PARTNERSHIPINTERESTS PURCHASE AGREEMENT byand among MILLENNIUMMIDSTREAM PARTNERS, L.P., theOWNERS OF THE PARTNERSHIP INTERESTS OF MILLENNIUM MIDSTREAM PARTNERS,L.P., and EAGLEROCK ENERGY PARTNERS, L.P. Datedas of September 11, 2008

(a)           Purchase Price.  The purchase price shall be paid as follows:

 

(i)           Cash Payment.  Buyer shall pay to Sellers $181,000,000 (the “Cash Payment”), as adjusted pursuant to the various adjustments described in Section 2.3 below, by wire transfer of immediately available funds to the accounts designated by Sellers and in the proportional amount per Seller as set forth in Schedule 2.2(a). of which $180,400,000 will be delivered to Sellers at Closing and $600,000 will be delivered to the Escrow Agent, on behalf of Sellers, pursuant to Section 2.2(c).

(ii)          Buyer Units.  Buyer shall deliver to Sellers 4,000,000 whole Common Units (the “Buyer Units”), of which 2,181,818 Buyer Units will be delivered to Sellers at Closing and 1,818,182 Buyer Units will be delivered to the Escrow Agent, on behalf of Sellers, pursuant to Section 2.2(c).

 

(b)           Payment of Indebtedness for Borrowed Money.  Buyer will undertake to wire transfer of immediately available funds to the holders of the Indebtedness for Borrowed Money the amounts set forth in payoff letters and instructions provided by such holders; provided, however, that the Parties agree that the letters of credit in support of the P5 obligation will remain in effect at Closing until such time as the Buyer can replace such letters of credit.

 

(c)           Escrow Deposit.  At Closing, the parties will deliver (i) 1,818,182 Buyer Units and (ii) $600,000 to the Escrow Agent (the “Escrow Deposit”), which will be available to (i) satisfy certain amounts owed by Sellers to Buyer under this Agreement in accordance with Article IX of this Agreement, the adjustments set forth in Section 2.4 of this Agreement, and the escrow agreement attached as Exhibit C, and (ii) satisfy certain amounts owed by Sellers to Buyer pursuant to the special indemnity agreement attached as Exhibit D (the “Special Indemnity Agreement”).   The Parties agree to treat the Sellers as the owners of the Escrow Deposit for federal Tax purposes.

(a)           Indebtedness for Borrowed Money.  The Cash Payment will be reduced by an amount equal to the Indebtedness for Borrowed Money of the Company to be paid off by Buyer as of the Closing Date in accordance with Section 2.2(b) above.

 

(b)           Estimated Net Working Capital Adjustment.  At least five (5) Business Days prior to the Closing Date, not including the Closing Date, Sellers shall prepare and deliver to Buyer their written calculations of the Estimated Net Working Capital Adjustment (including the Estimated Effective Time Net Working Capital).  If the Estimated Effective Time Net Working Capital is less than the Target Net Working Capital, then the Cash Payment will be reduced dollar-for-dollar by such difference.  If the Estimated Effective Time Net Working Capital is greater than the Target Net Working Capital, then the Cash Payment will be increased dollar-for-dollar by an amount equal to such excess.  Such decrease or increase, if any, in the Cash Payment is hereinafter referred to as the “Estimated Net Working Capital Adjustment.”

 

(c)           Estimated Cash Settlements. At least five (5) Business Days prior to the Closing Date, not including the Closing Date, Sellers shall prepare and deliver to Buyer an estimate of all current assets and liabilities having post-Closing cash settlements within the prospective 12-month period but excluded from the determination of Net Working Capital as indicated on Exhibit E.  The Cash Payment paid at Closing shall be increased or decreased, as the case may be, by the net amount of such estimate.

(d)           Capital Expenditures.  The Cash Payment paid at Closing shall be increased by the amount of all Capital Expenditures described on Schedule 2.3(d), or which have been approved in advance by Buyer and are attributable to the Company, paid by or on behalf of Sellers or the Company in the ordinary course through the Effective Time.

 

(e)           Special Reduction in Cash Payment.  Sellers and the Company shall settle, terminate or unwind all natural gas, ethane and crude oil calls, puts, swaps and other commodity or interest rate hedges of the Company between the date hereof and Closing.  The Cash Payment shall be reduced by an amount equal to all net costs and expenses arising out of or related to settling, terminating or unwinding all natural gas, ethane and crude oil calls, puts, swaps and other commodity or interest rate hedges of the Company during the period after the Effective Time and prior to the Closing Date.  If the Sellers and the Company fail to settle, terminate or unwind the commodity or interest rate hedges, and Buyer chooses to waive its condition to closing provided in Section 8.1(q), then the Cash Payment shall be reduced by an amount equal to the net cost to settle, terminate or unwind the commodity or interest rate hedges as of the Closing.

 

(f)           Bonuses.  The Cash Payment will be reduced by the aggregate amount of transaction bonuses, change in control payments, incentive payments, “stay bonuses,” or similar payments payable to certain employees of the Company in connection with this transaction or as provided in Section 6.5(j), as reflected on Exhibit E, the amount and payment terms and conditions of which, the identities of the payees, and the amount payable to each such payee, and such other information as the Buyer may reasonably request, will be communicated by the Company to the Buyer at least five (5) Business Days prior to the Closing Date.  The total amount paid to employees under this Section 2.3(f) shall not exceed $900,000.

 

(g)           Vacation Pay.  The Cash Payment will be reduced by the aggregate amount of vacation pay and paid time off payable to employees of the Company under the Company’s standard employment policies, which amounts shall be as provided in the schedule submitted to Buyer pursuant to Section 6.5(g).

 

(h)           D&O Insurance Policy Run-off Premium.  The Cash Payment will be reduced by an amount equal to the cost of the premium paid by the Company pursuant to Section 6.8 to purchase run-off coverage under the Company’s current Director and Officer Insurance Policy for six years.

(b)           Collection of Accounts Receivable.  From and after the Closing, Buyer shall undertake to collect all accounts receivable listed on the Estimated Effective Time Net Working Capital in the ordinary course of business consistent with the Company’s past practices.  As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) days thereafter, Buyer shall prepare and deliver to Sellers (simultaneously with the delivery of the Final Calculations) a schedule setting forth adjustments to the Purchase Price for the failure by the Company to collect in full any accounts receivable included in the calculation of the Final Effective Time Net Working Capital.  Subject to the netting provisions of Section 2.4(e), within three (3) Business Days of the delivery by Buyer of such schedule to Sellers, the Parties shall direct that any such adjustment payable by Sellers pursuant to this Section 2.4(b) be immediately disbursed from the Escrow Account to Buyer.  After the adjustment set forth in the immediately preceding sentence, the Buyer will continue to collect such accounts receivable in the ordinary course of business consistent with the Company’s past practices, and to the extent that the Company receives payment denoted as specifically on account of any such receivable, Buyer hereby agrees to promptly pay the amount collected to Sellers in cash by wire transfer of immediately available funds.  Any disputes between the Parties with respect to the adjustment in this Section 2.4(b) shall be handled with the same dispute resolution procedure set forth in Section 2.4(a)(iii).

 

(c)           Post-Closing Cash Settlements. As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) days thereafter, Buyer shall prepare and deliver to Sellers (simultaneously with the delivery of the Final Calculations) a schedule setting forth adjustments to the Purchase Price for current assets and liabilities having post-Closing cash settlements within the prospective 12-month period but excluded from the determination of Net Working Capital as indicated on Exhibit E.  Subject to the netting provisions of Section 2.4(e), if the final post-Closing cash settlements described above are greater than the estimated post-Closing cash settlements made pursuant to Section 2.3(c), the Parties shall direct that the amount of such excess be immediately disbursed from the Escrow Account to Buyer.  Subject to the netting provisions of Section 2.4(e), if the final post-Closing cash settlements described above are less than the estimated post-Closing cash settlements made pursuant to Section 2.3(c), Buyer shall promptly pay such difference to Sellers in cash by wire transfer of immediately available funds.  Any disputes between the Parties with respect to such adjustment shall be handled with the same dispute resolution procedure set forth in Section 2.4(a)(iii).

 

(d)           Federal Income Tax Adjustment.  As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) days thereafter, Buyer shall prepare and deliver to Sellers a schedule setting forth adjustments to the Purchase Price for Post-Effective Time Taxes.  Subject to the netting provisions of Section 2.4(e), within three (3) Business Days of the delivery by Sellers of such schedule to Buyer, Buyer shall promptly pay such difference to Sellers in cash by wire transfer of immediately available funds.  Any disputes between the Parties with respect to such adjustment shall be handled with the same dispute resolution procedure set forth in Section 2.4(a)(iii).

(e)           Settlement.  In performing the post-Closing adjustments in this Section 2.4, the Parties agree to use the same methodology in determining the final adjustments to the Purchase Price as used in Exhibit E and in the estimates at Closing pursuant to Section 2.3.  In the event that an adjustment pursuant to this Section 2.4 requires that the Parties direct a disbursement of the Escrow Deposit to the Buyer, then for purposes of valuing the Buyer Units to be disbursed from the Escrow Deposit, such Buyer Units shall be valued at $13.75 per share.  Once all price adjustments under this Sections 2.4 have been finally determined, the Parties shall discharge their obligations to pay through netting of such adjustments, in which case the Party or Parties (as applicable) owing the greater aggregate amount in respect of such adjustments shall pay to the other Party or Parties (as applicable) the net amount owed; provided that if such payment is due from the Sellers, such payment shall come from the Escrow Account.

3.3.           No Conflict; Consents.  The execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated hereby by Seller do not and shall not:

 

(b)           if Seller is an entity, violate any Organizational Document of Seller; or

 

(c)           except as set forth on Schedule 3.3, require any filing with or permit, consent or approval of, or the giving of any notice to, any Person.

