CONTRIBUTION AGREEMENT by and among PIONEER NATURAL RESOURCES USA, INC. PIONEER NATURAL RESOURCES GP LLC and PIONEER SOUTHWEST ENERGY PARTNERS L.P. May 6, 2008
EXHIBIT 2.1
EXECUTION VERSION
CONTRIBUTION AGREEMENT
by and among
PIONEER NATURAL RESOURCES USA, INC.
PIONEER NATURAL RESOURCES GP LLC
and
PIONEER SOUTHWEST ENERGY PARTNERS L.P.
by and among
PIONEER NATURAL RESOURCES USA, INC.
PIONEER NATURAL RESOURCES GP LLC
and
PIONEER SOUTHWEST ENERGY PARTNERS L.P.
May 6, 2008
TABLE OF CONTENTS
| Page | ||||
ARTICLE I DEFINITIONS |
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1.1 Definitions |
2 | |||
1.2 Construction |
3 | |||
ARTICLE II CONTRIBUTIONS |
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2.1 Contribution by Pioneer USA to the General Partner of the GP Contribution Interest in Operating Company |
4 | |||
2.2 Contributions by Pioneer USA and the General Partner |
4 | |||
2.3 Redemption of the Initial General Partner Interest and the Initial Limited Partner Interest |
4 | |||
ARTICLE III MISCELLANEOUS |
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3.1 Order of Completion of Transactions |
5 | |||
3.2 Investment Intent |
5 | |||
3.3 No Representations and Warranties |
5 | |||
3.4 Choice of Law |
5 | |||
3.5 Notice |
5 | |||
3.6 Entire Agreement |
6 | |||
3.7 Jurisdiction; Service of Process |
6 | |||
3.8 Further Action |
6 | |||
3.9 Binding Effect |
6 | |||
3.10 Effect of Waiver or Consent |
6 | |||
3.11 Counterparts |
6 | |||
3.12 Invalidity of Provisions |
6 | |||
3.13 Assignment |
7 | |||
3.14 Direct or Indirect Action |
7 | |||
3.15 Laws and Regulations |
7 | |||
3.16 No Recourse Against Officers, Directors, Managers or Employees |
7 | |||
3.17 Arbitration |
8 | |||
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THIS CONTRIBUTION AGREEMENT, dated as of May 6, 2008, is entered into by and among Pioneer Natural
Resources USA, Inc., a Delaware corporation (“Pioneer USA”), Pioneer Natural Resources GP
LLC, a Delaware limited liability company (the “General Partner”), and Pioneer Southwest
Energy Partners L.P., a Delaware limited partnership (“MLP”). The foregoing parties hereto
are referred to in this Agreement individually as a “Party” and collectively as the “Parties.”
Each capitalized term used herein that is defined in Section 1.1 shall have the meaning assigned to
such term in Section 1.1. Other terms defined herein have the meanings so given them.
RECITALS
A. Pioneer USA and the General Partner have formed MLP pursuant to the Delaware Revised
Uniform Limited Partnership Act (the “Delaware Limited Partnership Act”), for the purpose
of engaging in any business activity that is approved by the General Partner, and that lawfully may
be conducted by a limited partnership organized pursuant to the Delaware Limited Partnership Act.
B. In order to accomplish the objectives and purposes in Recital A, the following actions have
been taken prior to the date hereof:
| 1. | Pioneer USA formed the General Partner under the terms of the Delaware Limited Liability Company Act and contributed $1,000 in exchange for all of the membership interest in the General Partner. | ||
| 2. | Pioneer USA and the General Partner formed MLP under the terms of the Delaware Limited Partnership Act to which the General Partner contributed $1 and Pioneer USA contributed $999 in exchange for a .1% general partner interest (the “Initial General Partner Interest”) and a 99.9% limited partner interest (the “Initial Limited Partnership Interest”) in MLP, respectively. | ||
| 3. | Pioneer USA formed Operating Company under the terms of the Texas Limited Liability Company Act and contributed $1,000 in exchange for all of the membership interests in Operating Company. | ||
| 4. | The Merger has been consummated. |
C. Pioneer USA and MLP desire for MLP, pursuant to the transactions to be effected pursuant to
this Agreement and the Membership Interest Sale Agreement, to acquire 100% of the membership
interest in the Operating Company (the “Acquisition”).
