AGREEMENT AND PLAN OF REDEMPTION AND MERGER by and among MarkWest Hydrocarbon, Inc. MarkWest Energy Partners, L.P. and MWEP, L.L.C.Agreement and Plan of Merger |
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QuickLinks -- Click here to rapidly navigate through this document Exhibit 10.1 AGREEMENT AND PLAN OF REDEMPTION AND MERGER by and among MarkWest Hydrocarbon, Inc. MarkWest Energy Partners, L.P. and MWEP, L.L.C. Dated as of September 5, 2007
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This AGREEMENT AND PLAN OF REDEMPTION AND MERGER, dated as of September 5, 2007 (this "Agreement"), is entered into by and among MARKWEST HYDROCARBON, INC., a Delaware corporation ("Hydrocarbon"), MARKWEST ENERGY PARTNERS, L.P., a Delaware limited partnership ("Energy Partners"), and MWEP, L.L.C., a Delaware limited liability company ("MergerCo") and a wholly-owned subsidiary of Energy Partners. WHEREAS, the Board of Directors of Hydrocarbon (the "Hydrocarbon Board"), upon the recommendation of the Deal Committee (as defined herein), and the Board of Directors of MarkWest Energy GP, L.L.C., the general partner (the "General Partner") of Energy Partners, upon the recommendation of the Conflicts Committee (as defined herein), have determined that it is in the best interests of Hydrocarbon and its stockholders, and Energy Partners and its limited partners, respectively, to consummate the business combination provided for herein pursuant to which (i) Hydrocarbon will, subject to the terms and conditions set forth herein, redeem in the Redemption (as defined herein) a portion of its outstanding shares of Hydrocarbon Common Stock (as defined herein) and then (ii) MergerCo will, subject to the terms and conditions set forth herein, merge (the "Merger") with and into Hydrocarbon, with Hydrocarbon surviving, such that following the Redemption and Merger, Hydrocarbon will be a direct, wholly owned subsidiary of Energy Partners; WHEREAS, the Fox Support Agreement (as defined herein), the Exchange Agreement (as defined herein) and the Class B Membership Interest Contribution Agreement (as defined herein) have been entered into simultaneously with the execution of this Agreement; and WHEREAS, the parties desire to make certain representations, warranties and agreements in connection with the Redemption and Merger and also to prescribe certain conditions to the Redemption and Merger. NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows: Section 1.1 Certain Definitions . As used in this Agreement, the following terms shall have the meanings set forth below: "Acquisition Proposal" means: any proposal or offer from or by any Person other than Energy Partners and MergerCo relating to (i) any direct or indirect acquisition of (A) all or substantially all of the assets of Hydrocarbon and its Subsidiaries, taken as a whole, (B) more than 20% of the outstanding equity securities of Hydrocarbon or (C) a business or businesses that constitute more than 20% of the cash flow, net revenues, net income or assets of Hydrocarbon and its Subsidiaries, taken as a whole; (ii) any tender offer or exchange offer, as defined pursuant to the Exchange Act, that, if consummated, would result in any Person beneficially owning more than 20% of the outstanding equity securities of Hydrocarbon; or (iii) any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving Hydrocarbon, other than the Redemption and Merger, pursuant to which the stockholders of Hydrocarbon prior to consummation of such transaction would hold less than 80% of the outstanding shares or equity interests of the surviving or resulting Person or parent thereof. 1
"Affiliate" has the meaning set forth in Rule 405 of the rules and regulations of the Securities Act, unless otherwise expressly stated herein. "Aggregate Consideration" shall mean the sum of (x) the Total Stock Consideration and (y) the Total Cash Amount. "Agreement" shall have the meaning set forth in the introductory paragraph to this Agreement. "Amended and Restated Partnership Agreement" shall mean the Third Amended and Restated Agreement of Limited Partnership substantially in the form attached hereto as Annex A . "Appraisal Shares" shall have the meaning set forth in Section 3.3. "Business Day" shall mean any day which is not a Saturday, Sunday or other day on which banks are authorized or required to be closed in the City of New York. "Cash Designated Shares" shall have the meaning set forth in Section 3.2(e)(ii)(B). "Cash Election Shares" shall have the meaning set forth in Section 3.2(b). "Certificate" shall have the meaning set forth in Section 3.1(f). "Certificate of Merger" shall have the meaning set forth in Section 2.2(b). "Change in U.S. Federal Tax Law" shall have the meaning set forth in Section 7.15(b). "Claim" shall have the meaning set forth in Section 6.12(a). "Class A Units" shall mean the Class A units representing limited partner interests of Energy Partners having the rights and obligations specified with respect to such Class A Units in the Amended and Restated Partnership Agreement. "Class B Membership Interest Contribution Agreement" shall mean the Class B Membership Interest Contribution Agreement, dated the date hereof, entered into among Energy Partners and the holders of Class B membership interests in the General Partner named therein. "Closing" shall have the meaning set forth in Section 2.3. "Closing Date" shall have the meaning set forth in Section 2.3. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Common Units" shall mean the common units representing limited partner interests of Energy Partners having the rights and obligations specified with respect to Common Units in the Partnership Agreement and Amended and Restated Partnership Agreement. "Compensation and Benefit Plans" shall have the meaning set forth in Section 5.3(l)(i). "Confidentiality Agreement" shall mean a confidentiality agreement substantially in the form attached hereto as Annex E (the "Confidentiality Agreement"). "Conflicts Committee" shall mean the Conflicts Committee of the Board of Directors of the General Partner, consisting (as of the date hereof) of William P. Nicoletti, Keith E. Bailey and Charles K. Dempster. "Deal Committee" shall mean the Deal Committee of the Hydrocarbon Board, consisting (as of the date hereof) of Michael L. Beatty, Karen L. Rogers, Donald D. Wolf and William F. Wallace. "Delaware LP Act" shall mean the Delaware Revised Uniform Limited Partnership Act, as amended. 2
"Deemed Stock Amount" shall mean the Total Common Stock Amount; provided , however , that regardless of the actual number of shares of Hydrocarbon Common Stock outstanding immediately prior to the Redemption, which shall take place immediately prior to the Effective Time, in no event shall the Deemed Stock Amount exceed the sum of (i) 11,954,334 and (ii) the aggregate number of shares of Hydrocarbon Common Stock, if any, issued by Hydrocarbon after the date of this Agreement in accordance with Section 4.2. "DGCL" shall mean the Delaware General Corporation Law. "Disclosure Schedule" shall have the meaning set forth in Section 5.1. "Dissenting Holders" shall mean Hydrocarbon stockholders who have demanded appraisal in accordance with the provisions of Section 262 of the DGCL with regard to the Redemption Charter Amendment or the Merger concerning their right to object to and dissent from the Redemption Charter Amendment or the Merger. "Effective Time" shall have the meaning set forth in Section 2.2(b). "Election Deadline" shall have the meaning set forth in Section 3.2(b). "Election Form" shall have the meaning set forth in Section 3.2(a). "Election Form Record Date" shall have the meaning set forth in Section 3.2(a). "Energy Partners" shall have the meaning set forth in the introductory paragraph to this Agreement. "Energy Partners Change in Recommendation" shall have the meaning set forth in Section 6.2. "Energy Partners' Disclosure Schedule" shall mean the Disclosure Schedule delivered by Energy Partners pursuant to Section 5.1. "Energy Partners Meeting" shall have the meaning set forth in Section 6.2. "Energy Partners Phantom Units" shall mean the phantom (notional) Common Units granted under the MarkWest Energy Partners, L.P. Long-Term Incentive Plan. "Energy Partners Termination Fee" shall mean an amount equal to $15 million in cash. "Energy Partners Recommendation" shall have the meaning set forth in Section 6.2. "Energy Partners Unitholder Approval" shall have the meaning set forth in Section 7.1. "Environmental Laws" shall mean all applicable local, state and federal environmental, health and safety laws and regulations, including, without limitation, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Water Act, the Federal Clean Air Act, and the Occupational Safety and Health Act, each as amended, regulations promulgated thereunder, and state counterparts. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "ERISA Affiliate" shall have the meaning set forth in Section 5.3(l)(iv). "Escrow Agent" shall mean Wells Fargo Bank, N.A. as escrow agent for the benefit of Energy Partners for certain payments under Article IX. "Escrow Fund" shall have the meaning set forth in Section 9.1(g). "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder. 3
"Exchange Agreement" shall mean the Exchange Agreement among Hydrocarbon, Energy Partners and the General Partner entered into simultaneously with the execution of this Agreement. "Exchange Fund" shall have the meaning set forth in Section 3.5. "Exchange Ratio" shall mean the quotient, rounded to the nearest ten-thousandth, obtained by dividing the Per Share Consideration by the Final Energy Partners Unit Price. "Excluded Party" shall have the meaning set forth in Section 6.6(a). "Expenses" shall have the meaning set forth in Section 9.1(f). "Final Energy Partners Unit Price" shall mean the volume-weighted average of the trading sale prices per Common Unit as reported on the NYSE during the Valuation Period. The Final Energy Partner Unit Price shall be calculated to the nearest one-hundredth of one cent. "Fox Support Agreement" shall mean the Voting Agreement among John M. Fox and MWHC Holdings Inc. and Energy Partners, entered into simultaneously with the execution of this Agreement. "General Partner" shall have the meaning set forth in the recitals to this Agreement. "General Partner Units" shall mean the general partner units representing a general partner interest in Energy Partners having the rights and obligations specified with respect to General Partner Units in the Partnership Agreement. "Governmental Authority" means any national, state, local, county, parish or municipal government, domestic or foreign, any agency, board, bureau, commission, court, tribunal, subdivision, department or other governmental or regulatory authority or instrumentality, or any arbitrator in any case that has jurisdiction over Hydrocarbon or Energy Partners, as the case may be, or any of their respective properties or assets. "Hydrocarbon" shall have the meaning set forth in the introductory paragraph of this Agreement. "Hydrocarbon Board" shall have the meaning set forth in the recitals to this Agreement. "Hydrocarbon Bylaws" means the bylaws of Hydrocarbon. "Hydrocarbon Change in Recommendation" shall have the meaning set forth in Section 6.6(c). "Hydrocarbon Charter" means the certificate of incorporation of Hydrocarbon. "Hydrocarbon Common Stock" means the Common Stock, par value $.01 per share, of Hydrocarbon. "Hydrocarbon Meeting" shall have the meaning set forth in Section 6.2. "Hydrocarbon Recommendation" shall have the meaning set forth in Section 6.2. "Hydrocarbon Restricted Stock" shall mean shares of Hydrocarbon Common Stock that have been granted to employees , directors and consultants of Hydrocarbon or its Subsidiaries and as of the Redemption, which shall take place immediately prior to the Effective Time, are subject to a "substantial risk of forfeiture" within the meaning of Section 83 of the Code. "Hydrocarbon Stockholder Approval" shall have the meaning set forth in Section 7.1. "Hydrocarbon Stock Options" means all employee and director stock options to purchase shares of Hydrocarbon Common Stock pursuant to awards granted under any of the Hydrocarbon Stock Option Plans. 4
"Hydrocarbon Stock Option Plans" shall mean the Hydrocarbon 2006 Stock Incentive Plan, the Hydrocarbon 1996 Stock Incentive Plan, the Hydrocarbon 1996 Non-Employee Director Stock Option Plan and any other plan pursuant to which any Hydrocarbon Stock Option is granted. "Hydrocarbon Termination Fee" shall mean an amount equal to $15 million in cash; provided, however, if Hydrocarbon terminates in accordance with Section 8.1(d)(i) and enters into a definitive agreement with respect to a Superior Proposal prior to the No Solicitation Start Date or a definitive agreement with an Excluded Party, then "Hydrocarbon Termination Fee" shall mean an amount equal to $7.5 million in cash. "Hydrocarbon's Disclosure Schedule" shall mean the Disclosure Schedule delivered by Hydrocarbon pursuant to Section 5.1. "HSR" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder. "IDRs" shall mean the Incentive Distribution Rights as defined in the Partnership Agreement. "Indemnification Expenses" shall have the meaning set forth in Section 6.12(a). "Indemnified Party" shall have the meaning set forth in Section 6.12(a). "Joint Proxy Statement" shall have the meaning set forth in Section 6.3(a). "Lien" shall mean any charge, mortgage, pledge, security interest, restriction, claim, lien, or encumbrance. "LLC Act" shall have the meaning set forth in Section 2.2(b). "Mailing Date" shall have the meaning set forth in Section 3.2(a). "Material Adverse Effect" shall mean, with respect to either Hydrocarbon or Energy Partners, any effect that (i) is or could reasonably be expected to be material and adverse to the financial position, results of operations, business or assets of Hydrocarbon and its Subsidiaries taken as a whole, or Energy Partners and its Subsidiaries taken as a whole, respectively, or (ii) materially impairs or could reasonably be expected to materially impair the ability of Hydrocarbon or Energy Partners, respectively, to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the Redemption and Merger and the other transactions contemplated by this Agreement; provided , however , that Material Adverse Effect shall not be deemed to include the impact of (a) circumstances affecting the gathering, processing or fractionation of natural gas companies generally, (b) the natural gas pipeline, treating and processing industry generally (including the price of natural gas and the cost associated with the drilling and/or production of natural gas), (c) any general market, economic, financial or political conditions, or outbreak or hostilities or war, in the United States or (d) the effects of the Redemption and Merger and compliance by either party with the provisions of this Agreement on the financial position, results of operations, business or assets of such party and its Subsidiaries, or the other party and its Subsidiaries, as the case may be, so long as, in the case of clauses (a), (b) or (c), the impact on Hydrocarbon or Energy Partners is not disproportionately adverse as compared to others in the industry. "Meeting" shall have the meaning set forth in Section 6.2. "Merger" shall have the meaning set forth in the recitals to this Agreement. "MergerCo" shall have the meaning set forth in the introductory paragraph in this Agreement. "Multiemployer Plans" shall have the meaning set forth in Section 5.3(l)(iii). "No-Solicitation Period Start Date" means 30 days immediately following the date of this Agreement. 5
