EXHIBIT 10.1
EXECUTION COPY
ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
APCO ARGENTINA INC.
AND
THE XXXXXXXX COMPANIES, INC.
EFFECTIVE DATE: JANUARY 1, 2004
TABLE OF CONTENTS
PAGE
1. DEFINITIONS......................................................... 1
2. TERM................................................................ 4
3. PROVISION OF SERVICES............................................... 4
4. COMPENSATION........................................................ 6
5. INVOICING AND PAYMENTS.............................................. 8
6. RIGHT TO AUDIT...................................................... 8
7. INDEPENDENT CONTRACTOR STATUS....................................... 9
8. INDEMNIFICATION..................................................... 9
9. INSURANCE........................................................... 10
10. CONFIDENTIALITY..................................................... 11
11. LIMITATION OF LIABILITY............................................. 12
12. NOTICES............................................................. 12
13. CERTAIN PRACTICES................................................... 14
14. NON-WAIVER.......................................................... 14
15. ASSIGNMENT.......................................................... 15
16. NON-EXCLUSIVE AGREEMENT............................................. 15
17. NO THIRD PARTY BENEFICIARY.......................................... 15
18. HEADINGS............................................................ 15
19. ENTIRE AGREEMENT.................................................... 15
20. SEVERABILITY........................................................ 15
21. AMENDMENTS.......................................................... 16
22. GOVERNING LAW....................................................... 16
23. DISPUTE RESOLUTION.................................................. 16
24. MUTUAL COOPERATION.................................................. 17
25. FORCE MAJEURE....................................................... 17
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ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") is made and entered
into as of this 1st day of January, 2004 ("Effective Date"), by and between APCO
Argentina Inc., a company organized under the laws of the Cayman Islands and its
Subsidiaries ("Company" or "Apco"), and The Xxxxxxxx Companies, Inc.
("Xxxxxxxx"), a company organized under the laws of the State of Delaware, USA.
WHEREAS, Company is a public company whose stock is traded on the NASDAQ
but has few employees and is in need of personnel to perform administrative
services on behalf of the Company;
WHEREAS, Xxxxxxxx owns approximately 69% of the issued and outstanding
stock of Company and has been providing administrative, legal and management
services ("Services") to Company without a formal written agreement.
WHEREAS, Company desires to engage the services of Xxxxxxxx to perform
various Services, under the terms and conditions hereinafter provided; and
WHEREAS, Xxxxxxxx is willing to perform the Services upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Parties agree as follows:
1. DEFINITIONS:
(a) The following terms have the meanings assigned herein.
(i) "Affiliate" of a Person means a Person (i) which is a
Subsidiary of that Person, (ii) of which that Person is a
Subsidiary, or (iii) which is a Subsidiary of a Person of
which that Person is a Subsidiary.
(ii) "Agreement" means this Administrative Services Agreement, as
amended or supplemented from time to time, and the exhibits
hereto, which are incorporated herein by reference.
(iii) "Applicable Law" means, with respect to any Person or any
property or asset, all laws, ordinances, codes, rules,
regulations, orders, writs, injunctions, decrees, rulings,
determinations, awards or standards of any Governmental
Authority, all Governmental Authorizations and all agreements
with any Governmental Authority applicable to or binding on
such Person (or its properties or assets) or to such property
or asset from time to time or at the time specified in this
Agreement, as the case may be.
(iv) "Bankruptcy" of a Person means (a) Involuntary Bankruptcy or
(b) commencement by a Person of a voluntary case or proceeding
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under any applicable bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by such
Person to the entry of a decree or order for relief in
respect of such Person in an involuntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy
or insolvency case or proceeding against such Person, or the
filing by such Person of a petition or answer or consent
seeking reorganization or relief under any Applicable Law; or
consent by such Person to the filing of such petition or to
the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
similar official of such Person or of any substantial part of
the property of such Person, or the making by such Person of
an assignment for the benefit of creditors, or the admission
by such Person in writing of its inability to pay its debts
generally as they become due, or the taking of corporate
action by such Person in furtherance of any such action.
(v) "Business Days" means any day other than Saturday, Sunday or
a legal holiday in New York, New York.
(vi) "Calendar Month" means any of January, February, March,
April, May, June, July, August, September, October, November
or December, as applicable.
(vii) "Claims" has the meaning specified in Section 8(a).
(viii) "Company" has the meaning specified in the preamble to this
Agreement.
(ix) "Confidential Information" has the meaning specified in
Section 10(a)(i).
(x) "Effective Date" has the meaning specified in the preamble to
this Agreement.
(xi) "Governmental Authority" means any judicial, legislative,
administrative or other national, state, municipal or local
governmental authority, ministry, department, any
administrative agency, office, organization or authority
having jurisdiction over the Parties.
(xii) "Governmental Authorization" means any authorization,
consent, ruling, permit, certification, exemption,
exoneration or registration by or with any Governmental
Authority.