D. The Acquisition will be consummated immediately after the issuance of the IPO Units by MLP.
NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the Parties
undertake and agree as follows:
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ARTICLE I
DEFINITIONS
DEFINITIONS
1.1 Definitions. The following capitalized terms have the meanings given below.
“AAA” means the American Arbitration Association.
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is under common control
with the Person in question. As used herein, the term “control” means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through ownership of Voting Securities, by contract or otherwise.
“Agreement” means this Contribution Agreement.
“Assets” means the membership interests in the Operating Company contributed to MLP
pursuant to the terms of this Agreement.
“Conflicts Committee” has the meaning assigned to such term in the Partnership
Agreement.
“Delaware Limited Partnership Act” has the meaning assigned to such term in Recital A
to this Agreement.
“Dispute” has the meaning assigned to such term in Section 3.17 to this Agreement.
“General Partner” has the meaning assigned to such term in the first paragraph of this
Agreement.
“GP Contribution Interest” means a 0.10295172491645% membership interest in the
Operating Company.
“Initial General Partner Interest” has the meaning assigned to such term in Item 2 of
Recital B to this Agreement.
“Initial Limited Partner Interest” has the meaning assigned to such term in Item 2 of
Recital B to this Agreement.
“IPO Units” means 8,250,000 common units representing limited partner interests in MLP
to be issued by MLP to the underwriters in connection with MLP’s initial public offering of such
common units.
“Limited Partners” has the meaning assigned to such term in the Partnership Agreement.
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“Membership Interest Sale Agreement” means the Membership Interest Sale Agreement
dated May 6, 2008 between Pioneer USA and MLP, which agreement is being entered into simultaneously
with the execution of this Agreement.
“Merger” has the meaning assigned to such term in the Merger Agreement.
“Merger Agreement” means the Agreement and Plan of Merger, dated as of May 1, 2008,
among Pioneer USA, the Operating Company, Pioneer Retained Properties Company LLC, and Pioneer
Limited Natural Resources Properties LLC.
“MLP” has the meaning assigned to such term in the first paragraph of this Agreement.
“Operating Company” means Pioneer Southwest Energy Partners USA LLC, a Texas limited
liability company.
“Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of MLP, dated as of May 6, 2008, as the same may be amended or restated from time to
time.
“Party” or “Parties” have the meanings assigned to such terms in the first
paragraph of this Agreement.
“Person” means an individual or a corporation, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.
“Pioneer USA” has the meaning assigned to such term in the first paragraph of this
Agreement.
“Representatives” means, with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, or other representative of such Person, including legal
counsel, accountants, and financial advisors.
“Rules” means the Commercial Arbitration Rules of the AAA.
“Units” means 20,521,200 common units representing limited partner interests in MLP.
“Voting Securities” means securities of any class of a Person entitling the holders
thereof to vote in the election of, or to appoint, members of the board of directors or other
similar governing body of the Person and, with respect to MLP, means common units representing
limited partners interests in MLP.
1.2 Construction. Unless the context requires otherwise: (1) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular
form of
nouns, pronouns and verbs shall include the plural and vice versa; (2) references to Articles
and Sections refer to Articles and Sections of this Agreement; (3) the terms “include,”
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“includes,”
“including” and words of like import shall be deemed to be followed by the words “without
limitation”; (4) the terms “hereof,” “herein” and “hereunder” refer to this Agreement as a whole
and not to any particular provision of this Agreement; and (5) references to money refer to legal
currency of the United States of America. The table of contents and headings contained in this
Agreement are for reference purposes only, and shall not affect in any way the meaning or
interpretation of this Agreement.
