,
quasi-fiduciary or similar duty or any other obligation of or by any (i) of the
Seller, or any of the Starfish Companies or (ii) Affiliate of any Person
described in (i) above and (B) subject tothe FTC Order, and the condition
therein that required the Seller to vest all its rights, duties, powers and
authority over the ongoing management of the Acquired Interest in a designated monitor
for the period beginning October 1, 2004, and continuing until Seller
divests of the Acquired Interest.

 

“Liability” or “Liabilities” shall mean any debt, obligation, claim, action,
cause of action, demand, assessment, loss, damage, liability, judgment,
settlement, penalty, cost, and expense.

 

“Material Adverse Effect”
means any condition, change or
effect that, individually or in the aggregate with other changes or effects, is
materially adverse to the business, operations and properties of the Starfish Companies or of the  Acquired Interest,
provided that in determining whether a Material Adverse Effect has occurred,
changes or effects relating to (i) the natural gas pipeline industry generally
(including, but not limited to, the price of natural gas and the costs
associated with the drilling and/or production of natural gas), (ii) United
States or global economic conditions or financial markets in general, or (iii)
the transactions contemplated by this Agreement, shall not be considered.

 

 “Ordinary Course of Business”
means the ordinary course of business consistent with the affected party’s past
custom and practice (including with respect to quantity and frequency).

 

“Organizational Documents” means the articles of incorporation,
certificate of incorporation, charter, bylaws, articles or certificate of
formation, regulations, operating agreement, certificate of limited
partnership, partnership agreement, and all other similar documents,
instruments or certificates executed, adopted, or filed in connection with the
creation, formation, or organization of a Person, including any amendments
thereto.

 

“Party” and “Parties” have the meanings set forth in the
preface.

 

“Permits” has the meaning set forth in Section 4(l).

 

“Permitted Encumbrances” means any of the following: (i) any
liens for Taxes and assessments not yet delinquent or, if delinquent, that are
being contested in good faith in the Ordinary Course of Business, which do not or would not have a Material Adverse Effect on the
Acquired Interest or the Starfish Companies and
that adequate reserve accounts have been established in accordance with GAAP;
(ii) any obligations or duties reserved to or vested in any municipality or
other Governmental Authority to regulate any Subject Asset in any manner including
all applicable Laws; (iii) mechanic’s, materialman’s, and similar liens not in excess of $50,000 individually and for which adequate reserve
accounts have been established in accordance with GAAP, and in the aggregate do
not have a Material Adverse Effect; (iv) any liens or
other Encumbrances created in the Ordinary Course of Business  pursuant
to operating, farm-out, construction, operation and maintenance, space lease or
similar agreements or the Organizational Documents of Starfish which individually or in the aggregate do not or would not
have a Material Adverse Effect on  the Acquired Interest or the Starfish Companies; and (v) easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
Ordinary Course of Business which, individually or  in
the aggregate, are not substantial in amount and which do not in

 

4

 

any case have a Material Adverse
Effect on the
value or the use of the property or interest subject thereto as it is currently
being used or materially interfere with the ordinary conduct of the business.

 

“Person” means an individual or entity, including, without
limitation, any partnership, corporation, association, joint stock company,
trust, joint venture, limited liability company, unincorporated organization,
or Governmental Authority (or any department, agency or political subdivision
thereof).

 

“Post-Closing Tax Period” means any
Tax period beginning after the Closing Date.

 

“Post-Closing Tax Return” means any Tax Return that is required
to be filed by or with respect to the
Acquired Interest or the Starfish Companies with respect to a Post-Closing Tax
Period.

 

“Pre-Closing Tax Period” means any Tax
periods or portions thereof ending on or before the Closing Date.

 

“Pre-Closing Tax Return” means any Tax Return that is required
to be filed by or  with
respect to the Acquired Interest or the Starfish Companies with respect to a
Pre-Closing Tax Period.

 

“Prime Rate” means the prime rate reported under “Money Rates”
in The Wall
Street Journal at the time such rate must be determined under the
terms of this Agreement.

 

“Purchase Price” has the meaning set forth in Section 2(b).

 

“Records” has the meaning set forth in Section 6(c).

 

 “Release” means any exposure to Hazardous Substances any presence, emission,
spill, seepage, leak, escape, leaching, discharge, injection, pumping, pouring,
emptying, dumping, disposal, migration, or release of Hazardous Substances into
or upon the environment, including the air, soil, improvements, surface water,
groundwater, the sewer, septic system, storm drain, publicly owned treatment
works, or waste treatment, storage, or disposal systems.

 

“Remediation” means any
investigation, clean-up, removal action, remedial action, restoration, repair,
response action, corrective action, monitoring, sampling and analysis,
installation, reclamation, closure, or post-closure in connection with the
suspected, threatened or actual Release of Hazardous Substances.

 

“Retained Liabilities” has the meaning set forth in Section 2(a).

 

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

 

“Securities Exchange Act” means the Securities Exchange Act of
1934, as amended.

 

“Seller” has the meaning set forth in the preface.

 

5

 

“Seller Indemnitees” means, collectively, the Seller, and each
of its Affiliates (other than the Acquired Interest) and each of their
respective officers (or persons performing similar functions), directors (or
persons performing similar functions), employees, agents, and representatives.

 

“Shell” has the meaning set forth in the Recitals, and shall include its
successors and assigns, including its “Transferee” under the Starfish Limited
Liability Company Agreement.

 

“Starfish” has the meaning set
forth in the Recitals.

 

“Starfish Companies” means collectively Starfish, Triton, Stingray
and West Cameron, including the Subject Assets.

 

 “Starfish Limited Liability
Company Agreement” means the Amended and Restated Limited Liability
Company Agreement of Starfish Pipeline Company LLC dated as of April 1,
2002.

 

“Stingray” has the meaning set forth in the Recitals.

 

“Straddle Period” means a Tax period or year commencing before
and ending after the Effective Time.

 

“Subject Asset(s)” means any or all of the assets of the Starfish Companies, including, without limitation, real property,
leaseholds, equipment, fixtures or personal property.

 

“Subsidiary” means, with respect to any relevant Person, any
other Person that is (directly or indirectly) controlled and more than
90%-owned (directly or indirectly) by the relevant Person.

 

“Tax” or “Taxes” means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code §59A), custom duties, capital stock, franchise,
profits, withholding, social security (or similar excises), unemployment,
disability, ad valorem, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty or addition
thereto, whether disputed or not.

 

“Tax Records” means all Tax Returns and Tax-related work papers
relating to the Acquired
Interest, the Subject Assets and/or the Starfish Companies.

 

“Tax Return” means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

 

“Third Party Claim” has the meaning set forth in Section 8(d).

 

“Transaction Documents” has the meaning set forth in Section 3(a)(ii).

 

6

 

“Triton” has the meaning set
forth in the Recitals.

 

“West Cameron” has the meaning set
forth in the Recitals.

 

2.                                       Purchase and Sale.

 

(a)                                  Sale of Acquired Interest.
Subject to the terms and conditions of this Agreement, the Seller agrees to
sell to the Buyer and the Buyer agrees to purchase from the Seller, effective January 1,
2005 (the “Effective Time”), all of the Seller’s
right, title and interest in and to the Acquired Interest, which is not
evidenced by a certificate.  The
Buyer hereby assumes and agrees to pay, honor and discharge when due and payable
any Liability relating to the ownership, operation, administration or use of
the Acquired Interest.  Notwithstanding
the foregoing, and notwithstanding anything to the contrary contained in this
Agreement, the Buyer shall not assume or perform or discharge any of the
following Liabilities (the “Retained Liabilities”):

 

(i)                                     any Liability of the Seller arising out of or relating to the execution,
delivery or performance of any of the Transaction Documents;

 

(ii)                                  any Liability arising out of or relating to financing and debt
instruments of Seller, or arising out of or relating to all accounts or trade
payable incurred by Seller;

 

(b)                                 Purchase Price.  In consideration for the sale of the Acquired
Interest, the Buyer agrees to pay to the Seller at the Closing Forty-Two
Million One Hundred Thousand Dollars ($42,100,000.00) (the “Purchase Price”)
payable by wire transfer of immediately available funds to one or more bank
accounts designated in a written notice by the Seller to the Buyer at least one business day
prior to the Closing Date. 

 

(c)                                  The Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of the
Seller, commencing at 10:00 a.m. local time on the third business day following
the satisfaction or waiver of all conditions to the obligations of the Parties
to consummate the transactions contemplated hereby (other than conditions with
respect to actions each Party will take at the Closing itself), or such other
date as the Buyer and the Seller may mutually determine (the
“Closing Date”).

