1
EXHIBIT 10.23
TAX AGREEMENT
This Tax Agreement is made and entered into as of the 23rd day of
February, 1995, by and between Amoco Production Company ("Seller"), a Delaware
corporation, Amoco Corporation ("Amoco"), an Indiana corporation and the
indirect parent of Seller, Xxxxxx International, Inc. ("Xxxxxx"), a
corporation organized under the laws of Texas, Xxxxxx Congo Holdings Company
("Xxxxxx Holdings"), a corporation organized under the laws of Texas and a
wholly-owned subsidiary of Xxxxxx, Nuevo Energy Company ("Nuevo"), a
corporation organized under the laws of Delaware, The Congo Holding Company
("Nuevo Holdings"), a corporation organized under the laws of Texas and a
wholly-owned subsidiary of Nuevo (Xxxxxx, Xxxxxx Holdings, Nuevo, and Nuevo
Holdings hereinafter collectively "Guarantors"), and Xxxxxx International
Congo, Inc. ("Xxxxxx Congo"), a corporation organized under the laws of Texas
and a wholly-owned subsidiary of Xxxxxx Holdings, and The Nuevo Congo Company
("Nuevo Congo"), a corporation organized under the laws of Texas and a
wholly-owned subsidiary of Nuevo Holdings (Xxxxxx Congo and Nuevo Congo
hereinafter collectively "Purchasers").
W I T N E S S E T H:
WHEREAS, Seller is the owner of ten (10) issued capital shares, one
hundred United States Dollars (U.S. $100.00) par value per share, of each of
Amoco Congo Exploration Company ("ACEC") and Amoco Congo Petroleum Company
("ACPC"), both Delaware corporations (hereinafter referred to as "Company" or
"Companies"), constituting all of the Companies' issued and outstanding shares
of capital stock ("Shares"); and
WHEREAS, Seller, Guarantors, and Purchasers have entered into a Stock
Purchase Agreement dated June 30, 1994 ("Agreement"), pursuant to which Seller
agrees to sell and Purchasers agree to purchase the Shares on the terms and
conditions stated therein; and
WHEREAS, the Agreement contemplates that the purchase and sale of the
Shares by Seller to Purchasers will be effectuated by means of a taxable
reverse subsidiary merger, with the result that ACEC will be wholly owned by
Xxxxxx Holdings and ACPC will be wholly owned by Nuevo Holdings; and
WHEREAS, OPIC has issued to Xxxxxx and Nuevo a contract of political
risk insurance (individually, an "Insurance Policy" and collectively,
"Insurance Policies") in respect of such Guarantor's investment in the
Companies; and, upon the payment of certain claims under either such policy,
the applicable Guarantor will transfer, or cause to be transferred, to OPIC
Shares and/or other interests in, or of, the applicable Company;
WHEREAS, OPIC and the Purchasers have entered into a Finance Agreement
(the "Finance Agreement") and a related Participation and Guaranty Agreement,
each dated as of the date hereof (collectively the "Loan Documents") (which
Loan Documents will become binding on the Companies upon consummation of the
mergers referenced above), pursuant to which OPIC has guaranteed the
obligations of the Purchasers and the Companies in respect of loans (the
"Loans") to be made by as yet unspecified lenders pursuant to the Finance
Agreement;
WHEREAS, true and correct copies of the Insurance Policies and the Loan
Agreements will be provided to Seller prior to Closing;
2
WHEREAS, the proceeds of the Loans advanced to Purchasers will be used
exclusively to finance the purchase of the Shares by the Purchasers;
WHEREAS, the obligations of the Companies and the Purchasers under the
Loan Agreements will be secured by a pledge of the Shares and by a lien on
specified escrow accounts at a bank in the United States containing only funds
denominated in U.S. dollars;
WHEREAS, the execution of this Tax Agreement by Purchasers, Guarantors,
Seller, Amoco, and the Companies is a condition precedent to Closing of the
sale of the Shares; and
WHEREAS, Companies' operations are subject to taxation in the Republic
of the Congo ("Congo") as branch operations of a foreign corporation; and
WHEREAS, Companies may have incurred substantial dual consolidated
losses ("DCLs"), as defined by the DCL Regulations; and
WHEREAS, Seller and its Consolidated Group have filed all necessary
certifications required pursuant to Treasury Regulation Section
1.1503-2A(d)(3), and intend to timely file all certifications required pursuant
to Treasury Regulation Section 1.1503-2(g)(2), with the United States Internal
Revenue Service ("IRS") regarding the use of said DCLs; and
WHEREAS, the existing DCLs of the Companies must be recaptured into
income under circumstances, potentially resulting in substantial tax liability;
and
WHEREAS, the parties hereto desire to avoid triggering recapture into
income of said DCLs pursuant to the provisions of the DCL Regulations, and
WHEREAS, the Purchasers hereby acknowledge that, after the sale of the
Companies to the Purchasers, the Seller can rely only on the Guarantors,
Purchasers and their successors and assigns, and the Companies to monitor the
transactions of the Companies and take any action necessary to prevent the
triggering of the DCL recapture liability.
