Document:

<PAGE>

EXHIBIT 10.1

                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of the 25th day of September, 2008 (the "EXECUTION DATE"), by and
between NUSTAR TERMINALS OPERATIONS PARTNERSHIP L.P., a Delaware limited
partnership ("SELLER"), and BLACKWATER NEW ORLEANS, L.L.C., a Louisiana limited
liability company ("PURCHASER"). Seller and Purchaser are sometimes referred to
herein individually as a "party" and collectively as the "parties." Capitalized
terms not otherwise defined herein shall have the meanings specified or referred
to in EXHIBIT A hereto.

                              PRELIMINARY STATEMENT

         Seller owns a terminal facility accommodating chemicals and liquid
fertilizer at or near Westwego, Louisiana.

         Seller is willing to sell, and Purchaser is willing to purchase, the
Assets (as defined below) in accordance with the terms of this Agreement.

         NOW THEREFORE, in consideration of the matters set forth in the
Preliminary Statement, the mutual promises and covenants herein set forth, and
subject to the terms and conditions hereof, the parties hereby agree as follows:

                           PURCHASE AND SALE OF ASSETS

1.1      SALE OF ASSETS. On the terms and subject to the conditions of this
         Agreement and for the consideration stated herein, at the Closing,
         Purchaser shall purchase and receive from Seller, and Seller shall sell
         and deliver to Purchaser subject to the Permitted Liens, all of
         Seller's right, title and interest in and to the following assets
         (collectively, the "ASSETS"):

         1.1.1.   The Land described on SCHEDULE 1.1.1 hereto;

         1.1.2.   The improvements located on the Land, including buildings,
                  facilities, fixtures, storage tanks, piping and related
                  on-site facilities and appurtenances (the "IMPROVEMENTS," and
                  together with the Land, the "REAL PROPERTY");

         1.1.3.   All equipment and fixtures appurtenant to the Facility and
                  used by Seller as of the date of this Agreement primarily in
                  its operation of the Facility, together with any and all
                  licenses or other rights to use real property held in
                  connection with same (such licenses and rights being the
                  "LICENSES," and together with said equipment and fixtures, the
                  "APPURTENANT EQUIPMENT");

         1.1.4.   All supplies, spare parts, tools, drawings, plats, equipment
                  manuals, books, furniture, machines, equipment, computers, and
                  records located at or relating to the Facility and all other
                  personal property located at the Facility, other than the
                  Excluded Personal Property set forth on SCHEDULE 1.2.6 hereto
                  (the "PERSONAL PROPERTY");

<PAGE>

         1.1.5.   All of Seller's rights, interests and obligations arising or
                  accruing after the Closing Date under written contracts,
                  purchase orders, sales orders, licenses, leases and other
                  agreements, arrangements and understandings and set forth on
                  SCHEDULE 1.1.5 hereto ("CONTRACTS");

         1.1.6.   To the extent transferable and relating to the Facility, all
                  of Seller's rights, interests and obligations arising or
                  accruing after the Closing Date under all permits and similar
                  authorizations from any Governmental Authority set forth on
                  SCHEDULE 1.1.6 hereto ("PERMITS");

         1.1.7.   To the extent transferable, all manufacturer and seller
                  warranties of, or other claims directly related to, any goods
                  or services provided to Seller regarding the Assets; and

         1.1.8.   All books, records, files or other embodiments of information
                  wherever located, hard copy or electronic format, whether
                  relating to past or current operations, in Seller's possession
                  and relating directly to the Facility (the "RECORDS").

1.2      EXCLUDED PROPERTY. Notwithstanding anything else in this Agreement, the
         Assets exclude the following (collectively, the "EXCLUDED PROPERTY"):

         1.2.1.   All Product Inventory;

         1.2.2.   Intra-company accounts and contracts of Seller including any
                  accounts and contracts between Seller and any of its
                  Affiliates;

         1.2.3.   Cash or bank accounts of Seller;

         1.2.4.   Accounts receivable, notes receivable and employee
                  receivables;

         1.2.5.   Proprietary trade names, trademarks, service marks, logos,
                  trade dress, insignia, and imprints of Seller and all signs
                  whose purpose is to display any of the foregoing and all forms
                  and documents which incorporate any of the foregoing;

         1.2.6.   The items of personal property that are listed on SCHEDULE
                  1.2.6 (collectively, the "EXCLUDED PERSONAL PROPERTY");

         1.2.7.   All Intellectual Property;

         1.2.8.   All rights to any of Seller's claims (whether or not filed)
                  for any federal, state, local, or foreign Income Tax or Tax
                  refunds or carrybacks;

         1.2.9.   The following documents: (A) all minute books, tax returns,
                  partnership documents of Seller or any of its Affiliates as
                  well as other business records or related documents of Seller
                  or any of its Affiliates that are not related to the Assets;
                  and (B) all Records that (i) are proprietary in nature, (ii)
                  are covered by the attorney-client privilege or work product
                  doctrine (other than Records which relate to any Assumed
                  Liability), (iii) are not readily severable from Seller's
                  general records through diligent efforts, (iv) relate to
                  employment matters for any person other than employees of

                                       2
<PAGE>

                  Seller employed in connection with the Assets within 30 days
                  prior to the date of this Agreement, or (v) are required by
                  applicable Law to be retained by Seller or any of Seller's
                  Affiliates in its care, custody, or control; provided,
                  however, to the extent the documents described in (v)
                  constitute Records, copies of such Records shall be delivered
                  to Purchaser;

         1.2.10.  All rights in connection with and assets of any employee
                  benefit or similar plans;

         1.2.11.  All insurance policies and rights thereunder;

         1.2.12.  The capital stock of any Affiliate of Seller;

         1.2.13.  All Claims of Seller and other rights to recover monies
                  against Third Parties, whether choate or inchoate, known or
                  unknown, contingent or non-contingent, arising prior to, on or
                  after the Closing Date that Seller or any of its Affiliates
                  may have and relating to or in connection with Seller's
                  ownership of the Assets prior to the Closing Date, including
                  without limitation Claims related to the cleaning and removal
                  of tank bottoms.

         1.2.14.  Any other properties or assets of Seller not specifically
                  described herein as being part of the "Assets."

1.3      AS-IS SALE. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
         ALL ASSETS TO BE CONVEYED HEREUNDER WILL BE CONVEYED ON AN "AS IS",
         "WHERE IS", AND "WITH ALL FAULTS" BASIS AT THE CLOSING, INCLUDING ANY
         ENVIRONMENTAL CONDITION, AND SELLER MAKES NO, AND HEREBY DISCLAIMS ALL
         OTHER, REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
         OTHERWISE, CONCERNING THE PHYSICAL CONDITION, UTILITY OR OPERABILITY OF
         ANY OF THE ASSETS, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
         MERCHANTABILITY OR OF FITNESS FOR PARTICULAR OR ORDINARY USES OR
         PURPOSES.

         EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, PURCHASER HAS
         INSPECTED, OR WAIVED (AND UPON CLOSING SHALL BE DEEMED TO HAVE WAIVED)
         ITS RIGHT TO INSPECT, THE ASSETS FOR ALL PURPOSES AND SATISFIED ITSELF
         AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND
         SUBSURFACE, INCLUDING, BUT NOT LIMITED TO, CONDITIONS SPECIFICALLY
         RELATED TO THE PRESENCE, RELEASE, OR DISPOSAL OF HAZARDOUS MATERIALS
         IN, ON, OR UNDER THE ASSETS. EXCEPT AS EXPRESSLY PROVIDED IN THIS
         AGREEMENT, PURCHASER IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE
         ASSETS. WITHOUT LIMITATION OF THE FOREGOING, SELLER MAKES NO, AND
         HEREBY DISCLAIMS ANY, WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED,
         STATUTORY, OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY
         DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION, OR MATERIALS NOW,
         HERETOFORE, OR HEREAFTER FURNISHED OR MADE AVAILABLE TO PURCHASER IN

                                       3
<PAGE>

         CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
         ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION, AND
         OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED BY SELLER OR OTHERWISE MADE
         AVAILABLE OR DISCLOSED TO PURCHASER ARE PROVIDED TO PURCHASER AS A
         CONVENIENCE AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR
         AGAINST SELLER, AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT
         PURCHASER'S SOLE RISK TO THE MAXIMUM EXTENT PERMITTED BY LAW.

1.4      USE OF NAMES. Prior to Closing, Seller shall remove or cause to have
         removed the names and marks used by Seller and Seller's Affiliates
         (including replacement of Seller's and their Affiliates name and number
         with Purchaser's name and designated number on any applicable pipeline
         markers located upon the Land) and all variations and derivations
         thereof and logos relating thereto from the Assets. Purchaser shall not
         make any use whatsoever of those names, marks, and logos.

1.5      ACCOUNTS RECEIVABLE; REVENUE; EXPENSES. From and after the Closing,
         Purchaser shall provide commercially reasonable assistance to Seller
         and its authorized representatives in collecting the amounts due with
         respect to the accounts receivable of Seller accruing from use of the
         Assets prior to the Closing, which efforts shall include receipt of
         funds billed by Seller for such accounts receivable and reasonable
         access to customer files and records with respect to such accounts
         receivable, but which efforts shall not include any obligation to spend
         any money or incur any out-of-pocket expense. Purchaser agrees that it
         will pay to Seller within thirty (30) days of receipt by Purchaser (i)
         any amounts received by Purchaser with respect to such accounts
         receivable, and (ii) any revenues (including throughput fees)
         attributable to the Assets prior to Closing to the extent same are paid
         to Purchaser. Seller agrees that it will promptly pay to Purchaser
         within thirty (30) days of receipt by Seller any amounts received by
         Seller with respect to Purchaser's use of the Assets at and subsequent
         to the Closing, including revenues and accounts receivable. All amounts
         so collected by Purchaser shall be applied to outstanding accounts
         receivable on a "first in, first out" basis, unless otherwise directed
         by the payor.

                                   ARTICLE II
                                 PURCHASE PRICE

2.1.     DEPOSIT. Purchaser shall pay to Seller, by wire transfer or delivery of
         other immediately available funds, a non-refundable deposit against the
         Purchase Price of the Assets in an amount equal to $150,000 (the
         "DEPOSIT"). Seller hereby acknowledges receipt of one-half of the
         Deposit upon the signing of the Letter of Interest between the parties
         dated July 28, 2008 ("LOI"), and one-half of the Deposit upon Purchaser
         and Seller entering into this Agreement on the Execution Date. In the
         event the Closing should not occur for any reason (other than due to
         Seller's breach of this Agreement), Seller will retain the Deposit as a
         break-up fee. Seller and Purchaser hereby acknowledge and agree that
         the Deposit constitutes consideration for the exclusivity set forth in
         the Letter of Interest between the parties dated July 28, 2008, and in
         part reflects a fair and reasonable monetary estimate of the
         substantial time, effort and resources Seller will expend in connection
         with the negotiation of the acquisition. In the event the Closing
         occurs, the Deposit shall be credited against the Purchase Price

                                       4
<PAGE>

2.2      PURCHASE PRICE; PAYMENT.

         2.2.1.   The purchase price to be paid by Purchaser for the transfer,
                  sale and assignment by Seller of the Assets shall be the sum
                  of Four Million Eight Hundred Thousand and No/100 Dollars
                  ($4,800,000) minus (i) the amount of any Prepaid Storage Fees
                  as of the Closing minus (ii) Seller's prorated share of the
                  Expenses minus (iii) the Third Party Inventory Shrinkage (such
                  net consideration shall hereinafter be referred to as the
                  "PURCHASE PRICE"), payable at the Closing.

                  a)       For purposes of this Agreement, "PREPAID STORAGE
                           FEES" means the aggregate amount of all fees and
                           other amounts paid to Seller prior to the Closing by
                           Third Parties storing Product Inventory at the
                           Facility as of the Closing to the extent and for the
                           period such fees and other payments entitle the payor
                           to storage or similar services at, or use of some
                           portion of, the Assets on and subsequent to the
                           Closing Date prorated for the period such storage or
                           special services are to be provided subsequent to the
                           Closing. All Prepaid Storage Fees in Seller's
                           possession as of the date of this Agreement are
                           listed in SCHEDULE 2.1.1(A). Seller shall provide
                           Purchaser with an updated list of Prepaid Storage
                           Fees at least within two (2) business days prior to
                           Closing.

                  b)       Seller shall provide to Purchaser an estimate of the
                           Third Party Inventory Shrinkage at least two (2)
                           business days prior to Closing, and shall cooperate
                           with Purchaser's reasonable requests to participate
                           in the reconciliation process. After such estimate is
                           delivered, Seller shall not remove additional product
                           inventory from the Facility without providing
                           reasonably detailed notice of same to Purchaser. At
                           Purchaser's option, Purchaser may contact Seller's
                           customers reflected by such inventory records and
                           request confirmation of the accuracy of such records.

         2.2.2.   As soon as reasonably practical, but in no event later than
                  two (2) business days prior to the Closing Date, Seller shall
                  in good faith cause to be prepared and delivered to Purchaser
                  a statement (the "CLOSING STATEMENT") setting forth the
                  Purchase Price, calculated in conformity with Section 2.1.1
                  above.

         2.2.3.   At the Closing, Purchaser shall pay the Purchase Price (as
                  properly reflected in the Closing Statement) to Seller by wire
                  transfer of immediately available funds to the account of
                  Seller, written notice of which account shall have been
                  provided to Purchaser not less than one (1) business day prior
                  to the Closing.

2.3      ALLOCATION OF PURCHASE PRICE FOR TAX PURPOSES. Seller and Purchaser
         agree that the proper allocation for purposes of IRS Form 8594 of
         amounts paid in connection with the transactions contemplated hereunder
         is as set forth in SCHEDULE 2.2, and the parties shall file IRS Form
         8594 consistently with the terms of same.

