SETTLEMENT AGREEMENT AND AMENDMENT
Exhibit
10.3
AND
AMENDMENT
This
Settlement Agreement and Amendment (this “Agreement”) entered into this
22nd day of October, 2008, is made by and among those parties to a certain
purchase and sale agreement dated as of July 7, 2005 (as modified, supplemented
and amended from time to time, the “Purchase and Sale Agreement”),
a certain transfer and assumption agreement dated as of July 7, 2005 (as
modified, supplemented and amended from time to time, the “Transfer and Assumption
Agreement”), a certain Marketing Agreement and Related Services
Agreement, dated as of July 1, 2007 (the “Marketing Agreement”), a
certain Base Contract for Sale and Purchase of Natural Gas, dated July 7, 2005,
and Confirmation Nos. 1 and 2 of the same date (the “GPA”), and all other
interrelated agreements thereto, including the Transition Services Agreement
(collectively, the “PSA”), namely, Calpine Gas
Holdings LLC, CPN Pipeline Company, Calpine Corporation, Calpine Producer
Services, L.P., Calpine Fuels Corporation, Calpine Energy Services, L.P., and
their subsidiaries and affiliates, as applicable (collectively, “Calpine”), on the one hand,
and Rosetta Resources Inc., Rosetta Resources Operating LP (individually and as
successor by merger with Rosetta Resources California, LLC; Rosetta Resources
Rockies, LLC; Rosetta Resources Texas GP, LLC; Rosetta Resources Texas LP, LLC;
and Rosetta Resources Texas LP) and Rosetta Resources Offshore, LLC and their
subsidiaries and affiliates, as applicable (collectively, “Rosetta”), on the other
hand. Calpine and Rosetta are sometimes referred to collectively as
the “Parties” and
individually as a “Party.”
RECITALS
A. The
PSA provided for the sale to Rosetta of ultimate ownership and control of all or
substantially all of the assets comprising Calpine’s oil and gas business (the
“Sale
Transaction”). Except as otherwise provided in this Agreement,
capitalized terms shall have the respective meanings given to them in the
PSA.
B. On
or about December 20, 2005 (the “Commencement Date”), Calpine
filed petitions for relief under chapter 11 of title 11 of the United States
Code (the “Bankruptcy
Code”) in the United States Bankruptcy Court for the Southern District of
New York (the “Bankruptcy
Court”). Calpine’s chapter 11 cases are being jointly
administered under Case No. 05-60200-brl (the “Chapter 11
Cases”).
C. As
a result of Calpine’s filing for protection under Chapter 11 of the Bankruptcy
Code, certain issues remained open and unresolved with respect to the PSA and
potential conveyances thereunder, and a number of disputes have arisen between
the Parties. Among other things, there are open issues with respect
to the status of legal title to the Properties as of the Commencement
Date. Specifically, the Non-Consent Properties, the Xxxxxxxx
Properties (as defined below), and a number of other oil and gas properties
identified in the PSA were not conveyed, and/or were not able to be conveyed, to
Rosetta prior to the Commencement Date and, in a motion filed under Section 365
in June 2006 and the corresponding Order(s) thereto entered by the Bankruptcy
Court (the “365 Motion and
Orders”), Calpine identified a list of other oil and gas properties
(which included the Non-Consent Properties, among others) contending Calpine
still held some legal, equitable or other interest in these oil and gas
properties.
D. On
or about August 1, 2006, Rosetta filed a series of Proofs-of-Claim in the
Chapter 11 Cases (the “POCs”). Since the
filing of the POCs, Calpine has filed an objection to the POCs (the
“Calpine Objection”) and
Calpine’s Objection has been carried or continued by the Bankruptcy Court,
postponing adjudication of those issues until after the Lawsuit (defined below)
has been resolved.
E. On
or about June 29, 2007, Calpine Corporation filed an adversary proceeding styled
Calpine Corp. v. Rosetta
Resources, Inc., Adv. No. 07-01760-brl, in the Bankruptcy Court, against
Rosetta Resources Inc. alleging that the Sale Transaction was a fraudulent
conveyance under relevant state and federal law, and shortly thereafter, Rosetta
Resources Inc. filed counterclaims against Calpine Corporation in such
proceeding (such proceeding, including such counterclaims, the “Lawsuit”).
F. Pursuant
to that certain Partial Transfer and Release Agreement dated as of
August 3, 2007 (as modified, supplemented and amended from time to
time, the “PTRA”) and
approved by the Bankruptcy Court on September 11, 2007, the Parties reached an
interim business solution with respect to a certain list of properties resolving
the outstanding disputes concerning legal title on those properties, subject to
the outcome of the Lawsuit. Pursuant to the PTRA, various conveyances
and other documents were executed and delivered by the Parties.
