Document:

Exhibit
4.1

 

 

	
  COMMON
  STOCK

  	
   

  	
   

  	
   

  	
  COMMON
  STOCK

  
	
  Certificate

  Number
ZQ 000223

  	
   

  	
  

  	
   

  	
  Shares
**600620******

  ***600620*****

  ****600620****

  *****600620***

  ******600620**

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IMAGE ENTERTAINMENT, INC.

  	
   

  	
   

  
	
   

  	
   

  	
  INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THIS
  CERTIFIES THAT

  	
  

  	
  CUSIP 452439  20  1

  

  SEE REVERSE FOR CERTAIN DEFINITIONS

  
	
   

  	
   

  	
   

  	
   

  
	
  is the owner
  of

  	
  

  	
   

  
											

 

FULLY-PAID AND NON-ASSESSABLE SHARES NO PAR VALUE COMMON STOCK, OF

IMAGE ENTERTAINMENT, INC.

transferable on the books of
the Corporation by the holder hereof in person or by holder’s duly authorized
attorney, upon surrender of this Certificate properly endorsed. This
Certificate and the shares represented hereby are issued and shall be held
subject to all the provisions of the Articles of Incorporation and Bylaws of
the Corporation as now or hereafter amended (a copy of which is on file with
the Transfer Agent), to all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer Agent.

 

In Witness
Whereof, the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.

 

	
   

  	
   

  	
  

  	
  DATED  <<Month Day Year>>

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COUNTERSIGNED
  AND REGISTERED

  
	
   

  	
  /s/ Martin
  W. Greenwald

  	
  COMPUTERSHARE
  TRUST CO., INC.

  
	
   

  	
  President
  & CEO

  	
  (DENVER)

  
	
   

  	
   

  	
  TRANSFER
  AGENT AND REGISTRAR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Dennis
  Hohn Cho

  	
  By

  	
   

  
	
   

  	
  Corporate
  Secretary

  	
  AUTHORIZED SIGNATURE

  

 

SECURITY INSTRUCTIONS ON REVERSE

 

14969

 

 

TRANSFER FEE: $25.00 PER CERTIFICATE ISSUED

 

IMAGE ENTERTAINMENT,
INC.

 

THE CORPORATION WILL FURNISH
TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE A FULL STATEMENT OF THE
POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS, OF EACH CLASS OF STOCK OR SERIES THEREOF AUTHORIZED
TO BE ISSUED AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS.

 

The following abbreviations,
when used in the inscription on the face of this certificate, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

	
  TEN COM 

  	
  - as tenants in common

  	
   

  	
  UNIF GIFT MIN ACT-

  	
   

  	
  Custodian

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
    (Cust)

  	
   

  	
     (Minor)

  
	
  TEN ENT 

  	
  - as tenants by the
  entireties

  	
   

  	
   

  	
  under Uniform Gifts to
  Minors Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
           (State)

  
	
  JT TEN 

  	
  - as joint tenants with
  right of survivorship

  	
  UNIF TRF MIN ACT

  	
   

  	
   

  	
  Custodian (until age   )

  	
   

  
	
   

  	
    and not as tenants in common

  	
   

  	
   

  	
  (Cust)

  	
  (Minor)

  
	
   

  	
   

  	
   

  	
   

  	
  under Uniform Transfers to
  Minors Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
                  (State)

  
																			

 

	
   

  	
  Additional abbreviations
  may also be used though not in the above list.

  

 

	
  For value received,

  	
   

  	
   hereby sell, assign
  and transfer unto

  

 

	
  PLEASE INSERT SOCIAL
  SECURITY

  	
   

  
	
  OR OTHER IDENTIFYING NUMBER

  	
   

  
	
  OF ASSIGNEE

  	
   

  	
   

  
			

 

 

	
   

  

(PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
  Shares

  

of the capital stock
represented by the within Certificate, and do hereby irrevocably constitute and
appoint

 

	
   

  	
  Attorney

  

to transfer the said stock on
the books of the within-named Corporation with full power of substitution in
the premises.

 

	
  Dated:

  	
   

  	
  20

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature(s) Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
  THE SIGNATURE(S) SHOULD BE
  GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings
  and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED
  SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.

  	
   

  	
   

  	
  Notice:   THE SIGNATURE TO THIS ASSIGNMENT MUST
  CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN
  EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

  
									

 

 

	
  SECURITY INSTRUCTIONS
THIS IS WATERMARKED PAPER, DO NOT ACCEPT WITHOUT
  NOTING

  WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK.Exhibit 10.1

 

EXECUTION VERSION

 

PURCHASE AND SALE AGREEMENT

(JAVELINA)

 

 

By and Between

 

El Paso Corporation 
(Seller)

 

and

 

MarkWest Energy Partners, L.P.

 (Buyer)

 

 

Covering the Acquisition of

 

The following Equity Interests in

 

(Acquired Company Equity Interests)

 

100% of Javelina Land Company, L.L.C.

100% of Javelina Holding GP, L.L.C.

100% of Javelina Holding Company, L.P.

40% of Javelina Company

40% of Javelina Pipeline Company

 

(the Acquired Companies)

 

 

September 16, 2005

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  THE TRANSACTION

  	
   

  
	
   

  	
  (a)

  	
  Sale of Acquired Company Equity Interests

  	
   

  
	
   

  	
  (b)

  	
  Consideration

  	
   

  
	
   

  	
  (c)

  	
  The Closing

  	
   

  
	
   

  	
  (d)

  	
  Deliveries at the Closing

  	
   

  
	
   

  	
  (e)

  	
  Interim Closing Statement and Post-Closing Adjustment

  	
   

  
	
   

  	
  (f)

  	
  Retained Assets

  	
   

  
	
   

  	
  (g)

  	
  Cash Pooling Arrangements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  REPRESENTATIONS AND WARRANTIES CONCERNING
  THE TRANSACTION

  	
   

  
	
   

  	
  (a)

  	
  Representations and Warranties of the Seller

  	
   

  
	
   

  	
  (b)

  	
  Representations and Warranties of the Buyer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS AND WARRANTIES CONCERNING
  THE ACQUIRED COMPANY EQUITY INTERESTS, ACQUIRED COMPANIES AND ACQUIRED
  COMPANY ASSETS

  	
   

  
	
   

  	
  (a)

  	
  Organization, Qualification, and Company Power

  	
   

  
	
   

  	
  (b)

  	
  Capitalization

  	
   

  
	
   

  	
  (c)

  	
  Noncontravention

  	
   

  
	
   

  	
  (d)

  	
  Changes

  	
   

  
	
   

  	
  (e)

  	
  Legal Compliance; Permits

  	
   

  
	
   

  	
  (f)

  	
  Tax Matters

  	
   

  
	
   

  	
  (g)

  	
  Contracts and Commitments

  	
   

  
	
   

  	
  (h)

  	
  Litigation

  	
   

  
	
   

  	
  (i)

  	
  Environmental Matters

  	
   

  
	
   

  	
  (j)

  	
  Title to the Acquired Company Assets

  	
   

  
	
   

  	
  (k)

  	
  Potential Preferential Purchase Rights

  	
   

  
	
   

  	
  (l)

  	
  Financial
  Information

  	
   

  
	
   

  	
  (m)

  	
  Employee Matters

  	
   

  
	
   

  	
  (n)

  	
  Regulatory Matters

  	
   

  
	
   

  	
  (o)

  	
  No Unrecorded Obligations

  	
   

  
	
   

  	
  (p)

  	
  Intellectual Property

  	
   

  
	
   

  	
  (q)

  	
  Sufficiency of the Acquired Company Assets

  	
   

  
	
   

  	
  (r)

  	
  Bank Accounts

  	
   

  
	
   

  	
  (s)

  	
  Bonds; Guarantees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  PRE-CLOSING COVENANTS

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  
	
   

  	
  (b)

  	
  Notices, Consents and Audited Financial Statements

  	
   

  
					

 

i

 

	
   

  	
  (c)

  	
  Operation of Business

  	
   

  
	
   

  	
  (d)

  	
  Affirmative Covenants

  	
   

  
	
   

  	
  (e)

  	
  Damage or Condemnation

  	
   

  
	
   

  	
  (f)

  	
  Access

  	
   

  
	
   

  	
  (g)

  	
  HSR Act

  	
   

  
	
   

  	
  (h)

  	
  Intercompany Transactions

  	
   

  
	
   

  	
  (i)

  	
  Notices and Effect of Supplements to
  Schedules

  	
   

  
	
   

  	
  (j)

  	
  Eligible Employees

  	
   

  
	
   

  	
  (k)

  	
  Reorganization Transactions

  	
   

  
	
   

  	
  (l)

  	
  Surety Bonds; Guarantees

  	
   

  
	
   

  	
  (m)

  	
  No Shop

  	
   

  
	
   

  	
  (n)

  	
  Transition Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  POST-CLOSING COVENANTS

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  
	
   

  	
  (b)

  	
  Litigation Support

  	
   

  
	
   

  	
  (c)

  	
  Delivery and Retention of Records

  	
   

  
	
   

  	
  (d)

  	
  Pipeline Markers and El Paso Marks

  	
   

  
	
   

  	
  (e)

  	
  Payments

  	
   

  
	
   

  	
  (f)

  	
  Accounts Receivable

  	
   

  
	
   

  	
  (g)

  	
  Post-Closing Environmental Filings

  	
   

  
	
   

  	
  (h)

  	
  Mutual Mistake

  	
   

  
	
   

  	
  (i)

  	
  Real Property Matters

  	
   

  
	
   

  	
  (j)

  	
  Operatorship and ROFR Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  CONDITIONS TO OBLIGATION TO CLOSE

  	
   

  
	
   

  	
  (a)

  	
  Conditions to Obligation of the Buyer

  	
   

  
	
   

  	
  (b)

  	
  Conditions to Obligation of the Seller

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  OBLIGATIONS, SURVIVAL AND INDEMNIFICATION

  	
   

  
	
   

  	
  (a)

  	
  Survival of Representations, Warranties and
  Covenants

  	
   

  
	
   

  	
  (b)

  	
  Indemnification Provisions for Benefit of
  the Buyer

  	
   

  
	
   

  	
  (c)

  	
  Indemnification
  Provisions for Benefit of the Seller

  	
   

  
	
   

  	
  (d)

  	
  Matters
  Involving Third Parties

  	
   

  
	
   

  	
  (e)

  	
  Determination
  of Amount of Adverse Consequences

  	
   

  
	
   

  	
  (f)

  	
  Tax
  Treatment of Indemnity Payments

  	
   

  
	
   

  	
  (g)

  	
  Exclusive
  Remedy

  	
   

  
	
   

  	
  (h)

  	
  Disclaimer
  of Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  TAX MATTERS

  	
   

  
	
   

  	
  (a)

  	
  Post-Closing
  Tax Returns

  	
   

  
	
   

  	
  (b)

  	
  Pre-Closing
  Tax Returns

  	
   

  
	
   

  	
  (c)

  	
  Straddle
  Periods

  	
   

  
	
   

  	
  (d)

  	
  Straddle
  Returns

  	
   

  
	
   

  	
  (e)

  	
  Claims
  for Refund

  	
   

  
	
   

  	
  (f)

  	
  Indemnification

  	
   

  
	
   

  	
  (g)

  	
  Cooperation
  on Tax Matters

  	
   

  
					

 

ii

 

	
   

  	
  (h)

  	
  Certain
  Taxes

  	
   

  
	
   

  	
  (i)

  	
  Confidentiality

  	
   

  
	
   

  	
  (j)

  	
  Audits

  	
   

  
	
   

  	
  (k)

  	
  Control
  of Proceedings

  	
   

  
	
   

  	
  (l)

  	
  Powers
  of Attorney

  	
   

  
	
   

  	
  (m)

  	
  Remittance
  of Refunds

  	
   

  
	
   

  	
  (n)

  	
  Purchase
  Price Allocation

  	
   

  
	
   

  	
  (o)

  	
  Closing
  Tax Certificate

  	
   

  
	
   

  	
  (p)

  	
  Reporting
  of Post-Closing Transactions

  	
   

  
	
   

  	
  (q)

  	
  Settlements

  	
   

  
	
   

  	
  (r)

  	
  Section 754
  Elections

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  TERMINATION

  	
   

  
	
   

  	
  (a)

  	
  Termination
  of Agreement

  	
   

  
	
   

  	
  (b)

  	
  Effect
  of Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  (a)

  	
  Confidentiality

  	
   

  
	
   

  	
  (b)

  	
  Public
  Announcements

  	
   

  
	
   

  	
  (c)

  	
  Insurance

  	
   

  
	
   

  	
  (d)

  	
  No
  Third Party Beneficiaries

  	
   

  
	
   

  	
  (e)

  	
  Succession
  and Assignment

  	
   

  
	
   

  	
  (f)

  	
  Counterparts

  	
   

  
	
   

  	
  (g)

  	
  Headings

  	
   

  
	
   

  	
  (h)

  	
  Notices

  	
   

  
	
   

  	
  (i)

  	
  Governing
  Law

  	
   

  
	
   

  	
  (j)

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
  (k)

  	
  Severability

  	
   

  
	
   

  	
  (l)

  	
  Transaction
  Expenses

  	
   

  
	
   

  	
  (m)

  	
  Construction

  	
   

  
	
   

  	
  (n)

  	
  Exhibits
  and Schedules

  	
   

  
	
   

  	
  (o)

  	
  Entire
  Agreement

  	
   

  
					

 

iii

 

	
  EXHIBITS AND
  SCHEDULES

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Facilities

  
	
  Exhibit B

  	
   

  	
  Form of Acquired Company Equity Interests
  Assignment

  
	
  Exhibit C

  	
   

  	
  Form of Retained Assets Assignment

  
	
  Exhibit D

  	
   

  	
  Form of Transition Services Agreement

  
	
  Exhibit E-1

  	
   

  	
  Form of Certification of Non-Foreign Status
  (El Paso Corporation)

  
	
  Exhibit E-2

  	
   

  	
  Form of Certification of Non-Foreign Status
  (El Paso Field Operations Company)

  
	
  Exhibit F

  	
   

  	
  Form of Environmental Access Agreement

  
	
  Exhibit G

  	
   

  	
  Form of Javelina Indemnity Agreement

  
	
  Exhibit H-1

  	
   

  	
  Form of Gas Processing Agreement (West
  Refinery)

  
	
  Exhibit H-2

  	
   

  	
  Form of Gas Processing Agreement (East
  Refinery)

  
	
  Exhibit H-3

  	
   

  	
  Form of Agreement for Sale and Purchase of
  Hydrogen

  
	
  Exhibit I

  	
   

  	
  Form of Javelina Assignment

  
	
   

  	
   

  	
   

  
	
  Schedule 1(a)

  	
   

  	
  Seller’s
  Knowledge Individuals

  
	
  Schedule 1(b)

  	
   

  	
  Product
  Inventory Value Amount and Pricing Schedule Example

  
	
  Schedule 1(c)

  	
   

  	
  Working
  Capital Schedule Example

  
	
  Schedule 2(e)

  	
   

  	
  Interim
  Closing Statement Example

  
	
  Schedule 3(a)(ii)

  	
   

  	
  Consents (Seller Parties)

  
	
  Schedule 3(a)(iii)

  	
   

  	
  Noncontravention (Seller Parties)

  
	
  Schedule 3(b)(ii)

  	
   

  	
  Consents
  (Buyer)

  
	
  Schedule 3(b)(iii)

  	
   

  	
  Noncontravention
  (Buyer)

  
	
  Schedule 4(c)

  	
   

  	
  Noncontravention
  (Acquired Companies)

  
	
  Schedule 4(d)

  	
   

  	
  Changes

  
	
  Schedule 4(f)

  	
   

  	
  Tax
  Matters

  
	
  Schedule 4(g)(i)

  	
   

  	
  Acquired
  Company Contracts

  
	
  Schedule 4(g)(ii)

  	
   

  	
  Material
  Contract Defaults

  
	
  Schedule 4(g)(vi)

  	
   

  	
  Affiliate
  Contracts

  
	
  Schedule 4(h)

  	
   

  	
  Litigation

  
	
  Schedule 4(i)

  	
   

  	
  Environmental
  Matters

  
	
  Schedule 4(j)

  	
   

  	
  Exceptions
  to Title to the Acquired Company Assets

  
	
  Schedule 4(k)

  	
   

  	
  Potential
  Preferential Purchase Rights

  
	
  Schedule 4(l)(i)

  	
   

  	
  Audited
  Financial Information

  
	
  Schedule 4(l)(ii)

  	
   

  	
  Unaudited
  Financial Information

  
	
  Schedule 4(p)

  	
   

  	
  Intellectual
  Property

  
	
  Schedule 4(r)

  	
   

  	
  Bank
  Accounts

  
	
  Schedule 4(s)

  	
   

  	
  Bonds;
  Guarantees

  
	
  Schedule 5(c)

  	
   

  	
  Operation
  of Business

  
	
  Schedule 5(c)(x)

  	
   

  	
  Capital
  Expenditures

  
	
  Schedule 5(f)(ii)

  	
   

  	
  Site
  Access Insurance

  
	
  Schedule 5(h)(i)

  	
   

  	
  Affiliate
  Contracts to be Terminated

  
	
  Schedule 5(j)

  	
   

  	
  Eligible
  Employees

  
	
  Schedule 5(j)(vi)

  	
   

  	
  Severance
  Pay

  
	
  Schedule 5(l)

  	
   

  	
  Surety
  Bonds

  
					

 

iv

 

PURCHASE AND SALE AGREEMENT

(JAVELINA)

 

THIS PURCHASE AND SALE AGREEMENT, dated as of September 16, 2005,
is by and between El Paso Corporation, a Delaware corporation (the “Seller”), and MarkWest Energy
Partners, L.P., a
Delaware limited partnership (the “Buyer”).

 

INTRODUCTION

 

1.             The Acquired
Companies (defined below) own certain rights, title and interests in and to
certain natural gas processing plants, fractionation plants, pipelines and
related facilities and other assets.

 

2.             The Seller owns
(indirectly) equity interests in the Acquired Companies.

 

3.             Subject to the terms
and conditions set forth in this agreement, the Seller will sell to the Buyer,
and the Buyer will purchase and acquire from the Seller, such equity interests
in the Acquired Companies, and the Buyer will pay to the Seller the
consideration described in this agreement.

 

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

 

AGREEMENT

 

1.             Definitions.

 

“Access Right” has the meaning set
forth in Section 5(f)(ii)(A).

 

“Acquired Companies” means Javelina Land, Javelina GP,
Javelina Holding and the Javelina Partnerships.

 

“Acquired Company Assets”
means, excluding the Retained Assets and the Acquired Company Equity Interests,
all rights, title and interests of each Acquired Company in and to its assets
and properties, including its interest in the Facilities, and, as of the date
transferred into any Acquired Company, any rights, title or interests
transferred to any Acquired Company in connection with any Reorganization
Transaction.

 

“Acquired Company Contract”
means a written contract, lease or other agreement (other than any contract or
agreement to the extent it constitutes a Retained Asset) existing on the date
of this Agreement or entered into after the date of this Agreement in
accordance with Section 5(c), in each
case to which an Acquired Company is a party that will be binding on such
Acquired Company or any of the Acquired Company Assets.

 

“Acquired Company Equity Interests” means the Javelina
Land Interest, the Javelina GP Interest, the Javelina Holding 99% Interest, the
Javelina Plant Interest and the Javelina Pipeline Interest.

 

1

 

“Acquired Company Equity Interests Assignment”
means the Assignment of Equity Interests substantially in the form of Exhibit B, pursuant to which the Seller will convey
to the Buyer (or its permitted designee) all of the Acquired Company Equity
Interests (other than those Acquired Company Equity Interests that are
owned by any Acquired Company, being the Javelina Plant Interest and the
Javelina Pipeline Interest).

 

“Adverse Consequences” means
all actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, amounts paid in settlement, liabilities,
obligations, Taxes, liens, losses, expenses, and fees, including court costs
and reasonable attorneys’ fees and expenses, but excluding (except to the
extent paid to an unrelated third party pursuant to a Third Party Claim)
punitive, exemplary, special or consequential damages.

 

“Affiliate” means, with
respect to a specified Person, any Person that, directly or indirectly, through
one or more intermediaries, controls or is controlled by or is under common
control with such specified Person; provided, however, that (i) the
Acquired Companies (other than the Javelina Partnerships) shall be deemed to be
Affiliates (x) prior to the Closing, of the Seller and (y) on and after the
Closing, of the Buyer; and (ii) the Javelina Partnerships shall be deemed
(x) not to be Affiliates of the Seller and (y) to be Affiliates of the Buyer on
and after the Closing.  For purposes of
this definition, “control” (and its derivatives) means the possession, directly
or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting Equity Interests, by contract or otherwise.

 

“Agreement” means this
Purchase and Sale Agreement (including any exhibits, schedules, annexes, or
other attachments hereto) as amended, restated, supplemented or otherwise
modified from time to time.

 

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

 

“Buyer Diligence
Representatives” means, collectively, the agents, consultants,
contractors, employees or other representatives of or retained by the Buyer
that assist or will assist the Buyer in conducting or performing the Diligence
Activities and any employee, agent, contractor or subcontractor thereof.

 

“Buyer Indemnitees” means,
collectively, the Buyer and its Affiliates and each of their respective
officers (or natural persons performing similar functions), directors (or
natural persons performing similar functions), employees, agents and
representatives to the extent acting in such capacity.

 

“Buyer Party” means each of (i) the
Buyer and (ii) each Affiliate of the Buyer that is a party to a
Transaction Agreement.

 

“Buyer Plans”
means the applicable compensation and employee benefits plans, programs and
arrangements offered by the Buyer and its Affiliates from time to time.

 

2

 

“Capital Expenditures” means,
without duplication, amounts capitalized in accordance with GAAP by any
Acquired Company (in the case of the Javelina Partnerships, as prorated based
on the Javelina Percentage Interest).

 

“Cash Pooling Arrangements” means a cash pooling arrangement or
similar reimbursement arrangement with the Seller and its Affiliates, pursuant
to which the Seller and its Affiliates receive substantially all cash due to
(and make substantially all payments for) the Acquired Companies (other than
the Javelina Partnerships), which amounts are reflected as intercompany
receivables and payables or as capital contributions and distributions in
accordance with GAAP.

 

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

 

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

 

“Closing Statement” has the
meaning set forth in Section 2(e)(i).

 

“COBRA” has the meaning set
forth in Section 5(j)(x).

 

“Code” means the Internal
Revenue Code of 1986, as amended, or any successor Law.

 

“Commercial Agreements” means,
collectively, (i) Gas Processing Agreement by and between Javelina Plant
and Valero Refining-Texas L.P. West Refinery in the form of Exhibit H-1,
(ii) Gas Processing Agreement by and between Javelina Plant and Valero
Refining-Texas L.P. East Refinery in the form of Exhibit H-2, and (iii) Agreement
for Sale and Purchase of Hydrogen by and between Javelina Plant and Valero
Refining-Texas L.P. in the form of Exhibit H-3, in each case (x)
including any annexes, exhibits, schedules and other attachments thereto and
(y) as amended, restated, supplemented or otherwise modified through the date
of this Agreement.