                                       5
<PAGE>

                                   ARTICLE III
         RETAINED LIABILITIES; ASSUMED LIABILITIES; PURCHASER'S RELEASE

3.1      SELLER'S RETAINED LIABILITIES. Seller shall retain and shall pay and
         discharge when due only the following Liabilities (collectively, the
         "RETAINED LIABILITIES"):

         3.1.1.   any Liability for: (i) salary, wages and benefits for any
                  current or former employees of Seller pertaining to their
                  employment by Seller at the Facility prior to the Closing
                  Date, including any accrued and unused vacation entitlement
                  for the Employee, or (ii) any violations of law by Seller
                  relating to the hiring, employment or termination of
                  employment of any current or former employees of Seller
                  pertaining to their employment by Seller at the Facility prior
                  to the Closing Date;

         3.1.2.   all costs for property furnished or services rendered to or
                  for the benefit of the Assets prior to the Closing Date;

         3.1.3.   any (1) Liability of Seller and its Affiliates for Income
                  Taxes and (2) Liability of Seller for Taxes arising during, or
                  relating to, any period (or portion thereof), through and
                  including the Closing Date and which result from Seller's
                  operation of the Facility or ownership of the Assets prior to
                  the Closing Date; provided, however, that Purchaser shall
                  assume responsibility for payment of those Taxes set forth in
                  Section 4.4.2;

         3.1.4.   any Liability arising out of or related to the Excluded
                  Property;

         3.1.5.   any Liability arising out of or related to Pre-Closing Offsite
                  Disposal;

         3.1.6.   any Liability, other than Liability described in Section 3.1.5
                  above, arising out of or related to any enforcement action
                  brought by a Governmental Authority that shall have commenced
                  on or before the two (2) year anniversary of the Closing Date
                  to the extent the same relate to, result from or arise out of
                  the Facility's non-compliance with Environmental Laws prior to
                  the Closing Date;

         3.1.7.   any Liability arising out of or related to the exposure of any
                  Employee at any time to any Hazardous Materials to the extent
                  existing at or released from the Facility prior to the Closing
                  Date;

         3.1.8.   any Liability arising under any of the Contracts or Permits to
                  the extent such Liability has accrued prior to the Closing
                  Date;

         3.1.9.   any Liability sounding in tort or any statutory Liability,
                  other than Liability described in Section 3.1.5, Section 3.1.6
                  or Section 3.1.7 above, pursuant to a Proceeding brought by a
                  Third Party that shall have commenced on or before the five
                  (5) year anniversary of the Closing Date to the extent arising
                  out of or related to any occurrence or event happening prior
                  to the Closing Date;

         3.1.10.  any Liability, other than Liability described in Section
                  3.1.5, Section 3.1.6 or Section 3.1.7 above, with respect to
                  litigation pending against Seller as of the Closing Date
                  related in any manner to the Facility or the Assets or
                  defending or prosecuting the same.

                                       6
<PAGE>

3.2      PURCHASER'S ASSUMED LIABILITIES. Upon the Closing, Purchaser, without
         any further action by Purchaser or Seller, shall assume and be solely
         liable for the following Liabilities (collectively, the "ASSUMED
         LIABILITIES"):

         3.2.1.   any Liability under any and all of the Contracts, Licenses and
                  Permits arising after the Closing Date (but excluding any
                  Liability arising out of or relating to any such instrument or
                  a breach thereof that has accrued prior to the Closing Date);

         3.2.2.   any Liability under Environmental Law to perform Corrective
                  Action of any Environmental Condition;

         3.2.3.   any Liability arising out of or related to any enforcement
                  action brought by a Governmental Authority that shall have
                  commenced after the two (2) year anniversary of the Closing
                  Date to the extent the same relate to, result from or arise
                  out of the Facility's non-compliance with Environmental Laws
                  prior to the Closing Date;

         3.2.4.   any Liability arising out of or related to a Release of
                  Hazardous Materials pursuant to a Proceeding brought by a
                  Third Party to the extent the same relate to, result from, or
                  arise out of Seller's ownership or operation of the Facility
                  prior to the Closing Date, but excluding any such Liability to
                  the extent expressly set forth in Section 3.1.5, Section 3.1.6
                  or Section 3.1.7;

         3.2.5.   any Liability arising out of or related to the exposure of any
                  natural person at any time to any Hazardous Material to the
                  extent existing at or released from the Facility prior to, on
                  or after the Closing Date, but excluding any such Liability to
                  the extent expressly set forth in Section 3.1.7;

         3.2.6.   any Liability arising out of or related to Title Claims;

         3.2.7.   any Liability arising out of or related to the operation of
                  the Facility or the ownership of the Assets, whether arising
                  prior to or after the Closing, including any Liability arising
                  out of or related to the condition of the Assets prior to or
                  at the time of Closing, but excluding the Retained
                  Liabilities.

3.3      RELEASE. Upon the terms and subject to the conditions of this
         Agreement, without any further action by Purchaser or Seller, (i)
         Purchaser agrees from and after the Closing that Purchaser shall pay,
         perform and discharge when due, whether based in whole or in part on
         violation of Laws, strict liability, contract, willful misconduct,
         ordinary or gross negligence of Seller, the Assumed Liabilities; and
         (ii) Seller agrees from and after the Closing that Seller shall pay,
         perform and discharge when due, whether based in whole or in part on
         violation of Laws, strict liability, contract, willful misconduct,
         ordinary or gross negligence of Purchaser, the Retained Liabilities.
         Effective as of the Closing, Purchaser hereby unconditionally releases
         and discharges Seller, Seller's Affiliates, and the partners,
         employees, officers and directors of Seller and Seller's Affiliates,
         from all of the Assumed Liabilities, and Seller hereby unconditionally

                                       7
<PAGE>

         releases and discharges Purchaser, Purchaser's Affiliates, and the
         partners, members, managers, employees, shareholders, officers and
         directors of Purchaser and Purchaser's Affiliates, from all of the
         Retained Liabilities.

                                   ARTICLE IV
                                     CLOSING

4.1      TIME AND PLACE. The closing of the transaction contemplated hereby (the
         "CLOSING") shall be held on October 31, 2008 at the offices of Milling
         Benson Woodward LLP, 909 Poydras Street, Suite 2300, New Orleans,
         Louisiana, unless another time, place or date is agreed to in writing
         by the parties hereto (the day of the Closing being referred to herein
         as the "CLOSING DATE"). If the Closing does not occur by October 31,
         2008, a party that is not then in material default under this Agreement
         may, by written notice to the other party, terminate this Agreement
         without further obligation to the other party in accordance with
         Section 15.1 below.

4.2      SELLER'S DELIVERIES. At the Closing, Seller shall deliver to Purchaser
         the following:

         4.2.1.   Deliver to the Title Company a quitclaim deed for Seller's
                  right, title and interest in and to the Real Property in the
                  form attached hereto as EXHIBIT B ("DEED"), executed by
                  Seller;

         4.2.2.   an assignment and bill of sale for the Appurtenant Equipment
                  and Personal Property substantially in the form attached as
                  EXHIBIT C ("ASSIGNMENT AND BILL OF SALE"), executed and
                  acknowledged by Seller;

         4.2.3.   an assignment and assumption of Permits and Contracts
                  substantially in the form attached as EXHIBIT D ("ASSIGNMENT
                  AND ASSUMPTION OF PERMITS AND CONTRACTS"), executed by Seller;

         4.2.4.   an assumption and release agreement substantially in the form
                  attached as EXHIBIT E ("ASSUMPTION AND RELEASE AGREEMENT"),
                  executed by Seller;

         4.2.5.   possession of the Assets, subject to the Permitted Liens;

         4.2.6.   certified copies of appropriate partnership action by Seller
                  authorizing the transactions contemplated by this Agreement
                  and authorizing the person(s) executing the documents
                  referenced in this Section 4.2 to enter into this Agreement
                  and such other documents on behalf of Seller;

         4.2.7.   a certificate that the representations and warranties made by
                  Seller in this Agreement are true and correct in all material
                  respects as of the Closing Date, as though made at and as of
                  the Closing Date.

4.3      PURCHASER'S DELIVERIES. At the Closing, Purchaser shall deliver to
         Seller the following:

         4.3.1.   the Purchase Price in immediately available funds in
                  accordance with Section 2.1, together with the reimbursement
                  to Seller in immediately available funds for Purchaser's share
                  of any applicable Transfer Taxes as provided in Section 4.4.2;

                                       8
<PAGE>

         4.3.2.   the Assignment and Bill of Sale substantially in the form
                  attached as EXHIBIT C, executed by Purchaser;

         4.3.3.   the Assignment and Assumption of Permits and Contracts
                  substantially in the form attached as EXHIBIT D, executed by
                  Purchaser;

         4.3.4.   the Assumption and Release Agreement substantially in the form
                  attached as EXHIBIT E, executed by Purchaser;

         4.3.5.   the Guaranty substantially in the form attached as EXHIBIT F,
                  executed by Blackwater Midstream Corp., as guarantor;

         4.3.6.   certified copies of appropriate corporate action by Purchaser
                  authorizing the transactions contemplated by this Agreement
                  and authorizing the person(s) executing the documents
                  referenced in this Section 4.3 to enter into this Agreement
                  and such other documents on behalf of Purchaser;

         4.3.7.   a certificate that the representations and warranties made by
                  Purchaser in this Agreement are true and correct in all
                  material respects as of the Closing Date, as though made at
                  and as of the Closing Date.

4.4      APPORTIONMENT OF TAXES, UTILITIES AND OTHER EXPENSES.

         4.4.1.   The following items relating to the Assets: (i) general real
                  estate ad valorem taxes for the then current fiscal year, (ii)
                  personal property taxes, (iii) charges for utilities or
                  municipal charges, and (iv) other prepaid expenses related to
                  the Assets and their operations (collectively, "EXPENSES"),
                  shall be prorated as of the Closing Date and shall be adjusted
                  at the Closing. Subject to such pro-ration, Seller shall pay
                  all Expenses assessed against the Assets for periods on or
                  before the Closing Date; provided, however, that if any
                  Expenses are payable in installments, Seller shall be
                  responsible for paying only that portion of such installments
                  to the extent applicable to periods prior to the Closing Date.
                  Subject to such pro-ration, Purchaser shall pay all Expenses
                  assessed against the Assets for all periods after the Closing
                  Date. Notwithstanding the foregoing, Seller shall pay all
                  special assessments levied prior to the Closing, but only to
                  the extent Seller received notice of same prior to the Closing
                  and to the extent such assessments are attributable to
                  pre-Closing ownership and operation of the Facility.

         4.4.2.   Purchaser shall pay and assume all Liabilities for any
                  applicable sales tax, documentary or other similar transfer
                  tax, real property filing fees and any other similar Taxes
                  (other than Income Taxes) (collectively, "TRANSFER TAXES"),
                  whether imposed on Seller or Purchaser, and whether paid with
                  a return or imposed by a Governmental Authority upon audit or
                  otherwise, arising from the transfer of Assets contemplated by
                  this Agreement.

         4.4.3.   If any of the Expenses to be apportioned in Section 4.4.1 are
                  not readily ascertainable as of the time of Closing, such
                  apportionments shall, to the extent necessary, be based on the
                  parties' reasonable estimate thereof. The parties shall
                  cooperate with each other in making the calculations upon
                  which any Expenses are to be allocated in favor of Seller or

                                       9
<PAGE>

                  Purchaser, as the case may be. Such apportionments made on the
                  basis of estimates shall be recalculated promptly after the
                  availability of required information, but in any event within
                  six (6) months of the Closing Date, and any overpayments or
                  underpayments due a party shall be adjusted by suitable
                  payment from the applicable party.

         4.4.4.   After the Closing Date, if either Purchaser or Seller (as
                  applicable, the "RECEIVING PARTY") receives a bill for
                  Expenses that covers periods both before and after the Closing
                  Date, the Receiving Party shall either (a) pay such bill in
                  its entirety and invoice the other party (the "SHARING PARTY")
                  for the portion of the Expenses payable by such other party in
                  accordance with the principles of proration set forth in
                  Section 4.4.1, in which event the Sharing Party shall promptly
                  reimburse the Receiving Party receiving such invoice, or (b)
                  if the Sharing Party is primarily responsible for payment as
                  prorated pursuant to Section 4.4.1, forward a copy of such
                  bill to the Sharing Party within 10 days of receipt and pay
                  that portion of the Expenses payable by it in accordance with
                  the principles of proration set forth in Section 4.4.1, in
                  which event the Sharing Party shall timely pay its portion of
                  the bill directly. After the Closing Date, if a Receiving
                  Party receives a bill for Expenses that covers only a period
                  for which the Receiving Party is not responsible under the
                  terms of this Agreement, then the Receiving Party shall
                  forward the bill to the party who is responsible for such
                  Expenses in accordance with the terms of this Agreement (the
                  "OBLIGATED PARTY") for payment directly by the Obligated
                  Party. The Obligated Party shall pay such bill in timely
                  fashion (except to the extent that it is being protested
                  through proper procedures and the Obligated Party uses
                  reasonable best efforts to cause the Governmental Authority or
                  other person issuing such bill to correct the name on the
                  account, and the Obligated Party shall pay any amount found to
                  be its responsibility).

         4.4.5.   Any refunds received in respect of Expenses apportioned
                  pursuant to this Section 4.4 shall be paid to the party to
                  whom such Expenses are apportioned pursuant to this Section
                  4.4 if received from the payor by another party.

         4.4.6.   Seller and Purchaser will provide each other with such
                  cooperation and information as each may reasonably request of
                  the other with regard to the preparation and filing of
                  returns, or the conduct of an audit or other proceeding in
                  respect of Taxes.

                                    ARTICLE V
                         CONDITIONS PRECEDENT TO CLOSING

         Subject to the terms hereof, the obligations of Seller and Purchaser at
the Closing are subject to the satisfaction or waiver at or prior to the Closing
of each of the respective conditions set forth below.

5.1.     CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligations of Purchaser at
         the Closing are subject to the satisfaction prior to or at the Closing
         of each of the following conditions:

         5.1.1.   Seller shall have performed (a) in all respects those
                  covenants required by this Agreement to be performed by it at
                  or prior to the Closing that are not qualified by materiality,
                  and (b) in all material respects those covenants required by
                  this Agreement that are qualified by materiality to be
                  performed by it at or prior to the Closing;

                                       10
<PAGE>

         5.1.2.   Seller shall have delivered, or caused to be delivered, to
                  Purchaser all agreements, instruments, certificates and
                  documents required to be so delivered under this Agreement,
                  including those listed in Section 4.2;

         5.1.3.   There shall not have been any material adverse change with
                  respect to the condition of the Assets, and all of Seller's
                  representations and warranties set forth in Article VI shall
                  remain true and correct in all material respects as at the
                  Closing;

         5.1.4.   There shall not be in effect any Order barring the
                  consummation of the transactions contemplated by this
                  Agreement;

         5.1.5.   Purchaser shall have obtained a firm commitment for the
                  financing of the Purchase Price, on terms and conditions
                  reasonably satisfactory to Purchaser; and

         5.1.6.   There shall not have been issued any notice of violations of
                  city, county, state, federal, building, land use, fire,
                  health, safety, environmental, hazardous materials or other
                  governmental or public agency codes, ordinances, regulations,
                  or orders with respect to the Facility that are individually
                  or in the aggregate material to the continued operation of the
                  Business.