(xiii) "Involuntary Bankruptcy" means entry by any competent
governmental authority of any jurisdiction or a court having
jurisdiction in the premises of (i) a decree or order for
relief in respect
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of such Person in an involuntary case or proceeding under
any applicable bankruptcy, insolvency, reorganization or
other similar law or (ii) an involuntary or contested decree
or order adjudging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or
in respect of such Person under any applicable law, or
appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of such
Person or of any substantial part of the property of such
Person, or ordering the winding up or liquidation of the
affairs of such Person.
(xiv) "Parties" and "Party" mean Company and Xxxxxxxx or either of
them.
(xv) "Person" means any individual, corporation, partnership,
joint venture, association, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
(xvi) "Representatives" of a Party shall mean directors, officers,
employees, auditors, counsel, financial and other advisors
and other representatives and Affiliates of such Party, and
such Affiliates' directors, officers, employees, auditors,
counsel, financial and other advisors and other
representatives.
(xvii) "Services" shall have the meaning specified in the second
Whereas clause to this Agreement hereinabove.
(xviii) "Subsidiary" of a Person means (i) a corporation more than
50% of the outstanding voting shares of which is owned,
directly or indirectly, by such Person or by one or more
other Subsidiaries of such Person or by such Person and one
or more Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more
other Subsidiaries of such Person, or such Person and one or
more other Subsidiaries thereof, directly or indirectly, has
at least a majority ownership and power to direct the
policies, management and affairs thereof.
(xix) "US Foreign Corrupt Practices Act" means the United States
Foreign Corrupt Practices Act of 1977, as amended from time
to time.
(xx) "Xxxxxxxx" has the meaning specified in the preamble to this
Agreement.
(xxi) "Xxxxxxxx E&P" shall mean Xxxxxxxx' exploration and
production, business unit that conducts exploration and
production of hydrocarbons activities.
(b) For all purposes of this Agreement, except as otherwise expressly
provided or to the extent that the context otherwise requires:
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(i) the terms defined herein include the plural as well as the
singular and vice versa;
(ii) words importing gender include all genders;
(iii) any reference to an "Article", "Section" or "Exhibit" refers
to an article, section or exhibit, as the case may be, of this
Agreement;
(iv) all references to "this Agreement" mean this Agreement,
including all exhibits hereto, and the words "herein",
"hereof", "hereto" and "hereunder" and other words of similar
import refer to this Agreement and its exhibits, as a whole
and not to any particular article, section, exhibit or other
subdivision;
(v) the symbol "$" or "US$" means United States dollars; and
(vi) whenever the words "include," "includes," or "including" are
used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
2. TERM:
(a) This Agreement shall be effective commencing upon the Effective
Date.
(b) This Agreement shall remain in effect for one year and shall
automatically renew on the anniversary of the Effective Date and each year
thereafter unless terminated by either party upon 90 days prior written notice
prior to any anniversary of the Effective Date. Either Xxxxxxxx or Company may
terminate any given Service provided hereunder at any time upon 60 days prior
written notice.
(c) Promptly after the date of any termination, Xxxxxxxx shall be paid
for any Services rendered by Xxxxxxxx through the date on which Xxxxxxxx ceases
to perform such Services.
(d) Termination of this Agreement in accordance with this Section 2
shall not affect the rights, privileges, duties, liabilities or obligations of
either Party which arose or accrued prior to the date of termination, and this
Section 2 and Sections 8, 9, 10, 11, 14, 17, 18, 19, 20, 22 and 23 shall survive
any termination of this Agreement.
3. PROVISION OF SERVICES:
(a) Company hereby appoints and retains Xxxxxxxx to perform the Services
on the terms and conditions set forth in this Agreement. Xxxxxxxx hereby accepts
and agrees to perform the Services in accordance with the terms and conditions
of this Agreement.
(b) Subject to any limitations on availability and resources and such
other limitations as set forth in this Agreement, the Services shall be those
administrative, legal and financial services described below and such other
services as may be agreed upon from time to time by
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Company and Xxxxxxxx, which shall be performed or provided subject to and under
the direction and supervision of, Company:
(i) internal audit, corporate communications, controller,
security, human resources, storage, accounting, legal, tax,
risk management and insurance, administration, management,
corporate secretarial services and information services,
including without limitation, hardware support, systems
design, programming, production and distribution services but
only to the extent of current capacity levels and subject to
limitations set forth in any applicable agreements of
Xxxxxxxx;
(ii) right to use third party licensed software licensed to
Xxxxxxxx but only to the extent and subject to the
limitations set forth in such licenses;
(iii) providing Xxxxxxxx' personnel to hold certain executive
positions of the Company;
(iv) establishing and maintaining appropriate administrative,
business, accounting and financial systems; maintaining
Apco's home office accounts, perform consolidation
accounting, account analysis, financial reporting, assure
compliance with US GAAP and work with the Company's external
auditors in the US and Argentina;
(v) preparing and issuing monthly operations and financial
reports;
(vi) preparing and/or filing, on behalf of the Company, Securities
and Exchange Commission filings and other information
required to be filed as a public company in compliance with
Applicable Law;
(vii) obtaining, on behalf of Company, Governmental Authorizations,
including completing and executing any related applications
and filings;
(viii) preparing and executing (upon proper authorization) on behalf
of Company agreements for professional services; and
(ix) preparation for and scheduling of meetings of the Board of
Directors and preparing agendas for same.