(a)           Except as set forth on Schedule 3.4, Seller holds of record and owns beneficially such Interests set forth next to its name in Exhibit A, free and clear of all Liens (other than restrictions under the Securities Act and state securities Laws).  As of the Closing Date, the Interests of Seller will be free and clear of all Liens.

 

(b)           Seller is not a party to any option, warrant, purchase right, or other contract or commitment (other than this Agreement) that could require Seller to sell, transfer, or otherwise dispose of Seller’s Interests.  As of the Closing Date, Seller will not be a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of Seller’s Interests.

(a)           Each Seller is acquiring the Buyer Units for his or its own account and not with a view to, or for offer of resale in connection with, a distribution thereof, within the meaning of the Securities Act.  In acquiring the Buyer Units, such Seller is not offering or selling, and will not offer or sell, for himself or itself in connection with any distribution of the Buyer Units, and such Seller does not have a participation in and will not participate in any such undertaking or in any underwriting of such an undertaking except in compliance with applicable federal and state securities laws.

 

(b)           Each Seller is an “accredited investor” as such term is defined under Regulation D promulgated under the Securities Act.  Additionally, each Seller acknowledges that he or it is able to fend for himself or itself, can bear the economic risk of his or its investment in the Buyer Units, and has such knowledge and experience in financial and business matters similar to the transaction described herein such that he or it is capable of evaluating the merits and risks of an investment in the Buyer Units.

 

(c)           Further, each Seller understands that such Buyer Units will not have been registered pursuant to the Securities Act or any applicable state securities laws, that the Buyer Units, when issued, will be characterized as "restricted securities" under federal securities laws, and that under such laws and applicable regulations the Buyer Units cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.  Each such Seller represents that he or it is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act.  Stop transfer instructions may be issued to the transfer agent for securities of the Buyer (or a notation may be made in the appropriate records of the Buyer) in connection with the Buyer Units issued hereunder.  It is agreed and understood by such Seller that, should any certificate be issued representing any of the Buyer Units, each such certificate shall conspicuously setforth on the face or back thereof, in addition to any legends required by Law, a legend in substantially the following form:

(d)           Each Seller represents and acknowledges that Buyer is issuing the Buyer Units pursuant to an exemption from the registration requirements of the Securities Act based on the representations provided by Sellers hereunder.

(a)           MMP is a limited partnership, duly organized, validly existing and in good standing under the Laws of Delaware and has the requisite organizational power and authority to own or lease its assets and to conduct its business as it is now being conducted.  MMP is duly licensed, qualified and in good standing in each jurisdiction in which the ownership or operation of its assets or the character of its activities is such as to require it to be so licensed or qualified, except where the failure to be so licensed or qualified would not reasonably be expected to have a Material Adverse Effect on MMP.  Sellers have made available to Buyer true copies of all existing Organizational Documents of MMP.  MMP GP, LLC, a Delaware limited liability company is the sole general partner of  MMP.

 

(b)           Each of the MMP Affiliated Companies is duly organized, validly existing, and in good standing under the Laws of the jurisdiction of its incorporation (or other formation) and has the requisite organizational power and authority (including full corporate or other entity power and authority) to own or lease its assets and to conduct its business as it is now being conducted.  Each of the MMP Affiliated Companies is duly licensed or qualified in each jurisdiction in which the ownership or operation of its assets or the character of its activities are such as to require it to be so licensed or qualified,except where the failure to be so licensed or qualified would not reasonably be expected to have a Material Adverse Effect on such the MMP Affiliated Company.  Sellers have made available to Buyer true copies of all existing Organizational Documents of the MMP Affiliated Companies.

 

(a)           violate any Law applicable to MMP or require any filing with, consent, approval or authorization of, or notice to, any Governmental Authority;

 

(b)           violate any Organizational Document of MMP;

 

(c)           except as set forth on Schedule 4.2 and the filing as required by the HSR Act, require any filing with or permit, consent or approval of, or the giving of any notice to, any Person; or

 

(d)           except as would not reasonably be expected to have a Material Adverse Effect on the ability of MMP to enter into and perform its obligations under this Agreement, (i) breach any Material Contract to which MMP or an MMP Affiliated Company is a party or by which MMP or an MMP Affiliated Company may be bound, (i) result in the termination of any such Material Contract, (ii) result in the creation of any Lien under any Material Contract or (iii) constitute an event that, after notice or lapse of time or both, would result in any such breach, termination or creation of a Lien.

(a)           The MMP Interests and MMP Affiliate Interests as shown on Exhibit A constitute all of the issued and outstanding partnership interests and other incidents of ownership of MMP and the MMP Affiliated Companies.  The MMP Interests and the MMP Affiliate Interests are duly authorized, validly issued, fully paid, nonassessable and are free and clear of any Lien or other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such Interests, subject only to applicable securities Laws).

 

(b)           Except as set forth on Schedule 4.3(b), there are no (i) outstanding partnership or membership interests, equity interests or other securities of MMP or the MMP Affiliated Companies other than the Interests, (ii) outstanding securities of MMP or the MMP Affiliated Companies convertible into, exchangeable or exercisable for partnership or membership interests, equity interests or other securities of such entity, (iii) authorized or outstanding options, warrants or other rights to purchase or acquire from MMP or the MMP Affiliated Companies, or obligations of MMP or the MMP Affiliated Companies to issue, any equity interests or other securities, including securities convertible into or exchangeable for membership interests or other securities of such entity, or (iv) authorized or outstanding bonds, debentures, notes or other indebtedness that entitles the holders to vote (or convertible or exercisable for or exchangeable into securities that entitle the holders to vote) with holders of units or interests of MMP or MMP Affiliated Companies on any matter (the items in clauses (i), (ii), (iii) and (iv) being referred to collectively as the “Company Securities”).  There are no outstanding obligations of MMP or the MMP Affiliated Companies to repurchase, redeem or otherwise acquire any Company Securities.

 

(c)           Except as described in Exhibit A, neither MMP nor any of the MMP Affiliated Companies (i) own, directly or indirectly, any capital stock, equity interests or other securities of any Person, or (ii) have any Subsidiaries.

(a)           Schedule 4.5 sets forth true and complete copies of the following financial statements (collectively, the “MMP Financial Statements”): (i) the audited consolidated balance sheet of the Company as of, and for the year ended, December 31, 2007 and December 31, 2006, together with the related audited consolidated statements of income, changes in owners’ equity and cash flow for the period then ended; (ii) the audited consolidated balance sheet of MME as of, and for the years ended, December 31, 2005 and December 27, 2006, together with the related audited consolidated statements of income, changes in owners’ equity and cash flow for the period then ended (excluding MME Pipeline Company, LLC and CMA Pipeline Partners, LP); and (iii) the unaudited balance sheet of the Company as of and for the period ended on June 30, 2008, together with the related unaudited consolidated statements of income, changes in owners’ equity and cash flow for the period then ended.  The MMP Financial Statements have been prepared in accordance with GAAP (except as otherwise stated in the footnotes or the audit opinion related thereto and except for the accrual of vacation, paid time off and sick pay) and present fairly in accordance with GAAP, the financial position and the results of operations of the Company as of, and for the periods ended on, such dates, except for normal year-end adjustments and the absence of footnotes with respect to the MMP Financial Statements described in clause (iii).

 

(b)           The Company has received no written notice from any Governmental Authority concerning noncompliance with, or deficiencies in, the Company’s financial reporting practices.  All material transactions have been properly recorded in the accounting records underlying the MMP Financial Statements.   To the Knowledge of the Company, there are no significant deficiencies, including material weaknesses, in the design or operation of internal control over the Company’s financial reporting.  To the Knowledge of the Company, no member of the Company’s management nor any other employee with a significant role in the Company’s internal control over financial reporting has committed any act of fraud having a material effect on the Financial Statements. The Company has not received or otherwise obtained Knowledge of any complaint, allegation, assertion or claim, whether written or oral alleging fraud or suspected fraud affecting the Company.

(c)           All liabilities and obligations that are required by GAAP to be reflected or reserved against in the balance sheet included in Unaudited Financial Statements have been so reflected or reserved against in such balance sheet.

(a)           Schedule 4.9(a) contains a true and complete listing of the following Contracts in effect on the date of this Agreement and to which the Company is a party (each Contract that is required to be listed on Schedule 4.9(a), being “Material Contracts”):

(b)           True and complete copies of all Material Contracts have been made available to Buyer other than any Material Contracts that contain confidentiality provisions prohibiting their disclosure, in which case such material Contracts have been summarized without violating the confidentiality provisions and a copy of the summaries thereof has been made available to Buyer.

 

(c)           Except as set forth in Schedule 4.9(c), each Material Contract (other than such Material Contracts with respect to which all performance and payment obligations have been fully performed or otherwise discharged by all parties thereto prior to the Closing) (i) is in full force and effect and (ii) represents the legal, valid and binding obligation of the Company and, to the Knowledge of the Company, represents the legal, valid and binding obligation of the other parties thereto, in each case enforceable in accordance with its terms.  Except as set forth in Schedule 4.9(c), neither the Company nor, to the Knowledge of the Company, any other party is in material breach of any Material Contract, and neither Sellers nor the Company has received any written or, to the Knowledge of the Company, oral notice of termination or breach of any Material Contract.