NOW THEREFORE, in consideration of the premises and the respective
covenants, agreements, and conditions contained herein, the parties hereby
agree as follows:
1. Definitions
For the purposes of this Tax Agreement, the following terms shall have
the following meanings:
"Affiliate" shall mean:
(1) any company at least fifty percent (50%) of whose shares
entitled to vote for the election of directors are owned,
directly or indirectly, by such party;
(2) any company which owns, directly or indirectly, at least
fifty percent (50%) of the shares entitled to vote for the
election of directors of such party; or
2
3
(3) any company at least fifty percent (50%) of whose shares
entitled to vote for the election of directors are owned,
directly or indirectly, by a company which at the same
time owns, directly or indirectly, at least fifty percent
(50%) of the shares entitled to vote for the election of
directors of such party.
"Closing Agreement" shall mean an agreement described in Treasury
Regulation Section 1.1503-2(g)(2)(iv)(B)(2).
"Code" shall mean the U.S. Internal Revenue Code of 1986, as amended.
All references herein to the Code, or to the Treasury Regulations
promulgated thereunder, shall include any amendments or any substitute
or successor provisions thereto.
"Consolidated Group" shall mean a group of corporations that has elected
to make a consolidated return with respect to income tax imposed by
chapter 1 of the Code.
"DCL" shall mean the dual consolidated losses of the Companies, if any,
as defined in section 1503(d) of the Code and the DCL Regulations.
"DCL Regulations" shall mean Treasury Regulation Section 1.1503-2A,
Treasury Regulation Section 1.1503-2, or any successor regulation as in
effect from time to time.
"Event of Default" shall have the meaning defined in the Finance
Agreement.
"Loss Event" shall have the meaning defined in the Insurance Policies.
"Obligated Person" shall mean any Person (other than OPIC or any Person
(other than a Person who is a party to this Tax Agreement) who acquires
any interest in any of the Shares or any of the assets of any Company
from or under the direction of OPIC solely as a result of OPIC's
exercise of its rights under any Insurance Policy or Loan Agreement) who
acquires any interest in any of the Shares or any of the assets of any
Company (including but not limited to any transferee, creditor,
guarantor, or subrogee), excluding any unrelated third party who
purchases hydrocarbons or surplus materials or equipment from a Company
in the ordinary course of the Company's business.
"OPIC" shall mean the Overseas Private Investment Corporation, an agency
of the United States of America organized as a corporation under the
laws of the United States.
"Person" shall have the meaning contained in section 7701(a)(1) of the
Code and any Treasury Regulations promulgated thereunder.
3
4
"Separate Unit" shall have the meaning contained in Treasury Regulation
Section 1.1503-2(c)(3).
"Taxes" shall mean all federal, state, local, foreign, and other net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties, or other taxes, fees,
assessments, or charges in the nature of a tax, together with any
interest and any penalties, additions to tax or additional amounts with
respect thereto, and the term "Tax" means any of the foregoing Taxes.
"Tax Agreement" shall mean this Tax Agreement and any amendments thereto.
"Triggering Event" shall mean any one or more of the events specified in
Treasury Regulation Section 1.1503-2(g)(iii)(A) or Treasury Regulation
1.1503-2A(d)(4), the occurrence of which would require the recapture of
DCLs, plus applicable interest, into income as provided in the DCL
Regulations.