 

(d)           Deliveries at the Closing.  At the Closing, (i) the Seller will deliver
to the Buyer the various certificates, instruments, and documents referred to
in Sections 7(a) and 9(i), (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in Section 7(b),
(iii) the Seller will execute and deliver to the Buyer an Assignment of
Membership Interest, and (iv) the Buyer will execute and deliver to the Seller
an Assignment of Membership Interest.

 

3.                                       Representations and
Warranties Concerning the Transaction.

 

(a)                                  Representations and
Warranties Concerning the Seller.  The Seller hereby represents and warrants to
the Buyer as follows:

 

7

 

(i)                                     Organization of
the Seller.  The Seller is a limited
partnership, duly organized, validly existing, and in good standing under the
Laws of the state of Delaware with all requisite power and authority to carry
on its business as it is now conducted.

 

(ii)                                  Authorization of
Transaction. The Seller has full power and authority to enter into,  execute and deliver this Agreement and
the related documents (the “Transaction Documents”) to which it is a party and
to consummate and perform
its obligations hereunder and thereunder. The Transaction Documents to which it
is a party constitute the valid and legally binding obligation of the Seller,
enforceable against it in accordance with their terms and conditions, subject,
however, to the effects of bankruptcy, insolvency, reorganization, moratorium
or similar Laws affecting creditors’ rights generally, and to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law). 
The Seller has obtained all necessary authorizations, consents,
approvals and/or waivers, in order to consummate and perform
its obligations under the Transaction Documents and need not give any notice
to, make any filing with, or obtain any authorization, consent, or approval of (A)  any Governmental Authority in order to
consummate the transactions contemplated by this Agreement, except for the
prior approval of the Federal Trade Commission (“FTC”) or (B) any Person (other than a Governmental Authority) in order to
consummate the transactions contemplated by this Agreement, including, without
limitation, the prior approval of Shell.

 

(iii)                               Noncontravention.  Subject to prior approval of the FTC and except as set forth in Schedule 3(a)(iii),
which scheduled items do not, individually or in the aggregate,
constitute or give rise to a Material Adverse Effect with respect to the
consummation of the transactions contemplated hereby, neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any Governmental Authority to which the Seller is subject or any provision
of its Organizational Documents or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Seller is a party or by which it is bound or to which any of its
assets is subject, except for such violations, defaults, breaches, or other
occurrences that do not, individually or in the aggregate, have or give rise to a Material Adverse Effect on the
ability of the Seller to consummate the transactions contemplated by this
Agreement.  Neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, are subject to any preferential rights to
purchase under the Organizational Documents or other agreements of the Starfish
Companies.

 

(iv)                           Brokers’
Fees.  The Seller has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions

 

8

 

contemplated by
this Agreement for which the Buyer could become liable or obligated.

 

(v)                                 The Acquired Interest.  The Seller owns of record and beneficially
all of the Acquired Interest and has good and valid title free and clear of any restrictions of
transfer and Encumbrances, except as set forth in the Organizational
Documents of the Starfish Companies, and there are no
Commitments with respect to the Equity Interest of the Acquired Interest.  The Acquired Interest has been
duly authorized, and is validly issued and fully paid and non-assessable.  The Acquired Interest represents 50% of the
Equity Interest in Starfish. The Seller is not a party to
any voting trust, proxy, or other agreement or understanding with respect to
voting the Equity Interest of the Acquired Interest.  Consummation of the Transactions and
compliance with the Starfish Limited Liability Company Agreement to the extent
within the Parties’ reasonable control, shall result in Buyer becoming a full
Substituted Member under the Starfish Limited Liability Company Agreement, with
the full right to exercise the powers, rights, privileges, preferences and
restrictions afforded a Member thereunder and to receive a 50% share of allocations
and distributions thereunder pertaining to all operations of the Starfish
Companies from and after the Closing Date.

 

(b)                                 Representations and
Warranties of the Buyer.  The Buyer hereby represents and warrants to the
Seller as follows:

 

(i)                                     Organization of
the Buyer.  The Buyer is a limited
partnership duly organized, validly existing, and in good standing under the
Laws of the state of Delaware with all requisite power and authority to carry
on its business as it is now conducted.

 

(ii)                                  Authorization of
Transaction.  The Buyer has full
power and authority to execute and deliver the Transaction Documents to which
it is a party and to perform its obligations hereunder and thereunder.  The Transaction Documents to which the Buyer
is a party constitute the valid and legally binding obligation of the Buyer,
enforceable against the Buyer in accordance with their terms and conditions,
subject, however, to the effects of bankruptcy, insolvency, reorganization,
moratorium, or similar Laws affecting creditors’ rights generally and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). The Buyer need not give any
notice to, make any filing with, or obtain any authorization, consent, or approval
of any Governmental Authority, except with respect to FTC approval, to
consummate the transactions contemplated by this Agreement.

 

(iii)                               Noncontravention.  Subject to the prior approvals of the FTC and except as set forth in Schedule 3(b)(iii), which scheduled items do not, individually
or in the aggregate, constitute or give rise to a Material Adverse Effect with
respect to the consummation of the transactions

 

9

 

contemplated hereby, neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any Governmental Authority to which the Buyer is subject or any provision of
its Organizational Documents or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice,
approval or consent under any agreement, contract, lease, license, instrument,
or other arrangement to which the Buyer is a party or by which it is bound or
to which any of its assets is subject, except for such violations, defaults, breaches,
or other occurrences that do not, individually or in the aggregate, have a
material adverse effect on the ability of the Buyer to consummate the
transactions contemplated by this Agreement.

 

(iv)                              Brokers’
Fees.  The Buyer has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the Seller
could become liable or obligated.

 

(v)                                 Investment.  The Buyer is not acquiring the Acquired
Interest with a view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act. 
The Buyer, together with its directors and executive officers and
advisors, is familiar with investments of the nature of the Acquired Interest,
understands that this investment involves substantial risks, has adequately
investigated the Acquired Interest and each of the Starfish Companies, and has
substantial knowledge and experience in financial and business matters such
that it is capable of evaluating, and has evaluated, the merits and risks
inherent in purchasing the Acquired Interest, and is able to bear the economic
risks of such investment.

 

(vi)                              Financing.  The Buyer has sufficient immediately
available funds to enable it to make payment of the Purchase Price at Closing
without encumbrance or delay and without causing the Buyer to become insolvent
or to declare insolvency.

 

4.                                       Representations and
Warranties Concerning the Acquired Interest and the Starfish
Companies.  The Seller hereby represents
and warrants to the Buyer as follows:

 

(a)                                  Organization, Qualification,
Company Power, Subsidiaries.  Each
of the Starfish Companies (x) is a limited liability company duly organized and
validly existing, under the Laws of the jurisdiction of its formation; (y) is
duly authorized to conduct business and is in good standing under the Laws of
each jurisdiction where such qualification is required, except where the lack
of such qualification would not have a Material Adverse Effect; and (z) has and
will have full power and authority to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. The copies of
the limited liability company agreements of each of the Starfish Companies
provided to the Buyer by the Seller are full and complete copies of such
agreements as in effect on the date of this Agreement.  Stingray, Triton and West
Cameron are the only Subsidiaries of Starfish and no Starfish Company directly
or indirectly owns beneficially or otherwise, any Equity Interest of another
Person, except another Starfish Company.

 

10

 

(b)                                 Noncontravention.  Subject to
the prior approval of the FTC and except as set
forth in Schedule 4(b), which scheduled items do not, individually
or in the aggregate, constitute or give rise to a Material Adverse Effect with
respect to the Starfish Companies, neither the execution
and delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any Governmental Authority to which the Acquired Interest or any of the
Starfish Companies are subject or any
provision of the Organizational Documents of the Acquired Interest or any of
the Starfish Companies or (ii) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right
to accelerate, terminate, modify, or cancel, or require any notice or trigger
any rights to payment or other compensation under any agreement, contract,
lease, license, instrument, or other arrangement (x) to which the Acquired
Interest or any of the Starfish Companies  are a party or by which they are bound, or (y) to
which any Subject Asset (or result in the imposition of any Encumbrance upon
any of the Subject Assets), except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, failure to give
notice, right to payment or other compensation, or Encumbrance would not have a
Material Adverse Effect, or would not materially adversely affect the ability
of the Seller to consummate the transactions contemplated by this
Agreement.  Except for the prior approval
of the FTC, neither the Acquired Interest nor any of the Starfish Companies
need give notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Authority in order for the Parties to
consummate the transactions contemplated by this Agreement, except where the
failure to give notice, to file, or to obtain any authorization, consent, or
approval would not have a Material Adverse Effect or would not materially
adversely affect the ability of the Seller to consummate the transactions
contemplated by this Agreement.