 

(a)           The Company has delivered to Buyer true, correct and complete copies of the following documents with respect to each Company Plan (i) each writing constituting a part of such Plan (including, but not limited to, the plan document(s), adoption agreement, prototype or volume submitter documents, trust agreement, annuity contract, third party administrative contracts and insurance contracts) and all amendments thereto; (ii) the three most recent Annual Reports (Form 5500 Series) including all applicable schedules, if required; (iii) the current summary plan description and any material modifications thereto, if required to be furnished under ERISA, or any written summary provided to participants with respect to any Plan for which no summary plan description exists; (iv) the most recent determination letter (or if applicable, advisory or opinion letter) from the IRS, if any, or if an application for a determination letter is pending, the application with all attachments; (v) all notices received by the Company or any ERISA Affiliate from the IRS, Department of Labor, Pension Benefit Guaranty Corporation or other governmental agency relating to such Plan; and (vi) a written description of each oral Plan. Each Company Plan has been operated and administered in accordance with its provisions and all applicable Laws.

(c)           None of the current or former independent contractors or individual service providers of the Company or any of its Affiliates could be reclassified as an employee.  No independent contractor or individual service provider of the Company or an Affiliate is eligible to participate or is participating in any Company Plan.

 

(d)           Schedule 4.11(d) sets forth a true, correct and complete list of each Administaff Plan.  With respect to each of the Administaff Plans, MMP shall use Reasonable Efforts to cause Administaff to deliver to Buyer (or to provide to MMP for delivery to Buyer) a copy of the Plan document and any related trust agreement and other governing documents, and the current summary plan descriptions or other participant communications.

 

 

(b)           The Company is not subject to any outstanding order, judgment or arbitration award from any Governmental Authority under any Environmental Laws requiring remediation of any Constituents of Concern or the payment of any material fine or penalty; and

 

(c)           The Company is not subject to any action pending or threatened in writing, whether judicial or administrative, alleging noncompliance with or potential liability under any Environmental Law.

(a)           Except as set forth in Schedule 4.13(b), the Company possesses all material Permits necessary for it to own its assets and operate its business as currently conducted.  To the Knowledge of the Company, (i) all such Permits are in full force and effect and (ii) there are no lawsuits or other proceedings pending or threatened in writing before any Governmental Authority that seek the revocation, cancellation, suspension or adverse modification thereof.  

(a)           All persons employed in connection with the business of the Company are Administaff Employees.  Schedule 4.15(a) identifies all Administaff Employees by name; identity of the Company that is the co-employer of the Administaff Employees; position or job title; initial date of hire; seniority or service credit date if different from initial date of hire; status (whether active or on leave absence, and if on leave, the type of leave); and classification as exempt or non-exempt.  The Company has provided to the Buyer a true, complete, and accurate list of the compensation of each Administaff Employee by type (base salary, commission, bonus, and the like).

 

(b)           The Company is not:  (i) a party to, bound by, or negotiating any collective bargaining agreement or other labor union contract, and, to the Knowledge of Sellers, there are no organizational campaigns, petitions or other unionization activities with respect to the Administaff Employees or (ii) subject to any strikes, slowdowns, work stoppages, or other labor controversy and, to the Knowledge of Sellers, no such actions are threatened.  There are no unfair labor practice complaints or any union representation questions or certification petitions involving the Company or any Administaff Employee pending before the National Labor Relations Board or, to the Knowledge of Sellers, threatened, and there have been no such complaints, questions or petitions within the last three (3) years.

(c)           Except as disclosed in Schedule 4.15(c), the Company has (i) complied, and is in compliance in all material respects, with all Laws (including the common Law) pertaining to employment and employment practices, including, but not limited to Laws governing or regarding labor relations, the payment of wages or other compensation, hours of work and overtime, worker classification, employment-related immigration and authorization to work in the United States, employment discrimination and harassment, occupational safety and health, occupational safety and health, and privacy of health information, and any and all other Laws governing or pertaining to the terms and conditions of employment, (ii) timely paid or made provision for payment of, and has properly accrued for in the financial statements of the Company, all accrued salaries, wages, commissions, bonuses, and severance pay with respect to any current or former employee or on account of employment, (iii) timely paid vacation, sick, and other paid leave with respect to any current or former employee or on account of employment, (iv) complied with the Older Workers’ Benefit Protection Act with respect to any waivers of liability under the Age Discrimination in Employment Act obtained by it in the last 300 days, and (v) not had a “plant closing” or “mass layoff” as those terms are defined in WARN within the last four (4) years.  No current or former employee or person claiming to be or have been an employee of the Company has a right to be recalled, reinstated, or restored to employment under any agreement, Law, or policy or practice of the Company.  The Company is not a party to, or otherwise bound by, any Order or settlement with respect to any current or former employee, the terms and conditions of employment, or the working conditions of any employee.  The Company does not have, and is not required by applicable Law to have, an affirmative action plan.  No Action is pending nor, to the Knowledge of the Company, is any Action threatened by or on behalf of any present or former employee, applicant, person claiming to be an employee, or any classes of the foregoing, alleging or concerning a violation of, or compliance with, any Law (including the common Law) pertaining to employment and employment practices, including, but not limited to Laws governing or regarding labor relations, the payment of wages or other compensation, hours of work and overtime, worker classification, employment-related immigration and authorization to work in the United States, employment discrimination and harassment, occupational safety and health, occupational safety and health, and privacy of health information (including the common Law), and there have been no such Actions within the past three (3) years.  There is no current or, to the Knowledge of Sellers, threatened Action in which any current or former director, officer, employee or agent of the Company is or may be entitled to indemnification.

(a)           Schedule 4.17(a) describes all real property, leaseholds or other interests in real property owned by the Company.  The Company has delivered or made available to the Buyer copies of the deeds and other instruments (as recorded) by which the Company acquired such real property and interests, and copies of all title insurance policies, opinions, abstracts and surveys in the possession of the Company and relating to such property or interests.

 

(c)           Except as described on Schedule 4.17(c), the Company owns, with good and indefeasible title in the case of real property, and good title with respect to all other assets, subject only to the Permitted Liens, all the properties and assets (real, personal and mixed, tangible and intangible) reflected as owned in the books and records of the Company, including, but not limited to, all the properties and assets reflected in the balance sheet (except for assets held under capitalized leases disclosed and personal property sold since the Balance Sheet Date in the ordinary course of business and consistent with past practice), and all the properties and assets purchased or otherwise acquired by the Company since the Balance Sheet Date (except for personal property acquired and sold since the Balance Sheet Date in the ordinary course of business and consistent with past practice).  All tangible assets are in good working condition, except for (i) normal wear and tear, (ii) Hurricane Damages that are covered as a Retained Hurricane Repair Obligation, and (iii) such assets not in good working condition which would not cause a Material Adverse Effect.

 

(d)           All buildings, plants and structures owned by the Company lie wholly within the boundaries of the real property owned by the Company and do not encroach upon the property of, or otherwise conflict with the property rights of, any other Person.

 

(a)           violate any Law applicable to Buyer or require any filing with, consent, approval or authorization of, or, notice to, any Governmental Authority;

 

(b)           violate any Organizational Document of Buyer; or

 

(c)           require any filing with or permit, consent or approval of, or the giving of any notice to, any Person.

(a)           From the Signing Date through the Closing, Sellers shall cause the Company to operate its business in the ordinary course and, without limiting the generality or effect of the foregoing, Sellers will use their Reasonable Efforts to cause the Company to preserve intact its business and its relationships with customers, suppliers and others having business relationships with the Company, in each case in all material respects.

 

(b)           Without limiting the generality or effect of Section 6.1(a), prior to the Closing, Sellers shall cause the Company not to, and Sellers and the Company shall not take any action to:

 

(a)           From the Signing Date through the Closing, Sellers shall afford to Buyer and its authorized Representatives reasonable access, during normal business hours and in such manner as not to unreasonably interfere with normal operation of the business, to the properties, books, contracts, records and appropriate officers and Administaff Employees of the Company and shall furnish such authorized Representatives with all financial and operating data and other information concerning the affairs of the Company as Buyer and such Representatives may reasonably request.  Sellers shall have the right to have a Representative present at all times during any such inspections, interviews and examinations.  Additionally, Buyer shall hold in confidence all such information on the terms and subject to the conditions contained in the Confidentiality Agreement.  Notwithstanding the foregoing, Buyer shall have no right of access to, and Sellers shall have no obligation to provide to Buyer, information relating to (i) bids received from others in connection with the transactions contemplated by this Agreement (or similar transactions) and information and analyses (including financial analyses) relating to such bids; (ii) any information the disclosure of which would jeopardize any privilege available to the Company or Sellers relating to such information or would cause the Company or Sellers to breach a confidentiality obligation; or (iii) any information the disclosure of which would result in a violation of Law.  Further, Buyer shall have no right to perform or conduct any environmental sampling or other invasive environmental investigating on or about any property, real or personal, of the Company, without the prior written consent of the Company, which consent shall not be unreasonably withheld.  Buyer and Sellers shall cooperate to ensure that the provision of access hereunder to Buyer and its authorized Representatives shall comply in all respects with the FERC’s Standards of Conduct for Transmission Providers set forth in 18 C.F.R. Part 37, et al.

 

(b)           The Company shall grant Buyer and its Representatives access to all Material Contracts (including all amendments), and will permit Buyer and its Representatives to make a copy of all such Material Contracts.

(c)           Buyer shall indemnify the Seller Indemnified Parties and their Representatives, and save them harmless, effective as and from the date hereof, from and against any claims, demands, actions, causes of action, damages, losses, costs, liabilities, or expenses that they or any of them may suffer or incur, or that may be made or brought against any of them, as a result of, in respect of, or arising out of any injury to the person or property of Buyer or its Representatives as a result of, or in connection with any site visits or inspections of the assets or properties of any Seller Indemnified Party unless caused by the willful misconduct or gross negligence of the Company or any Administaff Employee or other representative of the Company.  THE INDEMNIFICATION PROVISIONS IN THIS SECTION 6.2 SHALL BE ENFORCEABLE REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION.