ARTICLE II
CONTRIBUTIONS
CONTRIBUTIONS
2.1 Contribution by Pioneer USA to the General Partner of the GP Contribution Interest in
Operating Company. Immediately after the issuance of the IPO Units, and prior to the
transactions described in Section 2.2, Pioneer USA hereby grants, contributes, transfers, assigns
and conveys to the General Partner, its successors and assigns, for its and their own use forever,
all of Pioneer USA’s right, title and interest in and to the GP Contribution Interest, and the
General Partner hereby accepts the GP Contribution Interest as an additional contribution to the
capital of the General Partner.
2.2 Contributions by Pioneer USA and the General Partner. Immediately after the
transaction described in Section 2.1, (a) Pioneer USA hereby grants, contributes, transfers,
assigns and conveys to MLP, its successors and assigns, for its and their own use forever, all of
Pioneer USA’s right, title and interest in and to a 73.3573936581775% membership interest in
Operating Company in exchange for Units representing a 71.254% limited partner interest in MLP and
MLP hereby accepts such membership interest as a contribution to the capital of MLP, and (b) the
General Partner hereby grants, contributes, transfers, assigns and conveys to MLP, its successors
and assigns, for its and their own use forever, all of the General Partner’s right, title and
interest in and to the GP Contribution Interest, and MLP hereby accepts the GP Contribution
Interest in exchange for a continuation of the General Partner’s .1% general partner interest in
MLP. MLP hereby accepts the membership interests in the Operating Company conveyed to it pursuant
to this Section 2.2 and assumes the obligations attributable to such interests that arise on and
after the date of this Agreement. The transactions described in this Section 2.2 and the sale by
Pioneer USA of a 26.5396546169060% interest in the Operating Company to MLP pursuant to the
Membership Interest Sale Agreement shall all occur simultaneously and as component parts of a
single plan.
2.3 Refund to General Partner and Redemption of the Initial Limited Partner Interest.
MLP hereby (a) refunds the $1 to the General Partner that was contributed to MLP by the General
Partner for the Initial General Partner Interest, and (b) redeems the Initial Limited Partner
Interest from Pioneer USA and retires the Initial Limited Partner Interest in exchange for a
payment in cash to Pioneer USA equal to an aggregate $999.
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ARTICLE III
MISCELLANEOUS
MISCELLANEOUS
3.1 Order of Completion of Transactions. The transactions provided for in Article II
of this Agreement shall be deemed completed on the date of this Agreement in the order set forth in
Article II (the completion of each such succeeding transaction being conditioned on the concurrent
completion of the prior transactions).
3.2 Investment Intent. The membership interest in the Operating Company to be
acquired by MLP is being acquired for its own account, for investment and with no intention of
distributing or reselling such membership interest or any part thereof or interest therein in any
transaction which would be a violation of the securities laws of the United States of America or
any state or foreign country or jurisdiction. The Units to be acquired by Pioneer USA are being
acquired for its own account, for investment and with no intention of distributing or reselling
such Units or any part thereof or interest therein in any transaction which would be a violation of
the securities laws of the United States of America or any state or foreign country or
jurisdiction.
3.3 No Representations and Warranties. Pioneer USA and the General Partner make no
representations or warranties whatsoever, and disclaim all liability and responsibility for any
representation, warranty, statement, or information made or communicated (orally or in writing) to
MLP (including any opinion, information, or advice which may have been provided to MLP by any
Affiliate or Representative of Pioneer USA and the General Partner or by any investment bank or
investment banking firm, any petroleum engineer or engineering firm, Pioneer USA’s and the General
Partner’s counsel, or any other agent, consultant, or representative) regarding the Assets or the
assets, liabilities or operations of the Operating Company.
3.4 Choice of Law. This Agreement shall be subject to and governed by the laws of the
State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction
or interpretation of this Agreement to the laws of another state.
