EX-10.7 6 d328862dex107.htm EX-10.7 TRANSITION SERVICES AND SEPARATION AGREEMENT
Exhibit 10.7
TRANSITION SERVICES AND SEPARATION AGREEMENT
THIS TRANSITION SERVICES AND SEPARATION AGREEMENT (this βAgreementβ), dated February 28, 2017, is made by and between Linn Operating, Inc., a Delaware corporation (βLOIβ), Linn Midstream, LLC, a Delaware limited liability company (βLMβ), Linn Energy, LLC, a Delaware limited liability company (βLinn Energyβ), LinnCo, LLC, a Delaware limited liability company (βLCβ), Linn Energy Finance Corp., a Delaware corporation (βLEFβ), Linn Energy Holdings, LLC, a Delaware limited liability company (βLEHβ), Linn Exploration & Production Michigan LLC, a Delaware limited liability company (βLE&PMβ), Linn Exploration Midcontinent, LLC, a Delaware limited liability company (βLEMβ), Linn Midwest Energy LLC, a Delaware limited liability company (βLMEβ), Mid-Continent I, LLC, a Delaware limited liability company (βMC-Iβ), Mid-Continent II, LLC, a Delaware limited liability company (βMC-IIβ), Mid-Continent Holdings I, LLC, a Delaware limited liability company (βMCH-Iβ), Mid-Continent Holdings II, LLC, a Delaware limited liability company (βMCH-IIβ) (LOI, LM, Linn Energy, LC, LEF, LEH, LE&PM, LEM, LME, MC-I, MC-II, MCH-I and MCH-II are referred to in this Agreement collectively as βLINNβ; provided, however, that with respect to particular uses of the term in this Agreement, βLINNβ shall mean each, any or all of LOI, LM, Linn Energy, LC, LEF, LEH, LE&PM, LEM, LME, MC-I, MC-II, MCH-I and MCH-II as applicable to the context of such use), and Xxxxx Petroleum Company, LLC, a Delaware limited liability company (βXxxxxβ). Each of LINN and Xxxxx is referred to in this Agreement individually as a βParty,β and LINN and Xxxxx are referred to in this Agreement collectively as the βParties.β Capitalized terms used in this Agreement shall have the respective meanings set forth in Exhibit A.
WHEREAS, on May 11, 2016, Linn Energy and its subsidiaries (including Xxxxx) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas;
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relieve LINN collectively from any liability under this Agreement with respect to such portion of the Services; provided, further, that if Xxxxx does not approve a Third Partyβs provision of Services and such failure causes LINN to be unable to provide the Services on a commercially reasonable basis, LINN will be excused from performing such Services or portion thereof without penalty until an acceptable provider is approved by Xxxxx. |
1.3 |
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particular state or area on behalf of Xxxxx to allow for such a Xxxxx Permit transfer, and shall not be responsible to the extent it is not reasonably practicable to transfer or assign any Xxxxx Permit to Xxxxx at the end of the Transition Period or at all. |
1.8 |
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contained herein, LINN shall have no responsibility for any information provided by Xxxxx to XXXX that may be included in any regulatory filing or undertaking, nor shall it be responsible to the extent of any investigation, inquiry or action taken by any Governmental Authority in relation to the Services, except to the extent resulting from or related to the gross negligence or willful misconduct of LINN. |
1.12 |
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Section 1.12 of Exhibit B. For the avoidance of doubt, LINN shall not secure new facilities or negotiate new facility leases on behalf of Xxxxx without the prior written agreement of the Parties. |
1.13 | Information Technology Systems. |
(C) |
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shall provide continued use of its telephonic and networking systems, which may be modified to restrict access to LINNβs network. During the Separation Period, Xxxxx and XXXX shall cooperate to allow (i) Xxxxx to replace all network and telephonic systems related to the Xxxxx Assets and (ii) the rerouting of networks connected to LINNβs retained hardware and also connected to Transferred Hardware, in each case, at Xxxxxβx sole cost and expense in accordance with and subject to the terms and conditions of Section 5.2(A). |
1.14 | Tax. As described in Section 1.14 of Exhibit B, LINN shall assist with, and maintain proper documentation for, the collection and remittance of federal, state, and local sales, use, and ad valorem taxes to the extent related to the Xxxxx Assets during the Accounting Period, but only with respect to the Hydrocarbons produced from and activities related to the Xxxxx Properties prior to the end of the Transition Period. In addition, LINN shall prepare and distribute 1099 forms for owners for all activity for the time period LINN is responsible for the related distributions and disbursements, and Xxxxx shall be responsible for 1099 forms for owners for all activity effective with Xxxxxβx assumption of administrative responsibilities of the related distributions and disbursements. Xxxxx will prepare and file any corporate income tax filings due for Xxxxx, even if due during the Term. |
1.16 |
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operating and financial data as requested by Xxxxx. Xxxxx shall be responsible for all costs and expenses associated with such storage and retrieval (including incremental costs and expenses incurred by LINN in providing assistance in accordance with this Section 1.16) in accordance with and subject to the terms and conditions of Section 5.2(A). |
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2. | General. |
2.2 | Notice of Accidents. LINN shall promptly provide Xxxxx notice of any material accidents or emergencies that occur with respect to the Services or the Xxxxx Assets. |
2.3 | Personnel and Access. |
(A) | Personnel. LINN shall provide personnel to staff and perform the Services, which may be accomplished to the extent necessary by (i) employees of LINN or Third Party contractors (subject to paragraph (A) of Section 5.2). All personnel engaged or directed by LINN to perform LINNβs obligations under this Agreement shall be duly qualified, licensed, trained, and experienced to perform such obligations. LINN shall at all times require such personnel to comply with Applicable Law in the same manner as a reasonable and prudent operator. Notwithstanding anything to the contrary contained herein, in no event shall LINN be required to maintain the employment of, or any contractual relationship with, any particular individual or group, or to make available to Xxxxx any particular individual or any individual at any particular time. Xxxxx acknowledges the transitional nature of the Services and agrees that LINN may make changes from time-to-time in the personnel performing the Services if LINN is making similar changes in performing similar services for itself. |
(B) |
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with LINNβs Representatives who are providing the Services, and LINN shall make such Representatives reasonably available to Xxxxx for such consultations during normal business hours, either directly or through one or more designated centralized point(s) of contact, in each case subject to the applicable individualβs availability during normal business hours. In connection with Xxxxxβx access to the Operated Xxxxx Properties or to any Xxxxx Related Assets located on property owned by LINN, Berry must be accompanied by a LINN Representative at all times. Xxxxx shall indemnify, defend, and hold harmless the LINN Indemnified Parties from and against any and all liability for injury to Xxxxxβx officers, employees, invitees, and/or agents, resulting from, or relating to, the presence of any such officers, employees, invitees, and/or agents at any Operated Xxxxx Properties, any Non-Operated Xxxxx Properties with respect to which LINN coordinated access for Xxxxx, or any property owned by LINN, or from any such personβs traveling to or from such property in a vehicle owned by LINN, in each case other than any such injury and resulting liability caused by the gross negligence or willful misconduct of LINN. |
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assistance, then LINN shall be relieved of its obligation to perform such portion of the Services to the extent prevented thereby; provided, however, that LINN shall use commercially reasonable efforts to mitigate, overcome, or work around such failure or delay in order to perform such portion of the Services; provided, further, that Xxxxx will reimburse LINN for any reasonable and documented additional costs or expenses incurred by LINN that are attributable to mitigating, overcoming, or working around the effects of such failure or delay in accordance with and subject to the terms and conditions of paragraph (A) of Section 5.2. |
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written instructions, if any, provided by such chief executive officer or his designee with respect to particular aspects of the Services. Notwithstanding anything herein to the contrary, (i) in no event shall LINN be required to act in a manner inconsistent with its health, safety and environmental policies in effect as of the Execution Date and (ii) LINN may take any action it deems necessary in its reasonable belief and in good faith to prevent or avoid imminent risk to life or property. |
3. | Xxxxx Separation. |
3.1 | Assets |
(i) | the Leasehold Interests and Mineral Interests summarized on the Xxxxx Statement of Assets and Liabilities and as further described on Schedule 1, and Xxxxxβx interest in the Leases and lands included in any units with which such Leasehold Interests and Mineral Interests (or the lands covered thereby) may have been pooled, unitized, or communitized (collectively, the βXxxxx Leasehold and Mineral Interestsβ); |
(ii) | the interests in oil, gas, water, disposal, observation, or injection xxxxx located on or traversing the Xxxxx Leases and Mineral Interests, whether producing, non-producing, plugged, unplugged, shut-in, or temporarily abandoned, as described on Schedule 2 (collectively, the βXxxxx Xxxxxβ, and together with the Xxxxx Leasehold and Mineral Interests, the βXxxxx Propertiesβ); |
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(iii) | the Hydrocarbons in storage above a custody transfer point; and |
(iv) | the office leases, field offices, and storage yards described on the Xxxxx Statement of Assets and Liabilities and as further described on Schedule 3 (collectively, the βXxxxx Facilitiesβ). |
For the avoidance of doubt, the Parties acknowledge and agree that from and after the Effective Date, Xxxxx shall continue to be responsible for all Liabilities attributable to or arising from the Xxxxx Assets except as otherwise provided in this Agreement and except for any such Liabilities discharged or otherwise released pursuant to or in connection with the Xxxxx Consensual Plan or the LINN Consensual Plan.