 

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

 

“Confidentiality Agreement”
means the letter agreement dated April 22, 2005 between the Seller and the
Buyer relating to information pertaining to the transactions contemplated by
this Agreement.

 

“Deductible Notice” has the
meaning set forth in Section 5(j)(xi).

 

“Diligence Activities” has the
meaning set forth in Section 5(f)(ii)(A).

 

“Effective Time” means 12:01 a.m.
on the Closing Date.

 

3

 

“El Paso Marks” means the names “El Paso” and  “Coastal”
and other trademarks, service marks, and trade names owned by El Paso
Corporation and its respective Affiliates.

 

“Electronic Data”
means all electronic documents, data and other computer based communications
and information stored on any electronic, digital, or other storage or back up
media and retained in the Ordinary Course of Business by the Seller, any
Acquired Company or any Affiliate of any such Person, including, without
limitation, operating, accounting, financial, environmental, measurement
(including SCADA), regulatory data and the information and data contained in
the electronic data room, but excluding the Retained Electronic Data.

 

“Eligible Employees”
has the meaning set forth in Section 5(j)(i).

 

“Encumbrance” means any Lien,
encumbrance, option, right of first refusal, Commitment, voting right,
easement, servitude, transfer restriction or title defect.

 

“Environmental
Access Agreement” means the Environmental Access Agreement
substantially in the form of Exhibit F, relating to the Seller’s
remediation rights under Section 8(b)(xii).

 

“Environmental Laws” means all
applicable federal, state and local laws, statutes, regulations and ordinances
in effect as of the date of this Agreement relating to the protection of the
public health, welfare and the environment, including those laws relating to
the storage, handling and use of Hazardous Substances and those relating to the
generation, processing, fractionation, treatment, storage, transportation,
disposal or other management thereof, as to each, as amended.  The term “Environmental
Laws” does not include operating practices or standards that may be employed or
adopted by other industry participants or recommended by a Governmental
Authority.

 

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

 

“EPMEPC” means El Paso Merchant
Energy-Petroleum Company, a Delaware corporation (formerly known as Coastal
Refining & Marketing Inc.)

 

“Equity Interest” means (a) with
respect to a corporation, any and all shares of capital stock, (b) with
respect to a partnership, limited liability company, trust or similar Person,
any and all units, interests or other partnership, limited liability company,
trust or similar interests, and (c) any other direct equity ownership or
participation in a Person.

 

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

 

“Facilities” means the rights, title and interests of each Acquired Company in and
to the facilities commonly known as the Javelina Plant and the Javelina
Pipeline, each of which are more particularly described on Exhibit A.

 

“Field Operations” means El
Paso Field Operations Company, a Delaware corporation.

 

“FCC
Regulations” means those Laws promulgated by the Federal
Communications Commission.

 

4

 

“FTC”
means the Federal Trade Commission.

 

“Fundamental Representations”
means those representations and warranties contained in Sections
3(a)(i) (Seller Organization and Good Standing), 3(a)(ii) (Seller Authorization of
Transaction), 3(a)(iv) (Seller Brokers), 3(b)(i) (Buyer
Organization and Good Standing), 3(b)(ii) (Buyer
Authorization of Transaction), 3(b)(iv) (Buyer Brokers), 4(a) (Acquired
Company Organization, Qualification and Company Power), 4(b) (Acquired
Company Capitalization), 4(f) (Acquired Company Tax Matters), and 4(m)
(Employee Matters).

 

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

 

“Governmental Authority” means
the United States or any agency thereof and any state, county, city or other
political subdivision, agency, court or instrumentality.

 

“Hazardous Substances” means
any pollutants, contaminants, toxics or hazardous or extremely hazardous
substances, materials, wastes, constituents, compounds or chemicals that are
regulated by, or may form the basis of liability under, any Environmental Laws.

 

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

 

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

 

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

 

“Intellectual Property” means all intellectual property rights used by the
Acquired Companies that do not constitute Retained Assets and that arise from
or in respect of the following: (i) patents and applications therefor,
including continuations, divisionals, continuations-in-part, or reissues of
patent applications and patents issuing thereon, (ii) trademarks, service
marks, trade names, service names, brand names, trade dress rights, logos,
Internet domain names and corporate names, and all applications, registrations
and renewals thereof, (iii) copyrights and registrations and applications
therefor, works of authorship and mask work rights, (iv) Software and (v) Technology;
provided, however,
that Intellectual Property does not include Software of a general nature that
is licensed by the Seller and its Affiliates and not unique to the Acquired
Companies, such as accounting, tax and similar Software.

 

“Interim Agreement” means the Interim Agreement effective as of September 1,
2005 by and between Javelina Plant and Valero Refining-Texas, L.P.

 

“Interim Closing Statement”
has the meaning set forth in Section 2(e)(i).

 

“Javelina Assignment” means the
Assignment and Assumption Agreement (Javelina Company) substantially in the
form of Exhibit I pursuant to which certain Rights of Way will be
transferred into Javelina Plant.

 

5

 

“Javelina GP” means Javelina Holding
GP, L.L.C., a Delaware limited liability company.

 

“Javelina GP Interest” means all of
the Equity Interests in Javelina GP.

 

“Javelina Holding” means Javelina
Holding Company, L.P., a Delaware limited partnership.

 

“Javelina Holding Assignment”
means that certain Assignment and Assumption Agreement (Javelina) dated September 16,
2005 by and between El Paso Corporation and El Paso CNG Company, L.L.C.
(formerly known as Coastal Natural Gas Company), on the one hand, and Javelina
Holding, on the other hand, relating to the assignment and transfer of certain
contracts and agreements into Javelina Holding.

 

“Javelina Holding Interest” means all of the
Equity Interests in Javelina Holding, which consist of the Javelina Holding 99%
Interest and the Javelina Holding 1% Interest.

 

“Javelina Holding 99% Interest” means
a 99% limited partner interest in Javelina Holding.

 

“Javelina Holding 1% Interest” means
a 1% general partner interest in Javelina Holding.

 

“Javelina Indemnity Agreement” means
the Indemnity and Release Agreement substantially in the form of Exhibit G,
in which each of the Seller, on the one hand, and the Javelina Partnerships, on
the other hand, release and indemnify each other with respect to certain
potential claims.

 

“Javelina Insurance Policies” has the
meaning set forth in Section 11(c).

 

“Javelina Land” means Javelina Land
Company, L.L.C., a Delaware limited liability company.

 

“Javelina Land Assignment” means the
Assignment and Assumption Agreement (Javelina Land) dated July 5, 2005
relating to the transfer by EPMEPC to
Javelina Land of its right, title and interest in and to the certain property
described thereon, and the assignment of EPMEPC’s interest in such lease from
EPMEPC to Javelina Land and the assumption of obligations related thereto, as
filed in Nueces County, Texas.

 

“Javelina Land Buffer Tracts Assignments”
means, collectively, (i) that certain Assignment and Assumption Agreement
dated as of August 17, 2005 by and between Field Operations and El Paso
Production Oil & Gas Company, a Delaware corporation, and Javelina Land
and (ii) that certain Assignment and Assumption Agreement (Javelina Land)
dated as of August 17, 2005 by and between EPMEPC and Javelina Land, each,
in the case of (i) and (ii), (x) relating to the transfer and assignment
of certain land and (y) as filed in Nueces County, Texas.

 

“Javelina Land Interest” means all of
the Equity Interests in Javelina Land.

 

6

 

“Javelina Land Maximum Environmental Amount”
means the positive difference, if any, between $20,000,000 and the aggregate
costs incurred since the date of this Agreement by the Seller and its
Affiliates in connection with circumstances, conditions or other matters of the
nature described in Section 8(b)(vi) (including any
remediation costs).

 

“Javelina LP” means Javelina Holding
LP, L.L.C., a Delaware limited liability company.

 

“Javelina Operating Agreements”
means, collectively, (i) the Construction and Operating Agreement for the
Javelina Plant – Nueces County, Texas dated November 4, 1988 by and between
Javelina Holding (as successor-in-interest to El Paso Field Operations Company
and Coastal Javelina, Inc.) and Javelina Plant, and (ii) the System
Operating Agrement dated as of September 30, 1990 by and between Javelina
Holding (as successor-in-interest to El Paso Field Operations Company and
Coastal Javelina, Inc.) and Javelina Plant, each, in the case of (i) or
(ii) (including any exhibits, schedules, annexes or other attachments
thereto), as amended, restated, supplemented or otherwise modified from time to
time.

 

“Javelina Partnerships” means
Javelina Pipeline and Javelina Plant.

 

“Javelina Percentage Interest” means,
with respect to Javelina Pipeline or Javelina Plant, 40%.

 

“Javelina Pipeline”
means Javelina Pipeline Company, a Texas general partnership, created pursuant
to that certain Javelina Pipeline Company Partnership Agreement dated as of September 30,
1990 by and among Javelina Holding (as successor-in-interest to Field
Operations and Coastal Javelina, Inc.), K-M Javelina LP (as successor-in-interest
to K-M Javelina, Inc.) and Valero Javelina, L.P. (as successor in interest
to Valero Javelina Company) (including any exhibits, schedules, annexes or
other attachments thereto), as amended, restated, supplemented or otherwise
modified from time to time.

 

“Javelina Pipeline Interest” means a
40% general partner interest in Javelina Pipeline.

 

“Javelina Plant” means Javelina
Company, a Texas general partnership, created pursuant to that certain Javelina
Company Partnership Agreement dated as of November 4, 1988 by and among
Javelina Holding (as successor-in-interest to Field Operations and Coastal
Javelina, Inc.), K-M Javelina LP (as successor-in-interest to K-M Javelina, Inc.)
and Valero Javelina, L.P. (as successor in interest to Valero Refining Off-Gas
Processing) (including any exhibits, schedules, annexes or other attachments
thereto), as amended and restated by that certain Amended and Restated Javelina
Company Partnership Agreement dated as of September 30, 1990 by and among
Javelina Holding (as successor-in-interest to Field Operations and Coastal
Javelina, Inc.), K-M Javelina LP (as successor-in-interest to K-M Javelina, Inc.)
and Valero Javelina, L.P. (as successor in interest to Valero Javelina Company)
(including any exhibits, schedules, annexes or other attachments thereto), as
further amended, restated, supplemented or otherwise modified from time to
time.

 

“Javelina Plant Interest” means a 40%
general partner interest in Javelina Plant.

 

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

 

7

 

“Legal Right” means, to the
extent arising from, related to or in any way related to the Javelina
Partnerships (including the assets and operations associated with each), the legal authority and right (without risk of liability,
criminal, civil or otherwise), such that the contemplated conduct would not
constitute a violation, termination or breach of, or require any payment under,
or permit any termination under, any contract or agreement; arrangement;
applicable Law; fiduciary, quasi-fiduciary or similar duty; or any other
obligation.

 

“Lien” means any deed of
trust, mortgage, pledge, lien, or other security interest.

 

“Material Adverse Effect”
means any change, effect, event or occurrence with respect to the financial
condition, properties, assets or operations of the Acquired Companies
(excluding the Javelina Partnerships, but including their proportional
interests therein) that is material and adverse to the Acquired Companies
(excluding the Javelina Partnerships, but including their proportional
interests therein), taken as a whole, provided that in determining whether a
Material Adverse Effect has occurred, the following shall not be
considered:  changes, effects, events and
occurrences relating to (i) the natural gas pipeline, treating and
processing industry generally (including the price of natural gas and the costs
associated with the drilling and/or production of natural gas), (ii) any
general market, economic, financial or political conditions, or outbreak or
hostilities or war, in the United States, or (iii) the transactions
contemplated by this Agreement; provided, however,
that to be excluded under subsection (ii) above, such condition may
not disproportionately affect, as compared to others in such industry, any of
the Acquired Companies, or their respective businesses, assets, properties,
results of operation or condition (financial or otherwise).

 

“Material Contracts” has the
meaning set forth in Section 4(g).

 

“New Contract” means any
Acquired Company Contract for which the Buyer’s consent is required pursuant to
Section 5(c).

 

“Notice and Consent
Requirements” means giving any notices to, making any filings
with, and obtaining, any authorizations, consents, waivers, releases, approvals
(including as required under the HSR Act), licenses or other rights of
Governmental Authorities and other Persons either Party is required to obtain (1) in
connection with the matters referred to in this Agreement, including matters
described in Sections 3(a)(ii), 3(a)(iii),
3(b)(ii), 3(b)(iii),  4(c), 4(i) and
4(k), the corresponding Schedules, and the Reorganization
Transactions, or (2) under each of the Technology Licenses, in the case of
(1) and (2) so as to permit the Closing to occur as soon as
reasonably practicable, and thereafter with respect to the Seller’s
post-Closing Notice and Consent Requirements obligations under Section 5(b)(i).

 

“Obligations” means duties,
liabilities and obligations, whether vested, absolute or contingent, known or
unknown, asserted or unasserted, accrued or unaccrued, liquidated or
unliquidated, due or to become due, and whether contractual, statutory or otherwise.

 

“Ordinary Course of Business”
means the ordinary course of business consistent with the applicable Person’s
past custom and practice.

 

“Organizational Documents”
means the articles of incorporation, certificate of incorporation, charter,
bylaws, articles or certificate of formation, regulations, operating

 

8

 

agreement,
certificate of limited partnership, partnership agreement, and all other
similar documents, instruments or certificates executed, adopted, or filed in
connection with the creation, formation, or organization of a Person, including
any exhibits, schedules, annexes or other attachments thereto, each as amended,
restated, supplemented or otherwise modified from time to time.

 

“Other Purchase Agreements”
means, collectively, (i) the Purchase and Sale Agreement dated as of even
date herewith by and between the Buyer and Kerr-McGee Corporation (and certain
of its Affiliates) and (ii) the Purchase and Sale Agreement dated as of
even date herewith by and between the Buyer and Valero Energy Corporation (and
certain of its Affiliates), whereby the Buyer, directly or indirectly, has
agreed to acquire all of the Equity Interest in the Javelina Partnerships
(other than that portion of such Equity Interest constituting any portion of
the Acquired Company Equity Interest).

 

“Parties” means, collectively, the Buyer
and the Seller.

 

“Party” means, individually,
the Buyer or the Seller.

 

“Permits”
means any approvals, authorizations, consents, licenses, permits or
certificates issued by a Governmental Authority.

 

“Permitted Encumbrances” means
any Encumbrance relating to any of the following: (i) any Taxes not yet
delinquent or, if delinquent, that are being contested in good faith in the
Ordinary Course of Business; (ii) any obligations or duties reserved to or
vested in any municipality or other Governmental Authority to regulate any
Acquired Company Assets in any manner, including any applicable Laws; (iii) any
inchoate, mechanic’s, materialmen’s, and similar liens arising or incurred in
the Ordinary Course of Business; (iv) any inchoate liens or other
Encumbrances created pursuant to any operating, construction, operation and
maintenance, co-owners, cotenancy, lease or other operating agreements for which
amounts are not due; (v) the Organizational Documents of any Acquired
Company; (vi) any purchase money liens and liens securing rental payments
under capital lease arrangements; (vii) all matters of public record and (viii) any easements, rights-of-way, restrictions
and other similar arrangements incurred in the Ordinary Course of Business
which, in the aggregate, are not substantial in amount, character or extent and
which do not in any case materially interfere with the ordinary conduct of the
business of any of the Acquired Companies, taken as a whole.

 

“Person” means an individual
or entity, including any partnership, corporation, association, joint stock
company, trust, joint venture, limited liability company, unincorporated
organization, or Governmental Authority (or any department, agency or political
subdivision thereof).

 

“Plant Land” means any and all
surface leases, fee interests or other rights of ingress, egress and use of
land with respect to (i) the land assigned under the Javelina Land Assignment
and (ii) the Lease dated as of April 25, 1989 between EPMEPC and
Javelina Plant, as amended, restated, supplemented or otherwise modified from
time to time.

 

“Post-Closing Tax Period”
means any Tax period beginning on or after the Effective Time.

 

9

 

“Post-Closing Tax Return”
means any Tax Return that is required to be filed for any of the Acquired
Companies, the Seller or any of its Affiliates with respect to a Post-Closing
Tax Period.

 

“Potential
Delayed Hire Eligible Employees” has the meaning set forth in Section 5(j)(i).

 

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

 

“Pre-Closing Tax Return” means
any Tax Return that is required to be filed for any Acquired Companies, the
Seller or any of its Affiliates with respect to a Pre-Closing Tax Period.

 

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

 

“Product Inventory” means,
collectively, the quantity of natural gas, natural gas liquids and other
products that are owned by the Acquired Companies (other than the Javelina
Partnerships) and, to the extent of the Javelina Percentage Interest, the
Javelina Partnerships as of the
Effective Time, whether held in storage facilities, pipelines, fractionators or
other facilities, including imbalances;
but excluding line fill, tank bottoms, and cushion, pad and retainage
products.

 

“Product Inventory Value Amount” means
the Product Inventory quantity segregated as between all liquids and all gas,
with each to be valued as set forth on Part I of Schedule 1(b).  An example of the schedule of Product
Inventory valuation using pricing and quantity information as of March 31,
2005 is set forth on Part II of Schedule 1(b).

 

“Project Manager” shall have
the meaning ascribed to such term in the partnership agreements of the Javelina
Partnerships.

 

“Prorated Retained Employee Severance Amount”
means, with respect to a Retained Employee, the amount derived by multiplying (i) the
severance pay paid to such Retained Employee under the applicable severance
plan of the Seller and its Affiliates in which such Retained Employee
participated immediately prior to the Closing Date by (ii) a fraction the
numerator of which is equal to (A) three hundred sixty-five (365) minus (B) the
number of days from and including the applicable termination date to and
including the date the Buyer hires the Retained Employee, and the denominator
of which is three hundred sixty-five (365).

 

“Purchase Price” means one
hundred forty-two million dollars ($142,000,000) plus (i) the amount, if
any, by which the total of the Purchase Price Increases exceeds the total of
the Purchase Price Decreases, or minus (ii) the amount, if any, by which
the total of the Purchase Price Decreases exceeds the total of the Purchase
Price Increases.

 

“Purchase Price Decreases”
means, without duplication, (i) 100% of the amount, if any, of negative
Working Capital of the Acquired Companies (other than the Javelina
Partnerships), as of the Effective Time, (ii) the Javelina Percentage
Interest of the amount, if any, of negative Working Capital of each Javelina
Partnership as of the Effective Time, (iii) to the extent the Product Inventory
Value Amount is negative, the Product Inventory Value Amount, (iv) any

 

10

 

reduction of
the Purchase Price pursuant to Section 5(e) (Damage or
Condemnation), (v) long-term Unrecorded Obligations and indebtedness for
borrowed money of the Acquired Companies (other than the Javelina
Partnerships), excluding any such items otherwise specifically allocated in
this Agreement and (vi) the Javelina Percentage Interest of the long-term
Unrecorded Obligations and indebtedness for borrowed money of the Javelina
Partnerships, excluding any such items otherwise specifically allocated in this
Agreement.

 

“Purchase Price Increases”
means, without duplication, (i) 100% of the amount, if any, of positive
Working Capital of the Acquired Companies (other than the Javelina
Partnerships) as of the Effective Time, (ii) the Javelina Percentage
Interest of the amount, if any, of positive Working Capital of each Javelina
Partnership as of the Effective Time, (iii) to the extent the Product
Inventory Value Amount is positive, the Product Inventory Value Amount and (iv) the
Reimbursable Capital Expenditures.

 

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

 

“Reimbursable Capital Expenditures”
means the aggregate amount of Capital Expenditures paid or payable by the
Seller or its Affiliates (including the Acquired Companies) or the Javelina
Partnerships (as prorated based on the Javelina Percentage Interest) that have
been consented to in writing by the Buyer (in its sole discretion).

 

“Reorganization Transactions”
means (i) the transactions contemplated by the Transaction Agreements, the
Interim Agreement, the Javelina Land Assignment and the Javelina Land Buffer
Tracts Assignments; and (ii) the
formation and organization of Javelina Land, Javelina GP, Javelina LP and
Javelina Holding, including the contributions of assets and the assumptions of
obligations related thereto and certain specified obligations.

 

“Retained
Assets” has the meaning
set forth in Section 2(f).

 

“Retained Assets
Assignment” means the assignment and assumption agreement
substantially in the form of Exhibit C, by which all of the
Retained Assets are assigned by the Acquired Companies (other than the Javelina
Partnerships) to the Seller (or its designee), and by which the transferee
assumes certain obligations, effective as of a date prior to the Effective
Time.

 

“Retained
Electronic Data” means all electronic mail stored on any
electronic, digital, or other storage or back up media and retained in the
Ordinary Course of Business by the Seller or any Affiliate of the Seller (other
than the Acquired Companies).

 

“Retained Employees” means the
Eligible Employees of the Seller and its Affiliates other than the Transferred
Employees.

 

“Retained Employee Obligations”
means all claims, costs, expenses, liabilities and other obligations, including
liability for severance benefits, accrued vacation, benefits under employee
benefit plans, benefits required by Section 4980B(f) of the Code,
COBRA or other applicable statutes and all retiree medical benefits that any
Retained Employee or Transferred Employee may be entitled to receive under any
employee benefit plan, related to the retention, termination or transfer of any
Retained Employee or Transferred Employee; provided, however,
for the

 

11

 

avoidance of
doubt, this term shall not include any claims, costs, expenses, liabilities or
other obligations to the extent arising out of the Buyer’s obligations to any
Transferred Employee after such employee’s Transferred Employee Start Date.

 

“Rights of Way” means any and
all rights-of-way, easements, permits, licenses, franchises or other rights of
ingress and egress associated with, arising out of, or related to the ownership
or operation of the Acquired Company Assets.

 

“ROFR Waiver Agreement” means the
ROFR Waiver and Side Agreement as of even date herewith among the partners of
the Javelina Partnerships and certain of their respective Affiliates (including
any exhibits, schedules, annexes or other attachments thereto), as amended,
restated or otherwise modified from time to time, which agreement addresses,
among other things, certain possible preferential purchase rights relating to
the Javelina Pipeline Interest and the Javelina Plant Interest, as well as
operatorship of, and access to, the Javelina Partnerships.

 

“SEC” means the Securities and
Exchange Commission.

 

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

 

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

 

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

 

“Seller’s Knowledge” means the
actual conscious awareness of each individual listed on Schedule 1(a) with
respect to a particular fact or other matter at the time of determination (i.e.
at signing or Closing, or both) without investigation or inquiry.

 

“Seller Party” means each of (i) the
Seller and (ii) each Affiliate of the Seller that is a party to any
Transaction Agreement.