5.2.     CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller at the
         Closing are subject to the satisfaction prior to or at the Closing of
         each of the following conditions:

         5.2.1.   Purchaser shall have performed (a) in all respects those
                  covenants required by this Agreement to be performed by it at
                  or prior to the Closing that are not qualified by materiality,
                  and (b) in all material respects those covenants required by
                  this Agreement to be performed by it at or prior to the
                  Closing that are qualified by materiality;

         5.2.2.   Purchaser shall have delivered to Seller the Purchase Price
                  and all agreements, instruments, certificates and documents
                  required to be so delivered under this Agreement or any
                  related agreement between the parties, including those listed
                  in Section 4.3;

         5.2.3.   Seller and Purchaser shall have entered into one or more
                  terminal services agreements on terms substantially similar to
                  the existing Contracts in respect of any such Contract
                  requiring Third Party consent to assign for which consent has
                  not been obtained at Closing for the sole purpose of enabling
                  Seller to provide Purchaser with the benefits of such Contract
                  until such time as consent has been obtained in accordance
                  with Article XIV; and

         5.2.4.   There shall not be in effect any Order barring the
                  consummation of the transactions contemplated by this
                  Agreement.

                                       11
<PAGE>

                                   ARTICLE VI
                     SELLER'S REPRESENTATIONS AND WARRANTIES

         Seller hereby warrants and represents to Purchaser that, except as set
forth on the schedules attached hereto:

6.1      ORGANIZATION. Seller is a limited partnership, duly organized, validly
         existing and in good standing under the laws of the state of Delaware.

6.2      AUTHORITY; ENFORCEABILITY. Seller has the power and authority to
         execute and deliver this Agreement and each agreement and instrument
         delivered or to be delivered by Seller pursuant hereto, and to carry
         out its obligations hereunder and thereunder. The execution, delivery
         and performance of this Agreement and each agreement and instrument
         delivered or to be delivered pursuant hereto by Seller, and the
         consummation of the transactions provided for hereby and thereby, have
         been duly authorized and approved by all requisite partnership action
         of Seller, and no other act or proceeding on the part of Seller or its
         Affiliates is necessary to authorize the execution, delivery or
         performance of this Agreement or of such other agreements and
         instruments, or the transactions contemplated hereby or thereby; and
         each of this Agreement and such agreements and instruments is, or upon
         its execution and delivery will be, legal, valid, binding and
         enforceable against Seller in accordance with its respective terms,
         subject to the effects of bankruptcy, insolvency, reorganization,
         moratorium, and other laws of general application relating to
         creditors' rights and equitable remedies.

6.3      TITLE TO ASSETS. During the Seller Ownership Period, Seller has not
         granted any interest in the Real Property to any Third Party. Except as
         otherwise provided in Article VIII, Seller has good and marketable
         title to the Assets, free and clear of all Liens other than Permitted
         Liens.

6.4      NO BREACH. The execution and delivery of this Agreement and each
         agreement and instrument delivered or to be delivered pursuant hereto
         by Seller, and the consummation of the transactions provided for hereby
         and thereby and the compliance by Seller with any of the provisions
         hereof or thereof does not and will not violate, or conflict with, or
         result in a breach of, any provisions of the constituent documents of
         Seller

6.5      CONTRACTS. SCHEDULE 1.1.4 sets forth a list of Contracts in effect on
         the date of this Agreement to which Seller is a party or is bound that
         relate to the Assets. To Seller's knowledge, neither Seller nor any
         other party is in or has given notice of breach of any of the
         Contracts. To Seller's knowledge, (i) the Contracts are valid and
         enforceable and assignable to Purchaser without the consent of any
         other person except as set forth on SCHEDULE 6.5, and (ii) no
         circumstance exists that with or without notice or lapse of time would
         give rise to a breach of any of the Contracts.

6.6      ACTIONS AND PROCEEDINGS. Except as set forth on SCHEDULE 6.6, there is
         no action, suit, investigation, judicial or administrative proceeding,
         or arbitration pending, or, to Seller's knowledge, threatened, against
         Seller or any of its Affiliates involving any of the Assets that would
         reasonably be expected to have a material adverse effect on the Assets.
         There is no judgment, decree, injunction, order, determination or award

                                       12
<PAGE>

         of any Governmental Authority outstanding against Seller (other than
         general regulatory orders applicable to businesses of the type operated
         by Seller) that would reasonably be expected to have a material adverse
         effect on the Assets. SCHEDULE 6.6 sets forth a list of all pending or
         threatened actions, suits, investigations, judicial or administrative
         proceedings, and arbitrations against Seller involving any of the
         Assets and known to Seller.

6.7      BROKERS. All negotiations relating to this Agreement, the agreements
         and instruments delivered pursuant hereto, and the transactions
         contemplated hereby and thereby have been carried on without the
         intervention of any person acting on behalf of Seller or its Affiliates
         in such manner as to give rise to any valid claim against Purchaser for
         any broker's or finder's fee or similar compensation in connection with
         the transactions contemplated hereby or thereby.

6.8      COMPLIANCE WITH LAWS AND PERMITS. To Seller's knowledge:

         6.8.1    Seller and the Assets are in compliance in all material
                  respects with all applicable Laws in connection with the
                  operation of the Assets, except for laws governing Title
                  Claims, for which Seller makes no representation of any kind
                  or character.

         6.8.2    SCHEDULE 6.8.2 lists all material Permits currently held by
                  Seller with respect to the Assets.

6.9      EMPLOYEE MATTERS. SCHEDULE 6.9 contains a complete listing of all
         employees that are employed by Seller in connection with the Assets,
         together with information regarding length of service for each such
         employee. Seller is not party to any collective bargaining agreement or
         similar agreement with respect to employees of Seller employed at the
         Facility. There is no labor strike, slowdown, work stoppage or lockout
         in effect or, to Seller's knowledge, threatened against or otherwise
         affecting the employees of Seller involved in the operation of the
         Assets.

6.10     ERISA. Except as set forth on SCHEDULE 6.10:

         6.10.1   Seller has, at all times, complied, and currently complies, in
                  all material respects with the applicable continuation
                  requirements for its welfare benefit plans, including (1)
                  Section 4980B of the Code and Sections 601 through 608,
                  inclusive, of ERISA which provisions are hereinafter referred
                  to collectively as "COBRA" and (2) any applicable state
                  statutes mandating health insurance continuation coverage for
                  employees.

         6.10.2   There is no material or pending proceeding by any Governmental
                  Entity relating to any Employee Benefit Plan. Neither Seller
                  nor any fiduciary of any Employee Benefit Plan has engaged in
                  a transaction with respect to any such plan that could subject
                  Seller or Purchaser to a tax or penalty imposed by either
                  Section 4975 of the Code or Section 502(l) of ERISA or a
                  violation of Section 406 of ERISA.

         6.10.3   Except for continuation coverage requirements of COBRA, Seller
                  has no obligations or potential liability for benefits to
                  employees, former employees or their respective dependents
                  following termination of employment or retirement other than
                  as described in the Employee Benefit Plans.

                                       13
<PAGE>

6.11     TAXES. All Tax returns, information returns and statements, forms and
         reports required by any Governmental Authority to be filed by Seller
         and relating to Taxes to which Seller is subject in respect of any Tax
         period ending on or before the Closing Date have been or will be
         properly filed when due, and all Taxes shown thereon to be due and
         payable have been or will be timely paid. There are no Liens for Taxes
         upon any of the Assets, except for Liens for Taxes not yet due and
         payable.

6.12     SOLVENCY. Seller is not now insolvent, nor will it be rendered
         insolvent as a result of the consummation of the transactions
         contemplated by this Agreement. There are no bankruptcy,
         reorganization, or arrangement proceedings pending against, being
         contemplated by, or, to the knowledge of Seller, threatened against
         Seller.

6.13     DUE DILIGENCE MATERIALS. To Seller's knowledge, Seller has provided
         true, complete and correct copies of all records and documentation in
         its possession and relating to the Facility and the Assets that have
         been requested by Purchaser.

6.14     BOOKS OF ACCOUNT. The financial books, records and accounts of Seller
         with respect to the Assets, to the extent the same have been furnished
         to Purchaser, are complete and correct and represent actual, bona fide
         transactions and have been maintained in accordance with Seller's
         normal business practices. The books, records and accounts of Seller
         relating to the Assets and operation of the Facility accurately and
         fairly reflect the transactions and the assets and liabilities
         associated with the Assets, operation of the Facility and conduct of
         Seller's business, and with respect thereto, Seller has not engaged in
         any transaction, maintained any bank account or used any of its funds,
         except for transactions, bank accounts and funds which have been and
         are reflected in the normally maintained books and records of the
         Seller.

                                   ARTICLE VII
                   PURCHASER'S REPRESENTATIONS AND WARRANTIES

         Purchaser hereby warrants and represents to Seller that:

7.1      ORGANIZATION. Purchaser is a limited liability company duly organized,
         validly existing and in good standing under the laws of the State of
         Louisiana.

7.2      AUTHORITY; ENFORCEABILITY. Purchaser has the power and authority to
         execute and deliver this Agreement and each agreement and instrument
         delivered or to be delivered by Purchaser pursuant hereto, and to carry
         out its obligations hereunder and thereunder. The execution, delivery
         and performance of this Agreement and each agreement and instrument
         delivered or to be delivered pursuant hereto by Purchaser, and the
         consummation of the transactions provided for hereby and thereby, have
         been duly authorized and approved by all requisite partnership action
         of Purchaser, and no other act or proceeding on the part of Purchaser
         or its Affiliates is necessary to authorize the execution, delivery or
         performance of this Agreement or of such other agreements and
         instruments, or of the transactions contemplated hereby or thereby; and
         each of this Agreement and such agreements and instruments is, or upon
         its execution and delivery will be, legal, valid, binding and
         enforceable against Purchaser in accordance with its respective terms,
         subject to the effects of bankruptcy, insolvency, reorganization,
         moratorium, and other laws of general application relating to
         creditor's rights and equitable remedies.

                                       14
<PAGE>

7.3      NO BREACH. The execution and delivery of this Agreement and each
         agreement and instrument delivered or to be delivered pursuant hereto
         by Purchaser, and the consummation of the transactions provided for
         hereby and thereby and the compliance by Purchaser with any of the
         provisions hereof or thereof does not and will not violate, or conflict
         with, or result in a breach of, any provisions of the constituent
         documents of Purchaser.

7.4      BROKERS. All negotiations relating to this Agreement, the agreements
         and instruments delivered pursuant hereto, and the transactions
         contemplated hereby and thereby have been carried on without the
         intervention of any person acting on behalf of Purchaser or its
         Affiliates in such manner as to give rise to any valid claim against
         Seller for any broker's or finder's fee or similar compensation in
         connection with the transactions contemplated hereby or thereby.

                                  ARTICLE VIII
                                  TITLE MATTERS

PURCHASER'S TITLE DILIGENCE. As of the date of this Agreement, Purchaser has
received a copy of a commitment for title insurance and a survey covering the
Real Property, the cost and expense for which (determined as of the date of this
Agreement) shall be borne and paid one-half each by Seller and Purchaser at the
Closing. Purchaser has been afforded ample opportunity to investigate the state
of title to the Real Property and is willing to accept Seller's title to same,
such as it may be, on an "as is, where is" basis. Purchaser acknowledges that
Seller may not currently hold good title to all of the Real Property or the
improvements located thereon. At the Closing (assuming such occurs), Seller
shall transfer its rights in and to the Real Property to Purchaser without
representation or warranty of any kind, and SELLER HEREBY EXPRESSLY DISCLAIMS
ANY AND ALL WARRANTIES, REPRESENTATIONS AND COVENANTS OF TITLE TO THE REAL
PROPERTY OF ANY KIND OR CHARACTER, WHETHER IMPLIED, EXPRESS OR STATUTORY, EXCEPT
AS TO SELLER'S OWN ACTS; provided, however, that any legal rights to the Real
Property that may have accrued to Seller during its possession of the Assets are
intended to pass to Purchaser upon Purchaser's possession of the Real Property.

                                   ARTICLE IX
                                 INDEMNIFICATION

9.1      INDEMNIFICATION OBLIGATIONS. Seller and Purchaser (each, as the case
         may be, an "INDEMNITOR") each shall release, defend, indemnify and hold
         harmless the other and its respective Affiliates, as well as the
         partners, officers, directors, members, managers, agents and employees
         of any of them (each, as the case may be, an "INDEMNITEE"), from and
         against each and every Loss, which results from, arises out of or is
         attributable in any way to any of the following:

                                       15
<PAGE>

                  9.1.1    Liability expressly assumed or retained by the
                           Indemnitor pursuant to this Agreement;

                  9.1.2    any inaccuracy or breach of a representation or
                           warranty made by the Indemnitor in this Agreement or
                           in

                  9.1.3    any non-fulfillment or breach of the obligations,
                           covenants or agreements made by the Indemnitor in
                           this Agreement or in documents delivered by the
                           Indemnitor at the Closing.

9.2      PROCEDURES.

         9.2.1    In the event that any officer or registered agent of
                  Indemnitee receives CLAIM") giving rise to a right of
                  indemnification of such Indemnitee hereunder, the Indemnitee
                  shall, within sixty (60) days after receipt of such notice,
                  give written notice thereof to the Indemnitor setting forth
                  the facts and circumstances giving rise to such claim for
                  indemnification and shall tender the defense of such claim to
                  the Indemnitor. If the Indemnitee fails to give such notice
                  and tender such defense within such 60-day period, the
                  Indemnitee shall be solely responsible for any Loss with
                  respect to such claim to the extent the Loss is attributable
                  to such failure; but failure to give such notice and tender
                  such defense within such 60-day period shall not result in a
                  forfeiture or waiver of any rights to indemnification for any
                  Loss with respect to such claim to the extent the Loss is not
                  attributable to such failure.

         9.2.2    The Indemnitor shall be solely responsible for selecting the
                  attorneys to defend any matter subject to indemnification
                  and/or taking all actions necessary or appropriate to resolve,
                  defend, and/or settle such matters, and shall be entitled to
                  contest, on its own behalf and on the Indemnitee's behalf, the
                  existence or amount of any obligation, cost, expense, debt or
                  liability giving rise to such claim. The Indemnitor shall keep
                  the Indemnitee fully and timely informed as to actions taken
                  on such matters. The Indemnitee shall cooperate fully with the
                  Indemnitor and its counsel and shall provide them reasonable
                  access to the Indemnitee's employees, consultants, agents,
                  attorneys, accountants, and files to the extent necessary or
                  appropriate to defend or resolve the matter, the Indemnitor
                  reimbursing the Indemnitee with respect to the cost of any
                  such access. The Indemnitee shall have the right, but not the
                  duty, to participate with attorneys of its own choosing, at
                  its own expense, in the defense of any Loss for which the
                  Indemnitor is obligated to defend and indemnify it, and to
                  approve any settlement that may give rise to a Loss on the
                  part of Indemnitee, without relieving the Indemnitor of any
                  obligations hereunder.