(c) In addition, amounts expended pursuant to Company's request with
respect to claims and litigation ( including settlement costs and reasonable
expenses associated therewith, and attorney's fees, expenses and court costs)
will be reimbursed by Company to Xxxxxxxx.
(d) Xxxxxxxx shall determine the number and identity of personnel to be
provided to perform the Services but shall ensure that sufficient personnel are
provided at all times. Company agrees that Xxxxxxxx may employ subcontractors to
perform the Services. Any individuals employed by Xxxxxxxx and performing
Services hereunder shall be and remain the employees of Xxxxxxxx and/or its
Affiliates (and not of Company). Company shall be free at any time to accept,
reject or, upon reasonable notice, ask for replacements for any such personnel.
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All equipment provided to such personnel by Company shall remain the property of
Company and all equipment provided to such personnel by Xxxxxxxx shall remain
the property of Xxxxxxxx.
(e) Xxxxxxxx shall not be required to qualify to do business in any
state or foreign country in order to provide Services requested by Company.
Notwithstanding anything to the contrary, Xxxxxxxx shall not be obligated or
required to provide any Service that it is not currently providing to its other
Affiliates.
(f) If Company should discontinue its use of equipment, third party
software or related items which items were leased, purchased, or licensed by
Xxxxxxxx or its Affiliates on Company's behalf and at Company's request, at any
time during the term of this Agreement or prior thereto, the Company shall
reimburse to Xxxxxxxx all charges, costs and expenses actually incurred by
Xxxxxxxx in connection with the cancellation or assignment of any applicable
leases, licenses or other contracts associated with such items; provided,
however, that Xxxxxxxx will allow a representative of Company to participate in
negotiations with regard to such charges prior to any assessment thereof. To the
extent Company shall have specifically requested Xxxxxxxx or its Affiliates to
purchase equipment for the benefit of Company, and such purchase was made,
Company shall purchase from Xxxxxxxx any of such equipment owned by Xxxxxxxx, at
a price equal to Xxxxxxxx' net book value for such equipment. Such obligations
apply whether the discontinuance of use occurs upon the termination of this
Agreement or prior thereto.
4. COMPENSATION:
As full and complete compensation for Services, Company agrees to pay Xxxxxxxx
in the following manner:
i. The Company will pay Xxxxxxxx a percentage (to be defined later herein) of
the certain and specific corporate services allocated to Xxxxxxxx E&P by
Xxxxxxxx using the Modified Massachusetts Formula (the "MMF"). The
allocated services for which the Company will pay are those services that
specifically benefit the Company and include but are not limited to Tulsa
Facilities; Manager General Services (Call Center, Mail, Office, Park and
Facilities scheduling); Tulsa Office Services; Tulsa Mail Services; Tulsa
Forms Management & Purchasing; Xxxxxxxx Travel Service; Manager Food, TVI,
Print, Records; Tulsa Print Services, Tulsa Record Management; Treasurer &
Credit; Risk Management & Insurance; Corporate Secretary; Ethics; Audit;
Investor Relations; Research Accounting and Sarbanes Oxley. Xxxxxxxx' cost
centers will be analyzed at least annually by both Xxxxxxxx and Apco to
determine whether the listing of cost centers utilized hereunder is
complete and appropriate. The Company will pay Xxxxxxxx for its share of
these allocated services based on a separate MMF allocation to be computed
between it and Xxxxxxxx E&P.
The MMF is a three-factor formula, which allocates costs to subsidiaries,
divisions or business units giving equal weight to operating revenue less
cost-of-sales, gross payroll and gross property, plant and equipment. For
purposes of this calculation hereunder, revenues will be reported net of
royalties. For purposes of the MMF calculation, gross payroll shall
include total wages, salaries and other compensation, such as would be
reportable on IRS form 941 or the Argentine equivalent. In the event of
changes due to acquisitions, mergers or asset sales, this allocation will
be adjusted quarterly.
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Individual percentages for each factor will be determined by dividing the
amount of each factor for the Company by the total of the factor for
Xxxxxxxx E&P. The separate labor, operating revenue and property factors
for the Company as a percentage of Xxxxxxxx E&P shall be added together
and then divided by three to calculate the weighted average percent for
the Company. The weighted percentage represents the percent that the
Company will pay to Xxxxxxxx for its share of the named services allocated
to Xxxxxxxx E&P by Xxxxxxxx.
The payment by the Company to Xxxxxxxx based on the MMF allocation is
intended to reimburse Xxxxxxxx for all Services described in Article 3.(b)
above that are provided to the Company and for which it will not be
charged directly. Direct charges such as legal services, rent, computer
leasing, LAN charges, printing and reproduction services and other similar
services which are directly identifiable to Apco will be directly charged
to Apco.