(a)           From the date of this Agreement until the Closing, the Parties shall, and shall cause their respective Affiliates to:

 

(c)           In connection with any filing under the HSR Act, Buyer and the Sellers agree to split any filing fee equally.  On the date of filing under the HSR Act or within two Business Days thereof, Sellers shall wire transfer to Buyer an amount equal to one half of the required filing fee.

(a)           On or before the date that is five (5) business days prior to the Closing Date, Buyer shall notify Sellers in writing of the identities of any Administaff Employees that will not be retained by the Company, Buyer or an Affiliate of Buyer after the Closing Date (“Non-Retained Employees”).  Sellers shall terminate and cause Administaff to terminate the employment of all such Non-Retained Employees on or before the Closing Date.  Any severance payment or other compensation due to any Non-Retained Employee as a result of such termination of employment shall be the responsibility and liability of Sellers and included as a current payable in the Net Working Capital adjustment.  Any Loss with respect to (i) the Administaff Employees or relating to employment or terms and conditions of employment of the Administaff Employees arising on or before the Closing Date, or (ii) under or in connection with the Administaff Plans, any Contract with Administaff, or the termination such Contract, shall be the sole responsibility of Sellers, and Sellers shall indemnify and hold harmless Buyer and its respective Affiliates, including the Company, with respect to any such Loss.  Any severance payment, other compensation, or Loss resulting from the termination by Buyer on or after the Closing Date of the employment of any Administaff Employee not designated by Buyer as a Non-Retained Employee in accordance with the requirements of this Section 6.5(a) shall be the responsibility and liability of Buyer.  Except as otherwise provided in this Section 6.5(a), Buyer shall indemnify and hold harmless Sellers and their respective Affiliates with respect to all Losses relating to or arising out of Buyer’s designation of Non-Retained Employees.

(b)           For a period of at least one year beginning on the Closing Date and subject to the remaining paragraphs of this Section 6.5, and an individual’s continued employment with or co-employment by the Company or Buyer, Buyer shall provide or cause to be provided to each Administaff Employee who is actively co-employed by the Company as of the Closing and who has not been designated by the Buyer as a Non-Retained Employee (a “Continuing Employee”) with (i) base compensation at a rate substantially similar to such Continuing Employee’s base compensation rate immediately prior to the Closing and (ii) benefits substantially similar to the benefits provided to similarly situated employees of Buyer and its Affiliates. The Parties agree that the foregoing is not a guarantee of compensation or benefits or continuing employment or co-employment by Buyer.

 

(c)           Buyer shall make Reasonable Efforts to cause each Continuing Employee and such Continuing Employee’s eligible dependents (including all such dependents covered immediately prior to the Closing Date by an Administaff Plan that is a group health plan), to (i) be eligible for coverage under group health, prescription drug, dental and similar type welfare benefit plans maintained by Buyer or that provide benefits to the Continuing Employee and such Continuing Employee’s eligible dependents, effective immediately on the date coverage ceases under the Administaff Plans, and (ii) for purposes of satisfying deductibles, out-of-pocket maximums or other similar limitations, credit such Continuing Employee and such Continuing Employee’s eligible dependents, for the year during which such coverage under such plans begins, with any deductibles, co-insurance and co-payments already incurred during such year under the Administaff Plans that provide similar benefits but only if the Administaff Plan and the comparable Plans in which the Continuing Employees become eligible to participate after the Closing have the same plan year .

 

(d)           Buyer shall make Reasonable Efforts to cause any employee benefit plans that cover the Continuing Employees to recognize each Continuing Employee’s years of service and level of seniority prior to the Closing Date with Sellers, the Company, and its Affiliates (including service and seniority with any other employer that was recognized by Sellers, the Company, or their respective Affiliates) for purposes of terms of employment and eligibility and vesting, but not for purposes of benefit accrual, retirement eligibility, or benefit determination, under such plans and programs, including paid vacation, paid sick time, severance benefits and employer contribution rates under retirement plans.  For purposes of this Section 6.5(d), only actual years of service based on the hire date with the Company shall be credited with respect to a Continuing Employee; provided, however, that a Continuing Employee shall receive the same credit for years of service that such Continuing Employee had as of the Closing Date for purposes of Buyer’s or an Affiliate’s paid vacation leave.  Buyer shall make Reasonable Efforts to cause each employee welfare benefit plan or program sponsored by Buyer or one of its Affiliates that a Continuing Employee may be eligible to participate in on or after the Closing Date to waive any preexisting condition exclusion or any proof of insurability requirement with respect to participation and coverage requirements applicable to such Continuing Employee or such Continuing Employee’s dependents.

 

(e)           The Company shall, to the extent administratively feasible, make all payments under Section 2.3(f) prior to the Closing and shall not make any such payment to an individual unless (i) such individual has signed and, where applicable, not revoked a general release in the appropriate form attached as Exhibit F (other than payments described in Section 6.5(j) below), and (ii) where applicable, a period of not less than seven (7) days has elapsed following the execution and delivery by such individual’s acceptance of the general release.  The Company shall deliver a copy of the applicable general release to each individual to whom the Company elects to make a payment pursuant to Section 2.3(f) as soon as reasonably practical after the date of this Agreement.

 

(f)            Prior to the Closing Date, the Company shall take all actions necessary to (i) terminate all of the Company Plans effective as of the day prior to the Closing Date, and (ii) terminate the Company’s participation in the Administaff Plans effective (1) for any Administaff Plan that includes a cash or deferred arrangement described in Section 401(k) of the Code, as of the day prior to the Closing Date, and (2) for all other Administaff Plans, as of the Closing Date.

 

(g)           At least five (5) Business Days prior to the Closing Date, the Company shall submit a schedule to Buyer identifying the total amount of any accrued but unused vacation or paid time off benefits and the rate of accrual for vacation pay for each employee.  Buyer shall credit, or cause an Affiliate to credit, the Continuing Employees  with their accrued by unused vacation under its vacation policy and/or paid time off policy for use in 2008 under the terms of such policy and, to the extent such accrued but unused vacation is not used by a Continuing Employee is 2008, Buyer shall allow, or cause an Affiliate to allow, such Continuing Employee to carry over into 2009 any remaining accrued but unused vacation in accordance with its vacation policy and pay such Continuing Employee the value of any such remaining accrued but unused vacation that is not carried over.

 

(h)           In the event that Buyer is unable to provide for immediate participation by the Continuing Employees in a group health plan as of the Closing, the Buyer agrees to reimburse or cause an Affiliate to reimburse to each Continuing Employee who elects COBRA continuation coverage under an Administaff Plan that is a group health plan an amount equal to the excess of the COBRA premium over the premium that such Continuing Employee was required to paid immediately prior to the Closing for such coverage under the Administaff Plan that is a group health Plan.  Such reimbursement shall be made within ten (10) Business Days after the payment by such Continuing Employee of each COBRA premium payment.

 

(i)            Prior to the Closing, the Company will correct, where possible and permissible, any items described in Schedule 4.15(c).

 

(j)            Prior to the Closing, the letter agreements related to rights to acquire equity interests in the Company and retention bonuses described in that certain letter from Seller to Buyer dated as of the date of this Agreement shall be terminated and settled by the Company without any future liability to the Company, Buyer or any Affiliate of Buyer.

 

(l)            Sellers and the Company may retain a copy of any or all of the data room materials and other books and records relating to the business or operations of the Company on or before the Closing Date.

 

(m)           Buyer shall preserve and keep a copy of all data room materials and all books and records relating to the business or operations of the Company on or before the Closing Date in Buyer’s possession for a period of at least seven (7) years after the Closing Date.  After such seven (7) year period, before Buyer shall dispose of any such data room materials or books and records, Buyer shall give Sellers at least ninety (90) days’ prior notice to such effect, and Sellers shall be given an opportunity, at their cost and expense, to remove and retain all or any part of such data room materials and books and records as Sellers may select.  Buyer shall provide to Sellers, at no cost or expense to Sellers, full access to such data room materials and books and records as remain in Buyer’s possession and full access to the properties and employees of Buyer and the Company in connection with matters relating to the business or operations of the Company on or before the Closing Date and any disputes relating to this Agreement.

(a)           Notwithstanding anything to the contrary herein, the Parties acknowledge and agree that at any time on or after the Closing Date, any of Sellers and their Affiliates may, in its sole discretion, take any action to terminate, obtain release of or otherwise limit its liability under any and all outstanding Company Guaranties as allowed under this Agreement.

 

(b)           BUYER SHALL INDEMNIFY AND HOLD HARMLESS SELLERS AND THEIR AFFILIATES FROM AND AFTER THE CLOSING FOR ANY LOSSES ARISING OUT OF OR RELATING TO ANY COMPANY GUARANTIES, WHETHER OR NOT SUCH GUARANTIES HAVE BEEN RELEASED.

 

(a)           No Seller shall, nor will it permit any Affiliate to, for a period commencing upon the Closing Date and ending upon the second anniversary thereof, either directly or indirectly, recruit or hire or attempt to recruit or hire, directly or by assisting others, any employee, consultant, or independent contactor of the Company; provided, that this shall not restrict a Seller or its Affiliates from hiring an employee, consultant, or independent contactor of the Company who responds to a general solicitation through a newspaper, online service, recruiting firm or similar service or medium.

(b)           The covenants contained in this Section 6.11 on the part of the Sellers will be construed as ancillary to and independent of any other provision of this Agreement, and the existence of any claim or cause of action of the Sellers against Buyer or any officer, director, or shareholder of Buyer, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Buyer of the covenants of Seller contained in this Section 6.11.

 

(c)            If any Seller violates any covenant contained in this Section 6.11 and Buyer brings legal action for injunctive or other relief, Buyer shall not, as a result of the time involved in obtaining the relief, be deprived of the benefit of the full period of any such covenant.  Accordingly, the covenants of the Sellers contained in this Section 6.11 shall be deemed to have durations as specified above, which periods shall commence upon the later of (i) the Closing Date and (ii) the date of entry by a court of competent jurisdiction of a final judgment enforcing the covenants of such Seller in this Section 6.11.