"Non-Electing Shares" shall have the meaning set forth in Section 3.2(b). "Non-Compliance Event" shall have the meaning set forth in Section 5.3(i)(i). "Non-Compliance Notification" shall have the meaning set forth in Section 5.3(i)(iii). "Non-Qualifying Income Cushion" shall have the meaning set forth in Section 9.1(g). "NYSE" shall mean the New York Stock Exchange. "Partnership Agreement" shall mean the Second Amended and Restated Agreement of Limited Partnership of Energy Partners, as in effect immediately prior to the Effective Time. "Pension Plan" shall have the meaning set forth in Section 5.3(l)(iii). "Per Share Cash Consideration" shall have the meaning set forth in Section 3.1(a). "Per Share Consideration" shall mean the quotient, rounded to the nearest ten-thousandth, obtained by dividing the Aggregate Consideration by the Total Common Stock Amount. "Per Share Stated Cash Consideration" shall mean the product, rounded to the nearest ten-thousandth, of (x) $20 multiplied by (y) a fraction, the numerator of which is the Deemed Stock Amount and the denominator of which is the Total Common Stock Amount. "Per Share Stated Unit Consideration" shall mean a number (which need not be a whole number) of Common Units equal to the product, rounded to the nearest ten-thousandth, of (x) 1.285 multiplied by (y) a fraction, the numerator of which is the Deemed Stock Amount and the denominator of which is the Total Common Stock Amount. "Per Share Unit Consideration" shall mean a number (which need not be a whole number) of Common Units equal to the Exchange Ratio. "Permitting Violation" shall have the meaning set forth in Section 5.3(i)(ii). "Person" or "person" shall mean any individual, bank, corporation, partnership, limited liability company, association, joint-stock company, business trust or unincorporated organization. "Plans" shall have the meaning set forth in Section 5.3(l)(iii). "Previously Disclosed" by a party shall mean information set forth in its Disclosure Schedule. "Redemption" shall mean redemption of shares of Hydrocarbon Common Stock pursuant to and in accordance with the Redemption Charter Amendment. "Redemption Charter Amendment" shall mean the Certificate of Amendment to the Certificate of Incorporation of Hydrocarbon in the form attached hereto as Annex B . "Redemption/Exchange Agent" shall mean Wells Fargo, N.A. or such other entity as may be selected by Energy Partners subject to the reasonable approval of Hydrocarbon. "Redemption/Merger Consideration" shall have the meaning set forth in Section 3.1(b). "Redemption Shares" shall mean all Stated Consideration Cash Shares and all Cash Election Shares unless (1) the aggregate cash amount that would be paid upon the redemption of the Cash Election Shares is greater than the Total Remaining Cash Amount, in which case only the Stated Consideration Cash Shares and those Cash Election Shares that are not Unit Designated Shares shall constitute Redemption Shares, or (2) the aggregate cash amount that would be paid upon the redemption of the Cash Election Shares is less than the Total Remaining Cash Amount, in which case all Stated Consideration Cash Shares, Cash Election Shares and Cash Designated Shares shall constitute Redemption Shares. Redemption Shares shall not include Treasury Shares, shares held by 6
Energy Partners or its Subsidiaries and, to the fullest extent permitted by law, shares of Dissenting Holders and Hydrocarbon Restricted Stock. "Registration Statement" shall have the meaning set forth in Section 6.3(a). "Regulatory Authorities" shall have the meaning set forth in Section 5.3(h)(ii). "Representatives" shall mean with respect to a Person, its directors, officers, employees, agents and representatives, including any investment banker, financial advisor, attorney, accountant or other advisor, agent or representative; provided , however , that John Fox shall not be considered a Representative for purposes of this Agreement. "Restructuring Transactions" shall mean the following, collectively, as provided for in the Exchange Agreement: the exchange by Hydrocarbon of its 4,938,992 Common Units for Class A Units and the exchange by the General Partner of its 2% economic interest in Energy Partners and the IDRs for Class A Units. "Rights" shall mean, with respect to any person, securities or obligations convertible into or exchangeable for, or giving any person any right to subscribe for or acquire, or any options, calls or commitments relating to, equity securities of such person. "Rule 145 Affiliate" shall have the meaning set forth in Section 6.7(a). "SEC" shall mean the Securities and Exchange Commission. "SEC Documents" shall have the meaning set forth in Section 5.3(g). "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations thereunder. "Significant Subsidiaries" shall have the meaning ascribed to such term in Section 1-01(w) of Regulation S-X under the Securities Act. "Stated Consideration" shall mean an amount equal to the Per Share Stated Cash Consideration plus the Per Share Stated Unit Consideration. "Stated Consideration Cash Shares" shall have the meaning set forth in Section 3.2(b). "Stated Consideration Shares" shall have the meaning set forth in Section 3.2(b). "Stated Consideration Unit Shares" shall have the meaning set forth in Section 3.2(b). "Subordinated Units" shall mean the subordinated units representing limited partner interests of Energy Partners having the rights and obligations specified with respect to Subordinated Units in the Partnership Agreement. "Subsidiary" shall have the meaning ascribed to such term in Rule 1-02 of Regulation S-X under the Securities Act, except, in the case of Hydrocarbon, Energy Partners and its Subsidiaries shall not be deemed to be Subsidiaries of Hydrocarbon. "Superior Proposal" means any Acquisition Proposal (except that references to 20% within the definition of "Acquisition Proposal" shall be replaced by "50%") made by a third party on terms that the Hydrocarbon Board (acting through the Deal Committee) determines, in its good faith judgment, after consulting with its or the Deal Committee's, as applicable, financial advisors and outside legal counsel, and taking into account all financial, legal, regulatory and other aspects of the Acquisition Proposal (i) to be more favorable to Hydrocarbon's stockholders, including the Unaffiliated Stockholders, from a financial point of view than the Redemption and Merger, taken together, and (ii) that is reasonably capable of being consummated. "Surviving Entity" shall have the meaning set forth in Section 2.2(a). 7
"Takeover Law" means any "fair price," "moratorium," "control share acquisition," "business combination" or any other anti-takeover statute or similar statute enacted under state or federal law. "Taxes" shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, property or other taxes, custom duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority. "Tax Returns" shall have the meaning set forth in Section 5.3(o). "Termination Date" shall have the meaning set forth in Section 8.1(b)(i). "Total Cash Amount" shall mean the product obtained by multiplying (x) $20.00 by (y) the Deemed Stock Amount. "Total Common Stock Amount" shall mean the total number of shares of Hydrocarbon Common Stock, less the number of shares of Hydrocarbon Restricted Stock, outstanding immediately prior to the Redemption, which shall take place immediately prior to the Effective Time. "Total Remaining Cash Amount" shall mean the amount of cash equal to the (x) Total Cash Amount minus (y) the Total Stated Consideration Cash Amount. "Total Stated Consideration Cash Amount" shall mean the product obtained by multiplying (x) the Per Share Cash Consideration by (y) the total number of Stated Consideration Cash Shares. "Total Stock Amount" shall mean the product obtained by multiplying (x) 1.285 by (y) the Deemed Stock Amount. "Total Stock Consideration" shall mean the product obtained by multiplying (x) the Total Stock Amount by (y) the Final Energy Partners Unit Price. "Treasury Shares" shall mean shares of Hydrocarbon Common Stock owned by Hydrocarbon or any of its Subsidiaries at the Effective Time. "Unaffiliated Stockholders" means the holders of Hydrocarbon Common Stock, other than John M. Fox and MWHC Holdings Inc., their respective affiliates, and the respective officers and directors of Hydrocarbon and the General Partner. "Unit Designated Shares" shall have the meaning set forth in Section 3.2(e)(i)(B). "Unit Election Shares" shall have the meaning set forth in Section 3.2(b). "Unit Issuance" shall mean (i) the issuance of Common Units in the Merger pursuant to this Agreement and (ii) the issuance of Class A Units to Hydrocarbon and the General Partner in the Restructuring Transactions. "Unit Majority" shall mean the Unit Majority as defined in the Partnership Agreement. "Valuation Period" shall mean the ten consecutive trading days during which the Common Units are traded on the NYSE, ending on the third calendar day immediately prior to the Effective Time, or if such calendar day is not a trading day, then ending on the trading day immediately preceding such calendar day. 8
Section 2.1 The Redemption . (a) Amendment to Hydrocarbon Charter . The Hydrocarbon Board, in connection with the execution of this Agreement, has adopted the Redemption Charter Amendment. (b) The Redemption . Upon the effectiveness of the Redemption Charter Amendment and immediately prior to the Effective Time of the Merger, as provided in the Redemption Charter Amendment, each Redemption Share shall be redeemed at a redemption price equal to the Per Share Cash Consideration. Such Per Share Cash Consideration shall be paid in accordance with the procedures for payment thereof to holders of Certificates as set forth in Section 3.5. Section 2.2 The Merger . (a) The Surviving Entity . Subject to the terms and conditions of this Agreement, at the Effective Time, which shall be immediately following the Redemption, MergerCo shall merge with and into Hydrocarbon, the separate existence of MergerCo shall cease and Hydrocarbon shall survive and continue to exist as a Delaware entity (Hydrocarbon, as the surviving corporation in the Merger, sometimes being referred to herein as the "Surviving Entity"), such that following the Merger, Hydrocarbon will be a direct, wholly owned subsidiary of Energy Partners. (b) Effectiveness and Effects of the Merger . Subject to the satisfaction or waiver of the conditions set forth in Article VII in accordance with this Agreement, the Merger shall become effective upon the later to occur of the filing in the office of the Secretary of State of the State of Delaware of a properly executed certificate of merger (the "Certificate of Merger") or such later date and time as may be set forth in the Certificate of Merger (the "Effective Time"), in accordance with the DGCL and the Delaware Limited Liability Company Act (the "LLC Act"). The Merger shall have the effects prescribed in the DGCL and the LLC Act. (c) Certificate of Incorporation and Bylaws . At the Effective Time, the Hydrocarbon Charter shall be amended in its entirety to read as set forth in Annex C , and as so amended shall be the certificate of incorporation of the Surviving Entity, until duly amended in accordance with the terms thereof and applicable law. At the Effective Time, the Hydrocarbon Bylaws shall be amended in its entirety to read as set forth in Annex D , and as so amended shall be the bylaws of the Surviving Entity until duly amended in accordance with the terms of the certificate of incorporation of the Surviving Entity, such bylaws and applicable law. (d) Directors of the Surviving Entity . Frank M. Semple, Nancy K. Buese and Andrew L. Schroeder shall be the directors of the Surviving Entity as of the Effective Time, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the Surviving Entity. (e) Officers of the Surviving Entity . The officers of Hydrocarbon immediately prior to the Effective Time shall be the officers of the Surviving Entity as of the Effective Time, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the Surviving Entity. Section 2.3 Closing . Subject to the satisfaction or waiver of the conditions as set forth in Article VII in accordance with this Agreement, the filing of the Redemption Charter Amendment, followed by the filing of the Certificate of Merger (as defined herein) with the Delaware Secretary of State, and the closing of the Redemption, the Restructuring Transactions, the Merger and the other transactions contemplated hereby (the "Closing") shall occur on (a) the third business day after the day on which the last of the conditions set forth in Article VII shall have been satisfied or waived in 9
accordance with the terms of this Agreement or (b) such other date to which the parties may agree in writing. The date on which the Closing occurs is referred to as the "Closing Date." The Closing of the transactions contemplated by this Agreement shall take place at the offices of Hogan & Hartson L.L.P., One Tabor Center, Suite 1500, 1200 Seventeenth Street, Denver, Colorado 80202, at 10:00 a.m. local time on the Closing Date. Section 3.1 Redemption and Merger Consideration . Subject to the provisions of this Agreement: (a) By virtue of the Redemption, each Redemption Share shall be redeemed upon the effectiveness of the Charter Amendment immediately prior to the Effective Time for cash in an amount having a value equal to the Per Share Consideration in the Redemption (the "Per Share Cash Consideration"). (b) By virtue of the Merger, at the Effective Time each share of Hydrocarbon Common Stock issued and outstanding immediately prior to the Effective Time that has not been redeemed pursuant to the Redemption (other than Treasury Shares, shares held by Energy Partners or its Subsidiaries and, to the fullest extent permitted by law, shares of Dissenting Holders and Hydrocarbon Restricted Stock) shall be converted into the Per Share Unit Consideration. The Per Share Unit Consideration, together with the Per Share Cash Consideration, shall be referred to herein as the "Redemption/Merger Consideration." (c) By virtue of the Redemption, the Total Cash Amount deposited by Hydrocarbon with the Redemption/Exchange Agent will be used to redeem shares of Hydrocarbon Common Stock and such shares of Hydrocarbon Common Stock shall be treated as redeemed and canceled immediately prior to the Merger. (d) By virtue of the Merger, all of the limited liability company interests in MergerCo outstanding immediately prior to the Effective Time shall be converted into and become 1,000 fully paid and nonassessable shares of common stock of the Surviving Corporation. (e) By virtue of the Merger, each Treasury Share and each share of Hydrocarbon Common Stock owned by Energy Partners or its Subsidiaries shall cease to be outstanding and shall be canceled without payment of any consideration therefor, and no partnership interest of Energy Partners or other consideration shall be delivered in exchange therefor. (f) All shares of Hydrocarbon Common Stock, when redeemed in the Redemption or converted in the Merger, shall cease to be outstanding and shall automatically be canceled and cease to exist. Each holder of a certificate (a "Certificate") previously representing any such shares shall cease to have any rights with respect thereto, except the right to receive (i) the Redemption/Merger Consideration, (ii) any distributions in accordance with Section 3.5(c) and (iii) any cash to be paid in lieu of any fractional Common Unit in accordance with Section 3.5(e), in each case to be issued or paid in consideration therefor upon the surrender of such Certificates in accordance with Section 3.5. Section 3.2 Election Procedures . (a) An election form and other appropriate and customary transmittal materials (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates theretofore representing shares of Hydrocarbon Common Stock shall pass, only upon proper delivery of such Certificates to the Redemption/Exchange Agent) in such form as Energy Partners and Hydrocarbon shall mutually agree (the "Election Form") and pursuant to which each holder of record of shares of Hydrocarbon Common Stock as of the close of business on the Election Deadline may make an election pursuant to this Section 3.2, shall be mailed at the same time as the Joint Proxy Statement or 10