Xxxxxxxx currently uses MMF to allocate expenses to its business
units and, as a result, MMF has been selected as the method by which
expenses will be allocated by Xxxxxxxx E&P to the Company hereunder. In
the event Xxxxxxxx adopts a different method for the allocation of
corporate expenses to its business units in the future, Xxxxxxxx and the
Company shall meet to determine whether the new allocation method will be
used hereunder or whether the Parties shall continue the use of the MMF
allocation method for purposes of this Agreement. Should the Parties
determine to use a different allocation method, their agreement to do so
shall be reflected in an Amendment to this Agreement. In the event the
Parties determine to continue the use of the MMF allocation method, no
Amendment to this Agreement shall be required.
ii Xxxxxxxx shall provide the Company with the services of those positions
set forth on Exhibit "A" that perform specific functions for the Company
and spend either substantial time in the performance of services for the
Company or consistently provide time to the Company every month. Exhibit
"A" may be modified by the Parties from time to time as needed to add or
remove positions which will be provided hereunder.
The Parties agree that the positions described on Exhibit "A" have devoted
and will continue to devote substantial and or consistent time to the
business of the Company. Accordingly, time for services of the listed
positions will be paid for by the Company on the basis of an allocation of
the salary, and bonus of those individuals plus a factor determined
annually by Xxxxxxxx (for 2004, this factor is 33%) for employee benefits
and taxes (the "Salary Allocation").
Unless a modification is agreed by the Parties through an agreed revision
to Exhibit "A", the Salary Allocation percentages to be used for the
positions described in Exhibit "A" are as follows:
Director of International Exploration and Production 75 %
Senior Accounting Analyst 75 %
Administrative Assistant III 50 %
Manager of International Exploration and Production 25 %
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The percentages and positions shall be reviewed by the parties
periodically and adjusted but not more than on an annual basis.
iii. The Company will also pay Xxxxxxxx one hundred thousand dollars ($100,000)
per year for the services of those Xxxxxxxx employees that hold the
positions of Chairman and Chief Executive Officer and Chief Financial
Officer of Apco as compensation for time devoted by those employees in the
performance of their duties for the Company. Such amount is based upon a
percentage of such individual's Salary Allocation determined by using an
estimate of the time actually spent by such employees on behalf of APCO
and will be periodically reviewed and adjusted by the Parties as
appropriate to more accurately reflect the actual time spent.
iv. The Company shall pay Xxxxxxxx separately for Services that are not
included above and are directly identifiable to the Company on an as-used
basis. Such Services include but are not limited to rent for the square
footage of office space occupied by the Company on the 26th and the 37th
floors of the Bank of Oklahoma Tower, One Xxxxxxxx Center, Tulsa,
Oklahoma, computer leasing costs, local area network (LAN), telephone,
printing and reproduction services and supplies and legal services. These
services will be charged to the Company on the same rate as charged to
other Xxxxxxxx' Affiliates or Subsidiaries. The Company shall also
reimburse Xxxxxxxx for the cost of any insurance coverage provided to APCO
by Xxxxxxxx .
5. INVOICING AND PAYMENTS:
Xxxxxxxx shall at a minimum submit quarterly invoices to Company for
Services rendered hereunder and will provide full supporting documentation upon
the request of Company. Company shall pay Xxxxxxxx the amounts of such invoices
within thirty (30) days after receipt; provided, that if Company shall have any
objection to all or any portion of an invoice, Company shall notify Xxxxxxxx of
the same within thirty (30) days after receipt of the invoice, give reasons for
its objection and pay only the portion of the invoice which is not in dispute.
Representatives of Xxxxxxxx and Company shall confer within sixty (60) days of
receipt of objection by Company regarding a particular invoice to resolve any
disputed invoices. In the event such representatives are unable to reach
agreement with regard to such a dispute, the matter shall be resolved in
accordance with Section 23.
6. RIGHT TO AUDIT:
Xxxxxxxx shall keep such books and records (which books and records shall
be maintained on a consistent basis and substantially in accordance with
generally accepted accounting principles) as shall readily disclose , as allowed
by law, the basis for any charges or credits, ordinary or extraordinary, billed
to Company under this Agreement. Company shall, as allowed by law, have the
right, upon reasonable notice from Company to Xxxxxxxx and during regular
business hours, to inspect, examine and audit or cause to be audited each year
the accounts and records of Xxxxxxxx reasonably related to the Services provided
hereunder, except where such accounts and records would otherwise be considered
proprietary or confidential, in which case such audit shall be conducted by an
independent auditor agreed to by the Parties, provided such right is exercised
in a manner that does not interfere with the provision of the
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Services hereunder by Xxxxxxxx. Any audit by Company hereunder shall be at
Company's sole cost and expense.
