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EXHIBIT 10.14
ASSET PURCHASE AGREEMENT
AMONG
NEWFIELD OFFSHORE INC.,
HUFFCO INTERNATIONAL, L.L.C.
AND
HUFFCO TURKEY, INC.
MAY 12, 1997
2
TABLE OF CONTENTS
PAGE
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ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . 1
1.02 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 CASH PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . 2
1.04 ADJUSTMENT TO CASH PURCHASE PRICE . . . . . . . . . . . . . 2
1.05 ESPOIR FIELD . . . . . . . . . . . . . . . . . . . . . . . . 2
1.06 NIGERIAN VENTURE . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF HUFFCO TURKEY
2.01 GOOD TITLE . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02 ORGANIZATION AND QUALIFICATION . . . . . . . . . . . . . . . 4
2.03 AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.04 VALIDITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . 4
2.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES . . . . . . . . 5
3.02 ORGANIZATIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . 6
3.03 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . 6
3.04 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.05 VALIDITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . 7
3.06 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . 8
3.07 PERMITS; COMPLIANCE . . . . . . . . . . . . . . . . . . . . 8
3.08 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 9
3.09 ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . . . 9
3.10 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11 EMPLOYEE BENEFIT PLANS; LABOR MATTERS . . . . . . . . . . . 10
3.12 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 CERTAIN BUSINESS PRACTICES . . . . . . . . . . . . . . . . . 13
3.14 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . 13
3.15 CERTAIN AGREEMENTS . . . . . . . . . . . . . . . . . . . . . 14
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3.16 CONTRACTS AND COMMITMENTS . . . . . . . . . . . . . . . . . 14
3.17 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . 15
3.18 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.19 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.20 ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
4.01 ORGANIZATION AND QUALIFICATION . . . . . . . . . . . . . . . 16
4.02 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.03 VALIDITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . 16
4.04 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . 16
4.05 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . 17
4.06 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . 17
5.02 NEGATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . . 18
ARTICLE VI
COVENANTS OF HUFFCO TURKEY
6.01 COVENANTS OF HUFFCO TURKEY . . . . . . . . . . . . . . . . . 20
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS . . . . . . . . . . . . . . 20
7.02 ACCESS AND INFORMATION . . . . . . . . . . . . . . . . . . . 21
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS . . . . . . . . . . . 22
7.04 PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . 23
7.05 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.06 USE OF HUFFCO NAME . . . . . . . . . . . . . . . . . . . . . 23
7.07 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.08 REPLACEMENT OF BONDS, LETTERS OF CREDIT AND GUARANTEES . . . 24
7.09 RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS . . . 24
7.11 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 25
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7.12 SCOPE OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 29
7.13 CERTAIN TAX MATTERS . . . . . . . . . . . . . . . . . . . . 30
7.14 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . 30
7.15 REPURCHASE OF HUFFCO CHINA PREFERRED SHARES . . . . . . . . 30
ARTICLE VIII
CONDITIONS
8.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. . . . . . 31
8.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR . . . . . . 31
8.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND HUFFCO
TURKEY . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IX
MISCELLANEOUS
9.01 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 33
9.02 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . 33
9.03 WAIVER AND AMENDMENT . . . . . . . . . . . . . . . . . . . . 34
9.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES . . . . . . . . 34
9.05 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.06 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . 34
9.07 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.08 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 37
9.09 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . 37
9.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 37
9.11 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.12 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . 37
EXHIBITS:
Exhibit A -- Form of Declaration of Members Establishing the
Preferences, Limitations and Relative Rights of Series
"A" Preferred Shares of Huffco China, LDC
Exhibit B -- Form of Huffington Subscription Agreement
Exhibit C -- Form of Xxxxx Subscription Agreement
Exhibit D -- Form of General Conveyance, Assignment and Xxxx of
Sale
Exhibit E -- Form of Assumption Agreement
Exhibit F -- Form of Guaranty Agreement
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered
into as of May 12, 1997 by and among Newfield Offshore Inc., a Bahamian company
("Acquiror"), Huffco International, L.L.C., a Delaware limited liability
company (the "Company"), and Huffco Turkey, Inc., a Delaware corporation
("Huffco Turkey" and, together with the Company, the "Sellers").
WHEREAS, the Sellers are the sole record and beneficial owners of all
of the issued and outstanding common shares, par value U.S. $1.00 per share
("Huffco China Shares"), of Huffco China, LDC, a Bahamian limited duration
company ("Huffco China");
WHEREAS, it is a condition to the obligations of the Sellers to
consummate the transactions contemplated by this Agreement that Acquiror's
indirect parent company, Newfield Exploration Company, a Delaware corporation
("Newfield"), guarantee certain of the obligations of Acquiror pursuant to this
Agreement; and
WHEREAS, pursuant to the terms and subject to the conditions set forth
in this Agreement, (a) the Company desires to sell the assets hereinafter
described (including all of the Huffco China Shares owned by the Company) to
Acquiror, (b) Huffco Turkey desires to sell all the Huffco China Shares owned
by Huffco Turkey to Acquiror and (c) Acquiror desires to acquire such assets
and Huffco China Shares;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION. Pursuant to the terms and subject to the
conditions set forth in this Agreement, Acquiror agrees to purchase from (a)
the Company all of the assets of the Company and its subsidiaries except as set
forth on Schedule 1.01(a) hereto (the "Company Assets") and (b) Huffco Turkey
all of the issued and outstanding Huffco China Shares held by Huffco Turkey for
aggregate consideration of (i) a cash purchase price, subject to adjustment as
provided in Section 1.04, of $5,850,000 (the "Cash Purchase Price"), $5,800,000
of which is payable to the Company and $50,000 of which is payable to Huffco
Turkey, (ii) the contingent payments described in Sections 1.05 and 1.06 (the
"Contingent Payments"), (iii) the assumption by Acquiror, subject to Section
7.11 of this Agreement, of all of the obligations and liabilities set forth on
Schedule 1.01(b) hereto (the "Specifically Assumed Liabilities") and (iv) the
assumption by Acquiror, subject to Section 7.11 of this Agreement, of all of
the other obligations and liabilities, whether known or unknown, contingent or
accrued, of the Company arising with respect to the Company's operations prior
to the Closing (as defined in Section 9.06) other than those set forth on
Schedule 1.01(c) hereto (such assumed liabilities and obligations, together
with the Specifically Assumed Liabilities, are hereinafter referred to as the
"Assumed Liabilities"). Pursuant to the terms and subject to the conditions
set forth in this Agreement, (a) the Company agrees to sell the Company Assets
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Acquiror in consideration for $5,800,000 of the Cash Purchase Price, the
Contingent Payments and the assumption by Acquiror of the Assumed Liabilities
and (b) Huffco Turkey agrees to sell all of the Huffco China Shares held by it
to Acquiror in consideration for $50,000 of the Cash Purchase Price. The
transactions referred to in this Section 1.01 are hereinafter referred to
collectively as the "Acquisition."
1.02 CLOSING. The Closing shall take place (a) at 10:00 a.m. on
May 15, 1997 or, if later, the second business day following the date on which
the conditions set forth in Article VIII (other than the conditions set forth
in Sections 8.01(b), 8.02(c), 8.02(e), 8.03(c), 8.03(d) and 8.03(f) and the
delivery of the certificates described in Sections 8.02(a), 8.02(b), 8.03(a)
and 8.03(b)) of this Agreement have been (or, in the case of Sections 8.02(a),
8.02(b), 8.03(a) and 8.03(b), would be on such date) satisfied or, if
permissible, waived, at the offices of Xxxxxx & Xxxxxx L.L.P. located at 2300
First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx or (b) at such other date, place
and time as the parties hereto may agree in writing.
1.03 CASH PURCHASE PRICE. Subject to satisfaction or, if
permissible, waiver of the conditions set forth in Article VIII, the Cash
Purchase Price shall be paid by Acquiror at the Closing as follows: (a)
$5,800,000 (as such amount may be adjusted by Section 1.04) shall be paid to
the Company in immediately available funds and (b) $50,000 shall be paid to
Huffco Turkey in immediately available funds, in each case by wire transfer to
the account or accounts designated by the applicable Seller at least three
business days before Closing.
1.04 ADJUSTMENT TO CASH PURCHASE PRICE. The Cash Purchase Price
payable to the Company shall be increased by an amount equal to (a) all
payments made to the Company for the exercise of options under the Option Plan
(as defined in Section 5.02) on or after the date of this Agreement but before
the Closing and (b) all payments by the shareholders of the Company (the
"Shareholders") to the Company on or after May 1, 1997 pursuant to those
certain Promissory Notes made on or about February 20, 1996 payable to the
Company by the Shareholders in connection with the acquisition of their
respective interests in the Company.
1.05 ESPOIR FIELD.
(a) Contingent Payment. The parties hereby recognize and
acknowledge that the Company has in the past taken certain actions for the
purpose of acquiring an interest in production blocks CI-26 and CI-40, offshore
Cote d'Ivoire (the "Espoir Blocks"), and that Acquiror or another Newfield
company (as defined in Section 9.06 of this Agreement) may continue the
activities previously commenced by the Company after the Closing if the Espoir
Blocks become available. Subject to any right of offset pursuant to Section
7.11 of this Agreement, Acquiror hereby covenants and agrees that, if Acquiror,
any other Newfield company or any joint venture (whether in the form of an
entity or otherwise) in which any Newfield company holds an interest
successfully acquires an interest in either of the Espoir Blocks, either alone
or jointly with other parties (the "Espoir Interest") at any time prior to the
fifth anniversary of the Closing Date (as defined in Section 9.06), Acquiror
shall within 90 days after the consummation of the acquisition of the Espoir
Interest, pay to the Company, in immediately available funds by wire transfer
to an account or accounts specified by the Company, a one-time payment in an
amount determined in accordance with Section 1.05(b) below (the "Espoir Payment
Amount").
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(b) Determination of Espoir Payment Amount. If the
Espoir Value determined pursuant to Section 1.05(c) below is less than or equal
to $1,240,000 (representing the amount of the Company's sunk costs), the Espoir
Payment Amount shall be equal to the Espoir Value. If the Espoir Value is
greater than $1,240,000, the Espoir Payment Amount shall be equal to $1,240,000
plus 50% of the excess of the Espoir Value over $1,240,000.
(c) Determination of Espoir Value. Subject to adjustment
pursuant to the final sentence of this Section 1.06(c), the Espoir Value shall
be deemed to equal $4,000,000, unless Acquiror, any other Newfield company or
any joint venture (whether in the form of an entity or otherwise) in which any
Newfield company holds an interest contemporaneously with or prior to the
acquisition of the Espoir Interest transfers or agrees to transfer all or a
portion of the Espoir Interest to an unaffiliated third party (other than
Petroci) for value pursuant to an arm's length transaction, in which case, the
Espoir Value shall equal the value of consideration received by Acquiror or any
of its subsidiaries (whether in the form of up-front cash payments, exchanged
properties, overriding royalties or otherwise) divided by the fraction of the
Espoir Interest which was transferred or agreed to be transferred. In the
event the Company and Acquiror are unable to agree on the value of any noncash
consideration paid or to be paid to Acquiror or any of its subsidiaries, such
parties shall retain a mutually agreed upon independent petroleum engineer to
determine such value, and his determination shall be binding upon the Company
and Acquiror. The fees and expenses of such independent petroleum engineer
shall be borne equally by the Company and Acquiror. If any portion of the
Espoir Interest is assigned by the government of Cote d'Ivoire to Petroci or to
any other person who has neither reviewed data related to the Espoir Blocks
that was furnished by the Company or any Newfield company nor entered into an
agreement regarding the Espoir Blocks with the Company or any Newfield company
(an "Unrelated Person"), the Espoir Value as otherwise determined by this
Section 1.06(c) shall be proportionately reduced by eliminating a percentage of
such Espoir Value equal to the percentage of the Espoir Interest held by all
Unrelated Persons.