G. On
or about December 19, 2007, the Bankruptcy Court approved Calpine’s Sixth
Amended Joint Plan of Reorganization (the “Plan”), which in the Plan or
order approving the Plan (the “Order”) provided, among other
things, that Calpine and Rosetta agreed to extend the deadline under Section 365
for Calpine to assume or reject the PSA and required any settlement of
litigation to which the Unsecured Creditors’ Committee is a party to have
Bankruptcy Court approval. On or about January 31, 2008, Calpine
emerged from bankruptcy, announcing the effective date of the Plan.
H. Following
negotiations, the Parties have now reached a final business solution in
connection with the PSA (under which Calpine is to convey to Rosetta all “Oil
and Gas Properties” (defined below)), the POCs, Calpine’s Objection, the Sale
Transaction and the Lawsuit, and desire to settle all outstanding disputes and
issues on the basis set forth in this Agreement, which includes the following
attached exhibits:
(a) Exhibit
A – Xxxxxxxx Properties;
(b) Exhibit
B – Conveyance Documents;
(c) Exhibit
C – Amended and Restated GPA, including Special Provisions and Confirmation Nos.
1 and 2 for the dedicated California production; and
(d) Exhibit
D - Rio Vista Office Sublease.
AGREEMENT
NOW
THEREFORE, for valuable consideration as exchanged between Calpine and Rosetta
in this Agreement, the Parties agree:
1. Amendment; Assumption of
PSA.
(a) Calpine
and Rosetta hereby amend the PSA to remove the “Xxxxxxxx Properties” (as defined
in Section 3(a) below) from the “Properties,” “Non-Consent Properties,” and
“Preferential Rights Properties” (as defined in the PSA, and all applicable
schedules and exhibits thereto) that were, or shall be conveyed to Rosetta
pursuant to the PSA.
(b) Calpine
hereby agrees to assume the PSA, as so amended, and each Party hereby agrees
that, except as otherwise expressly provided in this Agreement, all of its
respective obligations under the PSA shall and hereby do apply to the Sale
Transaction, including without limitation its respective indemnity obligations
(including without limitation as provided in Article 16 of the Purchase and Sale
Agreement and Section 4 of the Transfer and Assumption Agreement).
2. Settlement
Payment.
(a) At
the “Settlement Closing” (as defined in Section 8 below), Rosetta agrees to pay
to Calpine the aggregate sum of Ninety-Seven Million Dollars ($97,000,000.00)
(the “Settlement
Payment”).
(b) The
Settlement Payment shall fully discharge and satisfy all obligations for final
adjustments, payments and reconciliations provided for in the PSA, including
without limitation Articles 4 and 15 of the Purchase and Sale Agreement, and as
described in the proposed Final Settlement Statement dated as of
May 12, 2006, a copy of which was previously delivered to Calpine by
Rosetta (the “PSA FSS”),
and all amounts otherwise currently due from Calpine to Rosetta, or from Rosetta
to Calpine, pursuant to this Agreement, including without limitation all claims
for accumulated or earned interest, net revenues and additional monies related
to the PSA.
(c) The
Settlement Payment constitutes the full and final adjustment of the Purchase
Price and no additional payments shall be required, including, without
limitation, in connection with any net revenues from any Properties, Non-Consent
Properties, and Xxxxxxxx Properties attributable to Calpine’s interests and that
were received by Rosetta after the Effective Date, and amounts withheld at
Closing for the Xxxxxxxx Properties and Non-Consent Properties.
(d) The
Settlement Payment shall constitute sufficient and adequate consideration for
the full and final releases that Calpine grants in this Agreement to fully
compromise and release all claims asserted in the Lawsuit, including without
limitation, all claims that could have been or should have been asserted by
Calpine in relation thereto and whether known or unknown.
3. Xxxxxxxx
Properties.
(a) Pursuant
to Section
1(a), the Parties amend the PSA, as of the Effective Date, to exclude the
properties set forth in Exhibit A attached
hereto, being those leases and xxxxx that are more fully described as the
“Transferred Assets” and any of Calpine’s other rights within the “Area of
Mutual Interest,” as such terms are defined in the July 1998 Joint Development
and Acquisition Agreement entered into by and between Xxxxxxxx Production Co.,
LLC and Sheridan Energy, Inc. (the “Xxxxxxxx Preferential Rights
Properties” or the “Xxxxxxxx
Properties”). For all purposes under this Agreement and the
PSA, the Xxxxxxxx Properties are not included in the “Oil and Gas Properties” to
be conveyed to Rosetta.
(b) The
Parties agree that Rosetta (i) withheld that portion of the Purchase Price
allocated to the Xxxxxxxx Properties at the Closing, and (ii) subsequent to the
Closing, has or may have received additional amounts attributable to production
from Calpine’s interest in the Xxxxxxxx Properties. Calpine hereby
waives any and all rights and claims that it may have to recover from Rosetta
any amounts owed or allegedly owed to Calpine for the Xxxxxxxx Properties,
including any such deferred portion of the Purchase Price, amounts attributable
to post-Closing or post-Effective Date production revenue and joint interest
xxxxxxxx in respect of the Xxxxxxxx Properties, and all other amounts allocable
or attributable to the Xxxxxxxx Properties. All such obligations have
and will be discharged upon payment of the Settlement Payment.