7. INDEPENDENT CONTRACTOR STATUS:
(a) Xxxxxxxx hereby declares it is engaged in an independent business
and agrees to perform the Services as an independent contractor with, except as
otherwise provided for hereunder, full responsibility for the control and
direction of its employees and subcontractors. Xxxxxxxx, in its performance of
this Agreement, has and hereby retains the right to exercise full control and
supervision over the accomplishment of the objectives set forth herein;
provided, however, that Company shall be free at any time to accept, reject or
request replacement of any Xxxxxxxx personnel providing the Services. Xxxxxxxx
shall make reasonable efforts to complete the Services in a timely manner.
Xxxxxxxx shall not be required to provide personnel to work a specific number of
hours per day or specific days of the week. Xxxxxxxx shall not be an agent,
employee or servant for and may not bind Company. This Agreement is not intended
to and shall not create a partnership, joint venture or agency of any kind or
type. It is understood that Xxxxxxxx is free to contract for similar services to
be performed for others during the term of this Agreement.
(b) Xxxxxxxx hereby accepts full and exclusive liability for the payment
of its employees' compensation and benefits including any and all contributions
or taxes for unemployment insurance, old age retirement benefits, pensions or
annuities now or hereafter imposed by or under Applicable Law and which are
measured by the wages, salaries or other remuneration paid to the persons
employed by Xxxxxxxx with respect to Services performed under the terms of this
Agreement. Xxxxxxxx further warrants that it will comply with all other
Applicable Law to which it is subject as an employer regarding compensation,
hours of work or other conditions of employment, including those applicable to
minimum wage and overtime wages.
(c) Neither Xxxxxxxx nor its employees providing Services to Company
under this Agreement shall be entitled to participate in or receive benefits
under any programs maintained by Company for its employees, including, without
limitation, life, medical and disability benefits, pension, profit sharing or
other retirement plans or other fringe benefits. Nor shall any Xxxxxxxx
employees be entitled to any direct or indirect compensation or remuneration of
any kind from Company as a result of the Services performed under this
Agreement.
8. INDEMNIFICATION:
(a) Xxxxxxxx shall be responsible for and shall defend and hold harmless
Company from and against all claims, demands, causes of action, liabilities,
fines, penalties, loss, or expense (including, without limitation, reasonable
attorneys' fees, costs and expenses) (collectively "Claims") of every kind and
character, whether they be direct or indirect, arising from or related to,
actions and/or omissions of any kind from personnel providing Services to
Company hereunder when not performing tasks or assignments for or on behalf of
Company. The above indemnity of this Section 8(a) shall not apply to, and
Company shall indemnify, protect, defend and hold harmless Xxxxxxxx, its owners,
Affiliates, and all of their officers, directors, employees, consultants and
agents (collectively, the "Xxxxxxxx Group") from, Claims for bodily injury,
illness or death of any member of Xxxxxxxx Group, or of any employee of
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Xxxxxxxx' contractors or subcontractors when arising out of Company's or its
contractors' (other than Xxxxxxxx) or subcontractors' gross negligence or
willful misconduct.
(b) Company shall be responsible for and shall defend and hold harmless
Xxxxxxxx Group from and against all Claims of every kind and character, whether
they be direct or indirect, arising from or related to actions and/or omissions
of any kind of the personnel providing Services to Company by Xxxxxxxx hereunder
when performing tasks or assignments for Company (including the Services), EVEN
IF SUCH CLAIMS, DEMANDS, CAUSES OF ACTION, LIABILITIES, LOSSES OR EXPENSES ARE
BASED UPON THE NEGLIGENCE (WHETHER JOINT, CONCURRENT, ACTIVE, OR PASSIVE) OF THE
XXXXXXXX GROUP OR ACTIONS OR OMISSIONS (WHETHER OR NOT THE RESPONSIBILITY OF THE
XXXXXXXX GROUP) WHICH IMPOSE STRICT LIABILITY. The above indemnity of this
Section 8(b) shall not apply to, and Xxxxxxxx shall indemnify, protect, defend
and hold harmless Company from, Claims for bodily injury, illness or death of
any employee of Company or any of Xxxxxxxx' contractors or subcontractors when
arising out of any member of the Xxxxxxxx Group's gross negligence or willful
misconduct.
(c) Except for claims against Company for failure to make any payments
due hereunder, Xxxxxxxx shall defend, protect, indemnify and hold harmless
Company from and against all Claims of every kind and character arising from or
related to Xxxxxxxx' failure to pay its employees or because of its failure to
withhold federal and state income taxes or any other such taxes or state, local,
municipal, national or federal governmental charges which Xxxxxxxx may be
required to pay with respect to Xxxxxxxx' employees during the period of such
employment or which otherwise accrue under any employee plan or benefit
arrangement, including without limitation, all obligations of Xxxxxxxx for
salaries, vacation, and holiday pay, severance payments, bonuses and other forms
of compensation, benefits or other payments, as well as all costs and expenses
with respect to any termination by Xxxxxxxx of its employees who performed
Services under this Agreement.
9. INSURANCE:
(a) Xxxxxxxx shall carry or cause to be carried and maintained in force
throughout the entire term of this Agreement insurance coverage as described in
paragraphs (i) through (iii) below.