(d) Allocation of Consideration Received. The parties
hereby recognize and agree that the contingent Espoir Payment Amount is being
paid by Acquiror as consideration for the Company's interest in the development
of the Espoir Blocks project.
1.06 NIGERIAN VENTURE.
(a) Subject to any right of offset pursuant to Section
7.11 of this Agreement, Acquiror hereby covenants and agrees that, in the event
Acquiror, any other Newfield company or any joint venture (whether in the form
of an entity or otherwise) in which any Newfield company holds an interest
commits to a development program in or offshore of Nigeria pursuant to
Nigeria's Petroleum Act and Petroleum (Drilling and Productions) Regulations at
any time prior to the fifth anniversary of the Closing Date, Acquiror shall
within 90 days after the commitment to such development program, pay to the
Company, in immediately available funds by wire transfer to an account or
accounts specified by the Company, a one-time payment in the amount of
$1,000,000.
(b) Allocation of Consideration Received. The parties
hereby recognize and agree that the contingent payment provided pursuant to
this Section 1.06 is being paid by Acquiror as consideration for the Company's
interest in the development of a project in Nigeria.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF HUFFCO TURKEY
Huffco Turkey represents and warrants to Acquiror that:
2.01 GOOD TITLE. Huffco Turkey is the sole record and beneficial
owner of, and has good and valid title to, one Huffco China Share, free and
clear of all liens, claims, encumbrances, options, voting trusts, voting
agreements, proxies or other claims or charges of any nature whatsoever (other
than resulting from this Agreement or established by the terms of the
Memorandum and Articles of Association of Huffco China). Upon the transfer of
such Huffco China Share to Acquiror pursuant to the terms of this Agreement,
Acquiror shall be the owner of, and have good and valid title to, such Huffco
China Share, free and clear of all liens, claims, encumbrances, options, voting
trusts, voting agreements, proxies or other claims or charges of any nature
whatsoever (other than resulting from this Agreement or established by the
terms of the Memorandum and Articles of Association of Huffco China).
2.02 ORGANIZATION AND QUALIFICATION. Huffco Turkey is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware. Huffco Turkey has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary.
2.03 AUTHORITY. Huffco Turkey has all requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Huffco Turkey and the performance
by Huffco Turkey of its obligations hereunder, including the consummation of
the transactions contemplated hereby, have been duly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
Huffco Turkey are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Huffco Turkey.
2.04 VALIDITY OF AGREEMENT. Assuming the due authorization,
execution and delivery hereof by Acquiror, this Agreement constitutes the
legal, valid and binding obligation of Huffco Turkey enforceable in accordance
with its terms, (a) except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to or affecting creditors' rights generally, and without limitation,
the effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers and (b) subject to the limitations imposed by general
rules of equity (regardless of whether such enforceability is considered at law
or in equity).
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2.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by
Huffco Turkey does not, and the performance by Huffco Turkey of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not (i) conflict with or violate the Certificate of Incorporation or equivalent
organizational documents, in each case as amended or restated, of Huffco Turkey
or any of its subsidiaries, (ii) conflict with or violate any federal, state,
foreign or local law, statute, ordinance, rule or regulation (collectively,
"Laws") or any judgment, order, writ, injunction, determination, arbitration
award or decree applicable to Huffco Turkey or any of its subsidiaries or by or
to which any of their respective properties is bound or subject or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation or imposition of a mortgage, pledge, lien,
security interest or other charge or encumbrance on any of the properties or
assets of Huffco Turkey or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
authorization, franchise or other instrument or obligation to which Huffco
Turkey or any of its subsidiaries is a party or by or to which Huffco Turkey or
any of its subsidiaries or any of their respective properties is bound or
subject.
(b) The execution and delivery of this Agreement by
Huffco Turkey does not, and the performance by Huffco Turkey of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not, require Huffco Turkey to obtain any consent, license, permit, certificate,
waiver, approval, authorization or order of, or to make any filing with or
notification to, any foreign, federal, national, republic, provincial, state,
territorial, county, municipal or city agency, department, commission, board,
office, bureau, court, tribunal or any other political entity, aggregation, or
subdivision of any of the foregoing (each, a "Governmental Entity"), except as
disclosed in Schedule 2.05(b) hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Acquiror that:
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company is
a Delaware limited liability company, and the Company and each of its
subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, and the Company
and each of its subsidiaries has all requisite power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary.
Schedule 3.01(a) hereto sets forth a true and complete list of all the
Company's directly or indirectly owned subsidiaries, together with the
jurisdiction of incorporation or organization of each subsidiary, the
jurisdictions in which each such subsidiary is qualified to conduct business
and the percentage of each subsidiary's outstanding capital stock or other
equity interests owned by the Company or
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another subsidiary of the Company. Except (i) as set forth in Schedule 3.01(b)
hereto or (ii) for subsidiaries of the Company set forth in Schedule 3.01(a)
hereto, neither the Company nor any of its subsidiaries (x) directly or
indirectly owns, (y) has agreed to purchase or otherwise acquire or (z) holds
any interest convertible into or exchangeable or exercisable for, the capital
stock or other equity interest of any corporation, partnership, limited
liability company or other business entity.
3.02 ORGANIZATIONAL DOCUMENTS. The Company has heretofore
furnished to Acquiror complete and correct copies of the limited liability
company agreement, articles of association or equivalent organizational
documents, in each case as amended or restated to the date hereof, of the
Company and each of its subsidiaries. Neither the Company nor any of its
subsidiaries is in violation of any of the provisions of its limited liability
company agreement, articles of association or equivalent organizational
documents.
3.03 CAPITALIZATION.
(a) Huffco China. The authorized capital of Huffco China
amounts to U.S. $5,100 and consists of 5,000 Huffco China Shares and 1,125,000
Series "A" Preferred Shares, no par value ("Huffco China Preferred Shares").
Of the authorized Huffco China Shares, 100 are issued and outstanding, of such
issued and outstanding shares, 99 are held of record and beneficially by the
Company and one is held of record and beneficially by Huffco Turkey. As of the
date of this Agreement, no Huffco China Preferred Shares were issued or
outstanding. Prior to the Closing, Huffco China shall issue 1,125,000 Huffco
China Preferred Shares to the Company. Such issued and outstanding Preferred
Shares shall have the preferences, limitations and relative rights described in
Exhibit A to this Agreement. No Huffco China Shares or Huffco China Preferred
Shares are held by Huffco China in its treasury or by the Company's
subsidiaries . Except as set forth above, there are no capital shares
(including preferred shares) of, or other equity interests in, Huffco China
authorized, issued, outstanding or reserved for issuance for any purpose.
(b) Huffco (West Africa) Inc. The authorized capital of
Huffco (West Africa) Inc. amounts to U.S.$5,000 and consists of one class of
shares with 5,000 shares, U.S.$1.00 par value per share ("Common Shares"). Of
the authorized Common Shares, 100 will be issued to the Company prior to the
Closing and will comprise all of the issued and outstanding shares of Huffco
(West Africa) Inc. No Common Shares are held by Huffco (West Africa) Inc. in
its treasury or by the Company's subsidiaries. Except as set forth above,
there are no capital shares (including preferred shares) of, or other equity
interests in, Huffco (West Africa) Inc. authorized, issued, outstanding or
reserved for issuance for any purpose.
(c) Each of the issued capital shares of, or other equity
interests in, each of the Company's subsidiaries is or, with respect to Huffco
(West Africa) Inc., will be duly authorized, validly issued and, in the case of
capital shares, fully paid and nonassessable, and has not been or, with respect
to Huffco (West Africa) Inc., will not be issued in violation of, nor are any
of the authorized capital shares of, or other equity interests in, the
Company's subsidiaries subject to, any preemptive right, right of first refusal
or similar rights created by statute, the articles of association or the
equivalent organizational documents of any of the Company's subsidiaries, or
any agreement to which the Company or any of its subsidiaries is a party or is
bound, and all such issued shares or other equity interests of the Company's
subsidiaries described on Schedule 3.01(a) hereto
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("Subsidiary Shares"), except those shares shown as owned by Huffco Turkey, are
owned or, with respect to Huffco (West Africa) Inc., will be owned by the
Company or a subsidiary of the Company free and clear of all security
interests, liens, claims, pledges, agreements, limitations on the Company's or
such subsidiaries' voting rights, charges or other encumbrances of any nature
whatsoever, except as resulting from this Agreement or established by the terms
of the subsidiaries' organizational documents. Upon the transfer of such
Subsidiary Shares to Acquiror pursuant to the terms of this Agreement, Acquiror
shall be the owner of, and have good and valid title to, such Subsidiary
Shares, free and clear of all liens, claims, encumbrances, options, voting
trusts or agreements, proxies or other claims or charges of any nature
whatsoever (other than resulting from this Agreement or established by the
terms of the subsidiaries' organizational documents). No bonds, debentures,
notes or other indebtedness of the Company's subsidiaries having the right to
vote (or convertible into or exchangeable or exercisable for securities having
the right to vote) on any matters on which shareholders may vote ("Voting
Debt") are issued or outstanding.
(d) There are no outstanding subscriptions, options,
warrants or other rights (including registration rights), agreements,
arrangements or commitments of any character to which the Company or any of its
subsidiaries is a party relating to the issued or unissued capital stock or
other equity interests of the Company's subsidiaries (including any right or
potential right to payment based in any manner upon, or calculated with
reference to, the revenues, cash flow or earnings of any of the Company's
subsidiaries) or obligating the Company or any of its subsidiaries to grant,
issue or sell any shares of capital stock, Voting Debt or other equity
interests of the Company's subsidiaries. Except as set forth on Schedule
3.03(d) hereto, there are no obligations, contingent or otherwise, (i) of any
subsidiary of the Company to repurchase, redeem or otherwise acquire any shares
or other capital stock of the Company or the capital stock or other equity
interests of any subsidiary of the Company or (ii) of the Company or any
subsidiary of the Company to purchase equity interests in, lend funds to or
provide any guarantee with respect to the obligations of, any person. Except
as set forth in Schedule 3.03(d) hereto, there are no voting trusts,
shareholder agreements, proxies or other agreements or understandings with
respect to the voting of any shares of capital stock or other equity interests
of any of the Company's subsidiaries.
3.04 AUTHORITY. The Company has all requisite power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
action and no other proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Company.
3.05 VALIDITY OF AGREEMENT. Assuming the due authorization,
execution and delivery hereof by Acquiror, this Agreement constitutes the
legal, valid and binding obligation of the Company enforceable in accordance
with its terms, (a) except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to or affecting creditors' rights generally, and the effect of
statutory or other laws regarding fraudulent conveyances and preferential
transfers and (b) subject to the limitations imposed by general rules of equity
(regardless of whether such enforceability is considered at law or in equity).
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3.06 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the
Company does not, and the performance by the Company of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not (i) conflict with or violate the limited liability company agreement,
articles of association or equivalent organizational documents, in each case as
amended or restated, of the Company or any of its subsidiaries, (ii) conflict
with or violate any Laws or any judgment, order, writ, injunction,
determination, arbitration award or decree applicable to the Company or any of
its subsidiaries or by or to which any of their respective properties is bound
or subject or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or require payment under, or result in the creation or
imposition of a mortgage, pledge, lien, security interest or other charge or
encumbrance on any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, authorization, franchise or other instrument
or obligation to which the Company or any of its subsidiaries is a party or by
or to which the Company or any of its subsidiaries or any of their respective
properties is bound or subject.
(b) The execution and delivery of this Agreement by the
Company does not, and the performance by the Company of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not, require the Company to obtain any consent, license, permit, certificate,
waiver, approval, authorization or order of, or to make any filing with or
notification to, any Governmental Entity, except as disclosed in Schedule
3.06(b) hereto.