3.5 Notice. All notices, requests or consents provided for or permitted to be given
pursuant to this Agreement must be in writing and must be given by depositing same in the United
States mail, addressed to the Person to be notified, postpaid, and registered or certified with
return receipt requested or by delivering such notice in person or by telecopier or telegram to
such Party. Notice given by personal delivery or mail shall be effective upon actual receipt.
Notice given by telegram or telecopier shall be effective upon actual receipt if received during
the recipient’s normal business hours, or at the beginning of the recipient’s next business day
after receipt if not received during the recipient’s normal business hours. All notices to be sent
to a Party pursuant to
this Agreement shall be sent to or made to the attention of such Party at the address set
forth below or at such other address as such Party may stipulate to the other Parties in the manner
provided in this Section 3.5.
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0000 X. X’Xxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: General Counsel
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: General Counsel
3.6 Entire Agreement. This Agreement constitutes the entire agreement of the Parties
relating to the matters contained herein, superseding all prior contracts or agreements, whether
oral or written, relating to the matters contained herein.
3.7 Jurisdiction; Service of Process. Without limiting the Parties’ agreement to
arbitrate in Section 3.17, any action or proceeding seeking a temporary or preliminary injunction
to enforce any provision of, or based on any right arising out of, this Agreement must be brought
against any of the Parties in the courts of the State of Texas, County of Dallas, or, if it has or
can acquire jurisdiction, in the United States District Court for the Northern District of Texas
(Dallas Division), and each of the Parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) for such limited purpose in any such action or proceeding and waives
any objection to venue laid therein for such limited purpose. Process in any action or proceeding
referred to in the preceding sentence may be served on any Party anywhere in the world.
3.8 Further Action. In connection with this Agreement and all transactions
contemplated by this Agreement, each Party agrees to execute and deliver such additional documents
and instruments and to perform such additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
3.9 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their heirs, executors, administrators, successors, legal representatives
and permitted assigns, as well as any Persons asserting rights or claims on behalf of any of the
foregoing Persons.
3.10 Effect of Waiver or Consent. No waiver or consent, express or implied, by any
Party to or of any breach or default by any Party in the performance by such Party of its
obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other
breach or default in the performance by such Party of the same or any other obligations of such
Party hereunder. Failure on the part of a
Party to complain of any act of any Party or to declare any Party in default, irrespective of
how long such failure continues, shall not constitute a waiver by such Party of its rights
hereunder until the applicable statute of limitations period has run.
3.11 Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute an agreement binding on all the Parties hereto, notwithstanding that all
such Parties are not signatories to the original or the same counterpart. Each Party shall become
bound by this Agreement immediately upon affixing its signature hereto.
3.12 Invalidity of Provisions. If any provision of this Agreement or the application
thereof to any Party or circumstance shall be held invalid or unenforceable to any extent, the
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remainder of this Agreement and the application of such provision to other Parties or circumstances
shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
3.13 Assignment. No Party shall have the right to assign its rights or obligations
under this Agreement without the prior written consent of the other Parties; provided, however, a
merger shall not be deemed to be an assignment and a transfer of the rights and an assumption of
the obligations under this Agreement; provided further, however, that the transfer of all or
substantially all of the assets of a Party shall not be deemed an assignment of such rights or
obligations of such Party to this Agreement if the assignee assumes all of the obligations under
this Agreement.
3.14 Direct or Indirect Action. Where any provision of this Agreement refers to
action to be taken by any Party, or which such Party is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by such Party, including
actions taken by or on behalf of any Affiliate of such Party.
3.15 Laws and Regulations. Notwithstanding any provision of this Agreement to the
contrary, no Party shall be required to take any act, or fail to take any act, under this Agreement
if the effect thereof would be to cause such Party to be in violation of any applicable law,
statute, rule or regulation.