(i) Workers' Compensation insurance complying with the laws of the
state or states of the United States of America having
jurisdiction over each Xxxxxxxx employee and Employers'
Liability insurance with limits of $1,000,000 per each
accident, $1,000,000 disease per each employee and a
$1,000,000 disease policy limit.
(ii) Commercial General Liability insurance on an occurrence basis
with a combined single limit of $1,000,000 per each occurrence
for bodily injury and property damage.
(iii) Automobile Liability insurance with a combined single limit of
$1,000,000 per each occurrence for bodily injury and property
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damage, which insurance shall include coverage for all owned,
non-owned and hired vehicles.
(b) In each of the above-described policies, Xxxxxxxx agrees to waive
and shall require its insurers to waive any rights of subrogation or recovery
they may have against Company to the extent of Xxxxxxxx' obligations set forth
in Section 8 above.
(c) Under the policies described in (a)(ii) and (a)(iii) above, and to
the extent of the indemnities contained within this Agreement, Company shall be
named as additional insured as respects Xxxxxxxx' operations and as respects any
Services performed under this Agreement.
10. CONFIDENTIALITY:
(a) Confidential Information.
(i) "Confidential Information" shall mean all information of a
Party of a proprietary or confidential nature that any Party
(the "Disclosing Party") furnishes to the other Party (the
"Receiving Party"), whether such information is written or
oral and in whatever form or medium it is provided.
(ii) Information shall not be deemed to be Confidential Information
and the provisions of this Section 10 shall not apply to: (A)
information which is or becomes generally available to the
public other than as a result of a disclosure in violation of
this Agreement; (B) information which was already known to the
Receiving Party or its Representatives prior to being
furnished pursuant to this Agreement; (C) information which
becomes available to the Receiving Party or its
Representatives on a non-confidential basis from a source
other than a Disclosing Party or its Representatives if such
Receiving Party or its Representatives had no reason to
believe that such source was subject to any prohibition
against transmitting the information to such Receiving Party
or its Representatives; and (D) information independently
developed by the Receiving Party or its Representatives.
(b) Confidentiality Obligations.
(i) Each Receiving Party shall not disclose the Confidential
Information to third parties or any of such Receiving Party's
Affiliates, or to any other Person without the consent of the
other Party other than to: (A) such Receiving Party's
Representatives, (B) a financial advisor, legal counsel,
consultant, contractor or subcontractor that has a legitimate
business need to be informed; (C) a Governmental Authority, or
(D) a Person to which the Disclosing Party or its Affiliate is
required by Applicable Laws or the applicable rules of any
stock exchange or similar organization to disclose the
Confidential Information.
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(ii) In case of a disclosure of Confidential Information to a third
party permitted by paragraph (b)(i)(A) and (b)(i)(B), the
Receiving Party disclosing such information shall ensure that
such third party has signed an agreement to protect the
Confidential Information from further disclosure to the same
extent as the Parties are obligated under this Section 10.
(c) Notice Preceding Compelled Disclosure. If a Party or any
Representative of such Party reasonably believes it is required by Applicable
Law or the applicable rules of any stock exchange or similar organization
(whether requested by oral question, interrogatory, request for information or
documents, subpoena, civil investigative demand, similar law or legal process or
otherwise) to disclose any Confidential Information, such Party shall promptly
notify the other Party of such requirement as soon as it becomes aware of it.
(d) Return of Information. All written Confidential Information, except
for that portion of the Confidential Information that may be found in analyses,
compilations, studies or other documents prepared by the Disclosing Party or its
Representatives, shall be promptly returned upon written request of the
Disclosing Party or, at the election of the Receiving Party, destroyed, and no
copies shall be retained by such Receiving Party or its Representatives. That
portion of the Confidential Information that may be found in analyses,
compilations, studies or other documents and Confidential Information not so
requested or returned will be held and kept subject to the terms of this
Agreement, or destroyed.
(e) Specific Performance. The Parties recognize and agree that if any of
the provisions of this Section 10 are not performed in accordance with their
specific terms or are otherwise breached, immediate and irreparable harm or
injury would be caused for which money damages would not be an adequate remedy.
Accordingly, each Party agrees that, in addition to other remedies, the Parties
shall be entitled to an injunction restraining any violation or threatened
violation of the provisions of this Section 10 or to specific performance or
other equitable relief to enforce the provisions of this Section 10. In the
event that any action should be brought in equity to enforce the provisions of
this Section 10, no Party will allege, and each Party hereby waives the defense,
that there is adequate remedy at law.
11. LIMITATION OF LIABILITY:
NEITHER COMPANY NOR XXXXXXXX SHALL BE LIABLE TO THE OTHER OR ITS EMPLOYEES
IN ANY EVENT OR FOR ANY REASON FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOSS OF PROFITS, LOSS OF DATA, LOSS OF REVENUE OR LOSS
OF GOODWILL ARISING OUT OF OR RELATED TO THIS AGREEMENT.
