Exhibit 10.1
MASTER SEPARATION AGREEMENT
This Master Separation Agreement (this "Agreement"), dated ______________,
2003, is by and among Xxxxxxx Petroleum Corporation, a Delaware corporation
("WPC"), Xxxxxxx Oil and Gas Corporation, a Delaware corporation ("Xxxxxxx"),
Alliant Energy Corporation, a Wisconsin corporation ("Alliant Energy"), and
Alliant Energy Resources, Inc., a Wisconsin corporation ("Resources").
RECITALS
WHEREAS, Resources owns 1,000 shares of common stock, par value $1.00 per
share, of Xxxxxxx (the "Xxxxxxx Common Stock"), such stock being all of the
issued and outstanding capital stock of Xxxxxxx;
WHEREAS, Resources desires to transfer all of the Xxxxxxx Common Stock to
WPC in exchange for (i) the issuance by WPC to Resources of _______________
shares of Common Stock, par value $0.001 per share, of WPC (the "WPC Common
Stock"), which will constitute all of the issued and outstanding capital stock
of WPC upon issuance, (ii) the issuance by WPC to Resources of a promissory note
in the principal amount of $3,000,000, (iii) the execution of a Tax Separation
and Indemnification Agreement in the form attached hereto as Exhibit A (the "Tax
Separation and Indemnification Agreement") and (iv) the other consideration
described in this Agreement (such transactions are referred to herein as the
"Exchange"), and WPC desires to effect the Exchange;
WHEREAS, Resources and WPC desire the exchange to be treated, for tax
purposes only, as the sale by Xxxxxxx of all its assets followed by Xxxxxxx'x
liquidation, pursuant to an election by Resources and WPC under Section
338(h)(10) of the Internal Revenue Code of 1986, as amended, and the
corresponding provisions under state, local and foreign law;
WHEREAS, prior to the execution of this Agreement, Alliant Energy,
Resources, WPC and Xxxxxxx have entered into a purchase agreement, dated as of
___________, 2003, with the underwriters named therein (the "Purchase
Agreement") providing for the binding obligation by Resources to sell __________
shares of WPC Common Stock in an underwritten public offering (the "IPO"), and
providing to the underwriters an option to purchase up to an additional
__________ shares of WPC Common Stock from Resources; and
WHEREAS, WPC, Xxxxxxx, Alliant Energy and Resources desire to enter into
this Agreement to set forth their agreement regarding certain corporate
governance matters and certain other matters with respect to the ongoing
relationship between WPC, Xxxxxxx, Alliant Energy and Resources after the IPO.
NOW THEREFORE, in consideration of the representations, warranties and
covenants of the parties contained herein, and for good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
Section 1.1 Representations of Alliant Energy and Resources. Alliant Energy
and Resources hereby represent and warrant to WPC and Xxxxxxx that:
(a) The Xxxxxxx Common Stock is lawfully owned of record by Resources
and beneficially owned by Alliant Energy.
(b) Alliant Energy and Resources have full legal right, power and
authority to enter into this Agreement and to sell, assign, transfer and
convey the Xxxxxxx Common Stock hereunder.
(c) The delivery of the Xxxxxxx Common Stock to WPC pursuant to this
Agreement will transfer to WPC valid title to the Xxxxxxx Common Stock,
free and clear of all liens, encumbrances, restrictions and claims of every
kind.
(d) The execution, delivery and performance by Alliant Energy and
Resources of this Agreement have been duly authorized by all necessary
corporate action.
(e) This Agreement has been duly executed and delivered by Alliant
Energy and Resources and, assuming the due authorization, execution and
delivery of this Agreement by WPC and Xxxxxxx, represents a valid and
binding obligation of Alliant Energy and Resources, enforceable against
Alliant Energy and Resources in accordance with its terms, subject to
bankruptcy, insolvency and other laws affecting creditors' rights generally
and subject to general equitable principles.
Section 1.2 Representations of WPC. WPC hereby represents and warrants to
Alliant Energy and Resources that:
(a) Upon the issuance of the WPC Common Stock to Resources pursuant to
this Agreement, the WPC Common Stock shall constitute all of the issued and
outstanding capital stock of WPC.
(b) WPC has full legal right, power and authority to enter into this
Agreement and to issue the WPC Common Stock hereunder.
(c) The delivery of the WPC Common Stock to Resources pursuant to this
Agreement will transfer to Resources valid title to the WPC Common Stock,
free and clear of all liens, encumbrances, restrictions and claims of every
kind.
(d) The execution, delivery and performance by WPC of this Agreement
have been duly authorized by all necessary corporate action.
(e) This Agreement has been duly executed and delivered by WPC and,
assuming the due authorization, execution and delivery of this Agreement by
Alliant Energy, Resources and Xxxxxxx, represents a valid and binding
obligation of WPC, enforceable against WPC in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting creditors'
rights generally and subject to general equitable principles.
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(f) WPC is acquiring the Xxxxxxx Common Stock for investment and not
with a view toward distribution in violation of any applicable securities
laws.
(g) WPC hereby represents that it has no present plan or intention to
(i) enter into any transaction a significant purpose of which is to reduce
the amount of tax benefits otherwise payable to Resources under the Tax
Separation and Indemnification Agreement, (ii) enter into any transaction
which may result in the disqualification or invalidation of the Section
338(h)(10) Election (as that term is defined in the Tax Separation and
Indemnification Agreement), which transactions include but are not limited
to the merger, liquidation, conversion or other corporate transactions
involving Xxxxxxx which may result in the Internal Revenue Service (or
other applicable tax authority, as the case may be) disqualifying or
invalidating any Section 338(h)(10) Election, or (iii) sell, distribute or
otherwise dispose of any assets of WPC (including the stock of Xxxxxxx
acquired pursuant to this Agreement) or Xxxxxxx other than assets disposed
of by Xxxxxxx in the ordinary course of business.