9.3      CERTAIN LIMITATIONS. Notwithstanding anything to the contrary in this
         Article IX or elsewhere in this Agreement, the Indemnitor shall not
         have any obligation with respect to Losses subject to indemnification
         by the Indemnitor hereunder as a result of a breach(es) of
         representations or warranties unless the cumulative, aggregate amount
         of all such Losses exceeds or is reasonably expected to exceed $50,000
         (the "BASKET AMOUNT"), in which case only the excess shall be subject
         to indemnification under this Article IX. In no event shall either
         party's indemnification obligation exceed $750,000, except as to Seller
         for Losses arising from Retained Liabilities and as to Purchaser for
         Losses arising from the Assumed Liabilities, for which such party's
         indemnification obligation shall not be limited in amount or subject to
         the Basket Amount. To the extent Losses are incurred as a result of
         claims of a Third Party and such Third Party is determined to be

                                       16
<PAGE>

         entitled to consequential, special, punitive or indirect damages, the
         Indemnitee shall be entitled to indemnification against such damages
         notwithstanding the exclusion of such damages generally from the
         definition of "Losses." Notwithstanding anything to the contrary in
         this Article IX or elsewhere in this Agreement, Seller will not have
         any Liability under this Article IX for Losses resulting from a breach
         of any representation or warranty made in this Agreement or any
         certificate or document delivered by Seller pursuant to this Agreement
         if Purchaser had knowledge that such representation or warranty was not
         true in any material respect and failed to disclose such knowledge
         prior to Closing.

9.4      EXCLUSIVE REMEDY. Except as otherwise provided in Article XVI, the
         indemnification provided for in this Article IX shall be the exclusive
         remedy in any action seeking damages or any other form of monetary
         relief brought by any party to this Agreement against another party to
         this Agreement with respect to any provision of this Agreement, the
         transactions contemplated by this Agreement and/or any document,
         agreement or instrument delivered in connection with or pursuant to
         this Agreement; provided, however, that nothing herein shall be
         construed to limit the right of a party, in a proper case, to seek
         injunctive relief for a breach of this Agreement or any such other
         document or instrument. Each party hereby waives, to the fullest extent
         permitted under applicable law, any and all other rights, claims and
         causes of action, known or unknown, it or any indemnified person may
         have against the other party relating to this Agreement or the
         transactions pursuant to this Agreement. Any indemnity payment under
         this Article IX shall be treated as an adjustment to the Purchase Price
         for tax purposes unless a final determination (which shall include the
         execution of a Form 870-AD or successor form) with respect to the
         indemnified party or any of its Affiliates causes any such payment not
         to be treated as an adjustment to the Purchase Price for U.S. Federal
         income tax purposes.

9.5      DIRECT CLAIMS. In any case in which an Indemnitee seeks indemnification
         hereunder and no Third Party Claim is involved, the Indemnitee shall
         notify the Indemnitor in writing of any Losses which such Indemnitee
         claims is subject to indemnification pursuant to this Article IX. The
         notice shall describe the indemnification sought in reasonable detail
         to the extent known and shall indicate the amount (estimated, if
         necessary, and if then estimable) of the Losses that have been or may
         be suffered. Subject to the limitations otherwise set forth in this
         Article IX, the failure of the Indemnitee to exercise reasonable
         diligence in providing such notification shall not amount to a waiver
         of such claim except to the extent the resulting delay materially
         prejudices the position of the Indemnitor with respect to such claim.

                                    ARTICLE X
                                RECORDS & ACCESS

10.1     SELLER'S RIGHTS TO RECORDS. From and after the Closing Date, Purchaser
         will afford to Seller and its authorized representatives reasonable
         access during normal business hours to any records related to the
         Facility or the Assets in the possession of Purchaser, and, if
         requested, will furnish to Seller such additional information and
         cooperate with Seller in such other respects, including the making of
         employees available to Seller (at Seller's expense) as witnesses or
         deponents, as Seller may reasonably request for purposes of (a)
         financial reporting, (b) tax or similar purposes, (c) investigating
         Claims or conducting Litigation, or (d) in connection with the Retained
         Liabilities.

                                       17
<PAGE>

10.2     PRESERVATION OF RECORDS. Purchaser and Seller shall not destroy or
         otherwise dispose of any records acquired, removed, or retained
         hereunder for a period of seven (7) years following the Closing Date or
         such longer period as required by applicable regulations, laws,
         statutes, or court orders, except upon 30 days prior written notice to
         the other party (upon receipt of such notice, the other party (the
         "RECEIVING PARTY") may elect that such records be transferred to the
         Receiving Party at the sole cost and expense of the Receiving Party).
         During such seven year period, Seller and Purchaser shall make such
         records available to the other party or its authorized representatives
         (at such other party's sole expense) upon reasonable request for any
         business, legal or technical need in a manner which does not
         unreasonably interfere with the record holder's business operations.

                                   ARTICLE XI
               SELLER'S INTERIM OPERATIONS; CASUALTY; CONDEMNATION

11.1     INTERIM OPERATIONS. From and after the date of this Agreement and until
         the Closing, Seller shall conduct its business related to the Assets in
         all material respects in the ordinary course of business and shall use
         commercially reasonable efforts to:

         11.1.1   preserve intact its operations, including but not limited to
                  its books and records and business relationships with
                  customers, suppliers and others with whom it has business
                  relationships and keep available its key employees involved in
                  the operation of the Assets;

         11.1.2   maintain in effect all Permits, including all Permits that are
                  required for Seller to carry on the operations of the Assets;

         11.1.3   maintain and repair all of the material Assets in a manner
                  consistent with past practices; and

         11.1.4   maintain employee wages, compensation and benefits in a manner
                  consistent with past practices.

11.2     NO ADDITIONAL RIGHTS GRANTED. From and after the date of this Agreement
         and until the Closing, Seller shall not grant any rights in any of the
         Real Property to any Third Person.

11.3     CASUALTY OR CONDEMNATION.

         11.3.1   Seller shall give Purchaser prompt notice of (i) any fire or
                  other casualty substantially affecting a material portion of
                  the Assets (a "CASUALTY") between the date of this Agreement
                  and the Closing Date and (ii) any actual, pending or proposed
                  condemnation of any portion of the Assets, as to which Seller
                  have received written notice from the condemning authority
                  ("TAKING").

                                       18
<PAGE>

         11.3.2   In the event the Assets suffer a Casualty subsequent to the
                  date of this Agreement, but prior to the Closing Date,
                  Purchaser's obligation to close hereunder shall not be
                  affected except as provided below in this Section 11.3.2, and
                  Seller shall elect to either (i) prior to Closing, repair
                  fully or make adequate provision for the full repair of such
                  Assets to at least their prior condition, (ii) terminate this
                  Agreement in accordance with Article XVI below without further
                  Liability between the parties, or (iii) to provide Purchaser
                  with a credit against the Purchase Price in an amount agreed
                  upon by Seller and Purchaser to represent the reduction in the
                  value of the Assets by reason of the Casualty, taking into
                  account any repairs actually made by Seller to such Assets
                  prior to the Closing Date. However, if Seller shall have
                  elected to provide Purchaser with a credit against the
                  Purchase Price as provided in clause (iii) above, Purchaser
                  may terminate this Agreement prior to the Closing by notice to
                  Seller if the amount of the reduction in the Purchase Price
                  caused by the Casualty exceeds $250,000. In the event Seller
                  exercises its option under clause (i) above, Closing may be
                  delayed until November 28, 2008 to allow for the necessary
                  repairs, at which point, if said repairs have not been
                  completed, Seller shall be deemed to have exercised its option
                  under (iii) above, and the Closing shall occur on such date.

         11.3.3   In the event of a Taking, Purchaser's obligation to close
                  hereunder shall not be affected unless the amount of the
                  reduction in the value of the Assets by reason of the Taking
                  exceeds $150,000. In the event of any Taking that does not
                  result in a termination of this Agreement, all sums of money
                  (or other consideration) awarded as damages or otherwise
                  received on account of such Taking shall be applied as a
                  credit to Purchaser to the Purchase Price, and all claims for
                  any such award shall be assigned to Purchaser.

                                   ARTICLE XII
                                    PUBLICITY

         At all times prior to the Closing, no party will make any press release
or other public statement concerning this Agreement or the transactions
contemplated hereby, except upon mutual agreement, or as required by law. No
public statement or third-party disclosure will be made without advance notice
to and prior approval of the other party. No such approval will be unreasonably
withheld or delayed.

                                  ARTICLE XIII
                                EMPLOYEE MATTERS

SELLER'S EMPLOYEES. Purchaser agrees (i) to offer employment to Seller's present
full-time employees at the Facility ("TRANSFERRED EMPLOYEES") on terms and
conditions equivalent to those applied to Purchaser's current employees who are
similarly situated; and (ii) to recognize all periods of prior service of such
Transferred Employees with the Seller for purposes of vesting and eligibility in
respect of any employee benefit plan or arrangement and any other severance,
vacation or other employee benefit. Purchaser further agrees that it will take
no employment action, including any plant closing, mass layoff, change of
conditions of employment, or employment loss within the meaning of the WARN Act,
for a period of at least ninety (90) days after Closing, which causes Losses to
Seller under the Worker Adjustment Retraining Notification Act, 29 U.S.C. Sec.
2101 et. seq. Purchaser shall employ the Transferred Employees for a period of
at least 12 months beginning on the Closing Date, except to the extent any such
Transferred Employee is earlier terminated for cause.

                                       19
<PAGE>

                                   ARTICLE XIV
                 TRANSFER OF PERMITS AND ASSIGNMENT OF CONTRACTS

Seller and Purchaser agree to use their commercially reasonable efforts to
satisfy, prior to Closing, any preconditions to the transfer of the Permits,
Licenses, and Contracts from Seller to Purchaser. If there are prohibitions
against, or conditions to, the conveyance of any Permits, Licenses, or Contracts
without the prior written consent of Third Parties either as a result of the
provisions thereof or the requirements of applicable Law, and such written
consents are not obtained at or prior to the Closing, then (i) any provision
contained in this Agreement to the contrary notwithstanding, the transfer of
title to, or interest in, such Licenses, Permits, or Contracts pursuant to this
Agreement shall not become effective unless and until such consent requirement
is satisfied, waived or no longer applies, (ii) until such consent requirement
is satisfied, waived or no longer applies, Seller shall (without infringing the
legal rights of any third party, breaching any such License, Permit, or Contract
or violating any Law) provide Purchaser with the equivalent benefits of the
Permit, License, or Contract by subcontract, sublease or otherwise, on the
condition that Purchaser shall cooperate and assist in such efforts and provide
such services or perform such acts as may be reasonably required to enable
Seller to provide Purchaser with such equivalent benefits, and Purchaser shall
bear all economic burdens and other Liabilities of Seller regarding this
post-Closing period under the Permit, License, or Contract, notwithstanding the
fact that the same has not been transferred to Purchaser, and (iii) Closing
shall not be delayed pending satisfaction, waiver or expiration of such consent
requirement. When and if such consent requirement is so satisfied, waived or no
longer applies, to the extent permitted by applicable Law, the assignment of
such Permits, Licenses, and Contracts shall become effective automatically as of
the Closing Date, without further action on the part of Seller or Purchaser and
without payment of further consideration. After Closing, Seller shall reasonably
cooperate with Purchaser, at Purchaser's request and expense, to procure the
transfer of any Permits, Licenses and Contracts not transferred to Purchaser
prior to Closing.

                                   ARTICLE XV
                                    COVENANTS

15.1     COOPERATION. Each of the parties shall assist and cooperate with one
         another in all due diligence efforts and shall further assist and
         cooperate with one another to effect promptly and shall give any
         notices to make any filings with, and use its respective reasonable
         best efforts to obtain all consents, approvals, and authorizations of
         or any exemptions by, all Governmental Authorities in connection with
         the transactions contemplated by this Agreement.

15.2     AGREEMENTS. In the event any Contract's express term expires pursuant
         to its express provisions prior to the Closing, Seller shall provide
         immediate notice thereof to Purchaser, Seller shall not renew that
         Contract for a fixed contract term, and shall use commercially
         reasonable efforts to continue such Contract on a month-to-month basis,
         unless otherwise directed in writing by Purchaser.

15.3     TRANSITION. To the extent consistent with applicable Laws, each of the
         parties shall reasonably cooperate with each other and shall cause its
         officers, employees, agents and representatives to reasonably cooperate
         with each other for a period of thirty (30) days after Closing, or such
         longer period as Purchaser may reasonably require, to ensure the
         orderly transition of the Assets and the Assumed Liabilities to
         Purchaser and to minimize the disruption to the respective businesses
         of the parties hereto (including the parties' relationships with
         customers and suppliers) resulting from the transactions contemplated
         hereby.

                                       20
<PAGE>

                                   ARTICLE XVI
                                   TERMINATION

16.1     TERMINATION. This Agreement may, by notice given prior to or at the
         Closing, be terminated as follows:

         a)       by the mutual written agreement of Purchaser and Seller;

         b)       by Seller upon notice to Purchaser, if any of the conditions
                  in Section 5.2 shall have not been fulfilled by the time
                  required or shall have become incapable of fulfillment on or
                  prior to the Termination Date; provided, that Seller has
                  fulfilled its obligations, if any, under such condition;

         c)       by Purchaser upon notice to Seller, if any of the conditions
                  in Section 5.1 shall have not been fulfilled by the time
                  required or shall have become incapable of fulfillment on or
                  prior to the Termination Date;

         d)       by either Purchaser or Seller if the Closing shall not have
                  occurred (other than through the failure of any party seeking
                  to terminate this Agreement to comply fully with its
                  obligations under this Agreement) on or before October 31,
                  2008 (the "TERMINATION DATE"), or such later date as the
                  parties may agree upon in writing.

16.2     EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
         Section 16.1, the provisions contained in Article IX shall survive the
         termination of this Agreement. If the Closing does not occur because of
         a breach by a party, then the breaching party shall be liable to the
         non-breaching party for all Losses suffered by the non-breaching party
         arising from such breach.

16.3     SURVIVAL. The representations and warranties set forth herein shall
         survive the Closing. The parties express covenants herein shall survive
         the Closing to the extent necessary for the applicable party to perform
         its post-Closing obligations hereunder.

                                  ARTICLE XVII
                                   BULK SALES

Seller shall pay or otherwise satisfy in the ordinary course of business any
Liability in respect of trade creditors of Seller's business with respect to the
Assets that have accrued prior to the Closing Date. Subject to the foregoing
warranty, Seller and Purchaser hereby waive compliance with any applicable bulk
sales or similar laws.