3.07 PERMITS; COMPLIANCE. Each of the Company and its subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, identification and
registration numbers, approvals and orders necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted
(collectively, the "Company Permits"). Schedule 3.07 hereto sets forth a list
of each of the Company Permits and the jurisdiction issuing the same, all of
which are in good standing and, to the Company's knowledge, not subject to
meritorious challenge. Schedule 3.07 hereto also sets forth, as of the date of
this Agreement, all actions, proceedings or investigations pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries that could reasonably be expected to result in the loss,
suspension or revocation of a Company Permit. Except as set forth in Schedule
3.07 hereto, the Company and its subsidiaries are in material compliance with,
and none of them has received from any Governmental Entity any written notice
with respect to any non-compliance with, (i) any Law applicable to the Company
or any of its subsidiaries or by or to which any of their respective properties
is bound or subject, (ii) any judgment, order, writ, injunction determination,
arbitration award or decree applicable to the Company or any of its
subsidiaries or (iii) any of the Company Permits.
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3.08 FINANCIAL STATEMENTS.
(a) The Company has provided Acquiror with true, correct
and complete copies of its (i) unaudited consolidated balance sheet as of, and
its statements of operations and shareholders' equity and statement of cash
flows for the year ended, December 31, 1996 and the notes related thereto and
(ii) unaudited consolidating balance sheet as of, and its statements of
operations and stockholders' deficit and statement of cash flows for the three
months ended, March 31, 1997 (collectively, the "Company Financial
Statements"). Each of the Company Financial Statements (including, in each
case, any related notes thereto) (i) has been prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods covered thereby (except (A) to the extent disclosed
therein or required by changes in GAAP, or (B) as may be indicated in the notes
thereto) and (ii) fairly present the consolidated financial position of the
Company and its subsidiaries as of the respective dates thereof and the
consolidated results of operations and cash flows for the periods indicated
(subject, in the case of interim periods, to adjustments, consisting only of
normal, recurring accruals, necessary to present fairly such results of
operations and cash flows).
(b) Except (i) for reserves specifically reflected or
accrued for (and only to the extent reflected or accrued for) in the balance
sheet dated as of March 31, 1997 included in the Company Financial Statements
(the "Balance Sheet"), (ii) for liabilities incurred in the ordinary course of
business since March 31, 1997, or (iii) as otherwise disclosed in this
Agreement or any schedule to this Agreement (including without limitation
liabilities and obligations pursuant to the Contracts, Leases, Guarantees and
Affiliate Agreements), none of the Company or any of its subsidiaries has any
liabilities or obligations of any nature, whether absolute, accrued, contingent
or otherwise, and whether due or to become due. To the knowledge of the
Company, there is no basis for the assertion against the Company or any of its
subsidiaries of any such liability or obligation not described in clauses (i),
(ii) or (iii) above.
3.09 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated
by this Agreement or as set forth in Schedule 3.09 hereto, since December 31,
1996 the Company and its subsidiaries have conducted their respective
businesses only in the ordinary course and in a manner consistent with past
practice, and there has not been: (a) any damage, destruction or loss with
respect to any property, assets or business of the Company or any of its
subsidiaries that would constitute a Company Material Adverse Effect; (b) any
material increase in the benefits under, or the establishment or amendment of,
any bonus, insurance, severance, deferred compensation, pension, retirement,
profit sharing, performance awards (including, without limitation, the granting
of stock appreciation rights or restricted stock awards), stock purchase or
other employee benefit plan, or any increase in the compensation payable or to
become payable to any of the directors, officers or employees of the Company or
any of its subsidiaries except in the ordinary course of business and
consistent with past practice; (c) any purchase, sale or other disposition, or
any agreement or other arrangement for the purchase, sale or other disposition,
of any of the properties or assets of the Company or any of its subsidiaries
other than pursuant to this Agreement or in the ordinary course of business;
(d) any change in the financial condition, properties, assets, liabilities,
business or operations of the Company or any of its subsidiaries, which change
by itself or in conjunction with all other such changes, whether or not arising
in the ordinary course of business, would or could reasonably be expected to
constitute a Company Material Adverse Effect, other than operating results
-9-
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that have been generally consistent with the results reflected in the Company
Financial Statements and any adverse changes affecting the oil industry in
general; (e) any contingent liability incurred by the Company or any of its
subsidiaries as guarantor or otherwise with respect to the obligations of
others or any cancellation of any debt or claim owing to, or waiver of any
right of, the Company or any of its subsidiaries; (f) any mortgage, encumbrance
or lien placed on any of the properties of the Company or any of its
subsidiaries that remains in existence on the date this representation is made;
(g) any payment or discharge of a material lien or liability of the Company or
any of its subsidiaries that was not shown in the Company Financial Statements
or incurred in the ordinary course of business thereafter; or (h) any agreement
or understanding, whether in writing or otherwise, for the Company or any of
its subsidiaries to take any of the actions specified in clauses (a) through
(g) above. The term "Company Material Adverse Effect" as used in this
Agreement shall mean any change or effect that would or could reasonably be
expected to be materially adverse to the assets, business, prospects, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole, at the time of such change or effect.
3.10 LITIGATION. Except as set forth on Schedule 3.10 hereto,
there is no claim, action, suit, litigation, proceeding, arbitration or, to the
knowledge of the Company, investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief), pending or, to
the knowledge of the Company, threatened against the Company or any of its
subsidiaries or any properties or rights of the Company or any of its
subsidiaries, and neither the Company nor any of its subsidiaries is
specifically the subject of any executory judgment, order, writ, injunction,
decree or award of any Governmental Entity, including without limitation any
cease and desist order and any consent decree, settlement agreement or other
similar written agreement with any Governmental Entity.
3.11 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) Copies of Benefit Plans. Schedule 3.11(a) hereto
provides a list of each Benefit Plan. True, correct and complete copies of each
of such Benefit Plans, and related trusts, if applicable, including all
amendments thereto, have been furnished to Acquiror. There have also been
furnished to Acquiror, with respect to each such Benefit Plan required to file
such report or description, the most recent report on Form 5500 and the summary
plan description.
(b) Employee Benefit Plan Compliance.
(i) Neither the Company nor any of its
subsidiaries contributes to or has an obligation to contribute to, nor
has the Company or any of its subsidiaries at any time within six
years prior to the date of this Agreement contributed to or had an
obligation to contribute to, (A) a Plan subject to Title IV of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or (B) a "multiemployer plan" within the meaning of Section 3(37) of
ERISA.
(ii) All obligations, whether arising by Law or by
contract, required to be performed in connection with the Benefit
Plans have been performed, and there have been no omissions, defaults
or violations by any party with respect to any Benefit Plan or any Law
applicable thereto.
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15
(iii) Each Plan (as defined in Section 9.06) that
is intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), (A) satisfies the
requirements of such section in all material respects, (B) has
received a favorable determination letter from the Internal Revenue
Service (the "IRS") regarding such qualified status and (C) has not,
since receipt of the most recent favorable determination letter, been
amended or operated in a way that would materially adversely affect
such qualified status.
(iv) There is no matter pending (other than
routine qualification determination filings) with respect to any of
the Benefit Plans before the IRS, the Department of Labor, the Pension
Benefit Guaranty Corporation (the "PBGC") or any other Governmental
Entity.
(v) With respect to any employee benefit plan,
within the meaning of Section 3(3) of ERISA, that is not listed on
Schedule 3.11(a) hereto but which is sponsored, maintained, or
contributed to, or has been sponsored, maintained or contributed to
within six years prior to the date of this Agreement, by any
corporation, trade, business or entity under common control with the
Company or any of its subsidiaries, within the meaning of Section
414(b), (c), (m), or (o) of the Code or Section 4001 of ERISA
("Commonly Controlled Entity"), (A) no withdrawal liability, within
the meaning of Section 4201 of ERISA, has been incurred, which
withdrawal liability has not been satisfied, (B) no liability to the
PBGC has been incurred by any Commonly Controlled Entity, which
liability has not been satisfied, (C) no accumulated funding
deficiency, whether or not waived, within the meaning of Section 302
of ERISA or Section 412 of the Code has been incurred and (D) all
contributions (including installments) to such plan required by
Section 302 of ERISA and Section 412 of the Code have been timely
made.
(vi) Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
(A) contravenes the terms of any Benefit Plan, (B) will require the
Company or any of its subsidiaries to make a larger contribution to,
or pay greater benefits under, any Benefit Plan than it otherwise
would or (C) will create or give rise to any additional vested rights
or service credits under any Benefit Plan.
(vii) Neither the Company nor any of its
subsidiaries (A) sponsors or maintains any defined benefit pension
plan or (B) contributes to or has or had an obligation to contribute
to a retirement plan for which the contribution is or was calculated
either (1) on the basis of actuarial assumptions and methods or (2) on
a basis other than a fixed amount per month.
(c) No Additional Severance. Except as set forth in
Schedule 3.11(c) hereto, neither the Company nor any of its subsidiaries is a
party to any agreement, nor has the Company or any of its subsidiaries
established any policy or practice requiring, nor does any applicable Law
require, it to make a payment or provide any other form of compensation or
benefit to any person performing services for the Company or any of its
subsidiaries upon termination of such services that would not be payable or
provided in the absence of the consummation of the transactions
-11-
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contemplated by this Agreement, except the severance arrangements entered into
in connection with the transactions contemplated by this Agreement and approved
by Acquiror prior to Closing.
(d) No Excess Parachute Payments. In connection with the
consummation of the transactions contemplated by this Agreement, no payments
have or will be made under the Benefit Plans that, in the aggregate, would
result in imposition of the sanctions imposed under Section 280G or Section
4999 of the Code.
(e) Amendment or Termination of Benefit Plans. Each Plan
may be unilaterally amended or terminated in its entirety by the Company
without violating the terms of such Benefit Plans or applicable Law and without
liability except as to benefits accrued and vested thereunder prior to or upon
such amendment or termination.
(f) Labor Matters. There are no collective bargaining or
other labor union contracts to which the Company or its subsidiaries is a party
applicable to persons employed by the Company or its subsidiaries and no
collective bargaining agreement is being negotiated by the Company or any of
its subsidiaries. There is no pending or, to the knowledge of the Company,
threatened labor dispute, strike or work stoppage against the Company or any of
its subsidiaries. To the knowledge of the Company, none of the Company, any of
its subsidiaries or any of their respective representatives or employees has
committed any unfair labor practice in connection with the operation of the
respective businesses of the Company or its subsidiaries and there is no
pending or, to the knowledge of the Company, threatened charge or complaint
against the Company or any of its subsidiaries by the National Labor Relations
Board or any other Governmental Entity. The Company and each of its
subsidiaries have each complied with the Family and Medical Leave Act of 1993.
(g) Employment and Other Agreements. The Company has
furnished to Acquiror true, correct and complete copies of each (i) employment
agreement to which the Company or any of its subsidiaries is a party and (ii)
other agreement between the Company or any of its subsidiaries and any employee
or former employee that provides severance, health, deferred compensation or
other employee benefit. Schedule 3.11(g) hereto lists each such document
described in the preceding sentence.
(h) The Company has furnished to Acquiror a true and
correct list of all employees of the Company and each of its subsidiaries as of
April 30, 1997 and, with respect to each Affected Employee (as defined in
Section 7.07 of this Agreement), (i) his or her annual salary or annualized
hourly rate of pay, (ii) his or her expected annual bonus, if any, (iii)
whether he or she is an active or inactive employee and, if applicable, the
reason for inactive status, (iv) whether he or she is full-time (30 or more
hours per week) or part-time (less than 30 hours per week), and (v) whether he
or she is subject to or exempt from the provisions of the Fair Labor Standards
Act.