at such other time as Hydrocarbon and Energy Partners may agree (the date on which such mailing is commenced or such other agreed date, the "Mailing Date") to each holder of record of Hydrocarbon Common Stock as of the close of business on the record date for notice of the Hydrocarbon Meeting (the "Election Form Record Date"). (b) Each Election Form shall permit the holder (or the beneficial owner through appropriate and customary documentation and instructions), other than any holder of Appraisal Shares, to specify (i) the number of such holder's shares of Hydrocarbon Common Stock with respect to which such holder elects to have redeemed for the Per Share Cash Consideration in the Redemption ("Cash Election Shares"), (ii) the number of such holder's shares of Hydrocarbon Common Stock with respect to which such holder elects to have exchanged for the Per Share Unit Consideration in the Merger ("Unit Election Shares"), (iii) the number of such holder's shares of Hydrocarbon Common Stock with respect to which such holder elects to receive the Stated Consideration (the "Stated Consideration Shares"), a portion of which shares shall be Stated Consideration Cash Shares to be redeemed for the Per Share Cash Consideration in the Redemption, and a portion of which shares shall be Stated Consideration Unit Shares to be exchanged for the Per Share Unit Consideration in the Merger, both as provided for herein, and (iv) the number of such holder's shares of Hydrocarbon Common Stock with respect to which such holder makes no election ("Non-Electing Shares"). For each holder electing to receive the Stated Consideration, (x) that number of such holder's Stated Consideration Shares equal to the quotient obtained by dividing (1) the product of the Per Share Stated Cash Consideration multiplied by the number of such holder's Stated Consideration Shares by (2) the Per Share Cash Consideration, rounded to the nearest whole share, shall be deemed "Stated Consideration Cash Shares" hereunder and (y) that number of such holder's Stated Consideration Shares equal to (1) the number of such holder's Stated Consideration Shares minus (2) the number of such holder's Stated Consideration Cash Shares shall be deemed "Stated Consideration Unit Shares" hereunder. Any Hydrocarbon Common Stock with respect to which the Redemption/Exchange Agent has not received an effective, properly completed Election Form on or before 5:00 p.m., New York City time, on the 33rd day following the Mailing Date (or such other time and date as Hydrocarbon and Energy Partners shall agree) (the "Election Deadline") (other than any shares of Hydrocarbon Common Stock that constitute Appraisal Shares as of such time) shall also be deemed to be Non-Electing Shares. In addition, any shares of Hydrocarbon Common Stock treated as outstanding upon the exercise of Hydrocarbon Stock Options pursuant to Section 3.7(a) shall be deemed to be Non-Electing Shares. (c) Hydrocarbon and Energy Partners shall mail one or more Election Forms as may reasonably be requested from time to time by all Persons who become holders (or beneficial owners) of Hydrocarbon Common Stock between the Election Form Record Date and the close of business on the Business Day prior to the Election Deadline. Hydrocarbon shall provide to the Redemption/Exchange Agent all information reasonably necessary for it to perform as specified herein. (d) Any such election shall have been properly made only if the Redemption/Exchange Agent shall have actually received a properly completed Election Form by the Election Deadline. An Election Form shall be deemed properly completed only if accompanied by (i) one or more Certificates (or customary affidavits and indemnification regarding the loss or destruction of such Certificates or the guaranteed delivery of such Certificates) representing all certificated shares of Hydrocarbon Common Stock covered by such Election Form or (ii) in the case of shares in book-entry form, any additional documents specified by the procedures set forth in the Election Form, together with duly executed transmittal materials included in the Election Form. Any Election Form may be revoked or changed by the Person submitting such Election Form prior to the Election Deadline. In the event an Election Form is revoked prior to the Election Deadline, the shares of Hydrocarbon Common Stock represented by such Election Form shall become Non-Electing Shares and Energy Partners shall cause the Certificates, if any, representing Hydrocarbon Common Stock to be promptly returned without charge to the Person submitting the Election Form upon written request to that effect from the holder who 11
submitted the Election Form, except to the extent (if any) a subsequent election is properly made with respect to any or all of the applicable shares of Hydrocarbon Common Stock. Subject to the terms of this Agreement and of the Election Form, the Redemption/Exchange Agent shall have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in the Election Forms, and any good faith decisions of the Redemption/Exchange Agent regarding such matters shall be binding and conclusive. None of Energy Partners, MergerCo or the Redemption/Exchange Agent shall be under any obligation to notify any Person of any defect in an Election Form. (e) Within ten Business Days after the Election Deadline, unless the Effective Time has not yet occurred, in which case as soon after the Effective Time as practicable (and in no event more than ten Business Days after the Effective Time), Hydrocarbon and Energy Partners shall cause the Redemption/Exchange Agent to effect the allocation among the holders of shares of Hydrocarbon Common Stock of rights to receive cash in the Redemption or Common Units in the Merger in accordance with the Election Forms (subject to compliance with the provisions of this Agreement) as follows:
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Notwithstanding anything in this Agreement to the contrary, to the fullest extent permitted by law, for purposes of determining the allocations set forth in this Section 3.2, Energy Partners shall have the right to require, but not the obligation to require, that any shares of Hydrocarbon Common Stock that constitute Appraisal Shares as of the Election Deadline be treated as Cash Election Shares but not be subject to the pro rata selection process contemplated by this Section 3.2, and, if Energy Partners so requires, then, to the fullest extent permitted by law, any Appraisal Shares that receive the Redemption/Merger Consideration provided under this Article III shall be treated as Cash Election Shares but not be subject to the pro rata selection process contemplated by this Section 3.2. (f) The pro rata selection process to be used by the Redemption/Exchange Agent shall consist of such equitable pro ration processes as shall be mutually determined by Energy Partners and Hydrocarbon. Section 3.3 Appraisal Rights . Notwithstanding anything in this Agreement to the contrary, shares of Hydrocarbon Common Stock issued and outstanding immediately prior to the filing of the Redemption Charter Amendment or the Effective Time that are held by any record holder who is entitled to demand and properly demands appraisal of such shares pursuant to, and who complies in all respects with, the provisions of Section 262 of the DGCL (the "Appraisal Shares") shall not be converted into the right to receive the Redemption/Merger Consideration, but instead shall become the right to payment of the fair value of such shares in accordance with the provisions of Section 262 of the DGCL and the Redemption Charter Amendment and at the filing of the Redemption Charter Amendment or the Effective Time, all Appraisal Shares shall no longer be outstanding and shall automatically be canceled and cease to exist. Notwithstanding the foregoing, if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262 of the DGCL or a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by Section 262 of the DGCL, then the right of such holder to be paid the fair value of such holder's Appraisal Shares under Section 262 of the DGCL and the Redemption Charter Amendment shall be forfeited and cease and if such forfeiture shall occur following the Election Deadline, each of such holder's Appraisal Shares, to the extent permitted by law, shall be treated as Non-Electing Shares or pursuant to Section 3.2(e) as Cash Election Shares. Hydrocarbon shall deliver prompt notice to Energy Partners of any demands for appraisal of any shares of Hydrocarbon Common Stock and provide Energy Partners with the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal. Prior to the Effective Time, Hydrocarbon shall not, without the prior written consent of Energy Partners, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing. Section 3.4 Rights As Stockholders; Stock Transfers . After the Redemption or the Effective Time, as the case may be, holders of Hydrocarbon Common Stock shall cease to be, and shall have no rights, as stockholders of Hydrocarbon, other than to receive (a) any dividend or other distribution with respect to such Hydrocarbon Common Stock with a record date occurring prior to the Effective Time that may have been declared or made by Hydrocarbon on such shares of Hydrocarbon Common Stock 13
in accordance with the terms of this Agreement or prior to the date hereof and which remain unpaid at the Effective Time and (b) the consideration provided under this Article III. After the Effective Time, there shall be no transfers on the stock transfer books of the shares of Hydrocarbon Common Stock. Section 3.5 Exchange of Certificates . (a) Redemption/Exchange Agent . Hydrocarbon shall irrevocably deposit with the Redemption/Exchange Agent an amount in cash that shall be sufficient to effect the Redemption, and Energy Partners shall deposit or shall cause to be deposited the Common Units for the Merger with the Redemption/Exchange Agent, in each case for the benefit of the holders of shares of Hydrocarbon Common Stock and both of which together shall be used to make all deliveries of cash and the Common Units as required by and pursuant to this Article III. Energy Partners agrees to make available to the Redemption/Exchange Agent, from time to time as needed, cash sufficient to pay any distributions pursuant to Section 3.5(c) and to make payments in lieu of any fractional Common Units pursuant to Section 3.5(e). Any cash and Common Units deposited with the Redemption/Exchange Agent (including as payment for any fractional Common Units in accordance with Section 3.5(e) and any distributions in accordance with Section 3.5(c)) shall hereinafter be referred to as the "Exchange Fund." The Redemption/Exchange Agent shall, pursuant to irrevocable instructions, deliver the Redemption/Merger Consideration contemplated to be paid for shares of Hydrocarbon Common Stock pursuant to this Agreement, both through the Redemption and through the Merger, out of the Exchange Fund. Except as contemplated by Sections 3.5(c) and 3.5(e) hereof, the Exchange Fund shall not be used for any other purpose. (b) Exchange Procedures . Promptly after the Effective Time, Energy Partners shall instruct the Redemption/Exchange Agent to mail to each record holder of Certificates (other than such holders who have properly completed an Election form and elected the shares with respect to such Certificates as Cash Election Shares, Unit Election Shares, Stated Consideration Shares or Non-Electing Shares in accordance with Section 3.2 and other than Appraisal Shares), (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Redemption/Exchange Agent, and shall be in customary form and agreed to by Energy Partners and Hydrocarbon prior to the Effective Time) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Redemption/Merger Consideration payable in respect of the shares of Hydrocarbon Common Stock represented by such Certificates. Promptly after the Effective Time, upon surrender of Certificates for cancellation to the Redemption/Exchange Agent together with such letters of transmittal, properly completed and duly executed, and such other documents as may be required pursuant to such instructions, the holders of such Certificates and the holders of Certificates who previously surrendered Certificates to the Redemption/Exchange Agent with properly completed and duly executed Election Forms shall be entitled to receive in exchange therefor (A) Common Units representing, in the aggregate, the whole number of Common Units that such holder has the right to receive pursuant to this Article III (after taking into account all shares of Hydrocarbon Common Stock then held by such holder) and (B) a check in the amount equal to the aggregate amount of cash that such holder has the right to receive pursuant to this Article III, including cash payable in lieu of any fractional Common Units pursuant to Section 3.5(e) and distributions pursuant to Section 3.5(c). No interest shall be paid or accrued on any Redemption/Merger Consideration, cash in lieu of fractional shares or on any unpaid dividends and distributions payable to holders of Certificates. In the event of a transfer of ownership of shares of Hydrocarbon Common Stock which is not registered in the transfer records of Hydrocarbon, the Redemption/Merger Consideration payable in respect of such shares of Hydrocarbon Common Stock may be paid to a transferee if the Certificate representing such shares of Hydrocarbon Common Stock is presented to the Redemption/Exchange Agent, accompanied by all documents required to evidence and effect such transfer and the Person requesting such exchange shall pay to the Redemption/Exchange Agent in advance any transfer or other Taxes required by reason of the delivery of the 14
Redemption/Merger Consideration in any name other than that of the registered holder of the Certificate surrendered, or shall establish to the satisfaction of the Redemption/Exchange Agent that such Taxes have been paid or are not payable. Until surrendered as contemplated by this Section 3.5, each Certificate other than Certificates representing Appraisal Shares shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Redemption/Merger Consideration payable in respect of the shares of Hydrocarbon Common Stock represented by such Certificate and any distributions to which such holder is entitled pursuant to Section 3.4. (c) Distributions with Respect to Unexchanged Common Units . No distributions declared or made with respect to Common Units with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate representing Hydrocarbon Common Stock with respect to the Common Units that such holder would be entitled to receive upon surrender of such Certificate and no cash payment in lieu of fractional Common Units shall be paid to any such holder until such holder shall surrender such Certificate in accordance with this Section 3.5. Subject to applicable law, following surrender of any such Certificate, there shall be paid to such holder of the Common Units issuable in exchange therefor, without interest, (i) promptly after the time of such surrender, the amount of any cash due pursuant to Section 3.2 and cash payable in lieu of fractional Common Units to which such holder is entitled pursuant to Section 3.5(e) and the amount of distributions with a record date after the Effective Time theretofore paid with respect to the Common Units and payable with respect to such Common Units, and (ii) at the appropriate payment date, the amount of distributions with a record date after the Effective Time but prior to such surrender and a payment date subsequent to such surrender payable with respect to such Common Units. (d) No Further Rights in Hydrocarbon Common Stock . The Redemption/Merger Consideration delivered or issued, as the case may be, in accordance with the terms hereof (including any cash paid pursuant to Section 3.4, Section 3.5(c) or Section 3.5(e)) shall be deemed to have been issued in full satisfaction of all rights pertaining to such share of Hydrocarbon Common Stock. (e) Fractional Common Units . No certificates or scrip of the Common Units representing fractional Common Units or book entry credit of the same shall be issued upon the surrender for exchange of Certificates in the Merger, and such fractional interests will not entitle the owner thereof to vote or to have any rights as a holder of any Common Units. Notwithstanding any other provision of this Agreement, each holder of shares of Hydrocarbon Common Stock exchanged in the Merger who would otherwise have been entitled to receive a fraction of a Common Unit (after taking into account all Certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest rounded up to the nearest whole cent) in an amount equal to the product of (i) the closing sale price of the Common Units on the NYSE as reported by The Wall Street Journal on the trading day immediately preceding the date on which the Effective Time shall occur and (ii) the fraction of a Common Unit that such holder would otherwise be entitled to receive pursuant to this Article III. As promptly as practicable after the determination of the amount of cash, if any, to be paid to holders of fractional interests, the Redemption/Exchange Agent shall so notify Energy Partners, and it shall, or shall cause the Surviving Entity to, deposit such amount with the Redemption/Exchange Agent and shall cause the Redemption/Exchange Agent to forward payments to such holders of fractional interests subject to and in accordance with the terms hereof. (f) Termination of Exchange Fund with Respect to Merger . Any portion of the Exchange Fund constituting Common Units that remains undistributed to the holders of Hydrocarbon Common Stock in the Merger after 180 days following the Effective Time shall be delivered to Energy Partners upon demand and, from and after such delivery, any former holders of Hydrocarbon Common Stock (other than Appraisal Shares) who have not theretofore complied with this Article III shall thereafter look only to Energy Partners for the Redemption/Merger Consideration payable in the Merger in respect of such shares of Hydrocarbon Common Stock, any cash in lieu of fractional Common Units to which they are entitled pursuant to Section 3.5(e) and any distributions with respect to the Common Units to 15