                                  ARTICLE XVIII
                                   ASSIGNMENT

This Agreement may not be assigned by any party, in whole or in part without the
prior written consent of the other party, which consent shall not be
unreasonably withheld; PROVIDED, HOWEVER, that Seller's consent is hereby given
for Purchaser to assign this Agreement to an Affiliate prior to the Closing.
This Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their respective heirs, legal representatives, successors and
permitted assigns. This Agreement is not intended to, and does not create, any
rights in any third parties.

                                       21
<PAGE>

                                   ARTICLE XIX
                                    PAYMENTS

19.1     TERMS OF PAYMENT. Unless otherwise specified herein, any payment to be
         made hereunder shall be made in U.S. dollars by wire transfer of
         immediately available funds, without discount or deduction, or by such
         other means as the parties may agree.

19.2     INTEREST. Any amount not paid by any party when due hereunder shall
         bear interest from the date upon which payment was due through the date
         of payment at a rate equal to two percent (2%) above the prime rate of
         interest as announced by Chase Manhattan Bank N.A. in New York City
         from time to time.

                                   ARTICLE XX
                                     NOTICES

All notices or other communications required hereunder shall be in writing,
shall be addressed as specified below and shall be deemed to have been given:
(a) at the time of delivery when delivered personally; (b) upon receipt when
sent by Federal Express, or similar recognized overnight service; or (c) upon
completion of successful transmission (with electronic confirmation of receipt)
when sent by facsimile (unless transmission is completed outside recipient's
normal working hours, in which case such notice shall be deemed given at the
start of recipient's next business day), immediately followed by U.S. posting,
postage prepaid.

       Seller:
                         NUSTAR TERMINALS OPERATIONS PARTNERSHIP L.P.
                         c/o NuStar Energy L.P.
                         2330 N. Loop 1604 W.
                         San Antonio, Texas  78248
                         Attn: Winson Low, Vice President
                         Phone: (210) 918-2432
                         Fax:   (210) 918-3629
       Purchaser:
                         BLACKWATER NEW ORLEANS, L.L.C.
                         4006 Highway 44
                         Garyville, Louisiana  70051
                         Attn:  Frank Marrocco, Chief Commercial Officer
                         Phone: (908) 692-9389
                         Fax:   (985) 535-8510

                                       22
<PAGE>

                         WITH A COPY TO:

                         MILLING BENSON WOODWARD L.L.P.
                         909 Poydras Street, Suite 2300
                         New Orleans, Louisiana  70112-1010
                         Attn: Charles A. Snyder
                         Phone: (504) 569-7000
                         Fax:   (504) 569-7001

Any party may change its address or facsimile number by providing written notice
to the other party in accordance with the foregoing.

                                   ARTICLE XXI
                          GENERAL; ADDITIONAL COVENANTS

21.1     ENTIRE AGREEMENT. This Agreement, including all of the Schedules,
         Exhibits and attachments hereto, constitutes the entire understanding
         between the parties with respect to the subject matter contained herein
         and supersedes any prior understandings, negotiations or agreements,
         whether written or oral, between them respecting such subject matter.

21.2     CONSTRUCTION. Words of any gender used in this Agreement shall be
         construed to include any other gender, and words in the singular number
         shall include the plural, and vice versa, unless the context requires
         otherwise. The use of the phrase "including," or phrases of similar
         import, shall be deemed to include the phrase "without limitation".

21.3     CAPTIONS. The captions used in connection with the Articles and
         Sections of this Agreement are for convenience only and shall not be
         deemed to enlarge, limit or otherwise modify the meaning or
         interpretation of the language of this Agreement. Any references to
         "Articles", "Sections", "Schedules", "Exhibits", and "Schedules" are to
         Articles, Sections, Schedules, Exhibits, and Schedules of this
         Agreement. Each Schedule, Exhibit, and Schedule referred to herein is
         incorporated into this Agreement by such reference; provided that to
         the extent of any conflict or inconsistency between any of the
         Schedules, Exhibits or Schedules and this Agreement, this Agreement
         will prevail.

21.4     SEVERABILITY. If any term or other provision of this Agreement is
         invalid, illegal or incapable of being enforced by any rule of law, or
         public policy, all other conditions and provisions of this Agreement
         shall nevertheless remain in full force and effect so long as the
         economic or legal substance of the transactions contemplated hereby is
         not affected in any manner adverse to any party. Upon such
         determination that any term or other provision is invalid, illegal or
         incapable of being enforced, the parties hereto shall negotiate in good
         faith to modify this Agreement so as to effect the original intent of
         the parties as closely as possible in an acceptable manner to the end
         that transactions contemplated hereby are fulfilled to the extent
         possible.

21.5     NO WAIVER. The failure of any party to insist upon strict performance
         of any of the terms or conditions of this Agreement will not constitute
         a waiver of any of its rights hereunder.

                                       23
<PAGE>

21.6     PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARY. This Agreement shall
         inure to the benefit of and be binding upon Purchaser and Seller and
         their respective successors and assigns. Except as otherwise provided
         herein, nothing in this Agreement will be construed as conferring upon
         any person or entity other than Purchaser and Seller, and their
         respective successors in interest, any right, remedy or claim under or
         by reason of this Agreement.

21.7     GOVERNING LAW; CHOICE OF FORUM. This Agreement shall be governed by and
         construed in accordance with the laws of the State of Texas. Any claims
         arising from or related to this Agreement (whether in contract, tort or
         otherwise) shall be governed by the laws of the State of Texas. If any
         dispute shall arise between the parties concerning the construction of
         this Agreement or their respective rights and obligations hereunder,
         the dispute shall be settled by final and binding arbitration in
         accordance with the terms of this Section 21.7. The arbitration shall
         be conducted in accordance with the rules then prevailing of the
         American Arbitration Association, except as otherwise provided herein
         (the "Rules"). The arbitration shall be conducted in Houston, Texas.
         The arbitration proceedings shall be conducted by a single arbitrator
         selected in accordance with the Rules. The decision rendered by the
         arbitrator shall be final and binding and conclusive on all parties
         concerned and free of challenge or review in any court. The decision so
         rendered by the arbitrator shall be enforceable by any court of
         competent jurisdiction. The party or parties requesting such
         arbitration, on the one hand, and the adverse party or parties, on the
         other hand, shall bear equally the cost of the arbitration. Any court
         costs and other expenses, including reasonable attorneys' fees incurred
         by a party petitioning a court of competent jurisdiction to enforce the
         decision rendered by the arbitrator, shall be paid by the party or
         parties against whom the arbitrator's decision is being enforced.

21.8     BEST EFFORTS; TIME OF ESSENCE. Except as otherwise specifically
         provided herein, Purchaser and Seller shall each use its best efforts
         to satisfy the conditions to Closing and otherwise consummate the
         transactions contemplated by this Agreement as promptly as practical.
         Time is of the essence with respect to the Closing of this Agreement.

21.9     COUNTERPARTS. This Agreement may be executed in any number of
         counterparts and any party hereto may execute any such counterpart,
         each of which when executed by both parties and delivered shall be
         deemed to be an original.

21.10    EXTENSIONS OF TIME; WAIVER. It is agreed that any party to this
         Agreement may extend time for performance by any other party hereto or
         waive the performance of any obligation of any other party hereto or
         waive any inaccuracies in the representations and warranties of any
         other party, but any such waiver shall be in writing, and shall not
         constitute or be construed as a waiver of any other obligation,
         condition, representation or warranty under this Agreement.

21.11    FURTHER ASSURANCES. Purchaser and Seller shall take such additional
         action, and shall cooperate with one another, as may be reasonably
         necessary to effectuate the terms of this Agreement and any agreement
         or instrument delivered pursuant hereto.

21.12    NO PRESUMPTION AGAINST DRAFTER. Purchaser and Seller have each fully
         participated in the negotiation and drafting of this Agreement. If an
         ambiguity, question of intent or question of interpretation arises,
         this Agreement must be construed as if drafted jointly, and there must
         not be any presumption, inference or conclusion drawn against any party
         by virtue of the fact that its representative has authored this
         Agreement or any of its terms.

                                       24
<PAGE>

21.13    AMENDMENTS. This Agreement cannot be altered, amended, changed or
         modified in any respect or particular unless each such alteration,
         amendment, change or modification shall have been agreed to by each of
         the parties hereto and reduced to writing in its entirety and signed
         and delivered by each party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       25
<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date first set forth above.

                           SELLER:

                           NUSTAR TERMINALS OPERATIONS PARTNERSHIP L.P.,
                           a Delaware limited partnership

                                 By:
                                     ------------------------------------------
                                     Winson Low, Vice President

                                 PURCHASER:

                                 BLACKWATER NEW ORLEANS, L.L.C., a
                                 Louisiana limited liability company

                                 By:  Blackwater Midstream Corp., its Manager

                                 By:
                                     ------------------------------------------
                                     Dale T. Chatagnier, Chief Operating Officer

                                       26
<PAGE>

                                    EXHIBITS

Exhibit A                 Definitions

Exhibit B                 QuitClaim Deed

Exhibit C                 Assignment and Bill of Sale

Exhibit D                 Assignment of Permits and Contracts

Exhibit E                 Assumption and Release Agreement

Exhibit F                 Guaranty

                                    SCHEDULES

Schedule 1.1.1            Land Description

Schedule 1.1.5            Contracts

Schedule 1.1.6            Permits

Schedule 1.2.6            Excluded Personal Property

Schedule 2.1.1(a)         Prepaid Storage Fees

Schedule 2.2              Allocation of Purchase Price for Tax Purposes

Schedule 6.5              Third Party Consents

Schedule 6.6              Litigation

Schedule 6.9              Seller's Employees

Schedule 6.11             ERISA

                                       27
<PAGE>

                                    EXHIBIT A

                                   DEFINITIONS

         The following terms shall have the meanings set forth below for all
purposes of this Agreement:

         "AFFILIATE" means, with respect to a party, any individual or legal
business entity that, directly or indirectly, controls, is controlled by, or is
under common control with, such party. The term "control" (including the term
"controlled by") as used in the preceding sentence means the possession,
directly or indirectly, of the power to direct or cause the direction of
management and policies.

         "AGREEMENT" means this Purchase and Sale Agreement.

         "APPURTENANT EQUIPMENT" has the meaning specified in Section 1.1.3.

         "ASSETS" has the meaning specified in Section 1.1.

         "ASSIGNMENT AND BILL OF SALE" has the meaning specified in Section
4.2.2.

         "ASSIGNMENT OF PERMITS AND CONTRACTS" has the meaning specified in
Section 4.2.3.

         "ASSUMED LIABILITIES" has the meaning specified in Section 3.2.

         "CASUALTY" has the meaning specified in Section 11.3.1.

         "CLAIMS" means any demand, claim, grievance or Litigation, made or
pending for any Damages, specific performance, injunctive relief, remediation or
other equitable relief, whether or not ultimately determined to be valid.

         "CLOSING" has the meaning specified in Section 4.1.

         "CLOSING DATE" has the meaning specified in Section 4.1.

         "CLOSING STATEMENT" has the meaning specified in Section 2.1.2.

         "COBRA" shall mean Part 6 of Subtitle B of Title I of ERISA, Code
ss.4980B and any similar state Law.

         "CONTRACTS" has the meaning specified in Section 1.1.4.

         "CORRECTIVE ACTION" means any investigation, sampling, analysis,
monitoring, abatement, demolition, dismantlement, removal, decontamination,
remediation, cleanup, treatment, storage, disposal or other action that is
required to comply with Environmental Law.

         "DAMAGES" means all damages, dues, penalties, fines, costs, amounts
paid in settlement, liabilities, losses, assessments, judgments, awards,
arbitration awards, demands, claims, orders, expenses and fees, including costs
of investigation, court costs, costs of defense and reasonable attorneys' fees
and expenses.

                                       1
<PAGE>

         "DEPOSIT" has the meaning given such term in Section 2.1.

         "EFFECTIVE TIME" means 12:01 a.m. on the Closing Date.

         "EMPLOYEES" has the meaning specified in Article XIII.

         "EMPLOYEE BENEFIT PLANS" shall mean any "employee benefit plan" within
the meaning of Section 3(3) of ERISA and any bonus, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, vacation, severance, disability, death benefit, hospitalization or
insurance plan providing benefits to any present or former employee or
contractor of Seller or any member of the ERISA Group maintained by any such
entity or as to which any such entity has any Liability.

         "ENVIRONMENTAL CONDITION" means the existence of Hazardous Materials
at the Facility, or originating at the Facility and migrating to adjacent
properties, including in or on the soil, surface water, or groundwater at, on or
under the Facility or such adjacent properties, in each case to the extent the
levels of any such Hazardous Materials exceed naturally occurring background
levels in such area.

         "ENVIRONMENTAL LAWS" shall mean all applicable federal, state, and
local Laws, common law, standards, prohibitions, restrictions, directives,
interpretations, Orders, guidelines, permits, licenses, approvals and
entitlements that relate to safety, the protection of human health and/or the
environment or create rights or obligations in connection with the presence or
release of Hazardous Materials.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

         "EXCLUDED PERSONAL PROPERTY" has the meaning specified in Section
1.2.6.

         "EXCLUDED PROPERTY" has the meaning specified in Section 1.2.

         "EXECUTION DATE" has the meaning given such term in the preamble of
this Agreement.

         "EXPENSES" has the meaning specified in Section 4.4.1.

         "FACILITY" means Seller's terminal facility accommodating chemicals and
liquid fertilizer at or near Westwego, Louisiana, as well as all of the
facilities, equipment and other improvements associated therewith.

         "GOVERNMENTAL AUTHORITY" means any federal, state or local governmental
authority, regulatory or administrative agency, board, commission, judicial body
or other body having jurisdiction over the matter.

         "HAZARDOUS MATERIALS" means any substance which is listed, regulated or
defined as a hazardous substance, hazardous material, toxic substance, hazardous
waste, hazardous chemical, hazardous air pollutant, contaminant or pollutant
under any Environmental Laws, including (i) radioactive substances, (ii)
asbestos, (iii) radon, (iv) mercury, (v) lead-based paint, (vi) polychlorinated
biphenyls ("PCBs") and (vii) liquid and gaseous hydrocarbons, crude oil and
other petroleum products, and any fraction or by-product thereof.

                                       2
<PAGE>

         "IMPROVEMENTS" has the meaning specified in Section 1.1.2.

         "INCOME TAXES" means any individual or corporate income or franchise
tax based on net income.

         "INDEMNITEE(S)" has the meaning specified in Section 9.1.

         "INDEMNITOR(S)" has the meaning specified in Section 9.1.

         "INTELLECTUAL PROPERTY" means all patents, patent rights, trademarks,
service marks, trade names, and copyrights, and all applications for the
foregoing, and all trade secrets, know-how, inventions, research records,
confidential information, product designs, engineering specifications and
drawings, technical information and other intellectual property rights.

