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Exhibit 2.1

 

Execution version

 

  LIMITED LIABILITY COMPANY INTERESTS PURCHASE AGREEMENT

 

BY AND BETWEEN

 

CORENERGY INFRASTRUCTURE TRUST, INC., as Purchaser

 

AND

 

MOGAS ENERGY, LLC, as Seller

 

Dated as of November 17, 2014

 

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TABLE OF CONTENTS

 

 

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LIMITED LIABILITY COMPANY INTERESTS PURCHASE AGREEMENT

 

This LIMITED LIABILITY COMPANY INTERESTS PURCHASE AGREEMENT is dated as of November 17, 2014 (the “Execution Date”), by and between Mogas Energy, LLC, a Delaware limited liability company (“Seller”), and CorEnergy Infrastructure Trust, Inc., a Maryland corporation (“Purchaser”) (the foregoing parties to this Agreement may also be referred to herein as the “Parties” or individually as a “Party”).  Capitalized terms used and not otherwise defined herein have the meanings set forth in Article 1.

 

RECITALS

 

 

 

 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the covenants, representations and warranties set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

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ARTICLE 1

DEFINITIONS

 

 

“Acquisition Transaction” has the meaning set forth in Section 5.7.

 

“Action” means any action, claim, suit, complaint, investigation, proceeding, arbitration or litigation, whether civil or criminal, in law or in equity, whether or not by or before any arbitrator or Governmental Authority.

 

“Administrative Agent” means Union Bank of California, N.A.

 

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, that Person.  For the purposes of this definition, “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through ownership of voting securities or by contract or otherwise.

 

“Agreement” means this Limited Liability Company Interests Purchase Agreement, including (unless the context otherwise requires) the Exhibits, the Schedules and the Company Disclosure Schedule, as the same may be amended from time to time in accordance with the terms hereof.

 

“Allocable Amount” has the meaning set forth in Section 2.7.

 

“Allocation Schedule” has the meaning set forth in Section 2.7.

 

“Assets” has the meaning set forth in Section 3.13(b).

 

“Balance Sheet Date” has the meaning set forth in Section 3.6.

 

“Business” means the business of the Companies, consisting of, (a) with respect to MoGas Pipeline, the ownership and operation of the Pipeline and (b) with respect to UPSL, the ownership and lease of certain Real Property.

 

“Business Day” means a day other than: (i) Saturday, (ii) Sunday or (iii) any day on which banks located in the State of New York are authorized or obligated to close.

 

“Claim” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, notice of violation, proceeding, litigation, citation, summons, subpoena, investigation, suit, information request, audit, or administrative order of any nature, whether civil, criminal, administrative, regulatory, or otherwise, whether at law or in equity, and including any legal proceedings in respect thereof.

 

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“Claim Cap” has the meaning set forth in Section 7.2(d)(i).

 

“Claim Deductible Threshold” has the meaning set forth in Section 7.2(c).

 

“Claim Notice” has the meaning set forth in Section 7.3(a).

 

“Claim Response” has the meaning set forth in Section 7.3(a).

 

“Closing” means the closing of the Transactions and shall be deemed to have occurred at 11:59 p.m. Central Time on the Closing Date.

 

“Closing Date” has the meaning set forth in Section 2.4(a).

 

“Company Audited Financials” has the meaning set forth in Section 3.6.

 

“Companies” has the meaning set forth in Recital E.

 

“Company Interests” has the meaning set forth in Recital E.

 

“Company Disclosure Schedule” means the schedules delivered to Purchaser by or on behalf of Seller, in connection with this Agreement, and identified as such on the title page thereto.

 

“Company Financials” has the meaning set forth in Section 3.6.

 

“Company Unaudited Financials” has the meaning set forth in Section 3.6.

 

“Confidentiality Agreement” has the meaning set forth in Section 5.4(e).

 

“Contract” means any written or oral note, bond, mortgage, contract, license, lease, sublease, covenant, commitment, power of attorney, proxy, indenture, or other agreement or arrangement.

 

“D&D” has the meaning set forth in Recital C.

 

“D&O Tail Policy” has the meaning set forth in Section 5.5.

 

“Dispute Notice” has the meaning set forth in Section 2.6(b).

 

“Disputed Items” has the meaning set forth in Section 2.6(b).

 

“Effective Registration Statement” has the meaning set forth in Section 4.5.