(i) | The real property described on Schedule 4 (together with the field offices located thereon, the βHill Field Officesβ); |
(ii) | all of the equipment, machinery, fixtures and other tangible personal property and improvements located on or used or held for use in connection with the ownership or operation of the Xxxxx Properties, including tanks, boilers, plants, injection facilities, saltwater disposal facilities, compressors and other compression facilities (whether installed or not), pumping units, flow lines, pipelines, gathering systems, Hydrocarbon treating or processing systems or facilities, meters, machinery, pumps, motors, gauges, valves, power and other utility lines, roads, computer and automation equipment, SCADA and measurement technology, the Transferred Hardware, field radio telemetry and associated frequencies and licenses, pressure transmitters, central processing equipment and other appurtenances, improvements and facilities (collectively, the βXxxxx Equipmentβ); |
(iii) | all of the pipes, casing, tubing, tubulars, fittings, and other spare parts, supplies, tools, and materials located on, used, or held for use on or held as inventory in connection with the ownership or operation of the Xxxxx Properties, Xxxxx Facilities, Hill Field Offices, or Xxxxx Equipment; |
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(iv) | all of the governmental (whether federal, state, or local) permits, licenses, authorizations, franchises, grants, easements, variances, exceptions, consents, certificates, approvals, and related instruments or rights relating to the Xxxxx Properties that are not held by LOI as operator of Operated Xxxxx Properties (collectively, the βXxxxx Permitsβ); |
(v) | all of the Contracts (including sales and purchase contracts, operating agreements, exploration agreements, development agreements, balancing agreements, farmout agreements, service agreements, transportation, processing, treatment and gathering agreements, equipment leases and other contracts, agreements and instruments), including the Contracts described in Schedule 5, (collectively, the βXxxxx Contractsβ) but subject to Section 3.2 and excluding any Master Service Agreement in the name of LINN, other than those described in Part D of Schedule 5; |
(vi) | all of the proprietary rights and non-proprietary rights to all seismic, geological, geochemical, or geophysical data (including all maps, studies, Third Party studies, reservoir and production engineering studies and simulations, and all field and acquisition records) related to or obtained in connection with the Xxxxx Properties to the extent transferrable without a fee (or, in the event a transfer fee applies, to the extent Xxxxx has agreed, in writing, to pay such transfer fee) (the βXxxxx G&G Dataβ); |
(vii) | all of the Surface Rights; |
(viii) | all claims, refunds, abatements, variances, allocations, causes of action, claims for relief, choses in action, rights of recovery, rights of set-off, rights of indemnity, contribution or recoupment, counter-claims, cross-claims and defenses to the extent related to the Xxxxx Assets; |
(ix) | all of the information, books, databases, files, records and data (other than the Excluded LINN Records and Data), whether in written or electronic format, relating to Xxxxx or any of the other Xxxxx Assets (collectively, the βXxxxx Recordsβ), which Xxxxx Records shall include all minute books, stock ledgers, corporate seals, and stock certificates of Xxxxx; all reservoir, land, operation and production files and records, inclusive of lease records, well records, division order records, property ownership reports and files, contract files and records, well files, title records (including abstracts of title, title opinions and memoranda, and title curative documents), correspondence, production records, prospect files and other prospect information, supplier lists and files, customer lists and files; and all other data including proprietary and non-proprietary engineering, files and records in the actual possession or control of Xxxxx (or, if applicable, LINN to the extent |
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transferable to Xxxxx (i) without material restriction that is not overcome using commercially reasonable efforts (including a material restriction against assignment without prior consent if such consent is not obtained after commercially reasonable efforts) and (ii) without the payment of money or delivery of other consideration or unduly burdensome effect that Xxxxx does not agree in writing to pay or bear), inclusive of maps, logs, core analysis, formation tests, cost estimates, studies, plans, prognoses, surveys and reports, and including raw data and any interpretive data or information relating to the foregoing, and any other proprietary data in the actual possession or control of Xxxxx (or, if applicable, LINN to the extent transferable to Xxxxx (i) without material restriction that is not overcome using commercially reasonable efforts (including a material restriction against assignment without prior consent if such consent is not obtained after commercially reasonable efforts) and (ii) without the payment of money or delivery of other consideration or unduly burdensome effect that Xxxxx does not agree in writing to pay or bear) and relating to the ownership, operation, development, maintenance or repair of, or the production, gathering, treatment, processing, storing, sale or disposal of Hydrocarbons or produced water from, the Xxxxx Properties; |
(x) | all of the Xxxxx Receivables, cash call pre-payments and other refunds due to Xxxxx (or, if applicable, LINN) for royalty overpayments or future deductions as royalty offsets associated with any of the Xxxxx Properties; |
(xi) | all of the trade credits, accounts receivable, note receivables, take or pay amounts receivable, and other receivables attributable to the Xxxxx Assets or other Xxxxx Related Assets; |
(xii) | any software licenses and IT service agreements used solely in connection with or wholly attributable to the Xxxxx Properties, but only to the extent transferable without material restriction (the βXxxxx Softwareβ); |
(xiii) | all California greenhouse gas emissions credits and allowances and any other carbon dioxide allowances that are part of the Xxxxx Estate or scheduled on Schedule 10; and |
(xiv) | all of the vehicles used by, assigned to or otherwise associated with any Xxxxx Employee or solely with any of the other Xxxxx Operated Assets (including any such vehicle that is part of the LINN Estate) (the βVehiclesβ). |
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3.2 | Assignment of Contracts. |
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3.3 | Certain Ancillary Agreements. LINN (as applicable) and Xxxxx will execute the following agreements on the dates specified below: |
(i) | any change of operator forms required to designate Xxxxx as the operator of the Operated Xxxxx Properties (the βChange of Operator Formsβ) as soon as practical but in no event later than the final day of the Transition Period; and |
(ii) | letters in lieu of transfer or division orders directing all purchasers of production from the Xxxxx Assets to make payment of proceeds attributable to such production to Xxxxx from and after the Effective Date in a form reasonably satisfactory to both Parties (the βLetters in Lieuβ) as soon as practical but in no event later than the final day of the Transition Period. |
In connection with the ancillary agreements described above in this Section 3.3, the Parties agree that Xxxxx shall be the recognized operator of the Hill field and LINN shall be the recognized operator of the Hugoton field.