All other terms specifically defined in the Agreement and not defined herein
shall have the meanings assigned to them in the Agreement unless the context
clearly requires otherwise.
2. Initial Closing Agreement
A. Amoco, Guarantors, and Companies agree that prior to Closing,
they shall submit to the IRS a request for a Closing Agreement as
specified in Treasury Regulation Section
1.1503-2(g)(2)(iv)(B)(2).
B. In conjunction with the Closing Agreement specified in Article
2.A, above, and as an integral part thereof, Amoco shall request
from the IRS, on behalf of itself Guarantors, Purchasers, and
Companies, such rulings as Amoco, in its sole discretion (but in
consultation with Guarantors), deems necessary, which may
include, but may not be limited to, the following:
(1) that the net operating losses incurred by the Companies
are not DCLs;
(2) that the sale of the Shares pursuant to the Agreement will
not constitute a Triggering Event with respect to any DCLs
of the Companies;
(3) that a subsequent transfer of any of the Shares or any of
the assets of either of the Companies to OPIC or to any
other creditor as the result of a foreclosure or Loss
Event, to a bankruptcy trustee or receiver (or
substantially similar Person) as the result of a
bankruptcy proceeding or receivership (or a substantially
similar proceeding), or to the Congo (or an Affiliate
thereof) as a result of an expropriation, will not
constitute a Triggering Event; and
(4) that any transfer of any of the Shares or any of the
assets of either of the Companies to any Person that is
already a party to
4
5
the Closing Agreement specified in Article 2.A above will
not constitute a Triggering Event.
C. Amoco, Guarantors, Purchasers, and Companies agree to make all
representations and to supply all information necessary for the
IRS to enter into the Closing Agreement and to issue the rulings
requested under this Article 2, including, but not limited to:
(1) representations by Amoco, Guarantors, and Companies that
they agree to be jointly and severally liable for the
amount of income tax, plus applicable interest, due as a
result of the occurrence of any Triggering Event;
(2) representations by Guarantors and Companies that they will
treat any potential recapture amount as unrealized
built-in gain for purposes of section 384(a) of the Code;
(3) representations by Xxxxxx, Nuevo and Companies that they
will each timely file the certifications required by
Treasury Regulation Section Section
1.1503-2(g)(2)(iv)(B)(2)(iii) and 1.1503-2(g)(2)(i).
3. Covenants Regarding Periods After Closing
Purchasers, Guarantors, and Companies agree with respect to each taxable
year ending after the Closing Date that they:
A. shall not take any action to cause the occurrence of any
Triggering Event;
B. shall limit the business of the Companies to the exploitation of
the Yombo Permit;
C. shall promptly notify Seller of (i) any proposed voluntary sale,
exchange, transfer, contribution, distribution, actual or
constructive liquidation, dissolution, reorganization, lease,
farmout, or other disposition of a Company, any of the Shares
that would have the effect of causing a Company to cease being a
member of its Consolidated Group, or any of the assets of a
Company or any Separate Unit thereof (other than sales of
hydrocarbons or surplus materials or equipment to unrelated third
parties in the ordinary course of business), or (ii) any proposed
sale, exchange, transfer, contribution, reorganization,
distribution, actual or constructive liquidation, dissolution,
lease, or other disposition of a Guarantor or the stock of a
Guarantor that would have the effect of causing a Company to
become a member of a new Consolidated Group. Prior to the
consummation of any such voluntary sale, exchange, transfer,
contribution, reorganization, distribution, actual or
constructive liquidation, dissolution, lease, farmout, or other
disposition, Guarantors, Purchasers, and Companies shall:
(1) allow Seller to advise Guarantors, Purchasers, and
Companies regarding the terms and conditions of such
proposed sale, exchange, transfer, contribution,
reorganization, distribution, actual or constructive
liquidation, dissolution, lease, farmout, or other
disposition solely for the purpose of avoiding recapture
of any DCLs of the Companies or any Separate Unit thereof
as a result of said sale, exchange, transfer,
contribution,
5
6
reorganization, distribution, actual or constructive
liquidation, dissolution, lease, farmout, or other
disposition; and
(2) obtain the written approval of Seller with respect to such
terms and conditions, which approval shall not be
unreasonably withheld;
D. shall promptly notify Seller of any actual or potential
involuntary sale, exchange, transfer, contribution,
reorganization, distribution, actual or constructive liquidation,