12. NOTICES:
Except as specifically provided otherwise herein, all notices required or
permitted under this Agreement shall be in writing and shall be deemed given
upon actual receipt. Such notices may be given by: (a) personal delivery; (b)
facsimile; or (c) certified or registered mail for which postage is prepaid and
a return receipt is requested. Any such notices shall be sent to the
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respective addresses specified below. Any Party's address may be changed by
notice given to the other Party in accordance with this provision.
If to Company:
APCO Argentina Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxx Xxxx 00-0
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
President COO and CAO
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
APCO Argentina Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Assistant Secretary
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Xxxxxxxx:
The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx , Senior Attorney
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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13. CERTAIN PRACTICES:
(a) Each of the Parties represents, warrants and covenants that neither
it nor its Affiliates, officers, directors, employees or agents has made or
shall make, any payments, loans, gifts, or promises or offers of payments,
loans, gifts or anything of value, directly or indirectly to or for the use or
benefit in whole or in part of, any foreign official or employee of any
Governmental Authority or state-owned enterprise, or to or for the use of any
political party or official thereof, or candidate for political office, or to
any other Person if any such party knows, should have known or has or had reason
to suspect, that any part of such payment, loan, gift or promise or offer (i) is
for purposes of corruptly (A) influencing any act or decision of the recipient
in its official capacity or (B) inducing such recipient to (1) do or omit to do
any act in violation of its lawful duty or (2) use its influence to affect or
influence any act or decision of the government of any foreign country or
instrumentality thereof, or (3) secure any improper advantage, in each case, in
order to assist the parties in obtaining or retaining business for or with, or
directing business to, any person.
(b) Each Party agrees to advise all of its and its Affiliates' employees
and Representatives engaged in implementing this Agreement regarding these
practices and Applicable Law. Each Party agrees to take appropriate steps to
ensure that it and its Affiliates and their respective Representatives comply
with these practices and Applicable Laws. Each Party shall respond promptly, and
in reasonable detail, to any notice from any other Parties or their auditors
pertaining to the above stated warranty and representation and shall furnish
documentary support for such response upon request from such other Party.
(c) In carrying out the terms and provisions of this Agreement, each
Party agrees: (i) to ensure that all xxxxxxxx and reports rendered to the other
Party under the terms of this Agreement will, to the best of its knowledge and
belief, properly reflect the facts about all activities and transactions related
to this Agreement, and (ii) to promptly notify the other Party upon discovery of
any instance in which it fails to comply with this Section 13, or if it has
reason to believe that any xxxxxxxx or reports covered by (i) above are no
longer accurate and complete in any material respect.
(d) Each Party, in performing its obligations under this Agreement,
shall establish and maintain appropriate business standards, procedures and
controls, including those necessary to avoid any real or apparent impropriety or
adverse impact on the interests of the other Party. Each Party shall review with
reasonable frequency during the term of this Agreement such business standards
and procedures including those related to the activities of its employees and
agents in their relations with the other Party's employees, agents and
representatives, and other third parties.
14. NON-WAIVER:
(a) No waiver by either Party hereto of any breach or default of any
provision hereunder shall be deemed a waiver of any other provision hereof or a
waiver of any subsequent breach or default.
(b) Except as specifically provided otherwise herein, no failure or
delay on the part of either Party to exercise any right, power, or privilege
under this Agreement and no course of
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dealing between the Parties shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein expressly provided are
not exclusive of any rights or remedies which either Party would otherwise have
pursuant to law or equity unless specifically provided to the contrary herein.
No notice to or demand on one Party in any case shall entitle the other Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of a Party to any other or further action in
any circumstances without notice or demand.
15. ASSIGNMENT:
Neither Party shall assign this Agreement or any of its rights or claims
hereunder without the prior written consent of the other, except to any entity
which is an Affiliate of a Party or which succeeds to all or substantially all
of a Party's assets by merger, consolidation, reorganization or purchase.
Subject to the foregoing, this Agreement shall inure to the benefit of and bind
the successors and assigns of the Parties.
16. NON-EXCLUSIVE AGREEMENT:
Nothing herein contained shall be construed to prevent Company from
engaging other contractors or other persons during the term of this Agreement to
perform the Services.
17. NO THIRD PARTY BENEFICIARY
Nothing contained in this Agreement shall be considered or construed as
conferring any right or benefit on a Person not a Party, and neither this
Agreement nor the performance hereunder shall be deemed to have created a joint
venture or partnership between the Parties.
18. HEADINGS:
The headings preceding the text of the sections and subsections hereof are
inserted solely for convenience of reference and shall not constitute a part of
this Agreement, nor shall they affect its meaning, construction or effect.
19. ENTIRE AGREEMENT:
This Agreement is the entire agreement between the Parties with respect to
the subject matter hereof. This Agreement supersedes any and all prior
negotiations, promises, understandings, agreements, arrangements,
representations, warranties, and/or contracts of any form or nature whatsoever,
whether oral or in writing, and whether explicit or implicit, which may have
been entered into prior to the execution hereof between the Parties as to the
subject matter hereof.