(c) From
and after the Settlement Closing, Calpine shall take such actions as it deems,
in its sole discretion, appropriate to deal with the Xxxxxxxx Properties and all
claims that have been or may be made by Xxxxxxxx Production Co., LLC, its
affiliates, successors and assigns and Xxxxxxxx Family Trust, its heirs,
successors and assigns, (collectively, “Xxxxxxxx”) relating to
Xxxxxxxx’x “Preferential Right to Purchase” enumerated in Section 15.3 of the
July 1998 Joint Development and Acquisition Agreement entered into by and
between Xxxxxxxx and Sheridan Energy, Inc. For the avoidance of any
doubt, Rosetta waives any rights it may have to seek, and agrees to release
Calpine from and against, any amounts Rosetta may have paid on Calpine’s behalf
attributable to the Xxxxxxxx Properties, and all amounts received by Calpine
attributable to production from Calpine’s interest in the Xxxxxxxx Properties
after the Effective Date.
(d) At
the request of Calpine, Rosetta shall execute, acknowledge and deliver to
Calpine a quitclaim assigning to Calpine any and all rights, title or interest
it has or may have in the Xxxxxxxx Properties to the extent arising by, through
or under the PSA. Such quitclaim shall be without representation,
warranty or recourse of any kind except that Rosetta shall warrant that such
interests are free and clear of any claims or interests arising by, through or
under Rosetta, but not otherwise.
(e) At
the Settlement Closing, to the extent Rosetta has any rights or obligations as
interim operator of the Xxxxxxxx Properties, Rosetta shall resign as interim
operator of the Xxxxxxxx Properties, transfer any such rights to Calpine or its
designee and Calpine shall affirmatively assume all of Rosetta’s obligations and
rights as operator of the Xxxxxxxx Properties.
(f) Rosetta
represents and warrants to Calpine that, with respect to those Xxxxxxxx
Properties for which Rosetta served as the operator and for the period of time
that Rosetta acted as operator, to its knowledge: (i) Rosetta has
operated such properties as a reasonably prudent operator according to accepted
industry standards; (ii) Rosetta has paid all royalties due and owing for such
properties; (iii) Rosetta has paid all working interest owners all net
production revenue due and owing for such properties; and (iv) there are no
material, unsatisfied liabilities arising from its operation of such
properties.
(g) Calpine
agrees to indemnify, save and hold harmless Rosetta, together with Rosetta’s
affiliates, successors and assigns, and their respective officers, directors,
members, agents, representatives and employees (collectively, the “Rosetta Parties”) from and
against any and all demands, claims, actions, causes of action, assessments,
damages, liabilities, losses, expenses, fees, judgments or deficiencies of any
nature whatsoever (including reasonable attorneys’ fees and other costs and
expenses incident to any suit, action or proceeding or any appeal therefrom)
(each, a “Loss” and
collectively, the “Losses”) received, incurred or
sustained by, or threatened against, a Rosetta Party by Xxxxxxxx or any (i)
operator, (ii) purchaser of production, (iii) lessor or (iv) governmental
entity, relating to or arising from the Xxxxxxxx Properties, except for any
Losses addressed within Section 3(f) above --
for which Rosetta retains sole and exclusive responsibility, regardless of cause
or amount, including without limitation, all Losses related to net revenues
(taking into account production revenue and joint interest xxxxxxxx attributable
to Calpine’s interest in the Xxxxxxxx Properties) paid or to be paid to Rosetta
since the Closing Date.
(h) The
provisions of this Section 3 pertaining
to the Xxxxxxxx Properties shall be effective and binding upon the Parties
regardless of the disposition of any claims that Xxxxxxxx has made or may make
against Calpine or Rosetta, whether in the Chapter 11 Cases or
otherwise.
4. Resolution of Outstanding
Property Issues.
(a) At
the Settlement Closing, each Party agrees to execute, acknowledge and deliver
counterparts of all conveyance documents attached as or listed in Exhibit B (the “Conveyance
Documents”).
(b) In
addition to the properties transferred by the Conveyance Documents, Calpine
shall convey to Rosetta, at the Settlement Closing and from time to time
thereafter at Rosetta’s request, all right, title and interest in and to all of
Calpine’s oil and gas properties and oil and gas reserves that it owned on the
Effective Date, including without limitation, all leases, fee property, mineral
fee property, surface leases and easements, easements, rights-of-way, farm-out
agreements, pooling and unitization agreements, area of mutual interest
agreements, participation agreements and other interests of any kind in oil and
gas properties, whether listed or not in the schedules or exhibits to the PSA,
Calpine’s Section 365 Motion and Orders, excluding the Xxxxxxxx Properties (such
properties, including those described in the Conveyance Documents, collectively,
the “Oil and Gas
Properties”). The Oil and Gas Properties (including those
identified from time to time after the Settlement Closing and then conveyed to
Rosetta, free and clear of all liens, claims and encumbrances) shall be deemed
and considered to be part of the Properties for all purposes.