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3.12 TAXES. Except as set forth in Schedule 3.12 hereto:
(a) (i) all returns and reports ("Tax Returns") of or
with respect to any Tax (as defined in Section 9.06 hereof) which are required
to be filed with respect to the Company or any of its subsidiaries have been
duly and timely filed, (ii) all information provided in each such Tax Return
is true, correct and complete in all material respects, (iii) all Taxes shown
as due on each such Tax Return that are payable by the Company or any of its
subsidiaries have been timely paid in full, (iv) all withholding Tax
requirements imposed on or with respect to Company or any of its subsidiaries
have been satisfied in all material respects, and (v) no penalty, interest or
other charge is or will become due with respect to the late filing of any such
Tax Return or late payment of any such Tax, except any such tax for which
adequate provision has been made in the Balance Sheet in accordance with GAAP
and which is being contested in good faith;
(b) there is no claim pending against the Company or any
of its subsidiaries for any material amount of Taxes, and no material
assessment, deficiency or adjustment has been asserted or proposed with respect
to any Tax Return of or with respect to the Company or any of its subsidiaries;
(c) except for statutory liens for current Taxes not yet
due, no liens for Taxes exist upon any of the assets of the Company or any of
its subsidiaries; and
(d) there is not in force any extension of time with
respect to the due date for the filing of any Tax Return of the Company or any
of its subsidiaries or any waiver or agreement for any extension of time for
the assessment or payment of any tax of or with respect to the Company or any
of its subsidiaries.
3.13 CERTAIN BUSINESS PRACTICES. None of the Company, any of its
subsidiaries or any directors, officers, agents or employees of the Company or
any of its subsidiaries (in their capacities as such) has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful purposes
relating to political activity or (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the United States Foreign
Corrupt Practices Act of 1977, as amended.
3.14 ENVIRONMENTAL MATTERS.
(a) Neither the Company nor any of its subsidiaries has
any material liability under, nor is the Company or any of its subsidiaries in
violation in any material respect of, any Environmental Law and neither the
Company nor any of its subsidiaries has any liability to any non-Governmental
Entity under any Environmental Law arising from exposure to or otherwise in
connection with any Release or threatened Release of any Hazardous Material.
(b) For purposes of this Section 3.14, (i) "Hazardous
Material" shall mean any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant or contaminant,
as defined or regulated under any Environmental Law, or any other substance,
exposure to which is regulated under any Environmental Law, (ii) "Environmental
Law" shall mean and include any and all laws, common laws, statutes,
ordinances, rules, regulations,
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codes, licenses, permits, consents, approvals, authorizations, orders,
judgments, decrees, injunctions, requirements, agreements, or determinations of
any Governmental Entity in any and all jurisdictions in which the Company
presently or formerly owned, operated, leased, or used property, whether
existing as of the date hereof, previously enforced, or subsequently enacted,
that are related to (A) the protection, preservation, or restoration of the
environment (including, without limitation, air, water, vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource), or to human or animal health or
safety or (B) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
Release, or disposal of any Hazardous Material; and (iii) "Release" shall mean
and include any actual spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, dumping or disposing
into the environment in violation of applicable Law.
3.15 CERTAIN AGREEMENTS. None of the Company or any of its
subsidiaries is a party to, or bound by, any contract, agreement or
organizational document that purports to restrict, by virtue of a
noncompetition, territorial exclusivity or other provision covering such
subject matter, the scope of the business or operations of the Company or any
of its subsidiaries geographically or otherwise, except the Heads of Agreement
dated November 1, 1996 regarding farmouts of properties from Chevron and AGIP
in Nigeria, the Confidentiality Agreement between Xxxx-XxXxx China Petroleum
Ltd. and Huffco China dated March 1, 1996, the Letter Agreement between the
Company and African Petroleum PLC dated December 20, 1996 and all other
confidentiality agreements relating to data reviewed by the Company to which
the Company is subject (to the extent restrictions on use of such data
contained therein may be deemed to be covered by this Section).
3.16 CONTRACTS AND COMMITMENTS. Schedule 3.16 hereto sets forth a
list of (i) each contract or agreement to which the Company or any of its
subsidiaries is a party or by which its or their property is bound
("Contracts"); (ii) all real or personal property leases to which any of the
Company or any of its subsidiaries is a party ("Leases"); (iii) guarantees, or
agreements to indemnify or be contingently liable for, the payment or
performance by any other person or business entity to which the Company or any
of its subsidiaries is a party ("Guarantees"); and (iv) contracts or other
formal or informal understandings or agreements between the Company or any of
its subsidiaries and any of its officers, directors, employees, consultants,
agents or shareholders (or any of such shareholders' family members or
affiliates) that will be binding upon Acquiror, any other Newfield company or
any of the subsidiaries of the Company after the Closing ("Affiliate
Agreements"). A true and complete copy of each Contract, Lease, Guarantee and
Affiliate Agreement has been furnished to Acquiror prior to the date hereof.
Except as specifically disclosed in Schedule 3.16 hereto, each of the
Contracts, Leases, Guarantees and Affiliate Agreements constitutes the valid
and legally binding obligation of the parties thereto and is in full force and
effect without default on the part of any party thereto. Except as set forth
in Schedule 3.16 hereto, no current or former shareholder, employee,
consultant, officer or director, of the Company or any of its subsidiaries has
any interest in any property, tangible, or intangible, including patents, trade
secrets, other confidential business information, trademarks, service marks or
trade names used in or pertaining to the business of the Company or any of its
subsidiaries, except (with respect to shareholders) for the normal rights of a
shareholder.
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3.17 INTELLECTUAL PROPERTY. The Company or one or more of its
subsidiaries own, are licensed or otherwise have the right to use or
sublicense, all foreign and domestic patents, trademarks (common law and
registered), trademark registration applications, service marks (common law and
registered), service xxxx registration applications, trade names and
copyrights, copyright applications, trade secrets, know-how and other
proprietary information as are necessary for the conduct of the business of the
Company and its subsidiaries as currently conducted (the "Intellectual
Property"). A list of all such patents, trademarks, service marks and
copyrights is set forth on Schedule 3.17 hereto. Neither the Company nor any
of its subsidiaries is currently in receipt of any notice of infringement or
notice of conflict with the asserted rights of others in any patents,
trademarks, service marks, trade names, trade secrets and copyrights owned or
held by other persons. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate or
breach the terms of or cause any cancellation of any material license held by
the Company or any of its subsidiaries with regard to any patent, trademark,
service xxxx, trade name, trade secret or copyright, subject, however, to the
provisions of Section 7.06 of this Agreement.
3.18 BROKERS. No broker, finder, investment banker or other person
is entitled to any brokerage, finder's or other fee, commission or payment in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
3.19 INSURANCE. Schedule 3.19 hereto sets forth a list of all
policies of insurance currently held by the Company, any of its subsidiaries or
Huffco Group, Inc. on behalf of the Company and its subsidiaries with respect
to the business or operations of the Company or any of its subsidiaries (true
and complete copies of which have been furnished to Acquiror). Such insurance
policies are in full force and effect. The Company and its subsidiaries have
given in a timely manner to their respective insurers all notices required to
be given under such insurance policies with respect to all claims and actions
covered by insurance, and, except as set forth in Schedule 3.19 hereto, no
insurer has denied coverage of any such claims or actions or reserved it rights
in respect of or rejected any of such claims. The execution of this Agreement
and the consummation of the transactions contemplated hereby will not cause any
such insurance policies held by the Company's subsidiaries to lapse, terminate
or be canceled and will not result in any party thereto having the right to
terminate or cancel such insurance policies; provided that the insurance
policies maintained by Huffco Group, Inc. on behalf of the Company and its
subsidiaries shall not be transferred pursuant to this Agreement.
3.20 ASSETS. Except as set forth in Schedule 3.20 hereto, the
Company or its subsidiaries have good and defensible title, free and clear of
all liens and encumbrances, to all of the Company Assets (other than the
Subsidiary Shares). Schedule 3.20 hereto sets forth a list of the Company
Assets (other than the Subsidiary Shares) as of the date of this Agreement.
Upon the transfer of the Company Assets (other than the Subsidiary Shares) the
Acquiror, pursuant to the terms of this Agreement, will, except as set forth in
Schedule 3.20 hereto, have good and defensible title, free and clear of all
liens and encumbrances, to the Company Assets (other than the Subsidiary
Shares).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to the Company and Huffco
Turkey that:
4.01 ORGANIZATION AND QUALIFICATION. Acquiror is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of the Bahamas. Acquiror has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary.
4.02 AUTHORITY. Acquiror has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Acquiror and the performance by
Acquiror of its obligations hereunder, including the consummation of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Acquiror
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Acquiror.
4.03 VALIDITY OF AGREEMENT. Assuming the due authorization,
execution and delivery hereof by the other parties hereto, this Agreement
constitutes the legal, valid and binding obligation of Acquiror enforceable in
accordance with its terms, (a) except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to or affecting creditors' rights generally, and without limitation,
the effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers and (b) subject to the limitations imposed by general
rules of equity (regardless of whether such enforceability is considered at law
or in equity).
4.04 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by
Acquiror does not, and performance of its obligations hereunder, including the
consummation of the transactions contemplated hereby, will not (i) conflict
with or violate Acquiror's Memorandum or Articles of Association, (ii) conflict
with or violate any Laws in effect as of the date of this Agreement applicable
to Acquiror or any other Newfield company or by or to which any of their
properties is bound or subject or (iii) result in any breach of or constitute a
default (or an event that with or without notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or require payment under, or result
in the creation or imposition of a mortgage, pledge, lien, security interest or
other charge or encumbrance on any of the properties or assets of Acquiror or
any other Newfield company pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, authorization, franchise or other
instrument or obligation to which Acquiror or any other Newfield company is a
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party or by or to which Acquiror or any other Newfield company or any of their
respective properties is bound or subject.
(b) Except as described in Section 8.02(d) of this
Agreement, the execution and delivery of this Agreement by Acquiror does not,
and the performance of this Agreement by Acquiror, including the consummation
of the transactions contemplated hereby, will not require Acquiror or any
other Newfield company to obtain any consent, license, permit, certificate,
waiver approval, authorization or order of, or to make any filing with or
notification to, any Governmental Entities, except (i) the applicable
requirements, if any, of the Exchange Act of 1934, as amended (the "Exchange
Act"), the Securities Act of 1933, as amended (the "Securities Act"), the rules
and regulations thereunder, any other applicable state or federal securities or
blue sky laws and the New York Stock Exchange, Inc. (the "NYSE) or (ii) where
the failure to obtain such consents, licenses, permits, certificates, waivers,
approvals, authorizations or orders, or to make such filings or notifications
could not reasonably be expected to have an Acquiror Material Event.
4.05 PURCHASE PRICE. Acquiror has available to it sufficient funds
to pay the Purchase Price at the Closing.
4.06 BROKERS. No broker, finder, investment banker or other person
is entitled to any brokerage, finder's or other fee, commission or payment in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Acquiror or any other Newfield company.
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company hereby
covenants and agrees that, prior to the Closing, unless otherwise expressly
contemplated by this Agreement or consented to in writing by Acquiror, the
Company will and will cause each of its subsidiaries to:
(a) operate its business in the usual and ordinary course
consistent with past practices;
(b) use all reasonable efforts to preserve substantially
intact its business organization, maintain its rights and franchises, retain
the services of its respective officers and employees and maintain its
relationships with its respective suppliers and landlords;
(c) maintain and keep its properties and assets in as
good repair and condition as at present, ordinary wear and tear excepted, and
maintain supplies in quantities consistent with its customary business
practice; and
(d) use all reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage to those
currently maintained.