20. SEVERABILITY:
If, for any reason, any provision of this Agreement is unenforceable, the
remaining provisions hereof shall nevertheless be carried into effect.
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21. AMENDMENTS:
No amendment, supplement or waiver of this Agreement shall be valid unless
evidenced in writing and signed by a duly authorized representative of each
Party.
22. GOVERNING LAW:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
23. DISPUTE RESOLUTION:
(a) Negotiations; Arbitration.
(i) Any dispute, controversy or claim arising out of or relating
to this Agreement, or the performance, breach, termination or
invalidity hereof shall be settled by arbitration in
accordance with the American Arbitration Rules in effect on
the date hereof. The arbitration shall be the sole and
exclusive forum for resolution of the dispute, controversy or
claim, and the award shall be final and binding. Judgment
thereon may be entered by any court having jurisdiction. The
number of arbitrators shall be three, each of whom shall be
disinterested in the dispute, controversy or claim and shall
have no connection with either Party. One arbitrator will be
selected by each Party and one by mutual agreement of the
first two or, if they cannot agree, by the appointing
authority designated in accordance with the American
Arbitration Rules. The Parties shall have thirty (30) days to
each appoint an arbitrator. If, after such 30-day period, the
Parties have not made such appointment, the appointing
authority shall select all three arbitrators. The Parties and
the appointing authority may appoint from among the nationals
of any country, whether or not a Party is a national of that
country. The place of arbitration shall be The City of Tulsa,
Oklahoma. The arbitration shall be conducted in the English
language and any foreign-language documents presented at such
arbitration shall be accompanied by an English translation
thereof. The arbitrators shall apply the laws of the State of
Oklahoma without regard to the principles of conflicts of
laws.
(ii) In the event that there is an existing arbitration pursuant to
paragraph (i) above, and that the same or a similar dispute,
controversy or claim should arise between Persons other than
the parties to the existing arbitration, the arbitrators shall
have the power to allow the other Persons to be joined in the
existing arbitration with their express consent, and to make a
single final award determining all disputes, controversies or
claims among them.
(iii) Each Party hereby submits to the jurisdiction of the United
States District Court for the Northern District of Oklahoma in
any action,
16
suit or proceeding with respect to the enforcement of the
arbitration provisions of this Agreement and the jurisdiction
of such court with respect to the enforcement of any award
thereunder.
(iv) The compensation and expenses of the arbitrators shall be
borne equally by the Parties. Each Party shall bear its own
costs, expenses and attorneys' fees, provided that, if court
proceedings to stay litigation or compel arbitration are
necessary, the Party who unsuccessfully opposes such
proceedings shall pay all reasonable associated costs,
expenses, and attorneys' fees in connection with such court
proceedings.
(b) Waiver of Immunity. Each Party hereby irrevocably consents to and
waives any objection which it may now or hereafter have to the laying of venue
of any proceeding relating to enforcement of the arbitration provisions, or any
award thereunder brought in the courts specified, and further irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of any such proceeding in such courts.
(c) Judgment Currency. The obligation of a Party in respect of any sum
due from it to another Party expressed in United States Dollars, notwithstanding
any judgment in a currency other than United States Dollars, shall not be
discharged until the first Business Day following receipt by such other Party of
any sum adjudged to be so due in such other currency on which (and only to the
extent that) such other Party may in accordance with normal banking procedures
purchase United States Dollars with such other currency. If the Dollars so
purchased are less than the sum originally due to such other Party hereunder,
the obligated Party agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such other Party against such Dollar shortfall. If
the United States Dollars so purchased are greater than the sum originally due
to such other Party hereunder, such other Party agrees to the fullest extent
permitted by law to pay to the obligated Party an amount equal to the excess of
the Dollars so purchased over the sum originally due to such other Party
hereunder
24. MUTUAL COOPERATION:
Company and Xxxxxxxx will provide each other with such assistance as may
reasonably be required by any of them in connection with the performance of all
obligations under this Agreement.
25. FORCE MAJEURE:
Neither party hereto shall be liable in any manner for failure or delay of
performance of all or part of this Agreement (other than payment obligations),
directly or indirectly, owing to any acts of God, governmental orders or
restrictions, strikes or other labor disturbances, riots, embargoes, computer
equipment failures, power failures, telecommunication line failures,
revolutions, wars (declared or undeclared), sabotage, fires, floods, or any
other causes or circumstances beyond the control of the parties. The party,
however, experiencing such delay or
17
failure shall use reasonable efforts to give prompt notice to the other party
and shall use reasonable efforts to remove the causes or circumstances of
nonperformance with dispatch and or a consistent basis.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
APCO ARGENTINA INC. THE XXXXXXXX COMPANIES, INC.
/s/ Xxxxxx Xxxxx /s/ Xxxxxx X. Xxxxxxx
----------------------------------- ----------------------------------
By By
President & Chief Operating Officer Sr.Vice-President & CFO
Title Title
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