 

(d)           The covenants of the Sellers contained in this Section may be assigned by Buyer to any person to whom the business of the Company is transferred substantially as an entirety, it being the intention of the parties hereto that such covenants shall inure to the benefit of any successor to the business and assets of the Company, with the same force and effect as if such covenants had been made directly to such successor or successors.

(a)           Buyer and Sellers agree to treat the sale of the Interests by the Sellers for U.S. federal income tax purposes as a sale in 2008 of the Interests by the Sellers and a purchase in 2008 of all of the assets of MMP and the MMP Affiliated Companies (other than Sweeny) by the Buyer (as described in Situation 2 of Revenue Ruling 99-6, 1999-1 C.B. 432).  The existence of MMP as a partnership for U.S. federal income tax purposes shall terminate as of the Closing Date.  The parties hereby agree that (i) to the extent any Sellers receive Buyer Units in exchange for the assignment, sale or transfer of his, her or its Interest, the assignment of such Interest to Buyer shall be treated as an exchange of such Interest for Buyer Units of Buyer and shall be treated as a contribution to Buyer under Section 721 of the Code, and (ii) to the extent any Sellers receive cash for the assignment, sale or transfer of all or a portion of his, her or its Interest to Buyer, the parties hereby agree to treat such assignment, sale or transfer as a sale of such Seller’s Interest for cash.  If, contrary to the forgoing, the Parties hereto are required to treat the assignment, sale or transfer of the Interests as a merger or consolidation of the Company with and into Buyer pursuant to Section 708(b)(2)(A) of the Code, then the parties hereto intend that:  (i) such merger or consolidation shall be treated in the manner set forth in the Treasury Regulations Section 1.708-1(c)(3)(i); (ii) this Agreement is intended to and shall constitute an election to treat such assignment, sale or transfer as a sale of Interests by Sellers to the extent of cash received, pursuant to Treasury Regulations Section 1.708-1(c)(4); and (iii) to the extent of cash received by any Seller, to treat such Sellers as selling their respective Interest for cash pursuant to Treasury Regulations Section 1.708-1(c)(4) and Example 5 of the Treasury Regulations Section 1.708-1(c)(5). The Company shall, if not already in effect, make the election provided by Code Section 754 in accordance with Treasury Regulations Section 1.754-1(b) effective for the taxable year of the Company that includes the Closing Date.

(b)           Sellers shall prepare and timely file all Tax Returns required to be filed by or with respect to MMP and each of the MMP Affiliated Companies for a Pre-Closing Tax Period.  For the avoidance of doubt, Sellers shall cause to be prepared and timely filed the federal and Louisiana income Tax Returns for MMP and the MMP Affiliated Companies on IRS Form 1065 and Louisiana Form IT-565 for the period that ends on the Closing Date.  Buyer shall file all other Tax Returns required to be filed by or with respect to MMP and each of the MMP Affiliated Companies.  Sellers shall pay and be responsible for all income Taxes owed with respect to a Pre-Closing Tax Period and shall pay and be responsible for all other Taxes for periods (or portions of a Straddle Period, as defined below) ending on or before the Effective Time, except to the extent that such Taxes were taken into account in the calculation of Estimated Effective Time Net Working Capital.  Buyer shall pay and be responsible for all income Taxes owed with respect to all periods ending after the Closing Date and shall pay and be responsible for all other Taxes (other than income taxes) for periods, (or portions of a Straddle Period) ending after the Effective Time.  Liability for Taxes (other than income Taxes) for any Tax period that includes but does not end on the Effective Time (a “Straddle Period”) shall be apportioned between Buyer and Sellers as follows:  (i) property and similar ad valorem Taxes or franchise Taxes based solely on capital shall be apportioned to the Sellers for the period up to and including the Effective Time and to the Buyer for the period after the Effective Time on a ratable daily basis; and (ii) all other Taxes shall be apportioned between Buyer and Sellers based on an interim closing of the books of MMP and each of the MMP Affiliated Companies as of the Effective Time.  For this purpose, any franchise Tax paid or payable with respect to MMP or the MMP Affiliated Companies shall be allocated to the taxable period during which the income, operations, assets or capital comprising the base of such Tax is measured, regardless of whether the right to do business for another taxable period is obtained by the payment of such Tax.  Buyer shall file, or cause to be filed, all Tax Returns with respect to a Straddle Period.  Buyer shall provide a copy of each such Tax Return at least twenty (20) days before the due date for such Tax Return along with a computation of the allocations of Tax, if any, to Sellers.  Prior to the filing of such Tax Returns, Buyer shall make any revisions or adjustments reasonably requested by Sellers.  Five (5) days before the due date for such a Tax Return, the Sellers shall pay Buyer the excess, if any, of the Sellers’ share of the Taxes for such Straddle Period, as determined in this Section 7.1(b), over the amount of such Taxes taken into account in calculation of the Estimated Effective Time Net Working Capital.  Buyer and Sellers shall each provide the other with all information reasonably necessary to prepare a Tax Return.  Buyer agrees not to amend Sellers’ previously filed Tax Returns without Sellers’ prior consent, which consent shall not be unreasonably withheld.

(a)           Representations, Warranties and Covenants of Sellers.  (i) Each of the representations and warranties of Sellers and the Company made in this Agreement will be true and correct as of the date of this Agreement and as of the Closing (as if made anew at and as of the Closing), (ii) Sellers and the Company shall have performed or complied with all of the covenants and agreements required by this Agreement to be performed or complied with by Sellers and the Company on or before the Closing, and (iii) Sellers and the Company shall have delivered to Buyer a certificate, dated the Closing Date, certifying that the conditions specified in this Section 8.1(a) have been fulfilled;

 

(b)           Third Party Consents; Governmental Approvals.  All consents, approvals or waivers, if any, disclosed on any schedule to this Agreement or otherwise required in connection with the consummation of the transactions contemplated by this Agreement have been received.  All of the consents, approvals, authorizations, exemptions and waivers from Governmental Authorities that will be required to enable Buyer to consummate the transactions contemplated by this Agreement have been obtained;

 

(c)           HSR Approval.  The waiting period under the HSR Act applicable to the consummation of the sale and purchase of the Interests contemplated hereby shall have expired or been terminated;

 

(d)           No Injunction, Etc.  No provision of any applicable Law and no order will be in effect that will prohibit or restrict the consummation of the Closing;

 

(e)           No Proceedings.  No proceeding challenging this Agreement or the transactions contemplated hereby or seeking to prohibit, alter, prevent or materially delay the Closing or seeking Losses from Buyer or Sellers incident to this Agreement or the transactions contemplated hereby, will have been instituted by any Person before any Governmental Authority and be pending;

 

(f)           Resignations of Officers, Directors, and Managers.  The resignations (or evidence of removal) of each officer, director, and manager of the Company effective as of the Closing;

 

(g)           No Material Adverse Effect.  Since Balance Sheet Date, there shall not have been any Material Adverse Effect with respect to the Company or Buyer;

(h)           Assignment of Interests and Delivery of Certificates, etc.  Buyer shall have received an Assignment of Interests in form and substance reasonably acceptable to Buyer, duly executed by each Seller along with the certificates, documents and agreements representing a part of the Interests to be sold to Buyer hereunder, all of which shall be free and clear of all Liens and Encumbrances;

 

(i)            Legal Opinions.  Buyer shall have received (i) an opinion of counsel for the Company in substantially the form attached hereto as Exhibit G, (ii) an opinion of counsel for the respective Sellers regarding due authority, execution and enforceability as it relates to the respective Seller and no violations of organizational documents or applicable Law; and (iii) a tax opinion from the Company’s counsel, dated the Closing Date, that at least 90% of the gross income earned by the Company is “qualifying income” as that term is defined in Code Section 7704(d);

 

(j)            Net Working Capital.  Buyer shall have received and agreed to the Sellers’ written calculation of Estimated Effective Time Net Working Capital;

 

(k)           Marketing Agreement.  Buyer and Coxon (or an entity controlled by Coxon) shall have entered into a consulting agreement in substantially the form attached hereto as Exhibit H;

 

(l)            Noncompetition Agreements.  Buyer and each of MME Unit Holdings, LLC, O’Shea and Coxon shall have entered into the noncompetition agreement in substantially the form attached hereto as Exhibit I;

 

(m)           Transition Services Agreement.  Buyer and O’Shea shall have entered in to the Transition Services Agreement in substantially the form attached hereto as Exhibit J;

 

(n)           Escrow Agreement.  Buyer, Sellers and the Escrow Agent shall have entered into the escrow agreement for the Escrow Deposit in substantially the form attached hereto as Exhibit C ;

 

(o)           Special Indemnity Agreement.  Buyer and Sellers shall have entered into the Special Indemnity Agreement in substantially the form attached hereto as Exhibit D;

 

(p)           FIRPTA Certificate.  Each Seller shall have executed and delivered to Buyer a certificate in form and substance reasonable satisfactory to Buyer to the effect that each Seller is not a “foreign person” within the meaning of Code Section 1445 and the Treasury Regulations thereunder;

 

(q)           Payment of Bank and Other Indebtedness.  Buyer shall have received written evidence in form and substance reasonable satisfactory to Buyer setting forth the payoff amount for all Indebtedness for Borrowed Money of the Company or any Seller who has granted a Lien on the Interests to be sold hereunder, as applicable, including costs and expenses associated therewith, which amounts shall be paid by Buyer with a corresponding reduction in the Cash Payment;

