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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 7, 2000
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9210 95-4035997
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10889 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90024
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code:
(310) 208-8800
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Item 2. Acquisition or Disposition of Assets
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On March 7, 2000, Occidental Petroleum Corporation entered into an
agreement to acquire all of the common partnership interest in Altura Energy
Ltd. ("Altura"), the largest oil producer in the state of Texas. Altura has
proved reserves of approximately 850 million barrels of oil equivalent, which
are located in the Permian Basin.
Occidental will pay approximately $1.2 billion to the sellers, affiliates
of BP Amoco plc and Shell Oil Company, to acquire the common limited partnership
interest and will control the general partner which manages, operates and
controls 100 percent of the Altura assets. The partnership will borrow
approximately $2.4 billion, which will be recourse only to the Altura assets.
The sellers will retain a preferred limited partnership interest and will be
entitled to certain distributions from the partnership. The partnership will
loan approximately $2 billion to affiliates of the sellers, evidenced by two
notes, which will provide credit support to the partnership. The transaction is
valued at approximately $3.6 billion and is expected to close by April 30, 2000.
Funds for Occidental's investment will be provided by the net after-tax
proceeds of $700 million from the consummation of the recently announced sale of
Occidental's equity interest in Canadian Occidental Petroleum Ltd., which is
scheduled to close in April. The remaining $500 million is expected to be funded
by the sale of various non-strategic assets before year-end.
As a result of the acquisition, Occidental's worldwide oil production is
expected to rise immediately to 417,000 barrels per day, a 36 percent increase
above the average for 1999. In addition, Occidental's worldwide proved reserves
are expected to increase by 63 percent to approximately 2.2 billion barrels, on
an oil-equivalent basis.
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Item 7. Financial Statements and Exhibits
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(a) Financial statements of business acquired.
1. To be filed by amendment.*
(b) Pro forma financial information.
1. Pro forma financial information with respect to the acquisition of
the Altura interests to be filed by amendment.*
(c) Exhibits.
10.1 Purchase and Sale Agreement dated March 7, 2000, by and among Amoco
D. T. Company, Amoco X. T. Company, Amoco Y. T. Company, SWEPI LP, Shell Land &
Energy Company, Shell Onshore Ventures Inc., Shell K2 Inc., and Shell Everest,
Inc., as Sellers, and Occidental Petroleum Corporation, as Buyer.
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* Financial statements and pro forma information with respect to the
acquisition of the Altura interests are to be filed by amendment not later than
75 days after the date of the consummation of this transaction.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OCCIDENTAL PETROLEUM CORPORATION
(Registrant)
DATE: March 14, 2000 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice President and Controller
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INDEX TO EXHIBITS
EXHIBITS
10.1 Purchase and Sale Agreement dated March 7, 2000, by and among Amoco
D. T. Company, Amoco X.T. Company, Amoco Y. T. Company, SWEPI LP,
Shell Land & Energy Company, Shell Onshore Ventures Inc., Shell K2
Inc., and Shell Everest, Inc., as Sellers, and Occidental Petroleum
Corporation, as Buyer.
PURCHASE AND SALE AGREEMENT
BY AND AMONG
AMOCO D.T. COMPANY, AMOCO X.T. COMPANY,
AMOCO Y.T. COMPANY, SWEPI LP,
SHELL LAND & ENERGY COMPANY, SHELL ONSHORE VENTURES INC.,
SHELL K2, INC., AND SHELL EVEREST, INC., AS SELLERS,
AND
OCCIDENTAL PETROLEUM CORPORATION, AS BUYER
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Execution Version i
INDEX
ARTICLE 1. DEFINITIONS........................................................2
ARTICLE 2. SALE OF INTERESTS.................................................19
2.1 Sale and Purchase.................................................19
2.2 Account Balances..................................................19
2.3 Purchase Price....................................................19
2.4 Purchase Price Adjustments........................................19
2.5 Earnest Money.....................................................20
ARTICLE 3. PREFERENTIAL RIGHTS AND TITLE VALUES.............................20
3.1 Title Values......................................................20
3.2 Preferential Rights to Purchase...................................20
3.3 Consents to Assignment............................................21
ARTICLE 4. ACCOUNTING AND TAXES..............................................21
4.1 Distributions.....................................................21
4.2 Taxes. 21
4.3 Working Capital Settlement and Estimate of Adjusted Purchase
Price.............................................................22
4.4 Sales Tax and Fees................................................23
4.5 Tax Status........................................................23
4.6 Basis.............................................................23
4.7 Allocations.......................................................24
ARTICLE 5. LOSS, CASUALTY AND INSURANCE......................................24
5.1 Notice of Loss....................................................24
5.2 Casualty..........................................................24
5.3 Insurance.........................................................25
ARTICLE 6. ALLOCATION OF RESPONSIBILITIES AND INDEMNITIES....................25
6.1 Opportunity for Review............................................25
6.2 Sellers' Non-Environmental Indemnity Obligation...................25
6.3 Sellers' Environmental Indemnity Obligation.......................26
6.4 Sellers Retained Liabilities......................................26
6.5 Claim Periods and Thresholds......................................28
6.6 Third Party Claims Involving Both Sellers and the LP..............28
6.7 Notice of Claims..................................................29
6.8 Defense of Claims.................................................29
6.9 Determination of Title Defect Amounts.............................30
6.10 Waiver of Certain Damages.........................................30
6.11 Several Liability.................................................30
6.12 Sellers' Responsibility for Taxes.................................31
6.13 Cross-Release.....................................................31
6.14 Indemnity Allocation..............................................31
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ARTICLE 7. DISCLAIMERS.......................................................32
7.1 Disclaimer - Representations and Warranties.......................32
7.2 Disclaimer - Statements and Information...........................32
ARTICLE 8. SELLERS' REPRESENTATIONS AND WARRANTIES...........................33
8.1 LLC Sellers' Representations......................................33
8.2 LP Sellers' Representations.......................................35
8.3 Limitation on Sellers' Liability and Waiver.......................41
ARTICLE 9. BUYER'S REPRESENTATIONS AND WARRANTIES............................42
9.1 Organization and Good Standing....................................42
9.2 Corporate Authority; Authorization of Agreement...................42
9.3 No Violations.....................................................43
9.4 SEC Disclosure....................................................43
9.5 Funds.............................................................43
9.6 Third Party Claims, Disputes and Litigation.......................43
9.7 Bankruptcy........................................................44
9.8 Independent Evaluation............................................44
9.9 Knowledge of Sellers' Breach......................................44
ARTICLE 10. ADDITIONAL COVENANTS..............................................44
10.1 Subsequent Operations.............................................44
10.2 Rights-of-Way and Surface Leases..................................44
10.3 Buyer's Acknowledgement of Obligations............................44
10.4 Use of Certain Facilities.........................................45
10.5 Covenants of Sellers..............................................45
10.6 No-Shop...........................................................48
10.7 Financial Reporting Requirements..................................48
10.8 Certain Tax Refunds...............................................48
10.9 Further Assurances................................................48
10.10 Non-Solicitation of Employees.....................................49
10.11 Actions at Closing Date...........................................49
10.13 Additional Software Rights........................................51
ARTICLE 11. HSR ACT...........................................................51
11.1 HSR Filings.......................................................51
ARTICLE 12. PERSONNEL.........................................................51
12.1 Employee List.....................................................51
12.2 Employee Benefits.................................................52
12.3 Post-Employment Medical...........................................53
12.4 WARN Act..........................................................54
12.5 Liabilities and Indemnifications..................................54
12.6 Conflicts.........................................................55
ARTICLE 13. CONDITIONS PRECEDENT TO CLOSING...................................56
13.1 Conditions Precedent to Sellers' Obligation to Close..............56
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13.2 Conditions Precedent to Buyer's Obligation to Close...............56
13.3 Conditions Precedent to Obligation of Each Party to Close.........56
ARTICLE 14. THE CLOSING.......................................................57
14.1 Closing...........................................................57
14.2 Obligations of Sellers at Closing.................................57
14.3 Obligations of Buyer at Closing...................................58
ARTICLE 15. TERMINATION.......................................................58
15.1 Grounds for Termination...........................................58
15.2 Effect of Termination.............................................59
15.3 Dispute over Right to Terminate...................................60
ARTICLE 16. ARBITRATION.......................................................60
16.1 Arbitration.......................................................60
ARTICLE 17. MISCELLANEOUS.....................................................61
17.1 Notices...........................................................61
17.2 Brokers, Agents and Finders.......................................62
17.3 Access............................................................63
17.4 Generally Accepted Accounting Principles..........................67
17.5 Further Assurances................................................67
17.6 Amendments and Severability.......................................67
17.7 Successors and Assigns............................................67
17.8 Headings..........................................................68
17.9 Governing Law.....................................................68
17.10 No Partnership Created............................................68
17.11 Public Announcements..............................................68
17.12 No Third Party Beneficiaries......................................68
17.13 Waiver of Consumer Rights.........................................68
17.14 Not to be Construed Against Drafter...............................69
17.15 Exhibits..........................................................69
17.16 Execution in Counterparts.........................................69
17.17 Entire Agreement..................................................69
ARTICLE 18. SECOND CLOSING....................................................69
18.1 Sale and Purchase.................................................69
18.2 Purchase Price....................................................69
18.3 Conditions Precedent to Buyer's Obligation to Close...............69
18.4 Conditions Precedent to Obligation of Each Party to Close.........70
18.5 Closing...........................................................70
18.6 Obligations of Sellers at Closing.................................70
18.7 Obligations of Buyer at Closing...................................71
18.8 Remedies..........................................................71
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Exhibits
EXHIBIT A - PROPERTIES
EXHIBIT B - SELLERS RETAINED ENVIRONMENTAL LIABILITIES
EXHIBIT C-1 - THIRD PARTY CLAIMS, DISPUTES AND LITIGATION
EXHIBIT C-2 - SELLERS PRE-FORMATION LITIGATION
EXHIBIT D-1 - ASSIGNMENT OF LIMITED LIABILITY COMPANY INTEREST
EXHIBIT D-2 - ASSIGNMENT OF PARTNERSHIP INTEREST
EXHIBIT E - CERTIFICATE
EXHIBIT F - NON-FOREIGN AFFIDAVIT
EXHIBIT G - CERTAIN INSURANCE
EXHIBIT H-1 - PARTNERSHIP INTERESTS
EXHIBIT H-2 - PURCHASE PRICE ALLOCATION AMONG PARTNERSHIP INTERESTS
EXHIBIT H-3 - ADJUSTED PURCHASE PRICE ALLOCATION AMONG PARTNERSHIP/LLC
INTERESTS
EXHIBIT H-4 - EXCESS OR DEFICIENCY ALLOCATION AMONG SELLERS
EXHIBIT I - ESCROW AGREEMENT
EXHIBIT J - POLLUTION ABATEMENT AND CONTROL FACILITIES
EXHIBIT K-1 - EMPLOYEE BENEFIT PLANS, EMPLOYEE PENSION BENEFIT PLANS,
AND EMPLOYEE WELFARE BENEFIT PLANS
EXHIBIT K-2 - OTHER EMPLOYEE ARRANGEMENTS
EXHIBIT L - CERTAIN LP OFFICERS AND EMPLOYEES
EXHIBIT M - EXCEPTIONS TO LP SELLERS' REPRESENTATIONS AND WARRANTIES
EXHIBIT N-1 - RESTATED LP AGREEMENT
EXHIBIT N-2 - RESTATED LLC AGREEMENT
EXHIBIT N-3 - SHELL AFFILIATE LOAN AGREEMENT
EXHIBIT N-4 - SHELL AFFILIATE NOTE
EXHIBIT N-5 - SHELL GUARANTY
EXHIBIT N-6 - AMOCO AFFILIATE LOAN AGREEMENT
EXHIBIT N-7 - AMOCO AFFILIATE NOTE
EXHIBIT N-8 - AMOCO GUARANTY
EXHIBIT N-9 - OCCIDENTAL AGREEMENT
EXHIBIT N-10 - DEBT FINANCING TERMS
EXHIBIT O-1 - AMOCO AMENDED AND RESTATED LICENSE AGREEMENT
EXHIBIT O-2 - SHELL AMENDED AND RESTATED LICENSE AGREEMENT
EXHIBIT P - NEGOTIATING TEAMS
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PURCHASE AND SALE AGREEMENT
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THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is dated the 7th day of
March, 2000, by and among Amoco D.T. Company, a Delaware corporation
(hereinafter referred to as "Amoco LLC Seller"), SWEPI LP, a Delaware limited
partnership (hereinafter referred to as "Shell LLC Seller" when reference is
made to its role as a member of Altura Energy LLC and as "SWEPI" when reference
is made to its role as a limited partner of Altura Energy Ltd.) (Amoco LLC
Seller and Shell LLC Seller are hereinafter collectively referred to as "LLC
Sellers"), Amoco X.T. Company, a Delaware corporation (hereinafter referred to
as "Amoco XT"), Amoco Y.T. Company, a Delaware corporation (hereinafter referred
to as "Amoco YT") (Amoco XT and Amoco YT are hereinafter collectively referred
to as "Amoco LP Sellers"), Shell Land & Energy Company, a Delaware corporation
(hereafter referred to as "SLEC"), Shell Onshore Ventures Inc., a Delaware
corporation (hereinafter referred to as "SOVI"), Shell K2, Inc., a Delaware
corporation (hereinafter referred to as "SK2"), and Shell Everest, Inc., a
Delaware corporation (hereinafter referred to as ("SEI") (SWEPI, SLEC, SOVI,
SK2, and SEI are hereinafter collectively referred to as "Shell LP Sellers")
(Amoco LP Sellers and Shell LP Sellers are hereinafter collectively referred to
as "LP Sellers") (LLC Sellers and LP Sellers are hereinafter collectively
referred to as "Sellers") and Occidental Petroleum Corporation, a Delaware
corporation (hereinafter referred to as "Buyer"), and is based on the following
premises. Buyer and Sellers are sometimes hereinafter referred to individually
as a "Party" and collectively as the "Parties."
WHEREAS, the LP was formed for the purpose of holding and exploiting oil
and gas properties in the area specified in the LP Agreement;
WHEREAS, the LLC is the general partner of the LP;
WHEREAS, the Parties desire that Amoco LP Sellers and Shell LP Sellers
sell, assign and convey, and that Buyer LP purchase and accept, the Sold LP
Interests and join Amoco LP Sellers and Shell LP Sellers in ownership of the LP
as a limited partner in order to continue and enhance the LP's current
activities;
WHEREAS, the Parties desire that Shell LLC Seller sell, assign and convey,
and that Buyer Member purchase and accept, the Shell Sold LLC Interest, and that
Amoco LLC Seller sell, assign and convey, and that Buyer Member purchase and
accept, the Amoco Sold LLC Interest and join Amoco LLC Seller in ownership of
the LLC as a member in order to continue and enhance the LLC's current
activities;
WHEREAS, in conjunction with the consummation of the sale of the Sold LP
Interests and admittance of Buyer LP in the LP, the Parties desire that Buyer
LP, Amoco LP Sellers and Shell LP Sellers enter into the Restated LP Agreement;
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WHEREAS, in conjunction with the consummation of the sale of the Sold LLC
Interests and admittance of Buyer Member in the LLC, the Parties desire that
Buyer Member and Amoco LLC Seller enter into the Restated LLC Agreement, and
that Buyer Member manage, operate and control the LLC;
WHEREAS, simultaneously with the foregoing, the Parties desire that Lender
lend funds to the LP pursuant to the Debt Financing Agreement, that the LP lend
funds to Amoco Borrower pursuant to the Amoco Affiliate Loan Agreement and that
the LP lend funds to Shell Borrower pursuant to the Shell Affiliate Loan
Agreement; and
WHEREAS, the Parties have reached agreement regarding the foregoing
transactions.
NOW, THEREFORE, based on the mutual covenants and agreements herein
contained, the Parties agree as follows:
ARTICLE 1. DEFINITIONS
1. Definitions: In this Agreement capitalized terms have the meaning
provided in this Article. All defined terms include both the singular and the
plural of such terms. All references to Articles refer to Articles in this
Agreement, and all references to Exhibits and Schedules refer to Exhibits and
Schedules attached to and made a part of this Agreement.
1.1 "AAA" means the American Arbitration Association.
1.2 "Account Balances" has the meaning set forth in Article 2.2.
1.3 "Accounting Referee" means the accounting firm of Deloitte & Touche,
together with any experts such firm may require in order to settle a particular
dispute.
1.4 "Acquisition Transaction" has the meaning set forth in Article 10.6.
1.5 "Adjusted Purchase Price" has the meaning set forth in Article 2.3.
1.6 "Adverse Condition" means an individual existing condition of a
Property, or of the soil, subsurface, surface waters, groundwaters, atmosphere,
natural resources or other environmental medium, wherever located, associated
with the ownership or operation of a Property (including, without limitation,
the presence or release of Hydrocarbon or non-Hydrocarbon substances), which (a)
is not in compliance with Environmental Laws existing as of the date of this
Agreement, or (b) requires, if known, or will require, once discovered,
reporting to a Governmental Authority, investigation, monitoring, removal,
cleanup, remediation, restoration or correction in accordance with Environmental
Laws existing as of the date of this Agreement.
1.7 "Advisors" has the meaning set forth in Article 17.2.
1.8 "Affiliate" means any Person that, directly or indirectly, through one
or more entities, controls or is controlled by or is under common control with
the entity specified. For the purpose of this Article, the term "control" means
the power to direct or cause the direction of the management of such Person,
whether through the ownership of voting securities or by contract or agency or
otherwise. Prior to Closing, the LP and the LLC are Affiliates of Sellers and
from and after Closing, the LP and the LLC shall be Affiliates of Buyer and its
Affiliates and not Sellers.
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1.9 "Affiliate Contracts" has the meaning set forth in Article 6.13(a).
1.10 "Affiliated Group" means any affiliated group within the meaning of
Section 1504(a) of the Code or any similar group under a similar state or local
Law.
1.11 "Agreement" has the meaning set forth in the introductory paragraph.
1.12 "Altura Savings Plan" has the meaning set forth in Article 12.2(b).
1.13 "Altura Severance Plan" has the meaning set forth in Exhibit K-2.
1.14 "Amoco Amended and Restated License Agreement" means the agreement to
be signed at Closing contained in Exhibit O-1.
1.15 "Amoco Affiliate Loan Agreement" means the loan agreement to be
entered into between the LP and Amoco Borrower on the Closing Date,
substantially in the form attached hereto as Exhibit N-6.
1.16 "Amoco Affiliate Note" means the promissory note to be made by Amoco
Borrower in favor of the LP on the Closing Date, substantially in the form
attached hereto as Exhibit N-7.
1.17 "Amoco Aggregate Interest" means 63.915%.
1.18 "Amoco Borrower" means BP International Limited, a private limited
company organized under the laws of England.
1.19 "Amoco Guarantor" means BP Amoco p.l.c., a public limited company
organized under the laws of England.
1.20 "Amoco Guaranty" means the guaranty to be made by Amoco Guarantor in
favor of the LP on the Closing Date, substantially in the form attached hereto
as Exhibit N-8.
1.21 "Amoco Inside Basis" has the meaning set forth in Article 4.6(a).
1.22 "Amoco LLC Interest" means the Amoco Sold LLC Interest and the Amoco
Retained LLC Interest, collectively that are equal to the 63.915% Sharing Ratio
owned by Amoco LLC Seller.
1.23 "Amoco LLC Seller" has the meaning set forth in the introductory
paragraph.
1.24 "Amoco LP Interest" means the Amoco Sold LP Interest and the Amoco
Retained LP Interest, collectively that are equal to the 62.6367% Partnership
Interest owned by Amoco LP Sellers, collectively.
1.25 "Amoco LP Sellers" has the meaning set forth in the introductory
paragraph.
1.26 "Amoco Outside Basis" has the meaning set forth in Article 4.6(a).
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1.27 "Amoco Retained LLC Interest" means the percentage interest of Amoco
LLC Seller in the LLC set forth under the column titled "Retained Interest and
Post-Closing Interest" in Exhibit H-1.
1.28 "Amoco Retained LP Interests" means the aggregate of the percentage
interests of Amoco LP Sellers in the LP set forth under the column titled
"Retained Interest and Post-Closing Interest" in Exhibit H-1.
1.29 "Amoco Second Sold LLC Interest" means a 49% interest in the LLC held
by Amoco LLC Seller.
1.30 "Amoco Sellers" means Amoco LP Sellers and Amoco LLC Sellers.
1.31 "Amoco Sold LLC Interest" means the percentage interest of Amoco LLC
Seller in the LLC set forth under the column titled "Seller Interest Sold at
Closing" in Exhibit H-1.
1.32 "Amoco Sold LP Interests" means the aggregate of the percentage
interests of Amoco LP Sellers in the LP set forth under the column titled
"Seller Interest Sold at Closing" in Exhibit H-1.
1.33 "Amoco XT" has the meaning set forth in the introductory paragraph.
1.34 "Amoco YT" has the meaning set forth in the introductory paragraph.
1.35 "Arbitrable Dispute" means, except as provided otherwise in this
Agreement, any and all disputes arising under, related to, or in connection with
this Agreement or the LP Agreement.
1.36 "Assets" means those assets owned or held by the LP and the LLC,
including, without limitation, the Properties.
1.37 "Assignment of Limited Liability Company Interest" means a document in
the form of Exhibit D-1.
1.38 "Assignment of Partnership Interest" means a document in the form of
Exhibit D-2.
1.39 "Business Day" means each Day, except Days when federally chartered
banks are required to be closed.
1.40 "Buyer" has the meaning set forth in the introductory paragraph.
1.41 "Buyer Benefit Plans" has the meaning set forth in Article 12.2(e).
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1.42 "Buyer Group" means: (a) Buyer and its officers, directors, agents,
representatives, consultants and employees, and (b) Buyer's Affiliates and their
officers, directors, agents, representatives, consultants and employees.
1.43 "Buyer LP" means OXY Oil Partners, Inc., a Delaware corporation and
subsidiary of Buyer.
1.44 "Buyer Member" means OXY USA Inc., a Delaware corporation and
subsidiary of Buyer.
1.45 "Buyer's Negotiating Team" means the Persons named on Part I of
Exhibit P.
1.46 "Buyer's Representative" has the meaning set forth in Article
17.3(b)(ii).
1.47 "Casualty Loss" means any loss, damage or reduction in value of the
Assets which occurs during the period between execution of this Agreement and
Closing as a result of acts of God, fire, explosion, pipeline or gathering line
failure, earthquake, windstorm, flood, drought, blowout, but excepting downhole
mechanical failure (unrelated to the foregoing), depletion due to normal
production, depreciation of equipment through ordinary wear and tear, reservoir
changes, and transactions permitted under this Agreement.
1.48 "Certificate" means a document in the form of Exhibit E.
1.49 "Claim" means any and all claims, demands, suits, causes of action,
losses, damages, liabilities, fines, penalties and costs (including, without
limitation, attorneys' fees and costs of litigation), whether known or unknown,
including Environmental Claims and Non-Environmental Claims.
1.50 "Claimant" has the meaning set forth in Article 16.1 and means either
Buyer or Sellers collectively.
1.51 "Claiming Employees" has the meaning set forth in Article 12.5(b).
1.52 "Close" or "Closing" means the consummation of the sale of the Sold
LLC Interests from LLC Sellers to Buyer, and the consummation of the sale of the
Sold LP Interests from LP Sellers to Buyer, including execution and delivery of
all documents and other legal consideration provided in this Agreement pursuant
to Article 14.
1.53 "Closing Amount" has the meaning set forth in Article 2.3.
1.54 "Closing Date" means the later to occur of (i) the third Business Day
after satisfaction or waiver by the appropriate Parties of the conditions to
Closing set forth in Articles 14.2 and 14.3 and (ii) April 30, 2000.
1.55 "Code" means the Internal Revenue Code of 1986, as amended.
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1.56 "Compensation Claims" has the meaning set forth in Article 12.5(b).
1.57 "Computed Interest" means interest at a rate equal to LIBOR,
calculated daily.
1.58 "Confidential Information Memorandum" means that certain Confidential
Information Memorandum for Altura Energy Ltd. dated as of November, 1999,
prepared by Lehman Brothers and Credit Suisse First Boston.
1.59 "Confidentiality Agreement" means that certain Confidentiality
Agreement dated the 30th day of November, 1999, by and among BP Amoco
Corporation, Shell Exploration & Production Company, Buyer, and the LP, as it
may be amended from time to time.
1.60 "Contract" means any written or oral contract, agreement, agreement
regarding indebtedness, indenture, debenture, note, bond, loan, loan agreement,
collective bargaining agreement, lease, mortgage, franchise, license agreement,
purchase order, binding bid, commitment, letter of credit or any other legally
binding arrangement.
1.61 "Day" means a calendar day consisting of twenty-four (24) hours from
midnight to midnight.