3.4 | Delivery of Documents. |
(B) | Letters in Lieu. On or before the first day of the last month of the Transition Period, LINN will submit the Letters in Lieu to the appropriate counterparties. |
(C) |
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markup) (as each such term is defined in the Joint Use Agreement); and (ii) an amended and restated Exhibit D to the Joint Use Agreement containing a detailed description of all real and personal property comprising the βGathering Facilitiesβ (as defined in the Joint Use Agreement) based on information in LINNβs files and records, including a reasonably detailed description of each right-of-way and other real property interest included therein and a reasonably detailed description, with specifications, of each segment of pipe and other component thereof. |
3.5 | Assignment of Operating Property. |
(C) |
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form substantially similar to Exhibit F. In addition, LINN will take any additional steps necessary under applicable state or local law to transfer any title held by LINN to the Xxxxx Operating Property to Xxxxx. Xxxxx will reimburse LINN for the Operating Property Amount in accordance with Section 5.4. Prior to the end of the Transition Period, LINN will convey the Hill Field Offices to Xxxxx using a Special Warranty Deed in a form substantially similar to Exhibit G. |
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4. | Employment. |
4.3 |
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associated with such termination. For each Xxxxx-XXXX Employee (x) who is not made an offer of employment that would avoid a Qualifying Termination for such employee and (y) whose employment is terminated by LINN on or prior to the end of the Term, Xxxxx will be charged 30 percent of any severance fees and obligations associated with such termination (the aggregate amount payable by Xxxxx under this Section 4.3 is referred to herein as βXxxxx Xxxxxxxxx Feesβ). LINN shall retain responsibility for (A) 70 percent of any severance fees and obligations associated with the termination on or prior to the end of the Term of any Xxxxx-XXXX Employee, and (B) 100 percent of any severance fees and obligations associated with the termination of any LINN employee who is not an Available Employee or whose employment is not terminated on or before the end of the Term (even if such employee provides Services under this Agreement). |
5. | Term and Termination; Service Fees; Monthly Settlement. |
5.1 | Term and Termination. |
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earlier termination of this Agreement, LINN shall no longer be responsible for the performance of the Services, and all rights and obligations under this Agreement shall cease except for (i) rights or obligations that are expressly stated to survive the expiration or termination of this Agreement, (ii) the provisions set forth in the last sentence of paragraph (B) of Section 2.3, in paragraph (A) of Section 3.1, in paragraph (D) of Section 3.5 in paragraph (E) of Section 3.5, in paragraph (D) of this Section 5.1, in Sections 3.7, 4.4, 5.2, 5.4 and 5.5, and in Articles 6, 8, and 9, which shall continue in accordance with their terms, and (iii) the last sentence in paragraph (E) of this Section 5.1, which will survive the expiration or termination of this Agreement indefinitely, and (iv) liabilities and obligations that have accrued prior to such expiration or termination, including the obligation to pay any amounts that have become due and payable prior to such expiration or termination. |
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(D) | Obligations of LINN upon Termination. Without limiting the second sentence of paragraph (A) of this Section 5.1, upon termination of this Agreement, LINN shall assign, transfer, and deliver to Xxxxx (or to such other Person as Xxxxx shall direct) (i) title to all Xxxxx Related Assets that are part of the LINN Estate (in accordance with the provisions of Sections 3.2, 3.5, and 3.6 and subject to Xxxxxβx requirement to reimburse LINN for the same) and (ii) possession and control of all operations hereunder and all of the Xxxxx Assets in the possession or control of LINN or any subcontractor of LINN, but only to the extent Xxxxx has complied or does comply with the conditions precedent described in Section 3.4(A). Without limiting the foregoing, upon the effective date of termination, LINN shall assign and deliver to, and relinquish custody in favor of, Xxxxx (or such other Person selected by Xxxxx) all of Xxxxxβx funds held or controlled by LINN, and all Suspense Funds, and all books, accounts, records and inventories relating to the Xxxxx Assets, facilities and/or the operations hereunder. |
5.2 | Service Fees and Employee Expenses. |
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5.3 | Cash Call. |
5.4 |
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βCurrent Month Settlementβ shall be calculated (without duplication) as follows in this Section 5.4: |
(i) | the net revenue interest share of all revenues (less severance and production taxes allocable to Xxxxx under this Agreement and paid by or on behalf of LINN) attributable to the sale of production from the Xxxxx Properties and received by LINN; |
(ii) | less the working interest share of all direct operating expenses incurred by LINN for Xxxxxβx account (exclusive of any expenses prepaid by Xxxxx) (with respect to the Non-Operated Xxxxx Properties, such direct operating expenses shall include overhead charges based on the applicable XXXXX accounting procedures); |
(iii) | plus XXXXX and administrative overhead credits received by LINN from other owners for the Operated Xxxxx Properties (excluding Xxxxx) for operations subsequent to the Effective Date; |
(iv) | less the working interest share of all capital expenditures incurred by LINN for Xxxxxβx account related to the Xxxxx Properties for operations; |
(v) | less the working interest share of all bonuses, lease rentals, shut-in payments, and other charges paid by LINN on behalf of Xxxxx; |
(vi) | less the Reimbursement Expenses as stipulated in paragraph (A) of Section 5.2; |
(vii) | less the Management Fee as stipulated in paragraph (B) of Section 5.2; |
(viii) | less any amounts due under Section 5.2 that remain unpaid; |
(ix) | less the Operating Property Amount due under Section 3.5; |
(x) | less any Xxxxx Xxxxxxxxx Fees due under Section 4.3; and |
(xi) | plus or less, as applicable, such other amounts as may be agreed to by the Parties. |
Other than the Reimbursement Expenses, Management Fee and any Xxxxx Xxxxxxxxx Fees, Xxxxx shall not be charged hereunder for any internal overhead, XXXXX, non-billable charges of LINN allocated by LINN to any of the Xxxxx Properties, or XXXXX overhead charges attributable to the Operated Xxxxx Properties.