 

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“Environmental Laws” shall mean all federal, state, local and foreign Laws (including common law) and regulations relating to pollution or the environment, to natural resources or to human health and safety as affected by exposure to Hazardous Substances, including Laws relating to Releases or threatened Releases of Hazardous Substances or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, arrangement for disposal, Release, transport or handling of Hazardous Substances and all Laws with regard to record keeping, notification, disclosure and reporting requirements respecting Hazardous Substances, and Laws relating to the management, use restoration, or compensation for use of or damage to natural resources, including: (a) the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §§9601 et seq.) (“CERCLA”); (b) Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (42 U.S.C. §§6901 et seq.) (“RCRA”); (c) the National Environmental Policy Act (42 U.S.C. §§4321 et seq. (1969), as amended); (d) the Emergency Planning and Community Right to Know Act (42 U.S.C. §§11001 et seq.); (e) the Clean Air Act (42 U.S.C. §§ 7401 et seq.); (f) the Clean Water Act (33 U.S.C. §§1251 et seq.); (g) the Toxic Substances Control Act (15 U.S.C. §§2601 et seq.); (h) the Hazardous Materials Transportation Act (49 U.S.C. §§5101 et seq.); (i) the Occupational Safety and Health Act (29 U.S.C. §§651 et seq.); (j) any state, county, municipal or local Laws similar or analogous to the federal statutes listed in parts (a)-(i) of this subparagraph; and (k) any rules, regulations, directives, orders or the like adopted pursuant to or implementing the Laws  listed in parts (a)-(j) of this subparagraph.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

 

“ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, entity, trade or business that, together with the first entity, trade or business, would be treated as a single employer under Internal Revenue Code Section 414 or ERISA Section 4001(b).

 

“Escrow Agent” shall mean UMB Bank, N.A.

 

“Escrow Agreement” has the meaning set forth in Section 2.5(a).

 

“Estimated Closing Balance Sheet” has the meaning set forth in Section 2.3(a).

 

“Estimated Purchase Price” has the meaning set forth in Section 2.3(a).

 

“Estimated Working Capital” has the meaning set forth in Section 2.3(a).

 

“Execution Date” has the meaning set forth in the first paragraph of this Agreement.

 

“Existing D&O Coverage” has the meaning set forth in Section 5.5.

 

“Existing Muni Litigation” means the litigation described in items 2, 3, 4, and 5 of Schedule 3.5(a).

 

“Existing Refund Rate Litigation” means the litigation described in item 1 of Schedule 3.5(a).

 

“FERC” has the meaning set forth in Recital B.

 

“Final Closing Balance Sheet” has the meaning set forth in Section 2.6(a).

 

“Final Purchaser Payment” has the meaning set forth in Section 2.6(e).

 

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“Final Seller Payment” has the meaning set forth in Section 2.6(d).

 

“Final Working Capital” has the meaning set forth in Section 2.6(b).

 

“Fundamental Representations” has the meaning set forth in Section 7.1(a).

 

“GAAP” means generally accepted accounting principles in the United States, as in effect from time to time.

 

“Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, department or agency, or any court, authority, tribunal, administrative hearing body, or other body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power.  For the avoidance of doubt, Governmental Authority shall include all Taxing Authorities.

 

“Hazardous Substances” shall mean all substances, chemicals, wastes, materials, pollutants, or contaminants defined as Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. § 300.5, RCRA hazardous wastes, CERCLA hazardous substances, asbestos, toxic mold, polychlorinated biphenyls (PCBs), or defined as hazardous or toxic by, or regulated as such under, any applicable Environmental Law.

 

“HSR Act” means the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended.

 

“Indebtedness” means, with respect to the Companies, (a) any indebtedness for borrowed money (including the principal amount thereof, any accrued interest thereon, and any prepayment premiums or termination fees with respect thereto), whether short term or long term, (b) any indebtedness arising under capital leases, conditional sales contracts and other similar title retention instruments whether short term or long term, (c) all Liabilities secured by any pledge, mortgage or other security interest on any property owned by the Companies, (d) all Liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect the Companies against fluctuations in interest rates, (e) all indebtedness (other than trade payables incurred in the ordinary course of business) for the deferred purchase price of property or services, (f) any indebtedness evidenced by any note, bond, debenture mortgage or other debt instrument or debt security, (g) all interest, fees and other expenses owed with respect to indebtedness described in the foregoing clauses (a) through (f), and (h) all indebtedness referred to in the foregoing clauses (a) through (g) which is directly or indirectly guaranteed by either of the Companies or that is secured by the assets or properties of either of the Companies.