(h) WPC has not engaged in any business or activities other than such
actions as are necessary to prepare and execute the documents and take
actions necessary or desirable for the IPO.
Section 1.3 Representations of Xxxxxxx. Xxxxxxx hereby represents and
warrants to Alliant Energy and Resources that:
(a) The Xxxxxxx Common Stock constitutes all of the issued and
outstanding capital stock of Xxxxxxx.
(b) The execution, delivery and performance by Xxxxxxx of this
Agreement have been duly authorized by all necessary corporate action.
(c) This Agreement has been duly executed and delivered by Xxxxxxx
and, assuming the due authorization, execution and delivery of this
Agreement by Alliant Energy, Resources and WPC, represents a valid and
binding obligation of Xxxxxxx, enforceable against Xxxxxxx in accordance
with its terms, subject to bankruptcy, insolvency and other laws affecting
creditors' rights generally and subject to general equitable principles.
ARTICLE II
THE EXCHANGE
Section 2.1 Exchange of Stock. Effective as of immediately prior to the
closing of the IPO, Resources will sell, assign, transfer and convey to WPC all
of the Xxxxxxx Common Stock. In consideration of, and effective concurrently
with such transfer, WPC will (a) issue to Resources all of the WPC Common Stock,
(b) issue to Resources a promissory note in the aggregate principal amount of
$3,000,000 in the form attached hereto as Exhibit B (the "Note"), and (c)
deliver the executed Tax Separation and Indemnification Agreement.
Section 2.2 Deliveries. Effective immediately prior to the closing of the
IPO, (a) Resources will deliver to WPC stock certificates in proper form for
transfer representing the Xxxxxxx Common Stock, duly endorsed in blank or
accompanied by appropriate stock powers
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executed by Resources, (b) WPC will deliver to Resources stock certificates in
proper form for transfer representing the WPC Common Stock and (c) WPC will
deliver to Resources the Note.
ARTICLE III
IPO AND CORPORATE GOVERNANCE MATTERS
Section 3.1 Actions Prior to IPO.
(a) Until such time as WPC issues stock and any such stock is
registered with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), and trades on a public
market, WPC will not engage in any business other than taking such actions
as are necessary or desirable to effect the IPO.
(b) Prior to the closing of the IPO or the earlier termination of the
Purchase Agreement, Resources shall not be entitled to vote the WPC Common
Stock or to receive dividends in respect thereof.
Section 3.2 Board of Directors.
(a) In connection with any election of directors of WPC or Xxxxxxx, as
the case may be, so long as Alliant Energy beneficially own shares of WPC
Common Stock representing at least 10% of the outstanding shares of WPC
Common Stock, Alliant Energy shall have the right to designate and WPC and
Xxxxxxx shall cause the nomination of such number of directors of WPC and
Xxxxxxx, respectively, such that after such election (assuming all such
Alliant Energy designees are elected to the Board of Directors), the number
of directors to be designated by Alliant Energy will be equal to the
product (rounded up to the nearest whole number) of (i) the percentage of
the voting power of the outstanding shares of WPC Common Stock beneficially
owned by Alliant Energy multiplied by (ii) the total number of members of
WPC's Board of Directors or Xxxxxxx'x Board of Directors, as the case may
be; provided that in no event shall the number of directors designated by
Alliant Energy pursuant to this provision constitute less than one member
of WPC's Board of Directors or Xxxxxxx'x Board of Directors. If a vacancy
occurs or exists on the WPC or Xxxxxxx Board of Directors at any time,
including but not limited to a vacancy because of the death, disability,
retirement, resignation or removal of any director for cause or otherwise,
and the vacant position was held by a director designated by Alliant
Energy, then Alliant Energy shall have the sole right to designate an
individual to fill such vacancy and, subject to the fiduciary duties of
directors, the WPC Board of Directors or the Xxxxxxx Board of Directors, as
the case may be, shall elect such nominee to fill such vacancy. To the
extent permitted by law, WPC shall use its reasonable best efforts to
solicit from the stockholders of WPC eligible to vote for the election of
directors proxies in favor of the nominees designated by WPC's Board of
Directors in accordance with this Section 3.2(a). WPC shall vote its shares
of Xxxxxxx Common Stock in favor of the nominees designated by Xxxxxxx'x
Board of Directors in accordance with this Section 3.2(a).
(b) If at any time the total number of directors of WPC or Xxxxxxx is
increased or decreased, then the number of directors that Alliant Energy
shall have the right to designate pursuant to Section 3.2(a) shall as
promptly as practicable be increased or decreased so that the adjusted
ratio of directors designated by Alliant Energy to the total number of
directors is not less than the ratio of directors designated by Alliant
Energy (determined immediately prior to such
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increase or decrease in accordance with the provisions of Section 3.2(a))
to the total number of directors of WPC or Xxxxxxx, as the case may be,
immediately prior to such increase or decrease, as the case may be (the
"Ratio"). In such event, Alliant Energy and WPC and/or Xxxxxxx, as the case
may be, shall take such steps consistent with the provisions of Section
3.2(a) to effectuate such increase or decrease of directors designated by
Alliant Energy in relation to the Ratio as rapidly as reasonably possible.