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5.8 |
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Statement or the Independent Expert resolves the disputed matters, as applicable, (x) if the net amount of all entries in the Final Settlement Statement shows a balance owed to Xxxxx, then LINN shall pay to Xxxxx via wire transfer into a Xxxxx-owned account such net amount due and (ii) if the net amount of all entries in the Final Settlement Statement shows a balance owed to LINN, then Xxxxx shall pay to LINN via wire transfer into a LINN-owned account such net amount due. |
6. | Indemnification; Limitation and Exclusion of Damages. |
6.1 | Indemnity and Release by Xxxxx. |
(A) | Subject to Section 6.3 and Section 6.4, and the proviso to the last sentence of this Section 6.1(A), LINN shall have no liability to Xxxxx for, and Xxxxx hereby releases, and shall indemnify, defend, and hold harmless, the LINN Indemnified Parties from, each and every Claim attributable to, or arising out of, any act or omission by LINN involving or related to the Services (or Xxxxxβx use thereof), including, but not limited to, LINNβs failure to pay or to collect sums due, erroneous or improper payment, late payment, preparation of erroneous payment statement, administration of the Suspense Funds (including any escheatment obligations related thereto), or any other such cause, EVEN IF SUCH CLAIMS ARISE OUT OF THE NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF LINN OR THE LINN INDEMNIFIED PARTIES, except for any such Claim that may result from (and only to the extent it results from) LINNβs gross negligence or willful misconduct. The foregoing release and indemnity shall expressly survive any expiration or termination of this Agreement and shall apply notwithstanding anything to the contrary contained in this Agreement (including under this Article 6); provided, however, that Xxxxx shall have no indemnity or defense obligations to the LINN Indemnified Parties (and shall not be deemed to have released the LINN Indemnified Parties) with respect to any Claim for which LINN is required to indemnify or defend the Xxxxx Indemnified Parties pursuant to Section 6.2. |
(B) | XXXXX SPECIFICALLY AGREES TO FULLY DEFEND, INDEMNIFY AND HOLD HARMLESS ANY LINN INDEMNIFIED PARTY REGARDING ANY CLAIMS ARISING FROM, OR IN CONNECTION WITH, XXXXXβX OR ITS SUBCONTRACTORSβ EMPLOYEESβ ACTIVITIES ON OPERATED XXXXX PROPERTIES OR LINN-OWNED PROPERTY, INCLUDING, BUT NOT LIMITED TO, ALL CLAIMS FOR BODILY INJURY, PERSONAL INJURY, ILLNESS, OR DEATH BROUGHT BY XXXXXβX OR XXXXXβX SUBCONTRACTORβS EMPLOYEES AGAINST ANY LINN INDEMNIFIED PARTY, SOLELY TO THE EXTENT SUCH CLAIM RESULTS FROM OR IS ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF XXXXXβX OR ITS SUBCONTRACTORSβ EMPLOYEES, EXCEPT FOR ANY |
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SUCH CLAIM THAT MAY ARISE OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY LINN INDEMNIFIED PARTY. THIS PROVISION CONTROLS OVER ANY CONFLICTING PROVISION IN THIS AGREEMENT. |
6.2 | Indemnity by LINN. |
(A) | Subject to Section 6.3 and Section 6.4, LINN shall indemnify, defend, and hold harmless Xxxxx and its Affiliates, and their respective directors, officers, employees, agents, managers, shareholders and representatives (together with Xxxxx, the βXxxxx Indemnified Partiesβ) from and against any and all Claims suffered by the Xxxxx Indemnified Parties as a result of, caused by, or arising out of (i) any breach of any covenant of LINN under this Agreement, or (ii) the sole, joint or concurrent negligence, gross negligence or willful misconduct of LINN or its Affiliate in its performance or failure to perform under this Agreement; PROVIDED, HOWEVER, THAT LINN SHALL HAVE NO OBLIGATION TO INDEMNIFY THE XXXXX INDEMNIFIED PARTIES UNDER THIS SECTION 6.2(A) WITH RESPECT TO ANY CLAIM ATTRIBUTABLE TO LINNβS PERFORMANCE OF ITS OBLIGATIONS UNDER SECTION 1.1 AND SECTION 1.10 UNLESS SUCH CLAIM IS A RESULT OF, IS CAUSED BY, OR ARISES OUT OF LINNβS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. |
(B) | LINN SPECIFICALLY AGREES TO FULLY DEFEND, INDEMNIFY AND HOLD HARMLESS ANY XXXXX INDEMNIFIED PARTY REGARDING ANY CLAIMS ARISING FROM, OR IN CONNECTION WITH, LINNβS OR ITS SUBCONTRACTORβS EMPLOYEESβ ACTIVITIES RELATED TO THE XXXXX ASSETS, INCLUDING, BUT NOT LIMITED TO, ALL CLAIMS FOR BODILY INJURY, PERSONAL INJURY, ILLNESS, OR DEATH BROUGHT BY LINNβS OR ITS SUBCONTRACTORβS EMPLOYEES AGAINST ANY XXXXX INDEMNIFIED PARTY, EXCEPT FOR ANY SUCH CLAIM THAT MAY ARISE OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY XXXXX INDEMNIFIED PARTY REGARDLESS OF WHETHER SUCH INJURY OR DEATH IS OR IS ALLEGED TO BE CAUSED BY THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF SUCH XXXXX INDEMNIFIED PARTY. THIS PROVISION CONTROLS OVER ANY CONFLICTING PROVISION IN THIS AGREEMENT. |
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7. |
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purposes of Title 6, Chapter 127 of the Texas Civil Practice and Remedies Code, commonly known as the Texas Oilfield Anti-Indemnity Act, the indemnity and insurance provisions of this Agreement applicable to property damage and the indemnity and insurance provisions applicable to personal injury, bodily injury, and death shall be deemed separate for interpretation, enforcement, and other purposes. The Parties agree that in order to be in compliance with the Texas Oilfield Anti-Indemnity Act regarding mutually assumed indemnification for the other Partyβs sole or concurrent negligence, each Party shall carry supporting insurance in equal amounts of the types and in the minimum amounts as specified in the insurance requirements hereunder. All indemnities in this Agreement shall only be effective to the maximum extent permitted by Applicable Law. The Parties hereby incorporate Title 6, Chapter 127 of the Texas Civil Practice and Remedies Code as part of this Agreement and agree to the limits of that statute. If LINN does not carry insurance in the minimum amounts as specified in the insurance requirements in regard to mutual indemnity obligations, then it is agreed that LINN has approved self-insurance as stated in the Texas Oilfield Anti-Indemnity Act and the mutual indemnification amount shall be the maximum amount carried by LINN. |
8. | Arbitration. |
8.3 | Dispute Resolution by Independent Expert. |
(A) | Each Party shall have the right to submit each Dispute to an independent expert appointed in accordance with this Section 8.3 (each, an βIndependent Expertβ), who shall serve as sole arbitrator. The Independent Expert shall be appointed by mutual agreement of the Parties from among candidates with experience and expertise in the area that is |
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the subject of such Dispute, and failing such agreement, such Independent Expert for such Dispute shall be selected in accordance with the rules of the Commercial Arbitration Rules and Mediation Procedures (the βRulesβ) of the AAA. |
(B) | Each Dispute to be resolved by an Independent Expert shall be resolved in accordance with mutually agreed procedures and rules, including with regard to written discovery, depositions, summary judgment motions, prehearing procedures, and date, time, location and length of the hearing, and failing such agreement, in accordance with the Rules to the extent such Rules do not conflict with the provisions of this Agreement. The Independent Expert shall be instructed by the Parties to resolve such Dispute as soon as reasonably practicable in light of the circumstances, but in no case later than 30 days after conclusion of the arbitration hearing. The Independent Expert shall support the decision and award with a reasoned, written opinion. The decision and award of the Independent Expert shall be binding upon the Parties as an award under the Federal Arbitration Act and final and non-appealable to the maximum extent permitted by Applicable Law, and judgment thereon may be entered in a court of competent jurisdiction and enforced by any Party as a final judgment of such court. |
(C) | The charges and expenses of the arbitrator shall be shared one-half by Xxxxx and one-half by LINN. |
8.4 | Limitation on Arbitration. ALL OTHER DISAGREEMENTS, DIFFERENCES, OR DISPUTES ARISING BETWEEN THE PARTIES UNDER THE TERMS OF THIS AGREEMENT (AND NOT COVERED BY THE DEFINITION OF βDISPUTESβ SET FORTH IN SECTION 8.1) SHALL NOT BE SUBJECT TO ARBITRATION AND SHALL BE DETERMINED BY THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS UNLESS THE PARTIES OTHERWISE MUTUALLY AGREE. |
9. | Miscellaneous. |
9.2 |
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Plan, the terms of the Xxxxx Consensual Plan shall prevail. For the avoidance of doubt, the Agency Agreement and Power of Attorney dated March 5, 2014, executed by Xxxxx and LOI has been terminated and is of no further force or effect. |
9.3 | Amendment. This Agreement may be amended or modified only by written instrument executed by the authorized representatives of LINN and Xxxxx, respectively. |
9.4 | Choice of Law. The provisions of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to the conflicts of laws principles thereof. Subject to Article 8, each Party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the United States Bankruptcy Court for the Southern District of Texas over any suit, action, or proceeding arising out of or relating to this Agreement. |
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9.8 | Notices. |
(A) | All notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by email (with read receipt requested, with the receiving Party being obligated to respond affirmatively to any read receipt requests delivered by the other Party), (c) received by the addressee, if sent by a delivery service (prepaid, receipt requested) or (d) received by the addressee, if sent by registered or certified mail (postage prepaid, return receipt requested), in each case to the appropriate addresses and representatives (if applicable) set forth below, except as provided in paragraph (B) of this Section 9.8, (or to such other addresses and representatives as a Party may designate by notice to the other Party): |
(i) | If to LINN, then to: |
Linn Operating, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxx
Phone: (281)840β4000
E-mail: xxxxxxx@xxxxxxxxxx.xxx
with copies (which shall not constitute notice) to:
Linn Operating, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Phone: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxx.xxx
Xxxxxxxx & Xxxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxx, P.C.; Xxxxx X. Xxxxxx, Xx.