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5.02 NEGATIVE COVENANTS OF THE COMPANY. Except as expressly
contemplated by this Agreement or otherwise consented to in writing by
Acquiror, from the date of this Agreement until the Closing, the Company will
not do, and will not permit any of its subsidiaries to do, any of the
following:
(a) increase the compensation payable to or to become
payable to any director, executive officer or employee; (ii) grant any
severance or termination pay to, or enter into any employment or severance
agreement with, any director, officer or employee; (iii) establish, adopt or
enter into any employee benefit plan or arrangement or (iv) except as may be
required by applicable Law, amend, or take any other actions (including,
without limitation, the acceleration of vesting, waiving of performance
criteria or the adjustment of awards or any other actions permitted upon a
"change in control" of the Company), with respect to any of the Benefit Plans
or any of the plans, programs, agreements, policies or other arrangements
described in Section 3.11(g) of this Agreement, except the granting of the
remaining authorized but unissued stock options under the Company's 1996
Nonqualified Share Option Plan (the "Option Plan");
(b) declare or pay any dividend on, or make any other
distribution in respect of, outstanding shares of its or any of its
subsidiaries' capital stock or other equity interests, except dividends by a
wholly owned subsidiary of the Company to the Company or another wholly owned
subsidiary of the Company, except for the distribution of Huffco China
Preferred Shares as contemplated by Section 3.03(a);
(c) (i) redeem, purchase or otherwise acquire any shares
of its or any of its subsidiaries' capital stock, any securities or obligations
convertible into or exchangeable for any shares of its or its subsidiaries'
capital stock (other than any such acquisition directly from any wholly owned
subsidiary of the Company in exchange for capital contributions or loans to
such subsidiary), or any options, warrants or conversion or other rights to
acquire any shares of its or its subsidiaries' capital stock or any such
securities or obligations; (ii) effect any reorganization or recapitalization
of the Company or any of its subsidiaries; or (iii) split, combine or
reclassify any of its subsidiaries' capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of, or in
substitution for, shares of its subsidiaries' capital stock;
(d) issue (whether upon original issue or out of
treasury), sell, grant, award, deliver or limit the voting rights of any shares
of any class of its subsidiaries' capital stock, any securities convertible
into or exercisable or exchangeable for, or any rights, warrants or options to
acquire, any such shares, except for the issuance of Huffco China Preferred
Shares as contemplated by Section 3.03(a);
(e) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or
otherwise acquire or agree to acquire any assets of any other person (other
than the purchase of assets from suppliers or vendors in the ordinary course of
business and consistent with past practice and other than acquisitions of
equity interests in African Petroleum/Huffco International Ltd., a Bahamas
international business company, and AP Hydrocarbons Development Company
Limited, a company formed in Nigeria, both in connection with the Company's
proposed Nigerian project;
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(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its assets or any assets of any of its
subsidiaries, other than dispositions of used materials and equipment in the
ordinary course of business;
(g) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal relating to, or that may reasonably
be expected to lead to, any Competing Transaction (as defined below), or enter
into discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to, or endorse, any
Competing Transaction, or authorize any of the officers, directors, employees
or agents of the Company or any of its subsidiaries or any agent, investment
banker, financial advisor, attorney, accountant or other representative
retained by the Company or any of its subsidiaries to take any such action, and
the Company shall promptly notify Acquiror or promptly provide Acquiror with a
copy of all relevant terms of any such inquiries or proposals received by the
Company or any of its subsidiaries. For purposes of this Agreement, the term
"Competing Transaction" shall mean any proposal or offer from any person or
entity (other than Acquiror or an affiliate of Acquiror) relating to any
acquisition or purchase of all or (other than in the ordinary course of
business) any material portion of the assets of, or any possible disposition or
issuance of any capital stock or other equity interests in the Company or any
of its subsidiaries (or any rights or securities exercisable for or convertible
into any such capital stock or other equity interests) (other than pursuant to
the Option Plan), or any merger or other business combination with, the Company
or any of its subsidiaries;
(h) release any third party from its obligations under
any confidentiality or other similar agreement relating to information material
to the Company or any of its subsidiaries;
(i) propose to adopt any amendments to its limited
liability company agreement, articles of association or equivalent
organizational documents that would have an adverse effect on the consummation
of the transactions contemplated by this Agreement;
(j) with regard only to the subsidiaries of the Company,
(i) change any of its significant accounting policies or (ii) make or rescind
any material express or deemed election relating to Taxes, settle or compromise
any material claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, or change any of its
material methods of reporting income or deductions for Tax purposes from those
employed in the preparation of Tax returns for the taxable years ended December
31, 1995 and December 31, 1996 (as applicable), except, in the case of clause
(i) or clause (ii), as may be required by any Law or by GAAP;
(k) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument or under any financing lease, whether pursuant to a sale-
and-leaseback transaction or otherwise, except in the ordinary course of
business consistent with past practice and except for interest free advances
from affiliates of the Company as necessary to enable the Company to pay
operating expenses incurred in the ordinary course of business;
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(l) enter into any material arrangement, agreement or
contract with any third party other than an operating agreement covering Xxxxx
00/00, Xxxx xx Xxxxx, Xxxxxx'x Xxxxxxxx of China, substantially in the form of
the December 31, 1996 draft of such agreement provided to Acquiror, the
Memorandum and Articles of Association of African Petroleum/Huffco
International Ltd. as filed in the Commonwealth of the Bahamas on April 30,
1997, the Memorandum and Articles of Association of AP Hydrocarbons Development
Limited (as presently existing), and the Option Agreement, Farmout Agreement
and letter agreement among AP Hydrocarbons Development Limited, Nigerian
National Petroleum Corporation and Chevron Nigeria Limited substantially in the
form of the May 2, 1997 drafts of such agreements provided to Acquiror;
(m) take any action that reasonably could be expected to
result in any of the conditions set forth in Article VIII not being satisfied;
or
(n) agree in writing or otherwise to do any of the
foregoing.
ARTICLE VI
COVENANTS OF HUFFCO TURKEY
6.01 COVENANTS OF HUFFCO TURKEY. Huffco Turkey covenants and
agrees that, prior to the Closing, it will not:
(a) take any action that reasonably could be expected to
result in any of the conditions set forth in Article VIII not being satisfied;
or
(b) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal relating to, or that may reasonably
be expected to lead to, any Competing Transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to, or endorse, any Competing
Transaction, or authorize any agent, investment banker, financial advisor,
attorney, accountant or other representative retained by it to take any such
action, and Huffco Turkey shall promptly notify Acquiror or promptly provide
Acquiror with a copy of all relevant terms of any such inquiries or proposals
received by it.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS. From the date of this
Agreement through the Closing Date, the Company and Huffco Turkey, as
appropriate, shall give prompt notice to Acquiror, and Acquiror shall give
prompt notice to the Company, orally and in writing, after any executive
officer of the Company, Huffco Turkey or Acquiror, as applicable, becomes aware
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty of the party
giving such notice contained in this Agreement to be untrue or inaccurate at
any time from the date hereof to the Closing and (ii) any failure of the party
giving
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such notice to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by such person hereunder within the time
specified therefor.
7.02 ACCESS AND INFORMATION.
(a) From the date of this Agreement through the Closing
Date, the Company shall, and shall cause its subsidiaries to, (i) afford to
Newfield companies and their officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Acquiror Representatives") access during ordinary business hours and at other
reasonable times, upon reasonable prior notice, to the officers, employees,
accountants, agents, properties, offices and other facilities of the Company
and its subsidiaries and to the books and records thereof and (ii) furnish
promptly to Acquiror and the Acquiror Representatives such information
concerning the business, properties, contracts, records and personnel of the
Company and its subsidiaries (including, without limitation, financial,
operating and other data and information) as may be reasonably requested, from
time to time, by Acquiror or the Acquiror Representatives, in each case for the
purpose of conducting an investigation of the affairs of the Company and its
subsidiaries in connection with the transactions contemplated by this
Agreement. Notwithstanding the foregoing provisions of this Section 7.02, the
Company shall not be required to grant access or furnish information to the
Acquiror Representatives to the extent that such access or the furnishing of
such information is prohibited by any Law or contract. Acquiror's
investigation shall be conducted, to the extent reasonably practicable, in a
manner that minimizes any significant interference with the normal operations
of the Company.
(b) Acquiror shall, and shall direct and use all
reasonable efforts to cause the other Acquiror Representatives to, hold in
confidence and not disclose (except to Acquiror Representatives or as required
by applicable law, court order or the applicable rules of a stock exchange) all
nonpublic information received from the Company or its representatives in
connection with the transactions contemplated by this Agreement until the
earlier of (i) the Closing, (ii) three years after the termination of this
Agreement or (iii) such time as such information is otherwise publicly
available, and, if this Agreement is terminated, Acquiror shall, and shall
direct and use all reasonable efforts to cause the other Acquiror
Representatives to, either destroy or deliver to the Company all documents,
work papers and other materials (including copies) provided or based upon
information provided by the Company or its representatives in connection with
the transactions contemplated by this Agreement. In addition, from and after
the Closing until the earlier of three years after the Closing or such time as
such information is otherwise publicly available, Acquiror shall, and shall
direct and use all reasonable efforts to cause the other Acquiror
Representatives to, hold in confidence and not disclose (except as required by
applicable law, court order or the applicable rules of a stock exchange) all
nonpublic information regarding the members of the Company and agreements
between the Company and its members received from the Company or its
representatives in connection with the transactions contemplated by this
Agreement.
(c) The Company shall, shall cause its subsidiaries to
and shall direct and use all reasonable efforts to cause its and their
officers, managers, directors, members, shareholders, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Company Representatives") to, hold in confidence and not disclose (except to
other Company Representatives, as necessary or appropriate for purposes of tax
returns and other governmental
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filings, as necessary or appropriate to defend itself against claims or as
required by applicable law, court order or the applicable rules of a stock
exchange) all nonpublic information (i) retained by the Company (to the extent
it relates to any of the assets acquired or liabilities or obligations assumed
by a Newfield company pursuant to this Agreement) or (ii) provided by a
Newfield company or their representatives in connection with the transactions
contemplated by this Agreement, pursuant to the provisions of Sections 7.09 or
7.13 of this Agreement or pursuant to the terms of the Huffco China Preferred
Shares, in the case of clause (i), until the earlier of three years after the
Closing or until such time as such information is otherwise publicly available
and, in the case of clause (ii), until the earlier of three years after
disclosure or such time as such information is otherwise publicly available.
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS.
(a) The Company, Huffco Turkey and Acquiror shall each
use, and the Company and Acquiror shall cause each of their respective
subsidiaries to use, all reasonable efforts promptly (i) to take, or cause to
be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the transactions contemplated by this Agreement, (ii) to
obtain from any Governmental Entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained by the Company,
Huffco Turkey or Acquiror, respectively, or any of the Company's or Acquiror's
respective subsidiaries, in connection with the authorization, execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, (iii) to make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Acquisition required under (A) the Exchange Act, the Securities Act,
the rules and regulations thereunder and any other applicable federal or state
securities laws and (B) any other applicable Law; provided that the Company,
Huffco Turkey and Acquiror shall cooperate with each other in connection with
the making of all such filings. The Company shall furnish all information
reasonably requested by Acquiror for any application or other filing to be made
pursuant to any applicable Law in connection with the transactions contemplated
by this Agreement.
(b) The Company, Huffco Turkey and Acquiror agree, and
Acquiror and the Company shall cause each of their respective subsidiaries, to
cooperate and to use all reasonable efforts, not requiring the expenditure of
material funds or the transfer of material rights or assets, to contest and
resist any action, including legislative, administrative or judicial action,
and to have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or permanent) (an
"Order") that is in effect and that restricts, prevents or prohibits the
consummation of the Acquisition or any other transactions contemplated by this
Agreement.
(c) The Company, Huffco Turkey and Acquiror shall each
promptly give (or shall cause their respective subsidiaries to give) any
notices regarding the Acquisition, this Agreement or the transactions
contemplated hereby to third parties required by Law or by any contract,
license, lease or other agreement to which such person is a party or by which
such person is bound, and use (and cause its subsidiaries to use) all
reasonable efforts, not requiring the expenditure of material funds or the
transfer of material rights or assets, to obtain any third party consents (i)
necessary to consummate the transactions contemplated by this Agreement, (ii)
otherwise required under any contracts, licenses, leases or other agreements in
connection with the consummation of the
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transactions contemplated by this Agreement or (iii) required to prevent a
Company Material Adverse Effect from occurring after the Closing.
(d) If the Company, Huffco Turkey or Acquiror shall fail
to obtain any third party consent described in subsection (c)(i) above, the
parties shall consult and cooperate regarding the reasonable actions that can
be taken to limit the adverse effect upon the Company, Acquiror, their
respective subsidiaries and businesses resulting, or which could reasonably be
expected to result after the Closing, from the failure to obtain such consent.