 

(c)                                  Brokers’ Fees.  Neither the Seller
nor any of the Starfish Companies has any Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

 

(d)                                 Title to Tangible Assets.  The Subject Assets are free and clear of all
Encumbrances, except for (i) Permitted Encumbrances, (ii) the Encumbrances
disclosed in Schedule 4(d)(ii) and (iii)
Encumbrances which do not have a Material Adverse Effect.  The Encumbrances disclosed in Schedule 4(d)
(ii) do not, individually or in the aggregate, constitute or give rise to a
Material Adverse Effect.  To the Seller’s
Knowledge, all real property easements or rights of way
necessary for operation of pipelines and facilities included in the Subject
Assets (“Easements”) are valid and in force and effect.

 

(e)                                  Financial Data.  Schedule 4 (e) sets forth (A) an audited statement of income for the Starfish Companies for the twelve month period ended December 31, 2003; (B) an unaudited statement of income for the Starfish Companies for the ten month period ended October 31, 2004; (C) an audited balance sheet for the Starfish Companies as of December 31, 2003; (D) an unaudited balance sheet for the Starfish
Companies as of October 31, 2004
(the “Balance Sheet Date”); (E) an audited
statement of cash flow for the Starfish Companies
for the twelve month period ended December 31, 2003; and (F) an unaudited statement of cash flow for the Starfish Companies for the ten month period ended October 31, 2004 (collectively, the “Financial
Data”).  The Financial Data was prepared
in accordance with GAAP (except as expressly set forth therein, the absence of
footnotes (other than to the extent footnotes are included in Schedule 4(e)(i)), and

 

11

 

normal
year-end adjustments) and fairly presents, in all material respects, the
financial position and income and cash flow for the Starfish Companies as of the dates and for
the periods indicated. The Financial Data does not omit to state any Liability
required to be stated therein in accordance with GAAP (except as expressly set
forth therein, the absence of footnotes  (other than to the extent footnotes
are included in Schedule 4(e)), and normal year-end adjustments).

 

(f)                                    Material Change.  To the Seller’s Knowledge, except as set
forth in Schedule 4(f), since the Balance Sheet Date:

 

(i)                                     there
has not been any Material Adverse Effect;

 

(ii)                                  the
Subject Assets have been operated and maintained in the Ordinary Course of
Business in compliance with the standards which the operator operates its other
offshore pipelines;

 

(iii)                               there
has not been any damage, destruction or loss to any material portion of the
Subject Assets, whether or not covered by insurance, that would have a Material
Adverse Effect;

 

(iv)                              there
has been no repurchase or redemption of
the Acquired Interest;

 

(v)                                 there has been no
merger or consolidation of the Acquired Interest or any of the Starfish
Companies  with any other Person or
acquisition by the Acquired Interest or any of the Starfish Companies of the
Equity Interest or business of any other Person, nor any purchase, sale or
lease of material assets included in the Subject Assets;

 

(vi)                              there
has been no borrowing of funds, agreement to borrow funds or guaranty by the
Acquired Interest or any of the Starfish Companies except in the Ordinary
Course of Business and in no event where the Acquired Interest was collateral for such
borrowing or guaranty;

 

(vii)                           (A) neither the Seller nor
the Starfish Companies has received any written
notices from any customers, licensors, suppliers, distributors or sales
representatives informing the Seller or the Starfish Companies
that there has been a change in the relationship with the Starfish Companies or affecting any of the Subject Assets,
except for changes that do not have a Material Adverse Effect, and (B) there
has been no change in the relationship of the Starfish Companies
or affecting any of the Subject Assets, with any customers, licensors,
suppliers, distributors or sales representatives, except for changes that do
not have a Material Adverse Effect; and

 

(viii)                        there
is no contract, commitment or agreement to do any of the foregoing, except as
expressly permitted hereby.

 

(g)                                 Legal Compliance.  To the Seller’s Knowledge, each of the
Starfish Companies  have
complied in all material respects with all applicable Laws of all Governmental
Authorities.

 

12

 

The Seller
makes no representations or warranties in this Section 4(g) with respect
to Taxes or Environmental Laws, for which the sole representations and
warranties of the Seller are set forth in Sections 4(h) and 4(k), respectively.

 

(h)                                 Tax Matters.  To the Seller’s Knowledge, except as set
forth in Schedule 4(h) or as would not
have a Material Adverse Effect:

 

(i)                                     The Starfish Companies have filed, or have had filed on their
behalf, all Tax Returns that they were required to file, and such Tax Returns
are accurate and correct  in all
respects.  All Taxes due and payable (a) by any Person as a result of holding the Acquired Interest and interests in each
of the Starfish Companies and (b) by the Starfish Companies have been
paid.  There are no liens for Taxes with
respect to the Acquired Interest or any of the Starfish Companies;

 

(ii)                                  There is no dispute
or claim (including any claim for a deficiency in Taxes)
concerning any Tax Liability of any of the Starfish Acquired Interest and the
Starfish Companies claimed or
raised by any Governmental Authority
in writing, and Seller has no knowledge of any such
dispute or claim;

 

(iii)                               There are no outstanding
agreements or waivers extending the statutory period of limitations applicable
to any Tax Returns required to be filed by or with respect to the Acquired
Interest or any of the the Starfish Companies or any closing
agreement under Section 7121 of the Code or any similar provision of
state, local or foreign Tax law that relates to the Acquired Interest or the
Starfish Companies;

 

(iv)                              The Acquired Interest and
the Starfish Companies have not, at
anytime prior to the Closing Date, filed an election under Treasury Regulations
§ 301.7701-3 to be classified as a corporation for federal income Tax
purposes;

 

(v)                                 The Starfish Companies
(other than Starfish) since their inception have been and are disregarded as an
entity separate from Starfish for federal
income tax purposes under Treasury Regulations §§ 301.7701-2 and -3 and
any comparable provision of applicable state or local Tax law that permits such
treatment;

 

(vi)                              The Seller is not a foreign
person within the meaning of Section 1445 of the Code;

 

(vii)                           Neither the Acquired Interest nor any of the Starfish Companies are a
party to, is bound by or has any obligations under any Tax sharing agreement,
any Tax indemnification agreement;

 

(viii)                        The Starfish Companies each has collected and withheld all Taxes that
they each have been required to collect or withhold and timely submitted all
such collected and withheld Taxes to the appropriate Tax authorities.  Each Starfish Company has complied and is in
compliance with all applicable laws, rules and

 

13

 

regulations relating to the payment, withholding and information reporting
requirements relating to any Taxes required to be collected or withheld.

 

(ix)                                No claim has ever been made by an authority in a jurisdiction where the
Starfish Companies have not filed Tax Returns that any of them is or may be
subject to taxation by that jurisdiction;

 

(x)                                   The Starfish Companies will not be required to include any item of
income in, or exclude any item of deduction from, taxable income for any
Post-Closing Tax Period as a result of any (a) change in accounting method for
any Pre-Closing Tax Period under Section 481 of the Code (or any analogous
or comparable provision of U.S. state or local or non-U.S. Tax law), (b)
written agreement with a Tax authority with regard to the Tax Liability of any
Starfish Company for any Pre-Closing Tax Period, (c) installment sale or open
transaction disposition made prior to the Effective Time or prior to the
Closing on the Closing Date, or (d) prepaid amount received on or prior to the
Effective Time.

 

(i)                                     Contracts.  To
the Seller’s Knowledge, the Acquired Interest and each of the Starfish Companies have performed all material obligations required to be performed by them to date under applicable contracts, and is
not in default under any material obligation of any such contracts, except when
such default would not have a Material Adverse Affect.  To the Seller’s Knowledge, no other party to
any such contract is in default thereunder.

 

(j)                                     Litigation.  To the Seller’s Knowledge Schedule 4(j)  sets forth each instance in which the
Acquired Interest, any of the Starfish Companies or any of the Subject Assets
(i) are subject to any outstanding injunction, judgment, order, decree, ruling,
or charge or (ii) are a party to or the subject of any action, suit,
proceeding, hearing, or investigation of, in, or before any court or quasi-judicial
or administrative agency of any federal, state, local, or foreign jurisdiction,
or is the subject of any pending or, threatened claim, demand, or notice of
violation or Liability from any Person except where any of the foregoing would
not have a Material Adverse Effect.  