dissolution, lease, farmout, or other disposition of a Company or
any of the Shares or any of the assets of a Company or any
Separate Unit thereof, or any sale, exchange, transfer,
contribution, reorganization, distribution, actual or
constructive liquidation, dissolution, lease, or other
disposition of any of a Guarantor or the stock of a Guarantor
that could have the effect of causing a Company to become a
member of a new Consolidated Group, including, but not limited to
(i) any Event of Default by any of Guarantors, Purchasers, or
Companies under any Loan Document or other obligation to OPIC;
(ii) any default or claimed default by any of the Guarantors,
Purchasers, or Companies with respect to any indebtedness that
could result in a recapture of DCLs of the Companies or any
Separate Unit thereof; or (iii) any Loss Event under any
Insurance Policy or any other similar policy issued by any other
Person relating to the Companies that could result in a recapture
of DCLs of the Companies or any Separate Unit thereof;
E. shall, prior to any sale, exchange, transfer, contribution,
reorganization, distribution, actual or constructive liquidation,
dissolution, lease, farmout, or other disposition of a Company or
any of the Shares that would have the effect of causing a Company
to cease being a member of its Consolidated Group or any of the
assets of a Company or any Separate Unit thereof (other than
sales of hydrocarbons or surplus materials or equipment in the
ordinary course of business), notify Seller in writing of the
terms and conditions of the proposed sale, exchange, transfer,
contribution, disposition, reorganization, actual or constructive
liquidation, dissolution, lease, farmout, or other disposition
and Seller shall then have thirty (30) days to elect to purchase
such Shares or assets on such notified terms;
F. shall require any Obligated Person to agree to fulfill and be
bound by all of the obligations and covenants of Purchasers,
Guarantors, and Companies contained in this Tax Agreement;
G. shall honor and abide by, and shall not in any way amend the
terms and obligations, of that certain Letter dated November 21,
1994, to the Director General of Taxation of the Congo;
H. shall not permit any Company to incur secured indebtedness in
excess of $10,000,000 in the aggregate, other than the Loans,
without the prior written consent of Seller, which consent shall
be granted if the lender enters into an option agreement with
Seller similar in form and substance to that certain Option
Agreement attached as Schedule L to the Agreement; and
I. shall not permit any omission (other than any failure to
contribute money or assets to the Companies) that causes a
Triggering Event.
6
7
Notwithstanding the covenants contained in this Article 3, (A) if (i) the
conditions contained in Article 4.B or Article 4.C hereof are met with respect
to an event and (ii) any Guarantor or Purchaser is released from any indemnity
in accordance with Article 4.B hereof or Article 4.C hereof, then the
Guarantors and Purchasers shall, with respect to that event only, (a) have no
further obligation to comply with the obligations or covenants contained herein
and (b) be released from any breach of any covenant or obligation contained
herein, and (B) if (i) the conditions contained in Article 4.B hereof are met
with respect to an event and (ii) any Company is released from any indemnity in
accordance with Article 4.B hereof, then the Companies, Guarantors, and
Purchasers shall, with respect to that event only, (a) have no further
obligation to comply with the obligations or covenants contained herein, and
(b) be released from any breach of any covenant or obligation contained herein.
For purposes of this paragraph and Article 4.B and Article 4.C hereof, an event
shall be deemed to be a separate event regardless of whether it may be, or may
have been intended to be, directly or indirectly, dependent on, related to, or
contemporaneous with any other event.
4. Indemnification by Guarantors- Purchasers, and Companies
A. Except as expressly provided in Article 4.B and 4.C hereof
Xxxxxx, Xxxxxx Holdings, Xxxxxx Congo, Nuevo, Nuevo Holdings,
Nuevo Congo, ACEC, ACPC, or each of them, jointly and severally,
agree to indemnify and hold harmless Seller, its Affiliates and
their respective directors, officers and employees from and
against any and all Taxes, tax credits utilized, interest,
penalties, costs of enforcement and reasonable attorneys fees
incurred in defending any claim for Taxes, interest, penalties,
or additional income or the enforcement of this indemnification,
if any, arising out of or based upon or with respect to any
failure by Xxxxxx, Xxxxxx Holdings, Xxxxxx Congo, Nuevo, Nuevo
Holdings, Nuevo Congo, a Company, or any of them, to comply with
each and every obligation and covenant of this Tax Agreement.