(e) Acquiror covenants and agrees that, prior to the
Closing, Acquiror will not take any action that reasonably could be expected to
result in any of the conditions set forth in Article VIII not being satisfied.
7.04 PUBLIC ANNOUNCEMENTS. Acquiror and the Company shall consult
with each other before issuing any press release or otherwise making any public
statement with respect to this Agreement or the Acquisition and shall not issue
any press release or other written statement to the public prior to or at the
time of the Closing without the prior written consent of the other party, such
consent not to be unreasonably withheld; provided, however, that a party may,
without consulting with and, if applicable, obtaining the approval of the other
party, issue a press release or make a public statement if required by
applicable Law or the rules of the NYSE if such party has used commercially
reasonable efforts to consult with and, if applicable, obtain the approval of
the other party but has been unable to do so in a timely manner.
7.05 EXPENSES. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by
Acquiror (with respect to expenses incurred by Acquiror) and by the Company
(with respect to expenses incurred by the Company or Huffco Turkey); provided
that the parties recognize that the expenses paid by the Company prior to
Closing shall reduce the assets transferred to Acquiror or increase the Assumed
Liabilities assumed by Acquiror.
7.06 USE OF HUFFCO NAME. Within 60 days after the Closing Date,
Acquiror will eliminate the word "Huffco" from its and its subsidiaries'
properties and facilities; provided, however, that Acquiror shall have up to
six months to eliminate the word "Huffco" in any particular case if such
elimination would have an adverse impact on operations with respect to Xxxxx
00/00, Xxxx xx Xxxxx, Xxxxxx'x Xxxxxxxx of China. Except for the periods
described above, Acquiror and its subsidiaries shall have no right to use the
name "Huffco."
7.07 EMPLOYEES.
(a) Acquiror or another Newfield company has made offers
to employ, effective as of the Closing Date, all employees of the Company who
are named on Schedule 7.07 hereto and who are employed by the Company
immediately prior to the Closing Date (the "Affected Employees") on the terms
and conditions set forth in the offer letters from Acquiror.
(b) Acquiror or another Newfield company shall offer to
each Affected Employee who accepts employment with a Newfield company coverage
under a group health plan (as defined
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in Section 5000(b)(1) of the Code) that (i) provides medical and dental
benefits to such Affected Employee and his eligible dependents as of the
Closing Date, (ii) credits such Affected Employee with any deductibles already
incurred during 1997 under the Company's group health plan, and (iii) waives
any pre-existing condition restrictions (or, alternatively, Acquiror may make
arrangements mutually acceptable with the Company for continuing coverage of
pre-existing conditions pursuant to Part 6 of Title I of ERISA (COBRA) under
Huffco Group, Inc.'s group health plan).
(c) If Acquiror involuntarily terminates the employment
of an Affected Employee who accepts employment with a Newfield company without
cause prior to the first anniversary of the Closing Date, Acquiror agrees to
pay such terminated Affected Employee an amount of severance pay equal to the
product of (i) one month's salary, as determined at the date of this Agreement,
multiplied by (ii) such Affected Employee's number of full years of service for
the Company as shown on Schedule 7.07 hereto, but not to exceed 12 months'
salary. "Cause" for this purpose shall mean conduct such as fraud,
embezzlement, theft, commission of a felony, or other criminal act against
Acquiror or any of its subsidiaries, dishonesty in the course of employment, or
substantial continued failure to perform duties.
7.08 REPLACEMENT OF BONDS, LETTERS OF CREDIT AND GUARANTEES.
Promptly following Closing, Acquiror shall obtain, or cause to be obtained in
the name of Acquiror, replacements for all bonds, letters of credit and
guarantees posted by the Company with any Governmental Entity and relating to
the Company Assets, to the extent such replacements are necessary to permit the
cancellation of the bonds, letters of credit and guarantees posted by the
Company or to consummate the transactions contemplated by this Agreement.
7.09 RECORDS. The Company may retain duplicate copies of all of
its files, records, data and other information ("Records") that may be
reasonably useful or necessary for tax or accounting purposes ("Tax Records")
and shall retain (and there shall be excluded from the Company Assets) all
Records relating to the negotiation and consummation of the transactions
contemplated by this Agreement and all Records, the transfer of which is
prevented by third party agreement or applicable law. Acquiror shall, until
the termination of the applicable statute of limitations for federal income tax
purposes, (i) retain the Tax Records, (ii) make the Tax Records available to
the Company, its members, and each such person's officers, employees, advisors
and representatives upon reasonable notice during normal business hours and
(iii) furnish copies of any and all such Tax Records to any such person at such
person's expense. In addition, the Company and its managers, officers,
employees, advisors and representatives shall have the right upon reasonable
prior notice to inspect and copy, during normal business hours and at their
expense, books, records and copies of contracts affecting the Company's
entitlement to, and the calculation of, the Contingent Payments, and any member
of the Company shall have access for such purpose in connection with the bona
fide proposed exercise of options or other rights to acquire shares or other
equity interests in the Company.
7.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Except
as otherwise expressly provided in this Agreement, the parties'
representations, warranties, covenants and agreements set forth in or made
pursuant to this Agreement shall survive the Closing for the following periods
following the Closing Date:
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(a) The representations and warranties of the parties
(other than the representations and warranties set forth in Sections 2.01,
2.03, 3.01, 3.02, 3.03, 3.04, 3.13, 3.18, 4.01, 4.02 and 4.05) shall survive
for three years.
(b) The representations and warranties set forth in
Section 3.13 shall survive for five years.
(c) The covenants and agreements of the parties set forth
in Sections 5.01, 5.02, 6.01, 7.01,7.02(a) and 7.03(e) shall survive for three
years.
(d) All other representations, warranties, covenants and
agreements shall survive without limitation as to time.
Representations and warranties in the certificates delivered by the parties
pursuant to Sections 8.02(a), 8.02(b), 8.03(a) and 8.03(b) shall survive
Closing for the same periods of time as the respective representations,
warranties, covenants and agreements to which they refer. No investigation by
any party hereto made heretofore or hereafter shall affect the representations
and warranties of the other parties hereto and each such representation and
warranty shall survive such investigation and the Closing for the period
described above. The last day, if any, of the survival period of any
representation, warranty, covenant or agreement is hereinafter referred to as
the "Termination Date." Representations, warranties, covenants and agreements
set forth in this Agreement shall terminate and be of no further force or
effect after the applicable Termination Date (if any); provided, however, that
there shall be no such termination of any representation, warranty, covenant or
agreement with respect to a bona fide claim asserted with respect thereto prior
to the applicable Termination Date in accordance with the terms of Section
7.11.
7.11 INDEMNIFICATION.
(a) Indemnification by the Company. From and after the
Closing and subject to the terms and conditions of this Section 7.11, the
Company hereby agrees to indemnify, defend and hold harmless Acquiror and the
other Newfield companies (including the Company's subsidiaries after the
Closing) and each of their directors, officers, managers, members, employees,
agents, consultants, affiliates and controlling persons (hereinafter, the
"Acquiror Indemnified Parties") from and against all Losses (as defined below)
(INCLUDING, WITHOUT LIMITATION, LOSSES RESULTING FROM THE SOLE, CONCURRENT OR
COMPARATIVE NEGLIGENCE, OR STRICT LIABILITY, OF ANY OF THE ACQUIROR INDEMNIFIED
PARTIES) asserted against, imposed upon or incurred by any Acquiror Indemnified
Party, directly or indirectly, by reason of, arising out of, or resulting from
(i) the inaccuracy or breach of any representation or warranty of the Company
or Huffco Turkey contained in or made pursuant to this Agreement; (ii) the
breach of any covenant or agreement of the Company or Huffco Turkey contained
in or made pursuant to this Agreement; (iii) the matters set forth on Schedule
1.01(a) or Schedule 1.01(c) hereto, (iv) the ownership, operations, business or
conduct of the Company following the Closing (v) the Company's or any of its
subsidiaries employment practices, relationships or agreements (including any
payments made or costs and expenses incurred pursuant to those certain letter
agreements with Messrs. Saxby, Xxxxxxxx and Xxxxxx relating to foreign
citizens' repatriation to their home countries) prior to the Closing (other
than (A) accrued obligations of the Company for wages, salaries, bonuses and
other compensation, reimbursements and benefits
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under Benefits Plans incurred in the ordinary course of business and
(B) severance and other payments made within six months of the Closing Date in
connection with the termination of employment of employees of the Company after
March 31, 1997 but at or before the Closing, in an amount not to exceed
$327,000, (vi) violations or alleged violations by the Company or any of its
subsidiaries prior to the Closing of any license with respect to proprietary
information or any confidentiality or similar agreement, and (vii) any member's
ownership of Company Shares prior to the Closing or relationship with the
Company as a member or shareholder prior to the Closing. As used in this
Section 7.11, the term "Losses" shall include (i) all debts, liabilities and
obligations, (ii) all losses, damages, reasonable costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated matter) penalties, court costs and reasonable attorneys' fees and
expenses and (iii) all demands, claims, actions, costs of investigation, causes
of action, proceedings, arbitrations, judgments, settlements and assessments,
whether or not ultimately determined to be valid.
(b) Indemnification by Acquiror.
(i) From and after the Closing and subject to the
terms and conditions of this Section 7.11, Acquiror hereby agrees to indemnify,
defend and hold harmless the Sellers and each of their directors, officers,
managers, members, employees, agents, consultants, affiliates and controlling
persons (hereinafter, collectively, the "Seller Indemnified Parties") from and
against all Losses (INCLUDING, WITHOUT LIMITATION, LOSSES RESULTING FROM THE
SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE, OR STRICT LIABILITY, OF ANY OF THE
SELLER INDEMNIFIED PARTIES) asserted against, imposed upon or incurred by any
Seller Indemnified Party, directly or indirectly, by reason of, arising out of,
or resulting from (A) the inaccuracy or breach of any representation or
warranty of Acquiror contained in or made pursuant to this Agreement; (B) the
breach of any covenant or agreement of Acquiror contained in or made pursuant
to this Agreement; (C) except to the extent that any Acquiror Indemnified Party
is entitled to the protections or benefits of Section 7.11(a) with respect to a
particular matter, the ownership, operations, business or conduct of the
Company Assets following the Closing or (D) except to the extent that any
Acquiror Indemnified Party is entitled to the protections or benefits of
Section 7.11(a) with respect to a particular matter, the Assumed Liabilities.
(ii) From and after the Closing and subject to the
terms and conditions of this Section 7.11, Acquiror hereby agrees to indemnify,
defend and hold harmless each present or former officer, manager and member of
the Company from and against all Losses (INCLUDING WITHOUT LIMITATION LOSSES
RESULTING FROM THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE, OR STRICT
LIABILITY, OF ANY SUCH PERSON) asserted against, imposed upon or incurred by
any such person in their capacity as a present or former officer, manager or
member of the Company, directly or indirectly, by reason of, arising out of, or
resulting from the Assumed Liabilities, provided that such Losses shall be
included in the Losses for which any of the Acquiror Indemnified Parties are
entitled to indemnification by the Company under Section 7.11(a) to the extent
that any of the Acquiror Indemnified Parties would have been entitled to such
indemnification if such Losses had been suffered directly by any such Acquiror
Indemnified Party.
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(c) Deductible; Method of Payment; Time Limit; De Minimis
Losses.
(i) Notwithstanding the foregoing, no
indemnification obligation pursuant to clauses (i), (ii), (v), (vi) or (vii) of
Section 7.11(a) shall arise until the aggregate of all Losses pursuant to such
clauses exceeds $100,000; thereafter indemnification obligations pursuant to
such clauses shall be satisfied as provided for herein for all Losses in excess
of such $100,000 deductible; provided, however, that any Losses resulting from
the inaccuracy or breach of any of the representations and warranties set forth
in Section 3.13 of this Agreement shall not be subject to the foregoing
limitation.