(c) If the number of Alliant Energy designees serving on the WPC Board
of Directors or Xxxxxxx Board of Directors shall at any time exceed the
number of Alliant Energy designees determined pursuant to Sections 3.2(a)
and 3.2(b) (such difference being called the "Excess Director Number"),
then Alliant Energy shall cause a number of Alliant Energy designees equal
to the Excess Director Number to promptly resign from the WPC Board of
Directors or Xxxxxxx Board of Directors.
Section 3.3 Definition of Covered Action. For purposes of this Agreement, a
"Covered Action" shall mean any of the following actions:
(a) The issuance by WPC or Xxxxxxx of equity securities or securities
convertible into, exchangeable for, or options or rights to acquire any
equity securities of WPC (except for securities issued pursuant to any of
WPC's or Xxxxxxx'x employee stock option or employee benefits plans);
(b) The declaration, setting aside, making or payment of any dividend
or other distribution, payable in cash, stock, property or otherwise, with
respect to any of WPC's capital stock;
(c) The direct or indirect redemption, repurchase or other acquisition
by WPC of any of its capital stock;
(d) Any merger or consolidation of WPC or Xxxxxxx with or into any
person or the consummation of a similar business combination, transaction
or series of transactions;
(e) Any amendment to WPC's certificate of incorporation or by-laws;
(f) The taking of any action, or recommending to WPC's stockholders
any action that would impose any limitation on the rights of a stockholder
of WPC or that would deny any benefit to a stockholder of WPC
proportionately as a holder of WPC Common Stock that is made available to
other holders of WPC Common Stock;
(g) The adoption by WPC of a stockholder rights plan, a "poison pill"
plan or similar plan; or
(h) The adoption of a plan of complete or partial liquidation,
dissolution or winding-up of the business of WPC or Xxxxxxx.
Section 3.4 Corporate Action Regarding Covered Actions.
(a) So long as Alliant Energy beneficially owns 10% or more of the WPC
Common Stock, WPC and Xxxxxxx agree not to take, or enter into any
agreement in writing or
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otherwise to take, a Covered Action unless such Covered Action has been
first submitted to Alliant Energy for its approval and Alliant Energy has
approved such Covered Action in writing in accordance with the provisions
of Section 3.4(b).
(b) Any request for Alliant Energy's approval of a Covered Action
shall be submitted in writing to Alliant Energy by notice which shall (i)
describe the Covered Action in reasonable detail, and include reasonably
sufficient information (including such information as is given or will be
given to the WPC and/or Xxxxxxx Board of Directors) for Alliant Energy to
make a determination pursuant to this Section 3.4(b) and (ii) indicate that
such notice is a formal request for Alliant Energy's approval pursuant to
this Agreement. WPC shall promptly provide Alliant Energy with all
information requested by Alliant Energy which is in the possession of, or
reasonably obtainable by, WPC and relates to the Covered Action. Alliant
Energy shall in good faith use its commercially reasonable efforts to
respond to such request as expeditiously as possible, but shall in no event
respond later than ten business days after receipt of such notice (or such
later date as WPC and Alliant Energy shall agree).
ARTICLE IV
OTHER AGREEMENTS
Section 4.1 Registration Rights Agreement. Immediately following the
execution and delivery of this Agreement, Alliant Energy, Resources and WPC
shall execute and deliver the Registration Rights Agreement attached hereto as
Exhibit C (the "Registration Rights Agreement").
Section 4.2 Tax Separation and Indemnification Agreement. Immediately
following the execution and delivery of this Agreement, Alliant Energy,
Resources, WPC and Xxxxxxx shall execute and deliver the Tax Separation and
Indemnification Agreement.
Section 4.3 Service Agreement. Alliant Energy and Resources agree that,
following the consummation of the Exchange, neither WPC nor Xxxxxxx shall be
required to use any services provided by Alliant Energy or its Affiliates (as
defined in Section 8.1). If WPC and/or Xxxxxxx request any services to be
provided by Alliant Energy or its Affiliates, such services shall be provided
pursuant to that certain Services Agreement (Non-Utility Companies), dated May
22, 1998, among Alliant Industries, Inc. (n/k/a Alliant Energy Resources, Inc.),
IPC Development Company, Inc. and Alliant Services Company, Inc. (n/k/a Alliant
Energy Corporate Services, Inc.) until such time as Alliant Energy beneficially
owns less than ten percent (10%) of the outstanding shares of WPC Common Stock.
ARTICLE V
PUHCA MATTERS
Section 5.1 Compliance with PUHCA. For so long as WPC or Xxxxxxx remains a
"subsidiary company", as defined under the Public Utility Holding Company Act of
1935, as amended ("PUHCA"), of Alliant Energy, WPC agrees that it will, and will
cause Xxxxxxx and WPC's other direct or indirect subsidiaries to comply with all
applicable provisions of PUHCA and all applicable rules, regulations and orders
promulgated or issued by the Securities and Exchange Commission (the "SEC")
under PUHCA.