 

“Software” means any and all of the following that are used by the Acquired
Companies: (i) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code, (ii) databases and compilations, including any and all
data and collections of data, whether machine readable or otherwise, (iii) descriptions,
flow-charts and other work product used to design, plan, organize and develop
any of the foregoing, screens, user interfaces, report formats, firmware,
development tools, templates, menus, buttons and icons, and (iv) documentation
including user manuals and other training documentation related to any of the
foregoing.

 

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

 

“Straddle Return” means a Tax
Return for a Straddle Period.

 

“Tax” or “Taxes” means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits,

 

12

 

environmental
(including taxes under Code Section 59A), custom duties, capital stock,
franchise, profits, withholding, social security (or similar excises),
unemployment, disability, ad valorem, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax, levy tax or similar tax-based fee or imposition of any
kind whatsoever, whether imposed on any Acquired Company or Acquired Company
Assets by any Governmental Authority, pursuant to Treasury Regulation Section 1.1502-6
or any analogous provision of Law, as a transferee, successor or custodian, or
by contract or otherwise, together with any interest, penalty or addition
thereto, whether disputed or not.

 

“Tax Records” means all Tax
Returns and Tax-related work papers relating to any Acquired Company or
Acquired Company Asset.

 

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

 

“Technology” means, collectively, all designs, formulae, algorithms, procedures,
methods, techniques, ideas, know-how, research and development, technical data,
programs, subroutines, tools, materials, specifications, processes, inventions
(whether patentable and whether or not reduced to practice), apparatus,
creations, improvements, works of authorship and other similar materials that
are used by the Acquired Companies.

 

“Technology Licenses” means
any and all intellectual property licenses and other similar arrangements
(including, without limitation, computer software, telephone and radio
licenses, and scientific processes) relating to any of the Acquired Company
Assets.

 

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

 

“Transaction Agreements” means
this Agreement, the Acquired Company Equity Interests Assignments, the Retained
Assets Assignment, the Transition Services Agreement, the Environmental Access
Agreement, each of the Commercial Agreements, the Javelina Indemnity Agreement,
the ROFR Waiver Agreement, the Javelina Assignment and the Javelina Holding
Assignment.

 

“Transferred Employees”
means, collectively, all Eligible Employees who accept employment with the
Buyer or one of its Affiliates pursuant to the offers described in Section 5(j).

 

“Transferred Employee Start Date”
means (i) with respect to Eligible Employees other than those covered by (ii) below,
the Closing Date, and (ii) with respect to Potential Delayed Hire Eligible
Employees, the first day of the month following the date that the Seller
notifies the Buyer in writing that such Potential Delayed Hire Eligible
Employee is available.

 

“Transition Services Agreement”
means the Transition Services Agreement substantially in the form of Exhibit D,
relating to certain services to be performed after Closing.

 

“Unrecorded Obligations”
means, with respect to a Person, all liabilities incurred and payable by such
Person that relate to any deferred payment(s) on account of the provision of

 

13

 

goods or
services to such Person and that would be required to be recorded in accordance
with GAAP in such Person’s financial statements as a liability.

 

“Working Capital” means
current assets minus current liabilities as of the Effective Time as determined
in accordance with GAAP; provided, however, that the term “Working Capital” shall not include
(without duplication) the value of any (i) Product Inventory, (ii) current
assets or liabilities relating to Taxes, (iii) current assets or liabilities
relating to purchase accounting reserves, (vi) current liabilities or
current assets otherwise included in Working Capital and for which this
Agreement allocates the ultimate economic costs or benefits to the Seller or
the Buyer (e.g., specified Straddle Period Taxes), (vii) any accounts
receivable with a Person that has any account receivable balance 90 or more
days past due and (viii) any accounts receivable or accounts payable
within the Cash Pooling Arrangements.  Schedule 1(c) is the schedule of
Working Capital for the Acquired Companies as of March 31, 2005.

 

2.             The Transaction.

 

(a)           Sale of Acquired Company Equity Interests.  Subject
to the terms and conditions of this Agreement, the Seller agrees to sell to the
Buyer the Acquired Company Equity Interests (which includes beneficial and
indirect record ownership of the Javelina Plant Interest and the Javelina
Pipeline Interest), and the Buyer agrees to purchase such Acquired Company
Equity Interests.

 

(b)           Consideration.  In consideration for the assignment
of such Acquired Company Equity Interests, the Buyer agrees to pay the Seller
the Purchase Price set forth in the Closing Statement in cash by wire transfer
of immediately available federal funds.

 

(c)           The Closing.  The closing of the transactions
contemplated by this Agreement (the “Closing”)
shall take place at the offices of the Seller or its counsel, commencing at
10:00 a.m., local time, on the earlier to occur of (i) the first day
of the calendar month after which all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions each Party shall take at the Closing itself)
are and have been for a period of at least three (3) business days
satisfied or waived or (ii) such other date as the Parties may mutually
determine (the “Closing Date”); provided that, if such date is not a business day, the
Parties will close into escrow on the preceding business day with the Closing
to be effective for all purposes on the first day of the month.

 

(d)           Deliveries at the Closing.  At the
Closing,

 

(i)            the Seller shall deliver to the
Buyer the certificate referred to in Section 9(o);

 

(ii)           the Seller will, and will cause each applicable Seller Party
and, to the extent it has the Legal Right, each Javelina Partnership, to
execute and deliver each Transaction Agreement (other than any Transaction
Agreement that is executed before the Closing) to which such Seller Party is a
party;

 

(iii)          the Buyer will, and will cause the applicable Buyer Party
to, execute and deliver each Transaction Agreement to which such Buyer Party is
a party;

 

14

 

(iv)          the Seller shall deliver to the Buyer the Interim Closing
Statement;

 

(v)           the Seller shall deliver, or cause to be delivered, to the
Buyer evidence of the resignation or removal of any officers, directors,
Representatives (as defined in the partnership agreements of the Javelina
Partnerships) or managers of (x) each Acquired Company (other than any Javelina
Partnership) and (y) of the Javelina Partnerships that the Seller has the Legal
Right to so remove or to cause to so resign, in each case that the Buyer has
not identified to the Seller within a reasonable period of time before Closing
as a Person that will be continuing with such Acquired Company in that capacity
after the Closing;

 

(vi)          the Seller shall deliver to the Buyer an officer’s
certificate verifying that the conditions of the Buyer set forth in Section 7(a)(i) have
been satisfied;

 

(vii)         the Buyer shall deliver to the Seller an officer’s
certificate verifying that the conditions of the Seller set forth in Section 7(b)(i) have been satisfied;
and

 

(viii)        at any time on or before the Closing, the Seller shall
deliver to the Buyer such applicable Organizational Documents, resolutions and
certificates of good standing, in such form as is reasonably acceptable to the
Buyer.

 

(e)           Interim Closing Statement and Post-Closing
Adjustment.

 

(i)            At least five (5) business
days prior to the Closing Date, the Seller shall cause to be prepared and
delivered to the Buyer a statement (the “Interim
Closing Statement”) setting forth the Seller’s good faith
estimate of the Purchase Price, including a schedule of Product Inventory
valuation, Working Capital, Purchase Price Increases and Purchase Price
Decreases, in each case of the Acquired Companies, and any other reasonable
detail.  As soon as practicable, but in
any event no later than one hundred twenty (120) days following the Closing Date, the Buyer shall cause to be
prepared and delivered to the Seller (i) a good faith statement, including
reasonable detail, of the actual Purchase Price (such statement, as it may be
adjusted pursuant to Section 2(e)(ii),
the “Closing Statement”),
including a schedule of Product Inventory valuation, Working Capital,
Purchase Price Increases and Purchase Price Decreases, in each case of the
Acquired Companies, and any other reasonable detail.  In connection with the preparation of the
Closing Statement, the Seller shall measure the Product Inventory quantities in
its control as of the Effective Time, and the Buyer’s representatives shall be
given reasonable advance notice of, and shall be permitted to attend and
observe, such measurement and to have reasonable access to documentation of
Product Inventory positions prepared by the Seller and other Persons (to the
extent the Seller has the Legal Right or other legal authority and right to
access such Person’s documentation).  In
the event that all actual Product Inventory quantities are not known prior to
Closing, the Seller shall make a good faith estimate of the Product Inventory
quantities and the related Product Inventory Value Amount, which information
shall be attached to the Interim Closing Statement.  By way of example, Schedule 2(e) is
a hypothetical Interim Closing Statement that assumes the Closing occurred on March 31,
2005.

 

(ii)           Upon receipt of the Closing Statement, the Seller and the
Seller’s independent accountants shall be permitted during the succeeding sixty
(60)-day period to examine the
work papers used or generated in connection with the preparation of the Closing

 

15

 

Statement and such
other documents as the Seller may reasonably request in connection with its review
of the Closing Statement, including the income statements for the Acquired
Companies.  Within sixty (60) days of
receipt of the Closing Statement, the Seller shall deliver to the Buyer a
written statement describing in reasonable detail its objections (if any) to
any amounts or items set forth on the Closing Statement.  Additionally, if the Buyer receives a timely
objection to the proposed Closing Statement pursuant to the comparable
provision of the Other Purchase Agreements, the Buyer shall provide notice to
the Seller of objection notice and, if then elected by the Seller, the Seller
shall be deemed to have timely made the same objection to the Closing Statement
made under the Other Purchase Agreements. 
If the Buyer does not receive, within sixty (60) days of the Seller’s
receipt of the Closing Statement, the Seller’s written statement describing in
reasonable detail the Seller’s objections (and the Seller is not deemed to have
timely objected pursuant to the preceding sentence), the Closing Statement
shall become final and binding.  If the
Seller raises written objections within the 60-day period (or the Seller is
deemed to have timely objected pursuant to the preceding sentence), the Parties
shall negotiate in good faith to resolve any such objections.  If the Parties are unable to resolve any
disputed item, other than matters involving the application or interpretation
of the Law or other provisions of this Agreement, within thirty (30) days after
the Buyer’s receipt of the Seller’s written objections, any such disputed items
shall be submitted to a nationally recognized independent accounting firm
mutually agreeable to the Parties who shall be instructed to resolve such
disputed item in accordance with GAAP within thirty (30) days.  The resolution of such disputes (as limited
in the preceding sentence) shall be set forth in writing and shall be
conclusive, binding and non-appealable upon the Parties and the Closing
Statement shall become final and binding upon the date of such resolution.  The fees and expenses of such accounting firm
shall be paid one-half by the Buyer and one-half by the Seller.  The Parties agree that any disputed item
related to the application or interpretation of the Law or other provisions of
this Agreement shall not be resolved by the designated accounting firm.

 

(iii)          If the Purchase Price as set forth on the Closing Statement
exceeds the estimated Purchase Price as set forth on the Interim Closing
Statement, the Buyer shall pay the Seller, without offset or deduction, in cash
the amount of such excess. If the estimated Purchase Price as set forth on the
Interim Closing Statement exceeds the Purchase Price as set forth on the
Closing Statement, the Seller shall pay to the Buyer, without offset or
deduction, in cash the amount of such excess. After giving effect to the
foregoing adjustments, any amount to be paid by the Buyer to the Seller, or to
be paid by the Seller to the Buyer, as the case may be, shall be paid in the
manner and with interest as provided in Section 2(e)(iv) at
a mutually convenient time and place within five (5) business days after
the later of acceptance of the Closing Statement or the resolution of the
Seller’s objections thereto pursuant to Section 2(e)(ii)).

 

(iv)          Any payments pursuant to this Section 2(e) shall
be made by causing such payments to be credited in immediately available funds
to such account or accounts of the Buyer or the Seller, as the case may be, as
may be designated by the Buyer or the Seller, as the case may be.  The amount of the payment to be made pursuant
to this Section 2(e) shall bear
interest from and including the Closing Date to, but excluding, the date of
payment at a rate per annum equal to the Prime Rate plus two (2) percent
(not to exceed the maximum rate permitted by applicable Law).  Such interest shall be payable at the same
time as the payment to which it relates and shall be calculated on the basis of
a year of three hundred sixty five (365) days and the actual number of days for
which due.

 

16

 

(v)           Except as set forth in Section 2(e)(ii),
each Party shall bear its own expenses incurred in connection with the
preparation and review of the Closing Statement.

 

(f)            Retained Assets.  Notwithstanding any other
provision of this Agreement, the transactions contemplated by this Agreement
exclude each and every right, title, interest or other asset in any way
relating to the matters described below to the extent in any way owned by, or
that in any way accrued to the benefit of, any Acquired Company (other than
those actually owned by the Javelina Partnerships) (including their respective
successors) prior to the Closing Date (all of which are referred to as the “Retained Assets”):

 

(i)            Retained Electronic Data;

 

(ii)           the El Paso Marks;

 

(iii)          any refunds from taxing authorities attributable to any
period before the Effective Time;

 

(iv)          all books, records, work papers, Tax Returns, etc., relating
to Taxes;

 

(v)           all insurance policies or other agreements of insurance that
relate to the assets or businesses of any of such Acquired Company, except with
respect to any claims made prior to the Effective Time; and

 

(vi)          any files, records, contracts or other documents of the
Seller or any of its Affiliates relating to any analysis of the Buyer’s bid or
offer and any analysis of any other bids or offers with respect to any such
Acquired Company or all or any part of such Acquired Company Assets, including
those in competition with the Buyer’s bid or offer.

 

Prior to the Closing Date, the Seller shall cause any such Acquired
Company to transfer, for or without consideration, the Retained Assets to the
Seller, any of its Affiliates or any designee. 
Notwithstanding anything to the contrary provided elsewhere in this
Agreement, the term Acquired Company Assets does not include (and similar terms
or phrases contained in the Transaction Agreements shall not include) the
Retained Assets, and, accordingly, the Seller’s representations, warranties and
covenants shall not apply to the Retained Assets.  For the avoidance of doubt, but without limiting the generality of the
foregoing, neither the Seller nor any of its Affiliates is assuming or
otherwise becoming responsible for any Obligation pursuant to this Section 2(f); provided,
however, that the Seller is providing
the indemnification specified in Section 8(b)(ix)(B) relating
to the Retained Assets.

 

(g)           Cash Pooling
Arrangements.  The Acquired Companies
(other than the Javelina Partnerships) participate in the Cash Pooling
Arrangements.  At Closing, such Acquired
Companies will cease participation in the Cash Pooling Arrangements, and
thereafter all accounts receivable and accounts payable of such Acquired
Companies will be received and paid by such Acquired Companies (or as otherwise
directed by the Buyer).  All accounts
receivable and accounts payable of any such Acquired Company with any Seller
Affiliate, to the extent not actualized and settled in the Cash Pooling
Arrangements as of the Closing Date, will survive the Closing and be paid as
actualized in the normal course of business. 
Any such accounts will be included in the calculation of Working
Capital.

 

17

 

3.             Representations and Warranties Concerning the
Transaction.

 

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

 

(i)            Organization and Good
Standing.  Each Seller Party (other than the Acquired
Companies) is a limited liability company, limited partnership or corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Delaware. Each such Seller Party is duly qualified or authorized to do
business and is in good standing under the Laws of each state in which the
conduct of its business or the ownership of its assets or properties requires
such qualification or authorization, except where the lack of such
qualification would not have an adverse effect in any material respect on the
ability of any such Seller Party to consummate the transactions contemplated
hereby.  Each such Seller Party (other
than the Acquired Companies) has full power and authority to carry on the
businesses in which it is engaged (as such businesses are presently conducted)
and to own, lease and use the properties and assets owned, leased and used by
it, except where the lack of such power and authority would not have an adverse
effect in any material respect on the ability of any such Seller Party to
consummate the transactions contemplated hereby.

 

(ii)           Authorization of Transaction.  Each Seller Party has full power and
authority (including full entity power and authority) to execute and deliver
each Transaction Agreement to which such Seller Party is a party and to perform
its obligations thereunder.  The
execution and delivery of each of the Transaction Agreements to which any
Seller Party is a party and the consummation of the transactions contemplated
thereby have been duly authorized by all required entity action on the part of
each such Seller Party.  This Agreement
has been, and each of the other Transaction Agreements to which any Seller
Party is a party will be at or prior to the Closing, duly and validly executed
and delivered by such Seller Party, and each Transaction Agreement to which any
Seller Party is a party constitutes the valid and legally binding obligation of
such Seller Party, enforceable against such Seller Party in accordance with its
terms and conditions, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting creditors’
rights generally, and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).  Except as contemplated by Section 5(g) and as set forth on Schedule 3(a)(ii), no Seller Party or any
Acquired Company need give any notice to, make any filing with, or obtain any
waiver, Permit, order, authorization, consent, or approval of any Governmental
Authority or any other Person in order to consummate the transactions
contemplated by this Agreement or any other Transaction Agreement to which such
Seller Party is a party, except for the prior approval of the FTC and except
for such notices, filings, authorizations, consents or approvals as would not
have an adverse effect in any material respect on the ability of any Seller
Party to consummate the transactions contemplated hereby.

 

(iii)          Noncontravention.  Except for prior approval of the FTC, if
applicable, or as contemplated by Section 5(g) and
for filings specified in Schedule 3(a)(ii) or
as set forth in Schedule 3(a)(iii),
neither the execution and delivery of any Transaction Agreement to which any
Seller Party (other than the Acquired Companies) is a party, the compliance by
any such Seller Party with any of the provisions thereof, nor the consummation
of any of the transactions contemplated thereby, shall result in any violation
of or default (with or without notice or lapse

 

18

 

of time, or both)
under, or give rise to a right of termination or cancellation under, any
provision of (A) any Law to which any such Seller Party is subject or any
provision of its Organizational Documents, or (B) any agreement or permit
to which any such Seller Party is a party or by which it is bound or to which
any of its assets or properties are subject, or (C) any order of any
Governmental Authority applicable to any such Seller Party or by which any of
the properties or assets of such Seller Party are bound, except for any such
violation, default or right of termination or cancellation as would not have an
adverse effect in any material respect on the ability of any Seller Party to
consummate the transactions contemplated hereby.

 

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

 

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

 

(i)            Organization of the Buyer.  Each Buyer Party is a limited
partnership, limited liability company or corporation duly organized, validly existing,
and in good standing under the Laws of its state of organization.  Each Buyer Party is duly qualified or
authorized to do business and is in good standing under the Laws of each state
which requires such qualification, except where the lack of such qualification
would not have an adverse effect in any material respect on the ability of any
such Buyer Party to consummate the transactions contemplated hereby.  Each Buyer Party has full power and authority
to carry on the businesses in which it is engaged (as such businesses are
presently conducted) and to own, lease and use the properties and assets owned,
leased and used by it, except where the lack of such power and authority would
not have an adverse effect in any material respect on the ability of any such
Buyer Party to consummate the transactions contemplated hereby.

 

(ii)           Authorization of
Transaction.  Each Buyer Party has full power and authority
(including full entity power and authority) to execute and deliver each
Transaction Agreement to which such Buyer Party is a party and to perform its
obligations thereunder.  The execution
and delivery of each of the Transaction Agreements to which any Buyer Party is
a party and the consummation of the transactions contemplated thereby have been
duly authorized by all required entity action on the part of each such Buyer
Party.  This Agreement has been, and each
of the other Transaction Agreements to which any Buyer Party is a party will be
at or prior to the Closing, duly and validly executed and delivered by such Buyer
Party, and each Transaction Agreement to which any Buyer Party is a party
constitutes the valid and legally binding obligation of such Buyer Party,
enforceable against such Buyer Party in accordance with its terms and
conditions, subject, however, to the effects of bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditors’ rights generally, and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).  Except as contemplated by Section 5(g) and as set forth on Schedule 3(b)(ii), no Buyer Party need give
any notice to, make any filing with, or obtain any waiver, Permit, order,
authorization, consent, or approval of any Governmental Authority or any other
Person in order to consummate the transactions contemplated by this Agreement
or any other Transaction Agreement to which such Buyer Party is a party, except
for the prior approval of the FTC and

 

19

 

except for such
notices, filings, authorizations, consents or approvals as would not have an
adverse effect in any material respect on the ability of any Buyer Party to
consummate the transactions contemplated hereby.

 

(iii)          Noncontravention.  Except for the prior approval of the FTC or
as contemplated by Section 5(g) and
for filings specified in Schedule 3(b)(ii) or
as set forth in Schedule 3(b)(iii),
neither the execution and delivery of any Transaction Agreement to which any
Buyer Party is a party, the compliance by any such Buyer Party with any of the
provisions thereof, nor the consummation of any of the transactions
contemplated thereby, shall result in any violation or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination
or cancellation under, any provision of (A) any Law to which such Buyer
Party is subject or any provision of its Organizational Documents, or (B) any
agreement or permit to which any such Buyer Party is a party or by which it is
bound or to which any of its assets or properties are subject, or (C) any
order of any Governmental Authority applicable to any such Buyer Party or by
which any of the properties or assets of such Buyer Party are bound, except for
any such violation, default or right of termination or cancellation as would
not have an adverse effect in any material respect on the ability of any Buyer
Party to consummate the transactions contemplated hereby.

 

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

 

(v)           Investment.  The Buyer is not acquiring the Acquired
Company Equity Interests with a view to or for sale in connection with any
distribution thereof or any other security related thereto within the meaning
of the Securities Act.  The Buyer is
familiar with investments of the nature of the Acquired Company Equity
Interests, understands that this investment involves substantial risks, has
substantial knowledge and experience in financial and business matters such
that it is capable of evaluating, and has evaluated, the merits and risks
inherent in purchasing the Acquired Company Equity Interests, and is able to
bear such risks.  The Buyer has had the
opportunity to visit with the Seller and its applicable Affiliates and meet
with their representative officers and other representatives to discuss the
business, assets, liabilities, financial condition, and operations of the
Acquired Companies, has received (to the Buyer’s knowledge) all materials,
documents and other information in the possession of the Seller and its
Affiliates that the Buyer deems necessary or advisable to evaluate the Acquired
Companies, and has made its own independent examination, investigation,
analysis and evaluation of the Acquired Companies, including its own estimate
of the value of the Acquired Companies.

 

(vi)          Availability of Funds.  The Buyer has, or will have as of the Closing
Date, sufficient funds with which to pay the Purchase Price and consummate the
transactions contemplated by this Agreement. 
The ability of the Buyer to consummate the transactions contemplated by
this Agreement is not subject to any condition or contingency with respect to
financing.

 

20

 

4.             Representations and Warranties Concerning the
Acquired Company Equity Interests, Acquired Companies and Acquired Company
Assets.  The Seller represents and warrants to the
Buyer as follows:

 

(a)           Organization, Qualification, and Company Power.  Each of
Javelina Land and Javelina GP is a limited liability company duly organized,
validly existing and is in good standing under the laws of the State of
Delaware.  Javelina Holding is a limited
partnership duly organized, validly existing and is in good standing under the
laws of the State of Delaware.  Each
Javelina Partnership is a general partnership duly organized and validly
existing under the laws of the State of Texas. 
Each of Javelina Land, Javelina GP and Javelina Holding is duly
qualified or authorized to do business and is in good standing under the Laws
of the State of Texas.  Each Acquired
Company has full power and authority to carry on the businesses in which it is
engaged (as such businesses are presently conducted) and to own, lease and use
the properties and assets owned, leased and used by it in the State of
Texas.  The Seller has provided the Buyer
with complete copies (including all amendments, restatements and other
modifications) of the Organizational Documents of each Acquired Company as in
effect on the date of this Agreement.