(r)           Release of Liens.  Buyer shall have received written evidence in form and substance reasonably satisfactory to Buyer that all Liens on the assets of the Company or on the Interests of any Seller securing Indebtedness for Borrowed Money will be released upon payment thereof by Buyer;

 

(s)           Settlement of Hedges.  Sellers and the Company  shall have settled, terminated or unwound all natural gas, ethane and crude oil calls, puts, swaps and other commodity or interest rate hedges of the Company, and pursuant to Section 2.2(d) all costs and expenses associated therewith shall have been taken into account as an adjustment to the Cash Payment, if settled, terminated or unwound between the Effective Time and the Closing Date, or taken into account in calculating Effective Time Net Working Capital if settled, terminated or unwound prior to the Effective Time;

 

(t)           Allocation of Purchase Price Among Sellers.  Each Seller shall have executed and delivered to Buyer a written acknowledgement of the allocation by percentage and the amount of distribution of the Purchase Price among all the Sellers, as set forth on Schedule 2.2(a), and Sellers shall, jointly and severally, release and indemnify Buyer and the Company from any and all claims made by any Person arising out of or related to the payment of the Purchase Price in accordance with such allocation;

 

(u)           Release by Sellers, Officers and Directors.  Except for the rights provided in this Agreement, each Seller and each officer and director of the Company shall execute and deliver to Buyer and the Company a general release and waiver in form and substance reasonable satisfactory to Buyer regarding any and all claims, causes of action, rights and entitlements of such Seller, officer, or director, including, without limitation, any rights and entitlements of the Sellers arising from the agreement which they purchased their Interests in MMP;

 

(v)           Nonsolicitation Agreements.  Buyer shall have received Nonsolicitation Agreements executed by each of Joe Sutton and George Sakellaris, which agreements shall contain substantially the same terms and provisions as set forth in Section 6.11 hereof;

 

(w)           Termination of Agreements.  Buyer shall have received evidence that each of the documents and agreements described in Section 6.14 shall have been terminated without any cost or liability to the Company or Buyer; and

 

(x)           Miscellaneous.  Sellers and the Company shall have delivered such other certificates, instruments of conveyance, and documents as may be reasonably requested by Buyer and agreed to by Sellers and the Company prior to the Closing Date to carry out the intent and purposes of this Agreement.

(a)           Representations, Warranties and Covenants of Buyer.  (i) Each of the representations and warranties of Buyer made in this Agreement will be true and correct as of the date of this Agreement and as of the Closing (as if made anew at and as of the Closing), (ii) Buyer shall have performed or complied in all material respects with all of the covenants and agreements required by this Agreement to be performed or complied with by Buyer on or before the Closing, and (iii) Buyer shall have delivered to Sellers a certificate, dated the Closing Date, certifying that the conditions specified in this Section 8.2(a) have been fulfilled;

 

(b)           Third Party Consents; Governmental Approvals.  All consents, approvals or waivers, if any, disclosed on any schedule to this Agreement or otherwise required in connection with the consummation of the transactions contemplated by this Agreement have been received.  All of the consents, approvals, authorizations, exemptions and waivers from Governmental Authorities that will be required to enable Sellers to consummate the transactions contemplated by this Agreement have been obtained;

 

(c)           HSR Approval.  The waiting period under the HSR Act applicable to the consummation of the sale and purchase of the Interests contemplated hereby shall have expired or been terminated;

 

(d)           No Injunction, Etc.  No provision of any applicable Law and no order will be in effect that will prohibit or restrict the consummation of the Closing;

 

(e)           No Proceedings.  No proceeding challenging this Agreement or the transactions contemplated hereby or seeking to prohibit, alter, prevent or materially delay the Closing or seeking Losses from Buyer or Sellers incident to this Agreement or the transactions contemplated hereby, will have been instituted by any Person before any Governmental Authority and be pending;

 

(f)            No Material Adverse Effect.  Since June 30, 2008, there shall not have been any Material Adverse Effect with respect to Buyer; provided, however, if Sellers, in good faith, establish that this condition has not been met, this condition can be satisfied by Buyer, in the sole discretion of Buyer, if Buyer tenders to Sellers the aggregate amount of $55,000,000 in immediately available funds in lieu of delivering to Sellers Buyer Units as contemplated in Section 2.2 hereof. In such event, the Escrow Deposit shall be funded with $25,000,000 in cash rather than Buyer Units and the Parties hereto agree that provisions relating to this Agreement and the documents and agreements to be executed and delivered at the Closing shall be amended and/or modified  to give effect to this change; and

 

(g)           Other Deliveries.  Buyer shall have delivered such other certificates, instruments, and documents as may be reasonably requested by Sellers and agreed to by Buyer prior to the Closing Date to carry out the intent and purposes of this Agreement.

(a)           From and after the Closing, each Seller (individually, and not jointly or severally) will indemnify, defend and hold harmless Buyer and its officers, members, directors, employees and Affiliates (the “Buyer Indemnified Parties”) against any and all Losses Buyer shall suffer (any Loss of the Company after the Closing Date shall be deemed a Loss suffered by Buyer) as a result of, relating to or arising out of (i) any failure or breach of any representation or warranty (without regard to the terms “material,” “Material Adverse Effect” or any derivative thereof in the representations and warranties or in any defined terms used therein) made by that respective Seller pursuant to Article III under this Agreement to be true and correct as of the date hereof and as of the Closing (as if made anew at and as of the Closing), or (ii) the breach of any covenant or agreement made or to be performed by such Seller pursuant to this Agreement.

 

(b)           Subject to the limitations set forth in Section 9.3, from and after the Closing, the Buyer Indemnified Parties shall be entitled to indemnity against any and all Losses incurred or suffered by Buyer (any such Loss of the Company shall be deemed a Loss suffered by Buyer) as a result of, relating to or arising out of any failure or breach of any representation or warranty (without regard to the terms “material,” “Material Adverse Effect” or any derivative thereof in the representations and warranties or in any defined terms used therein) made by the Company pursuant to Article IV under this Agreement to be true and correct as of the date hereof and as of the Closing (as if made anew at and as of the Closing).

(c)           Subject to the limitations set forth in Section 9.3, from and after the Closing, the Buyer Indemnified Parties shall be entitled to indemnity against any and all Losses incurred or suffered by Buyer (any such Loss of the Company shall be deemed a Loss suffered by Buyer) as a result of, relating to or arising out of the matters more particularly described in the Special Indemnity Agreement.

 

(d)           Subject to the limitations set forth in Section 9.3, from and after the Closing Date, the Buyer Indemnified Parties shall be entitled to indemnity against any and all Losses incurred or suffered by Buyer as a result of, relating to or arising out of the Retained Compliance Matters, Retained Environmental Obligations, Retained Hurricane Repair Obligations or the Retained Litigation.

 

(e)           From and after the Closing, Buyer will indemnify, defend and hold harmless Sellers and their officers, members, directors, employees and Affiliates (the “Seller Indemnified Parties”) against any and all Losses incurred or suffered as a result of, relating to or arising out of (i) any failure of any representation or warranty made by Buyer in this Agreement to be true and correct as of the Closing (as if made anew at and as of the Closing), (ii) the breach of any covenant or agreement made or to be performed by Buyer pursuant to this Agreement, and (iii) the operation of the business of the Company after the Closing Date.

 

(f)            Buyer’s right to indemnification in accordance with the provisions of this Article IX will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any representation, warranty, covenant or obligation set forth in this Agreement.

 

(g)           THE INDEMNIFICATION PROVISIONS IN THIS ARTICLE IX SHALL BE ENFORCEABLE REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION.

(a)           In the event a Buyer Indemnified Party has a claim for indemnification against an individual Seller under Section 9.2(a) hereof, then the Buyer Indemnified Party’s sole and exclusive remedy shall be, at the election of the Buyer Indemnified Party, against (i) that respective Seller, and shall not have an indemnification claim against any other Sellers; and/or (ii) that respective Seller’s pro rata interest in the Escrow Deposit as referenced on Exhibit A hereto.

 

(b)           A Buyer Indemnified Party shall not be entitled to indemnity under Section 9.2(b) of this Agreement (other than on account of a breach of Section 4.3(b)) for Losses with respect to any claim (or group of related claims that result from substantially the same or substantially related circumstances) the amount of which is less than ten thousand dollars ($10,000) (the “De Minimis Threshold”), and if less than such De Minimis Threshold such claims shall not be subject to indemnity hereunder.  Furthermore, a Buyer Indemnified Party will not be entitled to indemnity under Section 9.2(b) of this Agreement (other than on account of a breach of Section 4.3(b)) with respect to claims that exceed the De Minimis Threshold until the aggregate amount of all such claims exceeds one million five hundred thousand dollars ($1,500,000) (the “Basket Amount”), and thereafter, the Buyer Indemnified Parties shall only be entitled to indemnity for the amount in excess of the Basket Amount.  For the avoidance of doubt, any claim for Losses that exceeds the De Minimis Threshold shall be weighted 100% (i.e. back to first dollar) in filling the Basket Amount, which Basket Amount shall serve as a deductible.  Notwithstanding the foregoing, the De Minimis Threshold and the Basket Amount shall not apply with respect to any claim related to Section 4.3(b) (Capitalization).

 

(c)           In the event a Buyer Indemnified Party is entitled to indemnity under Section 9.2(b),(c), or (d) of this Agreement, any such claim may be satisfied solely and exclusively against the Escrow Account.  Buyer Indemnified Parties shall have no further right to indemnity under Section 9.2(b),(c),or (d) at such time as all Buyer Units and cash have been disbursed from the Escrow Account.  Under no circumstance shall a Buyer Indemnified Party be entitled to recover an indemnity claim arising under Section 9.2(b), (c), or (d) of this Agreement directly against a Seller.