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Section 5.2 Energy Asset Investments. Alliant Energy agrees that WPC and
Xxxxxxx shall collectively be entitled to the use of up to $300 million of the
total authority to make investments in "energy assets" (as defined in the SEC
Omnibus Order, dated October 3, 2001, relating to Alliant Energy (the "SEC
Order")) granted to Alliant Energy pursuant to the SEC Order. Each of Alliant
Energy, WPC and Xxxxxxx agrees to cooperate with each other and to use its
reasonable best efforts to obtain an order from the SEC to the effect set forth
in Post-Effective Amendment No. 3 to the Application or Declaration on Form U-1
under PUHCA (File No. 70-9891) filed with the SEC on September 18, 2003, which
would provide WPC and Xxxxxxx authority to invest up to $800 million at any one
time outstanding in "energy assets" (including existing investments in "energy
assets" of the date of the IPO), provided that such order will not materially
decrease Alliant Energy's ability to continue to make limited investments in
"energy assets." WPC and Xxxxxxx shall be responsible for any and all costs
associated with seeking or obtaining such an order.
Section 5.3 Exemption from PUHCA. Xxxxxxx and/or WPC may seek a no-action
letter, order or other determination by the SEC or its staff, to the extent
available, that Xxxxxxx and/or WPC will not be considered a "subsidiary company"
of Alliant Energy under PUHCA. At WPC's and/or Xxxxxxx'x request, Alliant Energy
shall cooperate with WPC and Xxxxxxx and use its reasonable best efforts to
assist WPC and Xxxxxxx in obtaining such a determination. WPC and Xxxxxxx shall
be responsible for any and all costs associated with seeking or obtaining such a
determination.
ARTICLE VI
EMPLOYEE BENEFIT PLANS
Section 6.1 Phantom Equity Plan.
(a) WPC and Xxxxxxx hereby represent and warrant to Alliant Energy and
Resources that the Xxxxxxx Petroleum Corporation Phantom Equity Plan (the
"Phantom Plan") has been amended effective prior to the date hereof to
provide that any and all issuances of stock pursuant to the Phantom Plan
shall be made with shares of WPC Common Stock.
(b) WPC and Xxxxxxx agree to withhold from payments to participants
under the Phantom Plan through withholding of shares of WPC Common Stock
all amounts required by law and to pay all such amounts to the Internal
Revenue Service or other appropriate federal, state or local governmental
agency. Alliant Energy shall make a capital contribution to Xxxxxxx equal
to the aggregate amount of the withholding tax amounts to be paid to the
Internal Revenue Service and other appropriate federal, state or local
governmental agencies in the manner set forth in the Tax Separation and
Indemnification Agreement.
(c) WPC and Xxxxxxx agree to terminate the Phantom Plan as soon as all
payments to participants arising out of the Triggering Event (as defined in
the Phantom Plan) caused by the IPO have been made.
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ARTICLE VII
ACCESS TO INFORMATION
Section 7.1 Financial Information. For so long as Alliant Energy
beneficially owns at least 10% of the outstanding shares of WPC Common Stock,
and with respect to any financial reporting period during which Alliant Energy
beneficially owned at least 10% of the outstanding shares of WPC Common Stock:
(a) WPC shall provide to Alliant Energy within a mutually agreed upon
period after the end of each fiscal quarter and of each fiscal year, the
unaudited balance sheet, income statement and statement of cash flows of
WPC and its subsidiaries as of the end of such period;
(b) WPC shall provide to Alliant Energy such financial information or
documents in the possession of WPC or any of its subsidiaries as Alliant
Energy may reasonably request;
(c) WPC shall provide to Alliant Energy on a monthly basis such
management and other periodic reports related to financial information in
form and substance consistent with the practice of Xxxxxxx as of the date
of this Agreement; and
(d) WPC shall provide Alliant Energy with access to the employees and
other advisors of WPC and its subsidiaries who participated in the
preparation and review of the financial statements and management and
periodic reports provided to Alliant Energy pursuant to this Section 8.1.
Section 7.2 Audit Rights. WPC shall allow, and shall cause Xxxxxxx to
allow, on reasonable notice, Alliant Energy or its representatives to audit or
review the affairs of WPC or Xxxxxxx, including (a) having access to (and taking
copies of) the records of WPC and Xxxxxxx (and the working papers of their
accountants) and (b) having access to the premises of WPC, Xxxxxxx or any
subsidiary of WPC or Xxxxxxx and the ability to consult and discuss matters with
the auditors, advisors and management of WPC and Xxxxxxx (during normal office
hours). WPC and Xxxxxxx shall cooperate fully with Alliant Energy and its
representatives in connection with any such audit or review. In addition, WPC
and Xxxxxxx shall use all reasonable efforts to allow the independent
accountants of Alliant Energy to audit the working papers of and to assist in
any review undertaken by WPC's or Xxxxxxx'x independent accountants. Alliant
Energy shall coordinate its efforts in good faith with, and work with and
through, the Audit Committee of WPC's Board of Directors and WPC's or Xxxxxxx'x
internal audit department to accomplish such objectives.
ARTICLE VIII
Guarantee by WPC
Section 8.1 Guarantee. WPC irrevocably and unconditionally guarantees to
Alliant Energy and Resources the due performance by Xxxxxxx and its Affiliates
(as defined below) of their respective covenants, obligations and duties,
whether now or hereafter existing, to Alliant Energy and Resources and their
respective Affiliates under the Tax Separation and Indemnification Agreement so
that in the event Xxxxxxx or its Affiliates fail to observe or perform any
covenant, obligation or duty on their part to be observed or performed
thereunder, WPC will
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observe and perform that covenant, obligation or duty, as the case may be.