which they are entitled pursuant to Section 3.5(c), in each case, without any interest thereon. Any amounts remaining unclaimed by holders of shares of Hydrocarbon Common Stock immediately prior to such time as such amounts would otherwise escheat to or become the property of any governmental entity shall, to the extent permitted by applicable law, become the property of Energy Partners or Hydrocarbon, as the case may be, free and clear of any Liens, claims or interest of any Person previously entitled thereto. (g) No Liability . Neither Energy Partners, Hydrocarbon, nor the Surviving Entity shall be liable to any holder of shares of Hydrocarbon Common Stock for any Common Units (or distributions with respect thereto) or cash from the Exchange Fund delivered to a public official pursuant to any abandoned property, escheat or similar law. (h) Lost Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Hydrocarbon or Energy Partners, the posting by such Person of a bond, in such reasonable amount as Hydrocarbon or Energy Partners may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Redemption/Exchange Agent shall pay in exchange for such lost, stolen or destroyed Certificate the Redemption/Merger Consideration payable in respect of the shares of Hydrocarbon Common Stock represented by such Certificate and any distributions to which the holders thereof are entitled pursuant to Section 3.4. (i) Withholding . Each of Hydrocarbon, Energy Partners, the Surviving Entity and the Redemption/Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Hydrocarbon Common Stock such amounts as Hydrocarbon, Energy Partners, the Surviving Entity or the Redemption/Exchange Agent is required to deduct and withhold under the Code or any provision of state, local, or foreign Tax law, with respect to the making of such payment. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Hydrocarbon Common Stock in respect of whom such deduction and withholding was made by Hydrocarbon, Energy Partners, the Surviving Entity or the Redemption/Exchange Agent, as the case may be. (j) Book Entry of Common Units . All Common Units to be issued in the Merger shall be issued in book entry form, without physical certificates. Section 3.6 Anti-Dilution Provisions . In the event of any subdivisions, reclassifications, recapitalizations, splits, combinations or dividends in the form of equity interests with respect to the Common Units and the Hydrocarbon Common Stock (in each case, as permitted pursuant to Section 4.3), the number of Common Units to be issued in the Merger, the average closing sales prices of the Common Units determined in accordance with Section 3.5(e), the Per Share Cash Consideration, the Per Share Unit Consideration, the Per Share Stated Cash Consideration and the Per Share Stated Unit Consideration will be correspondingly adjusted. Section 3.7 Options and Restricted Shares . (a) Immediately prior to the Redemption, Hydrocarbon shall cause all outstanding Hydrocarbon Stock Options heretofore granted, regardless of whether or not vested or exercisable at the Effective Time, to be deemed exercised and each holder of an outstanding Hydrocarbon Stock Option, for purposes of this Agreement, shall be treated as of the Redemption, which shall occur immediately prior to the Effective Time, as holding a number of shares of Hydrocarbon Common Stock equal to (i) the number of shares of Hydrocarbon Common Stock subject to such Hydrocarbon Stock Option minus (ii) a number of shares of Hydrocarbon Common Stock that are equal in value, as determined as of the Effective Time, to (A) (x) the exercise price of such Hydrocarbon Stock Option times (y) the number of shares of Hydrocarbon Common Stock subject to such Hydrocarbon Stock Option plus (B) such amounts as are required to be withheld or deducted by Law with respect to the exercise of such Hydrocarbon Stock Options. 16
(b) At the Effective Time, all outstanding shares of Hydrocarbon Restricted Stock heretofore granted shall cease to represent shares of Hydrocarbon Restricted Stock and shall be assumed by Energy Partners and converted into Energy Partners Phantom Units at the Exchange Ratio. Any fractional Energy Partners Phantom Unit shall be rounded up to the nearest whole Energy Partners Phantom Unit. Each share of Hydrocarbon Restricted Stock so assumed and converted shall be subject to, and shall vest upon, the terms and conditions that are the same as those currently applicable to the shares of Hydrocarbon Restricted Stock. Promptly after the Effective Time, Energy Partners will provide each holder of shares of Hydrocarbon Restricted Stock with a notice describing the assumption and conversion of such shares. (c) With the exception of those Persons who hold shares of Hydrocarbon Restricted Stock, no Person shall have any right under any plan, program, agreement or arrangement with respect to Hydrocarbon Common Stock, or for the issuance or grant of any right of any kind, contingent or accrued, to receive benefits measured by the value of a number of shares of Hydrocarbon Common Stock at and after the Effective Time. From the date hereof until the Effective Time, except for the Redemption, the Restructuring Transactions or otherwise as expressly contemplated by this Agreement, (a) without the prior written consent of the Conflicts Committee (which consent shall not be unreasonably withheld, delayed or conditioned), Hydrocarbon will not, and will cause each of its Subsidiaries not to, and (b) without the prior written consent of the Deal Committee (which consent shall not be unreasonably withheld, delayed or conditioned), Energy Partners will not, and will cause each of its Subsidiaries not to: Section 4.1 Ordinary Course . Conduct the business of it and its Subsidiaries, other than, in the case of Hydrocarbon, Energy Partners and its Subsidiaries, other than in the ordinary and usual course or, to the extent consistent therewith, fail to use commercially reasonable best efforts to preserve intact its business organizations, goodwill and assets and maintain its rights, franchises and existing relations with customers, suppliers, employees and business associates, or take any action that would (a) adversely affect the ability of any party to obtain any approvals required under the HSR for the transactions contemplated hereby or (b) adversely affect its ability to perform any of its material obligations under this Agreement. Section 4.2 Capital Stock . In the case of Hydrocarbon and its Subsidiaries, other than (a) pursuant to stock options Previously Disclosed in its Disclosure Schedule, or (b) as otherwise set forth on Schedule 4.2 of Hydrocarbon's Disclosure Schedule, (i) issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of capital stock, any stock appreciation rights or any Rights, (ii) enter into any agreement with respect to the foregoing or (iii) permit any additional shares of capital stock to become subject to new grants of employee stock options, stock appreciation rights or similar stock-based employee rights (other than awards to newly hired employees consistent with past practice). Section 4.3 Dividends, Distributions . Other than in connection with the Restructuring Transactions, (a) make, declare or pay any dividend or distribution (except (i) in the case of Energy Partners, regular quarterly cash distributions of Available Cash (as defined in the Partnership Agreement) on the Common Units and the general partner interest of Energy Partners and (ii) in the case of Hydrocarbon, regular quarterly dividends, in each case in the ordinary course consistent with past practice but in an amount no greater than the per share dividend for the second quarter of 2007), on 17
or in respect of, or declare or make any distribution on any shares of its equity securities other than as Previously Disclosed; (b) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; or (c) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase, redeem or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding on the date hereof or as contemplated by any existing Compensation and Benefit Plan. Section 4.4 Compensation; Employment Agreements . In the case of Hydrocarbon and its Subsidiaries, except as set forth on Schedule 4.4 of Hydrocarbon's Disclosure Schedule, enter into or amend any written employment, severance or similar agreements or arrangements with any of its directors, officers or employees, or grant any salary or wage increase or increase any employee benefit (including incentive or bonus payments), except for (a) normal individual increases in compensation to employees (other than officers and directors) in the ordinary course of business consistent with past practice, (b) other changes as are provided for herein or as may be required by law or to satisfy contractual obligations existing as of the date hereof or (c) additional grants of awards to newly hired employees consistent with past practice. Section 4.5 Benefit Plans . In the case of Hydrocarbon and its Subsidiaries, except as set forth on Schedule 4.5 of the Hydrocarbon Disclosure Schedule, enter into or amend (except (i) as may be required by applicable law, (ii) to satisfy contractual obligations existing as of the date hereof, or (iii) in the ordinary course of business consistent with past practice which amendments, either individually or in the aggregate, would not reasonably be expected to result in a material liability to Hydrocarbon or such Subsidiaries) any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement related thereto, in respect of any of its present or former directors, officers or other employees, including, without limitation, taking any action that accelerates the vesting or exercise of any benefits payable thereunder. Section 4.6 Acquisitions and Dispositions . In the case of Hydrocarbon and its Subsidiaries, sell, lease, dispose of or discontinue any portion of its assets, business or properties, which is material to it and such Subsidiaries taken as a whole, or acquire, by merger or otherwise, or lease (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice) any assets or all or any portion of, the business or property of any other entity which, in either case, is material to it and such Subsidiaries taken as a whole, or would be likely to have a Material Adverse Effect on the ability of the parties to consummate the transactions contemplated by this Agreement or to delay materially the Effective Time. In the case of Energy Partners, Energy Partners will not, and will cause its Subsidiaries not to, merge, consolidate or enter into any other business combination transaction with any Person or make any acquisition or take any other action which would have a Material Adverse Effect on its ability to consummate the transactions contemplated by this Agreement. Section 4.7 Amendments . In the case of Hydrocarbon, amend its certificate of incorporation or bylaws. Section 4.8 Accounting Methods . Implement or adopt any material change in its accounting principles, practices or methods, other than as may be required by law or generally accepted accounting principles. 18
Section 4.9 Insurance . Fail to use commercially reasonable best efforts to maintain with financially responsible insurance companies, insurance in such amounts and against such risks and losses as has been customarily maintained by it in the past. Section 4.10 Taxes . (a) Make or rescind any material express or deemed election relating to Taxes unless it is reasonably expected that such action will not materially and adversely affect it, including elections for any and all joint ventures, partnerships, limited liability companies, working interests or other investments where it has the capacity to make such binding election; (b) settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except where such settlement or compromise will not materially and adversely affect it; or (c) change in any material respect any of its methods of reporting income, or deductions for federal income tax purposes from those employed in the preparation of its federal income tax return for the most recent taxable year for which a return has been filed, except as may be required by applicable law or except for such changes that are reasonably expected not to materially adversely affect it. Section 4.11 Debt, Capital Expenditures and the Like . In the case of Hydrocarbon, except as provided in Schedule 4.11 , (a) incur any indebtedness for borrowed money (except for working capital under existing credit facilities or equipment financing arrangements) or guarantee any such indebtedness of others, (b) enter into any material lease (whether operating or capital), (c) create any Lien on the property of Hydrocarbon or such Subsidiaries in connection with any pre-existing indebtedness, new indebtedness or lease (other than as permitted by clauses (a) and (b) of this Section 4.11), or (d) make or commit to make aggregate capital expenditures in excess of $5.0 million. Section 4.12 No Dissolution . Authorize, recommend, propose or announce an intention to adopt a plan of complete or partial dissolution or liquidation. Section 4.13 Adverse Actions . Knowingly take any action that is intended or is reasonably likely to result in (a) any of its representations and warranties set forth in this Agreement being or becoming untrue (taking into account the standard in Section 5.2) at any time prior to the Closing, (b) any of the conditions to the Redemption and Merger set forth in Article VII not being satisfied, (c) any material delay or prevention of the consummation of the Redemption and Merger or (d) a material violation of any provision of this Agreement except, in each case, as may be required by applicable law. Section 4.14 Agreements . Agree or commit to do anything prohibited by Sections 4.1 through 4.13. Section 5.1 Disclosure Schedule . On or prior to the date hereof, Energy Partners has delivered to Hydrocarbon and Hydrocarbon has delivered to Energy Partners a schedule (respectively, its "Disclosure Schedule") setting forth, among other things, items the disclosure of which is necessary or appropriate in relation to any or all of its representations and warranties; provided, however, that (a) no such item is required to be set forth in a Disclosure Schedule as an exception to a representation or warranty if its absence is not reasonably likely to result in the related representation or warranty being deemed untrue or incorrect under the standard established by Section 5.2, and (b) the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission by a party that such item represents a material exception or fact, event or circumstance or that such item is reasonably likely to result in a Material Adverse Effect. 19
Section 5.2 Standard . No representation or warranty of Energy Partners or Hydrocarbon contained in Section 5.3 (except Sections 5.3(b), 5.3(c)(i), 5.3(c)(ii), 5.3(d) and 5.3(e)) shall be deemed untrue or incorrect, and no party hereto shall be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, circumstance or event unless such fact, circumstance or event, individually or taken together with all other facts, circumstances or events inconsistent with any paragraph of Section 5.3, has had or is reasonably expected to have a Material Adverse Effect. Section 5.3 Representations and Warranties . Subject to Sections 5.1 and 5.2 and except as Previously Disclosed or (other than with respect to Sections 5.3(a) and (b)) as set forth in its SEC Documents filed and publicly available prior to the date hereof (excluding any disclosures included therein to the extent they are cautionary, predictive or forward-looking in nature, including those in any risk factor section of such documents), Hydrocarbon hereby represents and warrants to Energy Partners, and Energy Partners hereby represents and warrants to Hydrocarbon, to the extent applicable, in each case with respect to itself and its Subsidiaries, as follows: (a) Organization, Standing and Authority . Such party is a corporation, or in the case of Energy Partners, a limited partnership, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Such party (i) is duly qualified to do business and is in good standing in the states of the United States where its ownership or leasing of property or the conduct of its business requires it to be so qualified and (ii) has in effect all federal, state, local, and foreign governmental authorizations and permits necessary for it to own or lease its properties and assets and to carry on its business as it is now conducted. (b) Shares .
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(c) Subsidiaries .