Phone: (000) 000-0000; (000) 000-0000
E-mail: xxxxxxx.xxxxxx@xxxxxxxx.xxx
xxxxx.xxxxxx@xxxxxxxx.xxx
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(ii) | If to Xxxxx: |
Xxxxx Petroleum Company, LLC
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Chief Executive Officer
Phone: (000) 000-0000
E-mail: xxxxxx@xxx.xxx
with a copy (which shall not constitute notice) to:
Norton Xxxx Xxxxxxxxx US LLP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxxx, Partner
Phone: (000) 000-0000
E-mail: xxxx.xxxxx@xxxxxxxxxxxxxxxxxxx.xxx
(B) | Any notice required under Article 1 shall be delivered in the manner described by paragraph (A) of this Section 9.8 when delivered to: |
(i) | If to LINN, then to: |
Linn Operating, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx XxXxxx
Phone: 000-000-0000
E-mail: 281-840-4000
with copies (which shall not constitute notice) to:
Linn Operating, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Phone: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxx.xxx
(ii) | If to Xxxxx: |
Xxxxx Petroleum Company, LLC
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Chief Executive Officer
Phone: (000) 000-0000
E-mail: xxxxxx@xxx.xxx
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with a copy (which shall not constitute notice) to:
Norton Xxxx Xxxxxxxxx US LLP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxxx, Partner
Phone: (000) 000-0000
E-mail: xxxx.xxxxx@xxxxxxxxxxxxxxxxxxx.xxx
9.13 |
35
mitigate the effect of such Force Majeure Event, (ii) give notice to Xxxxx of the occurrence of the Force Majeure Event giving rise to the suspension and of its nature and anticipated duration, and (iii) during such Force Majeure Event, shall keep Xxxxx reasonably advised of its efforts to overcome such Force Majeure Event. |
9.14 | Interpretation. Unless otherwise expressly provided in this Agreement, for purposes of this Agreement, the following rules of interpretation shall apply: |
(i) | Calculation of Time Period. When calculating the period of time before which, within which, or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded, and if the last day of such period is a day other than a Business Day, then the period in question shall end on the next succeeding Business Day; |
(ii) | Dollars. Any reference in this Agreement to $ means United States dollars; |
(iv) | Gender and Number. Any reference in this Agreement to gender includes all genders, and words imparting the singular number only include the plural and vice versa; |
(vi) | Herein. Words such as βherein,β βhereof,β and βhereunderβ refer to this Agreement as a whole and not merely to a subdivision in which such words appear, unless the context otherwise requires; |
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[Signature Page Follows]
37
Xxxxx: | ||
XXXXX PETROLEUM COMPANY, LLC | ||
By: | /s/ Xxxxxx X. Xxxxx | |
Name: | Xxxxxx X. Xxxxx | |
Title: | Chief Executive Officer | |
LINN: | ||
LINN OPERATING, INC. | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
LINN MIDSTREAM, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
LINN ENERGY, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
LINNCO, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer |
38
LINN ENERGY FINANCE CORP. | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
LINN EXPLORATION & PRODUCTION MICHIGAN LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
LINN EXPLORATION MIDCONTINENT, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
LINN MIDWEST ENERGY LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
MID-CONTINENT I, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
MID-CONTINENT II, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer |
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MID-CONTINENT HOLDINGS I, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
MID-CONTINENT HOLDINGS II, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer | |
LINN ENERGY HOLDINGS, LLC | ||
By: | /s/ Xxxxx X. Xxxxxx, Xx. | |
Name: | Xxxxx X. Xxxxxx, Xx. | |
Title: | Executive Vice President and Chief Operating Officer |
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Exhibit A
DEFINITIONS
βAAAβ means the American Arbitration Association.
βAccess Periodβ shall have the meaning ascribed to it in Section 4.1.
βAccounting Periodβ means the Transition Period (as the same may be extended pursuant to Section 2.9) through the date that is the last day of the second full calendar month thereafter.
βAFEβ shall have the meaning ascribed to it in Section 1.2.
βAffiliateβ means, with respect to any Person, any other Person that directly or indirectly (through one or more intermediaries) Controls, is Controlled by, or is under common Control with, such specified Person.
βAgreementβ shall have the meaning ascribed to it in the Preamble.
βApplicable Lawβ means any applicable principle of common law, statute, law, rule, regulation, ordinance, order, code, ruling, writ, injunction, decree or other official act of or by any Governmental Authority.
βAssigned Operating Contractβ shall have the meaning ascribed to it in paragraph (C) of Section 3.2.
βAvailable Employeeβ means any employee listed on Schedule 6.
βXxxxxβ shall have the meaning ascribed to it in the Preamble.
βXxxxx Assetsβ shall have the meaning ascribed to it in paragraph (B) of Section 3.1.
βXxxxx Consensual Planβ shall have the meaning ascribed to it in the Recitals.
βXxxxx Contractsβ shall have the meaning ascribed to it in clause (v) of paragraph (C) of Section 3.1.
βXxxxx Employeeβ means any employee designated as a βXxxxx Employeeβ on Schedule 6.
βXxxxx Equipmentβ shall have the meaning ascribed to it in clause (ii) of paragraph (C) of Section 3.1.
βXxxxx Estateβ shall have the meaning given to the term βXxxxx Debtorsβ Estateβ in the LINN Consensual Plan.
Exhibit A, Page 1
βXxxxx Facilitiesβ shall have the meaning ascribed to it in clause (iv) of paragraph (B) of Section 3.1.
βXxxxx G&G Dataβ shall have the meaning ascribed to it in clause (vi) of paragraph (C) of Section 3.1.
βXxxxx Indemnified Partiesβ shall have the meaning ascribed to it in paragraph (A) of Section 6.2.
βXxxxx Leasehold and Mineral Interestsβ shall have the meaning ascribed to it in clause (i) of paragraph (B) of Section 3.1.
βXxxxx-XXXX Employeeβ means any employee designated as a βXxxxx-XXXX Employeeβ on Schedule 6.
βXxxxx Operating Contractsβ shall have the meaning ascribed to it in paragraph (A) of Section 3.2.
βXxxxx Operating Equipmentβ shall have the meaning ascribed to it in paragraph (A) of Section 3.5.
βXxxxx Operating Propertyβ shall have the meaning ascribed to it in paragraph (A) of Section 3.5.
βXxxxx Operating Yard Equipmentβ shall have the meaning ascribed to it in paragraph (A) of Section 3.5.
βXxxxx Permitsβ shall have the meaning ascribed to it in clause (iv) of paragraph (C) of Section 3.1.
βXxxxx Propertiesβ shall have the meaning ascribed to it in clause (ii) of paragraph (B) of Section 3.1.
βXxxxx Receivablesβ means all expenditures incurred by Xxxxx (or LINN or its Affiliate on behalf of Xxxxx) in connection with the ownership, operation and maintenance of the Xxxxx Properties (including rentals, overhead, royalties, Lease option and extension payments, Taxes and other charges and expenses billed under applicable operating agreements or governmental statute(s)) and billed by Xxxxx (or XXXX or its Affiliate on behalf of Xxxxx) to Third Party working interest owners, which remain outstanding and owed to Xxxxx (or XXXX or its Affiliate on behalf of Xxxxx);
βXxxxx Recordsβ shall have the meaning ascribed to it in clause (ix) of paragraph C of Section 3.1.