"Affiliate", for purposes of this Agreement, means any person or entity that
immediately following the IPO or at any time thereafter directly or indirectly
controls or is controlled by or is under the common control of the party
referred to and includes, without limitation, any subsidiary whose parent owns
50% or more of its voting securities. Notwithstanding the foregoing, for
purposes of this Agreement, (a) Affiliates of Alliant Energy or Resources shall
not include any entities that would not be Affiliates of Alliant Energy or
Resources but for Resources owning shares of WPC or an officer or director of
Resources or Alliant Energy serving as an officer or director of WPC, and (b)
Affiliates of WPC shall not include Alliant Energy, Resources or any Affiliates
of Alliant Energy or Resources.
Section 8.2 No Discharge of Liability. The liability of WPC pursuant to
this Article VIII shall not be discharged or affected in any way by (a) the
granting of an extension of time or other indulgence or concession to any of
Xxxxxxx or its Affiliates under the Tax Separation and Indemnification
Agreement, (b) any amendment to the Tax Separation and Indemnification
Agreement, (c) any compromise, release, abandonment, waiver, variation or
relinquishment of the rights of any of Alliant Energy or Resources or their
respective Affiliates against any of Xxxxxxx or its Affiliates under the Tax
Separation and Indemnification Agreement or by any omission to enforce such
rights, (d) any present or future law, regulation or order of any jurisdiction
or of any agency thereof purporting to reduce, amend, restructure or otherwise
affect any term of any obligation of Xxxxxxx or its Affiliates under the Tax
Separation and Indemnification Agreement, or (e) any other act, omission,
dealing or matter whatsoever (including, without limitation, any change in the
certificate of incorporation or bylaws of any of Xxxxxxx or its Affiliates or
the liquidation, dissolution, reorganization or merger of any of Xxxxxxx or its
Affiliates) that would or might release WPC from any or all of its obligations
under this Article VIII.
Section 8.3 Term. The guarantee provided under this Article VIII shall be
continuing and shall remain in full force and effect until 120 days after the
due performance, observance and fulfillment by Xxxxxxx and its Affiliates of all
of their respective covenants, terms, provisions and conditions contained in the
Tax Separation and Indemnification Agreement. Notwithstanding the foregoing, if
at any time after the termination of the guarantee provided under this Article
VIII pursuant to the preceding sentence, any payment made under the Tax
Separation and Indemnification Agreement is rescinded or must be returned or
repaid due to the insolvency, bankruptcy or reorganization of any of Xxxxxxx or
its Affiliates or pursuant to any provision of the Tax Separation and
Indemnification Agreement, the guarantee provided under this Article VIII shall
be reinstated.
Section 8.4 No Waiver or Prejudice. The guarantee provided under this
Article VIII is in addition to and shall not waive or prejudice or be waived or
prejudiced by any other guarantee, indemnity, security, claim, right or remedy
against any third party that any of Alliant Energy or Resources or their
respective Affiliates may have for the due performance of the obligations
guaranteed hereby, including, without limitation, any rights that any of Alliant
Energy or Resources or their respective Affiliates may have against any of WPC
or Xxxxxxx or any of their respective Affiliates under the Tax Separation and
Indemnification Agreement or otherwise at law or equity.
Section 8.5 Amounts Recoverable. Any amount not paid by Xxxxxxx or its
Affiliates properly due under the Tax Separation and Indemnification Agreement
and not recoverable from
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WPC on the basis of a guarantee (whether because of any legal limitation,
disability or incapacity on the part of Xxxxxxx or its Affiliates or any other
matter or thing, whether or not known to Alliant Energy or Resources or their
respective Affiliates) shall be nevertheless recoverable from WPC on the basis
of a full indemnity.
Section 8.6 Remedies. WPC shall be deemed to be primarily and jointly and
severally liable with Xxxxxxx and its Affiliates to observe and perform the
covenants, obligations and duties on the respective parts of Xxxxxxx and its
Affiliates under the Tax Separation and Indemnification Agreement and to
indemnify Alliant Energy and Resources and their respective Affiliates in
respect of all those matters for which Xxxxxxx and its Affiliates are
responsible to Alliant Energy and Resources and their respective Affiliates
under the Tax Separation and Indemnification Agreement. Alliant Energy and
Resources and their respective Affiliates may require WPC to observe and perform
all such covenants, obligations and duties as aforesaid and to indemnify Alliant
Energy and Resources and their respective Affiliates as aforesaid without first
(or ever) taking proceedings against Xxxxxxx or its Affiliates or any other
persons. WPC waives any right that it may have to require any of Alliant Energy
or Resources or their respective Affiliates to proceed against Xxxxxxx, its
Affiliates or any other person or to exhaust any security held by any of Alliant
Energy, Resources, their respective Affiliates or any other person, or to pursue
any other remedy in its power.
Section 8.7 No Subrogation. WPC hereby waives and shall have no right of
subrogation with respect to any payment made pursuant to its guarantee under
this Article VIII.
Section 8.8 Waiver of Formalities. WPC hereby waives all presentment,
demands for performance, protests, notices of nonperformance, protest, dishonor,
amendment or acceptance of the guarantee, and any other formality with respect
to any of the obligations of the guarantee under this Article VIII.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification of WPC and its Affiliates.