(ii) All indemnification obligations pursuant to
clauses (i), (ii), (v), (vi) or (vii) of Section 7.11(a) (except for those
relating to the inaccuracy or breach of any of the representations and
warranties set forth in Section 3.13) shall be satisfied only out of amounts,
if any, paid or payable to the Company with respect to the Contingent Payments
or the Huffco China Preferred Shares (collectively, the "Contingent Rights"),
or paid or payable for the purchase of any such Contingent Rights, prior to the
eighth anniversary of the Closing Date and not previously expended or
distributed by the Company to its members in accordance with the terms of this
paragraph (ii). Such indemnification obligations shall be nonrecourse to the
Company, except to the extent described in the preceding sentence. The Company
agrees that until all indemnification claims for which a Claim Notice (as
defined below) has been timely served by an Acquiror Indemnified Party (whether
pursuant to clauses (i), (ii), (v), (vi) or (vii) of Section 7.11(a) or
otherwise) have been resolved and satisfied, it shall retain, and not
distribute to its members or otherwise expend, amounts paid with respect to the
Contingent Rights prior to the eighth anniversary of the Closing Date, up to
the total amount of the indemnification claims remaining unsatisfied. The
Company further acknowledges and agrees that once the Company and the Acquiror
have agreed upon the amount of any claim by an Acquiror Indemnified Party, the
Acquiror or any other Newfield company, as appropriate, shall be entitled to
offset such amount against amounts thereafter payable by Acquiror or such other
Newfield company with respect to the Contingent Rights prior to the eighth
anniversary of the Closing Date. The Company shall be entitled to expend or
distribute to its members amounts received with respect to the Contingent
Rights in excess of indemnification claims by the Acquiror Indemnified Parties
that remain unresolved and unsatisfied at the time of such expenditure or
distribution and the Acquiror Indemnified Parties shall have no right to
recover such expenditures or distributions.
(iii) The Indemnifying Party shall satisfy all
indemnification obligations pursuant to this Section 7.11 (other than
obligations pursuant to clauses (i), (ii), (v), (vi) or (vii) of Section
7.11(a) unless relating to the inaccuracy or breach of any of the
representations and warranties set forth in Section 3.13) promptly after the
later of the expiration of the Notice Period (as defined below) or the
resolution of any Notice of Disagreement with respect to such obligation.
(iv) The obligations set forth in (A) Sections
7.11(a)(i), 7.11(a)(ii), 7.11(b)(i)(A) and 7.11(b)(i)(B) shall terminate and be
of no further force and effect on the applicable Termination Date with respect
to a particular representation, warranty, covenant or agreement, (B) Section
7.11(a)(v) shall terminate and be of no further force and effect on the second
anniversary of the Closing Date and (C) Sections 7.11(a)(vi) and 7.11(a)(vii)
shall terminate and be of no further force and effect on the third anniversary
of the Closing Date; provided, however, that there shall be
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no such termination of any such obligation with respect to a bona fide claim
asserted with respect thereto prior to the applicable termination date in
accordance with the provisions of Section 7.11(d). The other indemnity
obligations in this Section 7.11 shall continue without time limit.
(v) Notwithstanding the foregoing, an
indemnification obligation pursuant to clauses (i) and (ii) of Section 7.11(a)
shall arise only with respect to any Loss or series of related Losses that is
or are equal to or greater than $2,000.
(vi) The amount of an Indemnified Party's claim
for indemnification shall be reduced by the amount of any insurance proceeds
realized by the Indemnified Party (net of collection and additional or
increased insurance premium costs).
(d) Assertion of Claims. All claims for indemnification
by any of the Seller Indemnified Parties or any of the Buyer Indemnified
Parties pursuant to this Section 7.11 shall be asserted and resolved as
follows:
(i) Any person claiming indemnification pursuant
to this Section 7.11 is hereinafter referred to as an "Indemnified Party" and
any person against whom such claims are asserted is hereinafter referred to as
an "Indemnifying Party." If any Indemnified Party has a claim for Losses
against any Indemnifying Party pursuant to this Section 7.11, such Indemnified
Party shall with reasonable promptness notify the Indemnifying Party of such
Losses in writing, specifying the nature of and specific basis for such Losses
and indemnity claim and the amount or estimated amount thereof to the extent
then feasible and including a copy of all papers (if any) served with respect
to such claim (a "Claim Notice"). Notwithstanding the foregoing, failure to
deliver a Claim Notice with reasonable promptness shall have no effect on the
obligations of the Indemnifying Party except to the extent that such
Indemnifying Party is actually prejudiced thereby. If an Indemnifying Party
does not provide the Indemnified Party with a Notice of Disagreement (as
defined below) within 30 days from the date of effectiveness of a Claim Notice,
in each case given in accordance with the provisions of Section 9.07 of this
Agreement (the "Notice Period"), the amount of such Losses shall, subject to
the terms of this Section 7.11, be conclusively deemed an indemnification
obligation of the Indemnifying Party.
(ii) If, upon receipt of a Claim Notice, the
Indemnifying Party believes in good faith that the Indemnified Party is not
entitled to all or part of the indemnification described therein, then the
Indemnifying Party may provide the Indemnified Party with written notice of
such disagreement (a "Notice of Disagreement"). Such Notice of Disagreement
shall specify in reasonable detail the basis for such disagreement.
Thereafter, the Indemnified party and the Indemnifying Party shall negotiate in
good faith and use all reasonable efforts to resolve any matters set forth in
the Notice of Disagreement for a reasonable period of time.
(iii) If any Losses (other than Losses arising out
of or resulting from the matters described in Section 7.11(a)(iii) or (a)(iv))
are asserted against or sought to be collected from an Indemnified Party by a
third party, Acquiror shall defend by all appropriate proceedings with counsel
of its choice and use all reasonable efforts to settle such claims or prosecute
such proceedings to their conclusion. If the Company desires to participate
in, but not control, any such defense or settlement it may do so at its sole
cost and expense. If requested by Acquiror, the
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Company and any other Indemnified Party shall provide reasonable assistance to
Acquiror and its counsel in such defense or settlement. Notwithstanding the
foregoing, the Company is hereby authorized (A) prior to and during the Notice
Period, to file any motion, answer or other pleading that it deems necessary or
appropriate to protect its interests or those of the Indemnified or
Indemnifying Party and that is not prejudicial to the Indemnifying Party and
(B) during any period that Acquiror does not comply with its obligations
pursuant to this clause (iii), to take all actions that it deems necessary or
appropriate to protect its interests.
(iv) If any Losses arising out of or resulting
from the matters described in Section 7.11(a)(iii) or (a)(iv) are asserted
against or sought to be collected from an Indemnified Party by a third party,
the Company shall defend by all appropriate proceedings with counsel of its
choice and use all reasonable efforts to settle such claims or prosecute such
proceedings to their conclusion. If the Indemnified Party desires to
participate in, but not control, any such defense or settlement it may do so at
its sole cost and expense. If requested by the Company, Acquiror and any other
Indemnified Party shall assist the Company and its counsel in such defense or
settlement. Notwithstanding the foregoing, any Indemnified Party is hereby
authorized (A) prior to and during the Notice Period, to file any motion,
answer or other pleading that it deems necessary or appropriate to protect its
interests or those of the Indemnifying Party and that is not prejudicial to the
Indemnifying Party and (B) during any period that the Company does not comply
with its obligations pursuant to this clause (iv), to take all actions that it
deems necessary or appropriate to protect its interests.
(v) Notwithstanding the foregoing, prior to
settling any claim with a third party, the Indemnified Party shall send written
notice to the Indemnifying Party of any proposed settlement of the claim. The
Indemnifying Party shall have the option for 15 days following receipt of such
notice to (i) admit in writing liability for the claim and (ii) if liability is
so admitted, reject, in its reasonable judgment, the proposed settlement. If
the Indemnified Party settles any such claim without notifying the Indemnifying
Party or over the timely objection of the Indemnifying Party after it admits
its liability in writing, the Indemnified Party shall thereby waive any right
to indemnity therefor and shall indemnify the Indemnifying Party with respect
thereto.
(vi) The rights and remedies in this Section 7.11
shall be the exclusive rights and remedies of the parties with respect to
breaches of the representations, warranties, covenants and agreements contained
in Articles II, III, IV, V, VI, 7.01, 7.02(a) and 7.03(e) and in the
certificates delivered at Closing pursuant to Sections 8.02(a), 8.02(b),
8.03(a) and 8.03(b).
7.12 SCOPE OF REPRESENTATIONS AND WARRANTIES.
(a) Except as and to the extent expressly set forth in
Article II and in Article III and in the certificates to be delivered by
Sellers pursuant to Section 8.02(a) at Closing, Sellers make no, and disclaim
any, representations or warranties whatsoever, whether express or implied.
Each Seller disclaims all liability or responsibility for any other statement
or information made or communicated (orally or in writing) to Acquiror, its
affiliates, or any stockholder, officer, director, employee, agent, advisor or
representative of Acquiror (including, but not limited to, any opinion,
information or advice which may have been provided to any such person by any
representative of either Seller or any other person), wherever and however
made. Without limiting the foregoing, each
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Seller makes no representation or warranty as to (i) the amounts, value,
quality or deliverability of hydrocarbons from the Company Assets or assets
being sold by Huffco Turkey, (ii) any geological, geophysical or other
interpretations with respect to the Company Assets or assets being sold by
Huffco Turkey and (iii) any economic forecasts, in each case whether contained
in any material furnished to Acquiror by either Seller, its officers,
directors, employees, agents, advisors or representatives, or otherwise.
(b) Except as and to the extent expressly set forth in
Article IV and in the certificate to be delivered by Acquiror pursuant to
Section 8.03(a) at Closing, Acquiror makes no, and disclaims any,
representations or warranties whatsoever, whether express or implied. Acquiror
disclaims all liability and responsibility for any other statement or
information made or communicated (orally or in writing) to either Seller, its
affiliates or any stockholder, officer, director, employee, agent, advisor, or
representative of either (including, but not limited to, any opinion,
information or advice which may have been provided to any such person by any
representative of Acquiror or any other person), wherever and however made.
7.13 CERTAIN TAX MATTERS.
(a) Huffco China shall be treated as a partnership for
United States federal income tax purposes and the parties hereto (and their
affiliates) will characterize Huffco China as a partnership in any tax return,
statement, report or other filing made by any of them that relates to Huffco
China's status as a partnership for United States federal income tax purposes.
(b) The Company shall be responsible for preparing and
filing the United States federal income tax partnership returns of Huffco China
for the 1996 calendar year and for the short taxable year beginning on January
1, 1997 and ending on the Closing Date. Any such return shall be prepared on a
basis consistent with any prior such returns of Huffco China. The Company will
file a timely election under Section 754 of the Code to adjust the basis of the
assets of Huffco China in the manner provided in Sections 743 and 734 of the
Code. Acquiror and its affiliates shall cooperate with the Company and shall
make available to the Company all necessary books and records and timely take
all action necessary to allow the Company to prepare and file any such return
and make such election.
7.14 FURTHER ASSURANCES. The parties hereto agree to take or cause
to be taken such further action or deliver or cause to be delivered such
additional agreements or instruments as any of them may reasonably request for
the purpose of carrying out this Agreement or the transactions contemplated
hereby.
7.15 REPURCHASE OF HUFFCO CHINA PREFERRED SHARES. At a mutually
acceptable time between four and six years after the Closing Date, Acquiror and
the Company agree to use all reasonable efforts to negotiate and enter into a
mutually acceptable agreement providing for the sale of the Huffco China
Preferred Shares to a Newfield company for a purchase price equal to the amount
that would be paid by a willing buyer to a willing seller, each under no
compulsion to buy or sell, and payable either in cash or in other
consideration, as the parties may agree. If no agreement has been signed by
the sixth anniversary of the Closing Date, this Section 7.15 shall terminate.
To assist in their negotiations, the parties may retain an independent
petroleum engineering firm
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acceptable to the Acquiror and the Company. Such engineering firm shall
determine the fair market value of the Huffco China Preferred Shares, based on
the price that a willing buyer would pay to a willing seller when each is under
no compulsion to buy or sell, and shall report such value and the basis for
such value to the parties within 90 days of receipt of the parties' request.