 

(b)           Capitalization.

 

(i)            The capitalization of the
Acquired Companies on the Closing Date will be as follows:

 

(A)          Field Operations will
own (beneficially and of record) the Javelina Land Interest.

 

(B)           Field Operations will
own (beneficially and of record) the Javelina GP Interest.

 

(C)           Javelina GP will own
(beneficially and of record) the Javelina Holding 1% Interest.

 

(D)          Javelina LP will own
(beneficially and of record) the Javelina Holding 99% Interest.

 

(E)           Javelina Holding will
own (beneficially and of record) the Javelina Plant Interest and the Javelina
Pipeline Interest.

 

(ii)           The Acquired Company Equity Interests have been duly
authorized, and are validly issued and fully paid and (except with respect to
the general partner interests or as set forth to the contrary in the applicable
governing documents) non-assessable. 
Except to the extent created under the Securities Act, state securities
Laws, limited liability company Laws, partnership Laws and general corporation
Laws of the Acquired Companies’ state of formation, and as created by the
Organizational Documents of the Acquired Companies, (x) the Acquired Company
Equity Interests are each held as set forth above, free and clear of any
Encumbrances and (y) there are no Commitments with respect to any Equity
Interest (1) of any of the Acquired Companies (other than the Javelina
Partnerships), (2) constituting the Javelina Plant Interest or  (3) constituting the Javelina Pipeline
Interest.  Except as provided in the
Organizational

 

21

 

Documents of any
Acquired Company, no Seller Party is party to any voting trusts, proxies, or
other agreements or understandings with respect to the voting, redemption,
sale, transfer or other disposition of any Equity Interest of any of the
Acquired Companies.

 

(iii)          No Equity
Interests.  Other than any Acquired Company Equity
Interest, none of the Acquired Companies own, directly or indirectly (and the
Acquired Company Assets do not include), any Equity Interest in any other
Person.

 

(iv)          The Seller has provided the Buyer with a true and complete
copy of the Organizational Documents (including each and every amendment
thereof) of each of the Acquired Companies.

 

(v)           The Acquired Company Equity Interest Assignment will
transfer to the Buyer good and indefeasible title to the Acquired Company
Equity Interests (other than those Acquired Company Equity Interests that are
owned by any Acquired Company, being the Javelina Plant Interest and the
Javelina Pipeline Interest), free and clear of any and all Encumbrances.

 

(c)           Noncontravention.  Except for the approval of the
FTC, if applicable, or as contemplated by Section 5(g) or
as set forth in Schedule 4(c), neither
the execution and delivery of any Transaction Agreement, the compliance with
any of the provisions thereof, nor the consummation of any of the transactions
contemplated thereby, shall result in the imposition of any Encumbrance (except
any created by any Transaction Document) on any of the Acquired Company Equity
Interests or any of the Acquired Company Assets, result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination or cancellation under, any provision of:  (i) any material Law to which any of the
Acquired Companies or any of the Acquired Company Assets is subject or any
provision of the Organizational Documents of any of the Acquired Companies, or (ii) any
material agreement (excluding Rights of Way and Plant Land) or permit to which any of the Acquired Companies, any of the Acquired
Company Equity Interests or any of the Acquired Company Assets is subject, or (iii) any
order of any Governmental Authority applicable to any Acquired Company, any of
the Acquired Company Equity Interests or any of the Acquired Company Assets.

 

(d)           Changes.  Except (i) as set forth in Schedules 4(d), 4(l)(i) and
4(l)(ii), (ii) with respect to the
Reorganization Transactions and (iii) as otherwise permitted by this
Agreement, from May 31, 2005 to the date of this Agreement:

 

(i)            the Acquired Company Assets,
taken as a whole, have been operated and maintained in the Ordinary Course of
Business;

 

(ii)           the Acquired Companies, taken as a whole, have conducted
their respective businesses only in the Ordinary Course of Business;

 

(iii)          there has been no purchase, sale, exchange or lease of any
property, plant or equipment of any Acquired Company, other than those not
exceeding net proceeds of one million dollars ($1,000,000) in the aggregate;

 

22

 

(iv)          there has not been any change, event or loss affecting any
Acquired Company that has resulted, or would reasonably be expected to result,
in a Material Adverse Effect; and

 

(v)           there has been no contract, commitment or agreement to do
any of the foregoing, except as expressly permitted by this Agreement.

 

(e)           Legal Compliance; Permits.  To the
Seller’s Knowledge, currently and since December 31, 2002, each Acquired
Company has complied and is in compliance with all applicable Laws of all
Governmental Authorities.  Neither Seller
nor any Acquired Company has received any written notice of or has been charged
with the violation of any material Laws applicable to the Acquired Company
Assets.  To the Seller’s Knowledge, the
Acquired Companies currently have all material Permits that are necessary to
operate the Acquired Company Assets and the operations related thereto in the
Ordinary Course of Business, all such Permits are in full force and effect, and
no Acquired Company is in material default or violation (and no event has
occurred which, with notice or the lapse of time or both, would constitute a
material default or violation) of any term, condition or provision of any such
Permits.  Notwithstanding the previous
sentences, the Seller makes no representations or warranties in this Section 4(e) with respect to Taxes or
Environmental Laws, for which the sole representations and warranties of the
Seller are set forth in

Sections 4(f) and 4(i),
respectively.

 

(f)            Tax Matters.  Except as set forth in Schedule 4(f):

 

(i)            To the Seller’s Knowledge, the
Acquired Companies have timely filed all Tax Returns with respect to the
Acquired Companies and the Acquired Company Assets that they were required to
file and such Tax Returns are accurate in all material respects.  All Taxes (whether or not shown on any Tax
Return) required to be paid by any of the Acquired Companies or with respect to
the Acquired Company Assets have been paid.

 

(ii)           The Acquired Companies have duly complied with all
withholding Tax and Tax deposit requirements;

 

(iii)          None of the Acquired Companies are under investigation,
audit or examination by any Governmental Authority, and there are no claims or
proceedings now pending or threatened against the Acquired Companies with
respect to any Tax or any matters under discussion with any Governmental
Authority relating to any Tax;

 

(iv)          There are no liens on any of the Acquired Company Assets
related with any failure (or alleged failure) to pay any Tax;

 

(v)           There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any federal, state, local or
foreign income or other material Tax Returns required to be filed by or with
respect to any of the Acquired Companies;

 

(vi)          To the Seller’s Knowledge, all material Acquired Company
Assets have been included on the property tax rolls of the Tax jurisdictions in
which the property is located and there is no omitted property in such
jurisdictions; and

 

23

 

(vii)         None of the Acquired Companies have elected to be taxed or
are subject to being taxed as a corporation for federal income tax purposes.

 

(g)           Contracts and Commitments.  Included
in Schedule 4(g)(i) is a
description of each Acquired Company Contract (excluding Rights of Way and
Plant Land) existing on the date of this Agreement that fits into the
categories described in (i) – (xii) below (such Acquired Company Contracts
are, collectively, the “Material Contracts”):

 

(i)            (A) any that resulted in
aggregate payments by an Acquired Company of more than two million five hundred
thousand ($2,500,000) dollars during the twelve months ending December 31, 2004 (in
each case, based solely on the terms thereof and without regard to any expected
increase in volumes or revenues), or (B) are reasonably expected
(regardless of the term) to result in aggregate payments by an Acquired Company
of $2,500,000 or more in either calendar years 2005 or 2006;

 

(ii)           (A) any that resulted in aggregate revenues to an
Acquired Company of more than:  (1) two
million five hundred thousand ($2,500,000) dollars during the twelve months ending December 31,
2004 (in each case, based solely on the terms thereof and without regard to any
expected increase in volumes or revenues), or (B) are reasonably expected
(regardless of the term) to result in aggregate revenues by an Acquired Company
of $2,500,000 or more in either calendar years 2005 or 2006;

 

(iii)          any hydrocarbon purchase and sale, transportation,
processing or similar agreement of an Acquired Company that is not terminable
on one hundred eighty (180) days or less notice or that has a remaining term of
more than one hundred eighty (180) days;

 

(iv)          any that is an indenture, mortgage, loan, credit or
sale-leaseback or similar financial agreement or any other agreement
representing indebtedness for borrowed monies where an Acquired Company is a
borrower or a guarantor;

 

(v)           any that constitutes a lease under which an Acquired Company
is the lessor or the lessee of real or personal property, which lease (A) cannot
be terminated by such Acquired Company without penalty upon one hundred eighty
(180) days or less notice and (B) involves an annual base rental of more
than five hundred thousand ($500,000) dollars;

 

(vi)          any between an Acquired Company (other than the Javelina
Partnerships), on the one hand, and the Seller and its Affiliates (other than
the Acquired Companies or any current officer or director of any Acquired
Company), on the other hand, all of which are listed on Schedule 4(g)(vi);

 

(vii)         any with respect to any swap, forward, future or derivative
transaction or option or similar agreement, involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction;

 

(viii)        any entered into on or after December 31, 2004 for the sale of any of the
assets of any Acquired Company (other than Product Inventory sold in the
Ordinary Course of Business), for consideration in excess of five million
dollars ($5,000,000);

 

24

 

(ix)           each agreement that limits or purports to limit the ability
of an Acquired Company to compete in any line of business or with any Person or
in any geographic area or during any period of time that will not expire upon
consummation of the transactions contemplated by this Agreement and that is not
cancelable without penalty or further payment and without more than 30 days’
notice; and

 

(x)            any under which an Acquired
Company provides a guaranty or an indemnity with respect to any obligation of
any Person other than an Acquired Company.

 

Except as set forth on Schedule 4(g)(ii) and
except for any such matters that would not be material, there exists no
breach or default under any Material Contract or New Contract by any Acquired
Company or, to the Seller’s Knowledge, by any other Person that is a party to
such contract.  Except as set forth on Schedule 4(g)(ii) and except for any matter
that would not be material, to the Seller’s Knowledge no event has
occurred that with notice or lapse of time or both would reasonably be expected
to constitute a default under any Material Contract or New Contract by any
Acquired Company or, by any other Person who is a party to such contract.  No Acquired Company has received any written
notice of any material default under any Material Contract or New Contract, and
no Acquired Company has received from any other party to any Material Contract
or New Contract any written notice of such party’s intent to terminate any such
Material Contract.  The Seller has
furnished or made available to the Buyer a true and correct copy of each
Material Contract and New Contract, and each written amendment thereto.  To the Seller’s Knowledge, each Material
Contract and New Contract is in full force and effect and is valid, in each
case according to its terms.

 

(h)           Litigation.  Schedule 4(h) sets
forth each instance in which any of the Acquired Companies or any of the
Acquired Company Assets (A) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (B) is the subject of any
judicial, administrative or arbitral action, suit, or hearing pending before
any Governmental Authority or (C) to the Seller’s Knowledge, threatened
material claim, demand, or notice of violation or liability from any Person or
any investigation or similar proceeding by any Governmental Authority.

 

(i)            Environmental Matters.  To the Seller’s Knowledge, except
as set forth in Schedule 4(i):  (a) since December 31, 2002, the
Acquired Companies and their respective businesses, operations, and properties
have been and are in material compliance with all Environmental Laws and all
permits, registrations, licenses, approvals, exemptions, variances, and other
authorizations required of the Acquired Companies under material Environmental
Laws (the “Environmental Permits”); (b) since
December 31, 2003, the Acquired Companies have obtained or filed for all
material Environmental Permits for their respective businesses, operations, and
properties as they currently exist and all such Environmental Permits are
currently in full force and effect; (c) the Acquired Companies and their
respective businesses, operations, and properties are not subject to any
pending or material threatened claims, actions, suits, investigations,
inquiries or proceedings under Environmental Laws; (d) there have been no
material releases or threatened releases of Hazardous Substances on, under or
from the properties of the Acquired Companies; and (e) the Acquired
Companies have not received any written notice asserting an alleged liability
or obligation under any Environmental Laws against the Acquired Companies with
respect to the actual or alleged Hazardous Substance contamination of any
property offsite of the properties of the Acquired Companies.  To the Seller’s Knowledge,

 

25

 

the Seller has made
available to the Buyer complete copies of each report, study, assessment or
similar document (including any drafts that were prepared by consultants and
presented but not finalized) prepared with respect to any property or asset
(owned now) of any Acquired Company.  To
the Seller’s Knowledge, except for those made available, no other such reports
have been prepared for any Acquired Company or any of their properties during
the last four years.

 

The Seller does not make any
representation or warranty regarding any compliance or failure to comply with,
or any actual or contingent liability under, any Environmental Law, except as
expressly set forth in this Section 4(i).

 

(j)            Title to the Acquired
Company Assets.  Each Acquired
Company has good and marketable title to all of its respective Acquired Company
Assets, in each case free and clear of all Encumbrances, except (w) for
Permitted Encumbrances, (x) for Encumbrances disclosed on Schedule 4(j),
(y) with respect to claims that are not by, through or under such Acquired
Company, the Seller or any Seller Affiliate, and (z) with respect to Rights of
Way.  To the Seller’s Knowledge, each
Acquired Company has good and marketable title to all of its respective
Acquired Company Assets constituting Rights of Way, in each case, free and
clear of all Encumbrances, except (1) for Permitted Encumbrances, (2) for
Encumbrances disclosed on Schedule 4(j),
and (3) with respect to claims that are not by, through or under such
Acquired Company, the Seller or any Seller Affiliate.

 

(k)           Potential Preferential Purchase Rights.  Except as
set forth on Schedule 4(k), there are
no preferential purchase rights, rights of first refusal, options or other
rights held by any Person not a party to this Agreement to purchase or acquire
any or all of the Acquired Company Equity Interests, or any of the assets or
properties of the Acquired Companies, in whole or in part, that would be
triggered or otherwise affected as a result of the transactions contemplated by
this Agreement.

 

(l)            Financial Information.

 

(i)            Schedule 4(l)(i) sets forth (w) the audited
balance sheets as of December 31, 2004 and 2003 and related statements of
operations, cash flows and partners’ capital for the years ended December 31,
2004 and 2003 of Javelina Plant, (x) the audited balance sheets as of December 31,
2003 and 2002 and related statements of operations, cash flows and partners’
capital for the years ended December 31, 2003 and 2002 of Javelina Plant,
(y) the audited balance sheets as of December 31, 2004 and 2003 and
related statements of operations, cash flows and partners’ capital for the
years ended December 31, 2004 and 2003 of Javelina Pipeline and (z) the
audited balance sheets and related statements of operations, cash flows and
partners’ capital of Javelina Pipeline as of December 31, 2003 and 2002
and for the years then ended.  To the Seller’s Knowledge, each
set of the audited financial statements contained in Schedule 4(l)(i) was
prepared in accordance with GAAP and fairly presents, in all material respects,
the financial position and results of operation, cash flows and partners’
capital associated with the ownership and operation of such Persons referenced
therein as of the dates and for the periods indicated.

 

(ii)           Schedule 4(l)(ii) sets forth (x) the
unaudited balance sheet and related statements of operations and cash flows of
Javelina Plant as of May 31, 2005 and for the five

 

26

 

months then ended
and (y) the unaudited balance sheet and related statements of operations and
cash flows of Javelina Pipeline as of May 31, 2005 and for the five months
then ended.  To the Seller’s Knowledge,
each set of unaudited financial information contained in Schedule 4(l)(ii) (1) was
extracted from the corporate financial records of the Javelina Partnerships,
which records are maintained on the same basis on which the Project Manager
maintains its corporate financial records for similarly sized and situated
Persons, (2) was generally maintained and prepared in accordance with GAAP
concepts (except as set forth therein and except for the absence of footnotes,
year-end adjustments, periodic accrual adjustments, transactions and entries
typically eliminated in consolidation, the allocation of overhead and the
effects of the Reorganization Transactions), (3) reasonably presents, in
all material respects, the financial information depicted therein as of the
dates and for the periods indicated and (4) contains the primary
information used by the management of the Seller and its Affiliates to evaluate
the financial performance of the Acquired Companies.

 

(m)          Employee Matters.  None of the Acquired Companies
has any employees.  No Acquired Company
has ever been a party to any labor or collective bargaining agreement.  No Acquired Company has at any time
maintained, contributed to or been an adopting employer of any “employee
benefit plan” (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended), or any other plan, program or policy
of deferred compensation, fringe benefits or other compensatory arrangements
(written or unwritten) for any employees. 
No Acquired Company is liable for any contributions, withdrawal
liability, premiums or other obligations under ERISA pertaining to any employee
benefit plan of the Seller or any of its Affiliates.

 

(n)           Regulatory Matters.  No Seller
Party or Acquired Company is subject to regulation as (i) a “holding
company,” a “subsidiary company” of a “holding company,” an “affiliate” of a “holding
company,” or a “public utility,” as each such term is defined in the Public
Utility Holding Company Act of 1935, as amended, or (ii) an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder; or (iii) a “natural gas company,” as
defined in the Natural Gas Act of 1938, as amended.

 

(o)           No Unrecorded Obligations.  Except
for Unrecorded Obligations:  (i) disclosed,
reflected or reserved against on the face of the balance sheet for the five
months ended May 31, 2005 that are included in the financial information
contained in Schedule 4(l)(ii); (ii) incurred in the Ordinary
Course of Business after May 31, 2005; (iii) arising from the
execution, delivery or performance of this Agreement or any other agreement
contemplated hereby; or (iv) disclosed on any Schedule to this
Agreement, to the Seller’s Knowledge, none of the Acquired Companies has any
material Unrecorded Obligations.

 

(p)           Intellectual Property.  Schedule 4(p)
sets forth all Intellectual Property used by any Acquired Company in the
conduct of its business.  Except as set
forth on Schedule 4(p), the Acquired Companies own or have valid
licenses to use all such Intellectual Property. 
Except as set forth on Schedule 4(p), no Intellectual
Property used by any of the Acquired Companies is the subject of any challenge
received by any of the Acquired Companies in writing, and to the Seller’s
Knowledge, no such challenge has been threatened.

 

27

 

(q)           Sufficiency of the Acquired Company Assets.  Except as
otherwise set forth in this Agreement (including the Reorganization Transactions),
to the Seller’s Knowledge, the Acquired Company Assets constitute all of the
assets (excluding Rights of Way), taken as a whole, that generated the
financial results reflected in the financial information contained in Schedules
4(l)(i) and 4(l)(ii) and attributable to the twelve months
ending December 31, 2004 and the five months ending May 31, 2005.

 

(r)            Bank Accounts.  Other than the Javelina
Partnerships, none of the Acquired Companies maintains any bank accounts.  Schedule 4(r) contains a list, as
of the date of this Agreement, of each bank account of each Javelina
Partnership.

 

(s)           Bonds; Guarantees.  Except as
listed on Schedule 4(s), there are no bonds, guarantees or other
forms of credit support or similar arrangements provided by the Seller or its
Affiliates (other than the Acquired Companies) for the benefit of the Acquired
Companies.

 

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

 

(a)           General.  The Buyer shall use its
commercially reasonable efforts to satisfy the Seller’s conditions to closing
in Section 7(b).  The Seller shall use its commercially
reasonable efforts to satisfy the Buyer’s conditions to closing in Section 7(a).

 

(b)           Notices, Consents and Audited Financial Statements.

 

(i)            The Seller shall use
commercially reasonable efforts to obtain the satisfaction of all Notice and
Consent Requirements (other than with respect to those set forth on Schedules
3(b)(ii) or 3(b)(iii) or required under the HSR Act or FCC
Regulations) on or prior to the Closing Date. 
Each Party agrees that the ROFR Waiver Agreement, when duly executed and
delivered by the parties thereto, shall constitute procurement of the Notice
and Consent Requirements with respect to those matters set forth on Schedule 4(k).  The Buyer shall use commercially reasonable
efforts to obtain all Notice and Consent Requirements with respect to those set
forth on Schedules 3(b)(ii) and 3(b)(iii) (other than
with respect to those required under the HSR Act or FCC Regulations).  Each Party agrees to use commercially
reasonable efforts to cooperate with and assist the other Party in satisfying
the Notice and Consent Requirements for which the other Party is
responsible.  The Seller’s obligations
under the immediately preceding sentence shall survive for 90 days after the
Closing.  Each Party hereby acknowledges
and agrees that the failure to obtain the satisfaction of any Notice and
Consent Requirement, except for those under the HSR Act, shall not delay or
otherwise prohibit the occurrence of the Closing or the consummation of the
transactions contemplated by this Agreement. 
The Seller shall pay all Adverse Consequences arising from or
attributable to the failure to obtain the satisfaction of any Notice and
Consent Requirements required under FCC Regulations, and the Buyer shall pay
for all other Adverse Consequences arising from or attributable to the failure
to obtain the satisfaction of any other Notice and Consent Requirements.

 

(ii)           In addition to the audited financial statements provided in Schedule 4(l)(i),
the Seller will provide unaudited financial statements relating to the Javelina
Partnerships as of and for the period ending in 2005 through June 30,
2005.  The Seller will: (A) cause
the Javelina

 

28

 

Partnerships’
auditors to review such unaudited financial statements, (B) direct such
auditors to provide the Buyer’s auditors access to the auditors’ work papers,
and (C) use commercially reasonable efforts to provide other financial
information reasonably requested by the Buyer. 
The Buyer shall pay and/or reimburse the Seller for all reasonable costs
incurred in connection with the preparation of financial information referenced
in this Section 5(b)(ii), if the Closing occurs or if the Closing
does not occur for any reason other than the default under this Agreement by
the Seller.