(d) Corporate or Partnership Power . Such party and each of its Subsidiaries has the corporate power and authority, or in the case of Energy Partners the partnership power and authority, to carry on its business as it is now being conducted and to own all its properties and assets; and it has the corporate power and authority or, in the case of Energy Partners, the partnership power and authority, to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. (e) Equityholder Authority . In the case of this Agreement, subject to Hydrocarbon Stockholder Approval in the case of Hydrocarbon and Energy Partners Unitholder Approval in the case of Energy Partners, this Agreement and the transactions contemplated hereby have been authorized by all necessary corporate action (partnership action in the case of Energy Partners and limited liability company action in the case of MergerCo), and this Agreement has been duly executed and delivered and is a legal, valid and binding agreement of it, enforceable in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors' rights or by general equity principles). (f) No Defaults . Subject to receipt of the HSR approval, and the approval of Hydrocarbon's bank group, the declaration of effectiveness of the Registration Statement, required filings under 21
federal and state securities laws and the NYSE, and the approvals contemplated by Article VII, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) constitute a breach or violation of, or result in a default (or an event that, with notice or lapse of time or both, would become a default) under, or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, any note, bond, mortgage, indenture, deed of trust, license, franchise, lease, contract, agreement, joint venture or other instrument or obligation to which it or any of its Subsidiaries is a party or by which it or any of its Subsidiaries or properties is subject or bound, (ii) constitute a breach or violation of, or a default under, in the case of Hydrocarbon its certificate of incorporation or bylaws and in the case of Energy Partners its Partnership Agreement or MergerCo's operating agreement, (iii) contravene or conflict with or constitute a violation of any provision of any law, rule, regulation, judgment, order or decree binding upon or applicable to it or any of its Subsidiaries, (iv) result in the creation of any Lien on any of its assets or its Subsidiaries' assets other than in connection with any indebtedness obtained in connection with the transactions contemplated by this Agreement, or (v) cause the transactions contemplated by this Agreement to be subject to Takeover Laws. (g) Financial Reports and SEC Documents . Its annual report on Form 10-K for the fiscal year ended December 31, 2006, and all other reports, registration statements, definitive proxy statements or information statements filed or to be filed by it or any of its Subsidiaries subsequent to December 31, 2004 under the Securities Act, or under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, in the form filed, or to be filed (collectively, its "SEC Documents"), with the SEC (i) complied or will comply in all material respects as to form with the applicable requirements under the Securities Act or the Exchange Act, as the case may be, and (ii) did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; and each of the balance sheets contained in or incorporated by reference into any such SEC Document (including the related notes and schedules thereto) fairly presents the financial position of the entity or entities to which it relates as of its date, and each of the statements of income and changes in stockholders' equity and cash flows or equivalent statements in the case of Energy Partners in such SEC Documents (including any related notes and schedules thereto) fairly presents the results of operations, changes in stockholders' equity and changes in cash flows, as the case may be, of the entity or entities to which it relates for the periods to which it relates, in each case in accordance with generally accepted accounting principles consistently applied during the periods involved, except in each case as may be noted therein, subject to normal year-end audit adjustments in the case of unaudited statements. Except as and to the extent set forth on its balance sheet as of December 31, 2006, as of such date, neither it nor any of its Subsidiaries had any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on, or reserved against in, a balance sheet or in the notes thereto prepared in accordance with generally accepted accounting principles consistently applied. (h) Litigation; Regulatory Action .
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(i) Compliance with Laws . Except as set forth in Schedule 5.3(i) of its Disclosure Schedule, it and each of its Subsidiaries:
(j) Defaults . Neither it nor any of its Subsidiaries is in default under any contract, agreement, commitment, arrangement, lease, insurance policy, or other instrument to which it is a party, by which its respective assets, business, or operations may be bound or affected, or under which it or its respective assets, business, or operations receives benefits, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default. (k) No Brokers . No action has been taken by it that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the transactions contemplated by this Agreement, excluding, in the case of Hydrocarbon, fees to be paid to Merrill Lynch, Pierce, Fenner & Smith Incorporated, and, in the case of Energy Partners, fees to be paid to Lehman Brothers Inc. and RBC Capital Markets, in every case pursuant to letter agreements which have been heretofore disclosed to the other party. (l) Compensation and Benefit Plans .
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(m) Labor Matters . Except as set forth in Schedule 5.3(m) of a party's Disclosure Schedule, neither it nor any of its Subsidiaries is a party to, or is bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it or any of its Subsidiaries the subject of a proceeding asserting that it or any such Subsidiaries has committed an unfair labor practice (within the meaning of the National Labor Relations Act) or seeking to compel it or such Subsidiaries to bargain with any labor organization as to wages and conditions of employment. (n) Environmental Matters . Except as Previously Disclosed under Schedule 5.3(n) of a party's Disclosure Schedule, neither (i) the past or present conduct nor operation of such party or its Subsidiaries nor any condition of any property or asset presently or previously owned, leased or operated by any of them, including but not limited to on-site or off-site disposal or release of any chemical substance, product or waste, violates or violated Environmental Laws, and no condition has existed or event has occurred with respect to any of them or any such property that, with notice or the passage of time, or both, is reasonably likely to result in liability or obligations for any clean-up, remediation, disposal or corrective action under Environmental Laws or claims for personal injury, property damage or damage to natural resources, and (ii) such party nor any of its Subsidiaries has received any notice from any person or entity that it or its Subsidiaries or the operation or condition of any property or asset ever owned, leased, operated, held as collateral or held as a fiduciary by any of them is or was in violation of or otherwise are alleged to have liability under any Environmental Law or has entered into any consent decree or order or is subject to any order of any court or governmental authority or tribunal under any Environmental Law or relating to the clean-up of any hazardous materials contamination, including, but not limited to, responsibility (or potential responsibility) for the cleanup or other remediation of any pollutants, contaminants, or hazardous or toxic wastes, substances or materials at, on, beneath, or originating from any such property. (o) Tax Matters .
(p) Regulatory Approvals . Except as set forth in Schedule 5.3(p) of a party's Disclosure Schedule, the only approval of any governmental agency necessary to consummate the transactions contemplated by this Agreement (other than filings under the Securities Act) is pursuant to the HSR. As of the date hereof, neither Hydrocarbon nor the Energy Partners is aware of any reason why the approvals under the HSR will not be received. 25
(q) No Material Adverse Change . Except as disclosed in its SEC Documents filed with the SEC on or before the date hereof, since December 31, 2006, (i) it and its Subsidiaries have conducted their respective businesses in the ordinary and usual course (excluding the incurrence of expenses related to this Agreement and the transactions contemplated hereby), (ii) it has not made any material change in its accounting methods, principles or practices or its Tax methods, practices or elections and (iii) no event has occurred or circumstance arisen that, individually or taken together with all other facts, circumstances and events is reasonably likely to result in a Material Adverse Effect. (r) Insurance . It has previously delivered to the other party a schedule listing the officers' and directors' liability insurance policies, primary and excess casualty and liability insurance policies providing coverage for bodily injury and property damage maintained by it and its Subsidiaries. It and its Subsidiaries maintain insurance coverage reasonably adequate for the operation of their respective businesses taking into account the cost and availability of such insurance. (s) Condition and Sufficiency of Assets . The assets used in the business of it and its Subsidiaries are in operating condition and repair consistent with normal industry standards and are adequate for the uses to which they are being put and none of such assets are in need of replacement, maintenance or repairs except for ordinary and routine maintenance and repairs that are not material in nature or cost, except for assets which are not in service and the use of which are not required to conduct the business of it and its Subsidiaries in the ordinary course consistent with past practices. The assets in service are sufficient for the continued conduct of its business after the Closing. (t) Intellectual Property . Except as may be disclosed in Schedule 5.3(t) of its Disclosure Schedule, it and its Subsidiaries own or possess adequate licenses and other valid rights to use all patents, patent rights, trademarks, trademark rights and proprietary information used or held for use in connection with their respective businesses as currently being conducted, and there are no assertions or claims challenging the validity of any of the foregoing. (u) The Hydrocarbon Board Recommendations . At a meeting duly called and held, the Deal Committee determined that this Agreement and the transactions contemplated hereby, including the adoption of the Redemption Charter Amendment, are fair to and in the best interests of the Unaffiliated Stockholders, and recommended that the Hydrocarbon Board approve the Redemption Charter Amendment, this Agreement and the transactions contemplated hereby, declare the Redemption Charter Amendment and the Agreement advisable and recommend their adoption by the stockholders of Hydrocarbon. At a meeting duly called and held, the Hydrocarbon Board has approved and declared the advisability of, and resolved to recommend that its stockholders approve the Redemption Charter Amendment and adopt this Agreement. Hydrocarbon has taken all necessary actions to render the restrictions on "business combinations" (as defined in Section 203 of the DGCL) inapplicable to this Agreement and the transactions contemplated herby and thereby. (v) The Board of Directors of the General Partner Recommendations . At a meeting duly called and held, the Conflicts Committee determined that this Agreement and the transactions contemplated hereby, including the Unit Issuance and the adoption of the Amended and Restated Partnership Agreement, are fair and reasonable to, and in the best interests of, the Unaffiliated Common Unitholders and the Partnership, and recommended that the Board of Directors of the General Partner approve this Agreement and the transactions contemplated hereby and recommend to the Unaffiliated Common Unitholders that they approve the Merger, the Unit Issuance and the Amended and Restated Partnership Agreement. At a meeting duly called and held, the Board of Directors of the General Partner has approved and declared the advisability of, and resolved to recommend that the unitholders of Energy Partners approve the Merger, the Unit Issuance and the Amended and Restated Partnership Agreement. (w) Operations of MergerCo . In the case of Energy Partners, MergerCo was formed solely for the purpose of engaging in the transactions contemplated by this Agreement and has engaged in no 26
business other than in connection with entering into this Agreement and engaging in the transactions contemplated hereby. (x) Hydrocarbon Fairness Opinion . Merrill Lynch, Pierce, Fenner & Smith Incorporated has delivered to the Deal Committee its written opinion dated as of the date hereof, that as of such date, the Redemption/Merger Consideration is fair, from a financial point of view, to the Unaffiliated Stockholders, a copy of which has been provided to Energy Partners. (y) Energy Partners Fairness Opinion . Lehman Brothers Inc. has delivered to the Conflicts Committee its written opinion dated as of the date hereof, that as of such date, the Redemption/Merger Consideration paid in the Redemption and the Merger and the consideration paid for the Class B membership interests in the General Partner pursuant to the Class B Membership Interest Contribution Agreement, in the aggregate, are fair, from a financial point of view, to the holders of the Common Units (other than Hydrocarbon and its affiliates), a copy of which has been provided to the Hydrocarbon Board. Hydrocarbon hereby covenants to and agrees with Energy Partners, and Energy Partners hereby covenants to and agrees with Hydrocarbon, that: Section 6.1 Best Efforts . Subject to the terms and conditions of this Agreement, it shall use its commercially reasonable best efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, desirable or advisable under applicable laws, so as to permit consummation of the Redemption and Merger promptly and otherwise to enable consummation of the transactions contemplated hereby, including, without limitation, obtaining (and cooperating with the other party hereto to obtain) HSR approval and any other third party approval that is required to be obtained by Hydrocarbon or Energy Partners or any of their respective Subsidiaries in connection with the Redemption and/or Merger and the other transactions contemplated by this Agreement, and using commercially reasonable best efforts to lift or rescind any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the transactions contemplated hereby, and using commercially reasonable best efforts to defend any litigation seeking to enjoin, prevent or delay the consummation of the transactions contemplated hereby or seeking material damages, and each shall cooperate fully with the other parties hereto to that end, and shall furnish to the other party copies of all correspondence, filings and communications between it and its Affiliates and any Regulatory Authority with respect to the transactions contemplated hereby. In complying with the foregoing, neither it nor its Subsidiaries shall be required to take measures that would have a Material Adverse Effect on it and such Subsidiaries taken as a whole. Section 6.2 Equityholder Approvals . Subject to the terms and conditions of this Agreement, each of them shall take, in accordance with applicable law, applicable stock exchange rules and its certificate of incorporation and bylaws, in the case of Hydrocarbon, and the Partnership Agreement, in the case of Energy Partners, all action necessary to call, hold and convene, respectively, (i) an appropriate meeting of stockholders of Hydrocarbon to consider and vote upon the approval of the Redemption Charter Amendment, the Merger, the adoption of this Agreement and any other matters required to be approved by Hydrocarbon's stockholders for consummation of the Redemption and Merger (including any adjournment or postponement, the "Hydrocarbon Meeting") and (ii) an appropriate meeting of the holders of the Common Units to consider and vote upon the approval of the Merger, the Unit Issuance and the Amended and Restated Partnership Agreement, and any other matters required to be approved by them for consummation of the Merger (including any adjournment or postponement, the "Energy Partners Meeting"; and each of the Hydrocarbon Meeting and Energy Partners Meeting, a "Meeting"), respectively, promptly after the date hereof. Subject to Section 6.6(c), the Hydrocarbon 27