 

“Indemnity Escrow Account” has the meaning set forth in Section 2.5(a).

 

“Indemnification Claim” has the meaning set forth in Section 7.3(a).

 

“Indemnified Party” has the meaning set forth in Section 7.3(a).

 

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“Indemnifying Party” has the meaning set forth in Section 7.3(a).

 

“Independent Accountant” has the meaning set forth in Section 2.6(b).

 

“Insurance Policies” has the meaning set forth in Section 3.19.

 

“Intellectual Property” means all federal, state, local, international and foreign:  (a) patents and patent applications (including provisional applications), trade secrets and inventions (whether or not patentable); (b) trade names, trade dress, logos, slogans, work products, registered and unregistered trademarks and service marks, and applications to register trademarks and service marks; (c) copyrights in both published and unpublished works, and all copyright registrations and applications for copyright registration and all derivatives, adoptions and combinations of the above; (d) any mask work registrations and applications to register mask works; (e) registered and unregistered Internet domain names and applications to register Internet domain names; and (f) know-how, trade secrets, confidential information, software, technical information, data, plans, drawings, and blue prints, whether licensed or owned.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

“Joint Instruction Letter” has the meaning set forth in Section 2.5(a).

 

“Law” or “Laws” means any law, statute, code, constitution, treaty, Order, rule, regulation, protocol, ordinance or other legal restraint or requirement of a Governmental Authority, including common law.

 

“Leased Real Property” means all tracts, parcels and subdivided lots of real property, including any improvements thereon, in which a Company has a leasehold interest.

 

“Liabilities” means all Indebtedness, obligations and other liabilities of a Person (whether known or unknown, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether asserted or unasserted and whether due or to become due).

 

“Liens” means any mortgage, pledge, assessment, security interest, lease, lien, easement, encroachment, right-of-way, license, covenant, condition, restriction, adverse claim, equitable interest, preferential purchase right, levy, charge, option, or other encumbrance of any kind, or any conditional sale Contract, title retention Contract or other Contract to give any of the foregoing.

 

“Loss” or “Losses” means any Claims, judgments, awards, Liabilities, losses, Taxes, costs, expenses (including reasonable attorneys’ fees and expenses), damages, penalties, and fines.

 

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“Material Adverse Effect” means any event, change, circumstance, occurrence, or effect that has had or would reasonably be expected to cause or result in a material adverse effect on the business, assets, operations, results of operations, or financial condition of the Companies (considered together);  provided, however, that the foregoing shall not include:  (a) any such event or change resulting from or arising in connection with (i) changes or events affecting generally the industry in which the Companies operate (except, for clarity, to the extent such changes, events or developments disproportionately affect the Companies as compared to other industry participants), (ii) changes in general economic or political conditions or changes in interest rates, currency exchange rates or currency fluctuations, (iii) the public announcement of this Agreement or any action taken by a Party that is expressly required by this Agreement, (iv) the enactment, repeal or change in any Law, any change in GAAP, or any interpretation of any of the foregoing after the Execution Date generally affecting the industry in which the Companies operate (except, for clarity, to the extent such enactment, repeal, change, or interpretation disproportionately affects the Companies as compared to other industry participants), (v) the public announcement by Purchaser or any of its Affiliates of its plans or intentions (including in respect of customers) with respect to the Companies, (vi) any natural disaster or any acts of terrorism, sabotage, military action or war (whether or not declared) or any escalation or worsening thereof generally affecting the industry in which the Companies operate (except, for clarity, to the extent any such matter disproportionately affects the Companies as compared to other industry participants), (vii) any resolution, judgment, court decision or settlement agreement relating to the Existing Muni Litigation; or (b) any item referred to in this definition which is cured (including by payment of money) by the Companies or Seller (or any Affiliate thereof) to the reasonable satisfaction of Purchaser before the Closing Date.  For purposes of this definition, “the enactment, repeal or change in any Law” shall mean the adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any Law which occurs subsequent to the Execution Date.

 

“Material Contracts” has the meaning set forth in Section 3.17(a).

 

“Mogas Energy Credit Agreement” means that certain Credit Agreement, dated as of July 13, 2007 (as amended, supplemented or otherwise modified from time to time) among Mogas Energy, the Administrative Agent and the Secured Lenders (as such terms are defined therein).

 

“MoGas Pipeline” has the meaning set forth in Recital A.