         "LAWS" means all laws, rules, regulations, statutes, ordinances, codes,
plans, Orders, decrees, rulings and charges of any Governmental Authority,
including Environmental Laws.

         "LIABILITY" means any and all duties, liabilities and obligations,
whether accrued, fixed, contingent, mature or inchoate, direct or indirect,
known or unknown, and whether contractual, statutory or otherwise.

         "LICENSE" has the meaning specified in Section 1.1.3.

         "LIEN" means any encumbrance, lien, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, and servitude or transfer restriction.

         "LITIGATION" means any action, case, suit, arbitration, hearing,
investigation, charge, claim (including any claim of a violation of Law),
litigation or other proceeding pending, commenced, brought, conducted or
prosecuted before, or otherwise involving, any Governmental Authority or
arbitrator.

         "LOSS" or "LOSSES" means any loss, charge, assessment, settlements,
award, obligation, judgment, decree, lien, fine, penalty, Tax, damages
(excluding consequential, indirect or loss of profit damages, except as
otherwise provided herein), expense, cost and fee, including reasonable fees and
expenses of attorneys, consultants and experts.

         "OBLIGATED PARTY" has the meaning specified in Section 4.4.4.

         "ORDER" means any judgment, order, writ, injunction or decree of any
Governmental Authority having jurisdiction over the matter.

         "PERMITS" means the permits, licenses, registrations, and certificates
from any Governmental Authority required to own or operate, and relating
exclusively to the operation or ownership of the Assets.

                                       3
<PAGE>

         "PERMITTED LIENS" means the following: (a) liens for Taxes, assessments
or governmental charges or levies not yet due or delinquent; (b) statutory liens
of carriers, warehousemen, mechanics, materialmans', workers', repairers' and
other similar liens arising or incurred in the ordinary course of business for
amounts which are not due and payable; (c) easements, restrictive covenants,
rights of way and other similar restrictions of records that do not materially
adversely affect the use of the property subject thereto; (d) zoning, building
and other similar restrictions; and (e) minor imperfections of title (whether or
not of record) that do not materially adversely affect the value or use of the
property subject thereto.

         "PERSONAL PROPERTY" has the meaning specified in Section 1.1.4.

         "PREPAID STORAGE FEES" has the meaning specified in Section 2.1.1(a).

         "PRE-CLOSING OFF-SITE DISPOSAL" means the transportation, storage,
treatment or disposal of a Hazardous Material at any location other than the
Facility prior to the Closing Date; provided, however, such disposal expressly
excludes the Release of Hazardous Materials.

         "PROCEEDING" means any action, arbitration, hearing, charge, claim
(including any claim of a violation of Law), litigation or suit commenced,
conducted or prosecuted before, or otherwise involving, any Governmental
Authority or arbitrator.

         "PRODUCT INVENTORY" means all chemicals, refined petroleum products and
other products and substances derived there from that are located at the
Facility as of the Effective Time and are stored by Seller pursuant to Contracts
between Seller and Third Parties.

         "PURCHASE PRICE" has the meaning specified in Section 2.1.1.

         "PURCHASER" has the meaning specified in the introductory paragraph.

         "REAL PROPERTY" has the meaning specified in Section 1.1.2.

         "RECORDS" has the meaning specified in Section 1.1.8.

         "RECEIVING PARTY" has the meaning specified in Section 4.4.4.

         "RELEASE OF HAZARDOUS MATERIALS" means any release, emission, or
discharge of Hazardous Materials arising out of or in connection with the
ownership or operation of the Facility, including: (1) any release, emission, or
discharge of Hazardous Materials on the surface, in the soil, in the
groundwater, or in the air at the Facility; and (2) any migration of Hazardous
Materials released, emitted, or discharged at the Facility onto or into the
surface, soil, groundwater, or air of any other real property.

         "RETAINED LIABILITIES" has the meaning specified in Section 3.1.

         "SELLER" has the meaning specified in the introductory paragraph.

         "SELLER OWNERSHIP PERIOD" means the period of time from July 1, 2005 to
the Closing Date.

                                       4
<PAGE>

         "SHARING PARTY" has the meaning specified in Section 4.4.4.

         "TAX" or "TAXES" means any and all federal, state, local and foreign
taxes, charges, fees, levies, imposts, assessments, withholdings, impositions,
or other similar governmental charges and any interest, liens, additions to tax
or penalties thereon.

         "TAKING" has the meaning specified in Section 11.3.1.

         "TERMINATION DATE" has the meaning specified in Section 16.1(c).

         "THIRD PARTY" means any person, group or entity (including any
corporation, partnership or other business entity) other than an Indemnitee.

         "THIRD PARTY CLAIM" has the meaning specified in Section 9.2.1.

         "THIRD PARTY INVENTORY SHRINKAGE" means the monetary value (as
reasonably estimated by the parties based on current fair market value) of that
volume of Third Party products stored at the Facility pursuant to one or more of
the Contracts, for which there is a discrepancy between the amount actually
present at the Facility as of the Closing Date and the amount reflected by
Seller's inventory records as being stored at the Facility as of the Closing
Date.

         "TITLE CLAIMS" means any and all Liabilities arising from, related to
or based upon the state of title to the Assets (including Liabilities based upon
trespass or similar legal theories), but excluding Liabilities based upon the
state of title to the Real Property resulting from Seller's acts during the
Seller Ownership Period.

         "TITLE COMPANY" means Elizabeth Title Agency, L.L.C.

         "TRANSFER TAXES" has the meaning specified in Section 4.4.2.

                                       5exv10w1

 

    Exhibit 10.1
    

 

    EXECUTION
    VERSION
    

 

    AMENDED
    AND RESTATED SENIOR PREFERRED STOCK PURCHASE AGREEMENT

 

    AMENDED AND RESTATED SENIOR PREFERRED STOCK PURCHASE AGREEMENT
    (this “Agreement”) dated as of
    September 26, 2008, between the UNITED STATES DEPARTMENT OF
    THE TREASURY (“Purchaser”) and FEDERAL HOME
    LOAN MORTGAGE CORPORATION (“Seller”), acting
    through the Federal Housing Finance Agency (the
    “Agency”) as its duly appointed conservator
    (the Agency in such capacity, “Conservator”).
    Reference is made to Article 1 below for the meaning of
    capitalized terms used herein without definition.

 

    Background

 

    A. The Agency has been duly appointed as Conservator for
    Seller pursuant to Section 1367(a) of the Federal Housing
    Enterprises Financial Safety and Soundness Act of 1992 (as
    amended, the “FHE Act”). Conservator has
    determined that entry into this Agreement is (i) necessary
    to put Seller in a sound and solvent condition;
    (ii) appropriate to carry on the business of Seller and
    preserve and conserve the assets and property of Seller; and
    (iii) otherwise consistent with its powers, authorities and
    responsibilities.

 

    B. Purchaser is authorized to purchase obligations and
    other securities issued by Seller pursuant to
    Section 306(l)
    of the Federal Home Loan Mortgage Corporation Act, as amended
    (the “Charter Act”). The Secretary of the
    Treasury has determined, after taking into consideration the
    matters set forth in
    Section 306(l)(1)(C)
    of the Charter Act, that the purchases contemplated herein are
    necessary to (i) provide stability to the financial
    markets; (ii) prevent disruptions in the availability of
    mortgage finance; and (iii) protect the taxpayer.

 

    C. Purchaser and Seller executed and delivered the Senior
    Preferred Stock Purchase Agreement dated as of September 7,
    2008 (the “Original Agreement”), and the
    parties thereto desire to amend and restate the Original
    Agreement in its entirety as set forth herein.

 

    THEREFORE, the parties hereto agree as follows:

 

    Terms and
    Conditions

 

    1.  DEFINITIONS

 

    As used in this Agreement, the following terms shall have the
    meanings set forth below:

 

    “Affiliate” means, when used with respect to a
    specified Person (i) any direct or indirect holder or group
    (as defined in Sections 13(d) and 14(d) of the Exchange
    Act) of holders of 10.0% or more of any class of capital stock
    of such Person and (ii) any current or former director or
    officer of such Person, or any other current or former employee
    of such Person that currently exercises or formerly exercised a
    material degree of Control over such Person, including without
    limitation each current or former Named Executive Officer of
    such Person.

 

    “Available Amount” means, as of any date of
    determination, the lesser of (a) the Deficiency Amount as
    of such date and (b) the Maximum Amount as of such date.

 

    “Business Day” means any day other than a
    Saturday, Sunday or other day on which commercial banks are
    authorized to close under United States federal law and the law
    of the State of New York.

 

    “Capital Lease Obligations” of any Person shall
    mean the obligations of such Person to pay rent or other amounts
    under any lease of (or other similar arrangement conveying the
    right to use) real or personal property, or a combination
    thereof, which obligations are required to be classified and
    accounted for as capital leases on a balance sheet of such
    Person under GAAP and, for purposes hereof, the amount of such
    obligations at any time shall be the capitalized amount thereof
    at such time determined in accordance with GAAP.

 

    “Control” shall mean the possession, directly
    or indirectly, of the power to direct or cause the direction of
    the management or policies of a Person, whether through the
    ownership of voting securities, by contract or otherwise.

 

    “Deficiency Amount” means, as of any date of
    determination, the amount, if any, by which (a) the total
    liabilities of Seller exceed (b) the total assets of Seller
    (such assets excluding the Commitment and any unfunded amounts
    thereof), in each case as reflected on the balance sheet of
    Seller as of the applicable date set forth in this Agreement,
    prepared in accordance with GAAP; provided,
    however, that:

 

    (i) for the avoidance of doubt, in measuring the Deficiency
    Amount liabilities shall exclude any obligation in respect of
    any capital stock of Seller, including the Senior Preferred
    Stock contemplated herein;

 

    (ii) in the event that Seller becomes subject to
    receivership or other liquidation process or proceeding,
    “Deficiency Amount” shall mean, as of any date of
    determination, the amount, if any, by which (a) the total
    allowed claims against the receivership or other applicable
    estate (excluding any liabilities of or transferred to any LLRE
    (as defined in Section 5.4(a)) created by a receiver)
    exceed (b) the total assets of such receivership or other
    estate (excluding the Commitment, any unfunded amounts thereof
    and any assets of or transferred to any LLRE, but including the
    value of the receiver’s interest in any LLRE);

 

    (iii) to the extent Conservator or a receiver of Seller, or
    any statute, rule, regulation or court of competent
    jurisdiction, specifies or determines that a liability of Seller
    (including without limitation a claim against Seller arising
    from rescission of a purchase or sale of a security issued by
    Seller (or guaranteed by Seller or with respect to which Seller
    is otherwise liable) or for damages arising from the purchase,
    sale or retention of such a security) shall be subordinated
    (other than pursuant to a contract providing for such
    subordination) to all other liabilities of Seller or shall be
    treated on par with any class of equity of Seller, then such
    liability shall be excluded in the calculation of Deficiency
    Amount; and

    

    - 2 -

 

    (iv) the Deficiency Amount may be increased above the
    otherwise applicable amount by the mutual written agreement of
    Purchaser and Seller, each acting in its sole discretion.

 

    “Designated Representative” means Conservator
    or (a) if Conservator has been superseded by a receiver
    pursuant to
    Section 1367(a)
    of the FHE Act, such receiver, or (b) if Seller is not in
    conservatorship or receivership pursuant to
    Section 1367(a)
    of the FHE Act, Seller’s chief financial officer.

 

    “Director” shall mean the Director of the
    Agency.

 

    “Effective Date” means the date on which this
    Agreement shall have been executed and delivered by both of the
    parties hereto.

 

    “Equity Interests” of any Person shall mean any
    and all shares, interests, rights to purchase or otherwise
    acquire, warrants, options, participations or other equivalents
    of or interests in (however designated) equity, ownership or
    profits of such Person, including any preferred stock, any
    limited or general partnership interest and any limited
    liability company membership interest, and any securities or
    other rights or interests convertible into or exchangeable for
    any of the foregoing.

 

    “Exchange Act” means the Securities Exchange
    Act of 1934, as amended, and the rules and regulations of the
    SEC promulgated thereunder.

 

    “GAAP” means generally accepted accounting
    principles in effect in the United States as set forth in the
    opinions and pronouncements of the Accounting Principles Board
    and the American Institute of Certified Public Accountants and
    statements and pronouncements of the Financial Accounting
    Standards Board from time to time.

 

    “Indebtedness” of any Person means, for
    purposes of Section 5.5 only, without duplication,
    (a) all obligations of such Person for money borrowed by
    such Person, (b) all obligations of such Person evidenced
    by bonds, debentures, notes or similar instruments, (c) all
    obligations of such Person under conditional sale or other title
    retention agreements relating to property or assets purchased by
    such Person, (d) all obligations of such Person issued or
    assumed as the deferred purchase price of property or services,
    other than trade accounts payable, (e) all Capital Lease
    Obligations of such Person, (f) obligations, whether
    contingent or liquidated, in respect of letters of credit
    (including standby and commercial), bankers’ acceptances
    and similar instruments and (g) any obligation of such
    Person, contingent or otherwise, guaranteeing or having the
    economic effect of guaranteeing any Indebtedness of the types
    set forth in clauses (a) through (f) payable by
    another Person other than Mortgage Guarantee Obligations.

 

    “Liquidation End Date” means the date of
    completion of the liquidation of Seller’s assets.

 

    “Maximum Amount” means, as of any date of
    determination, $100,000,000,000 (one hundred billion dollars),
    less the aggregate amount of funding under the Commitment prior
    to such date.

    

    - 3 -

 

    “Mortgage Assets” of any Person means assets of
    such Person consisting of mortgages, mortgage loans,
    mortgage-related securities, participation certificates,
    mortgage-backed commercial paper, obligations of real estate
    mortgage investment conduits and similar assets, in each case to
    the extent such assets would appear on the balance sheet of such
    Person in accordance with GAAP as in effect as of the date
    hereof (and, for the avoidance of doubt, without giving effect
    to any change that may be made hereafter in respect of Statement
    of Financial Accounting Standards No. 140 or any similar
    accounting standard).

 

    “Mortgage Guarantee Obligations” means
    guarantees, standby commitments, credit enhancements and other
    similar obligations of Seller, in each case in respect of
    Mortgage Assets.

 

    “Named Executive Officer” has the meaning given
    to such term in
    Item 402(a)(3)
    of
    Regulation S-K
    under the Exchange Act, as in effect on the date hereof.

 

    “Person” shall mean any individual,
    corporation, limited liability company, partnership, joint
    venture, association, joint-stock company, trust, estate,
    unincorporated organization or government or any agency or
    political subdivision thereof, or any other entity whatsoever.

 

    “SEC” means the Securities and Exchange
    Commission.

 

    “Senior Preferred Stock” means the Variable
    Liquidation Preference Senior Preferred Stock of Seller,
    substantially in the form of Exhibit A hereto.