 

(k)                                  Environmental Matters.   To the Seller’s knowledge:

 

(i)                                     The Acquired
Interest and each of the Starfish Companies, except as set forth in Schedule 4(k)(i),  have complied, and they and their
operations and facilities  are in compliance with and have no Liability under any and  all applicable
maritime, federal, state and local Laws (including common law) relating to the
protection of human health or the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. section 9601, et seq. (“CERCLA”),
the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. section 6901,
et seq., the Clean Air Act, as amended, 42 U.S.C. section 7401, et seq.,
the Federal Water Pollution Control Act, as amended, 33 U.S.C. section 1251,
et seq., the

 

14

 

Occupational Safety and Health Act, as amended, and the Oil Pollution Act of 1990, 33
U.S.C. section 2701, et seq (collectively,
the “Environmental Laws” and individually an “Environmental Law”), except for
such instances of noncompliance or Liability, that
individually or in the aggregate do not, and will not, have a Material Adverse
Effect;

 

(ii)                                  (A) Except as set forth in Schedule 4(k)(ii)(A),
the Acquired Interest and each of the Starfish Companies have obtained all
permits, licenses, franchises, authorities, consents, and approvals, and has
made all filings and maintained all material information, documentation, and
records, as necessary under applicable Environmental Laws for the operation of
its assets and business as  presently
conducted, and; (B) except as set forth in Schedule 4(k)(ii)(B),
all such permits, licenses, franchises, authorities, consents,
approvals, and filings remain in full force and effect; (C) except as set forth in Schedule 4(k)(ii)(C), none of such
permits require notice, consent or other action in connection with the
consummation of the transaction contemplated by this Agreement, and (D) except
as set forth in Schedule 4(k)(ii)(D), no event has occurred that permits,
or upon the giving of notice or the lapse of time or otherwise would permit,
revocation or termination of any such permit, except for
such matters that individually or in the aggregate do not, and will not, have a
Material Adverse Effect;

 

(iii)                               Except as do not, and
will not, have a Material Adverse Effect, and except as set forth
in Schedule 4(k)(iii), (A) there are no pending or
threatened claims, demands, orders, information requests from
governmental authorities, actions, administrative
proceedings or lawsuits against the Acquired Interest or any of the Starfish Companies, and (y) neither the Seller nor any of the Starfish Companies nor the Subject Assets are subject to
any outstanding injunction, judgment, order, decree or ruling, under any
Environmental Laws and there is no basis for such claims, demands, actions,
proceedings or lawsuits;

 

(iv)                              Except as set forth in Schedule 4(k)(iv), none
of the real property presently or formerly owned or operated by the Acquired
Interest or any of the Starfish Companies
is listed on the National Priorities List, CERCLIS
or any similar state list of sites requiring Remediation;

 

(v)                                 Except as set forth in Schedule 4(k)(v),
the Seller
has not received any written notice that the Acquired Interest or any of the
Starfish Companies is or may be
a potentially responsible party under CERCLA or any analogous state law in
connection with any site actually or allegedly containing or used for the
treatment, storage or disposal of Hazardous Substances;

 

(vi)                              Except as set forth in Schedule 4(k)(vi),
neither the Acquired Interest nor any of the Starfish
Companies is or will be subject to any Liability,
arising from any facts, circumstances or conditions, existing, initiated or
occurring prior to the Closing, including but not limited to any Release or
threatened Release

 

15

 

of any Hazardous
Substances, except for such Liabilities that individually or in the aggregate
do not, and will not, have a Material Adverse Effect;

 

(vii)                           Except as set forth in Schedule 4(k)(vii),
none of the Starfish Companies has arranged, by contract, agreement or
otherwise, for the treatment, storage or disposal of Hazardous Substances at
any location such that they are or will be liable for the Remediation of such
location, except for such Liabilities that individually or in the aggregate do
not and will not have a Material Adverse Effect; and

 

(viii)                        Seller has furnished to Buyer copies of all environmental assessments,
reports, audits and other documents in its possession or under its control that
relate to the real property currently or formerly owned, operated or leased by
the Acquired Interest or any of the Starfish Companies or compliance with
Environmental Laws by any of the Starfish Companies.

 

The Seller makes no representation or warranty
regarding any compliance or failure to comply with, or any actual or contingent
liability under, any Environmental Law, except as expressly set forth in this Section 4(k).

 

(l)                                     Permits.  Except as set forth in Schedule 4(l),
each the Acquired Interest and each of the Starfish Companies owns or holds all
franchises, licenses, permits, consents, approvals, and authorizations of all
Governmental Authorities necessary for the conduct of its business
(collectively, the “Permits”), except for Permits whose absence would not have
a Material Adverse Effect.  Each Permit
is in full force and effect, and the Acquired Interest and each of the Starfish
Companies is in compliance with all obligations with respect to each Permit,
except where the failure to be in full force and effect or to be in compliance
would not have a Material Adverse Effect, and no event has occurred that
permits, or upon the giving of notice or the lapse of time or otherwise would
permit, revocation or termination of any Permit except such as would not have a
Material Adverse Effect. 

 

(m)                               Employee Matters.  Neither
the Acquired Interest nor any of the Starfish Companies has any employees.

 

(n)                                 Infringement. To the Seller’s
Knowledge, none of the Starfish Companies are infringing or received any notice
or other communication (in writing or otherwise) of any actual, alleged,
possible or potential infringement of, any proprietary asset owned or used by
any other Person, except such as would not have a Material Adverse Effect.  To the Seller’s Knowledge, no other Person is
infringing, an no proprietary asset owned or used by
any other Person infringes or conflicts with, any proprietary asset owned or
used by the Starfish Companies.

 

(o)                                 Condition
and Sufficiency of Assets.  To
the actual knowledge of Seller, the Subject Assets are in good operating
condition and repair, subject to ordinary wear and tear, and have been maintained
in accordance with standard industry practice.

 

16

 

(p)                                 Disclaimer of
Representations and Warranties Concerning Personal Property,
Equipment, and Fixtures.  The Buyer
acknowledges that (a) it has had and pursuant to this Agreement will have
before Closing access to the Seller, to the Acquired Interest and to each of
the Starfish Companies and the Subject Assets, and the officers and employees
of the Seller and (b) in making the decision to enter into this Agreement and
consummate the transactions contemplated hereby, the Buyer has relied solely on
the basis of its own independent investigation and upon the express
representations, warranties, covenants, and agreements set forth in this
Agreement.  Accordingly, the Buyer
acknowledges that, except as expressly set forth in this Agreement, the Seller
has not made, and THE SELLER MAKES NO AND DISCLAIMS ANY REPRESENTATION OR
WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW, STATUTE, OR
OTHERWISE, REGARDING (i) THE QUALITY, CONDITION, OR OPERABILITY OF ANY PERSONAL
PROPERTY, EQUIPMENT, OR FIXTURES, (ii) ITS MERCHANTABILITY, (iii) ITS FITNESS
FOR ANY PARTICULAR PURPOSE, (iv) ITS CONFORMITY TO MODELS, SAMPLES OF MATERIALS
OR MANUFACTURER DESIGN, OR (v) AS TO WHETHER ANY SUBJECT ASSET IS YEAR 2000
COMPLIANT,  AND ALL PERSONAL PROPERTY AND
EQUIPMENT IS DELIVERED “AS IS, WHERE IS” IN THE CONDITION IN WHICH THE SAME
EXISTS.

 

5.                                       Pre-Closing Covenants. The Parties
agree as follows with respect to the period between the date of this Agreement
and the Closing:

 

(a)                                  General. 
Each Party will use its best efforts to take all action and to do all
things necessary, proper, or advisable in order to consummate and make
effective the transactions contemplated by this Agreement.

 

(b)                                 Notices and Consents.  Each of the Parties will give any notices to,
make any filings with, and use its best efforts to obtain any authorizations,
consents, and approvals of Governmental Authorities it is required to obtain in
connection with the matters referred to in Section 3(a)(ii), 3(a)(iii),
3(b)(iii), 4(b)(i) and (4)(k)(ii)(C) so as to permit the Closing to occur not
later than 5:00 p.m. (Houston time) on April 15, 2005. Without limiting
the generality of the foregoing, the Buyer and the Seller agree to work in good
faith with each other and the FTC to consummate the transactions contemplated
hereby as soon as reasonably practicable, but in no event later than 5:00 p.m.
(Houston time) on April 15, 2005; provided, that, notwithstanding anything
to the contrary contained herein, this sentence shall not obligate the Buyer to
divest or hold separate any assets or enter into any agreement not contemplated
by this Agreement or modify this Agreement or any of the Transaction Documents
in order to obtain FTC approval.

 

(c)                                  Full Access.  The Seller, to the extent within the Seller’s
Legal Right, will permit and will cause the Acquired Interest and each of the
Starfish Companies to permit representatives of the Buyer to have full access
at all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Acquired Interest or the Starfish Companies, to all
premises, properties, personnel, books, records (including Tax records),
contracts, and documents of or pertaining to the Acquired Interest, each of the
Starfish Companies and the Subject Assets. Any information obtained by the
Buyer, its employees, representatives, consultants, attorneys, agents, lenders
and other advisors under this Section 5(c) shall be subject to the

 

17

 

confidentiality and use restrictions
contained in the Confidentiality Agreement. 
All “due diligence” activities of the Buyer shall be conducted in
accordance with applicable Laws and the Buyer shall indemnify the Seller and
its Affiliates from and against all personal injury or property damages
incurred as a result of any Buyer’s negligence in connection with such
activities.