B. Notwithstanding the foregoing Article 4.A, no Guarantor,
Purchaser, or Company, shall be required to indemnify Seller, its
Affiliates or their respective directors, officers, and
employees:
(1) if, in the case of (i) a voluntary sale, exchange,
transfer, contribution, reorganization, distribution,
actual or constructive liquidation, dissolution, lease,
farmout, or other disposition of a Company or any of the
Shares that would have the effect of causing a Company to
cease being a member of its Consolidated Group or assets
of a Company (other than sales of hydrocarbons or surplus
materials or equipment in the ordinary course of
business), or (ii) any sale, exchange, transfer,
contribution, reorganization, distribution, actual or
constructive liquidation, dissolution, lease, or other
disposition of a Guarantor or the stock of a Guarantor
that would have the effect of causing a Company to become
a member of a new Consolidated Group, such Guarantor,
Purchaser, or Company obtained the review and written
approval described in Article 3.C hereof;
(2) in the case of a transfer of any Shares or U.S. dollars
contained in any escrow account to OPIC or any other
secured lender as a result of a foreclosure upon default,
but only if Seller and OPIC or other secured lender, as
the case may be, are, at the time of
7
8
such transfer of Shares or U.S. dollars, parties to an
option agreement in the form and substance of that certain
Option Agreement attached as Schedule L to the Agreement;
(3) in the case of any transfer of Shares or assets resulting
from an expropriation or other Loss Event under an
Insurance Policy, unless OPIC fails to pay compensation
for any loss under political risk or similar insurance
because OPIC has determined that a primary cause of the
loss was unreasonable actions, including corrupt
practices, attributable to a Company, Purchaser, or
Guarantor; or
(4) if, in the case of any other sale, exchange, transfer,
contribution, reorganization, distribution, actual or
constructive liquidation, dissolution, lease, farmout, or
other disposition of a Company or any of the Shares or
assets of a Company not otherwise described in this
Article 4.B, such Guarantor, Purchaser, or Company
complied with Article 3.E hereof.
C. Notwithstanding the foregoing Article 3 or Article 0.X, xxxx of
the Guarantors or Purchasers shall be required to comply with the
covenants and obligations contained in Article 3 hereof or to
indemnify Seller, its Affiliates, or their respective directors,
officers, and employees in the case of a Triggering Event
attributable to a taxable period in which a Company is not an
Affiliate of any of the Guarantors.
5. Indemnification by Seller
If the Guarantors, Purchasers, and Companies shall have complied with
the obligations and covenants contained in Article 3 of this Tax
Agreement with respect to a Triggering Event that caused the recapture
of DCLs of a Company or a Separate Unit thereof and such DCLs are
attributable to periods ending on or before the Closing Date, then
Seller shall indemnify and hold harmless Guarantors, Purchasers,
Companies, their Affiliates, and their respective directors, officers
and employees from and against any and all Taxes, tax credits utilized,
interest, penalties, costs of enforcement, and reasonable attorneys fees
incurred in defending against any claim for Taxes, interest, penalties,
or additional income or the enforcement of this indemnification, if any,
arising out of or based upon or with respect to any such recapture.
6. Rights of Indemnifying Party
A. Each indemnified party hereunder agrees that within five (5)
calendar days following the issuance of any notice from any
taxing authority of a Tax assessment or deficiency resulting from
any DCL recapture in connection with which a claim for
indemnification under this Tax Agreement might be made (a
"Claim"), it will give prompt notice thereof to the indemnifying
party, together with a statement of such information respecting
any of such facts as it may have and a formal demand for
indemnification. The indemnifying party shall not be obligated
to indemnify the indemnified party with respect to any Claim if
the indemnified party falls to notify the indemnifying party in
sufficient time to permit the indemnifying party to defend
against such matter and to make a timely response thereto.