 

“MoGas Pipeline Credit Agreement” means that certain Credit Agreement, dated as of July 13, 2007 (as amended, supplemented or otherwise modified from time to time) among MoGas Pipeline, the Administrative Agent and the Secured Lenders (as such terms are defined therein).

 

“Most Recent Balance Sheet” shall mean the unaudited consolidated balance sheet of MoGas Pipeline as of the Balance Sheet Date.

 

“Muni Settlement Payment” has the meaning set forth in Section 6.2(g).

 

“NGA” has the meaning set forth in Section 3.20(a).

 

“Order” means any writ, judgment, decree, award, ruling, subpoena, verdict injunction or similar order of any Governmental Authority (in each such case whether preliminary or final).

 

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“Other Real Property Rights” means all other rights (other than rights in the Owned Real Property and the Leased Real Property, and including easements and rights-of-way) granted to a Company with respect to the use of any tracts, parcels or subdivided lots of real property or any improvements thereon.

 

“Outside Date” has the meaning set forth in Section 8.1(b).

 

“Owned Real Property” means all tracts, parcels and subdivided lots of real property, including any improvements thereon, in which a Company has an ownership interest.

 

“Parties” has the meaning set forth in the first paragraph of this Agreement.

 

“Payoff Letters” has the meaning set forth in Section 2.3(a).

 

“Permit” means each permit, certificate, license, franchise, registration, variance, consent, approval, authorization of, or any similar rights granted by or obtained from, any Governmental Authority.

 

“Permitted Liens” means any (a) inchoate mechanic’s, materialmen’s, workmen’s, repairmen’s and similar Liens, (b) Liens for Taxes not yet due and payable or for Taxes being contested in good faith through appropriate proceedings and for which adequate reserves are reflected on the Most Recent Balance Sheet, (c) pledges or deposits under workers’ compensation legislation, unemployment insurance laws or similar laws, (d) good faith deposits in connection with bids, tenders or contracts, including rent security deposits, (e) pledges or deposits to secure public or statutory obligations or appeal bonds, (f) Liens referred to on Schedule 3.13 of the Company Disclosure Schedule, and (g) in the case of real property, recorded easements, covenants and other restrictions which do not impair the current use of such real property in the business of the Companies in any material respect.

 

“Person” means any natural person, corporation, general partnership, limited partnership, limited liability company or partnership, proprietorship, other business organization, trust, union, association or Governmental Authority.

 

“Pipeline” has the meaning set forth in Recital B.

 

“Plan” means (a) each of the “employee benefit plans” (as such term is defined in Section 3(3) of ERISA), (b) any other plan, arrangement or policy providing for (i) health, life, vision or dental insurance coverage, workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits or retirement benefits, fringe benefits, or (ii) profit sharing, deferred compensation, bonuses, stock options, stock appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits, and (c) any other similar plan, fund, policy, benefit, program, custom, agreement, arrangement or understanding, in each of cases (a), (b), and (c), as to which either Company or any ERISA Affiliate of either Company is a sponsor or participating employer or as to which either Company or any ERISA Affiliate of either Company makes contributions or is required to make contributions or has any Liabilities thereunder, or which covers or provides benefits to any individual involved in the business of either Company or any ERISA Affiliate of either Company, for the benefit of any current or former director, manager, officer, consultant or employee.

 

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“Pre-Closing Statement” has the meaning set forth in Section 2.3.

 

“Project Credit Agreements” means, together, the Mogas Energy Credit Agreement and the MoGas Pipeline Credit Agreement.

 

“Project Debt” means the outstanding Indebtedness of Seller and MoGas Pipeline pursuant to the Project Credit Agreements.

 

“Proprietary Information” has the meaning set forth in Section 5.4(a).

 

“Purchase Price” has the meaning set forth in Section 2.2.

 

“Purchaser” has the meaning set forth in the first paragraph of this Agreement.

 

“Purchaser Common Stock” means Purchaser’s common stock, $0.001 par value per share.

 

“Purchaser’s Equity Financing” means the offer and sale to the public by Purchaser under the Effective Registration Statement of shares of Purchaser Common Stock, to finance all or a portion of the Purchase Price, as determined by Purchaser.

 

“Purchaser Indemnified Party” has the meaning set forth in Section 7.2(a).

 

“Qualified” means, as to any representation, warranty, obligation, covenant or other agreement, as applicable, that such provision is subject to a “materiality”, “material”, “Material Adverse Effect”, “in all material respects”, or similar materiality qualification, but excluding any knowledge qualification, and “Qualification” means the qualification in question.