 

(d)                                 Governmental Approvals. If the FTC notifies the Seller (x) that the Buyer is not an
acceptable purchaser of any part, or all, of the Acquired Interest or the
Starfish Companies or (y) that the manner in which (i) the sale of the Acquired
Interest or (ii) the transactions contemplated hereby are to be accomplished, is
not acceptable to the FTC, then either Party, after such Party has fulfilled
its obligations under and is in conformity with Section 5(b) above, shall
have the unilateral right to immediately terminate this Agreement.

 

6.                                       Post-Closing Covenants.  The Parties agree as follows:

 

(a)                                  General. 
In case at any time after the Closing any further action is necessary to
carry out the purposes of this Agreement, each of the Parties will take such
further action (including the execution and delivery of such further instruments
and documents) as the other Parties reasonably may request, all at the sole
cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification thereof under Section 8).

 

(b)                                 Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or before the Effective
Time involving the Acquired Interest, any of the Starfish Companies or the
Subject Assets, the other Party shall cooperate with the contesting or
defending Party and its counsel in the defense or contest, make available its
personnel, and provide such testimony and access to its books and records
(other than books and records which are subject to privilege or to
confidentiality restrictions) as shall be necessary in connection with the
defense or contest, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled to
indemnification thereof under Section 8).

 

(c)                                  Delivery and Retention of
Records.  On or before the
Closing Date, the Seller will deliver or cause to be delivered to the Buyer, at
the Buyer’s request, copies of Tax Records, which are relevant to Post-Closing
Tax Periods and all other files, books, records, information and data relating
to the Acquired Interest, each of the Starfish Companies and the Subject Assets
(other than Tax Records) that are in the possession or control of the Seller or
any of its Affiliates (the “Records”). 
The Buyer agrees to (i) hold the Records and not to destroy or dispose
of any portion thereof for a period of time as may be required by Law, and (ii)
at any time, upon reasonable request, provide the Seller with copies of, or
full access to, any of the Records, and access to the Buyer’s employees to the
extent that such access may be requested for any legitimate purpose at no cost
to the Seller (other than for reasonable out-of-pocket expenses); provided,
that such access will not be construed to require the disclosure of Records
that would cause the waiver of any attorney-client, work-product or like
privilege; provided further, that in the event of any litigation nothing herein
shall limit any Party’s rights of discovery under applicable Law. The Buyer
shall

 

18

 

have the same
rights, and the Seller shall have the same obligations, as are set forth in
this Section 6(c) with respect to any copies of the Records retained by
the Seller and access to the Seller’s (and its applicable Affiliate’s)
employees; provided, that such access will not be construed to require the
disclosure of Records that would cause the waiver of any attorney-client, work
product, or like privilege; provided further, that in the event of any
litigation nothing herein shall limit any Party’s rights of discovery under
applicable Law.

 

7.                                       Conditions to Obligation to
Close.

 

(a)                                  Conditions to Obligation of the
Buyer.  The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:

 

(i)                                     the
representations and warranties of the Seller contained in Section 3(a) and
Section 4 shall be true and correct in all material respects when made and
at Closing (except for those which refer to a specific date, which shall be
true and correct as of such date);

 

(ii)                                  the
Seller shall have obtained all consents and approvals listed on Schedule 5(b);

 

(iii)                               the
Seller shall have performed and complied with all of its covenants hereunder in
all material respects through the Closing;

 

(iv)                              there shall not be any
injunction, judgment, order, decree, ruling, or charge in effect preventing
consummation of any of the transactions contemplated by this Agreement; and

 

(v)                                 the
Seller shall have delivered to the Buyer a certificate to the effect that each
of the conditions specified in Subsections 7(a)(i)-(iv) is satisfied in all
respects.

 

The Buyer may waive any condition specified in this Section 7(a)
if it executes a writing so stating at or before the Closing.

 

(b)                                 Conditions to Obligation of
the Seller.  The obligation of
the Seller to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:

 

(i)                                     the
representations and warranties of the Buyer contained in Section 3(b)
shall be true and correct in all material respects when made and at Closing
(except for those which refer to a specific date, which shall be true and
correct as of such date);

 

(ii)                                  the
Buyer shall have performed and complied with all of its covenants hereunder in
all material respects through the Closing;

 

19

 

(iii)                               there shall not be any
injunction, judgment, order, decree, ruling, or charge in effect preventing
consummation of any of the transactions contemplated by this Agreement;

 

(iv)                              the Buyer shall have
delivered to the Seller a certificate to the effect that each of the conditions
specified in Subsections 7(b)(i)-(iii) is satisfied in all respects; and

 

(v)                                 referencingthe
FTC Order, the Federal Trade Commission shall have approved (i) Buyer as a
Pipeline Acquirer (as such term is defined in the Decision and Order) and (ii)
this Agreement as a Pipeline Divestiture Agreement (as such term is defined in
the Decision and Order).

 

The Seller may waive any condition specified in this Section 7(b)
if it executes a writing so stating at or before the Closing.

 

8.                                       Remedies for Breaches of
this Agreement.

 

(a)                                  Survival of Representations,
Warranties and Certain Covenants.

 

(i) All of the representations and warranties of the Seller contained
in Sections 3 and 4 and the certificates delivered at closing pursuant to Section 7(a)(v) (other than Sections 3(a)(v), 4(h) and 4(k)) shall survive the Closing
hereunder for a period of 12
months after the Closing Date;

 

(ii) the representations and warranties in Section 4(h)4(h) shall survive the Closing with respect
to any given claim that would constitute a breach of such representation or warranty
until the expiration of the statute of limitations applicable to the underlying
Tax matter giving rise to that claim;

 

(iii) the representations and warranties in Section 3(a)(v)
shall survive the Closing forever; and

 

(iv) the
representations and warranties in Section 4(k) shall survive the Closing
for a period of 24  months after
the Closing Date.  The representations
and warranties of the Buyer contained in Section 3 shall survive the
Closing for a period of 12  months
after the Closing Date.The covenants contained in Section 6 of this
Agreement and all other covenants contained in this Agreement to be performed
after the Closing shall survive the Closing indefinitely.

 

(b)                                 Indemnification Provisions
for Benefit of the Buyer.

 

(i)                                     In the event: (x)
the Seller breaches any of its representations, warranties, or covenants
contained herein (other than the covenants in Sections 2 and 6 and any other
covenants to be performed after the Closing, and the representations and
warranties in Section 3(a)); (y) there is an applicable survival period
pursuant to Section 8(a); and (z) the Buyer make a written claim for
indemnification against the Seller pursuant to Section 11(f) within such
survival

 

20

 

period, then the Seller agrees to indemnify the Buyer Indemnitees from
and against any Adverse Consequences by reason of all Adverse Events to the
extent they are the result of, arise out of or are  caused
proximately by the breach and suffered by such Buyer Indemnitees; provided,
that, except in the case of fraud, the Seller shall not have any obligation to
indemnify any Buyer Indemnitees from and against any such Adverse Consequences
by reason of all Adverse Events (A) until the Buyer Indemnitees, in the
aggregate, have suffered Adverse Consequences by reason of all Adverse Events
in excess of the Deductible Amount (after which point the Seller will be
obligated only to indemnify the Buyer Indemnitees from and against further such
Adverse Consequences) or thereafter (B) to the extent the Adverse Consequences
the Buyer Indemnitees, in the aggregate, have suffered by reason of all Adverse
Events exceeds an aggregate ceiling amount equal to $10,000,000.00 (after which
point the Seller will have no obligation to indemnify the Buyer Indemnitees
from and against further such Adverse Consequences).

 

(ii)                                  In the event: (x) the
Seller breaches any of its covenants in Sections 2 or 6 or any other covenants
to be performed after the Closing, or any of its representations and warranties
in Sections 3(a); (y) there is an applicable survival period pursuant to Section 8(a)
(which, as to the covenants in Sections 2 and 6 and any other covenants to be
performed after the Closing, or as to any of the representations and warranties
in Sections 3(a)(v) shall be forever); and (z) the Buyer make a written claim
for indemnification against the Seller pursuant to Section 11(f) within
such survival period, then the Seller agrees to indemnify the Buyer Indemnitees
from and against the entirety of any Adverse Consequences caused proximately by
the breach and suffered by the Buyer Indemnitees.

 

(iii)                               The Seller will
indemnify and hold harmless the Buyer Indemnitees (including the Acquired
Interest and the Starfish Companies) against joint and several Liability with
the Seller arising by reason of the Acquired Interest or any of the Starfish
Companies having been a member of a “controlled group of partnerships,” under “common
control” or a member of an “affiliated service group” with the Seller within the
meaning of Sections 414(c) or (m) of the Code, or having been required to be
aggregated with the Seller under Section 414(o) of the Code, or having
been under “common control” with the Seller, within the meaning of Section 4001(a)(14)
of ERISA.