8
9
B. The indemnifying party shall be entitled at its cost and expense
to contest and defend by all appropriate legal proceedings any
Claim with respect to which they are called upon to indemnify the
indemnified party; provided, that notice of the intention so to
contest shall be delivered by the indemnifying party to
indemnified party within 10 days after the date of receipt by the
indemnifying party of notice by the indemnified party of the
assertion of the Claim. Any such contest may be conducted in the
name and on behalf of the indemnifying party or the indemnified
party as may be appropriate. The indemnified party shall have
the right but not the obligation to participate in such
proceedings and to be represented by counsel of its own choosing
at its sole cost and expense.
C. If requested by the indemnifying party, the indemnified party
agrees to cooperate with the indemnifying party and its counsel
in contesting any Claim that the indemnifying party elects to
contest or, if appropriate, in making any counterclaim against
the Person asserting the Claim, or any cross-complaint against
any Person, and the indemnifying party will reimburse the
indemnified party for any expenses it incurs by so cooperating.
The indemnified party agrees to afford the indemnifying party and
its counsel the opportunity to be present at, and to participate
in, conferences with all Persons asserting any Claim the
indemnified party or conferences with representatives of or
counsel for such Persons.
D. The indemnified party shall take no action which would prejudice
the indemnifying party's defense of the matter giving rise to the
Claim.
E. The indemnified party shall have no right to recover from any
other party hereto any losses, costs, expenses, or damages
arising under or in connection with this Tax Agreement any amount
in excess of actual damages, court costs, and reasonable attorney
fees, suffered by such party. Each indemnified party waives any
right to recover punitive, special, exemplary, and consequential
damages arising under or in connection with this Tax Agreement.
7. Defense Against Tax Claims
A. Seller, Guarantors, Purchasers, and Companies each agrees to
notify the other parties to this Tax Agreement promptly in the
event that, in respect of a Company or any Separate Unit thereof,
(i) any tax authority, in the course of any audit or other
examination of the tax returns or records of such party, raises
any question or issue with respect to any loss, expense, or
deduction constituting a DCL or any potential DCL recapture, or
(ii) any tax authority issues a notice of proposed adjustment or
similar notice with respect to any potential DCL recapture.
Purchasers will permit Seller and will cause the Companies and/or
their successors to permit Seller, at Seller's option and
expense, to direct the Companies or Purchasers to take whatever
actions are reasonably necessary in Seller's judgment to contest
and defend any issues which may result in a claim for such Taxes
prior to the payment of such Taxes.
9
10
In the event Purchasers and/or the Companies are responsible for
paying Taxes described in this Tax Agreement or required to pay
Seller the amount of such Taxes under any of the terms of this
Tax Agreement, Seller will permit Purchasers, at Purchasers'
option and expense, to direct Seller to take whatever actions are
reasonably necessary in Purchasers' judgment to contest and
defend any issues which may result in a claim for such Taxes
prior to the payment of such Taxes and prior to the payment of
the amount of such Taxes to Seller. If Purchasers exercise the
option provided for in the preceding sentence, Seller will, at
Purchasers' request, cause its employees and representatives to
be available (at reasonable times and places) to consult with
employees and representatives of the Purchasers regarding the
issues relating to such Taxes. Purchasers shall reimburse Seller
for all its reasonable costs and expenses in complying with the
previous sentence.
In the event of a claim by any taxing authority which will
adversely affect both Seller, Purchasers and/or the Companies by
the liability to pay Taxes and by payments under the terms of
this Tax Agreement or, if the liability under such claim cannot
be readily ascertained, Seller and Purchasers agree to cooperate
fully with each other, each bearing its own expenses, to take
whatever action is necessary to contest and defend or to direct
the Companies to contest and defend any issue which may result in
a claim for Taxes or a payment under the terms of this Tax
Agreement prior to the payment of such Taxes and prior to the
payment of the amount of such Taxes to Purchasers or Seller.