(c) Rosetta
represents and warrants to Calpine that as of the date of this Agreement it is
not aware of any Oil and Gas Properties of any material value other than those
listed in the schedules or exhibits to the PSA and/or Calpine’s Section 365
Motion and Orders, and those that are listed in, described in or are the subject
of any of the Material Contracts, but excluding the Xxxxxxxx
Properties.
(d) The
Oil and Gas Properties are to be conveyed by Calpine to Rosetta effective as of
the Effective Date, free and clear of any and all liens, claims and
encumbrances, whether arising before or after July 7, 2005, arising by, through
or under Calpine.
(e) The
Parties agree to take all reasonable steps necessary to obtain acknowledgments
from various governmental agencies and authorities, including without
limitation, California State Lands Commission (“CSLC”), U.S. Department of
Interior, Minerals Management Service (“MMS”) or Bureau of Land
Management (“BLM”)
(collectively, “Agencies”) or Third Parties,
as may be required, that such Agencies or Third Parties will recognize the
applicable Rosetta entity as the record title owner and operator of each of the
Oil and Gas Properties, including those conveyed by Calpine on July 7, 2005 and
under the PTRA, as of the Effective Date.
(f)
In connection
with the process of transferring title to the Oil and Gas Properties and, as
applicable, the right to operate the same, Rosetta shall furnish to Agencies
such bonds and other security that may be required in connection
therewith. Following receipt of all required governmental approvals
of the transfer to Rosetta of legal title to the Oil and Gas Properties, Rosetta
agrees to aid and assist Calpine to secure the release of any collateral
security Calpine has posted with respect to the Oil and Gas
Properties.
(g) At
the Settlement Closing, each Party agrees to execute, acknowledge and deliver
counterparts of a Rio Vista office sublease, substantially in the form attached
hereto as Exhibit
D (the “Rio Vista
Sublease”).
5. Termination of Marketing
Agreement. Calpine acknowledges that Rosetta has timely
provided notice of its intent not to renew the Marketing
Agreement. The Marketing Agreement shall therefore expire, by its
terms, effective as of June 30, 2009, subject, however, to Rosetta’s
right to request a transition period as is more fully set forth and subject to
the terms in the Marketing Agreement. As fully set forth in Section 9
(“Releases”) of this Agreement, as of the date of the Settlement Closing (the
“Settlement Closing
Date”), the Parties hereby release, discharge, acquit, and covenant not
to xxx one another for any and all claims, causes of action, suits or demands
existing prior to the Settlement Closing Date, whether known or unknown, that
they have or could have asserted against one another arising from or related to
the Marketing Agreement, save and except current payment obligations for
services or hydrocarbon production, including balancing payments or prior period
adjustments attributable to the period before the Settlement Closing Date but
which have not yet been invoiced or paid.
6. Amendment of Gas Purchase
Agreement. At the Settlement Closing, each Party shall execute, and
deliver counterparts of, the Amended and Restated Base Contract for Sale and
Purchase of Natural Gas, with Special Provisions pertaining thereto, and Amended
and Restated Confirmations Nos. 1 and 2, originally dated July 7, 2005 issued
thereunder, by and between Calpine and Rosetta, substantially in the form
attached hereto as Exhibit C (the GPA,
as so amended and restated, the “GPA Amendment”). As
fully set forth in Section 9
(“Releases”) of this Agreement, as of the Settlement Closing Date, the Parties
hereby release, discharge, acquit, and covenant not to xxx one another for any
and all claims, causes of action, suits or demands existing prior to the
Settlement Closing Date, whether known or unknown, that they have or could have
asserted against one another arising from or related to the GPA, save and except
current payment obligations for services or hydrocarbon production (but not
including compression costs), including balancing payments or prior period
adjustments attributable to the period before the Settlement Closing Date but
which have not yet been invoiced or paid.
7. Court Approval; Assumption
and Assignment of Contracts and Leases and Related
Liabilities.
(a) The
Parties’ respective rights and obligations under this Agreement, including the
execution and delivery of the various documents to be executed and delivered by
the Parties pursuant to this Agreement at the Settlement Closing or thereafter
(collectively, the “Settlement
Documents”), are expressly subject to and contingent upon the entry by
the Bankruptcy Court of an order, in form and substance acceptable to Calpine
and Rosetta (the “Approval
Order”):
(i)
approving the
terms of this Agreement pursuant to Bankruptcy Rule 9019 and authorizing and
directing Calpine and Rosetta to perform their obligations
hereunder,
(ii) authorizing
the sale and transfer by Calpine to the appropriate Rosetta entity of the Oil
and Gas Properties identified in the exhibits to the Conveyance Documents (and
any other Oil and Gas Properties, as applicable), pursuant to the terms of this
Agreement and the PSA (as the same is modified and amended pursuant to this
Agreement), the Plan, and the Bankruptcy Code, free and clear of any and all
liens, claims and encumbrances and finding, in connection therewith, that
Rosetta is a good faith purchaser, and
(iii) authorizing
Calpine to assume the PSA, as the same is modified and amended herein, pursuant
to Section 365 of the Bankruptcy Code.