 

(iv)                              To the extent any Buyer
Indemnitee becomes liable to, and is ordered (pursuant to a final,
non-appealable order of a court of competent jurisdiction) to  pay to any third party, punitive damages
proximately caused by a material breach by the Seller of any representation,
warranty or covenant contained in this Agreement, then such punitive damages
shall be deemed actual damages to such Buyer Indemnitee and included within the
definition of Adverse Consequences for purposes of this Section 8.

 

(v)                                 Except for the rights
of indemnification provided in Sections 8 and 9(e), the Buyer hereby waives any
claim or cause of action pursuant to common or

 

21

 

statutory law or
otherwise against the Seller arising from any breach by the Seller of any of
its representations, warranties or covenants under this Agreement or the
transactions contemplated hereby.

 

(c)                                  Indemnification Provisions
for Benefit of the Seller.

 

(i)                                     In the event: (x)
the Buyer breaches any of its representations, warranties and covenants
contained herein; (y) there is an applicable survival period pursuant to Section 8(a);
and (z) any Seller makes a written claim for indemnification against any Buyer
pursuant to Section 11(f) within such survival period, the Buyer agrees to
indemnify the Seller Indemnitees from and against the entirety of any Adverse
Consequences caused proximately by the breach and suffered by such Seller
Indemnitees.

 

(ii)                                  Except for those
Liabilities for which the Seller has agreed to indemnify the Buyer Indemnitees
pursuant to Section 8(b), including, without
limitation, the Retained Liabilities, the Buyer agrees to
indemnify the Seller Indemnitees from and against the entirety of any Adverse
Consequences relating in any way to the Acquired Interest, any of the Starfish
Companies, the Subject Assets, or the ownership and operation of the Acquired
Interest, any of the Starfish Companies, arising after the Effective Time.

 

(iii)                               To the extent any Seller
Indemnitee becomes liable to, and is ordered (pursuant to a final,
non-appealable order of a court of competent jurisdiction) to pay to any third
party, punitive damages proximately caused by a material breach by any Buyer of
any representation, warranty or covenant contained in this Agreement, then such
punitive damages shall be deemed actual damages to such Seller Indemnitee and
included within the definition of Adverse Consequences for purposes of this Section 8.

 

(iv)                              Except for the
rights of indemnification provided in Sections 8 and 9(e), the Seller hereby
waives any claim or cause of action pursuant to common or statutory law or
otherwise against the Buyer arising from any breach by the Buyer of any of its
representations, warranties or covenants under this Agreement or the
transactions contemplated hereby.

 

(d)                                 Matters Involving Third Parties.

 

(i)                                     If any third party
shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third
Party Claim”) that may give rise to a claim for indemnification against any
other Party (the “Indemnifying Party”) under this Section 8, then the
Indemnified Party shall promptly (and in any event within five business days
after receiving notice of the Third Party Claim) notify the Indemnifying Party
thereof in writing (although the failure to so notify the Indemnifying Party
shall not relieve the Indemnifying Party from any Liability that

 

22

 

the Indemnifying
Party may have under this Section 8(d) except to the extent that such
failure prejudices the Indemnifying Party).

 

(ii)                                  The Indemnifying
Party will have the right to assume and thereafter conduct the defense of the
Third Party Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party; provided, however, that the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably) unless the judgment or proposed settlement
involves only the payment of money damages and does not impose an injunction or
other equitable relief upon the Indemnified Party and provides a clear and
unconditional release of the Indemnified Party.

 

(iii)                               Unless and until the
Indemnifying Party assumes the defense of the Third Party Claim as provided in
Subsection 8(d)(ii), the Indemnified Party may
defend against the Third Party Claim in any manner it reasonably may deem
appropriate.

 

(iv)                              In no event will
the Indemnified Party consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party which consent shall not be withheld or
delayed unreasonably.

 

(e)                                  Determination of Amount of
Adverse Consequences.  The
Adverse Consequences giving rise to any indemnification obligation hereunder
shall be limited to the actual loss suffered by the Indemnified Party (i.e.
reduced by any insurance proceeds or other payment or recoupment received from
any non-Affiliated third party insurance company (not to include captive
Subsidiary insurance carriers), realized or retained by the Indemnified Party
as a result of the events giving rise to the claim for indemnification net of
any expenses related to the receipt of such proceeds, payment or recoupment,
including retrospective premium adjustments, if any), and any reduction in
Taxes of the Indemnified Party (or the affiliated group of which it is a
member) occasioned by such loss or damage. 
The amount of the actual loss and the amount of the indemnity payment
shall be computed by taking into account the timing of the loss or payment, as
applicable, using a 10% interest or discount rate, as appropriate.  Upon the request of the Indemnifying Party,
the Indemnified Party shall provide the Indemnifying Party with information
sufficient to allow the Indemnifying Party to calculate the amount of the
indemnity payment in accordance with this Section 8(e).  An Indemnified Party shall take all
commercially reasonable steps to mitigate damages in respect of any claim for
which it is seeking indemnification and shall use reasonable efforts to avoid
any costs or expenses associated with such claim and, if such costs and
expenses cannot be avoided, to minimize the amount thereof.

 

(f)                                    Tax Treatment of Indemnity
Payments.  All indemnification
payments made under this Agreement, including any payment made under Section 9(e) hereof, shall be treated as purchase price
adjustments for Tax purposes.

 

23

 

9.                                       Tax Matters.

 

(a)                                  Post-Closing Tax Returns.  The Buyer shall pay (or shall
cause to be paid) any Taxes due with respect to Post-Closing Tax Returns based
on Schedules K-1 issued by Starfish and other relevant information.

 

(b)                                 Pre-Closing Tax Returns.  The Seller shall pay (or shall
cause to be paid) any Taxes due with respect to Pre-Closing Tax Returns based
on Schedules K-1 issued by Starfish and other relevant information.

 

(c)                                  Straddle Periods.  The Buyer shall be responsible for Taxes of
the Acquired Interest related to the portion of any Straddle Period commencing
after the Closing Date.  The Seller shall
be responsible for Taxes of the Acquired Interest relating to the portion of
any Straddle Period commencing before and ending on the Closing Date.  With respect to any Straddle Period, to the
extent permitted by applicable Law, the Seller or the Buyer shall elect to
treat the Closing Date as the last day of the Tax period.  If applicable Law will not permit the Closing
Date to be the last day of a period, then (i) real or personal property Taxes
of the Acquired Interest shall be allocated based on the number of days in the
partial period before and after the Closing Date, (ii) in the case of all other
Taxes based on or in respect of income, the Tax computed on the basis of the
taxable income or loss of the Acquired Interest for each partial period as
determined from their books and records, and (iii) in the case of all other
Taxes, on the basis of the actual activities or attributes of the Acquired Interest
for each partial period as determined from their books and records.

 

(d)                                 Claims for Refund.  The Buyer shall not file any claim for refund
of taxes with respect to the Acquired Interest for whole or partial taxable
periods on or before the Closing Date.

 

(e)                                  Indemnification.  The Buyer agrees to indemnify the Seller
against all Taxes of or with respect to the Acquired Interest (including Taxes on income allocable thereto) for
any Post-Closing Tax Period and the portion of any Straddle Period ending after
the Closing Date.  The Seller agrees to
indemnify the Buyer against all Taxes of or with respect to the Acquired
Interest (including Taxes on income allocable
thereto)  for any Pre-Closing Tax Period and the portion of
any Straddle Period ending on or before the Closing Date.

 

(f)                                    Cooperation on Tax Matters.

 

(i)                                     The Buyer and the
Seller shall cooperate fully, as and to the extent reasonably requested by the
other Party, in connection with the filing of Tax Returns pursuant to this Section 9
and any audit, litigation or other proceeding and making employees available on
a mutually convenient basis to provide additional information and explanation
of any material provided hereunder.  The
Buyer and the Seller shall (A) retain all books and records with respect to Tax
matters pertinent to the Acquired Interest relating to any whole or partial
taxable period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by the Buyer or the Seller,
any extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered

 

24

 

into with any taxing authority, and (B) give the other Party reasonable
written notice prior to transferring, destroying or discarding any such books
and records and, if the other Party so requests, the Buyer or the Seller as the
case may be, shall allow the other Party to take possession of such books and
records.

 

(ii)                                  The Buyer and the
Seller further agree, upon request, to use their best efforts to obtain any
certificate or other document from any Governmental Authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including, but not limited to, with respect to the transactions
contemplated hereby).

 

(iii)                               The Buyer and the Seller
agree, upon request, to provide the other Parties with all information that any
Party may be required to report pursuant to Section 6043 of the Code and
all Treasury Department Regulations promulgated thereunder.