(a) Alliant Energy and Resources, jointly and severally, shall
indemnify and hold WPC, Xxxxxxx, their respective officers and directors
and each person, if any, who controls WPC or Xxxxxxx within the meaning of
either Section 11 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "WPC Indemnified Parties"), harmless
from:
(i) Any and all losses, liabilities, claims and damages the
substance of which are based solely on the information provided by
Alliant Energy about Alliant Energy or Resources set forth under the
headings "Stock Ownership of Management and Selling Stockholder" and
"Relationship with Alliant Energy Corporation" in the Registration
Statement on Form S-1 (Registration No. 333-107341) filed with the SEC
with respect to the IPO (such Registration Statement, as amended, is
hereinafter called the "IPO Registration Statement");
(ii) Any losses, liabilities, claims and damages resulting from
the breach of any representation, warranty or covenant by Alliant
Energy or Resources set forth in this
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Agreement, the Registration Rights Agreement or the Tax Separation and
Indemnification Agreement; and
(iii) Any reasonable costs or expenses, including reasonable
attorneys' fees and expenses (subject to certain limitations when
Alliant Energy is defending the claim in accordance with Section
9.1(c)), of the WPC Indemnified Parties incident to a loss, liability,
claim or damage for which the WPC Indemnified Parties are entitled to
be indemnified pursuant to Section 9.1(a)(i) or 9.1(a)(ii) above.
(b) The indemnity obligation under this Section 9.1 shall apply
without regard to whether the loss, liability, claim, damage, cost or
expense for which indemnity is claimed hereunder was caused by the
negligence of any of the WPC Indemnified Parties (whether such negligence
be sole, joint or concurrent, active or passive), or whether such loss,
liability, claim, damage, cost or expense is based on strict liability,
absolute liability or arising as an obligation or contribution.
(c) After receipt by a WPC Indemnified Party of notice, or a WPC
Indemnified Party's actual discovery, of any action, proceeding, claim,
demand, or potential claim that could give rise to a right to
indemnification pursuant to any provision of this Agreement (any of which
is individually referred to as a "WPC Circumstance"), such WPC Indemnified
Party shall give Alliant Energy written notice describing the WPC
Circumstance in reasonable detail; provided, however, that no delay by such
WPC Indemnified Party in notifying Alliant Energy shall relieve Alliant
Energy and Resources from any liability or obligation hereunder unless (and
then solely to the extent) Alliant Energy's or Resources' position is
actually adversely prejudiced. In the event Alliant Energy notifies WPC
within fifteen days after such notice that Alliant Energy is assuming the
defense thereof, (i) Alliant Energy will defend the WPC Indemnified Parties
against the WPC Circumstances with counsel of its choice, provided such
counsel is reasonably satisfactory to WPC, (ii) the WPC Indemnified Parties
may retain separate co-counsel at its or their sole cost and expense
(except that Alliant Energy will be responsible for the fees and expenses
for the separate co-counsel to the extent WPC reasonably concludes that the
counsel Alliant Energy has selected has a conflict of interest), (iii) the
WPC Indemnified Parties will not consent to the entry of any judgment or
enter into any settlement with respect to the WPC Circumstances without the
written consent of Alliant Energy and (iv) Alliant Energy will not consent
to the entry of any judgment with respect to the WPC Circumstances, or
enter into any settlement which does not include a provision whereby the
plaintiff or claimant in the matter releases the WPC Indemnified Parties
from all liability with respect thereto, without the written consent of
WPC. In the event Alliant Energy does not notify WPC within fifteen (15)
days after a WPC Indemnified Party has given notice of the WPC Circumstance
that Alliant Energy is assuming the defense thereof, the WPC Indemnified
Parties may defend against, or enter into any settlement with respect to,
the WPC Circumstance in any manner the WPC Indemnified Parties reasonably
may deem appropriate, at Alliant Energy's cost.
(d) Indemnification under this Section 9.1 shall be in addition to any
remedies the WPC Indemnified Parties may have at law or equity; provided,
however, that in no event shall Alliant Energy and Resources (considered
for this purpose as one entity) be obligated to the WPC Indemnified Parties
under this Agreement or otherwise to pay in connection with this Agreement
or otherwise any amount in excess of the aggregate net proceeds received by
Resources in the IPO.
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Section 9.2 Indemnification of Alliant Energy and Its Affiliates.
(a) WPC and Xxxxxxx, jointly and severally, shall indemnify and hold
Alliant Energy and Resources, their respective officers and directors, and
each person, if any, who controls Alliant Energy or Resources within the
meaning of either Section 11 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Alliant Energy
Indemnified Parties"), harmless from:
(i) Any and all losses, liabilities, claims and damages related
to the conduct of the business of WPC and Xxxxxxx prior to and after
the IPO, except (1) any losses, liabilities, claims or damages arising
out of Resources' guarantees to (A) Point Xxxxxxxx Pipeline Company
and its partners of the obligations of Xxxxxxx Programs, Inc. under
that certain Guaranty Agreement, dated November 30, 1994, (B) Point
Xxxxxxxx Natural Gas Line Company and its partners of the obligations
of Xxxxxxx Programs, Inc. under that certain Guaranty Agreement, dated
November 30, 1994 and (C) Gaviota Gas Plant Company and its partners
of the obligations of Xxxxxxx Programs, Inc. under that certain
Guaranty Agreement, dated November 30, 1994 or (2) any losses,
liabilities, claims and damages related to the issuance by Alliant
Energy of shares of its common stock in connection with the
acquisition by Xxxxxxx of Okie Crude Company, Xxxx Gas Company, Xxxxxx
Gas Gathering Company, Okie Energy Company, Xxxxxx Energy Company and
Golden Gas Production Company;
(ii) Any and all losses, liabilities, claims and damages related
to the IPO or the IPO Registration Statement, including any and all
amounts payable by Alliant Energy or Resources pursuant to the
indemnification or contribution provisions of the Purchase Agreement,
except any losses, liabilities, claims or damages the substance of
which are based solely on the information provided by Alliant Energy
about Alliant Energy or Resources set forth under the headings "Stock
Ownership of Management and Selling Stockholder" and "Relationship
with Alliant Energy Corporation" in the IPO Registration Statement;
(iii) Any losses, liabilities, claims and damages resulting from
the breach of any representation, warranty or covenant by WPC or
Xxxxxxx set forth in this Agreement, the Registration Rights Agreement
or the Tax Separation and Indemnification Agreement; and
(iv) Any reasonable costs or expenses, including reasonable
attorneys' fees and expenses (subject to certain limitations when WPC
is defending the claim in accordance with Section 9.2(c)), of the
Alliant Energy Indemnified Parties incident to a loss, liability,
claim or damage for which the Alliant Energy Indemnified Parties are
entitled to be indemnified pursuant to Section 9.2(a)(i), 9.2(a)(ii)
or 9.2(a)(iii) above.