Board and the Deal Committee shall recommend such approval (the "Hydrocarbon Recommendation"), and each of Energy Partners and Hydrocarbon shall take all reasonable lawful action to solicit such approval by its respective equity holders. The Board of Directors of the General Partner and the Conflicts Committee shall recommend approval of the Merger, the Unit Issuance and the Amended and Restated Partnership Agreement to its holders of Common Units (the "Energy Partners Recommendation"). Notwithstanding the foregoing, at any time prior to obtaining Energy Partners Unitholder Approval, the Board of Directors of the General Partner and the Conflicts Committee may withdraw, modify or qualify in any manner adverse to Hydrocarbon the Energy Partners Recommendation (any such action being referred to as a "Energy Partners Change in Recommendation") if they have concluded in good faith, after consultation with, and taking into account the advice of their outside legal advisors and financial consultants, that an Energy Partners Change in Recommendation is necessary to comply with their fiduciary duties under applicable law. The obligation of Hydrocarbon to call, hold and convene the Hydrocarbon Meeting shall not be affected by a Hydrocarbon Change in Recommendation, and the obligation of Energy Partners to call, hold and convene the Energy Partners Meeting shall not be affected by an Energy Partners Change in Recommendation. Section 6.3 Registration Statement . (a) Each of Energy Partners and Hydrocarbon agrees to cooperate in the preparation of a registration statement on Form S-4 (the "Registration Statement") (including the joint proxy statement and prospectus and other proxy solicitation materials of Energy Partners and Hydrocarbon constituting a part thereof (the "Joint Proxy Statement") and all related documents) to be filed by Energy Partners with the SEC in connection with the issuance of Common Units in the Merger as contemplated by this Agreement. Each of Energy Partners and Hydrocarbon agrees that the other party shall have the right to consent to the disclosure to be contained in the Registration Statement and the Joint Proxy Statement. Provided Hydrocarbon has cooperated as required above, Energy Partners agrees to file the Registration Statement with the SEC as promptly as practicable. Each of Hydrocarbon and Energy Partners agrees to use all commercially reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as practicable after filing thereof. Energy Partners also agrees to use commercially reasonable best efforts to obtain all necessary state securities law or "Blue Sky" permits and approvals required to carry out the transactions contemplated by this Agreement. Hydrocarbon agrees to furnish to Energy Partners all information concerning Hydrocarbon, its Subsidiaries (other than Energy Partners and its Subsidiaries), officers, directors and stockholders and to take such other action as may be reasonably requested in connection with the foregoing. (b) Each of Hydrocarbon and Energy Partners agrees, as to itself and its Subsidiaries, other than, in the case of Hydrocarbon, Energy Partners and its Subsidiaries, that (i) none of the information supplied or to be supplied by it for inclusion or incorporation by reference in the Registration Statement will, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (ii) the Joint Proxy Statement and any amendment or supplement thereto will, at the date of mailing to stockholders and at the times of the Energy Partners Meeting and Hydrocarbon Meeting, not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Each of Hydrocarbon and Energy Partners further agrees that if it shall become aware prior to the Closing Date of any information that would cause any of the statements in the Registration Statement to be false or misleading with respect to any material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, 28
not false or misleading, it will promptly inform the other party thereof and take the necessary steps to correct such information in an amendment or supplement to the Registration Statement. (c) Energy Partners will advise Hydrocarbon, promptly after Energy Partners receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop order or the suspension of the qualification of the Common Units for offering or sale in any jurisdiction, of the initiation or threat of any proceeding for any such purpose, or of any request by the SEC for the amendment or supplement of the Registration Statement or for additional information. (d) Each of Energy Partners and Hydrocarbon will use its commercially reasonable best efforts to cause the Joint Proxy Statement to be mailed to its unitholders and stockholders, respectively, as soon as practicable after the effective date of the Registration Statement. Section 6.4 Press Releases . Each of Hydrocarbon and Energy Partners will not, without the prior approval of the Conflicts Committee in the case of Hydrocarbon and the Deal Committee in the case of Energy Partners, issue any press release or written statement for general circulation relating to the transactions contemplated hereby, except as otherwise required by applicable law or regulation or the rules of the NYSE (and the American Stock Exchange as applicable), in which case it will consult with the other party before issuing any such press release or written statement. Section 6.5 Access; Information . (a) Upon reasonable notice and subject to applicable laws relating to the exchange of information, each party shall, and shall cause its Subsidiaries to, afford the other parties and their officers, employees, counsel, accountants and other authorized representatives, access, during normal business hours throughout the period prior to the Effective Time, to all of its properties, books, contracts, commitments and records, and to its officers, employees, accountants, counsel or other representatives, and, during such period, it shall, and shall cause its Subsidiaries to, furnish promptly to such other parties and its representatives (i) a copy of each material report, schedule and other document filed by it pursuant to the requirements of federal or state securities law (other than reports or documents that Hydrocarbon or Energy Partners or their respective Subsidiaries, as the case may be, are not permitted to disclose under applicable law) and (ii) all other information concerning the business, properties and personnel of it as the other may reasonably request. Neither Hydrocarbon nor Energy Partners nor any of their respective Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of its customers, jeopardize the attorney-client privilege of the institution in possession or control of such information or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement. The parties hereto will make appropriate substitute disclosure arrangements under the circumstances in which the restrictions of the preceding sentence apply. (b) Energy Partners will not use any information obtained pursuant to this Section 6.5 for any purpose unrelated to the consummation of the transactions contemplated by this Agreement and will hold all information and documents obtained pursuant to this paragraph in confidence. No investigation by either party of the business and affairs of the other shall affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement, or the conditions to either party's obligation to consummate the transactions contemplated by this Agreement. Section 6.6 Acquisition Proposals . (a) Notwithstanding any other provision of this Agreement to the contrary, during the period beginning on the date of this Agreement and continuing until the No-Solicitation Period Start Date, Hydrocarbon and its Representatives shall have the right to, directly or indirectly, (i) initiate, solicit, facilitate and encourage Acquisition Proposals, (ii) enter into discussions relating to Acquisition Proposals, (iii) continue or otherwise participate in any discussions or negotiations regarding any 29
Acquisition Proposal, (iv) furnish to any Person any information or data with respect to Hydrocarbon, including by way of providing access to non-public information pursuant to (but only pursuant to an executed confidentiality agreement no less restrictive than the Confidentiality Agreement); provided that Hydrocarbon shall promptly provide or make available to Energy Partners any non-public information concerning Hydrocarbon or any Subsidiary that is provided or made available to any Person which was not previously provided or made available to Energy Partners; and (v) otherwise cooperate with or take any other action to facilitate any proposal that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal. Within 24 hours following the No-Solicitation Period Start Date, Hydrocarbon shall notify Energy Partners of (i) the number of Excluded Parties, (ii) the identity of each Excluded Party and (iii) the material terms and conditions of each Excluded Party's Acquisition Proposal and furnish copies of any documents and related correspondence provided in connection therewith (including any amendments or modifications to any of the foregoing) received from any Excluded Party. Hydrocarbon shall immediately cease any discussions with any Person (other than Energy Partners) that are ongoing as of the No-Solicitation Period Start Date and that constitute an Acquisition Proposal, except as may be expressly provided for in Sections 6.6(b) and 6.6(c), and except in respect of any Excluded Party. Any Person that submits an Acquisition Proposal that the Deal Committee and the Hydrocarbon Board determines in good faith constitutes, or could reasonably be expected to lead to, a Superior Proposal, no later than 24 hours following the No Solicitation Period Start Date shall be referred to herein as an "Excluded Party." Notwithstanding anything contained in Section 6.6(a) to the contrary, any Excluded Party shall cease to be an Excluded Party for all purposes under this Agreement at such time as the Deal Committee determines in good faith that the Acquisition Proposal made by such party ceases to be reasonably likely to lead to a Superior Proposal. (b) Except with respect to any written Acquisition Proposal from an Excluded Party received after the date hereof and prior to the No-Solicitation Period Start Date, none of Hydrocarbon and its Subsidiaries shall, and they shall cause their Representatives not to, directly or indirectly, (i) initiate, solicit, facilitate or knowingly encourage the submission of, any Acquisition Proposal, or (ii) participate in any negotiations or negotiations regarding, or furnish to any person any non-public information with respect to, any Acquisition Proposal. Notwithstanding anything to the contrary in this Section 6.6, nothing contained in this Agreement shall prohibit Hydrocarbon from furnishing any information to, or entering into or participating in discussions or negotiations with, any person that makes an unsolicited written Acquisition Proposal which did not result from a breach of this Section 6.6, if (i) the Deal Committee determines that such Acquisition Proposal constitutes or is likely to result in a Superior Proposal, and (ii) prior to furnishing such non-public information to such person, Hydrocarbon receives from such person an executed confidentiality agreement no less restrictive than the Confidentiality Agreement and furnishes Energy Partners with any such information that has not previously been furnished. Any breach of this Section 6.6 by any of Hydrocarbon's or its Subsidiaries' Representatives shall constitute a breach of this Section 6.6 by Hydrocarbon. (c) Other than in accordance with Section 6.6(e), and except as otherwise provided in this Section 6.6(c), neither the Hydrocarbon Board nor any committee thereof shall (1) (a) withdraw, modify or qualify in any manner adverse to Energy Partners the Hydrocarbon Recommendation or (b) publicly approve or recommend, or publicly propose to approve or recommend, any Acquisition Proposal (any action described in this clause (1) being referred to as a "Hydrocarbon Change in Recommendation"); or (2) approve, adopt or recommend, or publicly propose to approve, adopt or recommend, or allow Hydrocarbon or any of its Subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement, or other similar contract or any tender or exchange offer providing for, with respect to, or in connection with, any Acquisition Proposal. Notwithstanding the foregoing, at any time prior to obtaining the Hydrocarbon Stockholder 30
Approval, the Deal Committee may make a Hydrocarbon Change in Recommendation if it shall have concluded in good faith, after consultation with, and taking into account the advice of, its outside legal advisors and financial consultants, the Hydrocarbon Change in Recommendation is necessary to comply with its fiduciary duties under applicable law; provided, however , that the Deal Committee shall not be entitled to exercise its right to make a Hydrocarbon Change in Recommendation pursuant to this sentence unless Hydrocarbon has: (x) complied in all material respects with this Section 6.6, (y) provided to Energy Partners four calendar days prior written notice (such notice, a "Notice of Proposed Recommendation Change") advising Energy Partners that the Deal Committee intends to take such action and specifying the reasons therefor in reasonable detail, including, if applicable, the terms and conditions of any Superior Proposal that is the basis of the proposed action and the identity of the Person making the proposal and contemporaneously providing a copy of all relevant proposed transaction documents for such Superior Proposal (it being understood and agreed that any amendment to the terms of any such Superior Proposal shall require a new Notice of Proposed Recommendation Change and an additional four calendar day period), and (z) if applicable, provided to Energy Partners all materials and information delivered or made available to the Person or group of persons making any Superior Proposal in connection with such Superior Proposal (to the extent not previously provided). Any Hydrocarbon Change in Recommendation shall not change the approval of this Agreement or any other approval of the Board of Directors of Hydrocarbon, including in any respect that would have the effect of causing any state (including Delaware) corporate takeover statute or other similar statute to be applicable to the transactions contemplated hereby or thereby, including the Redemption and/or Merger. (d) In addition to the obligations of Hydrocarbon set forth in this Section 6.6, Hydrocarbon shall as promptly as practicable (and in any event within 24 hours after receipt) advise Energy Partners orally and in writing of any Acquisition Proposal or any matter giving rise to a Hydrocarbon Change in Recommendation and the material terms and conditions of any such Acquisition Proposal or any matter giving rise to a Hydrocarbon Change in Recommendation (including any changes thereto) and the identity of the Person making any such Acquisition Proposal. Hydrocarbon shall keep Energy Partners informed on a reasonably current basis of material developments with respect to any such Acquisition Proposal or any matter giving rise to a Hydrocarbon Change in Recommendation. (e) Nothing contained in this Agreement shall prevent Hydrocarbon or the Hydrocarbon Board from taking and disclosing to its stockholders a position contemplated by Rule 14d-9 and Rule 14e-2(a) promulgated under the Exchange Act (or any similar communication to stockholders) or from making any legally required disclosure to stockholders. Any "stop-look-and-listen" communication by Hydrocarbon or the Hydrocarbon Board to the stockholders of Hydrocarbon pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any similar communication to the stockholders of Hydrocarbon) shall not be considered a failure to make, or a withdrawal, modification or change in any manner adverse to Energy Partners of, all or a portion of the Hydrocarbon Recommendation. Section 6.7 Affiliate Arrangements . (a) Not later than the 15th day after the mailing of the Joint Proxy Statement, Hydrocarbon shall deliver to Energy Partners a schedule of each person that, to the best of its knowledge, is or is reasonably likely to be, as of the date of the relevant Meeting, deemed to be an "affiliate" of Hydrocarbon (a "Rule 145 Affiliate") as that term is used in Rule 145 under the Securities Act. (b) Hydrocarbon shall use its commercially reasonable best efforts to cause its Rule 145 Affiliates not to sell any securities received under the Merger in violation of the registration requirements of the Securities Act, including Rule 145 thereunder. Section 6.8 Takeover Laws . Neither party shall take any action that would cause the transactions contemplated by this Agreement to be subject to requirements imposed by any Takeover Laws, and each of them shall take all necessary steps within its control to exempt (or ensure the continued exemption of) the transactions contemplated by this Agreement from, or if necessary challenge the validity or applicability of, any stockholder rights plan adopted by such party or any applicable Takeover Law, as now or hereafter in effect, including, without limitation, Takeover Laws of any state that purport to apply to this Agreement or the transactions contemplated hereby. 31
Section 6.9 No Rights Triggered . Each of Hydrocarbon and Energy Partners shall take all steps necessary to ensure that the entering into of this Agreement and the consummation of the transactions contemplated hereby and any other action or combination of actions, or any other transactions contemplated hereby, do not and will not result in the grant of any Rights to any person (a) in the case of Hydrocarbon under its certificate of incorporation or bylaws and in the case of Energy Partners under its Partnership Agreement or (b) under any material agreement to which it or any of its Subsidiaries is a party. Section 6.10 Common Units Listed . In the case of Energy Partners, Energy Partners shall use its commercially reasonable best efforts to list, prior to the Closing, on the NYSE, upon official notice of issuance, the Common Units to be issued to the holders of Hydrocarbon Common Stock in the Merger. Section 6.11 Third Party Approvals . (a) Energy Partners and Hydrocarbon and their respective Subsidiaries, shall cooperate and use their respective commercially reasonable best efforts to prepare all documentation, to effect all filings, to obtain all permits, consents, approvals and authorizations of all third parties and HSR approval necessary to consummate the transactions contemplated by this Agreement and to comply with the terms and conditions of such permits, consents, approvals and authorizations and to cause the Redemption and/or Merger to be consummated as expeditiously as practicable. Each of Energy Partners and Hydrocarbon shall have the right to review in advance, and to the extent practicable each will consult with the other, in each case subject to applicable laws relating to the exchange of information, with respect to, all material written information submitted to any third party or any Regulatory Authorities in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each of the parties hereto agrees to act reasonably and promptly. Each party hereto agrees that it will consult with the other parties hereto with respect to the obtaining of all material permits, consents, approvals and authorizations of all third parties and Regulatory Authorities necessary or advisable to consummate the transactions contemplated by this Agreement, and each party will keep the other parties apprised of the status of material matters relating to completion of the transactions contemplated hereby. (b) Each party agrees, upon request, to furnish the other party with all information concerning itself, its Subsidiaries, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with the Registration Statement, the Joint Proxy Statement or any filing, notice or application made by or on behalf of such other party or any of such Subsidiaries to any Regulatory Authority in connection with the transactions contemplated hereby. Section 6.12 Indemnification; Directors' and Officers' Insurance. (a) Without limiting any additional rights that any director, officer, trustee, employee, agent, or fiduciary may have under any employment or indemnification agreement or under the Hydrocarbon Charter, the Hydrocarbon Bylaws or this Agreement or, if applicable, similar organizational documents or agreements of any of Hydrocarbon's Subsidiaries, from and after the Effective Time, Energy Partners and the Surviving Entity, jointly and severally, shall: (i) indemnify and hold harmless each person who is at the date hereof or during the period from the date hereof through the date of the Effective Time serving as a director or officer of Hydrocarbon or any of its Subsidiaries or as a fiduciary under or with respect to any employee benefit plan (within the meaning of Section 3(3) of ERISA) (collectively, the "Indemnified Parties") to the fullest extent authorized or permitted by applicable law, as now or hereafter in effect, in connection with any Claim and any losses, claims, damages, liabilities, costs, Indemnification Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) resulting therefrom; and (ii) promptly pay on behalf of or, within ten (10) days after any request for advancement, advance to each of the Indemnified Parties, any Indemnification Expenses incurred in defending, serving as a witness with respect to or otherwise 32