 

    “Warrant” means a warrant for the purchase of
    common stock of Seller representing 79.9% of the common stock of
    Seller on a fully-diluted basis, substantially in the form of
    Exhibit B hereto.

 

    2.  COMMITMENT

 

    2.1.  Commitment. Purchaser hereby commits to
    provide to Seller, on the terms and conditions set forth herein,
    immediately available funds in an amount up to but not in excess
    of the Available Amount, as determined from time to time (the
    “Commitment”); provided, that in no
    event shall the aggregate amount funded under the Commitment
    exceed $100,000,000,000 (one hundred billion dollars). The
    liquidation preference of the Senior Preferred Stock shall
    increase in connection with draws on the Commitment, as set
    forth in Section 3.3 below.

 

    2.2.  Quarterly Draws on Commitment. Within
    fifteen (15) Business Days following the determination of
    the Deficiency Amount, if any, as of the end of each fiscal
    quarter of Seller which ends on or before the Liquidation End
    Date, the Designated Representative may, on behalf of Seller,
    request that Purchaser provide immediately available funds to
    Seller in an amount up to but not in excess of the Available
    Amount as of the end of such quarter. Any such request shall be
    valid only if it is in writing, is timely made, specifies the
    account of Seller to which such funds are to be transferred, and
    contains a certification of the Designated Representative that
    the requested amount does not exceed the Available Amount as of
    the end of the applicable quarter. Purchaser shall provide such
    funds within sixty (60) days of its receipt of such request
    or, following any determination by the Director that the
    Director will be mandated by law to appoint a receiver for
    Seller if such funds are not received sooner, such shorter
    period as may be necessary

    

    - 4 -

 

    to avoid such mandatory appointment of a receiver if reasonably
    practicable taking into consideration Purchaser’s access to
    funds.

 

    2.3.  Accelerated Draws on Commitment.
    Immediately following any determination by the Director that
    the Director will be mandated by law to appoint a receiver for
    Seller prior to the Liquidation End Date unless Seller’s
    capital is increased by an amount (the “Special
    Amount”) up to but not in excess of the then current
    Available Amount (computed based on a balance sheet of Seller
    prepared in accordance with GAAP that differs from the most
    recent balance sheet of Seller delivered in accordance with
    Section 5.9(a) or (b)) on a date that is prior to the date
    that funds will be available to Seller pursuant to
    Section 2.2, Conservator may, on behalf of Seller, request
    that Purchaser provide to Seller the Special Amount in
    immediately available funds. Any such request shall be valid
    only if it is in writing, is timely made, specifies the account
    of Seller to which such funds are to be transferred, and
    contains certifications of Conservator that (i) the
    requested amount does not exceed the Available Amount (including
    computations in reasonable detail and satisfactory to Purchaser
    of the then existing Deficiency Amount) and (ii) the
    requested amount is required to avoid the imminent mandatory
    appointment of a receiver for Seller. Purchaser shall provide
    such funds within thirty (30) days of its receipt of such
    request or, if reasonably practicable taking into consideration
    Purchaser’s access to funds, any shorter period as may be
    necessary to avoid mandatory appointment of a receiver.

 

    2.4.  Final Draw on Commitment. Within fifteen
    (15) Business Days following the determination of the
    Deficiency Amount, if any, as of the Liquidation End Date
    (computed based on a balance sheet of Seller as of the
    Liquidation End Date prepared in accordance with GAAP), the
    Designated Representative may, on behalf of Seller, request that
    Purchaser provide immediately available funds to Seller in an
    amount up to but not in excess of the Available Amount as of the
    Liquidation End Date. Any such request shall be valid only if it
    is in writing, is timely made, specifies the account of Seller
    to which such funds are to be transferred, and contains a
    certification of the Designated Representative that the
    requested amount does not exceed the Available Amount (including
    computations in reasonable detail and satisfactory to Purchaser
    of the Deficiency Amount as of the Liquidation End Date).
    Purchaser shall provide such funds within sixty (60) days
    of its receipt of such request.

 

    2.5.  Termination of Purchaser’s
    Obligations. Subject to earlier termination pursuant to
    Section 6.7, all of Purchaser’s obligations under and
    in respect of the Commitment shall terminate upon the earliest
    of: (a) if the Liquidation End Date shall have occurred,
    (i) the payment in full of Purchaser’s obligations
    with respect to any valid request for funds pursuant to
    Section 2.4 or (ii) if there is no Deficiency Amount
    on the Liquidation End Date or if no such request pursuant to
    Section 2.4 has been made, the close of business on the
    15th Business Day following the determination of the
    Deficiency Amount, if any, as of the Liquidation End Date;
    (b) the payment in full of, defeasance of or other
    reasonable provision for all liabilities of Seller, whether or
    not contingent, including payment of any amounts that may become
    payable on, or expiry of or other provision for, all Mortgage
    Guarantee Obligations and provision for unmatured debts; and
    (c) the funding by Purchaser under the Commitment of an
    aggregate of $100,000,000,000 (one hundred billion dollars). For
    the avoidance of doubt, the Commitment shall not be
    terminable by Purchaser solely by reason of (i) the
    conservatorship, receivership or other insolvency proceeding of
    Seller or (ii) the Seller’s financial condition or any
    adverse change in Seller’s financial condition.

    

    - 5 -

 

		
	
    3.  
	
    PURCHASE
    OF SENIOR PREFERRED STOCK AND WARRANT; FEES

 

    3.1.  Initial Commitment Fee. In consideration
    of the Commitment, and for no additional consideration, on the
    Effective Date (or as soon thereafter as is practicable) Seller
    shall sell and issue to Purchaser, and Purchaser shall purchase
    from Seller, (a) one million (1,000,000) shares of Senior
    Preferred Stock, with an initial liquidation preference equal to
    $1,000 per share ($1,000,000,000 (one billion dollars)
    liquidation preference in the aggregate), and (b) the
    Warrant.

 

    3.2.  Periodic Commitment Fee.
    (a) Commencing March 31, 2010, Seller shall pay to
    Purchaser quarterly, on the last day of March, June, September
    and December of each calendar year (each a “Periodic Fee
    Date”), a periodic commitment fee (the
    “Periodic Commitment Fee”). The Periodic
    Commitment Fee shall accrue from January 1, 2010.

 

    (b) The Periodic Commitment Fee is intended to fully
    compensate Purchaser for the support provided by the ongoing
    Commitment following December 31, 2009. The amount of the
    Periodic Commitment Fee shall be set not later than
    December 31, 2009 with respect to the ensuing five-year
    period, shall be reset every five years thereafter and shall be
    determined with reference to the market value of the Commitment
    as then in effect. The amount of the Periodic Commitment Fee
    shall be mutually agreed by Purchaser and Seller, subject to
    their reasonable discretion and in consultation with the
    Chairman of the Federal Reserve; provided, that Purchaser
    may waive the Periodic Commitment Fee for up to one year at a
    time, in its sole discretion, based on adverse conditions in the
    United States mortgage market.

 

    (c) At the election of Seller, the Periodic Commitment Fee
    may be paid in cash or by adding the amount thereof ratably to
    the liquidation preference of each outstanding share of Senior
    Preferred Stock so that the aggregate liquidation preference of
    all such outstanding shares of Senior Preferred Stock is
    increased by an amount equal to the Periodic Commitment Fee.
    Seller shall deliver notice of such election not later than
    three (3) Business Days prior to each Periodic Fee Date. If
    the Periodic Commitment Fee is not paid in cash by 12:00 pm
    (New York time) on the applicable Periodic Fee Date
    (irrespective of Seller’s election pursuant to this
    subsection), Seller shall be deemed to have elected to pay the
    Periodic Commitment Fee by adding the amount thereof to the
    liquidation preference of the Senior Preferred Stock, and the
    aggregate liquidation preference of the outstanding shares of
    Senior Preferred Stock shall thereupon be automatically
    increased, in the manner contemplated by the first sentence of
    this section, by an aggregate amount equal to the Periodic
    Commitment Fee then due.

 

    3.3.  Increases of Senior Preferred Stock
    Liquidation Preference as a Result of Funding under the
    Commitment. The aggregate liquidation preference of the
    outstanding shares of Senior Preferred Stock shall be
    automatically increased by an amount equal to the amount of each
    draw on the Commitment pursuant to Article 2 that is funded
    by Purchaser to Seller, such increase to occur simultaneously
    with such funding and ratably with respect to each share of
    Senior Preferred Stock.

 

    3.4.  Notation of Increase in Liquidation
    Preference. Seller shall duly mark its records to reflect
    each increase in the liquidation preference of the Senior
    Preferred Stock contemplated

    

    - 6 -

 

    herein (but, for the avoidance of doubt, such increase shall be
    effective regardless of whether Seller has properly marked its
    records).

 

    4.  REPRESENTATIONS

 

    Seller represents and warrants as of the Effective Date, and
    shall be deemed to have represented and warranted as of the date
    of each request for and funding of an advance under the
    Commitment pursuant to Article 2, as follows:

 

    4.1.  Organization and Good Standing. Seller is
    a corporation, chartered by the Congress of the United States,
    duly organized, validly existing and in good standing under the
    laws of the United States and has all corporate power and
    authority to carry on its business as now conducted and as
    proposed to be conducted.

 

    4.2.  Organizational Documents. Seller has made
    available to Purchaser a complete and correct copy of its
    charter and bylaws, each as amended to date (the
    “Organizational Documents”). The Organizational
    Documents are in full force and effect. Seller is not in
    violation of any provision of its Organizational Documents.

 

    4.3.  Authorization and Enforceability. All
    corporate or other action on the part of Seller or Conservator
    necessary for the authorization, execution, delivery and
    performance of this Agreement by Seller and for the
    authorization, issuance and delivery of the Senior Preferred
    Stock and the Warrant being purchased under this Agreement, has
    been taken. This Agreement has been duly and validly executed
    and delivered by Seller and (assuming due authorization,
    execution and delivery by the Purchaser) shall constitute the
    valid and legally binding obligation of Seller, enforceable
    against Seller in accordance with its terms, except to the
    extent the enforceability thereof may be limited by bankruptcy
    laws, insolvency laws, reorganization laws, moratorium laws or
    other laws of general applicability affecting creditors’
    rights generally or by general equitable principles (regardless
    of whether enforcement is sought in a proceeding in equity or at
    law). The Agency is acting as conservator for Seller under
    Section 1367 of the FHE Act. The Board of Directors of
    Seller, by valid action at a duly called meeting of the Board of
    Directors on September 6, 2008, consented to the
    appointment of the Agency as conservator for purposes of
    Section 1367(a)(3)(I)
    of the FHE Act, and the Director of the Agency has appointed the
    Agency as Conservator for Seller pursuant to
    Section 1367(a)(1)
    of the FHE Act, and each such action has not been rescinded,
    revoked or modified in any respect.

 

    4.4.  Valid Issuance. When issued in accordance
    with the terms of this Agreement, the Senior Preferred Stock and
    the Warrant will be duly authorized, validly issued, fully paid
    and non-assessable, free and clear of all liens and preemptive
    rights. The shares of common stock to which the holder of the
    Warrant is entitled have been duly and validly reserved for
    issuance. When issued and delivered in accordance with the terms
    of this Agreement and the Warrant, such shares will be duly
    authorized, validly issued, fully paid and nonassessable, free
    and clear of all liens and preemptive rights.

    

    - 7 -

 

    4.5.  Non-Contravention.

 

    (a) The execution, delivery or performance by Seller of
    this Agreement and the consummation by Seller of the
    transactions contemplated hereby do not and will not
    (i) conflict with or violate any provision of the
    Organizational Documents of Seller; (ii) conflict with or
    violate any law, decree or regulation applicable to Seller or by
    which any property or asset of Seller is bound or affected, or
    (iii) result in any breach of, or constitute a default
    (with or without notice or lapse of time, or both) under, or
    give to others any right of termination, amendment, acceleration
    or cancellation of, or result in the creation of a lien upon any
    of the properties or assets of Seller, pursuant to any note,
    bond, mortgage, indenture or credit agreement, or any other
    contract, agreement, lease, license, permit, franchise or other
    instrument or obligation to which Seller is a party or by which
    Seller is bound or affected, other than, in the case of
    clause (iii), any such breach, default, termination,
    amendment, acceleration, cancellation or lien that would not
    have and would not reasonably be expected to have, individually
    or in the aggregate, a material adverse effect on the business,
    property, operations or condition of the Seller, the authority
    of the Conservator or the validity or enforceability of this
    Agreement (a “Material Adverse Effect”).

 

    (b) The execution and delivery of this Agreement by Seller
    does not, and the consummation by Seller of the transactions
    contemplated by this Agreement will not, require any consent,
    approval, authorization, waiver or permit of, or filing with or
    notification to, any governmental authority or any other person,
    except for such as have already been obtained.

 

    5.  COVENANTS

 

    From the Effective Date until such time as the Senior Preferred
    Stock shall have been repaid or redeemed in full in accordance
    with its terms:

 

    5.1.  Restricted Payments. Seller shall not,
    and shall not permit any of its subsidiaries to, in each case
    without the prior written consent of Purchaser, declare or pay
    any dividend (preferred or otherwise) or make any other
    distribution (by reduction of capital or otherwise), whether in
    cash, property, securities or a combination thereof, with
    respect to any of Seller’s Equity Interests (other than
    with respect to the Senior Preferred Stock or the Warrant) or
    directly or indirectly redeem, purchase, retire or otherwise
    acquire for value any of Seller’s Equity Interests (other
    than the Senior Preferred Stock or the Warrant), or set aside
    any amount for any such purpose.

 

    5.2.  Issuance of Capital Stock. Seller shall
    not, and shall not permit any of its subsidiaries to, in each
    case without the prior written consent of Purchaser, sell or
    issue Equity Interests of Seller or any of its subsidiaries of
    any kind or nature, in any amount, other than the sale and
    issuance of the Senior Preferred Stock and Warrant on the
    Effective Date and the common stock subject to the Warrant upon
    exercise thereof, and other than as required by (and pursuant
    to) the terms of any binding agreement as in effect on the date
    hereof.

 

    5.3.  Conservatorship. Seller shall not (and
    Conservator, by its signature below, agrees that it shall not),
    without the prior written consent of Purchaser, terminate, seek
    termination of or permit to be terminated the conservatorship of
    Seller pursuant to Section 1367 of the FHE Act, other

    

    - 8 -

 

    than in connection with a receivership pursuant to
    Section 1367 of the FHE Act.