3.16 No Recourse Against Officers, Directors, Managers or Employees. For the
avoidance of doubt, the provisions of this Agreement shall not give rise to any right of recourse
against any officer, director, manager or employee of any Party or any officer, director, manager
or employee of any Affiliate of any Party.
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3.17 Arbitration. Any claim, counterclaim, demand, cause of action, dispute, or any
other controversy arising out of or relating in any way to this Agreement or to the subject matter
of this Agreement or to any relationship created thereby (each a “Dispute”) shall be
resolved by binding arbitration. A Dispute must be resolved through arbitration regardless of
whether the Dispute involves claims that this Agreement is unlawful, unenforceable, void or
voidable or involves claims sounding in tort, contract, statute or common law. This Section 3.17
shall be binding on and shall inure to the benefit of the Parties and their Affiliates. The
validity, construction and interpretation of this Agreement to arbitrate, and all other procedural
aspects of the arbitration conducted pursuant hereto, shall be decided by the arbitral tribunal.
Any arbitration under this Agreement shall be administered by the AAA and conducted in accordance
with the Rules of the AAA in existence at the time of the arbitration. In resolving any Dispute,
the arbitral tribunal shall refer to the governing law as specified in Section 3.4 of this
Agreement. The arbitral tribunal shall not be empowered to award exemplary, punitive, indirect,
consequential, remote, speculative, treble, multiple or special damages, and the Parties and their
Affiliates waive any right they may have to recover such damages from one another. The arbitral
tribunal shall not be empowered to decide any dispute ex aequo et xxxx or amiable compositeur. The
seat (or legal place) and venue of the arbitration shall be in Dallas, Texas. The arbitration
shall be conducted in the English language.
The Dispute shall be decided by a panel of three neutral arbitrators. The claimant or
claimants shall nominate an arbitrator at the time of service of a request for arbitration. The
respondent or respondents shall nominate an arbitrator at the time of service of the response to
the request for arbitration. If the claimant(s) or respondent(s) fail to appoint an arbitrator,
then that arbitrator shall be appointed in accordance with the Rules. The two appointed arbitrators
shall together agree upon a third arbitrator to recommend to the AAA to chair the arbitration. If
the two party-appointed arbitrators are unable to agree upon an arbitrator within fifteen (15) days
of the respondent’s appointment of an arbitrator, then the chairman shall be chosen according to
the Rules. Notwithstanding the foregoing, if two or more respondents have interests with regard to
a Dispute that are not completely common, then all arbitrators shall be appointed in accordance
with the Rules and not by nomination or appointment by the Parties. Any arbitration award may be
enforced by the courts sitting in Dallas, Texas or any other court of competent subject matter
jurisdiction (including any jurisdiction in which a Party holds or keeps assets). Any action to
challenge, vacate or set aside the award in whole or in part must be brought in the courts sitting
in Dallas, Texas. The Parties and their Affiliates agree to waive any objections they may have to
personal jurisdiction, venue or forum non-conveniens for any action brought to enforce the award in
the courts sitting in Dallas, Texas or any other jurisdiction where a party against which
enforcement of the award is sought holds or keeps assets.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date
first above written.
| PIONEER NATURAL RESOURCES USA, INC. | ||||
By:
|
/s/ Xxxxxxx X. Xxxxx | |||
Name:
|
||||
Title:
|
Executive Vice President and Chief Financial Officer | |||
| PIONEER NATURAL RESOURCES GP LLC | ||||
By:
|
/s/ Xxxxxxx X. Xxxxx | |||
Name:
|
||||
Title:
|
Executive Vice President and Chief Financial Officer | |||
| PIONEER SOUTHWEST ENERGY PARTNERS L.P. | ||||
| By Pioneer Natural Resources GP LLC, Its general partner |
||||
By:
|
/s/ Xxxxxxx X. Xxxxx | |||
Name:
|
||||
Title:
|
Executive Vice President and Chief Financial Officer | |||
Signature page to Contribution Agreement