1.62 "Debt Financing" means the loans to the LP in accordance with the Debt
Financing Terms set forth in Exhibit N.
1.63 "Debt Financing Agreements" means the agreements evidencing the Debt
Financing.
1.64 "Defensible Title" means the title held by the LP that:
1.64.1 entitles the LP to receive throughout the duration of the
productive life of any Property not less than the "net
revenue interests" set forth in Exhibit A of all
Hydrocarbons produced, saved and marketed from any Property
except decreases in connection with those operations in
which the LP may be nonconsenting co-owners, decreases
resulting from the establishment or amendment of pools or
units, and decreases required to allow other working
interest owners to make up past underproduction or pipelines
to make up past under deliveries and except as stated in
such Exhibit A; and
1.64.2 obligates the LP to bear a percentage of the costs and
expenses associated with the ownership, operation,
maintenance and repair of any Property in an amount not
greater than the "working interests" set forth in Exhibit A
without increases throughout the productive life of such
Property, except as stated in Exhibit A and except increases
resulting from contribution requirements with respect to
defaulting co-owners under applicable operating agreements
and increases that are
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accompanied by at least a proportionate increase in the LP's
net revenue interest.
1.65 "Deficiency" has the meaning set forth in Article 4.3.
1.66 "Disputing Party" has the meaning set forth in Article 15.3.
1.67 "Dollars" means United States Dollars.
1.68 "DTPA" has the meaning set forth in Article 17.13.
1.69 "Earnest Money" has the meaning set forth in Article 2.5.
1.70 "Eligible Personnel" shall have the meaning set forth in Exhibit K-2.
1.71 "Environmental Claims" means all Third Party Claims which are asserted
pursuant to Environmental Laws or which relate to, arise out of, or are
connected with, directly or indirectly, Adverse Conditions, including, without
limitation, for personal injury, death or property damage under common law or
any other non-Environmental Laws.
1.72 "Environmental Laws" means, as the same have been amended to the date
of this Agreement, or such other date as provided in this Agreement, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1471 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 through 2629; the Oil Pollution
Act, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Section 11001 et seq.; and the Safe Drinking Water
Act, 42 U.S.C. Sections 300f through 300j; and all similar Laws of any
Governmental Authority having jurisdiction over the property in question
addressing pollution or protection of the environment and all regulations
implementing the foregoing.
1.73 "ERISA" has the meaning set forth in Article 8.2(u).
1.74 "ERISA Affiliates" has the meaning set forth in Article 8.2(u).
1.75 "ERISA Plans" has the meaning set forth in Article 8.2(u).
1.76 "Escrow Agreement" means that certain escrow agreement entered into
among Buyer, Sellers, and Chase Bank of Texas, National Association, the escrow
agent, the form of which is attached hereto as Exhibit I.
1.77 "Estate" has the meaning set forth in Article 3.2(b).
1.78 "Excess" has the meaning set forth in Article 4.3.
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1.79 "Excluded Assets" means assets of Sellers Group not contributed to the
LP pursuant to the Master Agreement.
1.80 "Fair Market Value" means, with respect to a Casualty Loss, the
commercially reasonable repair or comparable replacement cost of the Asset
subject to the Casualty Loss as of the date of such Casualty Loss.
1.81 "Financial Statements" has the meaning set forth in Article 8.2(p).
1.82 "Final Determination" has the meaning set forth in Article 4.6(e).
1.83 "First Party" has the meaning set forth in Article 10.12(c).
1.84 "Formation Date" means February 28, 1997.
1.85 "GAAP" has the meaning set forth in Article 17.4.
1.86 "Governmental Authority" means any federal, state, local, municipal or
other governments; any governmental, regulatory or administrative agency,
commission, body or other authority exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power, and any court or governmental tribunal, including, without
limitation, any tribal authority having jurisdiction.
1.87 "Greater Permian Area" means the lands within the counties of Chaves,
Curry, Eddy, Lea and Roosevelt, State of New Mexico, and the counties of
Andrews, Bailey, Borden, Brewster, Cochran, Coke, Concho, Cottle, Crane,
Crockett, Crosby, Culberson, Dawson, Dickens, Ector, Edwards, El Paso, Fisher,
Floyd, Gaines, Garza, Glasscock, Hale, Hockley, Howard, Hudspeth, Irion, Jeff
Davis, Kent, Kimble, King, Lamb, Loving, Lubbock, Lynn, Martin, Mason,
McCulloch, Menard, Midland, Mitchell, Motley, Nolan, Pecos, Presidio, Reagan,
Reeves, Runnels, Schleicher, Scurry, Sterling, Sutton, Terrell, Terry, Tom
Green, Upton, Val Verde, Ward, Winkler and Yoakum, State of Texas, and all Texas
and New Mexico counties contiguous to such counties.
1.88 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
1.89 "Hydrocarbons" means crude oil, natural gas, casinghead gas,
condensate, sulfur, natural gas liquids, and other liquid or gaseous
hydrocarbons and also means any other minerals of every kind or character.
1.90 "Indemnified Person" has the meaning set forth in Article 17.3(b)(ii).
1.91 "Indemnity Claim" has the meaning set forth in Article 6.7.
1.92 "Indemnity Claim Notice" means a notice of a Claim provided in
accordance with Article 6.7.
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1.93 "Interests" means the LLC Interests and the LP Interests.
1.94 "Intergroup Contributions" means capital contributions made pursuant
to and as defined in the LP Agreement by Sellers or their respective Affiliates
to the LLC or the LP, from and including the Settlement Date to, but excluding,
the Closing Date.
1.95 "Intergroup Distributions" means any dividends, equity redemptions or
repurchases, debt repayments or distributions made by the LLC or the LP to
Sellers or any of their respective Affiliates and any other amounts payable to
the LLC or the LP but received and retained by Sellers or any of their
respective Affiliates from and including the Settlement Date to, but excluding,
the Closing Date, excluding payments by the LLC or the LP to Sellers or their
respective Affiliates for goods or services delivered, performed or invoiced at
any time pursuant to written agreements or pursuant to certain informal
arrangements with a cost under such informal arrangements not to exceed Two
Hundred Thousand Dollars ($200,000) in the aggregate in the ordinary course of
business.
1.96 "IRS" has the meaning set forth in Article 8.2(y).
1.97 "IT Report" means that certain report dated November, 1999, prepared
by The IT Corporation, in conjunction with a Phase I environmental site
assessment covering the Properties.
1.98 "Laws" means any and all laws, statutes, ordinances, permits, decrees,
writs, injunctions, orders, codes, judgments, principles of common law, rules or
regulations (including, without limitation, Environmental Laws) which are
promulgated, issued or enacted by a Governmental Authority having jurisdiction.
1.99 "Lender" means one or more Third Party financial institutions that
will lend to the LP pursuant to the Debt Financing Agreements.
1.100 "LIBOR" means the London Interbank Offered Rate calculated on a per
annum basis using a three hundred sixty (360) Day year as set forth on page 3750
of the Telerate Screen for three month LIBOR (or if such screen shall cease to
be publicly available, as reported on Reuters Screen page "LIBO" or by any other
publicly available source of similar market rate). The LIBOR rate for Days other
than Business Days shall be the immediately preceding Business Day's rate.
1.101 "Licensed Technology" means Amoco Proprietary Technology, Amoco CO2
EOR Technology, Shell Proprietary Technology, Shell CO2 EOR Technology,
Partnership Technology and Partnership CO2 EOR Technology as those terms are
defined in the Amoco Amended and Restated License Agreement and the Shell
Amended and Restated License Agreement.
1.102 "LLC" means Altura Energy LLC, a Delaware limited liability company.
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1.103 "LLC Agreement" means the Limited Liability Company Agreement of
Altura Energy LLC dated as of February 20, 1997, between Amoco D. T. Company and
SWEPI LP, the successor of Shell Western E&P, Inc.
1.104 "LLC Group" means (a) the LLC and its officers, directors, agents,
representatives, consultants and employees, and (b) the LLC's Affiliates and
their officers, directors, agents, representatives, consultants and employees.
1.105 "LLC Interests" means the Amoco LLC Interest and the Shell LLC
Interest, collectively.
1.106 "LLC Sellers" has the meaning set forth in the introductory
paragraph.
1.107 "LLC Tax Matters Partner" means the tax matters partner of the LLC
designated by the parties to the LLC Agreement pursuant to Section 6231(a)(7) of
the Code.
1.108 "Lowest Cost Response" means that response to an Adverse Condition
that is reasonably expected to provide the lowest cost necessary for the
reporting, investigation, monitoring, removal, cleanup, remediation, restoration
or correction of such condition to meet Environmental Laws in effect at the time
of such response to the satisfaction of any Governmental Authorities with
jurisdiction over the Property on which such condition exists, which response
does not materially interfere with the use or operation of such Property;
provided that Buyer or the LP may, at its option, conduct a supplemental
response at its own expense.
1.109 "LP" means Altura Energy Ltd., a Texas limited partnership.
1.110 "LP Agreement" means that certain Agreement of Limited Partnership
dated as of February 25, 1997, by and among the LLC, Amoco LP Sellers, and Shell
LP Sellers.
1.111 "LP Group" means: (a) the LP and its officers, directors, agents,
representatives, consultants and employees, and (b) the LP's Affiliates and
their officers, directors, agents, representatives, consultants and employees.
1.112 "LP Interests" means the Amoco LP Interests and the Shell LP
Interests, collectively.
1.113 "LP Sellers" has the meaning set forth in the introductory paragraph.
1.114 "LP Tax Matters Partner" means the tax matters partner of the LP
designated by the parties to the LP Agreement pursuant to Section 6231(a)(7) of
the Code.
1.115 "Master Agreement" means that certain Master Agreement dated as of
February 20, 1997, among Sellers.
1.116 "Material Contracts" has the meaning set forth in Article 8.2(q).
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1.117 "Non-Environmental Claims" means all Claims, except for Environmental
Claims.
1.118 "Non-ERISA Plans" has the meaning set forth in Article 8.2(z).
1.119 "Non-Foreign Affidavit" means a document in the form of Exhibit F.
1.120 "NORM" means naturally occurring radioactive materials.
1.121 "NSAI Report" means that certain report prepared by Netherland,
Sewell & Associates, Inc. dated November 22, 1999 (as later supplemented and
corrected, copies of which supplement and correction were previously furnished
or made available to Buyer), entitled "Estimate of Reserves and Future Revenue
to the Altura Energy Ltd. Interest in Certain Oil and Gas Properties as of
January 1, 2000, Based on Escalated Prices and Costs."
1.122 "Occidental Agreement" means the agreement to be entered into between
Buyer and LP Sellers on the Closing Date, substantially in the form attached
hereto as Exhibit N-9.
1.123 "Operative Documents" means the following documents: the Restated LP
Agreement; the Restated LLC Agreement; the Shell Affiliate Loan Agreement; the
Shell Affiliate Note; the Shell Guaranty; the Amoco Affiliate Loan Agreement;
the Amoco Affiliate Note; the Amoco Affiliate Guaranty; the Occidental
Agreement; the Amoco Amended and Restated License Agreement; the Shell Amended
and Restated License Agreement; the Assignment of Limited Liability Company
Interest; the Assignment of Partnership Interest; the Certificate of each
Seller; the Certificate of Buyer; the Non-Foreign Affidavit of each Seller; and
certain modification agreements delivered pursuant to Article 14.2(f).
1.124 "Partnership Interest" means the right to a share of the profits and
losses of the LP and the right to receive distributions of the LP's assets, and
the right to vote with respect to the LP; in each case, as provided in the LP
Agreement.
1.125 "Party or Parties" has the meaning set forth in the introductory
paragraph.
1.126 "Permitted Encumbrances" means any and all of the following:
1.126.1 royalties, overriding royalties, production payments,
reversionary interests, convertible interests, net profits
interests and similar burdens encumbering the Properties to
the extent the net cumulative effect of such burdens does
not operate to reduce the net revenue interests of the
Properties to less than that set forth in Exhibit A or
increase the working interests above that set forth in
Exhibit A without a corresponding increase in the net
revenue interest above that set forth in Exhibit A;
1.126.2 consents to assignment and similar contractual provisions
affecting the Properties;
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1.126.3 preferential rights to purchase and similar contractual
provisions affecting the Properties;
1.126.4 required notices to and filings with a Governmental
Authority associated with the conveyance of the Properties;
1.126.5 rights reserved to or vested in a Governmental Authority
having jurisdiction to control or regulate the Properties in
any manner whatsoever, and all Laws of such Governmental
Authorities;
1.126.6 easements, rights-of-way, servitudes, surface leases,
sub-surface leases, grazing rights, logging rights, ponds,
lakes, waterways, canals, ditches, reservoirs, equipment,
pipelines, utility lines, railways, streets, roads and
structures on, over and through the Properties (including
such encumbrances in favor of Sellers Group entered into
pursuant to Article 10.2);
1.126.7 the terms and conditions of the unitizations,
communitizations, farmout or farmin agreements, term
assignments, poolings, licenses and permits affecting the
Properties;
1.126.8 liens for Taxes or assessments not yet delinquent or, if
delinquent, are being contested by the LP in good faith in
the normal course of business; provided, however, this
provision will not diminish or affect in any way the
Parties' rights and obligations under the indemnities
provided in this Agreement;
1.126.9 liens of operators relating to obligations not yet
delinquent or, if delinquent, are being contested by the LP
in good faith in the normal course of business; provided
however, this provision will not diminish or affect in any
way the Parties' rights and obligations under the
indemnities provided in this Agreement;
1.126.10 Third Party Claims referenced on Exhibit C-1;
1.126.11 gas imbalances associated with the Properties;
1.126.12 suspense funds associated with the Properties; and
1.126.13 such defects or irregularities in the title to the
Properties that do not materially interfere with the
ownership, operation, value or use of the Properties
affected thereby and that would not be considered material
when applying general standards in the oil and gas industry.
1.127 "Person" means an individual, group, partnership, corporation, trust
or other entity.
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1.128 "Personnel" has the meaning set forth in Article 12.1.
1.129 "Pollution Control Bonds" has the meaning set forth in Article 10.4.
1.130 "Pollution Control Facilities" has the meaning set forth in Article
10.4.
1.131 "Possible Condition Precedent Failure" has the meaning set forth in
Article 10.12(a).
1.132 "Post-Closing Notice" has the meaning set forth in Article 4.3.
1.133 "Post-March Computed Interest" means interest at a rate equal to
LIBOR minus the basis points per annum using a three hundred sixty (360) day
year in accordance with the following schedule:
<TABLE>
<S> <C>
For the period from and including March 31 to but excluding April 30 10 basis points
For the period from and including April 30 to but excluding May 31 20 basis points
For the period from and including May 31 to but excluding June 30 30 basis points
For the period from and including June 30 to but excluding July 31 40 basis points
For the period from and including July 31 to but excluding the Closing Date 50 basis points
</TABLE>
calculated on a daily basis.
1.134 "Pref Rights Holders" has the meaning set forth in Article 3.2(b).
1.135 "Process Safety Management" means Process Safety Management of Highly
Hazardous Chemicals, Explosives and Blasting Agents (29 C.F.R. 1910.119), as
amended.
1.136 "Property" or "Properties" means:
1.136.1 all oil and gas leasehold interests, royalty interests,
overriding royalty interests, mineral interests, production
payments, net profits interests and surface interests that
are attributable to the interests described in Exhibit A,
together with all non-producing interests, reversionary
interests, fee interests and leasehold interests that are
owned or held by the LP (including, without limitation,
surface interests and non-unitized horizons or zones both
below and above existing production), and the production of
Hydrocarbon and non-Hydrocarbon substances attributable to
the foregoing;
1.136.2 all unitization, communitization and pooling declarations,
orders, and agreements (including all units formed by
voluntary agreement and those formed under the rules,
regulations, orders or other official acts of any
Governmental Authority having jurisdiction) to the extent
they relate to any of the interests that are described in
Exhibit A, or to non-producing interests, reversionary
interests, fee interests and leasehold
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interests that are owned or held by the LP (including,
without limitation, surface interests and non-unitized
horizons or zones both below and above existing production),
or the production of oil, gas or other Hydrocarbon and
non-Hydrocarbon substances attributable to the foregoing;
1.136.3 all oil and/or gas sales contracts, processing contracts,
gathering contracts, transportation contracts, easements,
rights-of-way, servitudes, surface leases, subsurface
leases, farm-in and farm-out contracts, areas of mutual
interest, balancing contracts, operating agreements, and
other contracts, agreements and instruments to the extent
they relate to any of the interests that are described in
Exhibit A, or to non-producing interests, reversionary
interests, fee interests and leasehold interests that are
owned or held by the LP (including, without limitation,
surface interests and non-unitized horizons or zones both
below and above existing production), or the production of
oil, gas or other Hydrocarbon and non-Hydrocarbon substances
attributable to the foregoing; and 1.136.4 all personal
property, improvements, fixtures, wells (whether producing,
shut-in, injection, disposal, water supply or plugged and
abandoned), tanks, boilers, buildings, machinery, equipment,
pipelines, utility lines, imbalances (production, gathering,
transportation, processing or otherwise), suspense funds,
water rights, roads, permits, licenses and other
appurtenances, to the extent the same are situated upon and
used or held for use by the LP primarily associated with the
ownership, operation, maintenance or repair of the interests
that are described in Exhibit A, or with non-producing
interests, reversionary interests, fee interests and
leasehold interests that are owned or held by the LP
(including, without limitation, surface interests and
non-unitized horizons or zones both below and above existing
production), or the production of oil, gas or other
Hydrocarbon and non-Hydrocarbon substances attributable to
the foregoing.
1.137 "Properties Information" means those Records which are lease files,
land files, regulatory files, well files, gas processing files, division order
files, abstracts, title opinions, engineering, production, geological,
geophysical and other exploration data, books of accounts, records, maps,
drawings, core samples, reserve reports, engineering reports, and correspondence
with, reports to and filings with Governmental Authorities to the extent that
they are associated with the ownership or operation of the interests that are
described in Exhibit A or the production of oil, gas or other Hydrocarbon and
non-Hydrocarbon substances attributable thereto, and including any trade
secrets, know-how and copyrights in such Records. "Properties Information" shall
not include "Licensed Technology."
1.138 "Purchase Price" has the meaning set forth in Article 2.3.
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1.139 "Records" means the LLC's and the LP's books, records and files
(except that Sellers may retain copies of such records that relate to
liabilities as to which Sellers are obligated to provide indemnity that is not
subject to any thresholds in Article 6.5) (including, without limitation, the
NSAI Report and the IT Report). Buyer acknowledges that the LLC and the LP image
and retain Records in electronic format, and may provide imaged or electronic
Records as opposed to originals or hard copies. "Records" shall not include
"Licensed Technology."
1.140 "Remediation Cost" means the cost or expense of the Lowest Cost
Response of addressing an Adverse Condition (net of any operating costs that
would be incurred even in the absence of the Adverse Condition) or Environmental
Claim, including, without limitation, costs of investigation, monitoring,
reporting, removal, cleanup, remediation, restoration and correction, fines or
penalties, oversight or administrative costs of any Governmental Authority,
attorneys' fees and the cost or expense of defense against any Claim and
liabilities for any Claim, in each case related to, arising out of, or connected
with such Adverse Condition or Environmental Claim.
1.141 "Respondent" has the meaning set forth in Article 16.1 and means
either Buyer or Sellers collectively.
1.142 "Restated LLC Agreement" means the agreement and attachments thereto
substantially in the form attached hereto as Exhibit N-2.
1.143 "Restated LP Agreement" means the agreement and attachments thereto
substantially in the form attached hereto as Exhibit N-1.
1.144 "Retained Interests" means the Amoco Retained LLC Interest, the Amoco
Retained LP Interest and the Shell Retained LP Interest, collectively.
1.145 "Sales Tax" means any and all transfer, sales, use or similar taxes,
and any associated penalties and interest.
1.146 "SEC" has the meaning set forth in Article 10.7.
1.147 "Second Close" or "Second Closing" means the consummation of the
purchase and sale of the Amoco Second Sold LLC Interest from Amoco LLC Seller to
Buyer.
1.148 "Second Closing Amount" means Thirty Seven Million Five Hundred
Thousand Dollars ($37,500,000).
1.149 "Second Closing Date" means the later to occur of (i) the first
Business Day after 366 Days after the Closing Date and (ii) the first Business
Day after satisfaction or waiver by the appropriate Parties of the conditions to
the Second Closing set forth in Article 18.4.
1.150 "SEI" has the meaning set forth in the introductory paragraph.
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1.151 "Sellers" has the meaning set forth in the introductory paragraph.
1.152 "Sellers Group" means: (a) Sellers and their officers, directors,
agents, representatives, consultants and employees, and (b) Sellers' Affiliates
and their officers, directors, agents, representatives, consultants and
employees.
1.153 "Sellers Insurance Policies" has the meaning set forth in Article
5.3.
1.154 "Sellers Knowledge" means the actual knowledge of LP Sellers and LLC
Sellers and any of the individuals listed on Exhibit L.
1.155 "Sellers Negotiating Team" means, with respect to each Seller, the
Persons named on Part II of Exhibit P for such Seller.
1.156 "Sellers Retained Environmental Liabilities" means those matters set
forth in Exhibit B.
1.157 "Sellers Retained Liabilities" means the liabilities set forth in
Article 6.4.
1.158 "Settlement Date" means the 1st day of January, 2000, at 12:01 a.m.,
Central Standard Time.
1.159 "Sharing Ratio" means the right to a share of the profits and losses
of the LLC and the right to receive distributions of the LLC's assets and the
right to vote with respect to the LLC; in each case, as provided in the LLC
Agreement.
1.160 "Shell Affiliate Loan Agreement" means the loan agreement to be
entered into between the LP and Shell Borrower on the Closing Date,
substantially in the form attached hereto as Exhibit N-3.
1.161 "Shell Affiliate Note" means the promissory note to be made by Shell
Borrower in favor of the LP on the Closing Date, substantially in the form
attached hereto as Exhibit N-4.
1.162 "Shell Aggregate Interest" means 36.085%.
1.163 "Shell Amended and Restated License Agreement" means the agreement to
be signed at Closing contained in Exhibit O-2.
1.164 "Shell Borrower" means an entity designated by Shell Oil Company
prior to the Closing Date in which Shell Oil Company owns, directly or
indirectly, a substantial interest or which owns, directly or indirectly, a
substantial interest in Shell Oil Company and having its chief executive office
or principal place of business in the European Union, the United Kingdom, the
Netherlands, the United States or Canada.
1.165 "Shell Guaranty" means the guaranty made by Shell Oil Company in
favor of the LP on the Closing Date, substantially in the form attached hereto
as Exhibit N-5.
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1.166 "Shell Inside Basis" has the meaning set forth in Article 4.6(b).
1.167 "Shell LLC Interest" means the Shell Sold LLC Interest and the Shell
Retained LLC Interest, collectively, that is equal to the 36.085% Sharing Ratio
owned by Shell LLC Seller.
1.168 "Shell LLC Seller" has the meaning set forth in the introductory
paragraph.
1.169 "Shell LP Interest" means the Shell Sold LP Interests and the Shell
Retained LP Interests, collectively, that are equal to the 35.3633% Partnership
Interest owned by Shell LP Sellers, collectively.
1.170 "Shell LP Sellers" has the meaning set forth in the introductory
paragraph.
1.171 "Shell Outside Basis" has the meaning set forth in Article 4.6(b).
1.172 "Shell Retained LP Interests" means the aggregate of the interests of
Shell LP Sellers in the LP set forth under the column titled "Retained Interests
and Post-Closing Interest" in Exhibit H-1.
1.173 "Shell Sellers" means Shell LLC Sellers and Shell LP Sellers.
1.174 "Shell Sold LLC Interest" means the interest of Shell LLC Sellers in
the LLC set forth under the column titled "Seller Interest Sold at Closing" in
Exhibit H-1.
1.175 "Shell Sold LP Interests" means the aggregate of the interests of
Shell LP Sellers in the LP set forth under the column titled "Seller Interest
Sold at Closing" in Exhibit H-1.
1.176 "SK2" has the meaning set forth in the introductory paragraph.
1.177 "SLEC" has the meaning set forth in the introductory paragraph.
1.178 "Sold LLC Interests" means the Amoco Sold LLC Interests and the Shell
Sold LLC Interests, collectively.
1.179 "Sold LP Interests" means the Amoco Sold LP Interests and the Shell
Sold LP Interests, collectively.
1.180 "SOVI" has the meaning set forth in the introductory paragraph.
1.181 "Specified Representations and Warranties" has the meaning set forth
in Article 8.3(a).
1.182 "SWEPI" has the meaning set forth in the introductory paragraph.