 

“Real Property” means the Owned Real Property, the Leased Real Property and the Other Real Property Rights, collectively.

 

“Recent Registration Statement” has the meaning set forth in Section 4.5.

 

“Release” means any release, spill, emission, discharge, leaking, leaching, pumping, pouring, dumping, emptying, injection, deposit, disposal of or migration into or through the indoor or outdoor environmental medium or natural resources (including ambient air, surface water, groundwater, land and surface or subsurface strata) or into or out of any property.

 

“Representatives” means, with respect to any Person, such Person’s accountants, financial consultants, investment bankers, legal counsel, agents and other representatives.

 

“Required Closing Working Capital” has the meaning set forth in Section 2.2(a).

 

“Response Period” has the meaning set forth in Section 7.3(a).

 

“Return” or “Returns” has the meaning set forth in Section 3.16(a).

 

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“Ries Agreement” means that certain Agreement, dated as of September 30, 2013, by and among Seller, MoGas Pipeline, David J. Ries, Ries Holdings, Inc., DES Energy, Ltd., and D&D Energy.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Seller” has the meaning set forth in the first paragraph of this Agreement.

 

“Seller Indemnified Party” has the meaning set forth in Section 7.2(b).

 

“Subsidiary” means any Person in which either Company, directly or indirectly through other Subsidiaries, beneficially owns at least fifty percent (50%) of either the equity interest in, or the voting control of, such Person.

 

“Survival Period” has the meaning set forth in Section 7.1(a).

 

“Tax” or “Taxes” means any income, franchise tax, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Internal Revenue Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax or similar charge, fee, levy or impost of any kind whatsoever, or other taxes, duties, charges, fees, levies or other assessments imposed or required to be withheld by any Governmental Authority, including any amounts required to be paid or delivered to any state as unclaimed or abandoned property, and any license, regulatory or other fees and charges required to be paid or deliver to any state or any interest, penalties or additions thereto incurred under applicable Law with respect to such items (whether assessed in connection with any audit or other examination by any Governmental Authority or judicial or administrative proceeding or otherwise) and including liability for the taxes of any other Person as a transferee or successor, by contract, or otherwise.

 

“Taxing Authority” means any Governmental Authority that imposes or collects Taxes, including, without limitation, the Internal Revenue Service, or any federal, state, local or foreign taxing or regulatory authority.

 

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

 

“Third Party Claims” has the meaning set forth in Section 7.3(b).

 

“Transactions” has the meaning set forth in Recital E.

 

“Transaction Documents” means this Agreement, the Escrow Agreement, the Confidentiality Agreement, and any other documents, certificates or instruments executed or delivered in connection herewith or with the transactions contemplated hereby.

 

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“Treasury Regulations” means the federal income Tax regulations promulgated under the Internal Revenue Code, as amended from time to time, and including corresponding provisions of succeeding regulations.

 

“UPSL” has the meaning set forth in Recital C.

 

“UPSL Financials” has the meaning set forth in Section 3.6.

 

“UPSL Interests” has the meaning set forth in Recital E.

 

“Wire Transfer Instructions” has the meaning set forth in Section 2.3(a).

 

“Working Capital” means, as of the Closing: (a) all current assets of the Companies, minus (b) all current liabilities of the Companies, determined in accordance with the accounting principles, practices and policies established by GAAP consistent with the Most Recent Balance Sheet, except as specifically modified and described on the Working Capital Schedule.  Working Capital shall be computed without taking into account Project Debt but shall include any Muni Settlement Payment that remains unpaid as of the Closing.

 

“Working Capital Schedule” means the schedule attached hereto as Schedule 1, which sets forth the specific items of assets and liabilities to be used in computing “Working Capital”.

 

 

 

 

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ARTICLE 2

PURCHASE AND SALE OF INTERESTS; CLOSING

 

 

 

 

 

 

 

 

 (ii)            wire transfer instructions for the payments to be made by Purchaser pursuant to Section 2.3(b) (collectively, the “Wire Transfer Instructions”)

 

 

 

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The Pre-Closing Statement shall include a notice from Seller signed by an officer of MoGas Pipeline stating that the Estimated Closing Balance Sheet has been prepared in accordance with GAAP on a basis consistent with the Most Recent Balance Sheet (except as provided in Schedule 1), and on a basis consistent with this Agreement (including Schedule 1).  The Pre-Closing Statement shall also include, or Seller shall promptly provide, such information as Purchaser may reasonably request to substantiate the calculations shown on such Pre-Closing Statement.