 

(d)           In the event a Buyer Indemnified Party is entitled to indemnity under Section 9.2 (a), (c), or (d) of this Agreement, any such claim for indemnity shall not be subject to the De Minimis Threshold or the Basket Amount.

 

(e)           Except as provided in Section 2.5, the amount of any Losses subject to indemnification under this Article IX shall be reduced or reimbursed, as the case may be, by any third party insurance proceeds or third party recoveries, less the costs expended for such recoveries.  Buyer shall, and shall cause the Buyer Indemnified Parties to, use commercially reasonable efforts to collect any amounts available under such insurance coverage and from such other third party alleged to have responsibility.  If a Buyer Indemnified Party receives an amount under insurance coverage or from such third party with respect to Losses that were the subject of indemnification under this Article IX at any time subsequent to indemnification provided thereunder, then such Buyer Indemnified Party shall promptly reimburse the Seller(s), as applicable.

(a)           If any Person who or which is entitled to seek indemnification under Section 9.2 (an “Indemnified Party”) receives notice of the assertion or commencement of any claim asserted against an Indemnified Party by a third party (“Third Party Claim”) in respect of any matter that is subject to indemnification under Section 9.2, the Indemnified Party shall promptly (i) notify the Party obligated to the Indemnified Party pursuant to Section 9.2 above, (the “Indemnifying Party”) of the Third Party Claim and (ii) transmit to the Indemnifying Party a written notice (“Claim Notice”) describing in reasonable detail the nature of the Third Party Claim, a copy of all papers served with respect to such claim (if any), the Indemnified Party’s best estimate of the amount of Losses attributable to the Third Party Claim and the basis of the Indemnified Party’s request for indemnification under this Agreement.  Failure to timely provide such Claim Notice shall not affect the right of the Indemnified Party’s indemnification hereunder, except to the extent the Indemnifying Party is prejudiced by such delay or omission.

(b)           Subject to Section 9.4(e) below, the Indemnifying Party shall have the right to defend the Indemnified Party against such Third Party Claim.  If the Indemnifying Party notifies the Indemnified Party that the Indemnifying Party elects to assume the defense of the Third Party Claim (such election to be without prejudice to the right of the Indemnified Party to dispute whether such claim is an identifiable Loss under this Article IX), then the Indemnifying Party shall have the right to defend such Third Party Claim with counsel selected by the Indemnifying Party (who shall be reasonably satisfactory to the Indemnified Party), by all appropriate proceedings, to a final conclusion or settlement at the discretion of the Indemnifying Party in accordance with this Section 9.4(b).  The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided that the Indemnifying Party shall not enter into any settlement agreement without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed); provided further, that such consent shall not be required if (i) the settlement agreement contains a complete and unconditional general release by the third party asserting the claim to all Indemnified Parties affected by the claim and (ii) the settlement agreement does not contain any sanction or restriction upon the conduct of any business by the Indemnified Party or its Affiliates.  If requested by the Indemnifying Party, the Indemnified Party agrees, at the sole cost and expense of the Indemnifying Party, to cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim which the Indemnifying Party elects to contest, including the making of any related counterclaim against the Person asserting the Third Party Claim or any cross complaint against any Person.  The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 9.4(b), and the Indemnified Party shall bear its own costs and expenses with respect to such participation.

 

(c)           If the Indemnifying Party does not notify the Indemnified Party that the Indemnifying Party elects to defend the Indemnified Party pursuant to Section 9.4(b), then the Indemnified Party shall have the right to defend, and be reimbursed for its reasonable cost and expense (but only if the Indemnified Party is actually entitled to indemnification hereunder) in regard to the Third Party Claim with counsel selected by the Indemnified Party (who shall be reasonably satisfactory to the Indemnifying Party), by all appropriate proceedings, which proceedings shall be prosecuted diligently by the Indemnified Party.  In such circumstances, the Indemnified Party shall defend any such Third Party Claim in good faith and have full control of such defense and proceedings; provided, however, that the Indemnified Party may not enter into any compromise or settlement of such Third Party Claim if indemnification is to be sought hereunder, without the Indemnifying Party’s consent (which consent shall not be unreasonably withheld, conditioned or delayed).  The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this Section 9.4(c), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

 

 

(d)           Any claim by an Indemnified Party on account of Losses that does not result from a Third Party Claim (a “Direct Claim”) will be asserted by giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than thirty (30) days after the Indemnified Party becomes aware of such Direct Claim.  Such notice by the Indemnified Party will describe the Direct Claim in reasonable detail, will include copies of all available material written evidence thereof and will indicate the estimated amount, if reasonably practicable, of damages that has been or may be sustained by the Indemnified Party.  The Indemnifying Party will have a period of five (5) Business Days within which to respond in writing to such Direct Claim.  If the Indemnifying Party does not so respond within such five (5) Business Day period, the Indemnifying Party will be deemed to have rejected such claim, in which event the Indemnified Party will be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

 

(e)           Notwithstanding the foregoing, Sellers shall retain control over the defense of any Third Party Claim as it relates to the Retained Litigation, for so long as any Party, or the Company is actively contesting or defending against any charge, complaint, action, suit, proceeding hearing, investigation, claim, or demand in connection with any of the Retained Litigation, Sellers shall, at their sole cost and expense, (i) cooperate with and pay the fees and expenses of counsel for the Company in the defense or contest of such Retained Litigation, (ii) make available their personnel, and provide such testimony and access to their books and records as shall be necessary in connection with the defense or contest of such Retained Litigation, (iii) provide timely status reports to Buyer regarding the Retained Litigation; and (iv) timely pay in full all judgments, settlements and other awards for which the Company may become obligated.  Sellers shall defend any Retained Litigation in good faith and have full control of such defense and proceedings; provided, however, that Sellers may not enter into any compromise or settlement of such Retained Litigation without the prior written consent of Buyer (which consent shall not be unreasonably withheld, conditioned or delayed).  Buyer may participate in, but not control, any defense or settlement controlled by Sellers pursuant to this Section 9.4(e), and Buyer shall bear its own costs and expenses with respect to such participation.

 

(f)            Notwithstanding the foregoing, Buyer shall retain control over the defense of any Third Party Claim as it relates to the Retained Environmental Obligations as well as any action required by a Governmental Authority as it relates to the Retained Environmental Obligations.  After Closing, Buyer shall promptly commence such curative efforts and remedial actions to address the Retained Environmental Obligations, the cost and expenses of which will be covered by the Escrow Deposit.  Sellers shall assist in such effort with Buyer and any third party consultants who have advised Buyer with respect to this Agreement and such Retained Environmental Obligations.

(g)           Furthermore, Buyer may not enter into any compromise or settlement of such Third Party Claim or incur any expense related to the Retained Environmental Obligations if indemnification is to be sought hereunder, without the express written consent of the Sellers’ Representative, which will not be unreasonably withheld.

(a)           EXCEPT THOSE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT OR IN ANY CERTIFICATE OR WRITTEN STATEMENT FURNISHED, OR TO BE FURNISHED TO BUYER PURSUANT TO THIS AGREEMENT OR IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, NEITHER SELLERS NOR ANY OF THEIR AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE COMPANY ITS BUSINESS OR ANY OF ITS ASSETS, LIABILITIES OR OPERATIONS, INCLUDING WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, OR WITH RESPECT TO ANY FINANCIAL PROJECTIONS OR FORECASTS RELATING TO THE COMPANY, AND ANY SUCH OTHER REPRESENTATION AND WARRANTIES ARE HEREBY DISCLAIMED.

 

(b)           EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE SELLERS’ INTERESTS IN THE COMPANY AND ITS ASSETS ARE BEING TRANSFERRED THROUGH THE SALE OF THE INTERESTS “AS IS, WHERE IS, WITH ALL FAULTS,” AND SELLERS EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE COMPANY AND ITS ASSETS OR THE PROSPECTS (FINANCIAL OR OTHERWISE), RISKS AND OTHER INCIDENTS OF THE COMPANY AND ITS ASSETS.

9.8.           Exclusive Remedy.  The indemnifications and remedies set forth in this Agreement shall, from and after the Closing, constitute the sole and exclusive remedies of the Parties with respect to any breach of representation or warranty or non-performance, partial or total, of any covenant or agreement contained in this Agreement; provided that nothing in this Section 9.8 shall prevent either Party from seeking (i) injunctive or equitable relief, including, but not limited to specific performance, in pursuit of its indemnification claims or remedies under this Agreement; or (ii) an appropriate remedy arising out of or related to a Party’s fraud or criminal activity.

 

(b)           by Buyer, if there has been a breach by Sellers or the Company of any representation, warranty or covenant contained in this Agreement that has prevented the satisfaction of any condition to the obligations of Buyer at the Closing and, if such breach is of a character that it is capable of being cured, such breach has not been cured by Sellers or the Company within thirty (30) days after written notice thereof from Buyer;

 

(c)           by Sellers, if there has been a breach by Buyer of any representation, warranty or covenant contained in this Agreement that has prevented the satisfaction of any condition to the obligations of Sellers at the Closing and, if such breach is of a character that it is capable of being cured, such breach has not been cured by Buyer within thirty (30) days after written notice thereof from Sellers;

 

(d)           by either Buyer or Sellers if any Governmental Authority having competent jurisdiction has issued a final, non-appealable order, decree, ruling or injunction (other than a temporary restraining order) or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or

 

(e)           by either Buyer or Sellers, if the transactions contemplated hereby have not been consummated by October 31, 2008, provided that neither Buyer nor Sellers will be entitled to terminate this Agreement pursuant to this Section 10.1(e) if such Person’s breach of this Agreement has prevented the consummation of the transactions contemplated by this Agreement.