 

(c)           Operation of Business.  From the
date of this Agreement to the Closing Date, the Seller shall not, without the
consent of the Buyer (which consent shall not be unreasonably withheld or
delayed), except as expressly contemplated by this Agreement, including Section 5(k), or as contemplated by Schedule 5(c),
cause or (to the extent any Seller Party or its Affiliate has the Legal Right)
permit any of the Acquired Companies to engage in any practice, take any
action, or enter into any transaction outside the Ordinary Course of Business or, with respect to the assets and operations of the
Acquired Companies (with respect to the Javelina Partnerships, to the extent
any Seller Party or any of its Affiliates has the Legal Right), engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business.  Without limiting the
generality of the foregoing, without the consent of the Buyer (which consent
shall not be unreasonably withheld or delayed), except as expressly
contemplated by this Agreement, including Section 5(k) or as
contemplated by Schedule 5(c), or contemplated by the Other
Purchase Agreements (including exhibits and schedules attached thereto), to the
extent the Seller has the Legal Right, the Seller shall cause the Acquired
Companies not to do or agree to do any of the following from the date of this
Agreement to the Closing Date:

 

(i)            issue, sell, pledge, dispose of,
transfer, grant, encumber, or authorize the issuance, sale, pledge,
disposition, transfer or grant of its Equity Interests or any Commitments with
respect to its Equity Interests, or grant (other than the terms currently
provided in the Organizational Documents of any Acquired Company), any
Encumbrance upon its Equity Interests;

 

(ii)           cause or allow any Acquired Company Asset to become subject
to a Lien, except for Permitted Encumbrances;

 

(iii)          execute, amend or terminate (other than the expiration
thereof in accordance with its terms) any material Acquired Company Contract,
except to the extent that any such amendment occurs in the Ordinary Course of
Business and does not materially affect such contract, or enter into any
agreement that, if in effect on the date of this Agreement, would have
constituted a Material Contract;

 

(iv)          (A) acquire (including by merger, consolidation or
acquisition, in whole or in part, of Equity Interests or assets) any corporation,
partnership, limited liability company or other Person or any division thereof
or any material amount of assets on behalf of the Acquired Companies; (B) enter
into any material joint venture, partnership or similar arrangement; (C) incur
any Obligations for borrowed money or any guarantee of indebtedness of any
Person or make any loans or advances, except for intercompany borrowing in the
Ordinary Course of Business among the Acquired Companies and/or the Seller and
its Affiliates (including pursuant to the Cash Pooling Arrangements); or (D) except
for the Retained Assets, sell, lease or

 

29

 

otherwise dispose of any of its material
property or assets other than sales of goods or services in the Ordinary Course
of Business;

 

(v)           declare, set aside, make or pay any dividend or other
distribution (other than cash) in respect of the Equity Interests in the
Acquired Companies (other than the Javelina Partnerships) that are not made
pursuant to the Cash Pooling Arrangements, or repurchase, redeem or otherwise
acquire any outstanding units of membership interest, stock, partnership
interests or other ownership interests in any of the Acquired Companies;

 

(vi)          effect any liquidation (complete or partial), dissolution,
restructuring (other than as contemplated in Section 5(k))
recapitalization, reclassification or like change in the capitalization of any
of the Acquired Companies;

 

(vii)         amend in any material respect the Organizational Documents
of any Acquired Company;

 

(viii)        with respect to Eligible Employees (except to the extent
such action constitutes a Retained Asset or is done in the Ordinary Course of
Business): (1) modify the annual level of compensation of any Eligible
Employee, (2) grant any bonus, benefit or other direct or indirect
compensation to any Eligible Employee, (3) materially increase the
coverage or benefits available (or reduce the employees’ allocable share of
costs or premiums) under any benefit plan or create any new severance pay,
termination pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan or arrangement made to, for,
or with any employee or otherwise modify or amend or terminate any such plan or
arrangement or (4) enter into any employment, deferred compensation,
severance, consulting, non-competition or similar agreement (or amend any such
agreement) to which any of the Acquired Companies is a party and involving an
Eligible Employee, except, in each case, as required by applicable Law from
time to time in effect or by the terms of any benefit plans as in effect on the
date hereof;

 

(ix)           cancel or compromise any material debt or claim of any of
the Acquired Companies, or settle or agree to settle any action to which any of
the Acquired Companies is a party where the terms of such settlement or
agreement adversely impact the Acquired Companies or the operation of their
assets or business after such settlement or agreement;

 

(x)            enter into any commitment for
capital expenditures of any of the Acquired Companies in excess of $2,000,000
for all commitments in the aggregate that will not be paid before Closing,
except for reasonable capital expenditures made in connection with any
emergency or force majeure events affecting any of the Acquired Companies;

 

(xi)           enter into any labor or collective bargaining agreement or,
through negotiations or otherwise, make any commitment or incur any liability
to any labor organizations; and

 

(xii)          change any tax elections or, except to the extent done in
the Ordinary Course of Business, change any accounting principles or practices
used by the Acquired Companies
except as:  (1) required by Law or
GAAP, and (2) with prior written notice to the Buyer;

 

30

 

(xiii)         allow any material Permits held by any of the Acquired
Companies to terminate or lapse; or

 

provided, that notwithstanding any provision of this Section 5(c), each Acquired Company shall be
entitled to make or incur capital expenditures in accordance with the
terms of the Organizational Documents relating to the Javelina Partnerships and
the capital
expenditures budget set forth on Schedule 5(c)(x).

 

(d)           Affirmative
Covenants.  Except as expressly
contemplated by this Agreement, including Section 5(k) or as
contemplated by Schedule 5(c), or contemplated by the Other
Purchase Agreements (including exhibits and schedules thereto), to the extent
the Seller has the Legal Right, the Seller shall cause the Acquired Companies
to do the following from the date of this Agreement to the Closing Date:

 

(i)            use its commercially reasonable
efforts to (1) preserve in all material respects the Acquired Companies’
present business, operations, organization and goodwill and (2) preserve
its present relationships with customers and suppliers;

 

(ii)           maintain and repair in the Ordinary Course of Business the
operating assets of the Acquired Companies, normal wear and tear excepted; and

 

(iii)          provide the Buyer with copies of any amendments of
Organizational Documents of any Acquired Company that are not otherwise
prohibited by Section 5(c)(vii).

 

(e)           Damage or
Condemnation.  If, before Closing,
any part of the Acquired Company Assets are damaged or destroyed, or are
condemned, or if proceedings are filed for condemnation or under the right of
eminent domain that results in damage, destruction or condemnation of property
with (A) in the case of the Acquired Companies (other than the Javelina
Partnerships), a fair market value (as determined by the Parties), or (B) in
the case of the Javelina Partnerships, the Javelina Percentage Interest of a
fair market value (as determined by the Parties), in the aggregate of (i) 10% or less of the Purchase Price, the
Purchase Price shall be reduced by (x) in the case of the Acquired Companies
(other than the Javelina Partnerships) such amount, or (y) in the case of the
Javelina Partnerships, the Javelina Percentage Interest of such amount, the
Parties shall be obligated to proceed with the Closing, and the Seller shall
retain, or to the extent received by any Acquired Company or the Buyer following
the Closing, the Buyer or such Acquired Company shall pay to the Seller, all
property casualty insurance proceeds payable to the Seller or its Affiliates
relating to such damage, destruction or condemnation, and (ii) more than
10% of the Purchase Price, the Buyer shall not be obligated to consummate the
Closing, provided that, in lieu of electing not to close, the Buyer may elect:
(x) to offer to extend the date for Closing to allow the Seller the opportunity
(in the Seller’s sole discretion) to repair or replace, or to cause the repair
or replacement of, any such damaged or destroyed assets; or (y) accept the
Acquired Company Equity Interests, notwithstanding any such destruction,
taking, or pending or threatened taking (without reduction of the Purchase
Price therefor), in which case the Seller shall pay to the Buyer all property
casualty insurance proceeds actually received by the Seller or any of its
Affiliates that are not required to be paid by any of them as a reimbursement
to any property casualty insurance providers of the Seller and its Affiliates
by reason of the destruction, or taking of such assets, to the extent such sums
are not committed, used or applied

 

31

 

by the Seller or any of its Affiliates or the Javelina Partnerships
prior to the Closing Date to repair, restore or replace such damaged or taken
assets, and shall assign and transfer to the Buyer, or subrogate the Buyer to,
all of the right, title and interest of the Seller and its Affiliates in and to
any such unpaid awards or other payments arising out of the destruction,
taking, or pending or threatened taking that are actually received by the
Seller or any of its Affiliates and that are not required to be paid by any of
them as a reimbursement to any property casualty insurance providers of the
Seller and its Affiliates and the Javelina Partnerships.  If any such payments payable to the Buyer
under this Section 5(e) are not assignable, the Seller will collect such payments at the Buyer’s expense
and remit all such amounts, less any related expenses, to the Buyer as such are
collected.  Prior to the Closing, to the
extent it has the Legal Right, the Seller shall not compromise, settle or
adjust any amounts payable to the Buyer under clause (y) above, without first
obtaining the written consent of the Buyer, which consent shall not be
unreasonably withheld or delayed.  The
Buyer’s election under this
Section 5(e) shall expire twenty (20) days after the
earlier to occur of the date this Agreement terminates or the date on which the Buyer receives
written notice from the Seller describing in reasonable detail the nature and
amount becomes aware of such damage, destruction or proposed condemnation.

 

(f)            Access.

 

(i)            Books and Records.  To the extent they have the Legal Right, the
Seller shall permit, and shall cause its Affiliates to permit, representatives
of the Buyer to have full access at all reasonable times and upon reasonable
notice, and in a manner so as not to interfere with the normal business
operations of the Seller and its Affiliates and the Javelina Partnerships, to
all personnel, books, records (including Tax Records), contracts, and documents
of or pertaining to any of the Acquired Companies, excluding such files, books,
records, information and data constituting Retained Assets.  Without limiting the foregoing, the Seller
agrees to continue to make the information and data in the electronic data room
available to the Buyer.  All
investigations and due diligence conducted by the Buyer or any of its
representatives shall be conducted at the Buyer’s sole cost, risk and
expense.  To the extent they have the
Legal Right, the Seller shall, and shall cause the Acquired Companies and their
respective officers, employees, consultants, agents, accountants, attorneys and
other representatives to, use commercially reasonable efforts to cooperate with
the Buyer and the Buyer’s representatives in connection with such investigation
and examination.

 

(ii)           Site Access. 

 

(A)          Subject
to the terms and conditions of this Agreement, the Seller (with respect to each
Javelina Partnership, to the extent it has the Legal Right) hereby grants to
the Buyer and the Buyer Diligence Representatives the right to enter upon the
Acquired Company Assets for the purpose of making, and hereby grants to the
Buyer and the Buyer Diligence Representatives, the right to make, a reasonable
examination and inspection of the Acquired Company Assets, together with any
activities incidental thereto (the “Access Right”);
provided, however,
that the Access Right and any environmental examination conducted in connection
therewith shall not permit the Buyer to conduct any invasive procedures
(collectively, such examination, inspection and incidental activities, as so
qualified, are the “Diligence Activities”).  Neither the Buyer nor any Buyer Diligence
Representative shall engage in any activities on the Acquired Company Assets
other than the Diligence Activities.

 

32

 

(B)           The
Buyer shall provide the Seller reasonable written notice of the date and time
on which the Diligence Activities are expected to be conducted.

 

(C)           During
all periods that the Buyer and/or the Buyer Diligence Representatives are on
the Acquired Company Assets to conduct the Diligence Activities, and for a
one-year period thereafter, the Buyer and the Buyer Diligence Representatives
shall maintain policies of insurance, at its sole cost and expense and with
insurers reasonably satisfactory to the Seller as provided in Schedule
5(f)(ii).  Coverage under all
insurance required to be carried by the Buyer hereunder shall (w) be primary
insurance, (x) list the Seller as a “loss payee” or “additional insured” (as
applicable), (y) waive subrogation against the Seller and (z) provide for
thirty (30) days prior notice to the Seller in the event of cancellation or
modification of the policy or reduction in coverage.  The Buyer and the Buyer Diligence
Representatives shall provide evidence of such insurance to the Seller prior to
exercising their Access Rights.

 

(D)          The
Diligence Activities shall occur at reasonable times, in a manner so as not to
unreasonably interfere with the normal business operations of the Seller, its
Affiliates, any of the Javelina Partnerships or any other Person.  The Seller shall have the right to accompany
the Buyer and/or the Buyer Diligence Representatives whenever they are on site
on the Acquired Company Assets.   Buyer
and/or the Buyer Diligence Representatives shall coordinate any inspection or
assessment so as to minimize any inconvenience to or interruption of the
conduct of business of the Acquired Companies and their Affiliates.  The Buyer and/or the Buyer Diligence
Representatives shall abide by any relevant Person’s safety rules, regulations
and operating policies while conducting any Activities.

 

(E)           Except
insofar as reasonably necessary to carry out the Diligence Activities, all
vehicles brought by the Buyer and the Buyer Diligence Representatives onto the
Acquired Company Assets will be restricted to existing roadways, if any, on the
Acquired Company Assets.

 

(F)           All
Diligence Activities conducted or performed by the Buyer and the Buyer
Diligence Representatives on the Acquired Company Assets shall be conducted and
performed in material compliance with all applicable Laws, including
Environmental Laws.

 

(G)           The
Diligence Activities shall be conducted at the Buyer’s sole cost, risk and
expense.  Upon completion of the
Diligence Activities, the Buyer shall at its sole cost and expense and without
any cost or expense to the Seller or its Affiliates or the Javelina
Partnerships, (w) repair all damage done to the Acquired Company Assets in
connection with the performance of the Diligence Activities by the Buyer and
the Buyer Diligence Representatives, (x) restore the Acquired Company Assets to
the approximately same or better condition than they were prior to commencement
of the Diligence Activities, (y) remove all equipment, tools or other property
brought onto the Acquired Company Assets by the Buyer and the Buyer Diligence
Representatives in connection with the Diligence Activities and (z) return all
documents and copies of documents pertaining to the Acquired Company Assets.

 

(H)          The
Access Right shall remain in full force and effect until the earlier to occur
of (w) the date on which the Buyer notifies the Seller in writing that the
Buyer or any

 

33

 

Buyer Diligence Representative
is not continuing to perform with reasonable diligence any Diligence Activities
on the Acquired Company Assets, (x) the date on which the Buyer materially
breaches or violates any of the covenants or agreements contained in this Section
5(f)(ii); provided that such Access Rights
will resume when the Buyer provides reasonable assurance that such breach or
violation will not occur again and any continuing breach or violation is cured,
(y) the date this Agreement is terminated pursuant to Section 10 or (z)
the Closing Date.

 

(g)           HSR Act.  The Parties shall prepare, as soon as is
practicable, but in any event within ten (10) business days following the execution of this Agreement, all necessary
filings in connection with the transactions contemplated by this Agreement that
may be required under the HSR Act.  The
Parties shall submit such filings to the appropriate Governmental Authority as
soon as practicable after the execution hereof for filings under the HSR
Act.  The Parties shall request early
termination of the waiting period under the HSR Act for the HSR Act filing,
shall promptly make any appropriate or necessary subsequent or supplemental
filings and shall cooperate in the preparation of such filings as is reasonably
necessary and appropriate.  The Parties
shall use their respective commercially reasonable efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated hereby under any antitrust or trade regulatory laws of any
Governmental Authority.  The Buyer and the Seller agree to take all
actions that may be required by the FTC in order to consummate the transactions
contemplated hereby as soon as reasonably practicable, except agreeing to sell,
hold separate or otherwise dispose of any business or assets so required to be
sold, held separate or disposed of by the FTC. 
The Buyer shall pay 100% of all filing fees in connection with all
filings under the HSR Act.

 

(h)           Intercompany
Transactions.  Those agreements
listed on Schedule 4(g)(vi) that are also listed on Schedule
5(h)(i) shall be terminated as of the Closing, in such manner as the
Seller or its applicable Affiliates shall specify, without imposing liabilities
or expenses upon the Buyer, and none of the parties to such agreements shall
have any further liability or obligation in respect of any such transaction or
arrangement.  The Seller shall have the
right to settle any and all intercompany balances at any time (and from time to
time) up to and at the Closing in any manner as it so chooses, including
payment, offset, capitalization or otherwise; provided that, such settlements
shall be appropriately reflected in the calculation of Working Capital.

 

(i)            Notices and Effect
of Supplements to Schedules.  Each
Party will, promptly upon becoming aware of any fact, matter, circumstance or
event, which fact, matter, circumstance or event arose either (x) on or prior
to the date hereof or (y) after the date hereof but prior to the Closing, in
any case, (i) causing or that reasonably could cause either Party to be in
breach or violation of any of its representations, warranties, covenants or
agreements under this Agreement, give notice to such other Party with respect
to such fact, matter, circumstance or event, or (ii) requiring
supplementation or amendment of the schedules provided by the Parties attached
hereto, supplement or amend such schedules to this Agreement to reflect any
fact, matter, circumstance or event, which, if existing, occurring or known on
the date of this Agreement, would have been required to be set forth or
described in such schedules which were or have been rendered inaccurate
thereby.  Each Party will notify the
other Party promptly after the discovery by such Party that any representation
or warranty of the other Party contained in this Agreement is, becomes or will
be untrue in any material respect on or before the Closing

 

34

 

Date.  No such supplement or
amendment will amend or modify this Agreement or the Schedules in any
way for any purpose.

 

(j)            Eligible
Employees.  

 

(i)            Eligible Employees; Access.  Schedule 5(j) contains a list of
each employee of the Seller or its Affiliates to whom the Buyer may offer
employment (collectively, the “Eligible Employees”), which list also indicates
the Eligible Employees whom the Seller may need to retain or employ for a limited
time (not to exceed 90 days) after the Closing to address transitional matters
(collectively, the “Potential Delayed Hire Eligible Employees”).  Schedule 5(j) lists each current
employee of the Seller and its Affiliates that are primarily involved in the
businesses of the Acquired Companies.  Schedule 5(j)
also sets forth for each such employee, together with the years of service with
the Seller or its Affiliates and any predecessors that are currently credited
for the purpose of determining benefits for such employee.  The Buyer shall have the right, but not the
obligation, to enter into an employment agreement with each Eligible
Employee.  In order that the Buyer may
evaluate the possible employment of the Eligible Employees, two business days
after the date of this Agreement for those applicable locations in Houston,
Texas (and as soon thereafter as is reasonably practicable in all other
applicable locations), the Buyer, shall be entitled (x) to access employee
information relating to each Eligible Employee, to the extent permissible under
applicable Laws (including any limitations applicable to medical or any other
records), and (y) during normal business hours, to consult with the Eligible
Employees; such consultation which will be scheduled to reasonably accommodate
the schedules of both the Eligible Employee and the Seller.  At any time on or before Closing, the Seller
may add or delete individuals from the list of Eligible Employees as a result
of the hiring or the voluntary or involuntary termination of Eligible Employees
or similar circumstances involving Eligible Employees or to maintain the safe
and efficient operation of the assets and may reclassify any Eligible Employee
within the possible sub-classifications.

 

(ii)           Offers of Employment. The Buyer shall have no
obligation to offer employment to any Eligible Employee.  If the Buyer chooses to offer employment to
any Eligible Employee, the Buyer shall extend such offer within the thirty (30)
day period immediately following the date of this Agreement.  Any such offer shall include the following
terms:  the employment shall be (v) effective
as of the relevant Transferred Employee Start Date, (w) on a full-time, if the
relevant Eligible Employee had full-time status as of the date of this
Agreement, or a part-time, if the relevant Eligible Employee had part-time
status as of the date of this Agreement, basis, (x) at base salaries and wages
to each such Eligible Employees no less favorable than the base salaries and
wages of such Eligible Employees as of the date of this Agreement, (y) with
employee benefits that are no less favorable than those provided to similarly
situated employees of the Buyer and its Affiliates immediately prior to
Closing, and (z) at a location that does not require relocation by any of the
Eligible Employees.  Any offer to a
Potential Delayed Hire Eligible Employee may be conditioned upon the
Transferred Employee Start Date occurring no later than six months after the
Closing Date.  The Buyer will give each
Eligible Employee to whom an offer of employment is made no less than seven (7) days
from the date the offer is made to accept or reject the employment offer.  The Buyer shall notify the Seller of each
Eligible Employee that has accepted the offer of employment as promptly as
possible after such indication, but in no event later than three (3) days
prior to the Closing Date.  The

 

35

 

Buyer will, and will cause its applicable
Affiliates to, evaluate and make hiring decisions with respect to the Eligible
Employees in accordance with applicable Law. 
Nothing in this paragraph shall be construed to require the Buyer to
provide post retirement medical benefits to the Eligible Employees.

 

(iii)          Timing of Transfer.  All Transferred Employees shall become
employees of the Buyer or its Affiliates as of 12:00:01 a.m. of the
respective local time where the Transferred Employees are located on the
relevant Transferred Employee Start Date; provided, that
if any Transferred Employee is on a leave of absence approved by the Seller or
any of its Affiliates on what would otherwise be such employee’s Transferred
Employee Start Date, such employee shall not become an employee of the Buyer or
its Affiliates on that date.  Such
employee’s Transferred Employee Start Date shall be postponed until the first
day of the month following the expiration of such leave, provided
such employee is otherwise able to commence active employment and the Buyer’s
offer of employment remains in effect at that time.  At such time, the Buyer and its Affiliates
shall become responsible for payment of all salaries, wages and benefits and
all other claims, costs, expenses, liabilities and other obligations relating
to the employment of the Transferred Employees incurred from and after such
time.  The Seller or its Affiliate, as
the case may be, shall be responsible for all salaries, wages, and benefits and
all other claims, costs, expenses, liabilities and other obligations related to
the employment or termination the Transferred Employees incurred prior to such
time.  For purposes of medical, dental,
vision, disability and other similar benefits, a claim will be deemed to have
been incurred upon the incurrence of a qualified expense for which
reimbursement or payment is sought.

 

(iv)          Participation in Plans.  All Transferred Employees shall cease active
participation in all plans, programs and arrangements of the Seller and its
Affiliates relating to compensation and employee benefits as of 11:59 p.m.
on the day immediately prior to the relevant Transferred Employee Start Date,
and shall, from and after such time, be permitted to participate in the Buyer
Plans.  No liability arising under any
Seller plan, program or benefit is assumed by the Buyer or any Buyer Plan, and
any such liabilities of the Acquired Companies will be the responsibility of
the Seller.  Each of the Acquired
Companies shall be deemed to have withdrawn from any such plan, program or
benefit and each such plan, program or benefit shall be deemed terminated with
respect to the Acquired Companies effective at such time and date.

 

(v)           Credit for Service.  To the extent that any Transferred Employees
become eligible to participate in any Buyer Plan, for purposes of determining
eligibility to participate and vesting, service with the Seller or its
Affiliates shall be treated as service under such Buyer Plan other than Buyer’s
bonus program.  Such credited service
shall also be recognized for purposes of satisfying any pre-existing
conditions, actively at work exclusions and waiting periods with respect to
participation by and coverage of the Transferred Employees and their eligible
dependents in the Buyer Plans.  In
addition, with respect to the Transferred Employees, the Buyer shall use its
commercially reasonable efforts to cause all Persons administering or
underwriting any Buyer Plans that are group health plans, at no out-of-pocket
cost to the Buyer or the Acquired Companies, to (y) waive any pre-existing
conditions, unless such conditions are excluded under the Seller’s or the Buyer’s
group health plan, and so long as there is not a gap in creditable coverage of
sixty-three (63) days or more, any waiting periods with respect to the
Transferred Employees and their eligible dependents, and (z) waive any
actively-at-work exclusions.

 

36

 

(vi)          Termination.

 

(A)          If
the employment of any Transferred Employee is terminated by the Buyer or its
Affiliates within one year following the relevant Transferred Employee Start
Date (other than for termination due to violation of generally applicable
policies of such Persons or other circumstances reasonably constituting cause),
then the Buyer shall, or shall cause such Affiliate to, provide such
Transferred Employee with severance pay as set forth on Schedule 5(j)(vi) hereto.