(b) Notwithstanding
the foregoing, neither the terms of this Agreement nor the entry of the Approval
Order shall have an effect upon or otherwise waive or release any claims, causes
of action or rights under the PSA or otherwise that are not expressly waived or
released herein and approval of this Agreement shall not be conditioned upon any
demands, claims, actions or causes of action of any nature whatsoever that
Xxxxxxxx or any other Third Party may have or exercise against Calpine and/or
Rosetta with respect to the Xxxxxxxx Properties, the PSA or
otherwise. Calpine shall have the right in its sole discretion, to
seek an order from the Bankruptcy Court with respect to the Xxxxxxxx Properties
or any demands, claims, actions or causes of action made by Xxxxxxxx with
respect thereto; provided that, the
Approval Order and the obligations of the Parties under this Agreement shall
remain effective regardless of whether Calpine exercises such option or the
outcome of any such action.
(c)
Calpine shall, promptly upon the execution of this Agreement by the Parties,
file such motions and take such other action as reasonably may be required to
obtain the entry of the Approval Order. Rosetta agrees to assist
Calpine in this regard. Calpine shall provide notice of such motion
to all persons entitled thereto. If the Approval Order is not entered
by the Bankruptcy Court on or before December 31, 2008, or if the Approval Order
is overturned or modified on appeal, then this Agreement shall be of no further
force and effect and, in such event, (i) neither this Agreement nor any
negotiations and writings in connection with this Agreement shall in any way be
construed as or deemed to be evidence of or an admission on behalf of any Party
regarding any claim or right that such Party may have against the other Party,
and (ii) the Parties shall otherwise be restored to the position in effect prior
to the date of this Agreement.
(d) With
respect to any obligations due Third Parties, except as may be expressly
allocated to or assumed by Calpine under the PSA, Rosetta agrees to assume,
effective as of the Assumption Date (defined below), all other cure obligations
(as provided in Section 365(b)(1)(A) of the Bankruptcy Code) in connection with
any such assumption related to the Oil and Gas Properties, except to those
already addressed and/or paid under the 365 Motion and Orders, and to pay such
obligations which shall be set forth or, by agreement of the Parties, otherwise
provided for in the Bankruptcy Court order approving such
assumption. To the extent Rosetta reasonably disputes any cure claims
asserted by any counterparties, Calpine agrees to reasonably cooperate in
Rosetta’s defending against and opposing such asserted cure claims, and the
Parties agree to request that the Bankruptcy Court retain jurisdiction to
resolve any such disputes.
(e) The
term “Assumption Date”
shall mean: (i) for liabilities Rosetta assumed pursuant to the PSA, the
effective date of such assumption as provided in the PSA; and (ii) for
additional liabilities that Rosetta did not assume pursuant to the PSA but has
expressly agreed to assume pursuant to this Agreement or the PTRA, the date of
such agreement, or, if otherwise set forth, the effective date of such
assumption set forth in the applicable agreement or in the applicable Settlement
Document. The Parties agree to use all reasonable efforts to include
in such Approval Order any wording as may be reasonably requested by the
Agencies, Third Parties, or either Party, as applicable, in order to effectuate
the terms of this Agreement.
(f)
At or promptly
after the Settlement Closing, the Parties shall file such other motions,
pleadings and papers necessary to dismiss with prejudice the Lawsuit and the
Calpine Objection and to withdraw Rosetta’s POCs.
(g)
The Bankruptcy Court
shall retain jurisdiction to interpret and enforce this Agreement.
8. Settlement
Closing.
(a) The
Parties have exchanged executed copies of this Agreement. The
consummation of the transactions contemplated by this Agreement (the “Settlement Closing”) shall
occur upon the expiration of ten days following the entry of the Approval Order,
as to which no appeal or objection has been filed and not then
dismissed.
(b) At
the Settlement Closing, the Parties shall do the following:
(i)
Calpine shall
deliver original, executed counterparts of:
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(1)
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The
Conveyance Documents;
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(2)
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The
GPA Amendment;
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(3)
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The
Rio Vista Sublease;
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(4)
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A
receipt for the Settlement Payment;
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(5)
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Unless
previously delivered, resolutions of the boards of directors or similar
bodies of each of the relevant Calpine entities signatories hereto,
authorizing the execution, delivery and performance of into this Agreement
and the other Settlement Documents;
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(6)
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Agreed
Motion(s) to Dismiss with Prejudice the Lawsuit, Calpine’s Claims
Objection;
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(7)
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An
instrument implementing the resignation, transfer and assumption provided
for in Section 3(e) of this
Agreement;
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(8)
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All
Records pertaining to the Properties and the Oil and Gas Properties not
previously delivered to Rosetta;
and
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(9)
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any
other Settlement Documents reasonably requested by
Rosetta.