 

 

 

 (ii)             pay to the Escrow Agent SEVEN MILLION DOLLARS ($7,000,000) to be held in the Indemnity Escrow Account; an

 

 (iii)           pay to Seller the Estimated Purchase Price (as determined in Section 2.3(a)), and after deduction for (A) the amounts paid pursuant to Sections 2.3(b)(i) and (ii) and (B) any unpaid Muni Settlement Payment set forth in the statement delivered by Seller to Purchaser pursuant to Section 2.4(c)(vii), if not already taken into account in calculating Estimated Working Capital.

 

All of the foregoing payments shall be made by wire transfer of immediately available funds to such account or accounts as specified in the applicable Wire Transfer Instructions.

 

 

 

 

 

 

 (iii)           such other documents and certificates as are reasonably required by Seller to be delivered to effectuate the transactions contemplated hereby.

 

 

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 (v)            resignations of all directors or managers (as the case may be) and officers, in each case as such, of each Company (except Cy Zebot as the President of MoGas Pipeline);

 

 (vi)          a certification of non-foreign status executed by Seller in the form prescribed by Treasury Regulation Section 1.1445-2(b)(2);

 

 (vii)         a statement, signed by an officer of Seller and dated as of the Closing Date, indicating which, if any, of the Muni Settlement Payments remain unpaid as of the Closing Date, and the amount thereof; and

 

 (viii)       such other documents and certificates as are reasonably required by Purchaser to be delivered to effectuate the transactions contemplated hereby, including conveyance instruments, duly executed by Seller and in form and substance satisfactory to Purchaser, transferring to Purchaser full legal ownership of the Company Interests.

 

 

 

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 (ii)            On the date that is six (6) months after the Closing Date, Seller and Purchaser shall execute and deliver to the Escrow Agent a Joint Instruction Letter instructing the Escrow Agent to release to Seller escrow cash from the Indemnity Escrow Account such, following such release, the amount of escrow cash remaining in the Indemnity Escrow Account is (A) FOUR MILLION SIX HUNDRED SIXTY-SIX THOUSAND SIX HUNDRED SIXTY-SEVEN DOLLARS ($4,666,667), plus (B) a reasonable reserve amount determined by Seller and Purchaser in good faith in respect of any and all Claim Notices submitted by any Purchaser Indemnified Party prior to such date in accordance with Article 7 that remain pending as of such date.

 

 (iii)           On the date that is twelve (12) months after the Closing Date, Seller and Purchaser shall execute and deliver to the Escrow Agent a Joint Instruction Letter instructing the Escrow Agent to release to Seller escrow cash from the Indemnity Escrow Account such, following such release, the amount of escrow cash remaining in the Indemnity Escrow Account is (A) TWO MILLION THREE HUNDRED THIRTY-THREE THOUSAND THREE HUNDRED THIRTY-THREE DOLLARS ($2,333,333), plus (B) a reasonable reserve amount determined by Seller and Purchaser in good faith in respect of any and all Claim Notices submitted by any Purchaser Indemnified Party prior to such date in accordance with Article 7 that remain pending as of such date.

 

 (iv)          On the date that is eighteen (18) months after the Closing Date, Seller and Purchaser shall execute and deliver to the Escrow Agent a Joint Instruction Letter instructing the Escrow Agent to release to Seller escrow cash from the Indemnity Escrow Account such that, following such release, the amount of escrow cash remaining in the Indemnity Escrow Account equals a reasonable reserve amount determined by Seller and Purchaser in good faith in respect of any and all Claim Notices submitted by any Purchaser Indemnified Party prior to such date in accordance with Article 7 that remain pending as of such date.

 

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Purchaser, subject to such exceptions as are specifically disclosed in the Company Disclosure Schedule, as follows:

 

 

 

 

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 (iii)           All Contracts continuing over a period of more than six (6) months from the date hereof or exceeding $25,000 in value;

 

 (iv)           All Contracts with any distributor, dealer, representative or sales agency;

 

 (v)            All Contracts with any current or former officer, director, consultant, independent contractor or employee, or any Person in which any such Person has an interest, or any third party agency supplying the services of any consultants, employees (including temporary employees or “leased” employees) or independent contractors to such company (including any non-competition, confidentiality, trade secret or similar agreement);

 

 (vi)           All Contracts (including, without limitation, any lease, rental or occupancy agreement, license, or installment or conditional sale agreement) under which any of the Companies is either lessor or lessee relating to the Pipeline, the Assets or any property at which the Assets and the Pipeline are located;