βXxxxx Related Assets shall have the meaning ascribed to it in paragraph C of Section 3.1.
βXxxxx Xxxxxxxxx Feesβ shall have the meaning ascribed to it in Section 4.3.
Exhibit A, Page 2
βXxxxx Shared Contractsβ shall have the meaning ascribed to it in paragraph (A) of Section 3.2.
βXxxxx Softwareβ shall have the meaning ascribed to it in clause (xii) of paragraph (C) of Section 3.1.
βXxxxx Statement of Assets and Liabilitiesβ shall have the meaning ascribed to it in the Recitals.
βXxxxx Xxxxxβ shall have the meaning ascribed to it in clause (ii) of paragraph (B) of Section 3.1.
βBusiness Dayβ means any day, other than Saturday or Sunday, on which commercial banks are open for commercial business with the public in the state(s) in which the Xxxxx Assets are located and Houston, Texas.
βCash Callβ shall have the meaning ascribed to it in paragraph (A) of Section 5.3.
βChange of Operator Formsβ shall have the meaning ascribed to it in clause (i) of Section 3.3.
βClaimβ means any claim, demand, liability, suit, cause of action (whether in contract, tort otherwise), loss, cost, and expense of every kind and character.
βContractβ means any agreement, contract, obligation, promise or undertaking (other than a Lease or other instrument creating or evidencing an interest in the Xxxxx Properties) related to or used in connection with the operations of any Xxxxx Properties that is legally binding.
βControlβ means the ability (directly or indirectly through one or more intermediaries) to direct or cause the direction of the management or affairs of a Person, whether through the ownership of voting interests, by contract or otherwise.
βXXXXXβ shall mean the Council of Petroleum Accountants Societies, Inc.
βCurrent Month Settlementβ shall have the meaning ascribed to it in Section 5.4.
βDisputeβ shall have the meaning ascribed to it in Section 8.1.
βEffective Dateβ shall have the meaning ascribed to it in the Xxxxx Consensual Plan.
βExcluded LINN Records and Dataβ means (a) the general corporate files and records of LINN and its non-Xxxxx Affiliates, insofar as they relate to the business of LINN or its non-Xxxxx Affiliate generally and are not required for the future ownership or operation of the Xxxxx Assets; (b) all legal files and records (other than title opinions) other than legal files directly related to Claims associated with Xxxxx or the Xxxxx Assets; (c) federal or state income, franchise or margin tax files and records of LINN or its non-Xxxxx Affiliates; (d) employee files (other than any employee files for Available Employees hired by Xxxxx pursuant to Article 4 that may
Exhibit A, Page 3
be transferred to Xxxxx without violating Applicable Law); (e) reserve evaluation information or economic projections other than those related specifically to the Xxxxx Assets; (f) records relating to the sale of the Xxxxx Assets, including competing bids (g) proprietary data, information and data under contractual restrictions on assignment or disclosure for which no consent has been given; (h) privileged information (other than title opinions) and (i) any other files or records to the extent relating solely to any property or activities of LINN or its non-Xxxxx affiliates.
βFinal Settlement Statementβ shall have the meaning ascribed to it in Section 5.8.
βForce Majeure Eventβ shall have the meaning ascribed to it in Section 9.13.
βFull Management Feeβ shall have the meaning ascribed to it in paragraph (B) of Section 5.2.
βGovernmental Authorityβ means any court or tribunal (including an arbitrator or arbitral panel) in any jurisdiction (domestic or foreign) or any federal, tribal, state, county, municipal or other governmental or quasi-governmental body, agency, authority, department, board, commission, bureau, official or other authority or instrumentality.
βHill Field Officesβ shall have the meaning ascribed to it in clause (i) of paragraph (C) of Section 3.1.
βHugoton Field Officesβ means the real property described on Schedule 11 and all field offices located thereon.
βHydrocarbonsβ means oil, gas, minerals, and other gaseous and liquid hydrocarbons, or any combination of the foregoing, produced from and attributable to the Xxxxx Properties.
βIndependent Expertβ shall have the meaning ascribed to it in paragraph (A) of Section 8.3.
βLeaseβ means any oil and gas lease, oil, gas and mineral lease or sublease, or other leasehold interest, and the leasehold estates created thereby, including carried interests, rights of recoupment, options, reversionary interests, convertible interests and rights to reassignment.
βLeasehold Interestβ means, with respect to a Lease, a working or other interest in and to such Lease.
βLCβ shall have the meaning ascribed to it in the Preamble.
βLEFβ shall have the meaning ascribed to it in the Preamble.
βLEHβ shall have the meaning ascribed to it in the Preamble.
βLEMβ shall have the meaning ascribed to it in the Preamble.
βLE&PMβ shall have the meaning ascribed to it in the Preamble.
βLetters in Lieuβ shall have the meaning ascribed to it in clause (ii) of Section 3.3.
Exhibit A, Page 4
βLiabilitiesβ means any and all claims, rights, demands, causes of action, liabilities, obligations, damages, losses, fines, penalties, sanctions of every kind and character (including reasonable fees and expenses of attorneys, technical experts and expert witnesses), judgments or proceedings of any kind or character whatsoever, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due, and whether arising or founded in Applicable Law or voluntary settlement, and all reasonable expenses, costs and fees (including reasonable attorneysβ fees) in connection therewith.
βLimited Management Feeβ shall have the meaning ascribed to it in paragraph (B) of Section 5.2.
βLINNβ shall have the meaning ascribed to it in the Preamble.
βLINN Consensual Planβ shall have the meaning ascribed to it in the Recitals.
βLINN Estateβ shall have the meaning given to the term βLinn Debtorsβ Estateβ in the LINN Consensual Plan.
βLinn Energyβ shall have the meaning ascribed to it in the Preamble.
βLINN Indemnified Partiesβ shall mean LINN and its Affiliates, and its and their equity holders, directors, officers, employees, consultants, accountants, counsel, advisors, and agents.
βLMβ shall have the meaning ascribed to it in the Preamble.
βLMEβ shall have the meaning ascribed to it in the Preamble.
βLOIβ shall have the meaning ascribed to it in the Preamble.
βManagement Feeβ shall have the meaning ascribed to it in paragraph (B) of Section 5.2.
βMC-Iβ shall have the meaning ascribed to it in the Preamble.
βMC-IIβ shall have the meaning ascribed to it in the Preamble.
βMCH-Iβ shall have the meaning ascribed to it in the Preamble.
βMCH-IIβ shall have the meaning ascribed to it in the Preamble.
βMineral Interestβ means any mineral fee interest, mineral right or mineral servitude, including non-participating royalty interests and other rights of a similar nature, whether legal or equitable, whether vested or contingent.
βMirrored Licensesβ shall have the meaning ascribed to it in paragraph (B) of Section 1.13.
βMonthly Settlement Statementβ shall have the meaning ascribed to it in Section 5.4.
Exhibit A, Page 5
βMonthly Statementβ shall have the meaning ascribed to it in Section 1.11.
βNew Production Environmentβ shall have the meaning ascribed to it in Section 1.13(B) of Exhibit B.
βNon-Operated Xxxxx Propertiesβ shall mean the portion of the Xxxxx Properties currently operated by a Third Party or operated by LINN as an agent for a Person other than Xxxxx, as so identified on Schedule 1 and Schedule 2 (which Non-Operated Xxxxx Properties include the Hugoton properties and do not include the Hill properties).
βNon-Party Affiliateβ shall have the meaning ascribed to it in Section 9.5.