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1.183 "Tax" means all taxes, including income tax, surtax, remittance tax,
presumptive tax, net worth tax, special contribution, production tax, pipeline
transportation tax, value added tax, withholding tax and any gross receipts tax,
windfall profits tax, profits tax, severance tax, personal property tax, real
property tax, sales tax, transfer tax, use tax, excise tax, premium tax,
environmental tax (including taxes under Section 59A of the Code), customs
duties, stamp tax, capital stock tax, franchise tax, occupation tax, payroll
tax, employment tax, social security, unemployment tax, disability tax,
alternative or add-on minimum tax, estimated tax, and any similar tax imposed by
any Governmental Authority thereof together with any interest, fine or penalty,
or addition thereto, whether disputed or not.
1.184 "Tax Return" means any return, form, declaration of estimated Tax,
report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
1.185 "Third Party" means (i) any Person other than Sellers and Buyer and
their respective Affiliates and the LP and the LLC, and (ii) any Governmental
Authority.
1.186 "Title Defect" means (a) any matter that would cause the LP not to
have Defensible Title to a Property or (b) other than the Permitted
Encumbrances, an individual defect in the LP's title to a Property, and as to
both (a) and (b) expressly excluding the State of New Mexico's failure to
approve certain assignments by Sellers of New Mexico State Leases to the LP upon
formation of the LP that constitute Sellers Retained Liabilities.
1.187 "Title Value" means the value for each Property determined in
accordance with Article 3.1.
1.188 "Transition Benefits" has the meaning set forth in Exhibit K-2.
1.189 "Transition Period" has the meaning set forth in Exhibit K-2.
1.190 "Unit Operating Agreement" has the meaning set forth in Article
3.2(b).
1.191 "WARN Act" has the meaning set forth in Article 12.4.
1.192 "WARN Obligations" has the meaning set forth in Article 12.4.
1.193 "Working Capital" means current assets less current liabilities
determined in accordance with GAAP.
1.194 "Working Capital Adjusted Number" means the Working Capital for the
LP as of December 31, 1999, as set forth in the December 31, 1999 balance sheet
comprising a portion of the Financial Statements, less Thirty-Four Million Five
Hundred Thousand Dollars ($34,500,000).
1.195 "Working Capital Statement" has the meaning set forth in Article 4.3.
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ARTICLE 2. SALE OF INTERESTS
2.1 Sale and Purchase. On the Closing Date, upon the terms and conditions
set forth in this Agreement, Sellers agree (i) to sell and assign to Buyer
Member the Sold LLC Interests and (ii) to sell and assign to Buyer LP the Sold
LP Interests in accordance with Exhibit H-1. Sellers will retain and not sell
the Retained Interests pursuant to this Agreement except as otherwise
contemplated by Article 18.
2.2 Account Balances. (a) The LP's standard practice is that on each
regular banking Day all cash balances in the LP's bank accounts are transferred
63.915% to an account for Affiliates of Amoco LP Sellers and 36.085% to an
account for Affiliates of Shell LP Sellers. The amounts which are transferred
are recorded and treated as accounts payable of the recipients and as accounts
receivable of the LP (the "Account Balances").
(b) All Account Balances outstanding on the Closing Date will be paid in
cash to the LP at Closing. If and to the extent that, after the Settlement Date
and from and through the Closing Date, Account Balances have been offset by
equity distributions by the LP to Sellers, these distributions will constitute
Intergroup Distributions which will be taken into account in determining the
Adjusted Purchase Price.
2.3 Purchase Price. The total purchase price, subject to adjustment in
accordance with the terms of this Agreement, paid to Sellers by Buyer for the
Sold LLC Interests and the Sold LP Interests as described in Exhibit H-2 is One
Billion One Hundred Twenty-Four Million Eighty-One Thousand Four Hundred
Thirty-Eight Dollars ($1,124,081,438) (the "Purchase Price"), payable in full
(minus the sum of the amount of Earnest Money and interest earned thereon
pursuant to the Escrow Agreement (net of any escrow costs), which sum is
received by Sellers at Closing as partial payment of the Purchase Price and is
referred to as the "Closing Amount") at Closing in immediately available funds.
The Purchase Price shall be adjusted as set forth in Article 2.4 (as so
adjusted, the "Adjusted Purchase Price"). The Adjusted Purchase Price will be
allocated to Sellers in accordance with Exhibit H-3.
2.4 Purchase Price Adjustments. The Purchase Price shall be adjusted as
follows:
(a) upward by:
(1) the Working Capital Adjusted Number; and
(2) the amount of any Intergroup Contributions; and
(3) Computed Interest on Three Billion Seven Hundred Fifty Million
Dollars ($3,750,000,000) for the period from and including January 1, 2000,
through but excluding the earlier to occur of the Closing Date and March
31, 2000, and if Closing occurs on or after March 31, 2000, the Post-March
Computed Interest on Three Billion Seven Hundred Fifty Million Dollars
($3,750,000,000) for the period from and including March 31, 2000, to but
excluding the Closing Date.
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(b) downward by:
(1) the amount of any Intergroup Distributions; and
(2) the sum of the product obtained by multiplying (x) fifty basis
points (0.50%) divided by 360 by (y) the daily Account Balance for each day
from the Settlement Date through the Closing Date owed by Affiliates of
Sellers under the terms of the respective Revolving Credit and Cash
Management Agreements dated as of February 28, 1997, among the LP and
Sellers' Affiliates.
2.5 Earnest Money. Upon execution of this Agreement and concurrent with its
delivery to Buyer, Buyer shall deposit Three Hundred Seventy-Five Million
Dollars ($375,000,000) ("Earnest Money") with Chase Bank of Texas, National
Association, who shall hold the Earnest Money in escrow pursuant to the Escrow
Agreement. The Earnest Money will be paid in accordance with the Escrow
Agreement.
ARTICLE 3. PREFERENTIAL RIGHTS AND TITLE VALUES
3.1 Title Values. Sellers and Buyer shall agree on an allocation of the
Purchase Price or the appropriate portion thereof for federal income tax and
financial accounting purposes and, if necessary, for purposes of Article 6.9, no
later than March 31, 2001. If the Parties are unable to reach an agreement by
such date, the determination of Title Values will be submitted to binding
arbitration pursuant to Article 16 of this Agreement. Upon such agreement,
Sellers shall accept such Title Values for the purposes set forth above, but
otherwise shall make no representation or warranty as to the accuracy of such
values.
3.2 Preferential Rights to Purchase. (a) If in Sellers' reasonable judgment
the transactions contemplated by this Agreement trigger a preferential purchase
right held by a Third Party, Sellers shall cause the LP (i) to provide such
notice to the Third Party as may be required after consultation with Buyer with
respect to such preferential purchase right and (ii) to comply in all other
respects with the agreement in which the preferential purchase right arises. If,
prior to Closing, such preferential purchase rightsholder notifies Sellers that
it elects to exercise its rights with respect to an Asset to which its
preferential purchase right applies (in accordance with and determined by the
agreement in which the preferential purchase right arises), Sellers shall cause
the LP to transfer such Asset to the holder of the preferential purchase right,
and the LP shall retain the consideration therefor. If the time for exercise of
the preferential right to purchase has not expired prior to Closing, the Asset
will continue to comprise part of the Assets of the LP at Closing; provided,
however, if the holder of the preferential purchase right subsequently exercises
its preferential right to purchase, Buyer shall cause the LP to transfer the
Asset subject to the preferential purchase right to such rightsholder and the LP
shall be entitled to the consideration therefor.
(b) The Parties acknowledge that the sale of the Interests pursuant to this
Agreement may trigger a preferential purchase right to that certain oil and gas
estate (the "Estate") covered by that certain Unit Operating Agreement (as
amended, the "Unit Operating Agreement"), in favor of Fasken Land and Minerals,
Ltd. and certain other Persons (the "Pref Rights Holders") covering the Midland
Farms Unit. Sellers will cause the LP to comply with the preferential
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purchase right procedures required by the Unit Operating Agreement; and the
Parties agree that the allocation of that portion of the Purchase Price
attributable to the Pref Rights Holders' interest in the Estate is Sixty-Three
Million Dollars ($63,000,000).
3.3 Consents to Assignment. Sellers shall use reasonable efforts to obtain
prior to Closing any consents from Third Parties required to consummate the
transactions contemplated hereby.
ARTICLE 4. ACCOUNTING AND TAXES
4.1 Distributions. Sellers are entitled to all distributions, if any, paid
by the LP or the LLC with respect to the LLC Interests or the LP Interests, as
applicable, and are responsible for all capital contributions to the LP or the
LLC, as applicable (as defined in the LP Agreement and the LLC Agreement,
respectively), in each case to the extent they occur between January 1, 2000 and
the Closing Date.
4.2 Taxes.
(a) Tax Returns. Sellers shall prepare and file or cause the LLC or the LP
to prepare and file, in a timely manner, all separate federal, state, local and
tribal Tax Returns required by applicable Law for the LP and the LLC for which
the Tax period ends on or before the Closing Date and pay or cause the LLC or
the LP to pay any Taxes shown as due and payable on such Tax Returns. If LP
Seller or LLC Seller is a member of an Affiliated Group, each of Sellers shall
include its share of the income or loss of the LP or the LLC, as applicable, on
the applicable consolidated federal Tax Returns and combined state Tax Returns
for all periods ending on or before the Closing Date and pay any federal and
state Taxes due on such Tax Returns. If necessary, Sellers shall cause the LP
and the LLC to prepare the federal income Tax books for the LP and the LLC in
order to close such Tax books as of the Closing Date in accordance with Section
706(c)(2) of the Code. Sellers shall prepare and file or cause the LLC or the LP
to prepare and file all Tax Returns due on or before the Closing Date on a
monthly or quarterly basis, including, but not limited to, Sales Taxes and
severance taxes, and the LP or the LLC shall pay all Taxes shown as due on such
Tax Returns. Buyer shall prepare and file or cause to be prepared and filed all
separate federal, state and local Tax Returns for the LP and the LLC for which
the Tax year commences after or includes the Closing Date and pay or cause to be
paid by the LP any Taxes shown as due and payable on such Tax Returns.
(b) Cooperation. Sellers and Buyer shall (i) each provide the other, and
Buyer shall cause the LP and the LLC to provide Sellers, with such assistance as
may reasonably be requested by any of them in connection with the preparation of
any Tax Return, audit or other examination by any taxing authority or judicial
or administrative proceedings relating to liability for Taxes, (ii) each retain
and provide the other with access at reasonable times to review and copy any
records or information which the Party requesting access may reasonably deem
relevant to such Tax Return, audit or examination, proceeding or determination,
and (iii) each provide the other with the amount of any income, deductions or
other information required to be shown on any Tax Return of the other for any
period when the Party requested to furnish such information has such information
in its possession.
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The Party requesting assistance hereunder shall reimburse the other Parties
for reasonable out-of-pocket expenses (excluding the cost of wages and benefits
of employees of such Party providing such assistance, which shall be borne
solely by the Party providing such assistance) incurred in providing such
assistance to the extent such expenses exceed an aggregate amount of $50,000;
provided, however, that Buyer shall not be required to reimburse Sellers for
expenses incurred in providing assistance regarding the period prior to the
Formation Date. Without limiting the generality of the foregoing and
notwithstanding anything in this Agreement to the contrary, Buyer shall retain,
and shall cause the LP and the LLC to retain, until the later of (A) one hundred
twenty (120) Days after the expiration of all statutes of limitations (including
any extensions) or (B) ten (10) years after Closing, copies of all Tax Returns,
supporting work schedules and other records or information in its possession
which may be relevant to such returns for all taxable periods from January 1,
1997, to the Closing Date, inclusive, and shall not destroy or otherwise dispose
of any such records without first providing Sellers with an opportunity to
review and copy the same.
(c) Tax Elections. Buyer shall cause the LP and the LLC to have in effect
for the taxable year in which Closing occurs an election under Section 754 of
the Code.
4.3 Working Capital Settlement and Estimate of Adjusted Purchase Price. No
later than ten (10) Days after execution of this Agreement, Sellers shall submit
a statement (the "Working Capital Statement") and include therewith an estimate
of the Adjusted Purchase Price to Buyer. The statement shall be prepared using
the audited balance sheet prepared by Ernst and Young. Buyer shall have fourteen
(14) Days to review the Working Capital Statement, including any access to the
LP's and the LLC's financial books and records. On the Day following expiration
of such fourteen (14) Day review period, Buyer shall submit a written report
containing any changes Buyer proposes to be made to the Working Capital
Statement. Sellers and Buyer shall attempt to agree on a final Working Capital
Statement no later than five (5) Days prior to Closing. If Sellers and Buyer are
unable to agree by that date, Sellers' estimate shall be used to determine the
adjustment to the Purchase Price pursuant to Article 2.4 to be used at Closing.
Sellers and Buyer shall use reasonable efforts to resolve any dispute under this
Article 4.3 from and after the Closing Date or refer the matter to the
Accounting Referee for resolution. Within thirty (30) Days after the Closing
Date, Sellers shall submit to Buyer a statement (the "Post-Closing Notice")
which will set forth the difference, if any, between the estimated amount of
Intergroup Contributions and Intergroup Distributions and the actual amount of
Intergroup Contributions and Intergroup Distributions. If the net amount of such
difference is positive, such amount shall be referred to as an "Excess" and if
the net amount of such difference is negative, such amount shall be referred to
as a "Deficiency." Buyer shall notify Sellers within fifteen (15) Days after
receipt of the Post-Closing Notice whether it disputes Sellers' Post-Closing
Notice. If Buyer disputes Sellers' Post-Closing Notice, Buyer and Sellers shall
attempt to resolve any such dispute within fifteen (15) Days after Sellers
receive a notice from Buyer of such dispute. If Sellers and Buyer are unable to
resolve such dispute within such fifteen (15) Day period, the matter shall be
referred to the Accounting Referee for resolution. The Accounting Referee shall
make its determination as to such dispute under this Article 4.3 within thirty
(30) Days after referral of any dispute. The scope of any disputes to be
resolved by the Accounting Referee shall be limited to whether the calculation
of Working Capital on the Working Capital Statement and the other components of
the Adjusted Purchase Price were determined using the agreed methodology and
whether there were mathematical errors in such calculation. The determination
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of the Accounting Referee shall be final and binding upon the Parties. The
amount of any Excess or Deficiency shall be paid by the appropriate Party or
Parties to the Party or Parties to which such amount is owed (which amount, if
paid to Sellers, shall be paid in the percentages as set forth on Exhibit H-4)
within fifteen (15) Days after the determination of such amount pursuant to this
Article 4.3.
4.4 Sales Tax and Fees. Buyer shall pay all Sales Taxes, if any, and all
documentary, filing and other fees required in connection with the transfer of
the LP Interests and the LLC Interests and any deemed transfer of the Properties
and provide Sellers with written copies of any such recorded instruments, other
than transfers requested by Sellers pursuant to Article 10.2, for which Sellers
shall pay any such Sales Taxes and all other fees.
4.5 Tax Status. Sellers and Buyer acknowledge that (a) the LP is governed
by the LP Agreement and is a partnership for federal income tax (as well as
state Law) purposes; (b) the LLC is governed by the LLC Agreement and is a
partnership for federal income tax purposes; (c) the LLC is the LP Tax Matters
Partner; (d) Amoco LLC Seller is the LLC Tax Matters Partner; and (e) each
Seller shall be allocated its share of the LP's and/or the LLC's, as applicable,
items of income, gain, deduction and loss for federal and state income tax
purposes as of the Closing Date in accordance with the LP Agreement and the LLC
Agreement, and applicable federal and state Tax Law.
4.6 Basis. (a) Amoco LP Sellers represent and warrant that their tax basis
in the Amoco LP Interests (the "Amoco Outside Basis") equals the LP's tax basis
in its assets related to Amoco LP Sellers (the "Amoco Inside Basis"). Amoco LP
Sellers agree that if there is a Final Determination that as of the Closing
Date, the Amoco Outside Basis exceeded the Amoco Inside Basis, then within ten
(10) Business Days after the occurrence of such Final Determination, Amoco LP
Sellers will pay the Buyer LP an amount equal to 37.5% of the difference between
the Amoco Outside Basis and the Amoco Inside Basis by wire transfer of
immediately available funds to a bank account designated by Buyer LP.
(b) Shell LP Sellers represent and warrant that their tax basis in the
Shell LP Interests (the "Shell Outside Basis") equals the LP's tax basis in its
assets related to Shell LP Sellers (the "Shell Inside Basis"). Shell LP Sellers
agree that if there is a Final Determination that as of the Closing Date, the
Shell Outside Basis exceeded the Shell Inside Basis, then within ten (10)
Business Days after the occurrence of such Final Determination, Shell LP Sellers
will pay the Buyer LP an amount equal to 37.5% of the difference between the
Shell Outside Basis and the Shell Inside Basis by wire transfer of immediately
available funds to a bank account designated by Buyer LP.
(c) The payments described in subparagraphs (a) and (b) above shall not be
required to the extent that the Buyer Partner is otherwise compensated (e.g.,
through remedial allocations or because Code Section 613A(c)(7)(d) treats the
basis of oil and gas properties as belonging to the partners in the LP).
(d) Any payments required under subparagraphs (a) and (b) above shall be
treated as an adjustment to the purchase price.
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(e) For purposes of subparagraphs (a) and (b) above, "Final Determination"
means (i) a nonappealable judgment of a court of competent jurisdiction, (ii) a
closing agreement entered into by the LP and the IRS or (iii) a consent to a
final proposed administrative adjustment executed by the LP.
4.7 Allocations. For all purposes of this Agreement and the Restated LP
Agreement, the Parties agree that the Gross Asset Value (as defined in the
Restated LP Agreement) of the Original Assets (as defined in the Restated LP
Agreement) on the Closing Date shall be allocated to such assets as follows:
(a) first, to cash, Cash Equivalents (as defined in the Restated LP
Agreement), receivables, and any other current assets based on their relative
Fair Market Values (as defined in the Restated LP Agreement); and
(b) second,
(i) 88% to assets that are eligible for depletion under Code Section
611; and
(ii) 12% to assets that are eligible for depreciation under Code
Section 167.
No portion of the Gross Asset Value of the Original Assets shall be allocated to
any other assets, including but not limited to intangible property.
ARTICLE 5. LOSS, CASUALTY AND INSURANCE
5.1 Notice of Loss. From the date of execution of this Agreement until
Closing, Sellers will promptly notify Buyer of each instance of loss or damage
to the Assets, or any part thereof, known to Sellers and estimated to exceed
Five Million Dollars ($5,000,000) net to the LP's interest in the affected
Assets.
5.2 Casualty. (a) If, after the Settlement Date but prior to the Closing
Date, any portion of the Assets suffers a Casualty Loss that individually
exceeds Ten Million Dollars ($10,000,000), Buyer shall nevertheless be required
to Close and Sellers shall elect by written notice to Buyer prior to Closing
either (i) to cause any Asset affected by Casualty Loss to be repaired or
restored, at Sellers' sole cost, as promptly as reasonably practicable (which
work may extend after the Closing Date), or (ii) to indemnify Buyer through a
document reasonably acceptable to Sellers and Buyer against any costs or
expenses that Buyer reasonably incurs to repair or restore the Asset subject to
the Casualty Loss. In each case, Sellers shall be entitled to retain all rights
to insurance and other claims against Third Parties with respect to the Casualty
Loss except to the extent the Parties otherwise agree in writing. In no event
shall such cost of repair or restoration or any indemnity for repair or
restoration under this Article 5.2 associated with a Casualty Loss exceed, in
the case of a Property, the Title Value of the affected Property, or, in the
case of any other Asset, the Fair Market Value of the affected Asset.
(b) If, after the date of this Agreement but prior to the Closing Date, any
portion of the Assets suffers a Casualty Loss that is Ten Million Dollars
($10,000,000) or less, Buyer shall nevertheless be required to Close and the LP
shall retain all sums paid to the LP by Third Parties
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by reason of such Casualty Loss, including all of the LP's right, title and
interest (if any) in insurance proceeds, unpaid awards, and other rights against
Third Parties (other than Affiliates of Sellers and their directors, officers,
employees and agents) arising out of the Casualty Loss.
5.3 Insurance. Buyer understands and agrees that from and after the Closing
Date, except for the insurance listed on Exhibit G for which the LP or the LLC
is an express named insured, (a) no insurance coverage will be provided to the
LP or the LLC or Buyer under (i) any insurance policy issued to Sellers or any
Affiliate of any Seller, or (ii) any insurance policy (including reinsurance)
issued by any insurance company Affiliate of any Seller ((i) and (ii) being
together, "Sellers Insurance Policies"), and (b) no claims regarding any matter
whatsoever, whether or not arising from events occurring prior to Closing, shall
be made by the LP or the LLC or Buyer against or under Sellers Insurance
Policies, regardless of their date of issuance.
ARTICLE 6. ALLOCATION OF RESPONSIBILITIES AND INDEMNITIES
6.1 Opportunity for Review. Each Party represents that it has had an
adequate opportunity to review the release and indemnity provisions in this
Agreement, including, without limitation, the opportunity to submit the same to
legal counsel for review and comment. Based upon the foregoing representation,
the Parties agree to the provisions set forth below.
6.2 Sellers' Non-Environmental Indemnity Obligation. If Closing shall
occur, from and after the Closing Date each Seller shall release Buyer Group
(including, from and after the Closing Date, the LP and the LLC) from and shall,
subject to the limitations set forth in Article 6.5, fully protect, defend,
indemnify and hold Buyer Group (including, from and after the Closing Date, the
LP and the LLC) harmless from and against any and all (i) Title Defects and (ii)
Third Party Non-Environmental Claims relating to, arising out of, or connected
with, directly or indirectly (and, whether asserted before or after Closing
without extending the time limitations of Article 6.5(a)), the ownership of the
Interests or the ownership or operation of the Assets, including, without
limitation, ownership or operation of the Properties, or any part thereof, to
the extent, for both Title Defects and Third Party Non-Environmental Claims,
attributable to the period prior to the date of this Agreement, including,
without limitation, Third Party Non-Environmental Claims relating to:
(a) injury or death of any Person or Persons whomsoever,
(b) damages to or loss of any Property or resources,
(c) breach of contract,
(d) common law causes of action such as negligence, strict liability,
nuisance or trespass, or
(e) fault imposed by statute, rule, regulation or otherwise, even if caused
in whole or in part by the negligence (whether sole, joint, or concurrent),
strict liability, or other legal fault of any Person indemnified hereunder;
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provided, however, that with respect to each Property, once Sellers have paid,
in the aggregate, the Title Value to Buyer Group (including, from and after the
Closing Date, the LP and the LLC) or to a Third Party as an indemnity payment on
behalf of Buyer Group, then, except as provided with respect to Third Party
Non-Environmental Claims, Sellers shall have no further obligation to protect,
indemnify, defend or hold harmless Buyer Group (including, from and after
Closing Date, the LP and the LLC) with respect to such Title Defect or Title
Defects with respect to such Property.
6.3 Sellers' Environmental Indemnity Obligation. If Closing shall occur,
from and after the Closing Date each Seller shall release Buyer Group
(including, from and after the Closing Date, the LP and the LLC) from and shall,
subject to the limitations set forth in Article 6.5, fully protect, defend,
indemnify and hold Buyer Group (including, from and after the Closing Date, the
LP and the LLC) harmless from and against any and all Environmental Claims and
all Remediation Costs (including, without limitation, such Claims and costs
associated with asbestos or norm, plugging and abandonment, and process safety
management) relating to, arising out of, or connected with, directly or
indirectly (and, whether asserted before or after Closing without extending the
time limitations of Article 6.5(a)), the ownership of the Interests or ownership
or operation of the Assets, including, without limitation, ownership or
operation of the Properties, or any part thereof, to the extent, for both
Environmental Claims and Remediation Costs, attributable to the period prior to
the date of this Agreement, even if caused in whole or in part by the negligence
(whether sole, joint, or concurrent), strict liability, or other legal fault of
any Person indemnified hereunder.