B. If a Tax has been paid to any taxing authority and, as a result
of the payment of such Tax, either Seller or Purchasers incurs a
liability to make payment to the other because of the payment of
such Tax, provisions similar to Article 6.A above shall apply to
enable the party or parties bearing the burden of the Tax
liability to cause the appropriate party to take whatever action
is necessary to claim, pursue or litigate with respect to a
refund of such Tax. If the entire burden of an increased Tax
liability has been borne by Seller or by Purchasers, the right to
litigate for or otherwise claim Tax refunds shall be assigned, to
the extent it is legally permissible to do so, to the party
bearing such economic burden. If any refunds or settlement
amounts shall be delivered to the party who did not bear the
burden of the Tax liability, such party shall assign such amounts
to the party who bore the burden of the Tax liability. In the
event both Seller and Purchasers jointly bear the economic burden
of the payment of any Tax described in this Tax Agreement, Seller
and Purchasers agree to cooperate fully with each other, each
bearing its own expenses, to cause the appropriate party to
litigate the claim for Tax refund and to share the proceeds of
any refund or settlement in proportion to the economic burden
previously borne.
8. Survival
The obligations, covenants, and agreements set forth in this Tax
Agreement and in any certificate or instrument delivered in connection
herewith shall, unless otherwise provided herein, survive the date of
Closing.
9. Notices
10
11
A. All notices shall be given in writing and shall be delivered (i)
by hand to the party for which intended, (ii) by registered or
certified mail, return receipt requested, postage prepaid, (iii)
by telex, or (iv) by facsimile, all of which addressed to the
party for which it is intended at the following respective
addresses or such other address previously furnished in writing
by either party:
To Amoco or Seller: Amoco Production Company
000 XxxxXxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx,
Director of Taxes--APC(I)
To Guarantors or Purchasers: Xxxxxx International, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. X. Xxx Xxxxxx, Jr.
Nuevo Energy Company
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxx
To Companies: The Nuevo Congo Company
(formerly Amoco Congo Petroleum
Company)
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxx
Xxxxxx International Congo, Inc.
(formerly Amoco Congo Exploration
Company)
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. X. Xxx Xxxxxx, Jr.
B. The date of service of the notice shall be the date on which
notice is received.
11
12
10. No Waiver
No failure or delay by any party hereto in exercising any right, power,
privilege or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power, privilege or
remedy preclude the exercise of any other right power, privilege or
remedy. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law. No amendment,
modification or waiver of, or consent with respect to, any provision of
this Tax Agreement shall in any event be effective unless the same shall
be in writing.
11. Successors and Assigns
This Tax Agreement shall be binding upon and inure to the benefit of the
parties and their respective permitted successors and assigns other than
OPIC or any other Person who is not an Obligated Person. No party to
this Tax Agreement shall be relieved of its obligations hereunder, by
assignment or otherwise, without the prior written consent of the other
parties hereto.
12. Governing Law and Dispute Resolution
A. This Tax Agreement shall be governed by the laws of Illinois
excluding any choice of law provisions which would require the
application of the law of any other jurisdiction.
B. Any action, dispute, claim or controversy of any kind now
existing or hereafter arising between any of the parties hereto
in any way arising out of, pertaining to or in connection with
this Tax Agreement (a "Dispute") shall be resolved by binding
arbitration in accordance with the terms hereof. Any party may,
by summary proceedings, bring an action in court to compel
arbitration of any Dispute.
C. Any arbitration shall be administered by the American Arbitration
Association (the "AAA") in accordance with the terms of this
Article 12, the Commercial Arbitration Rules of the AAA, and, to
the maximum extent applicable, the Federal Arbitration Act.
Judgment on any award rendered by an arbitrator may be entered in
any court having jurisdiction.
D. Any arbitration shall be conducted before one arbitrator. The
arbitrator shall be a licensed practicing attorney who is
knowledgeable in the subject matter of the Dispute selected by
agreement between the parties hereto. If the parties cannot
agree on an arbitrator within 30 days after the request for an
arbitration, then any party may request the AAA to select an
arbitrator. The arbitrator may engage engineers, accountants or
other consultants that the arbitrator deems necessary to render a
conclusion in the arbitration proceeding.