βOffer Periodβ shall have the meaning ascribed to it in Section 4.2.
βOperated Xxxxx Propertiesβ shall mean that portion of the Xxxxx Properties currently operated by LINN as agent for Xxxxx, as so identified on Schedule 1 and Schedule 2 (which Operated Xxxxx Properties include the Hill properties and do not include the Hugoton properties).
βOperating Property Amountβ shall have the meaning ascribed to it in paragraph (C) of Section 3.5.
βPartyβ or βPartiesβ shall have the meaning ascribed to it in the Preamble.
βPersonβ means any individual, corporation (including any non-profit corporation), partnership, limited liability company, joint venture, estate, trust, association, organization or other entity or Governmental Authority.
βReference Periodβ shall have the meaning ascribed to it in Section 1.
βReimbursement Expensesβ shall have the meaning ascribed to it in paragraph (A) of Section 5.2.
βRepresentativesβ shall mean LINNβs existing personnel, including its current employees, contractors, attorneys, agents, representatives, and consultants.
βRulesβ shall have the meaning ascribed to it in paragraph (A) of Section 8.3.
βSeparation Periodβ means the period between the first day following the Transition Period (as the same may be extended pursuant to Section 2.9) and the end of the Accounting Period.
βService Feesβ shall have the meaning ascribed to it in paragraph (B) of Section 5.2.
βServicesβ shall have the meaning ascribed to it in Section 1.
βSurface Rightsβ means all surface leases, subsurface leases, rights-of-way, licenses, easements and other surface or subsurface rights agreements applicable to, used, or held in connection with the ownership, operation, maintenance or repair of, or the production, gathering, treatment, processing, storing, sale or disposal of Hydrocarbons or produced water from, the Xxxxx Properties, together with all surface fee interests in the lands covered by the Xxxxx Leasehold and Mineral Interests.
Exhibit A, Page 6
βSuspense Fundsβ means proceeds of production and associated penalties and interest in respect of any of the Operated Xxxxx Properties that are payable to Third Parties and are being held in suspense by LINN as the operator of such Operated Xxxxx Properties.
βTermβ shall have the meaning ascribed to it in paragraph (A) of Section 5.1.
βThird Partyβ means any Person other than Xxxxx or LINN or any of their Affiliates.
βTransferred Hardwareβ means the equipment described on Schedule 8, unless Xxxxx notifies LINN in writing within 30 days after the Effective Date that Xxxxx does not want one or more items on Schedule 8 to be included as Transferred Hardware.
βTransition JIB Balanceβ shall have the meaning ascribed to it in Section 5.6.
βTransition Periodβ means the period from the Effective Date through the date that is the last day of the second full calendar month after the Effective Date (as the same may be extended pursuant to Section 2.9).
βVehiclesβ shall have the meaning ascribed to it in clause (xiv) of paragraph (C) of Section 3.1.
Exhibit A, Page 7
Exhibit B
SERVICES
# | Service | General Description | ||
1.1 | Operator Services | β’ Manage and oversee day-to-day operation of the Operated Xxxxx Properties, including operation and management of existing xxxxx, structures, equipment, and facilities
β’ Supervise personnel, subcontractors, suppliers, vendors, etc.
β’ Monitor production and prepare and submit any necessary forms or reports as required by regulatory agencies
β’ Dispose of all salt water and waste materials
β’ Perform field operations
β’ Account for and disburse production (limited to the production of Hydrocarbons from the Xxxxx Assets prior to the end of the Transition Period)
β’ Administer the Suspense Funds; provided, however, that Xxxxx will assume the Suspense Funds (including any escheatment obligations related thereto) as of the first day following the Transition Period; provided, however, further, that prior to the end of the Transition Period, LINN will provide, or cause to be provided, any and all documentation in LINNβs possession necessary for Xxxxx to administer the Suspense Funds following the end of the Transition Period
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1.2 | Non-Operator Services | β’ Monitor operation of the Non-Operated Xxxxx Properties
β’ Collect revenues on behalf of Xxxxx
β’ Review operating expense statements; request additional information from, and address any concerns with, the Third Party operators (if necessary); and pay applicable operating expenses
β’ Process non-operated joint interest billing invoices
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1.3 | Permits | β’ Maintain all Permits
β’ Take reasonable action necessary to transfer or assign all Xxxxx Permits held in the name of LINN, contingent upon Xxxxxβx obligations described in Sections 1.3 and paragraph (A) of 3.4) |
Exhibit B, Page 1
# | Service | General Description | ||
1.4 | Transportation and Marketing | β’ Manage (or, if applicable, oversee provision by a Third Party approved by Xxxxx of) midstream services, transportation and marketing services, gas control services, and other similar services to physically and financially sell the production from the Operated Xxxxx Properties
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1.5 | Well Maintenance | β’ Provide supervision for all workover operations, recompletion operations, and any type of remedial operation or well service operation with respect to the Operated Xxxxx Properties
β’ Contract with supervisory personnel for onsite supervision as required (but in no event will LINN be required to add contract onsite supervision above the level of supervision currently provided)
β’ Establish and maintain well files containing information on operations performed in connection with each such well
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1.6 | Payment Services | β’ Pay lease rentals, shut-in royalties, minimum royalties, payments in lieu of production, royalties, overriding royalties, production payments, net profit payments, and other similar payments associated with the Operated Xxxxx Properties; provided, however, that, in the case of payments related to production from the Operated Xxxxx Properties other than shut-in payments during the Term, these obligations shall be limited to payment obligations arising from production from the Operated Xxxxx Properties prior to the end of the Transition Period
β’ Pay operating costs and invoices that are required to be paid under the terms and provisions of the applicable agreements and which are attributable to the ownership, operation, use, or maintenance of the Xxxxx Properties
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1.7 | Lease and Land Administration | β’ Provide all land, land administration, lease, and title services with respect to the Xxxxx Properties, in each case in the ordinary course of LINNβs business and in no case requiring additional services beyond those currently performed by LINN, including:
β’ Administer all leases and agreements relating to the Xxxxx Properties
β’ Maintain and update all lease, ownership, contract and property records and databases relating to the Xxxxx Properties through changes received at the end of the second calendar month following the Effective Date to the extent practicable |
Exhibit B, Page 2
# | Service | General Description | ||
β’ Generate, verify, process, approve and sign (provided that Xxxxx has provided LINN a special power of attorney authorizing LINN to sign on Xxxxxβx behalf) all internal and external division orders and transfer orders required in the normal course of business
β’ Identify, pay and appropriately invoice all rentals, surface, right of way, shut-in and other similar payments required by the leases or other agreements relating to the Xxxxx Properties
β’ Maintain all land, contract, division of interest, lease files, and other files relating to the subject lands, lease and land administration functions
β’ Maintain and update all royalty and suspense accounts, reports and databases
β’ Perform such other reasonable and customary administrative services as LINN administers or causes to be administered to maintain the leases or agreements relating to the Xxxxx Properties in the ordinary course of its business
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1.8 | Regulatory Affairs | β’ Provide services to comply with all regulatory requirements applicable to the Xxxxx Properties
β’ Prepare all federal, state, regulatory and other monthly production reports related to production of Hydrocarbons from the Xxxxx Properties prior to the end of the Transition Period; copies of said reports will be provided to Xxxxx
β’ Maintain incident management reporting processes in LINNβs ordinary course of business and maintain all existing safety practices, which could include all or any of the following: internal reports, OSHA filings, safety standard operating procedures (SOPs), emergency response protocols, chemical exposure and hearing testing, drug and alcohol programs, incident follow-up and other activities to provide health and safety training; provided, however, that nothing herein will require LINN to adopt new practices or change its existing practices |