10.2.        Effect of Termination.  If this Agreement is terminated under Section 10.1, all further obligations of the Parties under this Agreement will terminate without further liability or obligation of either Party to the other Parties hereunder; provided, however, that no Party will be released from liability hereunder if this Agreement is terminated and the transactions abandoned by reason of (a) failure of such Party to have performed its material obligations under this Agreement or (b) any material misrepresentation made by such Party of any matter set forth in this Agreement.  Nothing in this Section 10.2 will relieve any Party to this Agreement of liability for breach of this Agreement occurring prior to any termination, or for breach of any provision of this Agreement that specifically survives termination hereunder.  The Confidentiality Agreement shall not be affected by a termination of this Agreement.

(a)           This Agreement shall be governed and construed in accordance with the Laws of the State of Texas, without regard to the Laws that might be applicable under conflicts of Laws principles.

 

(b)           The Parties agree that the appropriate, exclusive and convenient forum for any disputes between any of the Parties hereto arising out of this Agreement or the transactions contemplated hereby shall be in any state or federal court in Houston, Texas, and each of the Parties hereto irrevocably submits to the jurisdiction of such courts solely in respect of any legal proceeding arising out of or related to this Agreement.  The Parties further agree that the Parties shall not bring suit with respect to any disputes arising out of this Agreement or the transactions contemplated hereby in any court or jurisdiction other than the above specified courts.  The Parties further agree, to the extent permitted by Law, that a final and nonappealable judgment against a Party in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and amount of such judgment.  Except to the extent that a different determination or finding is mandated due to the applicable Law being that of a different jurisdiction, the Parties agree that all judicial determinations or findings by a state or federal court in Houston, Texas with respect to any matter under this Agreement shall be binding.

(c)           To the extent that any Party hereto has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each such party hereby irrevocably (i) waives such immunity in respect of its obligations with respect to this Agreement and (ii) submits to the personal jurisdiction of any court described in Section 11.11(b).

 

(d)           THE PARTIES HERETO AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS AGREEMENT.

 

2.             Amendment to Section 2.5 of the Purchase Agreement.  Section 2.5 of the Purchase Agreement is hereby amended and restated in its entirety by the following:

(a)           The Parties acknowledge that certain assets of the Company, including, but not limited to, the Yscloskey and Terrebonne plants, incurred damages caused by Hurricane Gustav in 2008 (“Hurricane Gustav Damages”).  The Parties agree that the actual cost required to repair any such Hurricane Gustav Damages, as set forth in an appropriate “authorization for expenditure” delivered to the Company by the operator for the Company’s non-operated assets will be considered a “Retained Hurricane Gustav Repair Obligation” for purposes of this Agreement and shall be governed by the indemnification provisions set forth in Article IX hereof and shall be excluded from the adjustments to the Purchase Price as described in Section 2.3.  Furthermore, the Parties agree that Buyer, from and after Closing, shall promptly pay all repair expenses attributable to the Company for Hurricane Gustav Damages as set forth in an appropriate “authorization for expenditure” delivered to the Company by the operator of such assets.  Buyer may, thereafter, make claims against the Escrow Deposit in accordance with the provisions set forth in Article IX hereof for the amount of such Hurricane Gustav Damages.  If the amount of such claims exceeds, either individually or in the aggregate, the cash portion of the Escrow Deposit, Buyer may, at its sole election, either (i) retain any and all insurance proceeds recoverable from or on account of such Hurricane Gustav Damages or (ii) satisfy the balance of such claim with Buyer Units held in the Escrow Deposit valued as described in Article IX.  In the event Buyer makes an election under (ii) above, all insurance proceeds recoverable from or on account of such Hurricane Gustav Damages shall be delivered to the Escrow Agent and shall become part of the Escrow Deposit as governed by Article IX and the Escrow Agreement, as applicable.  Notwithstanding the forgoing, all business interruption insurance proceeds paid or payable to the Company recoverable from or on account of such Hurricane Gustav Damages for the period prior to the Effective Time shall be remitted by the Company to the Sellers’ Representative, for distribution to the Sellers.  All business interruption insurance proceeds paid or payable to the Company recoverable from or on account of such Hurricane Gustav Damages for the period after the Effective Time shall be retained by the Company and/or Buyer in Buyer’s sole discretion.  Any deductible days under such business interruption insurance shall be for the account of the Sellers.  Buyer shall use its Reasonable Efforts to collect any and all property and business interruption insurance.

(b)           The Parties acknowledge that certain assets of the Company, including, but not limited to, the Yscloskey and Terrebonne plants, incurred damages caused by Hurricane Ike in 2008 (“Hurricane Ike Damages”, and collectively, with Hurricane Gustav Damages, the “Hurricane Damages”).  The Parties agree that the actual cost required to repair any such Hurricane Ike Damages, as set forth in an appropriate “authorization for expenditure” delivered to the Company by the operator for the Company’s non-operated assets or as determined in good faith by Buyer for the Company’s operated assets, will be considered a “Retained Hurricane Ike Repair Obligation”, and collectively with Retained Hurricane Gustav Obligation, the “Retained Hurricane Repair Obligation”) for purposes of this Agreement and shall be governed by the indemnification provisions set forth in Article IX hereof and shall be excluded from the adjustments to the Purchase Price as described in Section 2.3.  Furthermore, the Parties agree that Buyer, from and after Closing, shall promptly pay all repair expenses attributable to the Company for Hurricane Ike Damages as set forth in an appropriate “authorization for expenditure” delivered to the Company by the operator of such assets.  Buyer may, thereafter, make claims against the Escrow Deposit in accordance with the provisions set forth in Article IX hereof for the amount of such Hurricane Ike Damages, subject to offset for any insurance proceeds recoverable from or on account of such Hurricane Ike Damages.  Notwithstanding the forgoing, all business interruption insurance proceeds paid or payable to the Company recoverable from or on account of such Hurricane Ike Damages for the period prior to the Effective Time shall be remitted by the Company to the Sellers’ Representative, for distribution to the Sellers.  All business interruption insurance proceeds paid or payable to the Company recoverable from or on account of such Hurricane Damages for the period after the Effective Time shall be retained by the Company and/or Buyer in Buyer’s sole discretion.  Any deductible days under such business interruption insurance shall be for the account of the Sellers.  Buyer shall use its Reasonable Efforts to collect any and all property and business interruption insurance.

3.            Amendment to Section 6.8 of the Purchase Agreement.  Section 6.8 of the Purchase Agreement is hereby amended and restated in its entirety by the following:

Section 6.8.  Director and Officer Indemnification.  For a period of not less than six (6) years after the Closing Date, Buyer shall cause the Organizational Documents of MMP and each MMP Affiliate Company to continue to include the same provisions concerning the exculpation, indemnification, advancement of expenses to and holding harmless of, all past and present employees, officers, agents and directors of such entity for acts or omissions occurring at or prior to the Closing as are contained in such documents as of the date of execution of this Agreement, and Buyer shall cause MMP and each MMP Affiliate Company to honor jointly and severally all such provisions, including making any indemnification payments and expense advancements thereunder.  If any indemnifiable claim is asserted or made within such six (6) year period, all rights to indemnification and advancement of expenses in respect of such claim shall continue to the extent currently permitted under the relevant entity’s Organizational Documents until such claim is disposed of or all orders in connection with such claim are fully satisfied.  The foregoing provisions of this section shall not apply with respect to any breaches of representations, warranties, or covenants under this Agreement by the Company or any Seller whether or not the period of survival of such breached representation, warranty or covenant shall have expired under this Agreement.  The Company shall also purchase, prior to the Closing, a run-off policy with respect to the Company’s current Director and Officer Insurance Policy, in order to extend such policy’s claims coverage (for periods prior to the Closing) for 6 years after the Closing Date.  Notwithstanding the foregoing, in the event that a Seller brings a claim alleging fraud, willful misconduct or gross negligence against any person who was an employee, officer, agent or director of MMP or any MMP Affiliate Company prior to the Closing based on an act or omission of such person occurring prior to the Closing, then the indemnification obligations of Buyer, MMP and/or the respective MMP Affiliate Company shall be limited to the coverage available under the run-off policy referenced in the prior sentence cover such claim, provided that the employee, officer, agent or director requesting such coverage shall be responsible for paying (or reimbursing the Buyer, MMP or the respective MMP Affiliate Company for) any deductible under such run-off policy.

4.            Ratification.  The Purchase Agreement, as hereby amended, is ratified and confirmed in all respects and shall continue in full force and effect in all respects in its original form, except as modified and amended hereby.

5.            Governing Law.   This Amendment is governed and construed in accordance with the Laws of the State of Texas, without  regard to the Laws that might be applicable under conflicts of Laws principles.  The Parties hereto agree that the appropriate, exclusive and convenient forum for any disputes between any of the Parties hereto arising out of this Amendment or the transactions contemplated hereby shall be in any state or federal court in Houston, Texas, and each of the Parties hereto irrevocably submits to the jurisdiction of such courts solely in respect of any legal proceeding arising out of or related to this Amendment.  The Parties further agree that the Parties shall not bring suit with respect to any disputes arising out of this Amendment or the transactions contemplated hereby in any court or jurisdiction other than the above specified courts.  The Parties further agree, to the extent permitted by Law, that a final and nonappealable judgment against a party in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and amount of such judgment.  Except to the extent that a different determination or finding is mandated due to the applicable Law being that of a different jurisdiction, the Parties hereto agree that all judicial determinations or findings by a state or federal court in Houston, Texas with respect to any matter under this Amendment shall be binding.  To the extent that any party hereto has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each such party hereby irrevocably (i) waives such immunity in respect of its obligations with respect to this Amendment and (ii) submits to the personal jurisdiction of any court described above.  THE PARTIES HERETO AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS AMENDMENT.

6.            Counterparts.  This Amendment may be executed in multiple counterparts, each of which when so executed shall be deemed an original and all of which shall constitute one and the same agreement.