 

(g)                                 Certain Taxes.  The Seller will file all necessary Tax
Returns and other documentation with respect to all transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if required by
applicable Law, the Buyer will, and will cause their Affiliates to, join in the
execution of any such Tax Returns and other documentation.

 

(h)                                 Confidentiality.  Any information shared in connection with
Taxes shall be kept confidential, except as may otherwise be necessary in
connection with the filing of Tax Returns or reports, refund claims, tax
audits, tax claims and tax litigation, or as required by Law.

 

(i)                                     Closing Tax Certificate.  At the Closing, the Seller shall deliver to
the Buyer a certificate signed under penalties of perjury (i) stating that it
is not a foreign corporation, foreign partnership, foreign trust or foreign
estate, (ii) providing its U.S. Employer Identification Number and (iii)
providing its address, all pursuant to Section 1445 of the Code.

 

10.                                 Termination.

 

(a)                                  Termination of Agreement. The
Parties may terminate this Agreement, as provided below:

 

(i)                                     the Buyer and the
Seller may terminate this Agreement by mutual written consent at any time
before the Closing;

 

(ii)                                  the Buyer may
terminate this Agreement by giving written notice to the Seller at any time
before Closing (A) in the event the Seller has breached any representation,
warranty or covenant contained in this Agreement in any material respect, the
Buyer have notified the Seller of the breach, the breach has continued without
cure for a period of 10 days after the notice of breach and such breach would
result in a failure to satisfy a condition to the Buyer’s obligation to
consummate the transactions contemplated hereby; (B) if the Closing shall not
have occurred on or before 5:00 p.m. (Houston time) on March 31, 2005
(unless the

 

25

 

failure results primarily from the Buyer itself breaching any
representation, warranty or covenant contained in this Agreement); or (C) if
any of the consents and approvals referred to in Section 5(b) are denied and the Buyer has fulfilled its obligations under and conforms with Section 5(b);

 

(iii)                               the Seller may terminate
this Agreement by giving written notice to the Buyer at any time before the
Closing (A) in the event the Buyer has breached any representation, warranty or
covenant contained in this Agreement in any material respect, the Seller has
notified the Buyer of the breach, the breach has continued without cure for a
period of 10 days after the notice of breach and such breach would result in a
failure to satisfy a condition to the Seller’s obligation to consummate the
transactions contemplated hereby; (B) if the Closing shall not have occurred on
or before 5:00 p.m. (Houston time) on March 31, 2005 (unless the failure
results primarily from the Seller itself breaching any representation, warranty
or covenant contained in this Agreement); (C) if the Seller
believes in its reasonable and good faith judgment that the transactions
contemplated hereby will not receive all necessary approvals of the FTC and the
Seller has fulfilled its obligations under and conforms with Section 5(b);
and

 

(iv)                              the Buyer or the Seller
may terminate this Agreement if any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency or body shall have
issued an order, decree or ruling or shall have taken any other action
permanently enjoining, restraining or otherwise prohibiting the transactions
contemplated hereby and such order, decree, ruling or other action shall have
become final and nonappealable.

 

(b)                                 Effect of Termination.  If any Party terminates this Agreement
pursuant to Section 10(a), all rights and obligations of the Parties
hereunder with respect to any Acquired Interest not theretofore sold to the
Buyer hereunder shall terminate without any Liability of any Party to any other
Party (except for any Liability of any Party then in breach); provided that the
confidentiality provisions contained in the Confidentiality Agreement shall
survive termination.

 

11.                                 Miscellaneous.

 

(a)                                  Press Releases and Public
Announcements. No Party shall issue any press release or make any
public announcement relating to the subject matter of this Agreement without
the prior written approval of the other Party; provided however, that no Party
shall unreasonably withhold or delay its approval to any Party’s request to
make a public disclosure that such requesting Party believes in good faith is
required by applicable Law or any listing or trading agreement concerning its
publicly traded securities.

 

(b)                                 No Third Party Beneficiaries.  This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.

 

26

 

(c)                                  Succession and Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. The Seller or the Buyer may assign either
this Agreement or any of its respective rights, interests or obligations
hereunder to an Affiliate without the prior written approval of the other
Party; provided, that no such assignment will relieve the Seller or the Buyer
from any of its respective obligations or Liabilities hereunder. Except as
provided in the foregoing sentence, neither of the Buyer nor the Seller may
assign either this Agreement or any of its respective rights, interests or
obligations hereunder without the prior written approval of the other Party.

 

(d)                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but which together will
constitute one and the same instrument.

 

(e)                                  Headings. 
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

(f)                                    Notices. 
All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given two business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below:

 

	
  If to the
  Seller by Mail:

  	
   

  	
  Enterprise
  Products Operating L.P.

  
	
   

  	
   

  	
  P.O. Box
  4324

  
	
   

  	
   

  	
  Houston,
  Texas 77210-4324

  
	
   

  	
   

  	
  Attn:
  President

  
	
   

  	
   

  	
  Phone: (713)
  880-6500

  
	
   

  	
   

  	
  Fax: (713)
  880-6570

  
	
   

  	
   

  	
   

  
	
  If to the
  Seller by hand-delivery:

  	
   

  	
  Enterprise
  Products Operating L.P.

  
	
   

  	
   

  	
  2727 North
  Loop West, Suite 700

  
	
   

  	
   

  	
  Houston,
  Texas 77008

  
	
   

  	
   

  	
  Attn:
  President

  
	
   

  	
   

  	
  Phone: (713)
  880-6500

  
	
   

  	
   

  	
  Fax: (713) 880-6570

  
	
   

  	
   

  	
   

  
	
  If to the Buyer:

  	
   

  	
  MarkWest Energy Partners, L.P.

  
	
   

  	
   

  	
  155 Inverness Drive West, Suite 200

  
	
   

  	
   

  	
  Englewood, CO 80112

  
	
   

  	
   

  	
  Phone: (303) 290-8700

  
	
   

  	
   

  	
  Fax: (303) 925-9305

  

 

Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the addresses set forth
above using any other means (including personal delivery, expedited courier,
messenger service, telecopy, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be 

27

 

deemed to have
been duly given unless and until it actually is received by the intended
recipient.  Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner herein
set forth.

 

(g)                                 Governing Law.  This Agreement shall be governed by and
construed in accordance with the domestic Laws of the state of Texas without
giving effect to any choice or conflict of law provision or rule (whether of
the state of Texas or any other jurisdiction) that would cause the application
of the Laws of any jurisdiction other than the state of Texas.

 

(h)                                 Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller.  No waiver by any
Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.

 

(i)                                     Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

 

(j)                                     Transaction Expenses.  The Buyer and the Seller will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby.

 

(k)                                  Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement. 
In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this
Agreement.  Any reference to any federal,
state, local, or foreign statute or Law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires otherwise.  The word “including” shall mean including
without limitation.

 

(l)                                     Incorporation of Exhibits
and Schedules.  The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

 

(m)                               Entire Agreement.  THIS AGREEMENT (INCLUDING THE DOCUMENTS
REFERRED TO HEREIN) CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES AND
SUPERSEDES ANY PRIOR UNDERSTANDINGS, AGREEMENTS, OR REPRESENTATIONS BY OR AMONG
THE PARTIES, WRITTEN OR ORAL, TO THE EXTENT THEY HAVE RELATED IN ANY WAY TO THE
SUBJECT MATTER HEREOF.

 

(n)                                 FTC Authorization.  The Parties acknowledge that unless the FTC
approves all of the transactions under the terms contemplated in this
Agreement, the Parties will either (i)

 

28

 

mutually agree
to modify the terms of this Agreement pursuant to requests made by the FTC or
(ii) terminate this Agreement in accordance with Sections 5(d) and 10(a).

 

Signature page
follows

 

29

 

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

 

	
   

  	
  SELLER

  
	
   

  	
   

  
	
   

  	
  ENTERPRISE
  PRODUCTS OPERATING L.P.

  
	
   

  	
  By
  Enterprise Products OLPGP, INC.,

  
	
   

  	
  Its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Enterprise Products Operating L.P.

  	
   

  
	
   

  	
  Name:

  	
  Enterprise
  Products Operating L.P.

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUYER

  
	
   

  	
   

  
	
   

  	
  MARKWEST
  ENERGY PARTNERS, L.P.

  
	
   

  	
  By MarkWest
  Energy GP, LLC

  
	
   

  	
  Its General
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MarkWest
  Energy Partners, L.P.

  	
   

  
	
   

  	
  Name:

  	
  MarkWest
  Energy Partners, L.P.