 

(B)           The
Seller shall retain liability and responsibility for the payment of severance
benefits (if any), incurred on or prior to the Closing Date as a result of any
Adverse Consequences, including the termination or transfer of employment of
any current or past employee from the Seller or its Affiliates on or prior to
the Closing Date; provided that, if the employment of any Retained Employee is
terminated by the Seller or its Affiliates as a result of the transactions
contemplated in this Agreement and the Buyer hires such terminated Retained
Employee within one year following the Closing Date, the Buyer shall reimburse
the Seller for the Prorated Retained Employee Severance Amount applicable to
such Retained Employee.

 

(vii)         Paid Time Off. With regard to vacation
allowances, Transferred Employees shall be eligible to begin accruing vacation
benefits as of the Transferred Employee Start Date, and the Buyer shall
provide, or shall cause the Acquired Companies to provide, credit for each
Transferred Employee’s service with the Seller, the Acquired Companies and
their respective Affiliates to the same extent as such service was recognized
by each of them immediately prior to the Transferred Employee Start Date,
provided that (i) the number of vacation days to which each Transferred
Employee will be entitled following the Transferred Employee Start Date shall
be determined exclusively under the Buyer’s vacation policies; (ii) the
number of vacation days available to any Transferred Employee under the Buyer’s
policies for its fiscal year that includes the Transferred Employee Start Date
shall be pro-rated based on the number of days between the Transferred Employee
Start Date and the last day of that fiscal year; and (iii) the Buyer will
not provide any credit or compensation for unused vacation days accumulated
with the Seller, any Acquired Company or their respective Affiliates.  With regard to other paid time off, it is
understood that the Buyer does not currently have a program of sick days or
paid time off allowances and nothing in this Agreement shall be construed to
require the Buyer to adopt any such program. 
Any liability for vacation days, hours or other vacation allowances, sick
days or other paid time off accrued by Transferred Employees prior to the
Transferred Employee Start Date shall be the responsibility of the Seller and
the Seller agrees to pay each Transferred Employee for all accrued but not
taken paid time off accrued under the Seller Plans through the Transferred
Employee Start Date within thirty (30) days after the Transferred Employee
Start Date.  With regard to any other
employee benefit plans of the Buyer or its Affiliates, Transferred Employees
will receive credit for service on the same basis as other similarly situated
employees of the Buyer or its Affiliates.

 

(viii)        WARN Act.  The Buyer will not engage within sixty (60)
days after the Closing Date in a “plant closing” or “mass layoff” (as such
terms are defined in the Worker Adjustment and Retraining Notification Act, as
amended, or any similar state law) at any Facility.

 

37

 

(ix)           Retained Employees.  From the
date of this Agreement until one year from and after the Closing Date, the
Buyer agrees not to (and shall not permit any of its Affiliates to) solicit,
offer employment to or employ any Retained Employee without the prior written
consent of the Seller; provided that, the foregoing shall not prohibit general
solicitations of employment not specifically directed toward such employees of
the Seller or its Affiliates or the hiring of such employees in response
thereto, nor the hiring, employment or engagement of any such employee of the
Seller or its Affiliates who presents himself or herself for employment without
direct or indirect solicitation by the Buyer or any Affiliate of the
Buyer.  The Seller and its Affiliates may
retain the services of any Retained Employee or terminate any such Retained
Employee’s employment at any time.  The
Seller and its Affiliates shall retain liability and be responsible for the
Retained Employee Obligations.  From the
date of this Agreement until one year from and after the Closing Date, the Seller shall not, and shall cause its Affiliates
not to, cause, solicit, induce or encourage any Transferred Employees to leave
their employment with the Buyer or its Affiliates; provided that, the foregoing
shall not prohibit general solicitations of employment not specifically
directed toward such employees of the Buyer or its Affiliates or the hiring of
such employees in response thereto, nor the hiring, employment or engagement of
any such employee of the Buyer or its Affiliates who presents himself or
herself for employment without direct or indirect solicitation by the Seller or any Affiliate of the Seller.

 

(x)            COBRA.  The Buyer shall provide and be solely
responsible for any continuation coverage required under Section 4980 of
the Code, Part 6 of Title I of ERISA or applicable state law (“COBRA”) to each
Transferred Employee or any person related to such Transferred Employee who is
a “qualified beneficiary” as that term is defined in COBRA whose first “qualifying
event” (as defined in COBRA) occurs after the Transferred Employee actually
commences participation in the Buyer’s group medical plan.  The Seller shall be solely responsible for
any other COBRA health care continuation claims of Transferred Employees and
their qualified beneficiaries.

 

(xi)           Deductible
Reimbursements.  Within sixty (60)
days following the Transferred Employee Start Date, the Seller shall deliver to
the Buyer a list of the deductible expenses paid by each Transferred Employee
under the Seller Plans during the current plan year up to the Closing Date and
the maximum deductible under the Seller Plan in which the Transferred Employee
was enrolled immediately prior to Closing (the “Deductible
Notice”).  From and after
the Closing Date through December 31, 2005, the Buyer shall reimburse each
Transferred Employee for any and all amounts paid by such Transferred Employee
that exceed the maximum deductible identified for such Transferred Employee on
the Deductible Notice; provided, that
the Transferred Employee provides to the Buyer the explanation of benefits sent
to them by their insurance provider as proof of such payment.  The Parties acknowledge and agree that
nothing in this Section 5(j)(xi) obligates the Buyer to reimburse a
Transferred Employee for coinsurance or maximum out-of-pocket amounts.

 

(k)           Reorganization
Transactions.  To the extent not
completed prior to the date of this Agreement, the Seller shall, or shall cause
its applicable Affiliates and, to the extent it has the Legal Right, each of
the Javelina Partnerships to, perform each of the Reorganization Transactions.

 

38

 

(l)            Surety Bonds;
Guarantees.  The Buyer agrees to
replace on or before the Closing Date each of the surety bonds or guarantees
issued by the Seller or any of its Affiliates with respect to the Acquired
Companies that are listed on Schedule 5(l).

 

(m)          No Shop.  The Seller shall not, and shall cause (to the
extent it has the Legal Right) its Affiliates and its and their directors,
officers and similar agents not to, (i) solicit, initiate or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of any of the Acquired Company Equity Interests or any substantial portion of
the Acquired Company Assets (including any acquisition structured as a merger,
consolidation or share exchange) or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. 
The Seller will use commercially reasonable efforts to cause its
financial advisors and other representatives not to do any of the foregoing.

 

(n)           Transition Services.  The Parties agree to negotiate in good faith
and enter into, execute and deliver to each other Annex I and Annex
II to the Transition Services Agreement; provided,
however, that, under the Transition
Services Agreement, the fee structure shall be based on the following: (x)
personnel costs shall be based on 150% of the base salaries of the applicable
personnel performing services thereunder, (y) costs for third party goods and
services shall be based on the amounts paid by the applicable service provider
for such goods and services and (z) a fee to be negotiated in good faith shall
be charged to cover the costs of various computer systems, communications and
network systems and other information technology.

 

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

 

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

 

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

 

(c)           Delivery and
Retention of Records.  Within
forty-five (45) days after the Closing Date, the Seller shall (with respect to
each of the Javelina Partnerships, to the extent the Seller or its Affiliate
have the Legal Right) deliver or cause to be delivered to the Buyer, copies of
Tax

 

39

 

Records which are relevant to Post-Closing Tax Periods and all other
files, books, records, information and data relating to the Acquired Companies,
including the Electronic Data and a CD containing all the information and data
contained in the electronic data room (other than Tax Records) that are in the
possession or control of the Seller or any of its Affiliates (excluding such
files, books, records, information and data constituting Retained Assets, the “Records”).  The
Buyer agrees to (i) hold the Records and not to destroy or dispose of any
thereof for a period of five (5) years from the Closing Date or such
longer time as may be required by Law, provided that, if it desires to destroy
or dispose of such Records during such period, it shall first offer in writing
at least sixty (60) days before such destruction or disposition to surrender
them to the Seller and if the Seller does not accept such offer within thirty
(30) days after receipt of such offer, the Buyer may take such action and (ii) following
the Closing Date to afford the Seller, its accountants, and counsel, during
normal business hours, upon reasonable request, full access to the Records and
to the Buyer’s employees to the extent that such access may be requested for
any legitimate purpose at no cost to the Seller (other than for reasonable
out-of-pocket expenses); provided that such access shall not be
construed to require the disclosure of Records that would cause the waiver of
any attorney-client, work product, or like privilege or cause the breach of any
confidentiality agreement; provided, further that in the event of
any litigation nothing herein shall limit either Party’s rights of discovery
under applicable Law.  All post-Closing
access to the Records and to the Buyer’s employees will be subject to
confidentiality obligations under Section 11(a).

 

(d)           Pipeline Markers and
El Paso Marks.  The Buyer
acknowledges and agrees that it obtains no right, title, interest, license or
any other right whatsoever to use the El Paso Marks and that the Seller and its
Affiliates do not have any Obligation to the Buyer with respect to the
establishment, registration or maintenance, whether prior to, on or after the
Closing, of any of the El Paso Marks, including any rights, title, interest or
license to use any El Paso Marks.  The
Buyer will not do any business or offer any goods or services under the El Paso
Marks.  The Buyer will not send, or cause
to be sent, any correspondence or other materials to any Person on any
stationery that contains any El Paso Marks or otherwise operate any Acquired
Company in any manner which would or might confuse any Person into believing
that the Buyer has any right, title, interest, or license to use the El Paso
Marks.  Within one hundred eighty (180)
days after the Closing Date, the Buyer shall remove the El Paso Marks from the
pipeline and facility markers, decals, logos and other signage on the real and
personal property of each Acquired Company referring to the Seller or any of
its Affiliates.  As promptly as
practicable after the Closing, the Buyer shall post the Buyer’s emergency
contact telephone numbers in place of any of the Seller’s or its Affiliates’
emergency contact telephone numbers.

 

(e)           Payments.  The Seller will promptly, after receipt
thereof, pay to the Buyer or the appropriate Acquired Company, any amounts
received by the Seller and its Affiliates after Closing that relate to the
business or operations of any Acquired Company (whether before or after the
Effective Time).  The Buyer will promptly,
after receipt thereof, pay, or cause the Acquired Companies to pay, to the
Seller any amounts (or, in the case of the Javelina Partnerships, the Javelina
Percentage Interest of any amounts) received by the Buyer and its Affiliates
and the Javelina Partnerships after Closing that should have been paid to the
Seller or its Affiliates.

 

40

 

(f)            Accounts Receivable.  To the extent any Acquired Company receives
cash payments with respect to its accounts receivable that were excluded from
Working Capital, the Buyer shall, or shall cause the applicable Acquired
Company to, promptly remit such payments (or, in the case of the Javelina
Partnerships, the Javelina Percentage Interest of such payments) to the Seller.  Towards this end, the Seller shall have the
right for two (2) years after the Closing Date to inspect and examine the
Records of the applicable Acquired Companies to determine compliance by the
Buyer with the provisions of this Section 6(f).

 

(g)           Post-Closing
Environmental Filings.  The Buyer
shall prepare (or cause to be prepared) and file (or cause to be filed) any
environmental reports, filings or certifications to any Governmental Authority
(including such filings involving periods that straddle the Effective Time)
with respect to the Acquired Company Assets or the Acquired Companies.  The Seller shall cooperate fully (with
respect to the Javelina Partnerships, to the extent it has the Legal Right), as
and to the extent reasonably requested by the Buyer, in connection with such
reports, filings, or certifications to be made by the Buyer.

 

(h)           Mutual Mistake.  If the Parties determine that the Seller and
its Affiliates did not transfer to one of the Acquired Companies any material
asset that the Parties mutually agree they both intended to be included as an
Acquired Company Asset, the Parties will cooperate to effect such transfer as
promptly as practical.

 

(i)            Real Property
Matters.  Except as represented and
warranted under Section 4(j), with respect to any and all real property
interests owned by any Acquired Company on the Effective Time, the Buyer shall,
and shall cause its applicable Affiliates to (i) waive any and all rights
of substitution and subrogation in and to any covenants and warranties (whether
arising under title documents, contracts, laws or otherwise) providing title
claims against the Seller and any of its Affiliates that is a predecessor in
title of any Acquired Company and (ii) release, forgive and otherwise
discharge and otherwise not pursue any claim, right or other cause of action in
favor of it or its Affiliates against the Seller or any of its Affiliates to
the extent same relates to title to any such real property interests.

 

(j)            Operatorship and
ROFR Matters.  The Buyer and the Seller
acknowledge that (i) Javelina Holding is the Project Manager of the
Javelina Partnerships pursuant to the partnership agreements of the Javelina
Partnerships and the Javelina Operating Agreements, and (ii) as of even
date herewith, the partners of the Javelina Partnerships executed and delivered
the ROFR Waiver Agreement, which provides (among other things) that Javelina
Holding will remain the Project Manager after the Closing pursuant to the terms
of the Javelina Operating Agreements and that those partners waive certain
preferential purchase rights provisions, which may or may not apply to the
transactions contemplated by this Agreement.

 

41

 

7.             Conditions to
Obligation to Close.  All proceedings
to be taken and all documents to be exchanged and delivered by all parties at
the Closing shall be deemed to have been taken and executed simultaneously
unless otherwise provided in this Agreement, and no proceedings shall be deemed
taken nor any documents executed or delivered until all have been taken,
executed, and delivered.

 

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

 

(i)            (A) the representations and
warranties of the Seller contained in Sections 3(a) and 4
shall be true and correct (without giving effect to any qualification as to
materiality or any supplements or amendments to the Schedules made
pursuant to Section 5(i)) as of the date of this Agreement and at
Closing (except for those that refer to a specific date, which must be true and
correct (without giving effect to any qualification as to materiality or any
supplements to the Schedules made pursuant to Section 5(i))
as of such date, except where all inaccuracies of such representations and
warranties would (or could reasonably be expected to) result in Adverse
Consequences constituting (in the aggregate) less than a Material Adverse Effect,
and (B) the Seller shall have performed in all material respects with all
of its covenants and agreements hereunder;

 

(ii)           there must not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement or any suit or action pending by a Governmental
Authority to enjoin the consummation of any of the transactions, contemplated
by this Agreement;

 

(iii)          any required waiting period under the HSR Act shall have
expired or early termination shall have been granted with respect to such
period;

 

(iv)          if there has been damage, destruction or condemnation of the
type described in the first sentence of Section 5(e),
the Buyer’s election to close must have been exercised and, in the case of Section 5(e)(ii)(x), agreed to by the
Seller;

 

(v)           the Seller shall have delivered, or caused to be delivered,
to the Buyer the unaudited financial statements of the Javelina Partnerships
reviewed by the auditors of the Javelina Partnerships for the period ending June 30,
2005, and if Closing is after October 31, 2005, the unaudited financial
statements of the Javelina Partnerships reviewed by the auditors of the
Javelina Partnerships for the calendar quarter ending September 30, 2005,
all in conformance with the requirements set forth in

Section 5(b)(ii);

 

(vi)          the Seller shall have delivered, or caused to be delivered,
to the Buyer each Transaction Agreement to which any Seller Party is a party
and, to the extent the Seller has the Legal Right, any Javelina Partnership is
a party.

 

(vii)         the Seller shall have delivered, or caused to be delivered,
to the Buyer evidence of the resignation or removal of any officers (x) of the
Acquired Companies (other than the Javelina Partnerships) and (y) of the
Javelina Partnerships that the Seller has the Legal Right to so remove or to
cause to so resign, in each case that the Buyer has not identified to the
Seller

 

42

 

within a reasonable period of time before Closing
as an officer that will be continuing with the applicable Acquired Company in
that capacity after the Closing;

 

(viii)        each of the Commercial Agreements shall have been executed
and delivered by each of the parties thereto; and

 

(ix)           with respect to each Other Purchase Agreement, the Closing
(as defined in such Other Purchase Agreement) under such Other Purchase
Agreement shall have occurred simultaneously with the Closing.

 

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

 

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

 

(i)            (A) the representations and
warranties of the Buyer contained in Section 3(b) shall be true and correct
(without giving effect to any qualification as to materiality or any
supplements or amendments to the Schedules made pursuant to Section 5(i))
as of the date of this Agreement and at Closing (except for those that refer to
a specific date, which must be true and correct (without giving effect to any
qualification as to materiality or any supplements to the Schedules made
pursuant to Section 5(i)) as of such date), except where all
inaccuracies of such representations and warranties would (or could reasonably
be expected to) not adversely affect the ability of the Buyer to consummate the
transactions contemplated by this Agreement, and (B) the Buyer shall have
performed in all material respects with all of its covenants and agreements
hereunder;

 

(ii)           there must not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement or any suit or action pending by a Governmental
Authority to enjoin the consummation of any of the transactions, contemplated
by this Agreement;

 

(iii)          any required waiting period under the HSR Act shall have
expired or early termination shall have been granted with respect to such
period;

 

(iv)          if there has been damage, destruction or condemnation of the
type described in the first sentence of Section 5(e),
the Buyer’s election to close must have been exercised and, in the case of Section 5(e)(ii)(x), agreed to by the
Seller;

 

(v)           taken together, the effect of all inaccuracies of
representations and warranties of the Seller as described in Section 7(a)(i)(A) is
less than three million dollars ($3,000,000);

 

(vi)          the Buyer shall have delivered to the Seller the estimated
Purchase Price set forth in the Interim Closing Statement in cash by wire
transfer of immediately available federal funds;

 

43

 

(vii)         each of the Commercial Agreements shall have been executed
and delivered by each of the parties thereto;

 

(viii)        with respect to each Other Purchase Agreement, the Closing
(as defined in such Other Purchase Agreement) under such Other Purchase
Agreement shall have occurred simultaneously with the Closing; and

 

(ix)           the Buyer shall have delivered, or caused to be delivered,
to the Seller each Transaction Agreement to which any Buyer Party is a party.

 

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

 

8.             Obligations,
Survival and Indemnification.

 

(a)           Survival of
Representations, Warranties and Covenants. 
(i) All of the representations contained in Sections
3(a) and 4 (other than the
Fundamental Representations) shall survive the Closing until April 1,
2007; and (ii) the Fundamental Representations shall survive the Closing
until ninety (90) days after the expiration of the applicable statute of
limitations.  The covenants and
obligations contained in Sections 2 and 6 and all other covenants and obligations
contained in this Agreement shall survive the Closing indefinitely.

 

(b)           Indemnification
Provisions for Benefit of the Buyer.

 

(i)            Representations and
Warranties - General.  In the event: (x)
the Seller breaches (without giving effect to any qualification as to
materiality (including Material Adverse Effect)) any of its representations or
warranties contained herein (other than those contained in Section 4(b) (Capitalization)
and Section 4(f) (Tax Matters)); and (y) the Buyer makes
a written claim for indemnification against the Seller pursuant to Section 11(h) within the applicable survival
period specified in Section 8(a), then
the Seller agrees to RELEASE, INDEMNIFY AND
HOLD HARMLESS the Buyer Indemnitees from and against the entirety of
any Adverse Consequences that are individually in excess of twenty-five
thousand dollars ($25,000) and that are suffered by the Buyer Indemnitees by
reason of each such breach; provided, that the Seller shall not have
any obligation to indemnify the Buyer Indemnitees from and against (A) the
entirety of any such Adverse Consequences by reason of such breaches until the
Buyer Indemnitees, in the aggregate, have suffered Adverse Consequences by
reason of all such breaches in excess of an initial aggregate deductible amount
equal to 1.0% of the Purchase Price, (B) after which point, 50% of any
such further Adverse Consequences by reason of such breaches until the Buyer
Indemnitees, in the aggregate (above such amounts described in (A) above),
have suffered Adverse Consequences by reason of all such breaches in excess of
a second deductible aggregate amount equal to 1.0% of the Purchase Price (after
which point the Seller shall be obligated only to indemnify the Buyer
Indemnitees from and against any further such Adverse Consequences), or (C) to
the extent all Adverse Consequences the Buyer Indemnitees, in the aggregate,
have suffered by reason of all such breaches exceeds an aggregate ceiling
amount equal to twenty eight million four hundred thousand dollars
($28,400,000) (after which point
the Seller shall have no obligation to indemnify the Buyer Indemnitees from and
against any further such Adverse Consequences).

 

44

 

(ii)           Representations and
Warranties - Special.  In the event: (x) the Seller breaches
(without giving effect to any qualification as to materiality (including
Material Adverse Effect)) any of its representations or warranties contained in
Sections 4(b) or 4(f); and (y) the Buyer makes a written
claim for indemnification against the Seller pursuant to Section 11(h) within
the applicable survival period specified in Section 8(a),
then the Seller agrees to RELEASE, INDEMNIFY AND
HOLD HARMLESS the Buyer Indemnitees from and against the entirety of
any Adverse Consequences that are suffered by the Buyer Indemnitees by reason
of each such breach.

 

(iii)          Covenants and Obligations.  In the event: 
(x) the Seller breaches any of its covenants or obligations in Sections 2 or 6
or any other covenants or obligations of the Seller in this Agreement is
breached; and (y) the Buyer makes a written claim for indemnification
against the Seller pursuant to Section 11(h) within the applicable survival
period specified in Section 8(a), then
the Seller agrees to RELEASE, INDEMNIFY AND
HOLD HARMLESS the Buyer Indemnitees from and against the entirety of
any Adverse Consequences that, except with respect to the covenants provided in
Section 9 (in which case there are no thresholds), are individually
in excess of twenty-five thousand dollars ($25,000) and that are suffered by
the Buyer Indemnitees by reason of such breaches.

 

(iv)          ERISA.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of any Adverse Consequences that are suffered by
the Buyer Indemnitees by reason of any of the Buyer Indemnitees having been
aggregated with the Seller or any Affiliate of the Seller under Section 414(o)
of the Code, or having been under “common control” with the Seller or such
Affiliate within the meaning of Section 4001(a)(14) of ERISA.

 

(v)           Retained Employee
Obligations.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of any Adverse Consequences that are suffered by
the Buyer Indemnitees with respect to the Retained Employee Obligations.

 

(vi)          Javelina Land Environmental
Matters.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of any Adverse Consequences that are suffered by
the Buyer Indemnitees with respect to the land owned by Javelina Land as of the
Closing Date to the extent (and only to the extent) such Adverse Consequences
(x) are or were Obligations of the Seller or any of its Affiliates (as applicable)
that resulted solely from its status as owner of such land and (y) arise from
the presence of Hazardous Substances in soil, subsurface media, groundwater or
surface water on such land and occurring, existing or otherwise attributable to
the period ending on or prior to the Effective Time, and which are the basis
for a requirement for remediation under current Environmental Laws by a
Governmental Authority charged with responsibility for administering such
Environmental Laws; provided that
such requirement is solely for the purpose of remediation of soil, subsurface
media, groundwater or surface water to the least restrictive remediation
standards accounting for the use of the property as of the Effective Time, and
is not required for operational compliance of any facility with Environmental
Laws.  Notwithstanding anything to the
contrary contained in this Section 8(b)(vi), the Seller shall not
have any obligation to indemnify the Buyer Indemnities from and against the
entirety of any Adverse

 

45

 

Consequences covered by this Section 8(b)(vi) to
the extent the Adverse Consequences the Buyer Indemnities, in the aggregate,
have suffered exceed the Javelina Land Maximum Environmental Amount (after
which the Seller shall have no obligation to indemnify the Buyer Indemnities
from and against any such further Adverse Consequences).