 

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 (vii)         All Contracts (including, without limitation, any note, debenture, bond, equipment trust agreement, letter of credit agreement, or loan agreement) for Indebtedness, including the borrowing or lending of money or for a line of credit or guarantee, pledge or undertaking of the Indebtedness of any other Person;

 

 (viii)       All Contracts for any charitable or political contribution;

 

 (ix)           All Contracts for any capital expenditure or leasehold improvement except for agreements regarding the foregoing that in the aggregate do not exceed $50,000 annually;

 

 (x)             All Contracts limiting or restraining any of the Companies from engaging or competing in any manner or in any business;

 

 (xi)            All Contracts (including any license, franchise, or distributorship agreement) that relates to any software, patent, trademark, trade name, service mark or copyright or to any ideas, technical assistance or other know-how of or used by either Company;

 

 (xii)          All Contracts related to the management of any of the Companies, the Pipeline and/or the Assets, including without limitation any agreement related to asset management, network management, interconnection, tariff administration or shared use of assets in excess of $25,000 in value;

 

 (xiii)        All collective bargaining agreements or other agreements to or with any labor union or other employee representative of a group of employees;

 

 (xiv)        All joint venture, partnership or other agreement (however named) involving a sharing of profits, losses, costs or liabilities by any of the Companies with any other Person;

 

 (xv)         All Contracts with any financial advisor or investment banking firm

 

 (xvi)        All Contracts with any Affiliate of the Companies;

 

 (xvii)       All derivatives Contracts (including master agreements or confirmations), or any other Contract evidencing financial or commodity hedging or similar trading activities;

 

 (xviii)     All agreements for the settlement of any Claim; or

 

 (xix)         All Contracts not made in the ordinary course of business.

 

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 (ii)            the name of the insurer, the name of the policyholder and the name of each covered insured; and

 

 

Seller has delivered to Purchaser true and complete copies of each Insurance Policy, including the Insurance Policy in respect of the Existing D&O Coverage.

 

 

 

 

 

 

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Seller, subject to such exceptions as are specifically disclosed in the Purchaser Disclosure Schedule, as follows:

 

 

 

 

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ARTICLE 5

COVENANTS

 

 

 

 

 

 (ii)            mortgage, pledge or subject to any Lien (other than Permitted Liens) any material assets, whether real, personal, fixed, tangible or intangible;

 

 (iii)           enter into any sale, transfer, lease or other disposition of, or enter into any agreement for the sale of, or give any Person an option to purchase, all or any part of the assets of such Company other than in the ordinary course of business;

 

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 (iv)          make any material change in its Tax or accounting methods, principles or practice unless required by applicable Law or GAAP;

 

 (v)            make any loans, advances or capital contributions to, or investments in, any Person;

 

 (vi)          enter into, amend, terminate, or waive any material rights or obligations under, any Material Contracts other than in the ordinary course of business;

 

 (vii)         breach, or fail to pay the premium under, any existing insurance policy;

 

 (viii)       enter into any transaction or arrangement with an Affiliate of the Company;

 

 (ix)           enter into any severance or similar agreement with any employee, or pay or agree to pay any bonuses or increase in salaries or other compensation to any of its directors, officers, or employees;

 

 (x)             modify its organizational documents;

 

 (xi)           take any action outside of the ordinary course of business other than distributions to members (subject to Section 5.1(g)); or

 

 (xii)         commit or agree, whether in writing or otherwise, to do any of the foregoing.

 

 

 

 (ii)            sell, assign, transfer or dispose of any of the Company Interests, or grant to any Person any option, warrant or other right therein, derivative or otherwise, except as otherwise contemplated in this Agreement; or

 

 (iii)           amend that certain letter agreement, dated as of the date hereof, between Seller, MoGas Pipeline, and Zebot Ventures, LLC.

 

 

 

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 (ii)             Purchaser and Seller further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including any Tax with respect to the transactions contemplated hereby), provided that, such Tax reduction gives rise to no adverse tax consequences or attributes with respect to the Party being asked to execute such certificate or other document.

 

 (iii)           Purchaser and Seller further agree, upon request, to provide the other Party with all information that either Party may be required to report pursuant to Section 6043 of the Internal Revenue Code, and all Treasury Department Regulations promulgated thereunder.