E. To the maximum extent practicable, an arbitration proceeding
hereunder shall be concluded within 180 days of the filing of the
Dispute with the AAA. Arbitration proceedings shall be conducted
in Houston, Texas. Arbitrators shall be empowered to impose
sanctions and to take such other actions as the arbitrators deem
necessary to the same extent a judge could impose sanctions or
take such other actions
12
13
pursuant to the Federal Rules of Civil Procedure and applicable
law. At the conclusion of any arbitration proceeding, the
arbitrator shall make specific written findings of fact and
conclusions of law. The arbitrator shall have the power to award
recovery of all costs and fees to the prevailing party. Each
party agrees to keep all Disputes and arbitration proceedings
strictly confidential except for disclosure of information
required by applicable law.
F. All fees of the arbitrator and any engineer, accountant or other
consultant engaged by the arbitrator, shall be paid by Seller, on
the one hand, and the Purchasers, on the other hand, equally
unless otherwise awarded by the arbitrator.
13. Further Assurances and Guaranty
A. Purchasers and Seller hereby agree to execute all such further
instruments and documents, and to take all such other actions, as
may be reasonable and appropriate to further effectuate the
intent of this Tax Agreement.
B. The Guarantors, jointly and severally, unconditionally guarantee
as if each of them were the primary obligor, the punctual payment
and performance of the Purchasers' and the Companies' obligations
under this Tax Agreement and any other agreement between
Purchasers, Companies, and Seller required by this Tax Agreement.
14. Headings
References herein to Articles are to Articles of this Tax Agreement.
Article headings in this Tax Agreement are included herein for
convenience of reference only and shall not constitute a part of the Tax
Agreement for any other purpose.
15. Severability of Provisions
Any provision of this Tax Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
16. Execution in Counterparts
This Tax Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of
which taken together shall constitute but one and the same instrument.
17. Entire Agreement
This Tax Agreement represents the entire understanding of the parties
with respect to the subject matter hereof. There are no other terms,
conditions, representations or warranties, express or implied, written
or
13
14
oral, except as set forth herein. No amendments, modifications or
additions hereto shall be binding unless executed in writing by all of
the parties to this Tax Agreement.
18. Expenses
Except as otherwise expressly provided in the Agreement or in this Tax
Agreement, each party shall pay its own expenses, including
consultants', counsels', and public accountants' fees and expenses
incurred in any way in connection with this Tax Agreement.
19. Confidentiality
Except as may be required by law or regulation or this Tax Agreement,
the parties agree to keep confidential this Tax Agreement and the terms
and provisions hereof and not to disclose them to any third party
without the prior written consent of the parties hereto.
20. No Third Party Beneficiaries
Nothing expressed or referred to in this Tax Agreement is intended to or
shall be construed to give any Person other than Amoco, Seller,
Purchasers, Guarantors, or Companies any legal or equitable remedy or
claim under or with respect to this Tax Agreement.
IN WITNESS WHEREOF, the parties have negotiated and duly executed this Tax
Agreement at Houston, Texas, on the day and year first written above.
AMOCO CORPORATION
By: /s/ Xxxx X Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Attorney-in-Fact
AMOCO PRODUCTION COMPANY
By: /s/ Xxxx X Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Attorney-in-Fact
XXXXXX INTERNATIONAL CONGO, INC.
By: /s/ X X Xxxxxx, Xx
Name: X.X. Xxxxxx, Xx.
Title: President
THE NUEVO CONGO COMPANY
By: /s/ Xxxxxxx X Xxxxxxx
14
15
Name: Xxxxxxx X. Xxxxxxx
Title: President
XXXXXX INTERNATIONAL, INC.
By: /s/ X X Xxxxxx, Xx
Name: X.X. Xxxxxx, Xx.
Title: President
NUEVO ENERGY COMPANY
By: /s/ Xxxxxxx X Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
THE CONGO HOLDING COMPANY
By: /s/ Xxxxxxx X Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
XXXXXX CONGO HOLDINGS, INC.
By: /s/ X X Xxxxxx, Xx
Name: X.X. Xxxxxx, Xx.
Title: President
AMOCO CONGO EXPLORATION COMPANY
By: /s/ Xxxx X Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Attorney-in-Fact
AMOCO CONGO PETROLEUM COMPANY
By: /s/ Xxxx X Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Attorney-in-Fact
15