 

(vii)         Taxes.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of (x) any Adverse Consequences that are suffered
by the Buyer Indemnitees with respect to Taxes, if any, imposed on any of the
Acquired Companies (other than the Javelina Partnerships) by reason of Treasury
Regulation Section 1.1502-6 (a) (or any similar provision of the
state or local Law) by reason of being a member of an Affiliated Group that
includes the regarded parent of the Seller at or before the Effective Time and
(y) the Javelina Percentage Interest of any Adverse Consequences that are
suffered by the Buyer Indemnitees with respect to Taxes, if any, imposed on any
of the Javelina Partnerships by reason of Treasury Regulation Section 1.1502-6
(a) (or any similar provision of the state or local Law) by reason of
being a member of an Affiliated Group that includes the regarded parent of the
Seller at or before the Effective Time.

 

(viii)        Retained Indebtedness Obligations.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of (x) any Adverse Consequences that are suffered
by the Buyer Indemnitees with respect to any indebtedness for borrowed money of
any Acquired Company (other than the Javelina Partnerships) represented by a
credit agreement, note, indenture or similar lending instrument to the extent
such amount is not included in the Working Capital calculation, or (y) the
Javelina Percentage Interest of any Adverse Consequences that are suffered by
the Buyer Indemnitees with respect to any indebtedness for borrowed money of
any Javelina Partnership represented by a credit agreement, note, indenture or
similar lending instrument to the extent such amount is not included in the
Working Capital calculation.

 

(ix)           Retained Seller Obligations.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of any:  (A) Adverse
Consequences that are suffered by the Buyer Indemnitees to the extent resulting
from any claims by any third party relating to any asset or property owned by
the Seller or its Affiliates prior to Closing that has never been owned or
operated by, or the subject of any contract or other agreement with or for the
benefit of, any Acquired Company; (B) Adverse Consequences relating to any
Obligations directly related to the Retained Assets described in Section 2(f),
but, with respect to the insurance matters retained in Section 2(f)(v),
the Seller shall not have an obligation under this Section 8(b)(ix)(B) to
release, indemnify or hold harmless the Buyer Indemnitees with respect to
Adverse Consequences relating to any litigation, environmental or other claims
under such policies, which claims (including the related deductible, self
insured retention and reimbursable amounts) shall be the responsibility of the
Buyer; (C) Adverse Consequences resulting from violations of Environmental
Laws to the extent relating to any real property interest owned as of the
Effective Time by any Acquired Company (other than the Javelina Partnerships)
to the extent such real property interest is not generally associated with the
Facilities described on Exhibit A; and (D) the Javelina
Percentage Interest of any Adverse Consequences resulting from violations of
Environmental Laws to the extent relating to any real property interest owned
as of the Effective Time by any Javelina Partnership

 

46

 

to the extent
such real property interest is not generally associated with the Facilities
described on Exhibit A;

 

(x)            Divested Acquired Company Assets.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of (x) any Adverse Consequences that are suffered
by the Buyer Indemnitees to the extent relating to any business (including any
plant or other substantial tangible asset) that both was owned and divested or
otherwise disposed of by any Acquired Company (other than the Javelina
Partnerships) at any time prior to the Closing Date and (y) the Javelina
Percentage Interest of any Adverse Consequences that are suffered by the Buyer
Indemnitees to the extent relating to any business (including any plant or
other substantial tangible asset) that both was owned and divested or otherwise
disposed of by either of the Javelina Partnerships at any time prior to the
Closing Date.

 

(xi)           Seller and Affiliate Claims.  The Seller shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Buyer Indemnitees
from and against the entirety of any Adverse Consequences that are suffered by
the Buyer Indemnitees for claims by the Seller and its Affiliates against the
Acquired Companies and attributable to the period prior to the Closing, except
for claims arising out of this Agreement or any Transaction Agreement, claims
with respect to any Acquired Company Contract or intercompany arrangements that
will not be terminated as of the Closing in accordance with Section 5(h) and
claims of the type for which the Buyer is providing indemnity pursuant to Section 8(c).

 

(xii)          Limitations. Notwithstanding any
representation, warranty, covenant or other agreement contained in this
Agreement, including the rights of indemnification provided in this Section
8, the Seller shall have no obligation to release, indemnify and
hold harmless any Buyer Indemnitee with respect to any Adverse Consequence (A) associated with, attributable to
or resulting from any environmental condition or circumstance (including the
non-compliance with any Environmental Law and the presence of any Hazardous
Substance) except to the extent the relevant condition or circumstance
(x) constitutes a breach of the representation and warranty set forth in Section 4(i) or
(y) is subject to indemnity in accordance with Sections 8(b)(vi) and
8(b)(ix)-(xi) or (B) to the extent relating to the Javelina
Partnerships or the assets, properties, obligations, activities and other
matters relating to the Javelina Partnerships, that portion of such Adverse
Consequence in excess of the product derived by multiplying the Javelina
Percentage Interest by the amount of such Adverse Consequence.  By way of clarification, the Parties
acknowledge and agree (1) that the Buyer has entered into a separate
purchase agreement with each partner of the Javelina Partnerships covering such
partner’s interest in such Javelina Partnerships, and (2) each such
purchase agreement is separate and independent from the others and is not
intended to increase the Seller’s exposure for Adverse Consequences, if
any.  For example, if it should happen
that one of the Javelina Partnerships has an Unrecorded Obligation of $100 that
would constitute a breach of the representation and warranty contained in Section 4(l),
the Seller’s maximum exposure with respect thereto (subject to any deductibles,
caps or other limitations) would be determined by multiplying $100 by the
Javelina Percentage Interest.  In lieu of
performing all or any portion of its Obligations under Section 8(b)(i) to
the extent relating to the representation and warranty set forth in Section 4(i),
or that are subject to indemnity in accordance with Sections 8(b)(vi) and
8(b)(ix)-(xi), the Seller shall have the right to

 

47

 

remediate any such environmental condition or
circumstance subject to the terms and conditions set forth in the Environmental
Access Agreement.

 

(c)           Indemnification
Provisions for Benefit of the Seller.

 

(i)            Representation, Warranties and
Covenants.  In the event: (x) the Buyer breaches any of
its representations, warranties, covenants or other obligations contained
herein; and (y) the Seller makes a written claim for indemnification against
the Buyer pursuant to Section 11(h) within the applicable survival
period specified in Section 8(a), then
the Buyer agrees to RELEASE, INDEMNIFY AND
HOLD HARMLESS the Seller Indemnitees from and against the entirety
of any Adverse Consequences that are individually in excess of twenty-five
thousand dollars ($25,000) and suffered by the Seller Indemnitees by reason of
such breaches.

 

(ii)           General.  Except to the extent the Seller is obligated
to indemnify the Buyer pursuant to Section 8(b),
the Buyer agrees to RELEASE, INDEMNIFY AND
HOLD HARMLESS the Seller Indemnitees from and against the entirety
of any Adverse Consequences relating in any way to the Acquired Companies,
Acquired Company Equity Interests, the Acquired Company Assets or the
ownership, operation or Obligations of any of them, in each such case, whether
or not arising during, related to or otherwise attributable to the period prior
to, on or after the Closing Date, including, without limitation, any Adverse
Consequences incurred or suffered by such Seller Indemnitees resulting or
arising from any such Person serving as a general partner of either of the
Javelina Partnerships.  Except as
otherwise expressly provided for in this Agreement, the Buyer’s Obligations
under this

Section 8(c)(ii) include and cover matters whether or not they
are set forth in the Schedules to this Agreement, including such
Obligations relating to litigation to which the Seller or any of its Affiliates
is a party.

 

(iii)          Eligible Employees.  The Buyer agrees to RELEASE, INDEMNIFY AND HOLD HARMLESS the
Seller Indemnitees from and against the entirety of any Adverse Consequences
that are suffered by the Seller Indemnitees that arise out of or relate to the
hiring of Eligible Employees, but only to the extent such Adverse Consequences
are not Retained Employee Obligations, or otherwise specifically the
obligations of the Seller.

 

(iv)          Acquired Company Claims.  The Buyer shall RELEASE, INDEMNIFY AND HOLD HARMLESS the Seller Indemnitees from and
against the entirety of any Adverse Consequences that are suffered by the
Seller Indemnitees for claims by the Acquired Companies against the Seller and
its Affiliates attributable to the period prior to the Closing, except for
claims arising out of this Agreement or any Transaction Agreement, and claims
with respect to any intercompany arrangements that will not be terminated as of
the Closing in accordance with Section 5(h).

 

(v)           Site
Access.  The Buyer agrees to RELEASE, INDEMNIFY AND HOLD HARMLESS the Seller Indemnitees
from and against the entirety of any Adverse Consequences that are suffered by
the Seller Indemnitees arising out of, resulting from or relating to any field
visit or other due diligence activities relating to any performance of the
Diligence Activities to the extent caused by acts or omissions of any Buyer
Party or Buyer Diligence Representative, even if such Adverse Consequences
arise out of or result from, solely

 

48

 

or in part, the sole, active, passive, concurrent or comparative
negligence, strict liability or other fault or violation of Law of or by the
Seller Indemnitees, except Adverse Consequences to the extent resulting from
the gross negligence or willful misconduct of the Seller Indemnitees.

 

(d)           Matters
Involving Third Parties.

 

(i)            If any third party shall notify
either Party (the “Indemnified Party”) with
respect to any matter (a “Third Party Claim”)
that is reasonably expected to give rise to a claim for indemnification against
the other Party (the “Indemnifying Party”)
under this Section 8, then the
Indemnified Party shall promptly (and in any event within five (5) business
days after receiving notice of the Third Party Claim) notify the Indemnifying
Party thereof in writing.  Failure to
notify the Indemnifying Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnified Party, except to the extent the
defense of such claim is materially prejudiced by the Indemnified Party’s
failure to give such notice, including having the effect of tolling or
suspending the statute of limitations applicable to such claim.

 

(ii)           The Indemnifying Party shall have the right to assume and
thereafter conduct the defense of the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party and the Indemnifying
Party shall have full control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that the
Indemnifying Party shall not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim which provides for or
results in any payment by or Obligation of the Indemnified Party of or for any
damages or other amount, any Encumbrance on any property of the Indemnified
Party, any finding of responsibility or liability on the part of the
Indemnified Party or any sanction or injunction of, restriction upon the
conduct of any business by, or other equitable relief upon the Indemnified
Party without the prior written consent of the Indemnified Party (not to be
withheld unreasonably).

 

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

 

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

 

(e)           Determination
of Amount of Adverse Consequences. 
The Adverse Consequences giving rise to any indemnification obligation
hereunder shall be limited to the actual loss suffered by the Indemnified Party
(i.e.
reduced by any insurance proceeds or other payment or recoupment received,
realized or retained by the Indemnified Party as a result of the events giving
rise to the claim for indemnification net of any expenses related to the
receipt of such proceeds, payment or recoupment, including retrospective
premium adjustments, if any), but not any reduction in Taxes of the Indemnified
Party (or the affiliated group of which it is a member) occasioned by such loss
or damage.  The amount of the actual loss
and the amount of the indemnity payment shall be computed by taking into
account the timing of the loss or payment, as applicable, using a Prime Rate
plus two percent interest or discount rate, as appropriate (not to exceed the
maximum rate permitted by applicable Law). 
Upon the request of the Indemnifying

 

49

 

Party, the Indemnified Party shall provide the Indemnifying Party with
information sufficient to allow the Indemnifying Party to calculate the amount
of the indemnity payment in accordance with this Section 8(e).  An Indemnified Party shall take all
reasonable steps to mitigate damages in respect of any claim for which it is
seeking indemnification and shall use commercially reasonable efforts to avoid
any costs or expenses associated with such claim and, if such costs and
expenses cannot be avoided, to minimize the amount thereof.  Nothing in this Section 8 is
intended to allow an indemnified Person to receive duplicative payments in
connection with a Party’s Obligations to release, indemnify and hold
harmless.  Without in any way limiting
the generality of the preceding sentence, although an indemnified Person may
seek recovery for an Adverse Consequence under any Section under which
such Adverse Consequence may be recoverable, to the extent an indemnified
Person has been paid for an Adverse Consequence under one Section of
this Agreement, that Person shall not be permitted to seek payment for that
Adverse Consequence under another Section of this Agreement, even
though that Adverse Consequence is of a type which would be covered by each
such Section.

 

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

 

(g)           Exclusive
Remedy.  The indemnities provided for
in this Section 8 shall be the sole
and exclusive remedy of the Indemnified Party against the Indemnifying Party by
contract, statute or otherwise, at law or equity, for any claim, cause of
action or other matter arising from any breach by the Buyer or the Seller, as
applicable, of any of its representations, warranties, covenants or other
agreements under this Agreement or the transactions contemplated hereby. Each
Party acknowledges that the payment of money, as limited by the terms of this
Agreement, shall be adequate compensation for breach of any representation,
warranty, covenant or agreement contained herein or for any other claim arising
in connection with or with respect to the transactions contemplated by this
Agreement.  As the payment of money shall
be adequate compensation, each Party hereby waives any right to rescind this
Agreement or any of the transactions contemplated hereby.

 

(h)           Disclaimer
of Representations and Warranties. 
The Buyer acknowledges that (i) it has had and pursuant to this
Agreement shall have before Closing access to the Acquired Companies and the
Acquired Company Assets and the officers or other representatives of the Seller
and (ii) in making the decision to enter into this Agreement and
consummate the transactions contemplated hereby, the Buyer has relied solely on
the basis of its own independent investigation, including environmental and
other inspections, and upon the express representations, warranties, covenants,
and agreements set forth in this Agreement, and the Seller expressly disclaims
all liability and responsibility for any representation, warranty, statement or
communication made or communicated (orally or in writing) to the Buyer or any
of its Affiliates, employees, agents, consultants or representatives other than
as expressly set forth in this Agreement or any Transaction Agreement
(including, without limitation, any opinion, information, projection or advice
that may have been provided to the Buyer by any officer, director, employee,
agent, consultant, representative or advisor of the Seller or any of its
Affiliates).  Toward this end, except as
expressly set forth in this Agreement, no Seller Indemnitee shall have liability
to the Buyer or any other Person resulting from the distribution to the Buyer,
or the Buyer’s use of, any such information relating to any Seller Indemnitee,
or

 

50

 

prepared by or on behalf of any Seller Indemnitee, and supplied to the
Buyer before the date of this Agreement, or any information, documents or
materials made available to the Buyer in any data rooms, any presentation or in
any other form relating to the business of the Acquired Companies in connection
with the transactions contemplated hereby. 
Accordingly, the Buyer acknowledges that, except as expressly set forth
in this Agreement, the Seller has not made, and THE SELLER MAKES NO AND
DISCLAIMS ANY, REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, AND
WHETHER BY COMMON LAW, STATUTE, OR OTHERWISE, REGARDING (i) TITLE TO ANY
OF THE ACQUIRED COMPANY ASSETS (INCLUDING ANY RIGHTS OF WAY) (WHETHER RELATING
TO DEFECTIVE TITLE OR GAPS IN TITLE), (ii) THE QUALITY, CONDITION, OR
OPERABILITY OF ANY REAL OR PERSONAL PROPERTY, EQUIPMENT, OR FIXTURES, INCLUDING
FREEDOM FROM LATENT OR PATENT VICES OR DEFECTS, (iii) THEIR
MERCHANTABILITY, (iv) THEIR FITNESS FOR ANY PARTICULAR PURPOSE, (v) THEIR
CONFORMITY TO MODELS, SAMPLES OF MATERIALS OR MANUFACTURER DESIGN, (vi) THE
CONTENTS, CHARACTER OR NATURE OF ANY REPORT OF ANY PETROLEUM ENGINEERING
CONSULTANTS, OR ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION
RELATING TO ANY ACQUIRED COMPANY ASSETS, (vii) THE QUANTITY, QUALITY,
PRODUCTION OR RECOVERABILITY OF HYDROCARBONS, (viii) ANY ESTIMATES OF THE
VALUE OF THE ACQUIRED COMPANY EQUITY INTERESTS OR RELATED ACQUIRED COMPANY
ASSETS OR FUTURE REVENUES GENERATED THEREFROM, (ix) THE MAINTENANCE,
REPAIR, CONDITION, QUALITY SUITABILITY, DESIGN OR MARKETABILITY OF THE ACQUIRED
COMPANY ASSETS, (x) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION
MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ANY PERSON
WITH RESPECT TO THE ACQUIRED COMPANY EQUITY INTERESTS OR ACQUIRED COMPANY ASSETS,
(xi) ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO THE BUYER OR ITS
AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR
ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR
ANY DISCUSSION OR PRESENTATION RELATED THERETO, (xii) ANY EXPRESS OR IMPLIED
WARRANTY OF FREEDOM FROM INTELLECTUAL PROPERTY INFRINGEMENT, (xiii) ANY RIGHTS
OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION
OR RETURN OF THE PURCHASE PRICE, (xiv) ANY MATTER OR CIRCUMSTANCE RELATING TO
ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE
PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR
ANY OTHER ENVIRONMENTAL CONDITION OF THE ACQUIRED COMPANY ASSETS, AND, EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL OF THE ACQUIRED COMPANY ASSETS
ARE DELIVERED IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS,
WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR
UNDISCOVERABLE), INCLUDING FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION.  THE INCLUSION BY ANY SELLER PARTY OF ANY OF
THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN THIS AGREEMENT DOES
NOT CONSTITUTE AN ADMISSION OR ACKNOWLEDGEMENT,

 

51

 

EXPRESSED OR IMPLIED, OF FAULT, RESPONSIBILITY OR LIABILITY OF ANY KIND
BY ANY SELLER PARTY UNDER ANY LAW (INCLUDING ANY ENVIRONMENTAL LAW) FOR ACTS,
OMISSIONS, OBLIGATIONS OR EVENTS INVOLVING THE PRESENCE, IF ANY, OF ANY
POLLUTANTS, CONTAMINANTS, TOXIN OR HAZARDOUS OR EXTREMELY HAZARDOUS SUBSTANCES,
MATERIALS, WASTES, CONSTITUENTS, COMPOUNDS OR CHEMICALS THAT ARE REGULATED BY,
OR MAY FORM THE BASIS OF LIABILITY UNDER, ANY ENVIRONMENTAL LAWS ON
OR ADJACENT TO THE ACQUIRED COMPANY ASSETS. 
The Parties agree that, to the extent required by Law to be effective,
the disclosures contained in this Section 8(h) are
“conspicuous” for purposes of any such Laws.

 

9.             Tax
Matters.

 

(a)           Post-Closing
Tax Returns.  The Buyer shall prepare
or cause to be prepared and file or cause to be filed any Post-Closing Tax
Returns with respect to the Acquired Company Assets or the Acquired
Companies.  The Buyer shall pay (or cause
to be paid) any Taxes due with respect to such Tax Returns.

 

(b)           Pre-Closing
Tax Returns.  The Seller shall
prepare or cause to be prepared and file or cause to be filed all Pre-Closing
Tax Returns (x) with respect to the Acquired Company Assets (other than those
of the Javelina Partnerships) or Acquired Companies (other than the Javelina
Partnerships) and (y) to the extent it has the Legal Right, with respect to the
Javelina Partnerships or the Acquired Company Assets thereof.  The Seller shall pay or cause to be paid (A) any
Taxes due with respect to those Tax Returns described in Section 9(b)(x)
and (B) the Javelina Percentage Interest of any Taxes due with respect to
those Tax Returns described in Section 9(b)(y).

 

(c)           Straddle
Periods.  The Buyer shall be
responsible for Taxes of the Acquired Company Assets and the Acquired Companies
related to the portion of any Straddle Period occurring on or after the
Effective Time.  The Seller shall be
responsible for Taxes of the Acquired Company Assets and the Acquired Companies
(in each case, with respect to Taxes of the Javelina Partnerships, solely to
the extent of the Javelina Percentage Interest of such Taxes) relating to the
portion of any Straddle Period occurring before and on the Effective Time.  With respect to any such Straddle Period, to
the extent permitted by applicable Law, the Seller or the Buyer shall elect to
treat the close of the day ending immediately prior to the Effective Time as
the last day of the Tax period.  If
applicable Law shall not permit such date to be the last day of a period, then (i) real
or personal property Taxes with respect to the Acquired Company Assets and the
Acquired Companies shall be allocated based on the number of days in the
partial period before and after such date, (ii) in the case of all other
Taxes based on or in respect of income, the Tax computed on the basis of the
taxable income or loss attributable to the Acquired Company Assets and the
Acquired Companies for each partial period as determined from their books and
records, and (iii) in the case of all other Taxes, on the basis of the
actual activities or attributes of the Acquired Company Assets and the Acquired
Companies for each partial period as determined from their books and records.

 

(d)           Straddle
Returns.  The Buyer shall prepare any
such Straddle Returns. The Buyer shall deliver, at least forty-five (45) days
prior to the due date for filing such Straddle Return

 

52

 

(including any extension) to the Seller a statement setting forth the
amount of Tax that the Seller owes, including the allocation of taxable income
and Taxes under Section 9(c), and
copies of such Straddle Return.  The
Seller shall have the right to review such Straddle Returns and the allocation
of taxable income and liability for Taxes and to suggest to the Buyer any
reasonable changes to such Straddle Returns no later than fifteen (15) days
prior to the date for the filing of such Straddle Returns.  The Seller and the Buyer agree to consult and
to attempt to resolve in good faith any issue arising as a result of the review
of such Straddle Returns and allocation of taxable income and liability for
Taxes and mutually to consent to the filing as promptly as possible of such
Straddle Returns.  Not later than five (5) days
before the due date for the payment of Taxes with respect to such Straddle
Returns, the Seller shall pay or cause to be paid to the Buyer an amount equal
to the Taxes as agreed to by the Buyer and the Seller as being owed by the
Seller.  If the Buyer and the Seller
cannot agree on the amount of Taxes owed by the Seller with respect to a
Straddle Return, the Seller shall pay or cause to be paid to the Buyer the
amount of Taxes reasonably determined by the Seller to be owed by the
Seller.  Within ten (10) days after
such payment, the Seller and the Buyer shall refer the matter to an independent
nationally recognized accounting firm agreed to by the Buyer and the Seller to
arbitrate the dispute. The Seller and the Buyer shall equally share the fees
and expenses of such accounting firm and its determination as to the amount
owing by the Seller with respect to a Straddle Return shall be binding on the
Seller and the Buyer.  Within five (5) days
after the determination by such accounting firm, if necessary, the appropriate
Party shall pay the other Party any amount which is determined by such
accounting firm to be owed.  The Seller
shall be entitled to reduce its obligation to pay Taxes with respect to a
Straddle Return by the amount of any estimated Taxes paid with respect to such
Taxes on or before the Effective Time.