 

5.7                No Shop. Prior to the earlier of the Closing or the termination of this Agreement, Seller shall not, and shall not permit any of its Affiliates (including the Companies) or any of its or their respective Representatives to, directly or indirectly, (a) discuss, encourage, negotiate, undertake, initiate, authorize, recommend, propose or enter into, any transaction involving a merger, consolidation, or business combination involving either Company, or the purchase or disposition of any material portion of the Assets or of any Company Interests, other than the transactions contemplated by the Transaction Documents (an “Acquisition Transaction”), (b) facilitate, encourage, solicit or initiate discussions, negotiations or submissions of proposals or offers in respect of an Acquisition Transaction, (c) furnish or cause to be furnished, to any Person, any information concerning the Business or the Assets in connection with an Acquisition Transaction, or (d) otherwise cooperate in any way with, assist or participate in, or facilitate or encourage, any effort or attempt by any other Person to do or seek any of the foregoing. Prior to the termination of this Agreement, Seller shall, and shall cause each of its Affiliates (including the Companies) and its and their respective Representatives to, immediately cease and cause to be terminated any existing discussions or negotiations with any Persons (other than Purchaser) conducted heretofore with respect to any Acquisition Transaction. Seller agrees that the rights and remedies for noncompliance with this Section 5.7 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable harm to Purchaser and that money damages would not provide an adequate remedy to Purchaser.

 

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ARTICLE 6

CONDITIONS TO CLOSING

 

 

 

(a)           Each of Seller’s representations and warranties in the first sentence of Section 3.1(a), Section 3.1(b), Section 3.2, and Section 3.3(a), in each case without giving effect to any Qualification therein, shall be true and correct on and as of the Closing Date with the same force and effect as if they had been made on and as of such date. The other representations and warranties made by Seller in Article 3, without giving effect to any Qualification therein, shall be true and correct on and as of the Closing Date with the same force and effect as if they had been made on and as of such date (except to the extent such representations and warranties are expressly made as of an earlier date, in which case such representations and warranties shall be true and correct on and as of such earlier date), except for such failures to be true and correct as have not had, and would not reasonably be expected to have, in the aggregate, a Material Adverse Effect or a material adverse effect on Seller’s ability to consummate the transactions contemplated hereby. Purchaser shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, to the foregoing effect.

 

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ARTICLE 7

SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION

 

 

 

 

 

 

 

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 (ii)             in no event shall Seller have liability in the aggregate under this Article 7 for Losses in excess of the Purchase Price actually received by Seller.

 

 

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ARTICLE 8

TERMINATION

 

 

 

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ARTICLE 9

MISCELLANEOUS PROVISIONS

 

 

If to Seller, to:

 

Mogas Energy, LLC

Attn:  Mohan Thomas, General Counsel

EIF Management / Ares Capital

3 Charles River Place

63 Kendrick Street

Needham, MA 02494

Facsimile No.:  781-292-7099

 

with a copy (which shall not constitute notice) to:

 

John Klusaritz

Foley & Lardner

Washington Harbor

3000 K Street, N.W.

Suite 600

Washington, DC 20007

Facsimile No.: 202-672-5399

 

If to Purchaser, to:

 

CorEnergy Infrastructure Trust, Inc.

Attn:  David J. Schulte, CEO

1100 Walnut, Suite 3350

Kansas City, MO 64106

Facsimile No.: 816-875-5875

 

with a copy (which shall not constitute notice) to:

 

Steven F. Carman

Husch Blackwell LLP

4801 Main St., Suite 1000

Kansas City, MO 64112

Facsimile No.: 816-983-8080

 

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All such notices, requests and other communications will (a) if delivered personally to the address as provided in this Section 9.1, be deemed given upon delivery, (b) if delivered by facsimile transmission to the facsimile number as provided for in this Section 9.1, be deemed given upon facsimile confirmation, and (c) if delivered by overnight courier to the address as provided in this Section 9.1, be deemed given on the earlier of the first Business Day following the date sent by such overnight courier or upon receipt (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 9.1).  Any Party from time to time may change its address, facsimile number or other information for the purpose of notices to that Party by giving notice specifying such change to the other Party hereto.

 

 

 

 

 

 

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[signature page follows]

 

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IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed as of the date first written above.

 

	Mogas Energy, LLC
	By:	/s/ Jose A. Torres Monllor
	Name:	Jose A. Torres Monllor
	Title:	Vice President
	CorEnergy Infrastructure Trust, Inc.
	By:	/s/ David J. Schulte
	Name:	David J. Schulte
	Title:	Chief Executive Officer