(b) The indemnity obligation under this Section 9.2 shall apply
without regard to whether the loss, liability, claim, damage, cost or
expense for which indemnity is claimed hereunder was caused by the
negligence of any of the Alliant Energy Indemnified Parties (whether such
negligence be sole, joint or concurrent, active or passive), or whether
such loss, liability, claim, damage, cost or expense is based on strict
liability, absolute liability or arising as an obligation or contribution.
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(c) After receipt by an Alliant Energy Indemnified Party of notice, or
an Alliant Energy Indemnified Party's actual discovery, of any action,
proceeding, claim, demand, or potential claim that could give rise to a
right to indemnification pursuant to any provision of this Agreement (any
of which is individually referred to as an "Alliant Energy Circumstance"),
such Alliant Energy Indemnified Party shall give WPC written notice
describing the Alliant Energy Circumstance in reasonable detail; provided,
however, that no delay by such Alliant Energy Indemnified Party in
notifying WPC shall relieve WPC or Xxxxxxx from any liability or obligation
hereunder unless (and then solely to the extent) WPC's or Xxxxxxx'x
position is actually adversely prejudiced. In the event WPC notifies such
Alliant Energy Indemnified Party within fifteen (15) days after such notice
that WPC is assuming the defense thereof, (i) WPC will defend the Alliant
Energy Indemnified Parties against the Alliant Energy Circumstances with
counsel of its choice, provided such counsel is reasonably satisfactory to
Alliant Energy, (ii) the Alliant Energy Indemnified Parties may retain
separate co-counsel at its or their sole cost and expense (except that WPC
will be responsible for the fees and expenses for the separate co-counsel
to the extent Alliant Energy reasonably concludes that the counsel WPC has
selected has a conflict of interest), (iii) the Alliant Energy Indemnified
Parties will not consent to the entry of any judgment or enter into any
settlement with respect to the Alliant Energy Circumstances without the
written consent of WPC and (iv) WPC will not consent to the entry of any
judgment with respect to the Alliant Energy Circumstances, or enter into
any settlement which does not include a provision whereby the plaintiff or
claimant in the matter releases the Alliant Energy Indemnified Parties from
all liability with respect thereto, without the written consent of Alliant
Energy. In the event WPC does not notify Alliant Energy within fifteen (15)
days after an Alliant Energy Indemnified Party has given notice of the
Alliant Energy Circumstance that WPC is assuming the defense thereof, the
Alliant Energy Indemnified Parties may defend against, or enter into any
settlement with respect to, the Alliant Energy Circumstance in any manner
the Alliant Energy Indemnified Parties reasonably may deem appropriate, at
WPC's cost.
(d) Indemnification under this Section 9.2 shall be in addition to any
remedies the Alliant Energy Indemnified Parties may have at law or equity.
Section 9.3 Contribution. If the indemnification provided for in this
Article IX from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified party in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in this Article IX, any legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding. No party shall be liable for contribution with
respect to any
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action or claim settled without its written consent, which consent shall not be
unreasonably withheld.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9.3 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph. No
person guilty of fraudulent misrepresentation (with the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
ARTICLE X
MISCELLANEOUS
Section 10.1 Expenses of IPO. Alliant Energy shall pay all of the fees and
expenses incurred by Alliant Energy or WPC in connection with the registration
and sale of shares of WPC Common Stock in the IPO, including all underwriting
discounts and commissions applicable to the sale of the shares of WPC Common
Stock to be sold by Resources in the IPO and including all fees and expenses
that are identified in Part II of the IPO Registration Statement; provided,
however, that WPC shall pay all legal, accounting and advisory fees that relate
to the ongoing business of WPC or Xxxxxxx and that were requested by WPC and/or
Xxxxxxx.
Section 10.2 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (a) when delivered by
hand or mail, (b) when transmitted by facsimile, with confirmation of receipt,
or (c) one business day after being sent by Express Mail, Federal Express or
other express delivery service with next day delivery, to the addressee at the
following address or facsimile number (or to such other address or facsimile
number as a party may specify from time to time by notice hereunder):
If to Alliant Energy or Resources:
Alliant Energy Corporation
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with copies to:
Alliant Energy Corporation
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
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Alliant Energy Resources, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx Xxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, III, Esq.
Facsimile No.: (000) 000-0000
If to WPC or Xxxxxxx:
Xxxxxxx Petroleum Corporation
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxxx Xxxx & Xxxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Kendor X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Section 10.3 Note. Without limiting the means by which WPC may obtain funds
to pay the principal and interest due to Resources on the Note, Alliant Energy
and Resources agree that WPC may use the proceeds of any issuance of equity by
WPC permitted under this Agreement to repay the principal and interest due to
Resources on the Note.