6.4 Sellers Retained Liabilities. If Closing shall occur, from and after
the Closing Date each Seller shall release Buyer Group (including, from and
after the Closing Date, the LP and the LLC) from and shall fully protect,
defend, indemnify and hold Buyer Group harmless from and against any and all
Claims relating to, arising out of, or connected with, directly or indirectly
(and no matter when asserted):
(a) Environmental Claims and Remediation Costs with respect to Sellers
Retained Environmental Liabilities, except to the extent caused by the acts or
omissions of any member of Buyer Group (including acts or omissions on or after
the Closing Date by the LP and the LLC); provided, however, that Sellers
acknowledge that Buyer Group, the LP and the LLC have no obligation to remediate
Sellers Retained Environmental Liabilities;
(b) The ownership or operation of the Excluded Assets, including, without
limitation, (1) Environmental Claims and (2) Third Party Non-Environmental
Claims relating to: (i) injury or death of any Person or Persons whomsoever,
(ii) damages to or loss of any Property or resources, (iii) breach of contract,
(iv) common law causes of action such as negligence, strict liability, nuisance
or trespass, (v) fault imposed by statute, rule, regulation or otherwise, even
if caused in whole or in part by the negligence (whether sole, joint, or
concurrent), strict liability, or other legal fault of any Person indemnified
hereunder, or (vi) Third Party Tax Claims or disputes;
(c) Environmental Claims or Remediation Costs with respect to the
Hydrocarbons currently floating above a perched water-bearing zone in the
vicinity of Hobbs, New Mexico, that have been or are being produced by the
Windmill Oil Company; provided, however, that
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Sellers shall only be liable for Claims incurred by Buyer Group (i) for Adverse
Conditions of such zones existing on the date of this Agreement (including any
migration therefrom prior to the date of remediation of such conditions), and
(ii) in excess of Two Hundred Thousand Dollars ($200,000) in any calendar year;
provided, further however, that Sellers acknowledge that none of Buyer Group,
the LP, or the LLC have any current obligation to remediate such condition;
(d) royalties, severance Taxes, or fees owed or payable to any Governmental
Authority or Person (including, without limitation, Claims alleging
undervaluation or underpayment thereof, or wrongdoing, fault, or strict
liability relating thereto) arising therefrom or in connection therewith, or
Claims pursuant to the False Claims Act or similar state Laws to the extent
attributable to the period prior to the Closing Date in respect of Hydrocarbon
or non-Hydrocarbon substances (including, without limitation, CO2) used,
purchased, produced, transported, sold or conveyed at, to, under, across or from
the Properties or properties formerly owned by the LP, except to the extent that
(i) a specifically identifiable accrual or reserve was included as a current
liability in the December 31, 1999 balance sheet comprising a portion of the
Financial Statements for the year ended December 31, 1999, and (ii) the amount
of such Claim is taken into account as a current liability in calculating
Working Capital as set forth on such balance sheet;
(e) Environmental Claims or Remediation Costs with respect to offsite
disposal of hazardous or non-hazardous waste (including, without limitation,
NORM, asbestos and Hydrocarbon or non-Hydrocarbon substances) to the extent
attributable to the period prior to the Formation Date, and any present or
future sites identified under Environmental Laws at which materials or wastes
generated by or on behalf of Sellers prior to the Formation Date were deposited;
(f) Sellers' existing disputes with the State of New Mexico concerning
Sellers' alleged underpayment of royalties and oil severance taxes for any
period prior to Closing, including, without limitation, the State of New
Mexico's failure to approve certain assignments by Sellers of New Mexico State
Leases to the LP upon formation of the LP;
(g) all litigation with respect to the Properties filed against Sellers
prior to the Formation Date including, without limitation, that litigation
listed on Exhibit C-2;
(h) all litigation listed on Exhibit C-1 regardless of when filed, but only
to the extent of Sellers' liability with respect to any such litigation, as
determined pursuant to a final disposition with respect thereto; and
(i) all Third Party Non-Environmental Claims filed prior to the Formation
Date regarding the Assets.
Claims made under this Article 6.4 may be made whether or not a Claim also
could be asserted under Articles 6.2 or 6.3, and Claims under this Article 6.4
are not subject to any of the limitations set forth in Article 6.5 or Article
8.3.
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6.5 Claim Periods and Thresholds. Sellers will have no obligation under
Articles 6.2 or 6.3 to protect, defend, indemnify, and hold Buyer Group harmless
from and against the Claims (or Title Defects or matters with respect to which
Remediation Costs will be incurred, as applicable) described in such Articles,
and the indemnified Person is solely responsible for any and all such Claims or
matters:
(a) for which the indemnified Person has not provided Sellers with an
Indemnity Claim Notice within (i) eighteen (18) months from and after Closing
with respect to such Non-Environmental Claims or Title Defects, or (ii) the
third anniversary of the Closing Date with respect to such Environmental Claims
(or matters with respect to which Remediation Costs will be incurred, as
applicable); and
(b) to the extent the aggregate of Claims of Buyer Group against Sellers
described in Articles 6.2 and 6.3 and breaches of representations and warranties
under Article 8 (except for the Specified Representations and Warranties) do not
exceed One Hundred Fifty Million Dollars ($150,000,000) (it being acknowledged
and agreed that the indemnified Persons are solely responsible for the aggregate
of all such Claims, Remediation Costs, breaches of such representations and
warranties, and Title Defects to the extent they do not exceed One Hundred Fifty
Million Dollars ($150,000,000) of actual expenditures incurred); and
(c) for each such Claim (or Title Defect or Remediation Costs) of Two
Million Dollars ($2,000,000) or less or expenditures with respect to each such
Claim; and these Claims, Remediation Costs, breaches of representations and
warranties (except for the Specified Representations and Warranties), and Title
Defects of Two Million Dollars ($2,000,000) or less will not be counted in
determining the One Hundred Fifty Million Dollar ($150,000,000) threshold in
subparagraph (b) above, provided that in calculating such Two Million Dollar
($2,000,000) threshold, any Dollar or materiality qualifiers in the
representations or warranties shall be disregarded; and
(d) the first Two Million Dollars ($2,000,000) of expenditures with respect
to each such Claim (or Title Defect or Adverse Condition with respect to which
Remediation Costs have been incurred) which exceeds Two Million Dollars
($2,000,000); provided, however, that the first Two Million Dollars ($2,000,000)
of expenditures for each such Claim will be counted in determining the One
Hundred Fifty Million Dollar ($150,000,000) threshold in subparagraph (b) above.
6.6 Third Party Claims Involving Both Sellers and the LP. In the event
Third Party Claims relating to, arising out of, or connected with the ownership
of the Interests or the ownership or operation of the Assets, including, without
limitation, the ownership or operation of the Properties or any part thereof,
are asserted against one or more of Sellers and against Buyer Group, the LP or
the LLC (other than Claims set forth in Article 6.4), (a) Sellers shall be
responsible for, and Articles 6.2 and 6.3 shall apply to, such Third Party
Claims to the extent attributable to the period prior to the Formation Date
(subject to the limitations set forth in Article 6.5), (b) the LP shall be
responsible for such Third Party Claims to the extent attributable to the period
between the Formation Date and the date of this Agreement, subject to
indemnification under Articles 6.2 or 6.3 (subject to the limitations set forth
in Article 6.5), and
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(c) the LP shall be responsible for such Third Party Claims to the extent
attributable to the period from and after the date of this Agreement.
6.7 Notice of Claims. If a Claim for indemnity is asserted against a Person
for which a Party may have an obligation of indemnity under this Article 6 or
elsewhere under this Agreement (an "Indemnity Claim"), the indemnified Person
shall give the indemnifying Party written notice of the underlying Claim setting
forth the particulars associated with the underlying Claim (including a copy of
the written underlying Claim, if any) as then known by the indemnified Person
("Indemnity Claim Notice"). For Indemnity Claims with respect to which Article
6.5 applies, an Indemnity Claim shall be deemed to have been made (subject to
clauses (b) and (c) thereof) upon the indemnified Person's providing an initial
Indemnity Claim Notice to the indemnifying Party stating that the Claim (or
Title Defect or Remediation Costs) underlying the Indemnity Claim could
reasonably be expected to exceed Two Million Dollars ($2,000,000). The
indemnified Person shall, to the extent practicable, give an Indemnity Claim
Notice within such time as will allow the indemnifying Party a reasonable period
in which to evaluate and timely respond to the underlying Claim; provided,
however, that (i) failure to do so shall not affect an indemnified Person's
rights hereunder except to the extent the indemnifying Party is prejudiced
thereby; (ii) the foregoing shall not extend the time periods set forth in
Article 6.5(a), but if an Indemnity Claim Notice is given to an indemnifying
Party within the applicable time period set forth in Article 6.5(a), such
Indemnity Claim Notice shall be effective, subject to the other limitations in
Article 6.5 or the other provisions of Article 6, as to costs and expenses
incurred or suffered after the expiration of such time period, with respect to
the matter generally described in such Indemnity Claim Notice; and (iii) the
indemnified Person shall not be required to provide an Indemnity Claim Notice
unless and until such Person believes that the underlying Claim (or Title Defect
or Remediation Costs) underlying the Indemnity Claim could reasonably be
expected to exceed the applicable threshold, which for purposes of Article 6.5
is Two Million Dollars ($2,000,000) per underlying Claim.
6.8 Defense of Claims. Upon receipt of an Indemnity Claim Notice involving
a Third Party for which an indemnifying Party reasonably believes it may have an
obligation of indemnity under this Agreement, the indemnifying Party may
(without prejudice to its right to contest its obligation of indemnity under
this Agreement) assume the defense of the Third Party Claim with counsel
selected by the indemnifying Party and reasonably satisfactory to the
indemnified Person. The indemnified Person shall cooperate in all reasonable
respects in such defense. If any Third Party Claim involves a fact pattern
wherein Buyer may have an obligation to indemnify any Seller and such Seller may
have an obligation to indemnify Buyer, each Party may assume the defense of and
hire counsel for that portion of the Third Party Claim for which it may have an
obligation of indemnity. In all instances, the indemnified Person may employ
separate counsel and participate in the defense of any Third Party Claim;
provided, however, if the indemnifying Party has assumed the defense of a Third
Party Claim pursuant to this Article 6.8 and has agreed to indemnify the
indemnified Person, the fees and expenses of counsel employed by the indemnified
Person will be borne solely by the indemnified Person. If (a) the underlying
Third Party Claim meets any applicable per-Claim threshold, (b) the underlying
Third Party Claim plus all previously asserted underlying Claims have exceeded
the One Hundred Fifty Million Dollar ($150,000,000) aggregate threshold, if
applicable in the circumstances, and (c) the indemnifying Party does not notify
the indemnified Person within the earlier to occur of:
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(a) three (3) Business Days before the time a response is due in any
litigation matter (so long as the Indemnity Claim Notice was presented to the
indemnifying Party at least ten (10) Days prior to the date the response is
due), or
(b) thirty (30) Days after receipt of the Indemnity Claim Notice, that the
indemnifying Party elects to undertake the defense of the Third Party Claim, the
indemnified Person may defend, at the expense of the indemnifying Party, the
Third Party Claim with counsel of the indemnified Person's choice, subject to
the right of the indemnifying Party to assume the defense of the Third Party
Claim at any time prior to settlement or final determination thereof. In such
event, the indemnified Person shall promptly send written notice to the
indemnifying Party of any proposed settlement of the Third Party Claim, which
settlement the indemnifying Party may accept or reject, in its reasonable
judgment, within ten (10) Days of receipt of the notice, unless the settlement
offer is limited to a shorter period, in which case the indemnifying Party will
have such shorter period in which to accept or reject the proposed settlement.
Failure of the indemnifying Party to accept or reject such settlement within the
applicable period will be deemed a rejection of the proposed settlement.
Notwithstanding the foregoing, the indemnified Person may settle any matter over
the objection of the indemnifying Party, but in so doing the indemnified Person
will waive any right to indemnity therefor as to (and only as to) liabilities
with respect to which the indemnifying Party has acknowledged in writing its
indemnity obligation.
6.9 Determination of Title Defect Amounts. The amount of a Title Defect
shall be determined as follows:
(a) if Buyer and Sellers agree on the amount, that amount shall be the
value of the Title Defect for purposes of this Article 6; and
(b) if Buyer and Sellers cannot agree on the amount, the Title Value of the
affected Property(ies) shall be used by the Parties for determining the amount.
6.10 Waiver of Certain Damages. Each of the Parties expressly waives and
agrees not to seek indirect, consequential, punitive or exemplary damages or
damages for lost profits of any kind with respect to any dispute arising under,
related to, or in connection with this Agreement or breach hereof; provided,
however, this provision will not diminish or affect in any way the Parties'
rights and obligations under any indemnities provided in this Agreement.
6.11 Several Liability. (a) Except as otherwise expressly set forth herein,
if any one or more Sellers have an indemnity obligation or otherwise have
liability hereunder, Amoco Sellers' percentage of the total liability for
amounts asserted under this Article 6 or Article 8 or any other Article will be
limited to the Amoco Aggregate Interest, and Shell Sellers' percentage of the
total liability for amounts asserted under this Article 6 or Article 8 or any
other Article will be limited to the Shell Aggregate Interest; provided that,
(i) notwithstanding any provision of this Agreement to the contrary, Shell
Sellers will be jointly liable for any and all Shell Seller liabilities, and
Amoco Sellers will be jointly liable for any and all Amoco Seller liabilities
and (ii) Buyer shall have no obligation to determine which Seller or Sellers are
liable and may assert
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liability against all Sellers, and the allocation of Sellers' liability among
themselves (except as to the percentages stated above) shall not be a defense to
any Claim by Buyer.
(b)(i) Notwithstanding any provision of this Agreement, no agreement,
consent, approval, waiver, action, notice or other conduct of Sellers under this
Agreement shall be effective unless made or given by both Shell Sellers and
Amoco Sellers and (ii) Shell Sellers shall act only collectively and Amoco
Sellers shall act only collectively; provided that nothing in this Article
6.11(b) shall limit any representations, warranties or covenants made
individually by Shell Sellers or Amoco Sellers, respectively.
6.12 Sellers' Responsibility for Taxes. Notwithstanding anything to the
contrary in this Article 6 or Article 7, from and after the Closing Date,
Sellers shall each protect, defend, indemnify, and hold harmless Buyer Group,
the LLC and the LP from any and all Taxes imposed on the LLC or the LP with
respect to the Assets, Properties, business or operations of the LLC or the LP
for any taxable period or portion thereof ending on or prior to the Closing
Date, except to the extent such Taxes are fully reflected as a liability in the
December 31, 1999 balance sheet comprising a portion of the Financial Statements
or are accrued in the ordinary course of business after the Settlement Date. To
the extent that, following the completion and delivery of the LP's annual
financial statements for the year 2000, the amount paid for the year 2000 by the
LP or the LLC with respect to such Taxes exceeds the amount accrued for the
Taxes in the balance sheet comprising a portion of such financial statements,
Buyer shall pay to Sellers the amount of such excess, in the same proportions as
the Closing Amount was paid to Sellers. This Article 6.12 shall not modify or
otherwise limit Sellers' indemnity obligations pursuant to Article 6.4(d).
6.13 Cross-Release. (a) Effective as of Closing, except for the performance
of the obligations and covenants in this Agreement, and except with respect to
the representations and warranties in this Agreement, Buyer, on its behalf and
on behalf of Buyer Group (including, from and after the Closing Date, the LP and
the LLC), hereby releases, acquits and discharges each member of Seller Group
from any and all Claims by Buyer Group with respect to Contracts or arrangements
between the LP or the LLC, on the one hand, and any member of Sellers Group
("Affiliate Contracts") to the extent (i) not attributable to a Third Party
Claim and (ii) attributable to pre-Closing periods; provided that the foregoing
release shall not release any settlement in the ordinary course of business of
outstanding amounts under Affiliate Contracts.
(b) Effective as of Closing, except for the performance of the obligations
and covenants in this Agreement, and except with respect to the representations
and warranties in this Agreement, each Seller, on its behalf and on behalf of
Sellers Group, hereby releases, acquits and discharges each member of Buyer
Group (including, from and after the Closing Date, the LP and the LLC), from any
and all Claims by Buyer Group with respect to Affiliate Contracts to the extent
(i) not attributable to a Third Party Claim and (ii) attributable to pre-Closing
periods; provided that the foregoing release shall not release any settlement in
the ordinary course of business of outstanding amounts under Affiliate
Contracts.
6.14 Indemnity Allocation. With respect to any amounts paid for
indemnification or for breach of representation or warranty pursuant to this
Agreement, the Person or Persons entitled to such amounts shall be the Person or
Persons that are the express beneficiary or
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beneficiaries under the relevant provisions of this Agreement that suffer and
are entitled to the Claim covered by such provisions (and it is acknowledged and
agreed that, to the extent that the LP suffers and is entitled to the Claim, any
amounts payable with respect thereto shall be made to the LP and not to any
other Person within Buyer Group); and if the LP is the indemnified Person or the
Person that receives any payment for breach of representation or warranty, the
LP's allocation of the contribution, benefit, loss and/or detriment with respect
to the matter that is the subject of the indemnification or breach shall be
governed by the Restated LP Agreement.
ARTICLE 7. DISCLAIMERS
7.1 Disclaimer - Representations and Warranties. Buyer acknowledges and
agrees that, except as otherwise expressly provided in this Agreement or the
Operative Documents, (i) the Interests will be assigned and conveyed from
Sellers to Buyer LP and Buyer Member without warranty, express, statutory,
implied or otherwise and (ii) Sellers make no warranty, express, statutory,
implied, or otherwise with respect to the Properties. Except as otherwise
expressly provided in this Agreement or in the Operative Documents, Sellers
hereby expressly disclaim any and all representations and warranties associated
with the Properties, express, statutory, implied or otherwise, including,
without limitation: (a) warranty of title, (b) existence of any and all
prospects, (c) geographic, geologic or geophysical characteristics associated
with any and all prospects, (d) existence, quality, quantity or recoverability
of Hydrocarbon and non-Hydrocarbon substances associated with the Properties,
(e) costs, expenses, revenues, receipts, accounts receivable, accounts payable,
suspense fund or gas imbalances associated with the Properties, (f) contractual,
economic or financial information and data associated with the Properties, (g)
continued financial viability or productivity of the Properties, (h)
environmental or physical condition of the Properties, (i) federal, state, local
or tribal income or other Tax consequences associated with the Properties, (j)
absence of patent or latent defects, (k) safety, (l) state of repair, (m)
merchantability, (n) conformity to models, (o) any rights of any member of Buyer
Group under appropriate statutes to claim diminution of consideration or return
of the Purchase Price, (p) warranty of freedom from patent or trademark
infringement, (q) warranties existing under applicable Law now or hereafter in
effect, and (r) fitness for a particular purpose; and Buyer (on behalf of itself
and Buyer Group) irrevocably waives any and all Claims it may have against
Sellers Group with respect to same, even if caused in whole or in part by the
negligence (whether sole, joint, or concurrent), strict liability, or other
legal fault of Sellers Group.
7.2 Disclaimer - Statements and Information. Sellers expressly disclaim any
and all liability and responsibility, except as otherwise expressly provided in
this Agreement or the Operative Documents, for and associated with the quality,
accuracy, completeness or materiality of the information, data and materials
furnished (electronically, orally, by video, in writing or any other medium,
including, without limitation, in the Confidential Information Memorandum, by
compact disk, in any data room, or otherwise) at any time to Buyer Group
associated with the transactions contemplated by this Agreement, including,
without limitation: (a) title to the Properties, (b) existence of any and all
prospects, (c) geographic, geologic or geophysical characteristics associated
with any and all prospects, (d) existence, quality, quantity or recoverability
of Hydrocarbon and non-Hydrocarbon substances associated with the Properties,
(e) costs, expenses, revenues, receipts, accounts receivable, accounts payable,
suspense fund or gas imbalances associated with the Properties, (f) contractual,
economic or financial information
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and data associated with the Properties, (g) continued financial viability or
productivity of the Properties, (h) environmental or physical condition of the
Properties, (i) federal, state, local or tribal income or other Tax consequences
associated with the Properties, (j) absence of patent or latent defects, (k)
safety, (l) state of repair, (m) merchantability, (n) conformity to models, (o)
any rights of any member of Buyer Group under appropriate statutes to claim
diminution of consideration or return of the Purchase Price, (p) warranty of
freedom from patent or trademark infringement, (q) warranties existing under
applicable Law now or hereafter in effect, and (r) fitness for a particular
purpose; and Buyer (on behalf of itself and Buyer Group) irrevocably waives any
and all Claims it may have against Sellers Group with respect to same, even if
caused in whole or in part by the negligence (whether sole, joint, or
concurrent), strict liability, or other legal fault of Sellers Group.
ARTICLE 8. SELLERS' REPRESENTATIONS AND WARRANTIES
8.1 LLC Sellers' Representations. Each LLC Seller severally (and not
jointly) represents and warrants with respect to itself and/or the LLC, as
applicable, the following to Buyer:
(a) Organization and Good Standing. Amoco LLC Seller is a corporation and
Shell LLC Seller is a limited partnership, in each case duly organized, validly
existing and in good standing under the Laws of the state of its organization
and has all requisite corporate or partnership power and authority to own the
LLC Interest. LLC Seller is duly licensed or qualified to do business as a
foreign corporation and is in good standing in all jurisdictions in which the
Properties are located. The LLC is a limited liability company duly organized,
validly existing and in good standing under the Laws of the state of its
formation.
(b) Corporate or Partnership Authority; Authorization of Agreement. Each
LLC Seller has all requisite corporate or partnership power and authority to
execute and deliver this Agreement and the Operative Documents to which it is a
party, to consummate the transactions contemplated by this Agreement and the
Operative Documents to which it is a party, and to perform all of its
obligations under this Agreement and the Operative Documents to which it is a
party. This Agreement constitutes, and the Operative Documents to which it is a
party, when executed and delivered by each LLC Seller, will constitute, the
valid and binding obligations of each LLC Seller, enforceable against it in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency or other Laws relating to or affecting the
enforcement of creditors' rights and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
(c) No Violations. LLC Seller's execution and delivery of this Agreement
and the Operative Documents to which it is a party and the consummation of the
transactions contemplated by this Agreement or such Operative Documents will
not:
(i) conflict with or require the consent of any Person under any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws or limited partnership agreement of LLC Seller or the LLC Agreement;
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(ii) violate any provision of, or, except as required in connection
with any filing under the HSR Act pursuant to Article 11.1 or Section 13.14
of the Restated LLC Agreement, require any filing, consent or approval
under any Law applicable to LLC Seller or the LLC (except for consents and
approvals of Governmental Authorities customarily obtained subsequent to
transfer of title);
(iii) conflict with, result in a breach of, constitute a default under
or constitute an event that with notice or lapse of time, or both, would
constitute a default under, accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under: (a) any mortgage, indenture, loan, credit agreement or other
agreement evidencing indebtedness for borrowed money to which the LLC or
such LLC Seller is a party or by which the LLC or such LLC Seller is bound
except, in the case of LLC Seller, where such conflict, breach or default
would not materially affect LLC Seller's ability to consummate the
transactions contemplated hereby; or (b) any order, judgment or decree of
any Governmental Authority; or
(iv) result in the creation or imposition of any lien or encumbrance
upon one or more of the LLC Interests, the LLC or the Properties.
(d) Third Party Claims, Disputes and Litigation. Exhibit C-1 sets forth all
Third Party Claims, disputes or litigation pending against the LLC or, to
Sellers Knowledge, threatened. There are no Third Party Claims, disputes or
litigation pending or, to LLC Seller's knowledge, threatened against LLC Seller
or the LLC that would prevent the consummation of the transaction contemplated
by this Agreement.
(e) Bankruptcy. There are no bankruptcy, reorganization or receivership
proceedings pending, being contemplated by or, to LLC Seller's knowledge,
threatened against LLC Seller or the LLC.
(f) Foreign Person. LLC Seller is not a "foreign person" within the meaning
of Section 1445 of the Code.
(g) Liens, Mortgages and Security Interests. There are no liens, mortgages
or security interests encumbering the LLC Interests.
(h) LLC Interest. The Amoco LLC Interest represents a 63.915% Sharing Ratio
and the Shell LLC Interest represents a 36.085% Sharing Ratio. Each LLC Seller
owns of record and beneficially the LLC Interests set forth beside its name
under the column titled "Pre-Closing Interest" in Exhibit H-1, in each case free
and clear of any Taxes, security interests, equities, Third Party Claims, and
demands and any restrictions on transfer, options, warrants, purchase rights,
conversion rights, exchange rights, or other contracts or commitments that could
require any LLC Seller to sell, transfer, or otherwise dispose of its LLC
Interest, other than this Agreement, the LLC Agreement, the other Operative
Documents and federal or state securities Laws. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
LLC Interests, other than the LLC Agreement.
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(i) Taxes. LLC Tax Matters Partner has timely filed or caused to be timely
filed all Tax Returns required by applicable Law for the LLC due on or prior to
the Closing Date and has timely paid or caused to be timely paid all material
Taxes shown as due and payable on such Tax Returns within the prescribed period
or any extensions thereof.
(j) Tax Liens. To LLC Seller's knowledge, there are no Tax liens burdening
the Properties, the LLC or the LP except for liens for current Taxes not yet due
and payable.
(k) Qualification as Partnership. The LLC currently is qualified, and has
since the date of its formation been qualified, to be treated as a partnership
for federal income Tax purposes.
(l) LLC Assets and Liabilities. The LLC has no assets other than its
interest in the LP, and the LLC has no liabilities other than liabilities
arising out of its status as the general partner of the LP and administrative
expenses aggregating less than Two Hundred Fifty Thousand Dollars ($250,000).
(m) Knowledge of Buyer's Breach. As of the date of this Agreement, LLC
Seller has no knowledge of any breach by Buyer of any of the representations and
warranties in Article 9.