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(ii) Rosetta
shall deliver original, executed counterparts of:
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(1)
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The
Conveyance Documents;
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(2)
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The
GPA Amendment;
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(3)
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The
Rio Vista Sublease;
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(4)
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Unless
previously delivered, resolutions of the boards of directors or similar
bodies of each of the relevant Rosetta entities signatories hereto,
authorizing the execution, delivery and performance of into this Agreement
and the other Settlement Documents;
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(5)
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Motion(s)
to Withdraw with Prejudice Rosetta’s
POCs;
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(6)
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An
instrument implementing the resignation, transfer and assumption provided
for in Section 3(e) of this Agreement;
and
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(7)
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any
other Settlement Documents reasonably requested by
Calpine.
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(iii) Rosetta
shall deliver the Settlement Payment, by cashier’s check or wire transfer of
immediately available funds to a bank account designated by Calpine to Rosetta
in writing not less than three (3) business days prior to the Settlement
Closing.
(c) The
Parties agree to work cooperatively with the Agencies toward the objective that,
on or before the Settlement Closing, all Agencies will have confirmed to the
Parties that their respective ministerial approvals will be granted upon receipt
of the Bankruptcy Court order approving this Agreement and their receipt,
respectively, of required documents.
9. Releases. The
following releases shall be effective at and as of the Settlement
Closing:
(a) Except
with respect to any Buyer Liabilities and any indemnities or other obligations
expressly assumed or undertaken by Rosetta pursuant to the PSA, this Agreement
or the Settlement Documents, unless otherwise released by Calpine, Calpine, for
itself and the other Calpine Parties (defined below) hereby releases,
discharges, acquits, covenants not to xxx, and agrees to forever hold harmless
the Rosetta Parties, from and against any and all claims, causes of action,
suits or demands that Calpine or its estate may have or may have had against the
Rosetta Parties up through and including the date of the Approval Order,
including without limitation all such claims, causes of action, suits or demands
that Calpine asserted, or should have or could have asserted (i) in the Lawsuit,
(ii) in response to the POCs, (iii) in regard to Calpine’s Objection, or (iv) in
any other action, of any kind or nature whatsoever, including without limitation
(A) all claims Calpine could have asserted under state law, Bankruptcy Law or in
equity, whether arising under fraudulent conveyance law or otherwise, against
Rosetta in connection with the Sale Transaction; (B) Rosetta’s operation,
management, or control of the Oil and Gas Properties (and all Properties
previously conveyed to Rosetta); (C) Rosetta’s obligations under the PSA to
convey, transfer or receive Oil and Gas Properties or to pay monies to Calpine
under the PSA FSS or otherwise; (D) for periods prior to the Settlement Closing
Date, Rosetta’s obligations under the Marketing Agreement or the GPA (except for
current payment obligations for services or hydrocarbon production, including
balancing payments or prior period adjustments under these agreements
attributable to the period before the Settlement Closing Date but which have not
yet been invoiced or paid); and (E) in connection with the Xxxxxxxx
Properties.
(b) Except
with respect to any Sellers’ Retained Liabilities of Sellers and Calpine under
the PSA, indemnities or other obligations expressly assumed or undertaken by
Calpine pursuant to the PSA, this Agreement or the Settlement Documents, unless
otherwise released by Rosetta under the PTRA, Rosetta, for itself and the other
Rosetta Parties, hereby releases, discharges, acquits, covenants not to xxx, and
agrees to forever hold harmless Calpine together with their affiliates,
successors and assigns, and their respective officers, directors, members,
agents, representatives and employees (collectively, the “Calpine Parties”), from and
against any and all claims, causes of action, suits or demands that Rosetta or
its estate may have or may have had against the Calpine Parties up through and
including the date of the Approval Order, including without limitation all such
claims, causes of action, suits or demands that Rosetta asserted, or should have
or could have asserted (i) in the Lawsuit, (ii) in the POCs, (iii) in Calpine’s
Objection, or (iv) in any other action, of any kind or nature whatsoever,
including without limitation (A) all claims Rosetta could have asserted under
state law, Bankruptcy Law or in equity, whether arising under breach of
contract, fraud or otherwise, against Calpine in connection with the Sale
Transaction; (B) Rosetta’s operation, management, or control of the Oil and Gas
Properties (and all Properties previously conveyed to Rosetta); (C) Calpine’s
obligations under the PSA to convey, transfer or receive Oil and Gas Properties
or pay monies to Rosetta under the PSA FSS or otherwise; (D) for periods prior
to the Settlement Closing Date, Calpine’s obligations under the Marketing
Agreement or the GPA (except for current payment obligations for services or
hydrocarbon production, including balancing payments or prior period adjustments
under these agreements attributable to the period before the Settlement Closing
Date but which have not yet been invoiced or paid); and (E) in connection with
the Xxxxxxxx Properties.