 

(e)           Claims
for Refund.  The Buyer shall not,
and, to the extent the Buyer has the Legal Right, shall cause the Acquired
Companies and any of their Affiliates not to, file any claim for refund of
Taxes with respect to the Acquired Company Assets and the Acquired Companies
for whole or partial taxable periods on or before the Effective Time.

 

(f)            Indemnification.  The Buyer agrees to indemnify the Seller
against all Taxes of or with respect to the Acquired Company Assets and the
Acquired Companies for any Post-Closing Tax Period and the portion of any
Straddle Period occurring after the Effective Time.  The Seller agrees to indemnify the Buyer
against all Taxes of or with respect to the Acquired Company Assets and the
Acquired Companies (in each case, with respect to Taxes of the Javelina
Partnerships, solely to the extent of the Javelina Percentage Interest of such
Taxes) for any Pre-Closing Tax Period and the
portion of any Straddle Period occurring on or before the Effective Time
(including any Tax liability associated with any matter listed on Schedules
4(f) and 4(h)), and the Buyer Parties against all Taxes of or
with respect to the Retained Assets.

 

(g)           Cooperation
on Tax Matters.

 

(i)            The Buyer and the Seller shall
cooperate fully, as and to the extent reasonably requested by the other Party,
in connection with the filing of Tax Returns pursuant to this Section 9(g) and any audit, litigation or
other proceeding and making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder.  The Buyer and the Seller
shall (A) retain all books and records in their possession with respect to
Tax matters pertinent to each Acquired Company relating to any

 

53

 

whole or partial taxable period beginning
before the Closing Date until the expiration of the statute of limitations
(and, to the extent notified by the Buyer or the Seller, any extensions
thereof) of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority, and (B) give
the other Party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other Party so requests, the
Buyer or the Seller, as the case may be, shall allow the other Party to take
possession of such books and records.

 

(ii)           The Buyer and the Seller further agree, upon request, to use
commercially reasonable efforts to obtain any certificate or other document
from any Governmental Authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including with
respect to the transactions contemplated hereby).

 

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

 

(h)           Certain
Taxes.  The Seller shall file all necessary
Tax Returns and other documentation with respect to all transfer, documentary,
sales, use, stamp, registration and other similar Taxes and fees, pay the
related Tax, and, if required by applicable Law, the Buyer shall, and shall
cause its Affiliates to, join in the execution of any such Tax Returns and
other documentation.  Notwithstanding
anything set forth in this Agreement to the contrary, the Buyer shall pay to
the Seller, on or before the date such payments are due from the Seller to a
Governmental Authority, any transfer, documentary, sales, use, stamp,
registration and other Taxes and fees incurred in connection with this
Agreement and the transactions contemplated hereby.

 

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

 

(j)            Audits.  The Seller or the Buyer, as applicable, shall
provide prompt written notice to the other Parties of any pending or threatened
tax audit, assessment or proceeding that it becomes aware of related to the
Acquired Company Assets or the Acquired Companies for whole or partial periods
for which it is indemnified by the other Party hereunder.  Such notice shall contain factual information
(to the extent known) describing the asserted tax liability in reasonable
detail and shall be accompanied by copies of any notice or other document
received from or with any tax authority in respect of any such matters.  If an Indemnified Party has knowledge of an
asserted tax liability with respect to a matter for which it is to be
indemnified hereunder and such Party fails to give the Indemnifying Party
prompt notice of such asserted tax liability, then (I) if the Indemnifying
Party is precluded by the failure to give prompt notice from contesting the
asserted tax liability in any forum, the Indemnifying Party shall have no
obligation to indemnify the Indemnified Party for any Taxes arising out of such
asserted tax liability, and (II) if the Indemnifying Party is not so precluded
from contesting, but such failure to give prompt notice results in a detriment
to the Indemnifying Party, then any amount which the Indemnifying Party is
otherwise required to pay the Indemnified Party pursuant to this Section 9(j) shall be reduced by the amount
of such detriment, provided, the Indemnified Party shall
nevertheless be

 

54

 

entitled to full indemnification hereunder to the extent, and only to
the extent, that such Party can establish that the Indemnifying Party was not
prejudiced by such failure.  This Section 9(j) shall control the procedure for
Tax indemnification matters to the extent it is inconsistent with any other
provision of this Agreement.

 

(k)           Control
of Proceedings.  The Party
responsible for the Tax under this Agreement shall control audits and disputes
related to such Taxes (including action taken to pay, compromise or settle such
Taxes).  The Seller and the Buyer shall
jointly control, in good faith with each other, audits and disputes relating to
Straddle Periods.  Reasonable
out-of-pocket expenses with respect to such contests shall be borne by the
Seller and the Buyer in proportion to their responsibility for such Taxes as
set forth in this Agreement.  Except as
otherwise provided by this Agreement, the noncontrolling Party shall be
afforded a reasonable opportunity to participate in such proceedings at its own
expense.

 

(l)            Powers
of Attorney.  To the extent the Buyer
has the Legal Right, the Buyer, the Acquired Companies and their respective
Affiliates shall provide the Seller and its Affiliates with such powers of
attorney or other authorizing documentation as are reasonably necessary to
empower them to execute and file returns they are responsible for hereunder,
file refund and equivalent claims for Taxes they are responsible for, and
contest, settle, and resolve any audits and disputes that they have control
over under

Section 9(k) (including any refund
claims which turn into audits or disputes).

 

(m)          Remittance
of Refunds.  If the Buyer or any
Affiliate of the Buyer receives a refund of any Taxes that the Seller is
responsible for hereunder, or if the Seller or any Affiliate of the Seller
receives a refund of any Taxes that the Buyer is responsible for hereunder, the
Party receiving such refund shall, within thirty (30) days after receipt of
such refund, remit it to the Party who has responsibility for such Taxes hereunder.  For the purpose of this Section 9(m), the term “refund” shall
include a reduction in Tax and the use of an overpayment as a credit or other
Tax offset, and receipt of a refund shall occur upon the filing of a Tax Return
or an adjustment thereto using such reduction, overpayment or offset or upon
the receipt of cash.

 

(n)           Purchase
Price Allocation.  The Seller and the
Buyer agree that the actual Purchase Price allocable to the Acquired Company
Assets shall be allocated to the Acquired Company Assets for all purposes
(including Tax and financial accounting purposes) as jointly agreed between the
Buyer and the Seller within 90 days after the Closing Date.  The Seller and the Buyer agree (i) to
report the federal, state and local income and other Tax consequences of the
transactions contemplated herein, and in particular to report the information
required by Section 1060(b) of the Code, and to jointly prepare Form 8594
(Asset Acquisition Statement under Section 1060) in a manner consistent
with such allocation and (ii) without the consent of the other Party, not
to take any position inconsistent therewith upon examination of any Tax return,
in any refund claim, in any litigation, investigation or otherwise.  The Seller and the Buyer agree that each will
furnish the other a copy of Form 8594 (Asset Acquisition Statement under Section 1060)
proposed to be filed with the Internal Revenue Service by such Party or any
Affiliate thereof within ten days prior to the filing of such form with the
Internal Revenue Service.  The Buyer, the Seller and their applicable
Affiliates will file all Tax Returns (including amended Tax Returns and claims
for refund) and information reports in a manner consistent with such
allocation.

 

55

 

(o)           Closing
Tax Certificate.  At the Closing, the
Seller shall deliver to the Buyer a certificate, in the form of Exhibits E-1  and  E-2, signed under penalties of perjury (i) stating
it is not a foreign corporation, foreign partnership, foreign trust or foreign
estate, (ii) providing its U.S. Employer Identification Number, and (iii) providing
its address, all pursuant to Section 1445 of the Code.

 

(p)           Reporting
of Post-Closing Transactions.  The
Buyer and the Seller agree to report all transactions not in the Ordinary
Course of Business occurring on the Closing Date after the Closing on the Buyer’s
federal income Tax Return to the extent permitted by Treasury Regulation Section 1.1502-76(b)(1)(ii)(B).

 

(q)           Settlements.  Notwithstanding anything to the contrary
contained in this Agreement, the Seller shall not be entitled to settle or
concede, either administratively or after the commencement of litigation, any
proceeding related to Taxes in a manner that could increase the amount of Taxes
of the Buyer or any of the Acquired Companies for any Post-Closing Tax Periods,
unless (i) the Buyer consents to such settlement or concession or (ii) the
Seller agrees to indemnify the Buyer for any such increase in the amount of
Taxes of the Buyer or any of the Acquired Companies for Post-Closing Tax
Periods.

 

(r)            Section 754
Elections.  To the extent it has the
Legal Right, the Seller shall take or cause to be taken such actions as are
requested by the Buyer in order to cause any Acquired Company that is treated
as a partnership for federal tax purposes to make a timely election under Section 754
of the Code with respect to the Seller’s sale of interests in any such entity
to the Buyer hereunder.

 

10.           Termination.

 

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

 

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

 

(ii)           (A) by either Party in writing, without liability to
the other Party on account of such termination (provided the terminating Party
is not in default or breach of any of representations, warranties, covenants
and agreements contained in this Agreement), if the Closing shall not have
occurred on or before 5:00 p.m. Houston, Texas time on December 1,
2005;

 

(iii)          the Buyer may terminate this Agreement by giving written
notice to the Seller at any time before Closing in the event the Seller has
materially breached any representation or warranty set forth in Section 3(a) or Section 4
or any covenant contained in this Agreement, the Buyer has notified the Seller
of the breach, the breach is not curable, or, if curable, has continued without
cure for a period of twenty-five (25) days after the written notice of breach
and such breach would result in a failure to satisfy a condition to the Buyer’s
obligation to consummate the transactions contemplated hereby; provided, that
the right to terminate this Agreement pursuant to this Section 10(a)(iii) shall not be available to the
Buyer if, at such time, the Buyer is in breach of any representation or
warranty set forth in Section 3(b) or

 

56

 

any covenant contained in this Agreement and
such breach would result in a failure to satisfy a condition to the Seller’s
obligation to consummate the transactions contemplated hereby;

 

(iv)          the Seller may terminate this Agreement by giving written
notice to the Buyer at any time before the Closing in the event the Buyer has
materially breached any representation or warranties set forth in Section 3(b) or any covenant contained in
this Agreement, the Seller has notified the Buyer of the breach, the breach is
not curable, or, if curable, has continued without cure for a period of
twenty-five (25) days after the written notice of breach and such breach would
result in a failure to satisfy a condition to the Seller’s obligation to
consummate the transactions contemplated hereby; provided that the right to
terminate this Agreement pursuant to this Section 10(a)(iv) shall not be available to the Seller
if, at such time, the Seller is in breach of any representation or warranties
set forth in Section 3(a) or Section 4
or any covenant contained in this Agreement and such breach would result in a
failure to satisfy a condition to the Buyer’s obligation to consummate the
transactions contemplated hereby;

 

(v)           the Parties may terminate this
Agreement if any Governmental Authority shall have issued an order, decree or
ruling or shall have taken any other action permanently enjoining, restraining
or otherwise prohibiting the transactions contemplated hereby and such order,
decree, ruling or other action shall have become final and nonappealable;
provided that the Party seeking to terminate this Agreement pursuant to this Section 10(a)(v) shall have complied with Section 5(a), Section 5(b) and Section 5(g),
it being agreed that the Parties shall promptly appeal any adverse
determination that is not nonappealable (and pursue such appeal with reasonable
diligence); and

 

(vi)          either Party may terminate this Agreement by giving written
notice to the other Party at any time before Closing if, prior to the time of
such notice, any of the Other Purchase Agreements had been duly terminated
pursuant to the provisions of such Other Purchase Agreement.

 

(b)           Effect
of Termination.  Except for the
obligations under Sections 5(f)(ii)(C),
5(f)(ii)(G),  8, 10 and 11, if either Party terminates this Agreement
pursuant to Section 10(a), all rights
and obligations of the Parties hereunder shall terminate without any liability
of either Party to the other Party (except for any liability of either such
Party then in breach); provided, that
the provisions contained in Sections 5(f)(ii)(C),
5(f)(ii)(G) and 8(c)(v) and
the confidentiality provisions contained in the Confidentiality Agreement shall
survive termination.

 

11.           Miscellaneous.

 

(a)           Confidentiality.  The Parties have previously executed and
delivered the Confidentiality Agreement. 
The Parties agree that, subject to Section 11(b) below,
the Confidentiality Agreement shall be in full force and effect until the
Closing Date.  If the Closing occurs, the
Buyer shall not be limited by the terms thereof with respect to information,
assets and operations of the Acquired Companies.  The Seller shall, and shall cause its
Affiliates to, not make disclosure of any confidential or proprietary
information relating to any Acquired Company to any Person other than (i) to
its owners, directors, officers, employees, consultants or other
representatives to whom such disclosure is necessary or convenient for the
completion of the transactions contemplated by this Agreement; (ii) as
required to convey title to any of the

 

57

 

Acquired Company Assets; (iii) as required by Law or any
securities exchange or market rule; (iv) as may be requested or required
by any Governmental Authority (provided that the Seller first notifies the
Buyer and gives the Buyer the opportunity to contest such request or
requirement), or (v) except with prior notice of such request for
disclosure to, and consent of, the Buyer (which consent may be withheld in the
Buyer’s sole discretion).  On or after
the Closing, the Seller agrees to use its commercially reasonable efforts to
provide, on an as needed basis, rights to enforce the confidentiality
agreements between the Seller and those Persons who where bidders for the
Acquired Company Assets.

 

(b)           Public
Announcements.  Neither Party shall
issue any press release or make any public announcement or otherwise publicly
disseminate information relating to the subject matter of this Agreement before
or after the Closing without the prior written approval of the other Party
(which approval will not be withheld or delayed unreasonably); provided that either Party may make any public disclosure it
believes in good faith is required by applicable Law or any listing or trading
agreement concerning its publicly traded securities (in which case the
disclosing Party will advise the other Party before making the disclosure and
will provide the other Party, to the extent practicable, with a reasonable
opportunity to comment on such proposed disclosures).

 

(c)           Insurance.  To the extent the Seller has the Legal Right,
(i) the Seller shall cause any insurance policies covering the Acquired
Company Assets (except those stand-alone insurance policies that are in the
name of any of the Javelina Partnerships and that are obtained solely to cover
the assets, facilities and/or operations of the Javelina Partnerships
(collectively, such policies are the “Javelina Insurance
Policies”)) to remain in
full force and effect or to be renewed and maintained in full force and effect
through (but not after) the Closing Date; provided, however, that the Seller shall maintain the Acquired
Companies (other than the Javelina Partnerships) or the Acquired Company Assets
(other than those of the Javelina Partnerships) (as applicable) as divested
entities or assets on such insurance policies and any subsequent renewals
thereof; (ii) the Seller shall not take any action to release any insurer
with respect to any claim made under any such insurance policy before the
Closing Date; provided, however,
that the Seller may release any such insurer (A) that is an Affiliate of
the Seller or (B) if such claim may be filed under a Javelina Insurance
Policy; and (iii) the Seller will file all insured claims (both before and
after Closing) that may be filed under any such insurance policy for any
Adverse Consequences occurring before Closing and will thereafter coordinate
with the Buyer to resolve all such claims after Closing; provided,
however, that (x) the Seller will not be
required to file such claims to the extent (A) the insurer of such claims
is an Affiliate of the Seller or (B) that such claims may be filed under a
Javelina Insurance Policy and (y) neither the Seller nor any of its Affiliates
shall be obligated or otherwise liable for any deductible, self insured
retention amount or reimbursable amount payable by any of them with respect to
any such claim.  The Buyer acknowledges
and agrees that, following the Closing, any insurance policies maintained by
the Seller and its Affiliates (including the applicable Acquired Companies) and
the Javelina Partnerships shall be terminated or modified to exclude coverage
of all or any portion of the assets, facilities and/or operations of the
Acquired Companies (except for the Javelina Insurance Policies), and, as a
result, the Buyer shall be obligated at or before Closing to obtain at its sole
cost and expense replacement insurance, including insurance required by any
Person to be maintained for or by the Acquired Companies.  The Buyer further acknowledges and agrees
that the Buyer may need to provide to certain Governmental

 

58

 

Authorities and other Persons evidence of such replacement or
substitute insurance coverage for the continued operations or businesses of the
Acquired Companies.

 

(d)           No
Third Party Beneficiaries.  Except
for the indemnification provisions, this Agreement shall not confer any rights
or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

 

(e)           Succession
and Assignment.  This Agreement shall
be binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. 
Neither Party may assign, alienate, delegate or otherwise transfer all
or any portion of its rights, interests or obligations under this Agreement
without the prior written approval of the other Party (which approval may not
be unreasonably withheld); provided, however, without the prior approval of the Seller, the Buyer
and its permitted successors and assigns may transfer any or all of its rights
or interests under this Agreement to a wholly owned subsidiary of the Buyer for
so long as such Person remains a wholly owned subsidiary of the Buyer,
including designating one or more such Persons to be the assignee of some or
any portion of the Acquired Company Equity Interests; and
provided  further that no transfer
shall result in the release of the requesting Party from any of its obligations
under this Agreement, and such Party shall remain a primary obligor (as opposed
to a surety) thereof.

 

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

 

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

 

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

 

	
  If to the
  Seller:

  	
   

  	
  El Paso Corporation

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  El Paso Tower

  
	
   

  	
   

  	
  1001 Louisiana, Suite 3050

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
   

  	
  Tel No.: (713) 420-7021

  
	
   

  	
   

  	
  Fax No.: (713) 420-5043

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  El Paso Corporation

  
	
   

  	
   

  	
  Attn: Steve McKemy

  
	
   

  	
   

  	
  El Paso Tower

  
	
   

  	
   

  	
  1001 Louisiana, Suite 2851B

  
	
   

  	
   

  	
  Houston, Texas 77002

  

 

59

 

	
   

  	
   

  	
  Tel No.: (713) 420-1983

  
	
   

  	
   

  	
  Fax No.: (713) 445-8188

  
	
   

  	
   

  	
   

  
	
  If to the
  Buyer:

  	
   

  	
  MarkWest Energy Partners, L.P.

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  155 Inverness Drive West, Suite 200

  
	
   

  	
   

  	
  Englewood, CO 80112

  
	
   

  	
   

  	
  Tel No.: (303) 290-8700

  
	
   

  	
   

  	
  Fax No.: (303) 290-8769

  

 

Either Party
may send any notice, request, demand, claim, or other communication hereunder
to the intended recipient at the addresses set forth above using any other
means other than electronic mail (including personal delivery, expedited
courier, messenger service, telecopy or ordinary mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient;
provided, if notice is sent by telecopy and such telecopy is received during
non business hours of the addressee, then such notice shall be deemed received
on the next business day of the addressee. 
Either Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Party notice in the manner herein set forth.

 

(i)            Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF
TEXAS WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.  VENUE FOR ANY ACTION ARISING UNDER THIS
AGREEMENT SHALL LIE EXCLUSIVELY IN ANY STATE OR FEDERAL COURT IN TEXAS.

 

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

 

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

 

(l)            Transaction
Expenses.  Except to the extent
otherwise provided for in this Agreement, each of the Buyer, on the one hand,
and the Seller, on the other hand, shall bear its and its Affiliates own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.  Except to the extent otherwise provided for
in this Agreement, for the avoidance of doubt, it is agreed that the Seller
will bear

 

60

 

(i) any and all expenses of the Acquired Companies (other than the
Javelina Partnerships) and (ii) the Javelina Percentage Interest of any
and all expenses of the Javelina Partnerships, in each case in connection with
this Agreement and the transactions contemplated hereby.

 

(m)          Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement. 
In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring
either Party by virtue of the authorship of any of the provisions of this
Agreement.  Any reference to any federal,
state, local, or foreign statute or Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.  The word “including” shall mean including
without limitation. All personal pronouns used in this Agreement, whether used
in the masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural, and vice versa.  All references herein to Exhibits, Schedules,
Articles, Sections or subdivisions thereof shall refer to the corresponding Exhibits,
Schedules, Article, Section or subdivision thereof of this Agreement
unless specific reference is made to such exhibits, articles, sections or
subdivisions of another document or instrument. The terms “herein,” “hereby,” “hereunder,”
“hereof,” “hereinafter,” and other equivalent words refer to this Agreement in
its entirety and not solely to the particular portion of the Agreement in which
such word is used.

 

(n)           Exhibits
and Schedules.

 

(i)            The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.  Any fact or item which is
disclosed in any part of the Transaction Agreements (including any schedule,
exhibit or other attachment thereto) will be deemed to have been disclosed for
all purposes of this Agreement (if reasonably apparent that such disclosure
relates to another portion of the Agreement),
notwithstanding the omission of a reference or cross-reference
thereto.

 

(ii)           Matters reflected in the Exhibits and Schedules
are not necessarily limited to matters required by the Agreement to be
reflected therein.  Such additional
matters are set forth for informational purposes and do not necessarily include
other matters of a similar nature.  In no
event shall the listing of such matters therein be deemed or interpreted to
broaden or otherwise amplify the applicable Party’s representations,
warranties, covenants or agreements contained in this Agreement.  The fact that any item of information is
contained in the Exhibits and Schedules shall not (i) be
construed as an admission of liability under any Law, (ii) mean that such
information is required by this Agreement to be disclosed in the Exhibits
and Schedules, (iii) mean that such information is material or (iv) be
used as a basis for interpreting the term “material” or “Material Adverse
Effect” or any similar qualification in this Agreement.

 

(iii)          If there is any conflict or other inconsistency between this
Agreement and the Exhibits and Schedules, the terms of this
Agreement shall prevail.  For the
avoidance of doubt, the Buyer hereby acknowledges and agrees that (A) nothing
contained in any of the Exhibits and Schedules shall constitute a
representation, warranty or other assurance (x) as to the quality, condition or
capability of any of the facilities, components or other assets contained
therein or (y) as to the ownership interest of the Seller or any other Person
as to any such asset and (B) with respect to such matters, the terms of
this Agreement shall govern, meaning that the

 

61

 

Buyer is exclusively relying on its own due
diligence and independent investigation, as contemplated by Section 3(b)(v) and
the representations, warranties and covenants contained in this Agreement.  Except as set forth in this Agreement , the
Seller hereby disclaims any and all representations, warranties or other
assurances with respect to any and all such assets, as contemplated by Sections
8(b)(xii) and 8(h).

 

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

 

[Signature Pages follow]

 

62

 

IN WITNESS
WHEREOF, the Parties have executed this Agreement as of the date first set
forth in the preamble.

 

	
   

  	
  EL
  PASO CORPORATION

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
  PRINTED
  NAME:

  	
   

  	
   

  
	
   

  	
  TITLE:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MARKWEST
  ENERGY PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MarkWest
  Energy GP, L.L.C.,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
  PRINTED
  NAME:

  	
   

  	
   

  
	
   

  	
  TITLE:

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