8.2 LP Sellers' Representations. Each LP Seller severally (and not jointly)
represents and warrants with respect to itself and/or the LP, as applicable, the
following to Buyer:
(a) Organization and Good Standing. LP Seller is a corporation or limited
partnership duly organized, validly existing and in good standing under the Laws
of the state of its organization and has all requisite corporate or partnership
power and authority to own the LP Interest. LP Seller is in good standing in all
jurisdictions in which the Properties are located. The LP is a limited
partnership duly organized, validly existing and in good standing under the Laws
of the state of its formation.
(b) Corporate or Partnership Authority; Authorization of Agreement. Each LP
Seller has all requisite corporate or partnership power and authority to execute
and deliver this Agreement and the Operative Documents to which it is a party,
to consummate the transactions contemplated by this Agreement and the Operative
Documents to which it is a party and to perform all of its obligations under
this Agreement and the Operative Documents to which it is a party. This
Agreement constitutes, and the Operative Documents to which it is a party, when
executed and delivered by each LP Seller, will constitute, the valid and binding
obligations of each LP Seller, enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency or other Laws relating to or affecting the enforcement of creditors'
rights and general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
(c) No Violations. LP Seller's execution and delivery of this Agreement and
the Operative Documents to which it is a party and the consummation of the
transactions contemplated by this Agreement and such Operative Documents will
not:
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(i) conflict with or require the consent of any Person under any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws or limited partnership agreement of LP Seller or the LP Agreement;
(ii) violate any provision of, or, except in connection with any
filing under the HSR Act pursuant to Article 11.1 or Section 14.15 of the
Restated LP Agreement, require any filing, consent or approval under any
Law applicable to LP Seller or the LP (except for consents and approvals of
Governmental Authorities customarily obtained subsequent to transfer of
title);
(iii) conflict with, result in a breach of, constitute a default under
or constitute an event that with notice or lapse of time, or both, would
constitute a default under, accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under: (a) any mortgage, indenture, loan, credit agreement or other
agreement evidencing indebtedness for borrowed money to which the LP or LP
Seller is a party or by which the LP or LP Seller is bound except, in the
case of LP Seller, where such conflict, breach or default would not
materially affect LP Seller's ability to consummate the transactions
contemplated hereby, or (b) any order, judgment or decree of any
Governmental Authority; or
(iv) result in the creation or imposition of any lien or encumbrance
upon one or more of the LP Interests, the LP or the Properties.
(d) Third Party Claims, Disputes and Litigation. Exhibit C-1 sets forth all
material Third Party Claims, disputes or litigation pending against the LP or,
to Sellers Knowledge, threatened. There are no Third Party Claims, disputes or
litigation pending or, to the best of LP Seller's knowledge, threatened against
LP Seller or the LP that would prevent the consummation of the transactions
contemplated by this Agreement.
(e) Bankruptcy. There are no bankruptcy, reorganization or receivership
proceedings pending, being contemplated by or, to LP Seller's knowledge and
belief, threatened against LP Sellers or the LP.
(f) Foreign Person. LP Seller is not a "foreign person" within the meaning
of Section 1445 of the Code.
(g) Liens, Mortgages and Security Interests. There are no liens, mortgages
or security interests encumbering the LP Interests.
(h) LP Interests. The Amoco LP Interest represents a 62.6367% Partnership
Interest and the Shell LP Interest represents a 35.3633% Partnership Interest,
which collectively represents a 98% Partnership Interest. Each LP Seller owns of
record and beneficially the LP Interest set forth beside its name under the
column titled "Pre-Closing Interest" in Exhibit H-1, in each case free and clear
of any Taxes, security interests, equities, Third Party Claims, and demands and
any restrictions on transfer, options, warrants, purchase rights, conversion
rights, exchange rights, or other contracts or commitments that could require
any LP Seller to sell,
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transfer, or otherwise dispose of its LP Interest, other than this Agreement,
the LP Agreement, the other Operative Documents and federal or state securities
Laws. There are no voting trusts, proxies, or other agreements or understandings
with respect to the voting of the LP Interests, other than the LP Agreement.
(i) Taxes. LP Tax Matters Partner has timely filed or caused to be timely
filed all Tax Returns required by applicable Law for the LP due on or prior to
the Closing Date and has timely paid or caused to be timely paid all material
Taxes shown as due and payable on such Tax Returns within the prescribed period
or any extensions thereof.
(j) Tax Liens. To LP Seller's knowledge, there are no Tax liens burdening
the Properties or the LP except for liens for current Taxes not yet due and
payable.
(k) Qualification as Partnership. The LP currently is qualified, and has
since the date of its formation been qualified, to be treated as a partnership
for federal income Tax purposes.
(l) Knowledge of Buyer's Breach. As of the date of this Agreement, LP
Seller has no knowledge of any breach by Buyer of any of the representations and
warranties in Article 11.
(m) Operatorship Status. To Sellers Knowledge, (i) there are no conditions
with respect to any of the Properties operated by the LP as of the Settlement
Date that could reasonably be expected to result in the termination or removal
of the LP as operator of such Properties, and (ii) no such termination or
removal of the LP's operatorship of any of the Properties is pending or
threatened.
(n) Title Defects. To Sellers Knowledge, there are no Title Defects with
respect to the LP's interest in any Property that could reasonably be expected
to result in a liability, cost, expense or loss to the LP of Two Million Dollars
($2,000,000) or more with respect to each such Property.
(o) Adverse Conditions. To Sellers Knowledge, there are no Adverse
Conditions relating to the LP's interest in any Property that could reasonably
be expected to result in a liability, cost, expense or loss to the LP of Two
Million Dollars ($2,000,000) or more with respect to such Property that are not
identified as a "Significant Environmental Finding" in the IT Report as such
term is defined in the IT Report.
(p) Financial Statements.
(i) LP Sellers have delivered to Buyer copies of the audited balance
sheets of the LP as of December 31 for 1997, 1998 and 1999, and the related
audited statements of income, changes in partners' capital and cash flows
for the ten-month period or fiscal year, as applicable, then ended
(collectively, the "Financial Statements"). The Financial Statements fairly
present the financial position, results of operation, partners' capital and
cash flows for the LP as of the dates and for the periods covered thereby,
in each case in accordance with GAAP except as described in the footnotes
to each of such Financial Statements.
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(ii) Since December 31, 1999, the LP has not incurred any liability
which would be required to be set forth on financial statements prepared in
accordance with GAAP, other than liabilities incurred in the ordinary
course of business.
(iii) The Financial Statements have been prepared in accordance with
Regulation S-X under the Securities Exchange Act of 1934, as amended.
(q) Material Contracts.
(i) To Sellers Knowledge, Part 2 of Exhibit M lists the following
Contracts to which the LP or the LLC is a party or by which the LP or the
LLC or any of their respective assets may be bound (collectively, the
"Material Contracts"):
(A) Farmouts, farmin or term assignments or other similar
Contracts affecting 2500 net acres or more;
(B) Contracts expiring from the Settlement Date through ninety
(90) Days following Closing that cannot be renewed automatically;
(C) Drilling Contracts with Key Drilling Co.;
(D) Nalco chemical unbundled service and supply Contracts;
(E) Carbon dioxide (CO2) Contracts (including replacement of
delivery in kind contracts);
(F) Third Party gas processing Contracts;
(G) Any Contract which involves the expenditure of Twenty-Five
Million Dollars ($25,000,000) or more (on a forward looking basis), other
than the following categories of Contracts arising in the ordinary course
of business;
(i) Contracts described in Article 1.136.1
(ii) Contracts described in Article 1.136.2;
(iii) oil or gas sales contracts; and
(H) any Contract with any of LP Sellers or LLC Sellers or their
respective Affiliates.
(ii) To Sellers Knowledge, prior to Closing, LP Sellers have furnished
or made available to Buyer true and complete copies of each Material
Contract.
(iii) As of Closing, except as disclosed on Part II of Exhibit M, LP
Sellers, LLC Sellers and their respective Affiliates, as applicable, will
have entered into or shall continue agreements with the LP, subject to
consultation with Buyer, pursuant to which
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the goods and services and other rights and benefits that were provided by
LP Sellers or LLC Sellers and their respective Affiliates to the LP prior
to Closing will be provided on the same terms after Closing.
(r) Compliance with Laws. The LP has not violated and is in compliance with
all applicable Laws except where such violation or noncompliance could not
reasonably be expected to result in a liability, cost, expense or loss to the LP
of Two Million Dollars ($2,000,000) or more to the LP. None of LP Sellers or the
LP has received any notice of a violation of or default by the LP with respect
to any applicable Law or any decision, ruling, order or award of any
Governmental Authority or arbitrator applicable to the LP or the assets,
properties, business or operations of the LP that would require disclosure
pursuant to Item 103 of Regulation S-K of the Securities Exchange Act of 1934,
as amended (as if the LP were a reporting company pursuant to such Act and were
subject to such Regulation).
(s) Ownership of Rights. Except as disclosed in Part 1 of Exhibit M, the
Assets comprise all of the rights, titles, interests or information that are
necessary for the LP to operate its business as it has historically been
operated.
(t) Affiliate Contracts. To Sellers Knowledge, none of Sellers, the LLC, or
the LP are in default in any material respect under any Contract entered into
between any Seller or any Affiliate, on the one hand, and the LP or the LLC, on
the other hand.
(u) ERISA Plans. (i) Set forth on Exhibit K-1 is a list identifying each
"employee benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act ("ERISA"), (x) which is subject to any provision of ERISA,
(y) which is maintained, administered or contributed to or by the LP, the LLC or
on its or their behalf by any affiliate of either (any "ERISA Affiliates") and
(z) which covers any employee or former employee of the LP or the LLC or under
which the LP or the LLC has any liability. Promptly after execution of this
Agreement, Sellers shall make available to Buyer accurate and complete copies of
all such plans (and, if applicable, the related trust agreements) and all
amendments thereto and summary plan descriptions thereof, together with (xx) the
two most recent annual reports (Form 5500 including, if applicable, Schedule B
thereto) prepared in connection with any such plan and (yy) the most recent
actuarial valuation report prepared in connection with any such plan. Such plans
are hereinafter referred to as the "ERISA Plans." For purposes of Articles
8.2(u)-(bb) only, an "affiliate" of the LP or the LLC means any other Person
which, together with the LP or the LLC, would be treated as a single employer
under Section 414(b), (c) or (m) of the Code.
(ii) The LLC has no employees and no ERISA Plans.
(iii) There are no ERISA Affiliates of the LP or the LLC other than
the LLC and the LP.
(v) Liabilities. No ERISA Plan (i) constitutes a "multiemployer plan," as
defined in Section 3(37) of ERISA, (ii) is maintained in connection with any
trust described in Section 501(c)(9) of the Code or (iii) is subject to Title IV
of ERISA or to the minimum funding standards of ERISA and the Code, other than
the qualified Altura Defined Benefit Plan identified
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on Exhibit K-1. There are no accumulated funding deficiencies as defined in
Section 412 of the Code (whether or not waived) with respect to any ERISA Plan.
The LP and the LLC have incurred no material liability under Title IV of ERISA
arising in connection with the termination of, or the complete or partial
withdrawal within the last six years from, any plan covered or previously
covered by Title IV of ERISA. The LP and the LLC have paid and discharged
promptly when due all liabilities and obligations with respect to an ERISA Plan,
which liabilities and obligations are of a character which if unpaid or
unperformed might result in the imposition of a lien against any of the assets
of the LP or the LLC post-Closing. As of the date of this Agreement, and, to
Sellers Knowledge, nothing done or omitted to be done, and no transaction or
holding of any asset under or in connection with any ERISA Plan has made or will
make the LP or the LLC subject to any material liability under Title I of ERISA
or liable for any tax pursuant to Sections 4971 through 4980B of the Code.
(w) Third Party Claims. Except as set forth on Exhibit C-1 and except for
routine Third Party Claims for benefits, there are no pending Third Party Claims
or, to Sellers Knowledge, any threatened Third Party Claims against the ERISA
Plans or the LP which could result in a material liability on the part of the LP
or the LLC or any ERISA Plan.
(x) Contributions. All contributions required to be paid or accrued on or
before the Closing Date with respect to the Altura Defined Benefit Plan as for
the 1999 plan year shall be paid or accrued by the LP prior to the Closing Date
and all other contributions or payments required to be paid or accrued before
the Closing Date with respect to the ERISA Plans and Non-ERISA Plans shall have
been paid or accrued by the LP in a timely manner.
(y) Qualifications. Each ERISA Plan which is intended to be qualified under
Section 401(a) of the Code , and each trust forming a part thereof which is
intended to be exempt from tax pursuant to Section 501(a) of the Code, has
received a favorable determination letter from the Internal Revenue Service
("IRS") to that effect. Promptly after execution of this Agreement, accurate and
complete copies of the most recent IRS determination letters with respect to the
ERISA Plans shall be made available to Buyer. To Sellers Knowledge, each ERISA
Plan is being maintained in substantial compliance with its terms and with the
material requirements prescribed by all applicable Laws, including the Code and
ERISA.
(z) Non-ERISA Plans. Set forth on Exhibit K-1 is a list identifying each
pay practice, employee benefit plan, policy, agreement, or arrangement (other
than the ERISA Plans) which (i) has been entered into, maintained, administered
or contributed to by the LP or the LLC or by any ERISA affiliate on behalf of
the LP or the LLC, (ii) covers any employee or former employee of the LP or the
LLC, and (iii) creates liability for the LP or the LLC. Such plans are
hereinafter referred to as the "Non-ERISA Plans." Sellers shall make available
to Buyer, promptly after the execution of this Agreement, accurate and complete
copies of all such plans (and, if applicable, the related trust agreements) and
all amendments thereto and summary plans descriptions thereof. To Sellers
Knowledge, each Non-ERISA Plan is being maintained in substantial compliance
with its terms and with the material requirements prescribed by Law and all
insurance contracts.
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(aa) Unions. There are no collective bargaining agreements or other similar
agreements, arrangements or understandings, written or, to Sellers Knowledge,
oral, with employees as a group to or by which the LP or the LLC is a party or
is bound. To Sellers Knowledge, neither the LP nor the LLC has been the subject
of any representational campaign by any union or other organization or group
seeking to become the collective bargaining representative of any employees or
been subject to or, to Sellers Knowledge, threatened with any strike or other
concerted labor activity or dispute.
(bb) Compliance. To Sellers Knowledge, and subject to Article 8.2(r), the
LP is in substantial compliance with all applicable Laws pertaining to
employment and wages, hours and other terms and conditions of employment in
respect of its employees. Other than as disclosed in Exhibit C-1, there is no
pending or, to Sellers Knowledge, threatened proceeding by or before, and
neither the LP nor the LLC is subject to any judgment, order, writ, injunction
or decree of or inquiry from, the National Labor Relations Board, the Equal
Employment Opportunity Commission, the Department of Labor, or any other
Governmental Authority in connection with any current, former or prospective
employee thereof.
(cc) No Conveyances. Since the Settlement Date, the LP has not conveyed to
Sellers any oil and gas leasehold interests, royalty interests, overriding
royalty interests, reversionary interests, mineral interests, production
payments, net profits interests or surface interests in producing or
non-producing Properties (i) with a book value to the LP, in the aggregate,
exceeding Five Million Dollars ($5,000,000) or (ii) in excess of, in the
aggregate, 10,000 net acres.
(dd) License Rights. The information and know-how, patents and software
rights licensed to the LP by Sellers under the Amoco Amended and Restated
License Agreement and the Shell Amended and Restated License Agreement are all
of the proprietary software rights, technical information, know-how and patents
owned or controlled by Sellers that are reasonably necessary for the LP to
operate its business substantially as it has historically been operated, except
for the rights the LP receives or has received under services provided by
Sellers and others or which the LP has obtained or could obtain from a Third
Party.
8.3 Limitation on Sellers' Liability and Waiver. Notwithstanding anything
contained in this Agreement (except Article 15.2) to the contrary, Buyer may not
bring a Claim against Sellers for breach of the representations or warranties
contained in this Agreement unless Buyer has provided Sellers with written
notice of such breach within eighteen (18) months after the Closing Date,
setting forth the particulars associated with the breach as then known by Buyer
(it being acknowledged and agreed that Buyer, on behalf of itself, Buyer Group
and its and their successors and assigns, irrevocably waives any and all Claims
it and they may have against Sellers for breaches of representations and
warranties not raised within such eighteen (18) month period). Except as
provided in Article 15.2, Buyer additionally may not bring a Claim against
Sellers for breach of the representations or warranties contained in this
Agreement unless:
(a) the amount associated with an individual breach, which would result in
Buyer's right to bring an individual Claim against Sellers for breach of a
representation or warranty under Article 8 (except Articles 4.6, 8.1(a), 8.1(b),
8.1(c)(i), 8.1(g), 8.1(h), 8.2(a), 8.2(b), 8.2(c)(i), 8.2(g) and 8.2(h)
(collectively, the "Specified Representations and Warranties")) exceeds Two
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Million Dollars ($2,000,000) and then only to the extent such Claim exceeds this
Two Million Dollar ($2,000,000) threshold; provided, however, that the first Two
Million Dollars ($2,000,000) for each such Claim will be counted in determining
the One Hundred Fifty Million Dollar ($150,000,000) threshold in Article 6.5(b);
and, provided further, that in calculating such Two Million Dollar ($2,000,000)
threshold, any Dollar or materiality qualifiers in the representations or
warranties shall be disregarded (it being acknowledged and agreed that Buyer, on
behalf of itself, Buyer Group and its and their successors and assigns,
irrevocably waives any and all such Claims it and they may have against Sellers
Group that do not exceed this Two Million Dollar ($2,000,000) threshold); and
(b) the aggregate amount associated with all breaches, which would result
in Buyer's right to bring multiple Claims against Sellers for breach of the
representations or warranties contained under this Article 8 (except for the
Specified Representations and Warranties), together with all Claims of Buyer
against Sellers pursuant to Articles 6.2 and 6.3, Title Defects and matters with
respect to which Remediation Costs have been incurred equals or exceeds One
Hundred Fifty Million Dollars ($150,000,000) (it being acknowledged and agreed
that Buyer, on behalf of itself, Buyer Group and its and their successors and
assigns, irrevocably waives any and all such Claims it and they may have against
Sellers Group that in the aggregate do not exceed the One Hundred Fifty Million
Dollar ($150,000,000) threshold);
provided that, for each event, circumstance, condition, act, omission, breach or
the like that forms the basis of any Claim by Buyer or Buyer Group under Article
6, Article 8 or any other provision of this Agreement, Buyer and Buyer Group
shall only be entitled to have one application of the expenditure(s) related to
such Claim against the One Hundred Fifty Million Dollar ($150,000,000) threshold
and shall not be entitled to multiple applications against such threshold or to
multiple recoveries and/or indemnities.
ARTICLE 9. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Sellers as follows:
9.1 Organization and Good Standing. Buyer, Buyer LP and Buyer Member are
corporations duly organized, validly existing and in good standing under the
Laws of the State of Delaware and have all requisite corporate power and
authority to own the LLC Interests, the LP Interests and the Properties. Buyer,
Buyer LP and Buyer Member will be, as of the Closing Date, duly licensed or
qualified to do business as a foreign corporation and are in good standing in
all jurisdictions in which the Properties are located.
9.2 Corporate Authority; Authorization of Agreement. Each of Buyer, Buyer
LP and Buyer Member has, and upon execution and delivery of each of the
Operative Documents to which it is a party, each of Buyer, Buyer LP and Buyer
Member will have, all requisite corporate power and authority to execute and
deliver this Agreement and the Operative Documents to which it is a party, to
consummate the transactions contemplated by this Agreement and the Operative
Documents to which it is a party and to perform all of its obligations under
this Agreement and the Operative Documents to which it is a party. This
Agreement constitutes, and the Operative Documents to which it is a party, when
executed and delivered by it, shall constitute, the valid and binding
obligations of Buyer, Buyer LP and Buyer Member, as the case
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may be, enforceable against it in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency or other Laws
relating to or affecting the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity).
9.3 No Violations. Buyer's execution and delivery of this Agreement and the
Operative Documents to which it is a party and the consummation of the
transactions contemplated by this Agreement and such Operative Documents will
not:
(a) conflict with or require the consent of any Person under any of the
terms, conditions or provisions of the certificate of incorporation or bylaws of
Buyer, Buyer LP or Buyer Member;
(b) violate any provision of, or require, except in connection with any
filing under the HSR Act pursuant to Article 11.1 or Section 13.14 of the
Restated LLC Agreement or Section 14.15 of the Restated LP Agreement, any
filing, consent or approval under any Law applicable to Buyer (except for
consents and approvals of Governmental Authorities customarily obtained
subsequent to transfer of title); or
(c) conflict with, result in a breach of, constitute a default under or
constitute an event that with notice or lapse of time, or both, would constitute
a default under, accelerate or permit the acceleration of the performance
required by, or require any consent, authorization or approval under: (a) any
mortgage, indenture, loan, credit agreement or other agreement evidencing
indebtedness for borrowed money to which Buyer, Buyer LP or Buyer Member is a
party or by which Buyer, Buyer LP or Buyer Member is bound except where such
conflict, breach or default would not materially affect Buyer's, Buyer LP's or
Buyer Member's ability to consummate the transactions contemplated hereby, or
(b) any order, judgment or decree of any Governmental Authority.
9.4 SEC Disclosure. Buyer LP and Buyer Member are acquiring the Interests
for their own accounts for use in their trade or business, and not with a view
toward any sale or distribution thereof, nor with any present intention of
making a distribution thereof within the meaning of the Securities Act of 1933,
as amended and the rules and regulations thereunder, any applicable state blue
sky Laws or other applicable securities Laws.
9.5 Funds. At Closing, Buyer, through Buyer LP, Buyer Member and the LP,
will have sufficient funds through financing or otherwise (and satisfactory
evidence thereof) to enable them to consummate the transactions contemplated
hereby and to pay the Closing Amount and all related fees and expenses of Buyer,
Buyer LP and Buyer Member.
9.6 Third Party Claims, Disputes and Litigation. As of the date of this
Agreement, there are no Third Party Claims, disputes or litigation pending or,
to Buyer's knowledge, threatened against Buyer, Buyer LP or Buyer Member that
would prevent the consummation of the transactions contemplated by this
Agreement.
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9.7 Bankruptcy. There are no bankruptcy, reorganization or receivership
proceedings pending, being contemplated by or, to Buyer's knowledge, threatened
against Buyer, Buyer LP or Buyer Member.
9.8 Independent Evaluation. BUYER IS SOPHISTICATED IN THE EVALUATION,
PURCHASE, OWNERSHIP AND OPERATION OF OIL AND GAS PROPERTIES AND RELATED
FACILITIES. IN MAKING ITS DECISION TO ENTER INTO THIS AGREEMENT AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREIN, BUYER: (A) HAS RELIED OR WILL
RELY SOLELY ON ITS OWN INDEPENDENT INVESTIGATION AND EVALUATION OF THE INTERESTS
AND THE PROPERTIES AND THE EXPRESS PROVISIONS OF THIS AGREEMENT AND (B) HAS
SATISFIED OR WILL SATISFY ITSELF AS TO THE ENVIRONMENTAL AND PHYSICAL CONDITION
OF AND CONTRACTUAL ARRANGEMENTS AFFECTING THE INTERESTS AND THE PROPERTIES.
9.9 Knowledge of Sellers' Breach. As of the date of this Agreement, none of
Buyer Group has knowledge of any breach by Sellers of any of the representations
and warranties in Articles 8.1 and 8.2.
ARTICLE 10. ADDITIONAL COVENANTS
10.1 Subsequent Operations. Sellers make no representations or warranties
to Buyer as to the retention of operatorship of any LP-operated Properties,
except as set forth in Article 8.2(m). Buyer acknowledges that the rights and
obligations associated with operatorship of the Properties are governed by the
applicable agreements and that operatorship of the Properties will be decided in
accordance with the terms of said agreements. Prior to Closing, Sellers agree to
cause the LP to use reasonable efforts to be retained as operator of the
LP-operated Properties to the extent applicable and to the extent permitted by
the applicable agreements.
10.2 Rights-of-Way and Surface Leases. At and after Closing, Sellers may
consult with Buyer, and Buyer will consider any reasonable request by Sellers
for a non-exclusive right-of-way and surface lease on, over and through the
Properties (including, but not limited to, pipeline, utility and road usage
rights-of-way, facility surface leases and all necessary or desirable rights of
ingress and egress) necessary or desirable to allow Sellers (and their
Affiliates) to continue to conduct operations on, over and across the Properties
associated with Sellers' other assets to the extent such operations do not
materially interfere with operations of the LP; provided, however, that Sellers
(and their Affiliates) shall retain all liability associated with use of such
right-of-way and surface lease and shall indemnify, defend and hold harmless
Buyer and the LP against any Third Party Claims associated therewith; and
provided, further, that neither Buyer nor the LP shall be obligated to expend
any money or to contract with any Third Party to provide any such right-of-way
or surface lease. Buyer and Sellers shall enter into mutually acceptable
agreements to further delineate any rights which may be granted hereafter.