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

30

 

Exhibit A

To
Purchase and Sale Agreement

 

ASSIGNMENT
OF MEMBERSHIP INTEREST

 

	
  STATE OF
  TEXAS

  	
  §

  	
   

  
	
   

  	
  §

  	
  KNOW ALL MEN
  BY THESE PRESENTS:

  
	
  COUNTY OF
  HARRIS

  	
  §

  	
   

  

 

THIS ASSIGNMENT OF
MEMBERSHIP INTEREST (“Assignment”) dated March 31, 2005, is by and between
Enterprise Products Operating L.P., a Delaware limited partnership (“Assignor”),
and  MarkWest Energy Partners, L.P., ,a
Delaware Limited Partnership (“Assignee”).

 

RECITALS:

 

A.                                   Assignor
owns a 50% Membership Interest in Starfish Pipeline Company, LLC (“Starfish”),
which is governed by that certain Amended and Restated Limited Liability
Company Agreement of Starfish Pipeline Company, LLC, dated as of April 1,
2002, as amended, by and among Shell Gas Transmission, LLC, and Assignor (the “Starfish
LLC Agreement”).  Capitalized terms used
herein without definition shall have the meanings ascribed to them in the
Starfish LLC Agreement.

 

B.                                     Pursuant
to that certain Purchase and Sale Agreement between Assignor and Assignee dated
January 24, 2005 (the “Purchase and Sale Agreement”), Assignor has agreed
to sell, assign, transfer and convey all of Assignor’s 50% Membership Interest
in Starfish (“Assignor’s Membership Interest”) to Assignee, leaving Assignor with
no Membership Interest in Starfish, and Assignee has agreed to purchase and
accept all of Assignor’s Membership Interest at and as of the Effective Date.

 

C.                                     The
parties desire to enter into this Assignment to evidence the transfer and
assignment from Assignor to Assignee.

 

NOW, THEREFORE, for
and in consideration of the purchase price set forth in the Purchase and Sale
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows.

 

1.                                       Assignment.  Assignor hereby sells, assigns, transfers and
conveys to Assignee Assignor’s Membership Interest subject to the terms of the
Starfish LLC Agreement.

 

2.                                       Acceptance.  Assignee hereby (a) purchases and accepts the
Assignor’s Membership Interest, (b) assumes the obligations of the Starfish LLC
Agreement applicable to Assignor’s Membership Interest, and (c) agrees to be
bound as a Member to all terms and conditions of the Starfish LLC Agreement, to
assume all obligations, Liabilities, except for the Retained
Liabilities (as such terms are defined in the Purchase and Sale Agreement),
and duties

 

 

with respect to the Assignor’s Membership
Interest to which Assignor was bound at and after the Effective Date, and to
become a party to the Starfish LLC Agreement by executing and delivering to the
Starfish Members a counterpart of the Starfish LLC Agreement.

 

3.                                       Amendment
of Documents.  It is the intention of the
parties hereto that Assignee be admitted to and become a Substituted Member in
the name, place and stead of Assignor with respect to the Assignor’s Membership
Interest.  Accordingly, Assignor and
Assignee agree to make, execute and deliver all documents, instruments and
certificates and to take such action that may be necessary or desirable to
accomplish such admission and substitution.

 

4.                                       Representations
and Warranties.  Assignor and Assignee
each represents and warrants that this Assignment is made in accordance with
all applicable Laws (including state and federal securities Laws) and the terms
and conditions of the Starfish LLC Agreement. 
Assignee further represents and warrants that the representations and
warranties set forth in Section 3.3 of the Starfish LLC Agreement are true
and correct with respect to Assignee.

 

5.                                       Applicability
of Purchase and Sale Agreement.  This
Assignment is made subject to, and without modification or amendment of, the
Purchase and Sale Agreement.  Such
representations and warranties therein as are expressly applicable to the
matters contained within this Assignment shall apply with respect thereto, in
accordance with the terms of the Purchase and Sale Agreement.

 

6.                                       Assignee
Notice Address.  Any notice intended to
be given Assignee under the Starfish LLC Agreement shall be addressed to the address
set forth below.

 

MarkWest Energy Partners, L.P.

155 Inverness Drive West, Suite 200

Englewood, CO 80112

Phone: (303) 290-8700

Fax: (303) 925-9305

 

7.                                       Further
Assurances.  Each of the parties hereto
agrees to execute such other, further and different documents and perform such
other, further and different acts as may be reasonably necessary or desirable
to carry out the intent and purpose of this Assignment.

 

8.                                       Successors
and Assigns.  This Assignment shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.

 

9.                                       Section Headings.  The section headings contained in this
Assignment are for reference purposes only and shall not affect the
interpretation of this Assignment.

 

10.                                 Governing
Law.  This Assignment shall be governed
in all respects, including validity, interpretation and effect, by and shall be
enforceable in accordance with the internal laws of the State of Texas, without
regard to conflicts of laws principles.

 

2

 

11.                                 Counterpart
Execution.    This Assignment may be executed in multiple
counterparts, each one of which will be deemed an original, but all of which
shall be considered together as one and the same instrument.

 

12.                                 Entire
Agreement.  This Assignment contains the
entire agreement between the parties regarding the subject matter hereof.  Any prior agreements, discussions or
representations not expressly contained herein shall be deemed to be replaced
by the provisions hereof and no party has relied on any such prior agreements,
discussions or representations as an inducement to the execution hereof.

 

Signature page follows

 

3

 

IN WITNESS WHEREOF, the
parties hereto, by their duly authorized representatives, have executed this
Assignment as of the date first set forth above but to be effective as of 12:01
a.m. Houston time on January 1, 2005 (the “Effective Time”).

 

	
  ASSIGNOR:

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
  ENTERPRISE PRODUCTS OPERATING

  L.P.

  	
  MARKWEST ENERGY PARTNERS,

  L.P.

  
	
  By Enterprise Products OLPGP, Inc.

  	
  By MarkWest Energy GP, LLC,

  
	
  Its General Partner

  	
  Its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Enterprise Products Operating L.P.

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Enterprise Products Operating L.P.

  	
   

  	
  By:

  	
  /s/ MarkWest Energy Partners, L.P.

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Name:

  	
  MarkWest Energy Partners, L.P.

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
											

 

4

 

	
  STATE OF
  TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF
  HARRIS

  	
   

  	
  §

  

 

This Assignment of Membership Interest was acknowledged before me on                   ,
200    , by                           ,
                                  
of Enterprise Products OLPGP, Inc., a Delaware corporation and the general
partner of Enterprise Products Operating L.P., a Delaware limited partnership,
on behalf of said limited partnership.

 

	
   

  	
   

  	
   

  
	
   

  	
   Notary
  Public, State of Texas

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   Printed/Typed
  Name of Notary

  
	
   

  	
   

  
	
   

  	
   My
  Commission Expires:

  	
   

  	
   

  
				

 

	
  STATE OF
  TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF
  HARRIS

  	
   

  	
  §

  

 

 

This Assignment of Membership Interest was acknowledged before me on                 ,
200    , by                         ,
                        
of                         ,
a                         ,
on behalf of said                         .

 

	
   

  	
   

  	
   

  
	
   

  	
   Notary
  Public, State of Texas

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   Printed/Typed
  Name of Notary

  
	
   

  	
   

  
	
   

  	
   My Commission
  Expires:

  	
   

  	
   

  
				

 

5

 

Schedule 1(b)

To
Purchase and Sale Agreement

 

Seller
Knowledge

 

Michael Creel

Mike Benigno

Jim Cisarik

Mario Rivera

Jim Schwarz

 

1

 

Schedule 1(c)

To
Purchase and Sale Agreement

 

Buyer
Knowledge

 

[To come]

 

1

 

Schedule 3(a)(iii)

To
Purchase and Sale Agreement

 

Contraventions
Relating to Seller

 

None.

 

2

 

Schedule 3(b)(iii)

To
Purchase and Sale Agreement

 

Contraventions
Relating to Buyer

 

None.

 

3

 

Schedule 4(b)

To
Purchase and Sale Agreement

 

Contraventions
Relating to Acquired Interest and Starfish Companies

 

None.

 

4

 

Schedule 4(d)(ii)

To
Purchase and Sale Agreement

 

Encumbrances
of Subject Assets

 

None.

 

5

 

Schedule 4(e)

To
Purchase and Sale Agreement

 

Financial
Data

 

6

 

Schedule 4(f)

To
Purchase and Sale Agreement

 

Material
Changes

 

None.

 

7

 

Schedule 4(h)

To
Purchase and Sale Agreement

 

Tax
Matters

 

None.

 

8

 

Schedule 4(j)

To
Purchase and Sale Agreement

 

Litigation

 

None.

 

9

 

Schedule 4(k)

To
Purchase and Sale Agreement

 

Environmental

 

None.

 

 

Schedule 4(l)

To
Purchase and Sale Agreement

 

Government
Permits

 

None.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}]]