All maps, calculations and other work papers of the engineering firm shall be
made available to either party at its request. Fees and expenses of the
engineering firm shall be borne equally by the parties.
ARTICLE VIII
CONDITIONS
8.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The
respective obligations of Acquiror, the Company and Huffco Turkey to effect the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of the following conditions, any or all of which may be
waived, in whole or in part, by the agreement of the parties to the extent
permitted by applicable Law:
(a) no Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any Law or Order which is in effect and which
has the effect of making the Acquisition or the other transactions contemplated
in this Agreement illegal or otherwise prohibiting consummation of the
Acquisition or such other transactions; and
(b) subscription agreements, substantially in the form of
Exhibits B and C hereto, shall have been executed and delivered by the parties
thereto.
8.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR. The
obligations of Acquiror to effect the transactions contemplated hereby shall be
subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived by Acquiror, in whole or in part,
to the extent permitted by applicable Law:
(a) each of the representations and warranties of the
Company and Huffco Turkey contained in this Agreement shall be true and correct
in all material respects (without duplication of any materiality exception
contained in any individual representation and warranty) as of the date of this
Agreement and as of the Closing as though made again as of the Closing.
Acquiror shall have received a certificate (i) of the President and the Vice
President and Managing Director of the Company, dated the Closing Date, to such
effect as it relates to the Company and (ii) of the President of Huffco Turkey,
dated the Closing Date, to such effect as it relates to Huffco Turkey;
(b) the Company and Huffco Turkey shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by the Company or Huffco Turkey
on or prior to the Closing. Acquiror shall have received a certificate (i) of
the President and the Vice President and Managing Director of the Company,
dated the Closing Date, to such effect as it relates to the Company and (ii) of
the President of Huffco Turkey, dated the Closing Date, to such effect as it
relates to Huffco Turkey;
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(c) the resignations, effective at Closing, of each of
directors and officers of Huffco China and Huffco (West Africa) Inc. shall have
been delivered to Acquiror;
(d) all consent, notification and approval requirements
with respect to Xxxxx 00/00, Xxxx xx Xxxxx, Xxxxxx'x Xxxxxxxx of China that
Acquiror reasonably believes are necessary or advisable in connection with the
transactions contemplated by this Agreement shall have been satisfied;
(e) the Company and Huffco Turkey shall have executed and
delivered to Acquiror a general assignment and xxxx of sale substantially in
the form of Exhibit D hereto and all such documents, instruments and
certificates as are reasonably necessary to effect the transfer of the
Subsidiary Shares (other than the Huffco China Preferred Shares) to Acquiror;
(f) the Company and Acquiror shall have received releases
from employees and former employees of the Company to an extent satisfactory to
Acquiror in its sole discretion; and
(g) Huffco Group, Inc. and its affiliates shall have
transferred to the Company all of the assets held by such persons on the date
of this Agreement of the type described in Schedule 3.20 hereto.
8.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND HUFFCO
TURKEY. The obligations of the Company and Huffco Turkey to effect the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of the following conditions, any or all of which may be
waived by the Company and Huffco Turkey, in whole or in part, to the extent
permitted by applicable Law:
(a) each of the representations and warranties of
Acquiror contained in this Agreement shall be true and correct in all material
respects (without duplication of any materiality exception contained in any
individual representation and warranty) as of the date of this Agreement and as
of the Closing as though made again as of the Closing. The Company and Huffco
Turkey shall have received a certificate of the President and the Treasurer of
Acquiror, dated the Closing Date, to such effect;
(b) Acquiror shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing. The Company
and Huffco Turkey shall have received a certificate of the President and the
Treasurer of Acquiror, dated the Closing Date, to such effect;
(c) Acquiror shall have executed and delivered to the
Company an assumption agreement substantially in the form of Exhibit E hereto;
(d) Acquiror shall have (i) paid the cash Purchase Price
to the Company and Huffco Turkey as provided in Article I;
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(e) the Company and Acquiror shall have received releases
from employees and former employees of the Company to an extent satisfactory to
the Company in its sole discretion; and
(f) Newfield shall have executed and delivered a guaranty
and indemnity agreement substantially in the form of Exhibit F hereto.
ARTICLE IX
MISCELLANEOUS
9.01 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Acquiror and the Company;
(b) by Acquiror or the Company if the Closing has not
occurred on or before 45 days from the date of this Agreement;
(c) by Acquiror, upon a material breach of any covenant
or agreement on the part of the Company or Huffco Turkey set forth in this
Agreement, or if any representation or warranty of the Company or Huffco Turkey
shall have become untrue, in either case such that the conditions set forth in
Section 8.02(a) or Section 8.02(b) would not be satisfied (a "Terminating
Company Breach"); provided that, if such Termination Company Breach is curable
by the Company or Huffco Turkey through the exercise of reasonable efforts and
for so long as the Company or Huffco Turkey continues to exercise such
reasonable efforts, Acquiror may not terminate this Agreement under this
Section 9.01(c);
(d) by the Company or Huffco Turkey, upon a material
breach of any covenant or agreement on the part of Acquiror set forth in this
Agreement, or if any representation or warranty of Acquiror shall have become
untrue, in either case such that the conditions set forth in Section 8.03(a) or
Section 8.03(b) would not be satisfied (a "Terminating Acquiror Breach");
provided that, if such Terminating Acquiror Breach is curable by Acquiror
through the exercise of its reasonable efforts and for so long as Acquiror
continues to exercise such reasonable efforts, the Company may not terminate
this Agreement under this Section 9.02(d); or
(e) by Acquiror or the Company, if there shall be any
Order which is final and nonappealable preventing the consummation of the
Acquisition, unless the party relying on such Order has not complied with its
obligations under Section 7.03(b).
9.02 EFFECT OF TERMINATION. In the event of any termination of
this Agreement pursuant to Section 9.01, the Company and Acquiror shall have no
obligation or liability to each other except that (i) the provisions of Section
7.05 shall survive any such termination, and (ii) nothing herein and no
termination pursuant hereto will relieve any party from liability for its
willful or negligent failure to comply with its covenants and agreements in
this Agreement.
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9.03 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits thereof to the
extent permitted by applicable Law. This Agreement may not be amended or
supplemented at any time, except by an instrument in writing signed on behalf
of each party hereto. The waiver by any party hereto of any condition or of a
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any other condition or subsequent breach.
9.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
(including the Schedules and Exhibits hereto) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both oral and
written, among the parties or any of them, with respect to the subject matter
hereof. Neither this Agreement nor any document delivered in connection with
this Agreement confers upon any person not a party hereto any rights or
remedies hereunder, except in the case of Section 7.11.
9.05 ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. Acquiror may, upon notice to the Company,
assign or delegate its rights and obligations under this Agreement or any part
hereof to one or more direct or indirect wholly owned subsidiaries of Newfield,
but no such assignment shall in any way operate to enlarge, alter or change any
obligation of or due to the Company or Huffco Turkey or relieve Acquiror of its
obligations hereunder and provided that any affiliate receiving an assignment
of all or a majority of Acquiror's right to receive the Huffco China Shares
shall also assume all of Acquiror's obligations pursuant to Section 7.11.
Except as set forth in this Agreement, this Agreement shall not be assignable
by any party hereto without the consent of the other parties hereto.
9.06 CERTAIN DEFINITIONS. For the purposes of this Agreement,
unless the context clearly indicates otherwise, the term:
(a) "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned person;
(b) "beneficial owner" and words of similar import shall
have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act.
(c) "Benefit Plan" or "Benefit Plans" shall mean each
Plan and each personnel policy, stock option plan, collective bargaining
agreement, bonus plan or arrangement, incentive award plan or arrangement,
vacation policy, severance pay plan, policy or agreement, deferred compensation
agreement or arrangement, executive compensation or supplemental income
arrangement, consulting agreement, employment agreement, and each other
employee benefit plan, agreement, arrangement, program, practice or
understanding that is not a Plan and that is sponsored, maintained or
contributed to by the Company or any of its subsidiaries for the benefit of the
employees, former employees, independent contractors, or agents of the Company
or any of its subsidiaries, or has been so sponsored, maintained or contributed
to since 1974;
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(d) "business day" shall mean any day other than a day on
which banks in Houston, Texas are authorized or obligated to be closed;
(e) "Closing" shall mean a meeting, which shall be held
in accordance with Section 1.02 of this Agreement, of persons interested in the
transactions contemplated by this Agreement at which all documents deemed
necessary by the parties to this Agreement to evidence the fulfillment or
waiver of all conditions precedent to the consummation of the Acquisition are
executed and delivered and the Cash Purchase Price is paid;
(f) "Closing Date" shall mean the date of the Closing as
determined pursuant to Section 1.02 of this Agreement;
(g) "control" (including the terms "controlled,"
"controlled by" and "under common control with") shall mean the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the management or policies of a person, whether through
the ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise;
(h) "Newfield company" shall mean Newfield and each
subsidiary of Newfield.
(i) "person" shall mean an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, other entity or group (as defined in Section 13(d) of the
Exchange Act);
(j) "Plan" or "Plans" shall mean each "employee benefit
plan," as such term is defined in Section 3(3) of ERISA, including, but not
limited to, any employee benefit plan that may be exempt from some or all of
the provisions of ERISA, that is sponsored, maintained or contributed to by the
Company or any of its subsidiaries for the benefit of the employees, former
employees, independent contractors, or agents of the Company or any of its
subsidiaries, or has been so sponsored, maintained or contributed to since
1974;
(k) "subsidiary" or "subsidiaries" of the Company,
Acquiror or any other person, shall mean any corporation, partnership, joint
venture or other legal entity of which the Company, Acquiror or any such other
person, as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity; and
(l) "Tax" or "Taxes" shall mean any and all taxes,
charges, fees, levies, assessments, duties or other amounts payable to any
federal, state, local or foreign taxing authority or agency, including, without
limitation, (i) income, franchise, profits, gross receipts, minimum,
alternative minimum, estimated, ad valorem, value added, sales, use, service,
real or personal property, capital stock, license, payroll, withholding,
disability, employment, social security, workers compensation, unemployment
compensation, utility, severance, excise, stamp, windfall profits, transfer and
gains taxes, (ii) customs, duties, imposts, charges, levies or other similar
assessments of any kind, and (iii) interest, penalties and additions to tax
imposed with respect thereto.
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9.07 NOTICES. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and (i) delivered in person or by courier, (ii) sent by
telecopy or facsimile transmission, or (iii) mailed, certified first class
mail, postage prepaid, return receipt requested, to the appropriate party at
the following addresses:
if to the Company:
Huffco International, L.L.C.
0000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Huffington
if to Huffco Turkey:
Huffco Turkey, Inc.
0000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Huffington
with copies in either case to:
Xxxxx & Xxxxx, L.L.P.
3000 One Shell Plaza
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx
if to Acquiror:
Newfield Offshore Inc.
c/o Newfield Exploration Company
000 X. Xxx Xxxxxxx Xxxx X, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
with copies to:
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
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41
or to such other address as the parties set forth above shall have furnished to
the other parties set forth above by notice given in accordance with this
Section 9.07. Such notices shall be effective (i) if delivered in person or by
courier, upon actual receipt by the intended recipient, (ii) if sent by
telecopy or facsimile transmission, when the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee, or (iii) if mailed, upon the earlier of five days after deposit in
the mail and the date of delivery as shown by the return receipt therefor.
9.08 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE STATE OF TEXAS, WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9.09 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
9.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
9.11 HEADINGS. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
9.12 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy available at law or in equity.
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42
IN WITNESS WHEREOF, Acquiror, the Company and Huffco Turkey have each
caused this Agreement to be executed on its behalf by its officer thereunto
duly authorized, all as of the date first above written.
NEWFIELD OFFSHORE INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx
Secretary and Treasurer
HUFFCO INTERNATIONAL, L.L.C.
By: /s/ Xxxxx Huffington
-------------------------------
Xxxxx Huffington
President
HUFFCO TURKEY, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
President
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