10.3 Buyer's Acknowledgement of Obligations. Except for matters for which
Sellers are obligated to indemnify Buyer Group pursuant to Articles 6.2, 6.3 or
6.4, and except for other matters that are Sellers' or any of their respective
Affiliates' express obligations under this Agreement or any of the Operative
Documents, Buyer acknowledges that the LP is responsible,
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and Buyer, Buyer LP and Buyer Member shall have no recourse against Sellers, for
all of the LP's debts, liabilities, commitments, duties and obligations,
including, without limitation, those arising under, related to, or in connection
with the ownership, operation or use of the Assets or the business of the LP.
Effective as of the Closing Date, Buyer shall cause the LP to expressly assume
all Environmental Claims and Remediation Costs attributable to Sellers'
ownership and operation of the Properties (other than Third Party Claims
relating to exposure of individuals to Hydrocarbon or non-Hydrocarbon
substances, including, without limitation, medical and health-related costs and
expenses and Claims of injury or death of any individual or liability therefor,
to the extent such Claims relate to exposure during the period prior to the
Formation Date), without limiting the indemnities and retention of liability by
Sellers in Article 6, pursuant to a written assumption instrument in form and
substance satisfactory to Sellers and Buyer to be executed and delivered at
Closing.
10.4 Use of Certain Facilities. Buyer acknowledges that the pollution
abatement and control facilities listed on Exhibit J attached hereto (the
"Pollution Control Facilities") which are included in the Properties were
constructed and equipped with the proceeds from the sale of (a) $93,000,000 of
Adjustable Rate Pollution Control Revenue Bonds issued by Hockley County
Industrial Development Corporation, due 2014, (b) $56,800,000 of Adjustable Rate
Pollution Control Revenue Bonds issued by Hockley County Industrial Development
Corporation, due 2019, and (c) $5,645,000 of Adjustable Rate Pollution Control
Revenue Bonds issued by Yoakum County Industrial Development Corporation, due
2019 (collectively, the "Pollution Control Bonds"). The Parties agree that such
Pollution Control Bonds are not being assumed by Buyer pursuant to or in
connection with this Agreement, and that such Pollution Control Bonds are being
retained by Amoco LP Sellers or their Affiliates. Buyer hereby covenants and
agrees that from and after the Closing Date, it shall (1) cause the LP to use
the Pollution Control Facilities exclusively as pollution control facilities in
accordance with Section 103(b)(4)(F) of the Internal Revenue Code of 1954, as
amended, and in full compliance with the use requirements set forth in the
applicable agreements (copies of which will be provided to Buyer by Amoco LP
Sellers) and other Tax certifications relating to the Pollution Control Bonds,
and (2) use reasonable efforts to substantially comply with all material
provisions of the applicable agreements securing the Pollution Control Bonds
relating to the operation, maintenance, insurance, use, removal of liens,
payment of Taxes and keeping of records with respect to the Pollution Control
Facilities. Prior to Closing, Sellers shall furnish Buyer with copies of the
applicable agreements and Tax certifications. Buyer agrees that the provisions
of this Article 10.4 shall be binding upon (i) any successors and assigns of
Buyer, (ii) any transferee of all or any portion of the Pollution Control
Facilities, and (iii) any grantee of rights of use and/or operation thereof.
Buyer further agrees that it will cooperate with Amoco LP Sellers in any
refunding of the Pollution Control Bonds by providing Amoco LP Sellers with any
information reasonably requested by Amoco LP Sellers that is necessary to issue
any such refunding bonds on a Tax-exempt basis.
10.5 Covenants of Sellers. Except to the extent consented to in writing by
Buyer or as contemplated by this Agreement or as contemplated by existing work
programs and budgets that have been approved by the LLC Managers Committee (as
defined in the LLC Agreement), Sellers agree that from the date hereof until
Closing:
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(a) each of LP Sellers and LLC Sellers shall maintain their proportionate
ownership of the LP and the LLC, respectively;
(b) Sellers will cause the LP to:
(i) cause the Properties to be operated and maintained in a good and
workmanlike manner consistent with prudent oilfield practices in all
material respects, and will pay or cause to be paid all costs and expenses
in connection therewith, subject to Article 10.5(c), (ii) conduct its
business, operations, activities and practices in all material respects
only in the ordinary course of business and consistent with past practice
subject to Article 10.5(c), (iii) comply in all material respects with all
Laws of all Governmental Authorities which are applicable to the LP and the
Assets, (iv) perform and comply in all material respects with all of the
material covenants and conditions contained in agreements relating to the
Assets, (v) pay all Taxes and assessments with respect to the Assets which
become due and payable prior to the Closing Date, and (vi) advise and
consult with Buyer on all material matters relating to the Assets,
including, without limitation, all proposed authorizations for expenditures
in excess of Five Million Dollars ($5,000,000), farmout or farmin proposals
or agreements, and amendments to agreements; and
(c) Sellers will cause the LP not to:
(i) enter into, adopt, or (except as may be required by Law or
contemplated by this Agreement, or requested by Buyer, or as is disclosed
in Article 12.3(g)) amend any bonus, profit sharing, compensation,
severance, termination, pension, retirement, deferred compensation,
employment, or other employee benefit agreement relating to Personnel, or
(ii) increase the compensation, bonus, or fringe benefits of Personnel,
except for increases in salaries or wages made in the ordinary course of
business consistent with past practice;
(ii) fail to maintain its partnership existence or institute
proceedings for its merger, consolidation or dissolution;
(iii) incur any liability or obligation of any nature (whether
absolute, accrued, contingent or otherwise and whether due or to become
due) in excess of Two Million Dollars ($2,000,000) except items incurred in
the ordinary course of business and consistent with past practice (counting
liabilities or obligations arising from one transaction or a series of
similar transactions, and all periodic installments or payments under any
lease or other agreement providing for periodic installments or payments,
as a single obligation or liability);
(iv) permit, allow or suffer any of its Assets (tangible or
intangible), having a value in excess of Two Million Dollars ($2,000,000),
to be subjected to any encumbrance, other than Permitted Encumbrances;
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(v) cancel any indebtedness or waive any Third Party Claims or rights
having a value in excess of Two Million Dollars ($2,000,000);
(vi) sell, transfer or otherwise dispose of any of its Assets
(tangible or intangible) having a value in excess of Two Million Dollars
($2,000,000);
(vii) enter into, terminate or amend any Contract in excess of Two
Million Dollars ($2,000,000) for the purchase or sale of Hydrocarbons which
is not cancelable on notice of not longer than ninety (90) days without
liability, penalty or premium;
(viii) except as disclosed on Part II of Exhibit M, enter into,
terminate or amend any material Contract with Affiliates or any other
material Contract with non-Affiliates, other than, in the case of Contracts
with non-Affiliates, in the ordinary course of business and consistent with
past practices;
(ix) enter into, amend or terminate any collective bargaining or labor
agreement;
(x) make any single capital expenditure or commitment in excess of Two
Million Dollars ($2,000,000) for additions to property, plant, equipment or
intangible capital assets or for any other purpose, or make aggregate
capital expenditures or commitments in excess of Ten Million Dollars
($10,000,000) for additions to property, plant, equipment or for any other
purpose;
(xi) make any material change in any method of accounting or
accounting practice or policy;
(xii) without notice to Buyer (and the Parties agree that Buyer shall
have no consent rights with respect hereto), voluntarily permit any leases
or other material rights with respect to the Properties to expire, waive or
release any material rights with respect to such Properties, or relinquish
its position as operator with respect to any Property, except in each case
in the ordinary course of business;
(xiii) without the consent of Buyer, voluntarily permit any leases or
other material rights with respect to the Properties to expire or waive or
release any material rights with respect to such Properties or relinquish
its position as operator with respect to any Property, in each case outside
the ordinary course of business;
(xiv) commence any drilling, reworking or completing or similar
operations on the Properties (except emergency operations and operations
required under presently existing contractual obligations);
(xv) pay or provide for any loan (other than through the LP's current
Revolving Credit and Cash Management Agreements), repayment of loan or
other extraordinary payment or advance of any nature whatsoever to any
Seller or any Affiliate of any Seller; or
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(xvi) agree, whether in writing or otherwise, to do any of the
foregoing.
10.6 No-Shop. From and after the date hereof and prior to the earlier of
Closing or termination of this Agreement as permitted under Article 15, Sellers
shall not, and shall cause their Affiliates, the LP and the LLC not to, conduct
any discussions with any Third Party with respect to any proposal for a merger,
consolidation, sale of a substantial portion of assets, securities or other
interest, tender offer or any similar transaction or business combination
involving the LP, the LLC or the Properties or any other transaction which would
conflict with the intent of this Agreement (collectively, an "Acquisition
Transaction"). In addition, Sellers shall not, and shall cause their Affiliates,
the LP and the LLC not to, nor will any of them authorize or permit any of their
respective officers, directors or employees or any attorneys, accountants,
investment bankers or other representatives retained by any of them to, directly
or indirectly, solicit or encourage (including by way of furnishing information)
any inquiries or the making of any proposal which it is reasonably expected may
lead to any Acquisition Transaction.
10.7 Financial Reporting Requirements. Each Seller shall, and shall cause
its Affiliates to, take reasonable measures to provide information pertaining to
the LP or the Assets and cooperate and assist Buyer (upon request by Buyer and
at Buyer's expense) in the preparation of financial information pertaining to
the LP or the Assets required by Buyer or its Affiliates in connection with
reports, registration statements and other filings to be made by any of them
related to the LP, the LLC, or these transactions with the U.S. Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, including obtaining
customary consents and comfort letters from the LP's statutory auditors and
customary legal opinions.
10.8 Certain Tax Refunds. Promptly following receipt of each refund listed
below (provided that such refund is final and nonappealable by or on behalf of
the State of Texas), Buyer will pay to Sellers an amount equal to any net refund
from the State of Texas for overpayment of severance Taxes and interest, if any
as filed by the LP as follows (but only with respect to overpayment for periods
prior to the Settlement Date):
Date Properties
12/3/98 Ector, N. Cowden, Foster, GS
12/4/98 Headlee Devonian
2/22/99 Crossett, Tippett
10/20/99 Wasson ODC, Levelland, Slaughter, Anton Irish,
Mallett and Glasscock
10.9 Further Assurances. From time to time after Closing, upon reasonable
request by Buyer, Sellers shall cause to be executed corrective conveyances of
real property without warranty and corrective assignments and bills of sale of
tangible personal property without warranty necessary to give full effect to the
transfer to the LP of the interests of Sellers Group (other than Excluded
Assets) in the Assets as of the Formation Date as contemplated by the
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instruments entitled "General Conveyance, Assignment and Bill of Sale" and
"Conveyance, Assignment and Bill of Sale" executed by or on behalf of one or
more members of Sellers Group and effective on or about the Formation Date.
10.10 Non-Solicitation of Employees. For a period of twenty-four (24)
months after Closing, no member of Seller Group shall offer employment to any
employee of the LP except for (i) any employee who has been discharged by the
LP; (ii) any employee who has terminated his employment with the LP (other than
through inducement by any member of Sellers Group); or (iii) any employee who
seeks employment with any member of Sellers Group (other than through inducement
by any member of Sellers Group). For a period of one (1) year following the
Closing Date, should any Personnel who are then in the employment of Buyer or
its Affiliates apply for employment with one of Sellers and should such Seller
make an offer of employment to such Personnel, such Seller shall notify Buyer
that it has made such an offer of employment and such offer shall not be
effective for thirty (30) Days following the date that such Seller so notified
Buyer. Notwithstanding anything herein to the contrary and except as otherwise
set forth in the Letter of Agreement concerning Reemployment of Certain
Employees by Parent Company dated February 28, 1997, by and between SWEPI and
the LP, Shell Oil Company for itself and its Affiliates, shall have the right,
but not the obligation, to accept applications of employment submitted by any
Personnel who are named in the above-identified letter, and to extend offers of
employment to such Personnel: (x) at any time, if they are then no longer
employed by Buyer or its Affiliates, or (y) if they are then employed by Buyer
or its Affiliates, at any time after the end of the sixty (60) Day period
following the execution of this Agreement.
10.11 Actions at Closing Date. On the Closing Date:
(a) Buyer will (i) cause Buyer LP to execute and deliver the Restated LP
Agreement, (ii) cause Buyer Member to execute and deliver the Restated LLC
Agreement, (iii) cause the LP to (A) enter into the Debt Financing Agreements,
(B) make the Special Distribution as described in Section 3.2 of the Restated LP
Agreement in a Dollar amount equal to the aggregate Amoco Outside Basis and
Shell Outside Basis, (C) deliver the Dollar amount equal to the face amount of
the Amoco Affiliate Note to the Amoco Borrower concurrently with receipt of the
Amoco Affiliate Note, and (D) deliver the Dollar amount equal to the face amount
of the Shell Affiliate Note to the Shell Borrower concurrently with receipt of
the Shell Affiliate Note, (iv) cause the LLC to execute and deliver the Restated
LP Agreement, and (v) execute and deliver the Occidental Agreement.
(b) Amoco DT will execute and deliver the Restated LLC Agreement.
(c) The Amoco LP Sellers will execute and deliver the Restated LP Agreement
and the Occidental Agreement.
(d) The Shell LP Sellers will execute and deliver the Restated LP Agreement
and the Occidental Agreement.
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(e) Amoco Sellers will cause (i) the Amoco Borrower to execute and deliver
the Amoco Affiliate Loan and the Amoco Affiliate Note and (ii) the Amoco
Guarantor to execute and deliver the Amoco Guarantee.
(f) Shell Sellers will cause (i) the Shell Borrower to execute and deliver
the Shell Affiliate Loan and the Shell Affiliate Note and (ii) the Shell
Guarantor to execute and deliver the Shell Guarantee.
10.12 Certain Pre-Closing Procedures. From and after the date of this
Agreement and until Closing or termination of this Agreement, Buyer and Sellers
agree that the following procedures will be followed:
(a) If any member of Buyer's Negotiating Team has or obtains actual
knowledge of any event(s), fact(s), condition(s) and/or circumstance(s) that
lead or reasonably should lead any such member to believe that there is a
reasonable probability that any of the Buyer's conditions precedent to Closing
(Articles 13.2 and 13.3) will not be satisfied (a "Possible Condition Precedent
Failure"), then Buyer will promptly notify Sellers of the event(s), fact(s),
condition(s) and/or circumstance(s) underlying such Possible Condition Precedent
Failure in order that Sellers will have the opportunity to cure or correct such
underlying event(s), fact(s), condition(s) or circumstance(s). As used above,
Buyer's Negotiating Team consists of the Persons named on Part I of Exhibit P.
(b) If any member of Sellers' respective Negotiating Teams has or obtains
actual knowledge of any event(s), fact(s), condition(s) and/or circumstance(s)
that lead or reasonably should lead any such member to believe that a Possible
Condition Precedent Failure will occur with respect to any of Sellers'
conditions precedent to Closing (Articles 13.1 and 13.3), then Sellers will
promptly notify Buyer of the event(s), fact(s), condition(s) and/or
circumstance(s) underlying such Possible Condition Precedent Failure in order
that Buyer will have the opportunity to cure or correct such underlying
event(s), fact(s), condition(s) and/or circumstance(s). As used above, Sellers'
respective Negotiating Teams consist of the Persons named on Part II of Exhibit
P.
(c) If any member of Buyer's Negotiating Team, on the one hand, or if any
member of either of Sellers' respective Negotiating Teams, on the other hand (in
any case, a "First Party") has or obtains actual knowledge of fact(s), event(s),
condition(s) and/or circumstance(s) that lead or reasonably should lead any such
member to believe that there may be a Possible Condition Precedent Failure of
the other Party, then the First Party will promptly notify the other Party(ies).
(d) Notice given under any of subparagraphs (a), (b) or (c) above (i) will
not operate to modify the rights and obligations of the Parties with respect to
Closing, (ii) will not operate as a notice of Closing, and (iii) will not modify
the provisions of Article 15.1. The giving or failing to give any such notice
will not affect the Parties' other rights and obligations under this Agreement,
including, without limitation, the Parties' rights with respect to
indemnification or breach of representation or warranty.
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10.13 Additional Software Rights. If Closing occurs, upon request from the
LP within sixty (60) Days after Closing, Sellers will procure within sixty (60)
Days on behalf of the LP and at no cost to the LP, licenses enabling the LP to
use the following software in the same manner and to the same extent as the LP
has been using the software during the period ending six (6) months prior to
Closing:
<TABLE>
<CAPTION>
VENDOR SOFTWARE DESCRIPTION
------ -------- -----------
<S> <C> <C>
Landmark Graphics Corp. Petroworks Petro Physical Analysis/99 version or later
Landmark Graphics Corp. Open Vision Visualization of ZMAP Data/99 version or later
Landmark Graphics Corp. SEIS 2D Seismic 2D Processing/99 version or later
Landmark Graphics Corp. Strata Model Reservoir Analysis/99 version or later
Schlumberger/Geoquest OFM Oil Field Manager/99 version or later
</TABLE>
ARTICLE 11. HSR ACT
11.1 HSR Filings. If compliance with the HSR Act is required in connection
with the transactions contemplated under this Agreement, as promptly as
practicable and in any event not more than fifteen (15) Business Days following
the date on which the Parties have executed this Agreement, Amoco Sellers will
cause their ultimate parent to, and Buyer will, file with the Federal Trade
Commission and the Department of Justice, as applicable, the required
notification and report forms and will as promptly as practicable furnish any
supplemental information which may be requested in connection therewith. Amoco
Sellers will cause their ultimate parent to, and Buyer will, request expedited
treatment (i.e., early termination) of such filing. Buyer and Amoco Sellers
shall use commercially reasonable efforts to make or modify all other filings
and submissions on a prompt and timely basis in connection with the filings
required by this Article 11.1.
ARTICLE 12. PERSONNEL
12.1 Employee List. Promptly after execution of this Agreement, Sellers
will make available to Buyer (a) a list of all employees of the LP ("Personnel")
(such list shall be updated as of the Closing Date), and (b) a copy of all
benefit and pay plans, policies, programs, practices, and Sellers shall, and
shall cause the LP to, and the LP will use reasonable efforts to obtain other
related written employee benefit communications applicable to Personnel
(attached as Exhibit K-1). Upon Buyer's request, Sellers will make available to
Buyer records or such other materials or information as Buyer shall reasonably
need prior to the Closing Date to effectuate the terms of this Agreement;
provided, however, that in no event shall Sellers or the LP be required to
provide to Buyer prior to the Closing Date, with respect to any Personnel, any
individual medical or medical benefits claim information or any individual
Personnel files. Buyer shall be granted access to individual benefit and pay
plan data for the purpose of verifying benefit plan enrollment, participation
and benefit levels, subject to the execution of an agreed confidentiality
agreement that will limit access to designated employees and agents of Buyer. In
addition, Seller shall cause the LP to provide reasonable access to Personnel in
a manner mutually agreed to by Buyer and Sellers. Buyer agrees to comply, and to
cause its Affiliates to comply, with the terms and conditions set forth in this
Article 12. Beginning on the Closing Date, subject to the other
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provisions of this Article 12, Buyer shall employ or cause its Affiliates to
employ all Personnel included on the list identified in this Article 12.1.
12.2 Employee Benefits. (a) Effective as of the Closing Date, Buyer will
assume sole responsibility for the administration, funding, sponsorship and
maintenance or termination of all of the benefit plans, policies, programs and
practices of the LP identified on Exhibit K-1. Thereafter, except as set forth
in Exhibit K-2, in Buyer's sole and absolute discretion, Buyer may (i) offer or
cause its Affiliates to offer Personnel enrollment in some or all of Buyer's
employee benefit programs, including Buyer's retirement plans and health and
welfare programs, that are offered to similarly situated employees of Buyer,
(ii) continue or cause its Affiliates to continue some or all of the benefits
listed on Exhibit K-1, or (iii) implement or cause its Affiliates to implement a
combination of (i) and (ii). Buyer may terminate or continue or cause its
Affiliates to terminate or continue any LP benefit program or plan for any
length of time and any costs associated with the continuation or termination of
these programs and plans will be solely at the LP's expense. Notwithstanding
anything herein to the contrary, Buyer shall provide or cause its Affiliates to
provide a package of employee benefit plans, programs, policies, and practices
that is the same as that provided to similarly situated employees of Buyer,
subject to necessary differences based on geography, availability or other
circumstances which may require specially designed incentive programs.
(b) At Buyer's request, Sellers shall cause the Managers Committee of the
LLC to approve an appropriate resolution by which the Altura Savings Plan,
established pursuant to Section 401(k) of the Code (the "Altura Savings Plan"),
shall be terminated immediately prior to the Closing Date. Sellers' obligations
shall not extend beyond causing the Managers Committee of the LLC to approve the
resolution necessary to terminate the Altura Savings Plan. Thereafter, Buyer
shall be solely and completely responsible for taking all steps necessary to
effectuate the termination of the Altura Savings Plan, and BUYER SHALL CAUSE THE
LP TO DEFEND, INDEMNIFY AND HOLD HARMLESS SELLERS FROM ANY AND ALL LIABILITY
ASSOCIATED WITH SUCH ACTION. In the event that Buyer does not request Sellers to
take the action described in this Article 12.2(b), Buyer shall be responsible
for the Altura Savings Plan as set forth in Article 12.2(a) above.
(c) No physical examination or other proof of insurability will be required
for initial enrollment by Personnel in any benefit program or plan of Buyer
except physical examinations normally required by a Third Party as a condition
to additional levels of life insurance coverage above four times base salary (in
total). Buyer shall waive or cause its Affiliates to waive all coverage
exclusions and limitations relating to waiting periods or pre-existing condition
exclusions to coverage or evidence of insurability with respect to such
enrollment by Personnel or their dependents, except as noted above.
(d) With respect to Buyer benefit plans, policies, programs or practices
(the "Buyer Benefit Plans") in which Personnel participate, Buyer shall grant or
cause its Affiliates to grant to all Personnel, from and after the Closing Date,
credit for all service credited by Sellers or the LP under the ERISA Plans or
the Non-ERISA Plans prior to the Closing Date for seniority, eligibility to
participate, eligibility for benefits, for the forms and levels of benefits, for
benefit accrual and for vesting purposes. To the extent Buyer Benefit Plans
provide medical or dental welfare benefits, such plans shall waive any
preexisting conditions and actively at work
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exclusions with respect to Personnel (but only to the extent such Personnel were
provided coverage under the ERISA Plans or the Non-ERISA Plans) and shall
provide that any expenses incurred on or before the Closing Date by or on behalf
of any Personnel shall be taken into account under the Buyer Benefit Plans for
purposes of satisfying applicable deductible, coinsurance and maximum
out-of-pocket provisions.
(e) Buyer will be responsible for providing either on its own or through
the LP the group health plan continuation coverage pursuant to Section 4980B of
the Code, and Sections 601 through 609 of ERISA for all Personnel and retirees
of the LP and their eligible dependents and will cover such Personnel and
retirees under either its own or the LP's group health plan to accommodate this
requirement. BUYER RELEASES SELLERS FROM AND SHALL FULLY PROTECT, DEFEND,
INDEMNIFY AND HOLD SELLERS HARMLESS FROM AND AGAINST ANY AND ALL THIRD PARTY
CLAIMS TO THE EXTENT RELATING TO EVENTS THAT OCCURRED WHILE PERSONNEL AND
RETIREES ARE EMPLOYED BY THE LP UNDER THE PROVISIONS OF SECTION 4980B OF THE
CODE OR SECTIONS 601 THROUGH 609 OF ERISA WITH RESPECT TO ANY PERSONNEL,
RETIREES OF THE LP OR DEPENDENT OR SPOUSE OF SUCH PERSONNEL OR RETIREE, WHO HAD
OR HAS A "QUALIFYING EVENT" (WITHIN THE MEANING OF SECTION 4980B(F)(3) OF THE
CODE) DURING EMPLOYMENT WITH THE LP.
(f) Sellers and Buyer agree to cooperate with each other in all reasonable
respects and, as and when requested by the other Party, agree to execute and
deliver, or cause to be executed and delivered, all such documents and
instruments as such Party shall reasonably deem necessary or desirable to
consummate any of the employee benefit obligations contemplated under this
Agreement. After execution of this Agreement, Sellers and the LP shall confer
with Buyer before making any oral or written communication to employees relating
to employment or benefit matters that concern Buyer's potential activities from
and after the Closing Date. Buyer shall be provided the opportunity to review
and revise any written communications to Personnel that relate to such matters.