Section 10.4 Entire Agreement. This Agreement, together with the
Registration Rights Agreement and the Tax Separation and Indemnification
Agreement, constitutes the entire agreement of the parties with respect to the
subject matter hereof, supersedes all prior agreements and understandings
between them, and may not be modified, amended or terminated except by a written
agreement signed by all of the parties hereto.
Section 10.5 Waivers. No waiver of any breach or default hereunder shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
of the same or similar nature.
Section 10.6 Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon Alliant Energy, Resources, WPC and Xxxxxxx and
their respective permitted successors and assigns and may not be assigned in
whole or in part by either of them without the prior written consent of the
other parties, and any such attempted assignment without such consent shall be
null and void, except that Alliant Energy or Resources may assign its rights
hereunder to
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an Affiliate of Alliant Energy without the prior written consent of WPC or its
permitted successors or assigns.
Section 10.7 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdictions, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
Section 10.8 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 10.9 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Wisconsin without
reference to the choice of law principles thereof.
Section 10.10 Third Parties. Except as provided in Article IX hereof with
respect to the WPC Indemnified Parties and the Alliant Energy Indemnified
Parties, nothing in this Agreement is intended to confer any rights or remedies
under or by reason of this Agreement on any persons other than the parties
hereto and their Affiliates and respective permitted successors and assigns.
Section 10.11 Headings. The Article and Section headings contained herein
are for the purpose of convenience only and are not intended to define or limit
the contents of such Articles and Sections and shall be given no effect in the
construction or interpretation of this Agreement. The term "including" or
"include" shall mean "including, without limitation," and the subsequent listing
of any matters shall in no event be construed to limit or narrow the breadth of
the preceding clause or matter. Any reference to an Article or Section herein
shall be deemed to be a reference to that Article or Section hereof.
Section 10.12 Rules of Construction. Each of Alliant Energy, Resources, WPC
and Xxxxxxx agree that (a) the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation or construction of this Agreement, and (b) no
usage of trade, course of dealing, course of performance or enforcement or
surrounding circumstances shall be used in interpreting or construing this
Agreement.
Section 10.13 Injunctions. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Therefore, the parties hereto shall be entitled to an injunction or injunctions
to prevent breach of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court having jurisdiction,
such remedy being in addition to any other remedy to which they may be entitled
at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ALLIANT ENERGY CORPORATION
By
-----------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
ALLIANT ENERGY RESOURCES, INC.
By
-----------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
XXXXXXX PETROLEUM CORPORATION
By
-----------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
XXXXXXX OIL AND GAS CORPORATION
By
-----------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
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EXHIBIT B
FORM OF NOTE
$3,000,000 ___________, 2003
FOR VALUE RECEIVED, Xxxxxxx Petroleum Corporation, a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of Alliant Energy
Resources, Inc., a Wisconsin corporation ("Resources"), or its assignees,
without setoff or counterclaim, the principal sum of Three Million Dollars
($3,000,000), payable on [Insert date two years after closing of IPO].
The unpaid principal balance hereof shall bear interest, payable on [Insert
date two years after closing of IPO], computed a rate of 5% per annum. Interest
shall be calculated by the actual number of days elapsed, using a daily rate
determined by dividing the annual rate by 360. All principal, interest and other
amounts unpaid after Default (as defined below) shall bear interest, payable on
demand, computed at a rate equal to 2% per annum plus the rate otherwise payable
hereunder.
All amounts payable on this note shall be payable in lawful money of the
United States of America in immediately available funds to such account of
Resources as Resources may designate, free and clear of, and without deduction
for or on account of, any and all present and future taxes, levies, imposts,
deductions, charges, withholdings and all liabilities with respect thereto.
This Note may be prepaid in full or in part at any time without premium or
penalty. All such prepayments shall be applied against the final principal
payment hereof due at maturity.
Borrower grants to Resources a security interest and lien in any credit
balance or other money now or hereafter owed Borrower by Resources, and agrees
that Resources may, at any time and without notice or demand, set off against
any such credit balance or other money any amount unpaid under this note,
whether or not due.
Without affecting the liability of any maker, endorser, surety or
guarantor, the holder may, from time to time and without notice, renew or extend
the time for payment, accept partial payments, release or impair any collateral
security for payment of this note, or agree not to xxx any party liable on it.
If any payment is not made when due or if the holder shall in good xxxxx
xxxx itself insecure (in each case, a "Default"), the unpaid balance of this
Note shall, at the option of the holder and without notice or demand, mature and
become immediately payable.
This Note is the "Note" referred to in, and is issued by the Borrower
under, that certain Master Separation Agreement, dated as of ________, 2003,
among the Borrower, Resources, Xxxxxxx Oil and Gas Corporation and Alliant
Energy Corporation (the "Master Separation Agreement").
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
The Borrower hereby agrees to indemnify the holder hereof against any loss,
cost or expense incurred by such holder in connection with the enforcement of
any and all rights
pertaining to this Note, including, without limitation, all court costs,
reasonable attorneys' fees and other costs of collection. No delay on the part
of the holder hereof in exercising any of its options, powers or rights, or any
partial or single exercise thereof, shall constitute a waiver thereof.
This Note shall be governed by and construed in accordance with the laws of
the State of Wisconsin, without giving effect to choice of law or conflicts of
laws principles.
XXXXXXX PETROLEUM CORPORATION
By:_________________________________________
Name: ______________________________________
Title: _____________________________________
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