(c) The
Parties each acknowledge that they have been advised by their respective legal
counsel and are familiar with the provisions of California Civil Code Section
1542, which provides as follows:
“A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor.”
Each of
the Parties, being aware of Section 1542, hereby expressly waives any and all
rights it may have thereunder, as well as under any other statutes or common law
principles of similar effect, with respect to the releases set forth in this
Agreement.
10. Entire
Agreement.
(a) Except
for the PSA (and the documents and agreements pertaining thereto), this
Agreement and the Settlement Documents are the entire agreement between the
Parties in respect of the subject matter hereof and shall not be modified,
altered, amended or vacated without the prior written consent of all Parties
hereto. No statement made or action taken in the negotiation of this
Agreement may be used by any Party for any purpose whatsoever.
(b) Except
as expressly set forth herein, nothing in this Agreement shall be deemed to
waive or release the Parties’ indemnification rights under the PSA, or any
rights, interests or claims that any of the Parties might have against any Third
Party pursuant to the PSA.
(c) Except
in regard to Calpine’s assumption of the PSA under Section 365 and the releases
and dismissal with prejudice of the Lawsuit as expressly provided in this
Agreement, nothing in this Agreement or the Settlement Documents shall diminish
or impair the Parties’ rights and interests under the PTRA. The
Parties agree that the releases made and given in this Agreement apply to the
properties that were the subject of the PTRA.
11. No Admissions; No
Presumption Against Drafter. This Agreement and its contents
are the result of negotiations by the Parties in an effort to compromise on
certain unresolved disputes. Nothing herein shall be held to be an
admission against the interests of either Party or form the basis for waiver or
estoppel in connection with either Party’s legal rights, claims or defenses
associated with the properties not addressed by this Agreement. Each
Party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement,
the same shall not be construed against any Party.
12. Further
Assurances.
(a) Each
Party shall provide to the other Party certified copies of resolutions duly
adopted by its board of directors or other governing body authorizing the
execution, delivery and performance of this Agreement and the documents and
transactions contemplate by this Agreement, including the Conveyance Documents,
the GPA Amendment, and the Limited Power of Attorney.
(b) Following
the execution of this Agreement, each Party is and shall be obligated to execute
and deliver such other certificates, agreements and other documents and take
such other actions as may be reasonably be requested, from time to time, by any
of the other Parties in order to consummate or implement to the fullest degree
possible the transactions and agreements contemplated by this
Agreement.
(c) To
the extent that same relate to the Sale Transaction and are not included in the
Bankruptcy Court’s order, pursuant to Section 365(d) of the Bankruptcy Code,
dated July 12, 2006 (the “365
Order”), Rosetta agrees to assist Calpine, following the Settlement
Closing, in Calpine’s efforts to secure release of the collateral security held
to secure the performance by Calpine of various obligations related to the Oil
and Gas Properties by providing records or copies of records and the use of the
reasonable time of its employees in support of this objective.
13. Notices. Notices
to the Parties under this Agreement shall be delivered to the
following:
|
If
to Calpine,
Calpine
Corporation
Attn.:
Xxxx Xxxxxx
000
Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
|
If
to Rosetta,
Attn.:
Xxxxxxx X. Xxxxxx
000
Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
|
14. Successors and
Assigns. This Agreement and all of the provisions hereof are
binding upon and shall inure to the benefit of the Parties and their respective
successors, assigns, agents, employees, representatives, officers, directors,
partners, parent companies, subsidiaries, affiliates, assigns,
predecessors-in-interest, successors-in interest, and
shareholders. Nothing in this Agreement, express or implied, is
intended to confer upon any person other than the Parties, and their successors
and assigns, any rights, remedies or obligations under or by reason of this
Agreement.
15. Governing
Law. The terms of this Agreement will be governed by, and
interpreted in accordance with the internal laws of, the State of Texas, without
regard to the rules regarding choice of laws or conflicts of laws.
16. Counterparts. This
Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed an original, but all of which together shall constitute
one and the same instrument.
17. No
Waivers. The failure of any Party to insist on performance of
any of the terms and conditions of this Agreement shall not be construed as a
waiver or relinquishment of any rights granted hereunder or of the future
performance of any such term, covenant or condition, but the obligations of the
Parties with respect thereto shall continue in full force and
effect.
18. Severability. Subsequent
to the Settlement Closing, if any part of this Agreement is found to be
prohibited, unlawful, void or for any reason unenforceable, then it shall be
deemed severable and separable from the remaining parts and it shall not
invalidate or render unenforceable the remaining parts of this
Agreement.
19. Representations. Each
Party represents and warrants to, and agrees with, the other Party as
follows:
(a) Each
Party has received or has been given full opportunity to receive independent
legal advice from its attorneys with respect to the advisability of making the
settlement provided for herein, and with respect to the advisability of
executing this Agreement.