(g) Sellers have disclosed that the LP has proposed to (i) amend the
qualified Altura Savings Plans and the qualified Altura Defined Benefit Plan to
provide for immediate vesting of certain participants and (ii) approve the
design and financial obligations under the special divestment incentive program.
It is understood that the foregoing amendments shall not be subject to the
limitations in Article 10.5 of this Agreement. Buyer acknowledges that the LP is
an on-going business entity that may need to modify and administer and maintain
various policies, procedures, or programs at times in the ordinary course of
business. Nothing in Article 10.5 of this Agreement is intended to prohibit the
LP from taking such action in the ordinary course of business. Sellers agree
that Buyer will be notified and consulted prior to any change contemplated by
this subsection.
(h) Buyer and Sellers agree that certain additional Personnel benefit
matters are set forth in Exhibit K-2.
12.3 Post-Employment Medical. (a) The LP has maintained a Post-Employment
Medical Plan for its employees and, at the time of Closing, there are certain
former employees of the LP who are no longer employed by the LP but are eligible
for the LP's Post-Employment
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Medical Plan. Buyer will continue the LP's Post-Employment Medical Plan or
alternatively will extend or will cause its Affiliates to extend the coverage of
its Medical Care Plan applicable to its retirees to the LP's former employees
covered under the LP's Post-Employment Medical Plan, and will waive any
preexisting conditions provisions, proof of good health, evidence of
insurability, minimum age and service requirements for this benefit, and will
also allow persons who are former employees of the LP as of the Closing Date to
obtain coverage under the Buyer Medical Care Plan on the same terms and
conditions as are available to Buyer's retirees except that no coverage shall be
provided to such former employees from and after their attainment of age 65.
(b) Buyer shall not assume any obligation to provide post-employment
retiree medical coverage to Personnel who were eligible to retire from one of
Sellers or an Affiliate of one of Sellers at the time such Personnel terminated
employment with Sellers or one of their Affiliates.
(c) In addition to Buyer's normal eligibility requirements for retiree
medical coverage, eligibility of Personnel for such coverage from and after age
65 shall require at least five years of actual service with Buyer from and after
the Closing Date.
(d) Buyer shall modify its retiree medical plan to provide eligibility for
coverage for Personnel who are credited with at least fifteen (15) years of
vesting service under the Altura Savings Plan and have attained at least fifty
(50) but not more than fifty-four (54) years of age, determined as of the
Closing Date; provided that such coverage shall otherwise be subject to all of
the terms and conditions of Buyer's retiree medical plan. Should such Personnel
retire prior to attaining five (5) years of actual service with Buyer from and
after the Closing Date, their eligibility for post retirement medical coverage
would be limited to coverage through age 64.
12.4 WARN Act. Buyer represents and warrants that there will be no major
employment losses of Personnel as a consequence of the transactions contemplated
by the Agreement that might trigger obligations under the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. Section 2101 et seq. (the "WARN Act"), or
under any similar provision of any federal, state, regional, foreign, or local
Law (referred to collectively as "WARN Obligations") during the first sixty (60)
Days from and after the Closing Date.
12.5 Liabilities and Indemnifications. (a) TO THE MAXIMUM EXTENT PERMITTED
BY APPLICABLE LAW, IF CLOSING SHALL OCCUR, FROM AND AFTER THE CLOSING DATE,
EXCEPT AS OTHERWISE PROVIDED IN ARTICLES 6.2, 6.3, OR 6.4, BUYER SHALL CAUSE THE
LP TO DEFEND, INDEMNIFY, AND HOLD HARMLESS SELLERS, THEIR OFFICERS, DIRECTORS
AND EMPLOYEES AND AFFILIATES, FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES,
CLAIMS, SUITS, LIABILITIES, JUDGMENTS AND EXPENSES (INCLUDING, BUT NOT LIMITED
TO, REASONABLE ATTORNEYS' FEES AND OTHER COSTS OF LITIGATION), AND ANY FINES,
PENALTIES AND ASSESSMENTS, ARISING OUT OF CLAIMS BY PERSONNEL THAT ARISE PRIOR
TO, ON, OR AFTER THE CLOSING DATE, BUT ONLY TO THE EXTENT THAT SUCH CLAIMS
RELATE TO THEIR PERIOD OF EMPLOYMENT WITH, OR THE TERMINATION OF THEIR
EMPLOYMENT FROM THE LP; PROVIDED, HOWEVER,
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THAT THIS ARTICLE 12.5 SHALL NOT LIMIT SELLERS' OBLIGATIONS UNDER ARTICLE 10.5
OR BUYER'S RIGHTS WITH RESPECT TO ARTICLE 8.2.
(b) IF CLOSING SHALL OCCUR, FROM AND AFTER THE CLOSING DATE, EXCEPT AS
OTHERWISE PROVIDED IN ARTICLES 5.3, 6.2, 6.3, OR 6.4, WITH RESPECT TO ALL
WORKERS' COMPENSATION (HEREINAFTER "COMPENSATION CLAIMS") FILED WITH AN
APPROPRIATE AGENCY BY ANY LP EMPLOYEE PRIOR TO, ON, OR AFTER THE CLOSING DATE
(SUCH EMPLOYEES ARE, FOR PURPOSES OF THIS PARAGRAPH, HEREINAFTER COLLECTIVELY
REFERRED TO AS "CLAIMING EMPLOYEE"), OR BY THE SPOUSE, DEPENDENT(S) OR PERSONAL
REPRESENTATIVE OF SUCH CLAIMING EMPLOYEE WHICH IS FILED PRIOR TO, ON, OR AFTER
THE CLOSING DATE, BUYER SHALL CAUSE THE LP TO PROCESS, DEFEND AND BE RESPONSIBLE
FOR, AND SHALL INDEMNIFY SELLERS AGAINST ANY SUCH COMPENSATION CLAIM WHETHER THE
INCIDENT OR ALLEGED INCIDENT GIVING RISE TO THE COMPENSATION CLAIM OCCURRED
PRIOR TO, ON, OR AFTER THE CLOSING DATE, BUT ONLY TO THE EXTENT SUCH
COMPENSATION CLAIM RELATES TO THE CLAIMING EMPLOYEE'S PERIOD OF EMPLOYMENT WITH
THE LP; PROVIDED, HOWEVER, THAT THIS ARTICLE 12.5 SHALL NOT LIMIT SELLERS'
OBLIGATIONS UNDER ARTICLE 10.5 OR BUYER'S RIGHTS WITH RESPECT TO ARTICLE 8.2.
(c) FROM AND AFTER THE CLOSING DATE, SELLERS SHALL DEFEND, INDEMNIFY, AND
HOLD HARMLESS BUYER GROUP (INCLUDING THE LLC AND THE LP) FROM AND AGAINST THE
CLAIMS OF PERSONNEL OR THEIR SPOUSES, DEPENDENTS OR PERSONAL REPRESENTATIVES
DESCRIBED IN PARAGRAPHS (a) AND (b) ABOVE, BUT ONLY TO THE EXTENT SUCH CLAIMS
RELATE TO PERIODS PRIOR TO PERSONNEL'S PERIOD OF EMPLOYMENT WITH THE LP OR ANY
SUBSEQUENT PERIOD OF EMPLOYMENT WITH SELLERS OR THEIR AFFILIATES.
(d) Any liability or obligation under any plan, program, policy or practice
of the LP as identified in Exhibit K-1, to pay benefits or claims - including,
without limitation, claims for pension benefits, health, dental, life,
accidental death, disability, and related benefits - for services rendered to
the LP prior to, on, or after the Closing Date with respect to anyone employed
by the LP at any time, or his or her spouse, or his or her dependents or
beneficiaries, shall remain the responsibility of the LP and Buyer.
12.6 Conflicts. In the event of any conflict between this Article 12 and
the other provisions of this Agreement or any ancillary agreements insofar as
they relate to employment with the LP and the LP's employee benefits matters,
the terms and conditions of this Article 12 shall govern.
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ARTICLE 13. CONDITIONS PRECEDENT TO CLOSING
13.1 Conditions Precedent to Sellers' Obligation to Close. Sellers will
consummate the sale of the Interests as contemplated by this Agreement on the
Closing Date, provided the following conditions precedent and those in Article
13.3 have been satisfied or have been waived by Sellers:
(a) the representations and warranties of Buyer contained in this Agreement
are true and correct in all material respects at and as of Closing as though
such representations and warranties were made at such time; and
(b) that Buyer has complied in all material respects with all covenants and
obligations contained in this Agreement to be performed or complied with by
Buyer prior to Closing.
13.2 Conditions Precedent to Buyer's Obligation to Close. Buyer will
consummate the purchase of the Interests as contemplated by this Agreement on
the Closing Date, provided the following conditions precedent and those in
Article 13.3 have been satisfied or have been waived by Buyer:
(a) The Specified Representations and Warranties are true and correct in
all material respects at and as of Closing as though such Specified
Representations and Warranties were made at such time. The representations and
warranties (other than the Specified Representations and Warranties) of Sellers
contained in this Agreement are true and correct at and as of Closing as though
such representations and warranties were made at such time, except for breaches
of such representations and warranties (other than the Specified Representations
and Warranties) that, individually or in aggregate, would not have a material
adverse effect on the business, operation, financial condition or results of
operations of the LP, taken as a whole, or on the transactions contemplated
hereunder; provided that for purposes of this Article 13.2(a), the Dollar
amounts and other materiality qualifiers in such representations and warranties
shall be disregarded; and provided further that this Article 13.2(a) shall not
modify any post-Closing remedies for the representations and warranties in this
Agreement or the remedies set forth in Article 15.2; and
(b) that Sellers have complied in all material respects with all
obligations and conditions contained in this Agreement to be performed or
complied with by Sellers prior to Closing.
13.3 Conditions Precedent to Obligation of Each Party to Close. The Parties
will consummate the sale and purchase of the Interests as contemplated in this
Agreement on the Closing Date, provided the following conditions precedent have
been satisfied or have been waived by the applicable Party:
(a) if applicable, consummation of the transactions contemplated under the
terms of this Agreement is not prevented from occurring by (and the required
waiting period, if any, has expired under) the HSR Act and the rules and
regulations of the Federal Trade Commission and the Department of Justice;
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(b) receipt from any Governmental Authority having appropriate jurisdiction
consenting to and approving the consummation of, and providing any authorization
required in connection with, the transactions contemplated under the terms of
this Agreement (except for those governmental consents and approvals customarily
obtained subsequent to the consummation of transactions of this type);
(c) there shall be no legal action or proceeding instituted by a
Governmental Authority having appropriate jurisdiction seeking to restrain,
enjoin or otherwise prohibit the consummation of the transaction contemplated
under the terms of this Agreement; and
(d) there shall be no order (including temporary restraining order),
non-appealable final order, decree or judgment of any Governmental Authority
having appropriate jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated herein.
ARTICLE 14. THE CLOSING
14.1 Closing. Closing shall take place at 10:00 a.m., Houston time, at the
Houston office of Baker Botts L.L.P., 910 Louisiana, Houston, Texas, 77002, on
the Closing Date. Sellers shall notify Buyer of the Closing Date at least three
(3) Business Days prior thereto. Sellers will jointly provide Buyer with wiring
instructions designating the account or accounts to which the Closing Amount is
to be delivered, specifying how the Adjusted Purchase Price, as estimated
pursuant to Article 4.3, is to be allocated among Sellers.
14.2 Obligations of Sellers at Closing. At Closing, Sellers will deliver or
cause to be delivered to Buyer, unless waived by Buyer, the following:
(a) a document executed by an authorized officer or an Attorney-in-Fact of
each LLC Seller assigning its LLC Interest in substantially the form of the
Assignment of Limited Liability Company Interest. This document will be executed
and acknowledged in five (5) multiple originals or such greater number as agreed
between the Parties;
(b) a document executed by an authorized officer or an Attorney-in-Fact of
each LP Seller assigning its LP Interest in substantially the form of the
Assignment of Partnership Interest. This document will be executed and
acknowledged in ten (10) multiple originals or such greater number as agreed
between the Parties;
(c) eleven (11) originals of the Certificate executed by an authorized
officer or an Attorney-in-Fact of each Seller;
(d) eleven (11) originals of the Non-Foreign Affidavit executed by an
authorized officer or an Attorney-in-Fact of each Seller;
(e) any necessary consents from the partners of the LP and the members of
the LLC required for the transfer of the Interests;
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(f) copies of the documents executed in accordance with Part II of Exhibit
M, in a mutually agreeable form (except with respect to documents that do not
bind or have any effect on the LP, the LLC, or Buyer), which (1) caused the
termination of certain LP formation documents and certain other contracts,
and/or (2) caused the amendment or modification of certain provisions of certain
LP formation documents and certain other contracts, and/or (3) release members
of the LLC management committee from certain liabilities to the LP;
(g) eleven (11) originals of an opinion of counsel executed by an
authorized attorney for each of Sellers and resolutions of each Seller's Board
of Directors authorizing the transactions contemplated by this Agreement
(including designation of the persons authorized to execute this Agreement on
behalf of Sellers), both in a mutually agreeable form;
(h) eleven (11) originals of the Operative Documents, other than the Amoco
Affiliate Note and the Shell Affiliate Note, to which any member of Seller Group
is a party; and
(i) one (1) original of the Amoco Affiliate Note and one (1) original of
the Shell Affiliate Note.
14.3 Obligations of Buyer at Closing. At Closing, Buyer will deliver or
cause to be delivered to Sellers, unless waived by Sellers, the following:
(a) the Closing Amount by wire transfer;
(b) the Assignment of Limited Liability Company Interest executed by an
authorized officer or an Attorney-in-Fact of Buyer Member referred to in Article
14.2(a);
(c) the Assignment of Partnership Interest executed by an authorized
officer or an Attorney-in-Fact of Buyer LP referred to in Article 14.2(b);
(d) eleven (11) originals of the Certificate executed by an authorized
officer or an Attorney-in-Fact of Buyer;
(e) eleven (11) originals of an opinion of counsel executed by an
authorized attorney for Buyer and resolution of Buyer's Board of Directors
authorizing the transaction contemplated by this Agreement (including
designation of the persons authorized to execute this Agreement on behalf of
Buyer), both in mutually agreeable forms; and
(f) eleven (11) originals of the Operative Documents to which any member of
Buyer Group is a party.
ARTICLE 15. TERMINATION
15.1 Grounds for Termination. Subject to Article 15.2, this Agreement may
be terminated (except for the provisions referenced in Article 15.2 below) at
any time prior to Closing upon the occurrence of any one or more of the
following:
(a) by the mutual written agreement of the Parties;
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(b) by any Party if the consummation of the transactions contemplated
herein would violate any non-appealable final order, decree or judgment of any
Governmental Authority having appropriate jurisdiction enjoining the
consummation of the transactions contemplated herein;
(c) by any Party if, under the HSR Act or otherwise, the Federal Trade
Commission or the Department of Justice shall have commenced or threatened to
commence any proceeding to delay or enjoin or seek substantial damages in
respect of the transactions evidenced by this Agreement ("threatened," for
purposes of this Article 15.1(c), means an actual vote of the Commissioners of
the FTC to commence such a proceeding);
(d) by any Party if consent to and approval of the consummation of, and
providing any authorization required in connection with, the transactions
contemplated under the terms of this Agreement (except for those governmental
consents and approvals customarily obtained subsequent to transactions of this
type) are required and not obtained from any Governmental Authority having
appropriate jurisdiction; or
(e) by any Party, if Closing has not occurred by the 120th Day following
the date of this Agreement, through no breach of this Agreement by the
terminating Party or its Affiliates.
15.2 Effect of Termination. A Party shall not have the right to terminate
this Agreement under Article 15.1 if it is then in breach of this Agreement. If
this Agreement is terminated in accordance with Article 15.1, such termination
will be without liability to any Party, except performance of the obligations
contained in Articles 6.11, 15.3, 16.1, 17.1, 17.2, 17.3, 17.9, 17.10, 17.11,
17.12, 17.13, 17.14, 17.15, 17.16 and 17.18 (which provisions will survive
termination of this Agreement) and except as expressly provided in this Article
15.2. If any Party terminates this Agreement pursuant to its rights under
Article 15.1, except as provided below in this Article 15.2, the Earnest Money,
together with the net interest earned thereon, shall be returned to Buyer, and
no Party shall have any liability to any other Party for such termination. If,
prior to the 120th Day following the date of this Agreement, all of Buyer's
conditions to Closing in Articles 13.2 and 13.3 have been satisfied and Sellers
are ready, willing and able to Close the transactions contemplated hereby, and
Buyer fails to Close such transactions on the Closing Date as set forth in
Sellers' notice under Article 14.1, and Sellers terminate this Agreement, then
Sellers shall be entitled to receive the Earnest Money, together with the net
interest earned thereon, as liquidated damages for Buyer's breach and not as a
penalty. If, prior to the 120th Day following the date of this Agreement, all of
Sellers' conditions to Closing in Articles 13.1 and 13.3 have been satisfied,
and Buyer is ready, willing and able to Close the transactions contemplated
hereby, and Sellers fail to Close such transactions on or before the date that
is three (3) Business Days after the satisfaction of all such conditions, and
Buyer terminates this Agreement, Buyer shall be entitled to the return of the
Earnest Money, together with the net interest earned thereon, and its actual
damages arising out of Sellers' failure, subject to Article 6.8. If the Earnest
Money is returned or delivered as provided above, then the remedies under this
Article 15.2 shall be the terminating Party's or Parties' exclusive remedy in
respect of the non-terminating Party's or Parties' breach of this Agreement, and
each Party hereby waives and releases any and other remedies it may have at law
or in equity against the other Parties hereto.
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15.3 Dispute over Right to Terminate. If there is a dispute between the
Parties over termination of this Agreement, Closing will not occur as scheduled.
The Party who disputes the termination of the Agreement (or the right of a Party
to terminate the Agreement) (the "Disputing Party") may, within thirty (30) Days
of the date on which Closing was scheduled to occur, initiate binding
arbitration in accordance with Article 16.1 to resolve the dispute. If the
Disputing Party fails (for any reason) to initiate binding arbitration to
resolve the dispute within such thirty (30) Day period, this Agreement will be
deemed terminated at the expiration of such thirty (30) Day period (and the
Parties, on behalf of themselves, their officers, directors, agents, employees,
successors and assigns, irrevocably waive any and all Claims they may have
against each other associated with the termination of this Agreement).
ARTICLE 16. ARBITRATION
16.1 Arbitration. Unless expressly provided otherwise in this Agreement,
any and all Arbitrable Disputes must be resolved through the use of binding
arbitration using three (3) arbitrators, in accordance with the Commercial
Arbitration Rules of the AAA, as supplemented to the extent necessary to
determine any procedural appeal questions by the Federal Arbitration Act (Title
9 of the United States Code). If there is any inconsistency between this Article
and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms
of this Article will control the rights and obligations of the Parties. If there
is another Arbitrable Dispute among the Parties pursuant to any agreement
entered into at Closing that involves the same facts and parties as the facts
and parties with respect to which an arbitration has been initiated pursuant to
this Agreement, such dispute and any arbitration initiated in connection
therewith shall be consolidated with the arbitration initiated pursuant to this
Agreement. No other arbitration shall be consolidated with any arbitration
initiated pursuant to this Agreement without the agreement of the Parties or
parties thereto. Arbitration must be initiated within the applicable time limits
set forth in this Agreement and not thereafter or if no time limit is given,
within the time period allowed by the applicable statute of limitations.
Arbitration may be initiated by either Sellers, acting collectively, or Buyer
("Claimant") serving written notice on Buyer or Sellers, respectively
("Respondent") that Claimant elects to refer the Arbitrable Dispute to binding
arbitration. Sellers must act collectively as a group for all purposes under
this Article 16.1. Claimant's notice initiating binding arbitration must
identify the arbitrator Claimant has appointed. Respondent shall respond to
Claimant within sixty (60) Days after receipt of Claimant's notice, identifying
the arbitrator Respondent has appointed. If Respondent fails for any reason to
name an arbitrator within the sixty (60) Day period, Claimant will name the
arbitrator for Respondent's account. The two (2) arbitrators so chosen shall
select a third arbitrator (who must have not less than seven (7) years
experience as an oil and gas lawyer) within thirty (30) Days after the second
arbitrator has been appointed. If the two arbitrators are unable to agree on a
third arbitrator within sixty (60) Days from initiation of arbitration, then a
third arbitrator shall be selected by the AAA office in Houston, Texas, with due
regard given to the selection criteria above and input from the Parties and
other arbitrators. The AAA shall select the third arbitrator not later than
ninety (90) Days from initiation of arbitration. In the event AAA should fail to
select the third arbitrator within ninety (90) Days from initiation of
arbitration, then either Party may petition the Chief United States District
Judge for the Southern District of Texas to select the third arbitrator. Due
regard shall be given to the selection criteria above and input from the Parties
and other arbitrators. Sellers will pay the compensation and expenses of the
arbitrator named by or for them, and Buyer will pay the compensation and
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expenses of the arbitrator named by or for it. Sellers and Buyer will each pay
one-half of the compensation and expenses of the third arbitrator. All
arbitrators must be neutral parties who have never been officers, directors or
employees of the Parties or any of their Affiliates. Unless expressly provided
otherwise in this Agreement, the two (2) arbitrators named by the Parties must
have not less than seven (7) years experience in the oil and gas industry, and
must have a formal education or training in the area of dispute (e.g.,
accounting for an accounting dispute, etc.). The hearing will be conducted in
Houston, Texas and commence within thirty (30) Days after the selection of the
third arbitrator. The Parties and the arbitrators should proceed diligently and
in good faith in order that the award may be made as promptly as possible. The
arbitrators shall determine the Arbitrable Disputes of the Parties and render a
final award in accordance with the substantive Law of the State of Texas,
excluding the conflicts provisions of such Law. The arbitrators shall set forth
the reasons for the award in writing. All statutes of limitations and defenses
based upon passage of time applicable to any Arbitrable Dispute (including any
counterclaim or setoff) shall be interrupted by the filing of the arbitration
and suspended while the arbitration is pending. The terms hereof shall not limit
any obligations of a Party to defend, indemnify, or hold harmless another Party
against court proceedings or other Claims, losses, damages or expenses. In order
to prevent irreparable harm, the arbitrators shall have the power to grant
temporary or permanent injunctive or other equitable relief. A Party may,
notwithstanding any other provision of this Agreement, seek temporary injunctive
relief from any court of competent jurisdiction; provided that the Party seeking
such relief shall (if arbitration has not already been commenced) simultaneously
commence arbitration. Such court-ordered relief shall not continue more than ten
(10) Days after the appointment of the arbitrators and in no event for longer
than sixty (60) Days. Except as provided in the Federal Arbitration Act, the
decision of the arbitrators will be binding on and non-appealable by the
Parties. The arbitrators may not grant or award indirect, consequential,
punitive or exemplary damages or damages for lost profits.
ARTICLE 17. MISCELLANEOUS
17.1 Notices. All notices and other communications required or desired to
be given hereunder must be in writing and sent (properly addressed as set forth
below) by: (a) U.S. mail with all postage and other charges fully prepaid, (b)
hand delivery or (c) facsimile transmission. A notice will be deemed effective
on the date on which such notice is received by the addressee, if by mail or
hand delivery, or on the date sent, if by facsimile (as evidenced by fax machine
confirmation of receipt); provided, however, if such date is not a Business Day,
then date of receipt will be on the next date which is a Business Day. No
notice, waiver or consent of Sellers hereunder shall be effective unless
executed by an authorized agent or officer of each Seller, whether by singular
instrument or counterpart. Each Party may change its address by notifying the
other Party in writing of such address change.
If to any one or more Amoco Sellers:
c/o Amoco D.T. Company
501 Westlake Park Boulevard
Houston, Texas 77079
Attn: Gary Paulson
Facsimile: 281-560-8850
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With a copy to: c/o Amoco X.T. Company
200 East Randolph Drive
Chicago, Illinois 60601
Attn: D. B. Pinkert
Facsimile: 312-856-4091
If to any one or more Shell Sellers:
c/o SWEPI LP
P.O. Box 576
Houston, Texas 77001-0576
Attn: W. van de Vijver
Facsimile: 713-241-7066
With a copy to: c/o Shell Exploration & Production Company
910 Louisiana Street
Houston, Texas 77002
Attn: R. G. Ford
Facsimile: 713-241-7066
If to Buyer: Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
Attn: Donald P. de Brier, Executive Vice
President and General Counsel
Telephone: 310-443-6176
Facsimile: 310-443-6195
17.2 Brokers, Agents and Finders. Sellers and Buyer have each retained
separate financial advisors and service providers ("Advisors") in connection
with the transactions contemplated by this Agreement. All fees and charges by
the Advisors to Sellers shall be the responsibility of Sellers, and all fees and
charges by the Advisors to Buyer shall be the responsibility of Buyer. The
respective Advisors are not authorized to act on behalf of Sellers or Buyer,
respectively, in the transactions contemplated by this Agreement. SELLERS
RELEASE AND SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD BUYER GROUP, THE LP AND
THE LLC HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS WITH RESPECT TO ANY
COMMISSIONS, FINDERS' FEES OR OTHER REMUNERATION DUE TO ANY BROKER, AGENT,
FINDER OR ADVISOR CLAIMING BY, THROUGH OR UNDER SELLERS. BUYER RELEASES AND
SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD SELLERS GROUP HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS WITH RESPECT TO ANY COMMISSIONS, FINDERS' FEES OR
OTHER REMUNERATION DUE TO ANY BROKER, AGENT OR FINDER CLAIMING BY, THROUGH OR
UNDER BUYER. Each Party shall be responsible for and shall bear the expenses
incurred by it in connection with negotiating and consummating the transactions
contemplated by this Agreement.