participating with respect to any Claim in advance of the final disposition of such Claim, including payment on behalf of or advancement to the Indemnified Party of any Indemnification Expenses incurred by such Indemnified Party in connection with enforcing any rights with respect to such indemnification and/or advancement, in each case without the requirement of any bond or other security). The indemnification and advancement obligations of Energy Partners and the Surviving Entity pursuant to this Section 6.12(a) shall extend to acts or omissions occurring at or before the Effective Time and any Claim relating thereto (including with respect to any acts or omissions occurring in connection with the approval of this Agreement and the consummation of the Redemption and Merger and the transactions contemplated by this Agreement, including the consideration and approval thereof and the process undertaken in connection therewith and any Claim relating thereto), and all rights to indemnification and advancement conferred hereunder shall continue as to a person who has ceased to be a director or officer of Hydrocarbon or any of its Subsidiaries after the date hereof and shall inure to the benefit of such person's heirs, executors and personal and legal representatives. As used in this Section 6.12(a): (x) the term "Claim" means any threatened, asserted, pending or completed action, whether instituted by any party hereto, any Governmental Authority or any other person, that any Indemnified Party in good faith believes might lead to the institution of any Action, whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism, arising out of or pertaining to matters that relate to such Indemnified Party's duties or service as a director or officer of Hydrocarbon, any of its Subsidiaries, or any employee benefit plan (within the meaning of Section 3(3) of ERISA) maintained by any of the foregoing at or prior to the Effective Time; and (y) the term "Indemnification Expenses" means reasonable attorneys' fees and all other reasonable costs, expenses and obligations (including experts' fees, travel expenses, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any Claim for which indemnification is authorized pursuant to this Section 6.12(a), including any Action relating to a claim for indemnification or advancement brought by an Indemnified Party. Neither Energy Partners nor the Surviving Entity shall settle, compromise or consent to the entry of any judgment in any actual or threatened Action in respect of which indemnification has been or could be sought by such Indemnified Party hereunder unless such settlement, compromise or judgment includes an unconditional release of such Indemnified Party from all liability arising out of such Action without admission or finding of wrongdoing, or such Indemnified Party otherwise consents thereto. (b) Without limiting the foregoing, Energy Partners and MergerCo agree that all rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time now existing in favor of the current or former directors or officers of Hydrocarbon or any of its Subsidiaries as provided in the Hydrocarbon Charter and Hydrocarbon Bylaws (or, as applicable, the charter, bylaws, partnership agreement, limited liability company agreement, or other organizational documents of any of Hydrocarbon's Subsidiaries) and indemnification agreements of Hydrocarbon or any of its Subsidiaries shall be assumed by the Surviving Entity in the Merger, without further action, at the Effective Time and shall survive the Merger and shall continue in full force and effect in accordance with their terms. (c) For a period of six (6) years from the Effective Time, the certificate of incorporation and bylaws of the Surviving Entity shall contain provisions no less favorable with respect to indemnification, advancement of expenses and limitations on liability of directors and officers than are set forth in the Hydrocarbon Charter and Hydrocarbon Bylaws, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years from the Effective Time in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Effective Time, were Indemnified Parties, unless such modification shall be required by Law and then only to the minimum extent required by Law. 33
(d) Energy Partners shall, or shall cause the Surviving Entity to, maintain for a period of at least six (6) years following the Effective Time, the current policies of directors' and officers' liability insurance maintained by Hydrocarbon and its Subsidiaries ( provided, that the Surviving Entity may substitute therefor policies of at least the same coverage and amounts containing terms and conditions which are not less advantageous to such directors and officers of Hydrocarbon than the terms and conditions of such existing policy from carriers with the same or better rating as the carrier under the existing policy provided that such substitution shall not result in gaps or lapses of coverage with respect to matters occurring before the Effective Time) with respect to claims arising from facts or events that occurred on or before the Effective Time, including in respect of the Redemption and Merger and the transactions contemplated by this Agreement; provided, that Energy Partners shall not be required to pay annual premiums in excess of 250% of the last annual premium paid by Hydrocarbon prior to the date hereof but in such case shall purchase as much coverage as reasonably practicable for such amount. (e) The provisions of Section 6.12(d) shall be deemed to have been satisfied if prepaid "tail" policies have been obtained by the Surviving Entity for purposes of this Section 6.12 from carriers with the same or better rating as the carrier of such insurances as of the date of this Agreement, which policies provide such directors and officers with the coverage described in Section 6.12(d) for an aggregate period of not less than six (6) years with respect to claims arising from facts or events that occurred on or before the Effective Time, including, in respect of the Redemption and Merger and the transactions contemplated by this Agreement. (f) If the Surviving Entity or any of its respective successors or assigns (i) consolidates with or merges with or into any other person and shall not be the continuing or surviving corporation, partnership or other entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then, and in each such case, proper provision shall be made so that the successors and assigns of the Surviving Entity assume the obligations set forth in this Section 6.12. (g) Energy Partners shall cause the Surviving Entity to perform all of the obligations of the Surviving Entity under this Section 6.12. (h) This Section 6.12 shall survive the consummation of the Redemption and Merger and is intended to be for the benefit of, and shall be enforceable by, the Indemnified Parties and their respective heirs and personal representatives, and shall be binding on the Surviving Entity and its successors and assigns. Section 6.13 Comfort Letters. (a) Hydrocarbon shall use all commercially reasonable best efforts to cause to be delivered to Energy Partners a "comfort" letter of Deloitte & Touche LLP, Hydrocarbon's independent public accountants, dated and delivered the date on which the Registration Statement shall become effective, in form and substance reasonably satisfactory to the Conflicts Committee and customary in scope and substance for letters delivered by independent public accountants in connection with registration statements similar to the Registration Statement. (b) Energy Partners shall use all commercially reasonable best efforts to cause to be delivered to Hydrocarbon a "comfort" letter of Deloitte & Touche LLP, Energy Partners' independent public accountants, dated and delivered the date on which the Registration Statement shall become effective, in form and substance reasonably satisfactory to the Deal Committee and customary in scope and substance for letters delivered by independent public accountants in connection with registration statements similar to the Registration Statement. 34
Section 6.14 Benefit Plans . The parties agree to take such actions with respect to compensation and employee benefit plans, programs, arrangements and other perquisites as are set forth on Schedule 4.5 of Hydrocarbon's Disclosure Schedule. Section 6.15 Notification of Certain Matters . Each of Hydrocarbon and Energy Partners shall give prompt notice to the other of (a) any fact, event or circumstance known to it that (i) is reasonably likely, individually or taken together with all other facts, events and circumstances known to it, to result in any Material Adverse Effect with respect to it or (ii) would cause or constitute a material breach of any of its representations, warranties, covenants or agreements contained herein, and (b) any change in its condition (financial or otherwise) or business or any litigation or governmental complaints, investigations or hearings, in each case to the extent such change, litigation, complaints, investigations, or hearings results in, or would reasonably be expected to result in, a Material Adverse Effect. Section 6.16 Rule 16b-3 . Prior to the Effective Time, Hydrocarbon shall take such steps as may be reasonably requested by any party hereto to cause dispositions of Hydrocarbon equity securities (including derivative securities) pursuant to the transactions contemplated by this Agreement by each individual who is a director or officer of Hydrocarbon to be exempt under Rule 16b-3 promulgated under the Exchange Act in accordance with that certain No-Action Letter dated January 12, 1999 issued by the SEC regarding such matters. Section 6.17 Amended and Restated Partnership Agreement . Subject to receipt of the Energy Partners Unitholder Approval, Energy Partners shall execute and make effective the Amended and Restated Partnership Agreement. Section 6.18 Board Membership . Prior to the mailing of the Joint Proxy Statement, Hydrocarbon shall designate in its sole discretion three (3) members from among the current members of the Hydrocarbon Board, two (2) of whom must be independent (the "Hydrocarbon Director Designees") to serve as members of the Board of Directors of General Partner following the Effective Time. Subject to the foregoing, the parties shall take such action as is necessary to cause the General Partner to cause the Hydrocarbon Director Designees to be appointed to the Board of Directors of General Partner effective as of the Effective Time, to serve until the earlier of such individual's resignation or removal or until his successor is duly elected and qualified. The obligations of each of the parties to consummate the Redemption and Merger are conditioned upon the satisfaction at or prior to the Closing of each of the following: Section 7.1 Stockholder Vote . The Merger, the Unit Issuance, the Amended and Restated Partnership Agreement and the other transactions contemplated hereby shall have been approved and adopted by the affirmative vote of a Unit Majority at the Energy Partners Meeting ("Energy Partners Unitholder Approval"), and the Redemption Charter Amendment, the Merger and this Agreement and the other transactions contemplated hereby shall have been approved and adopted by the affirmative vote of the holders of a majority of the shares of Hydrocarbon Common Stock outstanding and entitled to vote thereon at the Hydrocarbon Meeting ("Hydrocarbon Stockholder Approval"). Section 7.2 Governmental Approvals . Any waiting period (including any extended waiting period arising as a result of a request for additional information by the Federal Trade Commission or the U.S. Department of Justice) under the HSR shall have expired or been terminated. All other filings required to be made prior to the Effective Time with, and all other consents, approvals, permits and authorizations required to be obtained prior to the Effective Time from, any Regulatory Authority in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby by the parties hereto or their Affiliates shall have been made or 35
obtained, except where the failure to obtain such consents, approvals, permits and authorizations would not be reasonably likely to result in a Material Adverse Effect on Energy Partners or Hydrocarbon. Section 7.3 No Injunction . No order, decree or injunction of any court or agency of competent jurisdiction shall be in effect, and no law, statute or regulation shall have been enacted or adopted, that enjoins, prohibits or makes illegal consummation of any of the transactions contemplated hereby, and no action, proceeding or investigation by any Regulatory Authority with respect to the Redemption, the Merger or the other transactions contemplated hereby shall be pending that seeks to restrain, enjoin, prohibit or delay consummation of the Redemption, the Merger or such other transaction or to impose any material restrictions or requirements thereon or on Energy Partners or Hydrocarbon with respect thereto; provided, however, that prior to invoking this condition, each party shall have complied fully with its obligations under Section 6.1. Section 7.4 Representations, Warranties and Covenants of Energy Partners . In the case of Hydrocarbon's obligation to consummate the Redemption and the Merger: (a) each of the representations and warranties contained herein of Energy Partners shall be true and correct as of the date of this Agreement and upon the Closing Date with the same effect as though all such representations and warranties had been made on the Closing Date, except for any such representations and warranties made as of a specified date, which shall be true and correct as of such date, in any case subject to the standard set forth in Section 5.2; (b) each and all of the agreements and covenants of Energy Partners to be performed and complied with pursuant to this Agreement on or prior to the Closing Date shall have been duly performed and complied with in all material respects; and (c) Hydrocarbon shall have received a certificate signed by the Chief Financial Officer of the General Partner, dated the Closing Date, to the effect set forth in Section 7.4(a) and Section 7.4(b). Section 7.5 Representations, Warranties and Covenants of Hydrocarbon . In the case of Energy Partners' obligation to consummate the Merger: (a) each of the representations and warranties contained herein of Hydrocarbon shall be true and correct as of the date of this Agreement and upon the Closing Date with the same effect as though all such representations and warranties had been made on the Closing Date, except for any such representations and warranties made as of a specified date, which shall be true and correct as of such date, in any case subject to the standard set forth in Section 5.2; (b) each and all of the agreements and covenants of Hydrocarbon to be performed and complied with pursuant to this Agreement on or prior to the Closing Date shall have been duly performed and complied with in all material respects; and (c) Energy Partners shall have received a certificate signed by the Chief Financial Officer of Hydrocarbon, dated the Closing Date, to the effect set forth in Section 7.5(a) and Section 7.5(b). Section 7.6 Effective Registration Statement . The Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC or any other Regulatory Authority. Section 7.7 Opinion of Vinson & Elkins L.L.P. or Other Counsel. In the case of Energy Partners' obligation to consummate the Merger, Energy Partners shall have received an opinion from Vinson & Elkins L.L.P., counsel to Energy Partners, or other counsel that is reasonably acceptable to Energy Partners, to the effect that: (a) the Merger and the transactions contemplated by this Agreement will not result in the loss of limited liability of any limited partner of Energy Partners; 36
(b) 90% of the current gross income of Energy Partners constitutes qualifying income within the meaning of Section 7704(d) of the Code; (c) the Merger and the transactions contemplated by this Agreement will not cause Energy Partners to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes; (d) to the extent that it describes provisions of United States federal tax law, the discussion in the Registration Statement under the caption "Material U.S. Federal Income Tax Consequences," as it relates to the holders of Common Units (other than Hydrocarbon), is correct in all material respects; and (e) no gain or loss should be recognized by holders of Common Units as a result of the Merger (other than gain resulting from any decrease in partnership liabilities pursuant to Section 752 of the Code). In rendering such opinions, Vinson & Elkins L.L.P. or other counsel may require and rely upon representations and covenants including those contained in certificates of officers of the General Partner and others and opinions of Delaware counsel, reasonably satisfactory in form and substance to such counsel. Section 7.8 Opinion of Hogan & Hartson L.L.P. or Other Counsel . In the case of Hydrocarbon's obligation to consummate the Redemption and the Merger, Hydrocarbon shall have received an opinion from Hogan & Hartson L.L.P., counsel to Hydrocarbon, or other counsel that is reasonably acceptable to Hydrocarbon, to the effect that: (a) to the extent that it describes provisions of United States federal tax law, the discussion in the Registration Statement under the caption "Material U.S. Federal Income Tax Consequences," as it relates to the holders of Hydrocarbon Common Stock, is correct in all material respects; and (b) no gain or loss should be recognized by the holders of Hydrocarbon Common Stock to the extent Common Units are received in exchange therefor as a result of the Merger. In rendering such opinion, Hogan & Hartson L.L.P. or other counsel may require and rely upon representations and covenants including those contained in certificates of officers of Hydrocarbon and others and opinions of Delaware counsel reasonably satisfactory in form and substance to such counsel. Section 7.9 NYSE Listing . The Common Units issuable pursuant to this Agreement shall have been approved for listing on the NYSE, subject to official notice of issuance. Section 7.10 Amended and Restated Partnership Agreement . In the case of Hydrocarbon's obligation to consummate the Redemption and the Merger, Energy Partners shall have executed and made effective the Amended and Restated Partnership Agreement. Section 7.11 Dissenting Holders . In the case of Energy Partners' obligation to consummate the Merger, the shares of Hydrocarbon Common Stock held by Dissenting Holders shall not exceed 5% of the outstanding shares of Hydrocarbon Common Stock immediately prior to the Redemption. Section 7.12 Resignation of the Hydrocarbon Board . In the case of Energy Partners' obligation to consummate the Merger, Hydrocarbon shall have received resignations for all of the directors on the Hydrocarbon Board. Section 7.13 Restructuring Transactions . The Restructuring Transactions shall have been consummated pursuant to the Exchange Agreement. Section 7.14 Valuation Appraisal . In the case of Hydrocarbon's obligation to consummate the Redemption and the Merger, Energy Partners shall have received an appraisal from Duff & Phelps Acquisitions, LLC, which appraisal comes to the conclusion that the value of (i) the Common Units 37