 

    5.4.  Transfer of Assets. Seller shall not, and
    shall not permit any of its subsidiaries to, in each case
    without the prior written consent of Purchaser, sell, transfer,
    lease or otherwise dispose of (in one transaction or a series of
    related transactions) all or any portion of its assets
    (including Equity Interests in other persons, including
    subsidiaries), whether now owned or hereafter acquired (any such
    sale, transfer, lease or disposition, a
    “Disposition”), other than Dispositions for
    fair market value:

 

    (a) to a limited life regulated entity
    (“LLRE”) pursuant to
    Section 1367(i)
    of the FHE Act;

 

    (b) of assets and properties in the ordinary course of
    business, consistent with past practice;

 

    (c) in connection with a liquidation of Seller by a
    receiver appointed pursuant to Section 1367(a) of the FHE
    Act;

 

    (d) of cash or cash equivalents for cash or cash
    equivalents; or

 

    (e) to the extent necessary to comply with the covenant set
    forth in Section 5.7 below.

 

    5.5.  Indebtedness. Seller shall not, and shall
    not permit any of its subsidiaries to, in each case without the
    prior written consent of Purchaser, incur, assume or otherwise
    become liable for (a) any Indebtedness if, after giving
    effect to the incurrence thereof, the aggregate Indebtedness of
    Seller and its subsidiaries on a consolidated basis would exceed
    110.0% of the aggregate Indebtedness of Seller and its
    subsidiaries on a consolidated basis as of June 30, 2008 or
    (b) any Indebtedness if such Indebtedness is subordinated
    by its terms to any other Indebtedness of Seller or the
    applicable subsidiary. For purposes of this covenant the
    acquisition of a subsidiary with Indebtedness will be deemed to
    be the incurrence of such Indebtedness at the time of such
    acquisition.

 

    5.6.  Fundamental Changes. Seller shall not,
    and shall not permit any of its subsidiaries to, in each case
    without the prior written consent of Purchaser, (i) merge
    into or consolidate or amalgamate with any other Person, or
    permit any other Person to merge into or consolidate or
    amalgamate with it, (ii) effect a reorganization or
    recapitalization involving the common stock of Seller, a
    reclassification of the common stock of Seller or similar
    corporate transaction or event or (iii) purchase, lease or
    otherwise acquire (in one transaction or a series of
    transactions) all or substantially all of the assets of any
    other Person or any division, unit or business of any Person.

 

    5.7.  Mortgage Assets. Seller shall not own, as
    of any applicable date, Mortgage Assets in excess of (i) on
    December 31, 2009, $850 billion, or (ii) on
    December 31 of each year thereafter, 90.0% of the aggregate
    amount of Mortgage Assets of Seller as of December 31 of the
    immediately preceding calendar year; provided, that in no
    event shall Seller be required under this Section 5.7 to
    own less than $250 billion in Mortgage Assets.

    

    - 9 -

 

    5.8.  Transactions with Affiliates. Seller
    shall not, and shall not permit any of its subsidiaries to,
    without the prior written consent of Purchaser, engage in any
    transaction of any kind or nature with an Affiliate of Seller
    unless such transaction is (i) pursuant to this Agreement,
    the Senior Preferred Stock or the Warrant, (ii) upon terms
    no less favorable to Seller than would be obtained in a
    comparable arm’s-length transaction with a Person that is
    not an Affiliate of Seller or (iii) a transaction
    undertaken in the ordinary course or pursuant to a contractual
    obligation or customary employment arrangement in existence as
    of the date hereof.

 

    5.9.  Reporting. Seller shall provide to
    Purchaser:

 

    (a) not later than the time period specified in the
    SEC’s rules and regulations with respect to issuers as to
    which Section 13 and
    15(d) of the
    Exchange Act apply, annual reports on
    Form 10-K
    (or any successor or comparable form) containing the information
    required to be contained therein (or required in such successor
    or comparable form);

 

    (b) not later than the time period specified in the
    SEC’s rules and regulations with respect to issuers as to
    which Section 13 and
    15(d) of the
    Exchange Act apply, reports on
    Form 10-Q
    (or any successor or comparable form)containing the information
    required to be contained therein (or required in such successor
    or comparable form);

 

    (c) promptly from time to time after the occurrence of an
    event required to be therein reported (and in any event within
    the time period specified in the SEC’s rules and
    regulations), such other reports on
    Form 8-K
    (or any successor or comparable form);

 

    (d) concurrently with any delivery of financial statements
    under paragraphs (a) or (b) above, a certificate of
    the Designated Representative, (i) certifying that Seller
    is (and since the last such certificate has at all times been)
    in compliance with each of the covenants contained herein and
    that no representation made by Seller herein or in any document
    delivered pursuant hereto or in connection herewith was false or
    misleading in any material respect when made, or, if the
    foregoing is not true, specifying the nature and extent of the
    breach of covenant and/or representation and any corrective
    action taken or proposed to be taken with respect thereto, and
    (ii) setting forth computations in reasonable detail and
    satisfactory to the Purchaser of the Deficiency Amount, if any;

 

    (e) promptly, from time to time, such other information
    regarding the operations, business affairs, plans, projections
    and financial condition of Seller, or compliance with the terms
    of this Agreement, as Purchaser may reasonably request; and

 

    (f) as promptly as reasonably practicable, written notice
    of the following:

 

    (i) the occurrence of the Liquidation End Date;

 

    (ii) the filing or commencement of, or any written threat
    or notice of intention of any Person to file or commence, any
    action, suit or proceeding, whether at law or in equity or by or
    before any governmental authority or in arbitration, against
    Conservator, Seller or any other Person which, if adversely
    determined, would reasonably be expected to have a Material
    Adverse Effect;

    

    - 10 -

 

    (iii) any other development that is not a matter of general
    public knowledge and that has had, or would reasonably be
    expected to have, a Material Adverse Effect.

 

    5.10.  Executive Compensation. Seller shall
    not, without the consent of the Director, in consultation with
    the Secretary of the Treasury, enter into any new compensation
    arrangements with, or increase amounts or benefits payable under
    existing compensation arrangements of, any Named Executive
    Officer of Seller.

 

    6.  MISCELLANEOUS

 

    6.1.  No Third-Party Beneficiaries. Until the
    termination of the Commitment, at any time during the existence
    and continuance of a payment default with respect to debt
    securities issued by Seller
    and/or a
    default by Seller with respect to any Mortgage Guarantee
    Obligations, any holder of such defaulted debt securities or
    beneficiary of such Mortgage Guarantee Obligations
    (collectively, the “Holders”) may
    (a) deliver notice to the Seller and the Designated
    Representative requesting exercise of all rights available to
    them under this Agreement to draw on the Commitment up to the
    lesser of the amount necessary to cure the outstanding payment
    defaults and the Available Amount as of the last day of the
    immediately preceding fiscal quarter (the “Demand
    Amount”), (b) if Seller and the Designated
    Representative fail to act as requested within thirty
    (30) days of such notice, seek judicial relief for failure
    of the Seller to draw on the Commitment, and (c) if
    Purchaser shall fail to perform its obligations in respect of
    any draw on the Commitment, and Seller
    and/or the
    Designated Representative shall not be diligently pursuing
    remedies in respect of such failure, file a claim in the United
    States Court of Federal Claims for relief requiring Purchaser to
    pay Seller the Demand Amount in the form of liquidated damages.
    Any payment of liquidated damages to Seller under the previous
    sentence shall be treated for all purposes, including the
    provisions of the Senior Preferred Stock and Section 3.3 of
    this Agreement, as a draw and funding of the Commitment pursuant
    to Article 2. The Holders shall have no other rights under
    or in respect of this Agreement, and the Commitment shall not
    otherwise be enforceable by any creditor of Seller or by any
    other Person other than the parties hereto, and no such creditor
    or other Person is intended to be, or shall be, a third party
    beneficiary of any provision of this Agreement.

 

    6.2.  Non-Transferable; Successors. The
    Commitment is solely for the benefit of Seller and shall not
    inure to the benefit of any other Person (other than the Holders
    to the extent set forth in Section 6.1), including any
    entity to which the charter of Seller may be transferred, to any
    LLRE or to any other successor to the assets, liabilities or
    operations of Seller. The Commitment may not be assigned or
    otherwise transferred, in whole or in part, to any Person
    (including, for the avoidance of doubt, any LLRE to which a
    receiver has assigned all or a portion of Seller’s assets)
    without the prior written consent of Purchaser (which may be
    withheld in its sole discretion). In no event shall any
    successor to Seller (including such an LLRE) be entitled to the
    benefit of the Commitment without the prior written consent of
    Purchaser. Seller and Conservator, for themselves and on behalf
    of their permitted successors, covenant and agree not to
    transfer or purport to transfer the Commitment in contravention
    of the terms hereof, and any such attempted transfer shall be
    null and void ab initio. It is the expectation of the
    parties that, in the event Seller were placed into receivership
    and an LLRE formed to purchase certain of its assets and assume
    certain of its liabilities, the Commitment would remain with
    Seller for the benefit of the holders of the

    

    - 11 -

 

    debt of Seller not assumed by the LLRE.

 

    6.3.  Amendments; Waivers. This Agreement may
    be waived or amended solely by a writing executed by both of the
    parties hereto, and, with respect to amendments to or waivers of
    the provisions of Sections 5.3, 6.2 and 6.11, the
    Conservator; provided, however, that no such
    waiver or amendment shall decrease the aggregate Commitment or
    add conditions to funding the amounts required to be funded by
    Purchaser under the Commitment if such waiver or amendment
    would, in the reasonable opinion of Seller, adversely affect in
    any material respect the holders of debt securities of Seller
    and/or the
    beneficiaries of Mortgage Guarantee Obligations, in each case in
    their capacities as such, after taking into account any
    alternative arrangements that may be implemented concurrently
    with such waiver or amendment. In no event shall any rights
    granted hereunder prevent the parties hereto from waiving or
    amending in any manner whatsoever the covenants of Seller
    hereunder.

 

    6.4.  Governing Law; Jurisdiction; Venue. This
    Agreement and the Warrant shall be governed by, and construed in
    accordance with, the federal law of the United States of America
    if and to the extent such federal law is applicable, and
    otherwise in accordance with the laws of the State of New York.
    The Senior Preferred Stock shall be governed as set forth in the
    terms thereof. Except as provided in section 6.1 and as
    otherwise required by law, the United States District Court for
    the District of Columbia shall have exclusive jurisdiction over
    all civil actions arising out of this Agreement, the Commitment,
    the Senior Preferred Stock and the Warrant, and venue for any
    such civil action shall lie exclusively in the United States
    District Court for the District of Columbia.

 

    6.5.  Notices. Any notices delivered pursuant
    to or in connection with this Agreement shall be delivered to
    the applicable parties at the addresses set forth below:

 

    If to Seller:

 

    Federal Home Loan Mortgage Corporation

    c/o Federal
    Housing Finance Authority

    1700 G Street, NW

    4th Floor

    Washington, DC 20552

    Attention: General Counsel

 

    If to Purchaser:

 

    United States Department of the Treasury

    1500 Pennsylvania Avenue, NW

    Washington DC 20220

    Attention:  Under Secretary for Domestic Finance

    

    - 12 -

 

    with a copy to:

 

    United States Department of the Treasury

    1500 Pennsylvania Avenue, NW

    Washington DC 20220

    Attention:  General Counsel

 

    If to Conservator:

 

    Federal Housing Finance Authority

    1700 G Street, NW

    4th Floor

    Washington, DC 20552

    Attention:  General Counsel

 

    All notices and other communications provided for herein shall
    be in writing and shall be delivered by hand or overnight
    courier service, mailed by certified or registered mail. All
    notices hereunder shall be effective upon receipt.

 

    6.6.  Disclaimer of Guarantee. This Agreement
    and the Commitment are not intended to and shall not be deemed
    to constitute a guarantee by Purchaser or any other agency or
    instrumentality of the United States of the payment or
    performance of any debt security or any other obligation,
    indebtedness or liability of Seller of any kind or character
    whatsoever.

 

    6.7.  Effect of Order; Injunction; Decree. If
    any order, injunction or decree is issued by any court of
    competent jurisdiction that vacates, modifies, amends,
    conditions, enjoins, stays or otherwise affects the appointment
    of Conservator as conservator of Seller or otherwise curtails
    Conservator’s powers as such conservator (except in each
    case any order converting the conservatorship to a receivership
    under
    Section 1367(a)
    of the FHE Act), Purchaser may by written notice to Conservator
    and Seller declare this Agreement null and void, whereupon all
    transfers hereunder (including the issuance of the Senior
    Preferred Stock and the Warrant and any funding of the
    Commitment) shall be rescinded and unwound and all obligations
    of the parties (other than to effectuate such rescission and
    unwind) shall immediately and automatically terminate.

 

    6.8.  Business Day. To the extent that any
    deadline or date of performance of any right or obligation set
    forth herein shall fall on a day other than a Business Day, then
    such deadline or date of performance shall automatically be
    extended to the next succeeding Business Day.

 

    6.9.  Entire Agreement. This Agreement,
    together with the Senior Preferred Stock and Warrant, contains
    the entire agreement between the parties hereto with respect to
    the transactions contemplated hereby and supersedes and cancels
    all prior agreements, including, but not limited to, all
    proposals, term sheets, statements, letters of intent or
    representations, written or oral, with respect thereto.

 

    6.10.  Remedies. In the event of a breach by
    Seller of any covenant or representation of Seller set forth
    herein, Purchaser shall be entitled to specific performance (in
    the case of a breach of

    

    - 13 -

 

    covenant), damages and such other remedies as may be available
    at law or in equity; provided, that Purchaser shall not
    have the right to terminate the Commitment solely as a result of
    any such breach, and compliance with the covenants and the
    accuracy of the representations set forth in this Agreement
    shall not be conditions to funding the Commitment.

 

    6.11.  Tax Reporting. Neither Seller nor
    Conservator shall take, or shall permit any of their respective
    successors or assigns to take, a position for any tax,
    accounting or other purpose that is inconsistent with Internal
    Revenue Service Notice
    2008-76 (or
    the regulations to be issued pursuant to such Notice) regarding
    the application of Section 382 of the Internal Revenue Code
    of 1986, as amended, a copy of which Notice has been provided to
    Seller in connection with the execution of this Agreement.

 

    6.12.  Non-Severability. Each of the provisions
    of this Agreement is integrated with and integral to the whole
    and shall not be severable from the remainder of the Agreement.
    In the event that any provision of this Agreement, the Senior
    Preferred Stock or the Warrant is determined to be illegal or
    unenforceable, then Purchaser may, in its sole discretion, by
    written notice to Conservator and Seller, declare this Agreement
    null and void, whereupon all transfers hereunder (including the
    issuance of the Senior Preferred Stock and the Warrant and any
    funding of the Commitment) shall be rescinded and unwound and
    all obligations of the parties (other than to effectuate such
    rescission and unwind) shall immediately and automatically
    terminate.

 

    [Signature Page Follows]

    

    - 14 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]