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17.3 Access. (a) Records. The Records are Assets of the LLC and the LP;
provided, however, Sellers may retain copies of any or all Records including
originals of any income Tax Returns, reports or forms, and Buyer shall be
provided with copies of such Tax Returns, reports or forms, only to the extent
they relate to the LP's or the LLC's separate returns or separate Tax liability.
Buyer will maintain and/or cause the LP and the LLC to maintain the Records for
a period of ten (10) years after Closing and will afford Sellers full access to
the Records as reasonably requested by any Seller. If Buyer, the LP or the LLC
desires to destroy any Records within such ten (10) year period, such party
shall notify Sellers in writing prior to such destruction and provide Sellers
the opportunity to take possession of the same at Sellers' sole cost.
(b) Access. (i) Subject to Article 17.3(c) and applicable operator or other
Third Party approvals, which approval Sellers shall use reasonable efforts to
secure, Sellers shall, and shall cause each other member of Sellers Group
(including the LP and the LLC), to permit Buyer, at Buyer's risk and expense, to
conduct inspections of the Properties at any reasonable times prior to Closing;
provided, however, that unless Sellers give their prior written consent (which
shall not be unreasonably withheld or delayed), Buyer may not conduct testing or
sampling on the Properties. Sellers shall, and shall cause each other member of
Sellers Group to, make available, at reasonable times and upon reasonable
notice, to Buyer and its representatives (including, without limitation,
attorneys, accountants, engineers, consultants and other agents of Buyer) for
examination and copying such accounting, Tax, financial, technical, geological,
geophysical, engineering, environmental, safety, legal, land, title and other
information relating to the Properties insofar as same are in possession of the
LLC, the LP or any member of Sellers Group and, subject to the consent and
cooperation of applicable operators and other Third Parties, shall use
reasonable efforts to obtain, at Buyer's expense, such additional information
relating to the Properties as Buyer reasonably may request, to the extent in
each case that members of Sellers Group may do so without violating any Law or
any obligation of confidence or other contractual commitments to a Third Party
(and provided Sellers use reasonable efforts to obtain waivers of any such
obligations and contractual commitments). Prior to Closing, information that is
produced or accessed by Buyer under this Article 17.3 is subject to the
confidentiality obligation under Article 17.3(c). Further, at reasonable times
and upon reasonable notice, Sellers shall, and shall cause each other member of
Sellers Group, to afford Buyer and its representatives reasonable access from
the date hereof until Closing to selected employees and officers of the LP that
have been involved with the operation, maintenance or development of the
Properties and accounting or supervision thereof. Notwithstanding the foregoing,
Sellers shall have no obligations prior to Closing to make available documents
for which they or the LP is validly claiming an attorney-client privilege or
privilege as attorney work product.
(ii) Buyer, to the fullest extent permitted by Law, shall indemnify,
defend and hold harmless Sellers Group, the LP Group, the LLC Group, the
other owners of interests in the Properties and their respective officers,
directors, employees, agents and representatives (collectively "Indemnified
Persons"), from any and all Claims, including, without limitation, Claims
for (A) any injury to or death of any persons (including, without
limitation, officers, directors, employees, agents, consultants, legal and
financial advisors and other representatives of Buyer (collectively
"Buyer's Representatives")); (B) damage to property (including, without
limitation, damage to the property of Third
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Parties and the property of Buyer and Buyer's Representatives); or (C)
damage to natural resources or environmental damages to, or associated
with, such Properties to the extent caused by, arising out of, or resulting
from the activities of Buyer and Buyer's Representatives in connection with
said site visit and physical investigation of the Properties, even if such
indemnified event is caused by, arises out of or results from the
negligence of the Indemnified Persons, but not to the extent that any such
indemnified event or occurrence is caused by or the result of the gross
negligence or willful misconduct of the Indemnified Persons. Each of the
Indemnified Persons, as applicable, shall have the right at all times to
participate in the preparation for and conducting of any hearing or trial
related to this indemnification provision, as well as the right to appear
on its own behalf or to retain separate counsel to represent itself at any
such hearing or trial; provided, however, that Buyer shall not be required
to indemnify, defend or hold harmless Sellers Group or any Indemnified
Person with respect to any non-compliance with Laws or any physical
conditions or adverse conditions, including, without limitation, any waste
or hazardous materials discovered by Buyer or Buyer's Representatives in
connection with such site visit and physical inspection.
(iii) In addition to the foregoing indemnification obligations, Buyer
assumes full responsibility for all damage to the Properties and/or to
operations conducted by the Indemnified Persons, their respective
Affiliates, or other operators associated with the Properties to the extent
arising out of or resulting from activities of Buyer or Buyer's
Representatives in connection with any site visit and physical
investigation of any Properties (including, without limitation,
environmental remediation and response costs and damages to natural
resources located on, in, under or above any real property which is part of
or associated with the Properties) even if such damage is caused by, arises
out of or result from the negligence of the Indemnified Persons, but not to
the extent such damage is caused by, results from, or arises out of the
gross negligence or willful misconduct of the Indemnified Persons;
provided, however, that Buyer shall have no responsibility with respect to
any non-compliance with Laws or any physical condition or adverse
condition, including, without limitation, any waste or hazardous materials,
discovered by Buyer or Buyer's representatives in connection with such site
visit and physical inspection.
(c) Confidentiality. (i) With respect to Properties Information, if Closing
occurs, Sellers shall, and shall cause their Affiliates and the directors,
officers, employees, representatives, agents and advisors of Sellers and their
Affiliates to, maintain in confidence and not disclose Properties Information or
use Properties Information in the Greater Permian Area (except as needed
specifically for matters involving Sellers' or their Affiliates' litigation,
remediation, government reports required by Laws, indemnification obligations or
to comply with contracts) from the date of Closing until the fifth anniversary
thereof; provided, however, that in no case shall such Properties Information be
used or disclosed for sale, license or other commercial purposes for oil and gas
exploration and production activities, and provided further that Sellers and
their Affiliates agree to maintain the confidentiality thereof, and shall
require any Third Party receiving such Properties Information, other than the
LP, to agree to maintain the confidentiality thereof. From and after the fifth
anniversary of Closing, Sellers and their
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Affiliates will have the right to use but not sell or license such Properties
Information to Third Parties.
(ii) With respect to Records that are not Properties Information, if
Closing occurs, Sellers shall, and shall cause their Affiliates and the
directors, officers, employees, representatives, agents and advisors of
Sellers and their Affiliates to, maintain in confidence and not use or
disclose Records that are not Properties Information (except as needed
specifically for matters involving Sellers' or their Affiliates' Tax,
accounting, litigation, remediation, government reports required by Laws,
indemnification obligations or to comply with contracts) from the date of
Closing until the fifth anniversary thereof; provided, however, that in no
case shall such Records be used or disclosed for sale, license or other
commercial purposes for oil and gas exploration and production activities,
and provided further that Sellers and their Affiliates agree to maintain
the confidentiality thereof, and shall require any Third Party receiving
such Records, other than the LP, to agree to maintain the confidentiality
thereof. From and after the fifth anniversary of Closing, Sellers and their
Affiliates will have the right to use but not sell or license such Records
to Third Parties.
(iii) With respect to Licensed Technology, if Closing occurs, Buyer
shall, and shall cause its directors, officers, employees, representatives,
agents and advisors to return to the LP all Licensed Technology that has or
has been provided by Sellers or their Affiliates, the LP or the LLC or
accessed under Article 17.3(b) and to maintain in confidence and to use or
disclose Licensed Technology only as allowed under the Amended and Restated
Amoco License Agreement and the Amended and Restated Shell License
Agreement from Closing until the tenth anniversary thereof.
(iv) If Closing occurs, Sellers have used or shall use reasonable
efforts to cause Third Parties involved in the bidding process, with
respect to the sale of the Interests promptly to return or destroy all
copies of and excerpts containing information relating to the Interests.
(v) With respect to Licensed Technology and information relating to
the Properties, if Closing does not occur, Buyer shall, and shall cause its
directors, officers, employees, representatives, agents and advisors to,
return to Sellers all Licensed Technology, if any, and all copies of and
excerpts containing information relating to the Properties, that it has or
has been provided by Sellers, the LP or the LLC or accessed under Article
17.3 (b) after the date of this Agreement and to maintain in confidence and
not use or disclose (A) Licensed Technology from the date of this Agreement
until the tenth anniversary thereof and (B) such information relating to
the Properties from the date of this Agreement until the fifth anniversary
thereof. For the purposes of this Section 17.3(c)(v) only, the term
Licensed Technology, shall be construed as if Closing had occurred.
(vi) This Article 17.3 supersedes the Confidentiality Agreement which
is hereby terminated and of no further force and effect. If Closing does
not occur, Buyer shall, and shall cause its directors, officers, employees
representatives, agents and
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advisors to, return to Sellers all copies of and excerpts containing
information relating to the Properties, that it has or has been provided by
or accessed from Sellers, the LP or the LLC prior to the date of this
Agreement during the bidding process with respect to the sale of the
Interests, and to maintain in confidence and not use or disclose such
information from the date of this Agreement until the third anniversary
thereof.
(vii) The restrictions imposed by this Article 17.3 shall not apply to
any information:
(1) which the restricted Party can show was in the public
knowledge or literature or was publicly available as of the date of
this Agreement;
(2) which, with respect to information first provided by Sellers,
the LP or the LLC or accessed under Article 17.3(b), Buyer can show
was in its possession or in the possession of any of its Affiliates
prior to the date of this Agreement; or
(3) which, with respect to information that has been provided by
or accessed from Sellers, the LP or the LLC prior to the date of this
Agreement, Buyer can show was in its possession or in the possession
of any of its Affiliates prior to the date of the Confidentiality
Agreement,
and shall cease to apply to any information which, subsequent to the date of
this Agreement:
(1) the restricted Party can show has become part of the public
knowledge or literature or becomes publicly available other than
through or as a result of any act or omission in violation of this
Agreement;
(2) the restricted Party can show has been disclosed to the
restricted Party or any of its Affiliates by a Third Party having a
legal right to do so;
(3) which Buyer can show has been independently developed by
employees, officers or agents of Buyer or any of its Affiliates
without access to or reliance on such information; or
(4) which Sellers can show has been independently developed by
employees, officers or agents of Sellers or any of their Affiliates
(other than the LP or the LLC) without access to or reliance on such
information.
(viii) Notwithstanding the restrictions imposed by this Article 17.3,
any Party or Affiliate of a Party may disclose information pursuant to a
request by a Governmental Authority entitled by Law to require the same or
information the disclosure of which is required under applicable securities
Laws or stock exchange regulations; provided, however, that prior to such
disclosure, if practicable, the disclosing Party shall notify in writing
the Party or the Affiliate of a Party which is the source of such
information (where the identity of such Party or Affiliate can be
determined) that such request has
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been made and provided that the disclosing Party makes reasonable efforts
to secure a protective order or take advantage of other available processes
to restrict further disclosures by the recipient(s).
17.4 Generally Accepted Accounting Principles. Except as otherwise
expressly provided in this Agreement, all accounting matters under this
Agreement shall be determined in accordance with United States generally
accepted accounting principles, consistently applied ("GAAP").
17.5 Further Assurances. (a) Sellers hereby agree in good faith to provide
information to the Lender as reasonably requested by the Lender. If Buyer
informs Sellers that it is unable to complete arrangements with the Lender and
requests modification of the terms provided in the forms of the Amoco Affiliate
Loan Agreement, Amoco Affiliate Note, Amoco Guaranty, Shell Affiliate Loan
Agreement, Shell Affiliate Note or Shell Guaranty agreed to by Buyer and Sellers
and attached as Exhibits hereto and referenced in the term sheet of the Lender
dated March 7, 2000, Sellers will in good faith but without further
consideration allow modifications prior to Closing to the forms of the Amoco
Affiliate Loan Agreement, Amoco Affiliate Note, Amoco Guaranty, Shell Affiliate
Loan Agreement, Shell Affiliate Note or Shell Guaranty, as the case may be, so
long as such modifications would not materially adversely affect the legal
effect or economic consequences to Sellers and their Affiliates of the
transactions contemplated herein or therein or the financial reporting by
Sellers and their Affiliates of the transactions contemplated herein or therein.
(b) Sellers and Buyer agree to negotiate in good faith prior to Closing the
documents referred to in Article 14.2(f) that terminate, amend or modify the
agreements listed in Part II of Exhibit M consistent with the terms of such Part
II of such Exhibit.
(c) From and after Closing, at the request of any Party but without further
consideration, the Parties will execute and deliver or use reasonable efforts to
cause to be executed and delivered such other instruments of conveyance and take
such other actions as any Party reasonably may request to give effect to the
transactions contemplated by this Agreement.
17.6 Amendments and Severability. No amendments or other modifications to
this Agreement will be effective or binding on either of the Parties unless the
same are in writing, designated as an amendment or modification, and signed by
Sellers and Buyer. The invalidity of any one or more provisions of this
Agreement will not affect the validity of this Agreement as a whole, and in case
of any such invalidity, this Agreement will be construed as if the invalid
provision had not been included herein.
17.7 Successors and Assigns. This Agreement may not be assigned, either in
whole or in part, without the express written consent of the non-assigning
Parties, provided that Buyer shall have the right, without the consent of any
other Party, to assign this Agreement to one or more wholly-owned Affiliates but
no such assignment shall relieve Buyer of any of its liabilities or obligations
under this Agreement. The terms, covenants and conditions contained in this
Agreement are binding upon and inure to the benefit of Sellers and Buyer and
their respective successors and assigns.
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17.8 Headings. The titles and headings set forth in this Agreement have
been included solely for ease of reference and may not be considered in the
interpretation or construction of this Agreement.
17.9 Governing Law. THIS AGREEMENT (INCLUDING ADMINISTRATION OF THE BINDING
ARBITRATION PROVISION SET FORTH IN ARTICLE 16.1) IS GOVERNED BY THE LAWS OF THE
STATE OF TEXAS, EXCLUDING ANY CHOICE OF LAW RULES THAT MAY DIRECT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
17.10 No Partnership Created. Except as contemplated in the Operative
Documents, it is not the purpose or intention of this Agreement to create (and
it should not be construed as creating) a joint venture, partnership or any type
of association, and the Parties are not authorized to act as an agent or
principal for each other with respect to any matter related hereto.
17.11 Public Announcements. Neither Sellers nor Buyer (including any of
their agents, employees or Affiliates in either case) may issue a public
statement or press release with respect to the transactions contemplated by this
Agreement (including the price and other terms) without the prior written
consent of the other Parties (which consent may not be unreasonably withheld),
except as required by Law or listing agreement with a national security exchange
and then only after prior consultation with the other Parties.
17.12 No Third Party Beneficiaries. Except as otherwise provided in Article
10.10 with respect to Shell Oil Company, nothing contained in this Agreement
will entitle anyone other than Sellers or Buyer or their authorized successors
and assigns or the express beneficiaries of indemnity provisions to any Claim,
cause of action, remedy or right of any kind whatsoever.
17.13 Waiver of Consumer Rights. (a) BUYER REPRESENTS TO SELLERS THAT IT
(i) IS IN THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR
SERVICES FOR COMMERCIAL OR BUSINESS USE, (ii) HAS (OR IT IS OWNED OR CONTROLLED
BY A CORPORATION OR ENTITY WITH) ASSETS OF $25 MILLION OR MORE ACCORDING TO ITS
MOST RECENT FINANCIAL STATEMENT PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, AND (iii) THEREFORE, IS A "BUSINESS CONSUMER" AND NOT A
"CONSUMER" AS THOSE TERMS ARE DEFINED AND USED IN THE DECEPTIVE TRADE PRACTICES
- - CONSUMER PROTECTION ACT, SECTION 17.41, ET SEQ., OF THE BUSINESS AND COMMERCE
CODE OF THE STATE OF TEXAS (the "DTPA"). (b) WITHOUT IMPAIRING ITS
REPRESENTATIONS IN (a) ABOVE, IF BUYER HAS RIGHTS UNDER THE DTPA, BUYER HEREBY
WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT,
SECTION 17.41, ET SEQ., OF THE BUSINESS AND COMMERCE CODE OF THE STATE OF TEXAS.
TO EVIDENCE ITS ABILITY TO GRANT SUCH A WAIVER, BUYER REPRESENTS TO SELLERS THAT
IT (i) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT
ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED
HEREBY, (ii) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION, AND (iii)
IS REPRESENTED BY LEGAL
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COUNSEL. AFTER CONSULTATION WITH ITS ATTORNEY OF ITS OWN SELECTION, IT
VOLUNTARILY CONSENTS TO THIS WAIVER.
17.14 Not to be Construed Against Drafter. THE PARTIES ACKNOWLEDGE THAT
THEY HAVE HAD AN ADEQUATE OPPORTUNITY TO REVIEW EACH AND EVERY PROVISION
CONTAINED IN THIS AGREEMENT AND TO SUBMIT THE SAME TO LEGAL COUNSEL FOR REVIEW
AND COMMENT. BASED ON THE FOREGOING, THE PARTIES AGREE THAT THE RULE OF
CONSTRUCTION THAT A CONTRACT BE CONSTRUED AGAINST THE DRAFTER, IF ANY, NOT BE
APPLIED IN THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT.
17.15 Exhibits. The inclusion of any matter upon any Exhibit attached
hereto does not constitute an admission or agreement that such matter is
material with respect to the representations and warranties contained herein.
17.16 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, all
which when taken together shall constitute one and the same agreement.
17.17 Entire Agreement. This Agreement and the Exhibits attached hereto
which are incorporated herein by reference supersede all prior and
contemporaneous negotiations, understandings, letters of intent and agreements
(whether oral or written) between the Parties with respect to the subject matter
hereof and constitute the entire understanding and agreement between the Parties
with respect thereto.
ARTICLE 18. SECOND CLOSING
18.1 Sale and Purchase. On the Second Closing Date, Amoco LLC Seller agrees
to sell and assign the Amoco Second Sold LLC Interest to Buyer, and Buyer agrees
to buy and accept the Amoco Second Sold LLC Interest from Amoco LLC Seller.
18.2 Purchase Price. The Second Closing Amount is payable in full at the
Second Closing in immediately available funds.
18.3 Conditions Precedent to Buyer's Obligation to Close. Buyer will
consummate the purchase of the Amoco Second Sold LLC Interest as contemplated by
this Agreement on the Second Closing Date, provided the following representation
is true and the conditions precedent in Article 18.4 have been satisfied or have
been waived by Buyer:
(a) Amoco LLC Seller owns of record and beneficially the Amoco Second Sold
LLC Interest, free and clear of any Taxes, security interests, equities, Third
Party Claims, and demands and any restrictions on transfer, options, warrants,
purchase rights, conversion rights, exchange rights, or other contracts or
commitments that could require Amoco LLC Seller to sell, transfer, or otherwise
dispose of its LLC Interest, other than this Agreement, the LLC Agreement, the
other Operative Documents and federal or state securities Laws. There are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the LLC Interests, other than the LLC Agreement.
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18.4 Conditions Precedent to Obligation of Each Party to Close. The Parties
will consummate the sale and purchase of the Amoco Second Sold LLC Interest as
contemplated in this Agreement on the Second Closing Date, provided the
following conditions precedent have been satisfied or have been waived by the
applicable Party:
(a) Closing shall have occurred;
(b) if applicable, consummation of the transactions contemplated under the
terms of this Agreement to occur at the Second Closing is not prevented from
occurring by (and the required waiting period, if any, has expired under) the
HSR Act and the rules and regulations of the Federal Trade Commission and the
Department of Justice;
(c) receipt from any state and federal Governmental Authority having
appropriate jurisdiction consenting to and approving the consummation of, and
providing any authorization required in connection with, the transaction
contemplated under the terms of this Agreement to occur at the Second Closing
(except for those governmental consents and approvals customarily obtained
subsequent to the consummation of transactions of this type);
(d) there shall be no legal action or proceeding instituted by a
Governmental Authority having appropriate jurisdiction seeking to restrain,
enjoin or otherwise prohibit the consummation of the transactions contemplated
under the terms of this Agreement to occur at the Second Closing;
(e) there shall be no order (including temporary restraining order) of any
Governmental Authority restraining, enjoining or otherwise prohibiting the
consummation of the transaction contemplated under the terms of this Agreement
to occur at the Second Closing; and
(f) there shall not have occurred a Redemption or a Liquidation (as defined
in the Restated LLC Agreement).
18.5 Closing. The Second Closing shall take place at 10:00 a.m., Houston
time, at the Houston office of Baker Botts L.L.P., 910 Louisiana, Houston,
Texas, 77002, on the Second Closing Date. Amoco LLC Seller will provide Buyer
with wiring instructions designating the account or accounts to which the Second
Closing Amount is to be delivered.
18.6 Obligations of Sellers at Closing. At the Second Closing, Amoco LLC
Seller will deliver to Buyer, unless waived by Buyer, the following:
(a) a document executed by an authorized officer or an Attorney-in-Fact of
Amoco LLC Seller assigning the Amoco Second Sold LLC Interest in substantially
the form of the Assignment of Limited Liability Company Interest. This document
will be executed and acknowledged in five (5) multiple originals or such greater
number as agreed between Buyer and Amoco LLC Seller.
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18.7 Obligations of Buyer at Closing. At the Second Closing, Buyer will
deliver to Amoco LLC Seller, unless waived by Sellers, the following:
(a) the Second Closing Amount by wire transfer; and
(b) the Assignment of Limited Liability Company Interest executed by an
authorized officer or an Attorney-in-Fact of Buyer referred to in Article
18.6(a).
18.8 Remedies. Each of Amoco LLC Seller and Buyer acknowledges and agrees
that it would be irreparably damaged in the event that any of the provisions of
this Article 18 are not performed by the other Party hereto in accordance with
its specific terms or are otherwise breached, and that money damages alone would
not be easily calculable and would not be a sufficient remedy for any breach of
this Article 18. Accordingly, each of Amoco LLC Seller and Buyer shall be
entitled, without the requirement of posting a bond or other security, to
equitable relief, including, without limitation, injunctive relief and specific
performance, in the event of any breach of the provisions of this Article 18 by
the other Party hereto, in addition to all other remedies available at law or in
equity.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and
year first set forth above.
SELLERS:
AMOCO D.T. COMPANY
ATTEST:
By: /s/ I.C. CONN
/s/ M. S. HASKINS ---------------------------------
- ---------------------- Name: I. C. Conn
M. S. Haskins Title: President
Assistant Secretary
AMOCO X.T. COMPANY
ATTEST:
By: /s/ D. B. PINKERT
/s/ D. A. PLUMB ---------------------------------
- ---------------------- Name: D. B. Pinkert
D. A. Plumb Title: President
Secretary
AMOCO Y.T. COMPANY
ATTEST:
By: /s/ D. B. PINKERT
/s/ D. A. PLUMB ---------------------------------
- ---------------------- Name: D. B. Pinkert
D. A. Plumb Title: President
Secretary
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SWEPI LP (formerly known as Shell
Western E&P, Inc.)
By: Shell Energy Holding GP LLC,
its General Partner
By: /s/ DOUGLAS W. STREBEL
---------------------------
Name: Douglas W. Strebel
Title: Attorney-in-Fact
SHELL LAND & ENERGY COMPANY
By: /s/ DOUGLAS W. STREBEL
---------------------------------
Name: Douglas W. Strebel
Title: Attorney-in-Fact
SHELL ONSHORE VENTURES, INC.
By: /s/ DOUGLAS W. STREBEL
---------------------------------
Name: Douglas W. Strebel
Title: Attorney-in-Fact
SHELL K2, INC.
By: /s/ DOUGLAS W. STREBEL
---------------------------------
Name: Douglas W. Strebel
Title: Attorney-in-Fact
SHELL EVEREST, INC.
By: /s/ DOUGLAS W. STREBEL
---------------------------------
Name: Douglas W. Strebel
Title: Attorney-in-Fact
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<PAGE>
BUYER: OCCIDENTAL PETROLEUM CORPORATION
By: /s/ STEPHEN CHAZEN
---------------------------------
Name: Stephen Chazen
Title: Executive Vice President and
Chief Financial Officer