owned by Hydrocarbon and (ii) the IDRs and the economic interest in the 2% general partner interest in Energy Partners owned by the General Partner, collectively, can reasonably be found to be equal to the value of the Class A Units for which such common units, IDRs and economic interest in the general partner interest are being exchanged in consummation of the Restructuring Transactions as provided for in the Exchange Agreement. Section 7.15 Changes in Tax Law. (a) Hydrocarbon shall not be obligated to consummate the Redemption; and neither Hydrocarbon nor Energy Partners shall be obligated to consummate the Merger if either of the following shall have occurred:
(b) "Change in U.S. Federal Income Tax Law" means any change in the Code, Treasury Regulations, administrative pronouncements of the Internal Revenue Service, or judicial interpretations of the foregoing, if the Deal Committee or the Conflicts Committee determines, in its reasonable judgment, that it is more likely than not that such change could materially and adversely affect the U.S. federal income tax consequences to Hydrocarbon from the Merger or Restructuring Transactions. Section 7.16 Redemption . In the case of Hydrocarbon's and Energy Partners' obligation to consummate the Merger, the Redemption has been consummated pursuant to the Redemption Charter Amendment, subject to the payment of the redemption price of the Per Share Cash Consideration as provided in Section 3.5. Section 8.1 Termination . Notwithstanding anything herein to the contrary, this Agreement may be terminated and the Redemption and the Merger may be abandoned at any time prior to the Effective Time whether before or after the Hydrocarbon Stockholder Approval or Energy Partners Unitholder approval: (a) By the mutual consent of Energy Partners and Hydrocarbon in a written instrument. (b) By either Hydrocarbon or Energy Partners upon written notice to the other, if:
38
(c) By Energy Partners, upon written notice to Hydrocarbon, in the event that: (i) Hydrocarbon shall have materially breached Section 6.6; or (ii) a Hydrocarbon Change in Recommendation has occurred. (d) By Hydrocarbon (with the prior approval of the Deal Committee), upon written notice to Energy Partners, in the event that (i) if, at any time after the date of this Agreement and prior to obtaining the Hydrocarbon Stockholder Approval, Hydrocarbon receives an Acquisition Proposal and the Hydrocarbon Board (acting through the Deal Committee if such committee still exists) shall have concluded in good faith that such Acquisition Proposal constitutes a Superior Proposal, Hydrocarbon has complied with Section 6.6(c) of this Agreement, and the Hydrocarbon Board concurrently approves, and Hydrocarbon concurrently enters into, a definitive agreement with respect to such Superior 39
Proposal and has paid the Hydrocarbon Termination Fee pursuant to Section 9.1(b), or (ii) an Energy Partners Change in Recommendation has occurred. Section 8.2 Effect of Termination . In the event of the termination of this Agreement as provided in Section 8.1, written notice thereof shall forthwith be given by the terminating party to the other parties specifying the provision of this Agreement pursuant to which such termination is made, and except as provided in this Section 8.2, this Agreement (other than Article IX) shall forthwith become null and void after the expiration of any applicable period following such notice. In the event of such termination, there shall be no liability on the part of Energy Partners, MergerCo or Hydrocarbon, except as set forth in Section 9.1 of this Agreement and except with respect to the requirement to comply with the Confidentiality Agreement; provided that nothing herein shall relieve any party from any liability or obligation with respect to any fraud or intentional breach of this Agreement. Section 9.1 Fees and Expenses. (a) Whether or not the Redemption and the Merger are consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses, except as provided in Section 9.1(b), 9.1(c), 9.1(d) and 9.1(f). (b) If this Agreement is terminated by Energy Partners pursuant to Section 8.1(c) or by Hydrocarbon pursuant to Section 8.1(d)(i), then Hydrocarbon shall pay to the Escrow Agent for the benefit of Energy Partners the Hydrocarbon Termination Fee. If this Agreement is terminated by Hydrocarbon pursuant to Section 8.1(d)(ii), then Energy Partners shall pay to Hydrocarbon in immediately available funds the Energy Partners Termination Fee. If this Agreement is terminated by Energy Partners pursuant to Section 8.1(b)(iv) or Section 8.1(b)(v) or by Hydrocarbon or Energy Partners pursuant to Section 8.1(b)(iii), then Hydrocarbon shall pay to the Escrow Agent for the benefit of Energy Partners the Expenses of Energy Partners; provided, however , that Hydrocarbon shall not be obligated to pay the Expenses to Energy Partners in connection with the termination of this Agreement pursuant to Section 8.1(b)(iii) if Mr. Fox failed to comply with the terms of the Fox Support Agreement. (c) In the event that (i) an Acquisition Proposal with respect to Hydrocarbon has been proposed by any Person (meaning, for the purpose of this Section 9.1(c), a Person other than Energy Partners and MergerCo) or any Person has publicly announced its intention (whether or not conditional) to make such an Acquisition Proposal or such an Acquisition Proposal or such intention has otherwise become publicly known to Hydrocarbon's stockholders generally and in any event such proposal or intention is not subsequently withdrawn prior to the termination of this Agreement, (ii) thereafter this Agreement is terminated by either Hydrocarbon or Energy Partners pursuant to Section 8.1(b)(i) or Section 8.1(b)(iii) or by Energy Partners pursuant to Section 8.1(b)(iv) or Section 8.1(b)(v), and (iii) within 12 months after the termination of this Agreement, Hydrocarbon or any of its Subsidiaries enters into any definitive agreement providing for an Acquisition Proposal, or an Acquisition Proposal with respect to Hydrocarbon or any of its Subsidiaries is consummated, then Hydrocarbon shall pay to the Escrow Agent for the benefit of Energy Partners, if and when consummation of such Acquisition Proposal occurs, the Hydrocarbon Termination Fee less all Expenses of Energy Partners previously paid to Energy Partners; provided that for purposes of this Section 9.1(c), "50%" shall be substituted for "20%" in the definition of Acquisition Proposal. 40
(d) If this Agreement is (i) terminated by Hydrocarbon or Energy Partners pursuant to Section 8.1(b)(vi), or (ii) terminated by Hydrocarbon pursuant to Section 8.1(b)(iv) or Section 8.1(b)(v), then Energy Partners shall pay to Hydrocarbon the Expenses of Hydrocarbon. (e) Except as otherwise provided herein, any payment of the Hydrocarbon Termination Fee, the Energy Partners Termination Fee or Expenses pursuant to this Section 9.1 shall be made by wire transfer of immediately available funds to an account of the Escrow Agent designated by Energy Partners or an account designated by Hydrocarbon, as applicable, within one Business Day after such payment becomes payable; provided, however, that any payment of the Hydrocarbon Termination Fee pursuant to Section 9.1(b) by Hydrocarbon as a result of termination under Section 8.1(d)(i) shall be made prior to or concurrently with termination of this Agreement; provided, further , that any payment of the Hydrocarbon Termination Fee pursuant to Section 9.1(c) shall be made contemporaneously with the consummation of the Acquisition Proposal as provided in clause (iii) of Section 9.1(c). The parties acknowledge that the agreements contained in this Section 9.1 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, none of the parties would enter into this Agreement. (f) (i) If the Redemption and the Merger are consummated, the Surviving Entity shall pay, or cause to be paid, any and all property or transfer taxes imposed on either party in connection with the Merger, (ii) expenses incurred in connection with filing, printing and mailing the Joint Proxy Statement and the Registration Statement shall be paid by Energy Partners and (iii) filing fees payable pursuant to the HSR Act, regulatory laws and other filing fees incurred in connection with this Agreement shall be paid by the party incurring the fees. As used in this agreement, "Expenses" includes good faith estimate of all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party hereto and its affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the transactions contemplated hereby, including the preparation, printing, filing and mailing of the Joint Proxy Statement and the Registration Statement and the solicitation of stockholder/unitholder approvals and all other matters related to the transactions contemplated hereby; provided that the amount of Expenses payable by one party to another under this Section 9.1 shall not exceed $6.0 million. (g) Any amounts paid to the Escrow Agent pursuant to this Article IX, together with interest thereon (the "Escrow Fund"), shall be released by the Escrow Agent to Energy Partners as follows:
41
Hydrocarbon acknowledges and agrees that (x) the amount of a payment, if any, pursuant to Section 9.1(g)(ii) above is uncertain, and that depending on the amount of the demands made by Energy Partners pursuant to Section 9.1(g)(ii) above, the Escrow Fund may be insufficient to permit payments to Hydrocarbon pursuant to Section 9.1(g)(ii) above, and (y) it shall have no rights to any amounts in the Escrow Fund (other than as contemplated by this subsection (h)) or to audit or inquire into the amounts demanded by or paid to Energy Partners. (h) Hydrocarbon agrees that, notwithstanding any right that it or the General Partner may otherwise have, including pursuant to the Partnership Agreement, the Amended and Restated Partnership Agreement, or otherwise, it hereby waives and renounces for itself and its affiliates, and shall cause the General Partner to waive and renounce, any distribution by Energy Partners to its partners of any amount paid to Energy Partners by the Escrow Agent, together with an income allocation associated with such distribution, it being understood that following payment to Energy Partners from the Escrow Agent, Energy Partners will make a distribution to the holders of common units of Energy Partners who are unaffiliated with Hydrocarbon. (i) This Section 9.1 shall survive any termination of this Agreement. Section 9.2 Waiver; Amendment . Subject to compliance with applicable law, prior to the Closing, any provision of this Agreement may be (a) waived in writing by the party benefited by the provision and approved by the Conflicts Committee in the case of Energy Partners and by the Deal Committee in the case of Hydrocarbon and executed in the same manner as this Agreement, or (b) amended or modified at any time, whether before or after the Hydrocarbon Stockholder Approval, by an agreement in writing between the parties hereto approved by the Conflicts Committee in the case of Energy Partners and by the Deal Committee in the case of Hydrocarbon and executed in the same manner as this Agreement; provided that after the Hydrocarbon Stockholder Approval, no amendment shall be made that requires further Hydrocarbon Stockholder Approval without such further approval. Section 9.3 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute an original. Section 9.4 Governing Law . This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware, without regard to the conflict of law principles thereof (except to the extent that mandatory provisions of federal or Delaware law govern). Section 9.5 Confidentiality . Each of the parties hereto and their respective agents, attorneys and accountants will maintain the confidentiality of all information provided in connection herewith to the extent required by, and subject to the limitations of, the Confidentiality Agreement. 42
Section 9.6 Notices . All notices, requests and other communications hereunder to a party shall be in writing and shall be deemed given if personally delivered, telecopied (with confirmation) or mailed by registered or certified mail (return receipt requested) to such party at its address set forth below or such other address as such party may specify by notice to the parties hereto. If to Energy Partners, to:
With copies to:
If to Hydrocarbon, to:
With copies to:
43
Section 9.7 Entire Understanding; No Third Party Beneficiaries . Except for the Confidentiality Agreement, the Class B Membership Interest Contribution Agreement and the Exchange Agreement, all of which shall remain in effect, this Agreement represents the entire understanding of the parties hereto with reference to the transactions contemplated hereby and supersedes any and all other oral or written agreements heretofore made. Except as contemplated by Section 6.12, nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto or their respective successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement. Section 9.8 Severability . Any provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction. Section 9.9 Headings . The headings contained in this Agreement are for reference purposes only and are not part of this Agreement. Section 9.10 Jurisdiction . The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal court located in the State of Delaware or the Delaware Court of Chancery, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 9.6 shall be deemed effective service of process on such party. Section 9.11 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Section 9.12 Specific Performance . The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and, accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any federal court 44
located in the State of Delaware or in the Delaware Court of Chancery, in addition to any other remedy to which they are entitled at law or in equity. Section 9.13 Survival . All representations, warranties, agreements and covenants contained in this Agreement shall not survive the Closing or the termination of this Agreement if this Agreement is terminated prior to the Closing; provided, however, that if the Closing occurs, the agreements of the parties in Sections 3.5, 3.7, 6.12 and Article IX shall survive the Closing, and if this Agreement is terminated prior to the Closing, the agreements of the parties in Section 6.5(b), 8.2, and Article IX shall survive such termination. Section 9.14 No Act or Failure to Act . No act or failure to act by the Board of Directors of the General Partner shall constitute a breach by Energy Partners of this Agreement unless such act or failure to act is expressly approved by the Conflicts Committee. [Remainder of this page is intentionally left blank.] 45
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed in counterparts by their duly authorized officers, all as of the day and year first above written.
Annex A
A-i
A-ii
A-iii
THIRD AMENDED AND
RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF MARKWEST ENERGY PARTNERS, L.P. dated effective as of , 20 , is entered into by and among MarkWest Energy GP, L.L.C., a Delaware limited liability company, as the General Partner and as the lawful agent and attorney-in-fact for the Limited Partners, and MarkWest Hydrocarbon, Inc., a Delaware corporation, together with any other Persons who become Partners in the Partnership or parties hereto as provided herein. WITNESSETH: WHEREAS, the Partnership was formed under the Delaware Act on January 25, 2002; WHEREAS, in connection with the initial public offering of the Partnership in May 2002, the General Partner and other parties thereto entered into the First Amended and Restated Agreement; WHEREAS, on December 31, 2004, the General Partner effected Amendment No.1 to the First Amended and Restated Agreement; WHEREAS, on June 10, 2005, the Partnership effected Amendment No. 2 to the First Amended and Restated Agreement; WHEREAS, on February 28, 2007, the General Partner and other parties thereto amended and restated the First Amended and Restated Agreement, Amendment No. 1 and No. 2 in its entirety and entered into the Second Amended and Restated Agreement; WHEREAS, MarkWest Hydrocarbon, Inc., MWEP, L.L.C., a Delaware limited liability company and a wholly-owned subsidiary of the Partnership, and the Partnership have entered into the Agreement and Plan of Redemption and Merger dated September 5, 2007; and WHEREAS, the General Partner and the other parties hereto now desire to amend and restate the Second Amended and Restated Agreement in its entirety in the manner set forth in this Agreement, and all of the Partners join in this Agreement to evidence their agreement to the terms of this amended and restated instrument. NOW, THEREFORE, in consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby agree as follows: ARTICLE I Section 1.1 Definitions. The following defin | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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