Exhibit B, Page 3
# | Service | General Description | ||
1.9 | Plugging and Abandonment | β’ Obtain necessary non-operated working interest owner approval and regulatory permits to abandon any xxxxx included in the Operated Xxxxx Properties when required by applicable law to be abandoned during the Transition Period
β’ Provide supervision for abandonment operations and file all necessary abandonment reports after the completion of the abandonment operations
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1.10 | Environmental Compliance | β’ If LINN discovers instances of non-compliance with environmental, health, or safety laws, rules, or regulations, notify Xxxxx of such non-compliance
β’ [insert any reviews, audits or other queries required to be undertaken during the Transition Period as referenced in Section 1.10] | ||
1.11 | Bookkeeping; Finance and Treasury; Accounting | β’ Assist with internal reporting, management of general ledger functions, asset and real property accounting, treasury and financial management services, maintenance of capital expenditure, and other operating budgets for production from the Xxxxx Properties prior to the conclusion of Transition Period
β’ Monthly net lease operating statement reporting, including reasonable volume, pricing, revenue, and expense supporting detail on the 15th day after each month end during the Accounting Period
β’ Production and regulatory reporting related to the Xxxxx Properties (limited to reporting related to the Xxxxx Properties or production from the Xxxxx Properties prior to the conclusion of the Transition Period)
β’ Prepare joint interest accounting and xxxxxxxx associated with the Xxxxx Properties for periods prior to the end of the Transition Period
β’ Perform AFE tracking and status reporting relating to the Xxxxx Properties during the Transition Period
β’ Perform gas balancing relating to the Xxxxx Properties for periods and related to production prior to the end of the Transition Period
β’ Perform working interest and royalty owner disbursements for production from the Xxxxx Properties prior to the end of the Transition Period
β’ Provide collection of accounts receivable associated with the Xxxxx Properties relative only to periods and production prior to the end of the Transition Period |
Exhibit B, Page 4
# | Service | General Description | ||
β’ Provide any reports currently prepared in the ordinary course of LINNβs business related to the Xxxxx Properties that are practicably segregated to the Xxxxx Properties in generally the same manner and timing as currently prepared by LINN; provided that in the case of reports related to payments for production of hydrocarbons, such reports will be limited to production from the Xxxxx Properties prior to the end of the Transition Period
β’ Calculate, file, and remit severances taxes associated with the production from the Xxxxx Properties prior to the end of the Transition Period
β’ Provide production accounting services associated with the Xxxxx Properties for production from the Xxxxx Properties prior to the end of the Transition Period
β’ Provide revenue accounting services related to the Xxxxx Properties for production from the Xxxxx Properties prior to the end of the Transition Period
β’ Provide audit function support services associated with the Xxxxx Properties related to periods or production prior to the end of the Transition Period, limited to responsive audits and excluding any audit initiated by Xxxxx
β’ Process joint interest xxxxxxxx associated with the Non-Operated Xxxxx Properties related to periods prior to the end of the Transition Period
β’ Provide payout accounting services associated with the Xxxxx Properties related to periods prior to the end of the Transition Period
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1.12 |
Facilities | β’ Manage all real estate and facilities that are part of the Xxxxx Estate in connection with the operation of the Xxxxx Properties |
Exhibit B, Page 5
# | Service | General Description | ||
1.13(A)
Part One | Information Technology Systems β Standard Term Support During Transition Period
| β’ Provide IT-related infrastructure (hardware, software, network, security, etc.), technical expertise, and services necessary to maintain the operations of the Xxxxx Properties
β’ Provide consultation regarding the migration to Xxxxxβx information systems in respect to operation of the Xxxxx Properties
| ||
1.13(A)
Part Two | Information Technology Systems β Standard Term Support During Accounting Period
| β’ Provide IT data from LINN systems in their native or export format
β’ Provide continuing e-mail services for LINN employees performing Services under this Agreement
β’ Provide extraction of Xxxxx Asset related application data and transmittal of this data to Xxxxx in their native or export format
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1.13(B) | Information Technology Systems β Optional Additional Support
| β’ Create a copy of the database(s) in existing Transferred Hardware environment, specifically related to P2 and field view (the βNew Production Environmentβ)
β’ Provide limited access to no more than [three] of Xxxxxβx personnel to the New Production Environment for the limited purposes of (i) configuring the New Production Environment, (ii) loading Xxxxx Asset related data provided by LINN under Section 1.13(A) of this Exhibit B to the New Production Environment, and (iii) creating user security permissions for New Production Environment
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1.14 | Tax | β’ Assist with, and maintain proper documentation for, the collection and remittance of federal, state, and local sales, use, and ad valorem taxes
β’ Prepare and distribute 1099 forms for owners for all activity for the time period LINN is responsible for the related distributions and disbursements
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1.15 | Corporate Contracts
| β’ Perform, administer, and maintain existing contractual arrangements with respect to the Xxxxx Assets and the Services performed hereunder |
Exhibit B, Page 6
# | Service | General Description | ||
1.16 | Records Retention | β’ Provide necessary assistance in the storage and retrieval of documentation and backup information to the extent related to the Xxxxx Assets and the Services performed hereunder
β’ Provide, upon request from Xxxxx, any portion of Records not already provided, including but not limited to financial information from prior periods (to the extent such information requested exists in LINNβs financial reporting system and to the extent such information is included within the definition of Records)
β’ Provide other types of historical data to Xxxxx as reasonably needed in connection with Xxxxxβx audit and tax compliance activities, government reporting, or other Third Party inquiries
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1.17 | Transition | β’ Cooperate and assist in transition to Xxxxx of Services provided by LINN under this Agreement
β’ Provide data and information (e.g., accounting, division of interest, land data, production data, etc.) utilized by LINN in connection with this Agreement
β’ Provide the information that is available to LINN for Xxxxx to begin revenue distribution, joint interest xxxxxxxx, and payment of capital and operating expenses, taxes, shut-in payments, etc., in each case to the extent related to the Xxxxx Properties
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1.18 | HR; Employee Benefits; Payroll | β’ Continue to perform administration and management of human resources, employee benefits programs, and payroll services and function for LINNβs employees and independent contractors
β’ Comply with workers compensation laws and carry and maintain other customary insurance |
Exhibit B, Page 7
Exhibit C
FORM OF SETTLEMENT STATEMENT
FOR THE PERIOD (MONTHLY DURING TRANSITION PERIOD)
CALCULATION OF CASH TRANSFERRED: | ||||
Net revenues (as per paragraph (i) of Section 5.4) | $ | XXX | ||
less direct operating expenses (as per paragraph (ii) of Section 5.4) | XXX | |||
plus XXXXX recoveries (as per paragraph (iii) of Section 5.4) | XXX | |||
less capital expenditures (as per paragraph (iv) of Section 5.4) | XXX | |||
less bonus, lease rentals, shut-in payments, and other charges (as per paragraph (v) of Section 5.4) | XXX | |||
less Reimbursement Expenses (as per paragraph (A) of Section 5.2) | XXX | |||
less Management Fee (as per paragraph (B) of Section 5.2) | XXX | |||
less unpaid amounts due under Section 5.2 (as per paragraph (viii) of Section 5.4) | XXX | |||
less Xxxxx Xxxxxxxxx Fee(as per Section 4.3) | XXX | |||
plus or less Other (itemized) (as per paragraph (xi) of Section 5.4) | XXX | |||
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CURRENT MONTH SETTLEMENT | $ | XXX |
Exhibit C, Page 1
Exhibit X
XXXXX INSURANCE COVERAGE
[EXHIBIT FOLLOWS]
Exhibit D, Page 1
Exhibit E
MIRRORED LICENSES
[EXHIBIT FOLLOWS]
Exhibit E, Page 1
Exhibit F
XXXX OF SALE
[EXHIBIT FOLLOWS]
Exhibit F, Page 1
Exhibit G
SPECIAL WARRANTY DEED
[EXHIBIT FOLLOWS]
Exhibit G, Page 1