(b) Neither
Party (nor, without limitation, any officer, agent, employee, representative, or
attorney of or for either Party) has made any statement or representation to the
other Party regarding any fact relied upon in entering into this Agreement, and
each Party warrants that it does not rely upon any statement, representation or
promise of the other Party (or, without limitation, of any officer, agent,
employee, representative, or attorney for the other Party) in executing this
Agreement, or in making the settlement or granting the releases provided for
herein, except as expressly stated in this Agreement.
(c) Each
Party has made such investigation of the facts pertaining to the settlement
outlined above and to this Agreement, and of all the matters pertaining thereto,
as it deems necessary.
(d) No
Party has heretofore assigned, transferred, or granted, or purported to assign,
transfer, or grant, any of the claims, demands, causes of action or rights of
appeal disposed of by this Agreement.
(e) Each
term of this Agreement is contractual and not merely a recital.
20. Fees and
Expenses. Each Party shall pay its own costs, fees and
expenses (including attorneys’ fees) incurred in connection with the
preparation, negotiation, and execution of this Agreement, and the documents and
agreements contemplated by this Agreement, and shall not seek reimbursement
thereof from the other Party.
21. Headings. The
headings in this Agreement are for convenience only and shall not be considered
a part of or affect the construction or interpretation of any provision of this
Agreement.
22. Exhibits. The
exhibits attached to this Agreement are fully incorporated into and are made a
part of this Agreement for all purposes.
[signatures
begin on following page]
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date and
year first above written.
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
|
|
Name:
|
Xxxxxxx X. Xxxxxxxx
|
|
|
Date:
|
10/22/08
|
|
ROSETTA
RESOURCES OPERATING LP,
|
|
formerly
known as Calpine Natural Gas L.P.,
and
|
|
successor
by merger to Rosetta Resources California,
LLC,
|
|
Rosetta
Resources Rockies, LLC, Rosetta Resources Texas, GP,
LLC,
|
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
|
|
Name:
|
Xxxxxxx
X. Xxxxxxxx
|
|
|
Executive Vice President and Chief Financial
Officer
|
||
|
Date:
|
10/22/08
|
|
|
ROSETTA
RESOURCES OFFSHORE, LLC
|
||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
|
|
Name:
|
Xxxxxxx
X. Xxxxxxxx
|
|
|
Executive Vice President and Chief Financial
Officer
|
||
|
Date:
|
10/22/08
|
|
|
CALPINE
CORPORATION
|
||
|
By:
|
/s/ Xxxx X. Xxxxx
|
|
|
Name:
|
Xxxx
X. Xxxxx, President and
|
|
|
Chief Executive Officer
|
||
|
Date:
|
10/22/08
|
|
|
CALPINE
PRODUCER SERVICES, L.P.
|
||
|
By: CPN
Energy Services GP, Inc.
|
||
|
By:
|
/s/ Xxxx X. Xxxxx
|
|
|
Name:
|
Xxxx X. Xxxxx, President
|
|
|
Date:
|
10/22/08
|
|
|
CALPINE
FUELS CORPORATION
|
||
|
By:
|
/s/ Xxxx X. Xxxxx
|
|
|
Name:
|
Xxxx X. Xxxxx, President
|
|
|
Date:
|
10/22/08
|
|
|
CALPINE
GAS HOLDINGS, LLC
|
||
|
By:
|
/s/ Xxxx X. Xxxxx
|
|
|
Name:
|
Xxxx X. Xxxxx, President
|
|
|
Date:
|
10/22/08
|
|
|
CPN
PIPELINE COMPANY
|
||
|
By:
|
/s/ Xxxx X. Xxxxx
|
|
|
Name:
|
Xxxx X. Xxxxx, President
|
|
|
Date:
|
10/22/08
|
|
|
CALPINE
ENERGY SERVICES, L.P.
|
||
|
By:
|
/s/ Xxxxx X. Xxxxxxxx
|
|
|
Name:
|
Xxxxx X. Xxxxxxxx, Vice
President
|
|
|
Date:
|
10/22/08
|
|
EXHIBIT
A
XXXXXXXX
PROPERTIES
[See
attached pages.]
A-
EXHIBIT
B
CONVEYANCE
DOCUMENTS
[NOTE: There
will be a general conveyance, similar to the 2005 and 2007 conveyances,
substantially in the form of the attached document, in sufficient counterparts
for recording in approximately 20 counties or parishes in 8 states, plus
additional assignments of government-issued leases on appropriate government
forms.]
B-
EXHIBIT
C
AMENDED AND RESTATED GAS
SALES AGREEMENT
FOR DEDICATED CALIFORNIA
PRODUCTION
[See
attached pages.]
C-
EXHIBIT
D
RIO VISTA OFFICE
SUBLEASE
[See
attached pages.]
D-
