Shell CO2 Company, Ltd.
Master Agreement
MASTER AGREEMENT
THIS MASTER AGREEMENT (the "Master Agreement") is made and entered
effective the 1st day of January, 1998, (the "Effective Date") by and among the
following (collectively, the "Parties"):
SHELL WESTERN E&P INC., a Delaware corporation ("Shell"), and the following
named affiliates of Shell: Shell Western Pipelines Inc., a Delaware
corporation, Shell ▇▇▇▇▇▇ Pipeline Company, a Delaware corporation, Shell CO2
LLC, a Delaware limited liability company, Shell CO2 General LLC, a Delaware
limited liability company, and Shell Land & Energy Company, a Delaware
corporation (Shell and its named affiliates being collectively referred to
herein as the "the Shell Parties").
▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "A", a Delaware limited partnership ("KM"), and
the following named affiliate of KM: ▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC, a Delaware
limited liability company. (KM and its named affiliate being collectively
referred to herein as the "the KM Parties").
Subject to the terms and conditions of this Master Agreement, the Parties
have agreed to enter into certain business transactions, including, without
limitation, the organization of a limited partnership, all as more fully set
forth below.
In consideration of the premises and of the mutual covenants herein
contained, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS; EXHIBITS; SCHEDULES
1.1 Certain Definitions. As used in this Master Agreement, the following
terms shall have the respective meanings ascribed to them below:
1.1.1 Affiliate(s) shall have the meaning defined in the Limited
Partnership Agreement.
1.1.2 Assumption and Indemnification Agreement means that certain
Assumption and Indemnification Agreement having an effective date of January 1,
1998, by and between the Shell Parties and the KM Parties.
1.1.3 Central Basin Pipeline means (1) a 143 mile pipeline starting in
Denver City, Texas and terminating at McCamey, Texas consisting of pipe starting
at 26" in Denver City, Texas and telescoping to 16" pipe at McCamey, Texas; (2)
laterals owned by the KM Parties and connected to the Central Basin Pipeline
including the ▇▇▇▇▇▇▇▇▇▇ lateral, El Mar lateral, East Ford lateral, North
▇▇▇▇▇▇ lateral, ▇▇▇▇▇ lateral, North ▇▇▇▇ ▇▇▇▇▇ lateral, ▇▇▇▇▇▇▇ Lake lateral,
North Cross lateral, South Cross lateral (but excluding the Odessa lateral) and
connections to the Canyon Reef Carriers Pipeline and Comance Creek Pipeline; (3)
▇▇▇▇▇▇▇▇▇▇ pump and facilities; and (4) all other meters, and associated
equipment other than Excluded Assets described in Section 6.3 used to carry out
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the business of operating and owning Kinder Morgan's CO2 business in
the Permian Basin.
1.1.4 Chemical Substances shall have the meaning defined in the
Assumption and Indemnification Agreement.
1.1.5 Closing has the meaning set forth in Article 10.
1.1.6 Closing Date has the meaning set forth in Article 10.
1.1.7 CO2 Business has the meaning set forth in Section 2.1.
1.1.8 CO2 Assets has the meaning set forth in Section 3.1.
1.1.9 Code means the Internal Revenue Code of 1986, and any successor
statute, as amended from time to time.
1.1.10 Contributors means the Shell Parties and/or the KM Parties.
1.1.11 Controlling Interest shall have the meaning defined in the
Limited Partnership Agreement.
1.1.12 Due Diligence Process means the process by which the Parties
exchanged information in anticipation of the transactions contemplated herein
and which process is summarized in Sections 8.2(a) and 8.2(b).
1.1.13 Environmental Claim shall have the meaning defined in the
Assumption and Indemnification Agreement.
1.1.14 Environmental Cleanup Liability shall have the meaning defined
in the Assumption and Indemnification Agreement.
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1.1.15 Environmental Laws shall have the meaning described in the
Assumption and Indemnification Agreement.
1.1.16 Governmental Authority means any federal, state, municipal or
other local government or political subdivision thereof, or any entity, body or
authority exercising legislative, judicial, regulatory, administrative or other
governmental functions or any court, department, commission, board, bureau,
agency, instrumentality or administrative body of any of the foregoing.
1.1.17 Hazardous Materials shall have the meaning defined in the
Assumption and Indemnification Agreement.
1.1.18 KM Cash Contribution shall mean $25,000,000.
1.1.19 KM CO2 Assets has the meaning set forth in Section 6.
1.1.20 Legal Requirements means all applicable federal, state and local
laws, regulations, rules, ordinances, codes and standards, and all orders of
Governmental Authorities and Permits.
1.1.21 Limited Partner means any of the limited partners in the Limited
Partnership; and Limited Partners means all of the limited partners in the
Limited Partnership.
1.1.22 Limited Partnership means the Limited Partnership organized
under the terms of the Limited Partnership Agreement and this Master Agreement,
namely, Shell CO2 Company, Ltd.
1.1.23 Limited Partnership Agreement means that certain Agreement
of Limited Partnership of "Shell CO2 Company, Ltd.", a Texas Limited
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Partnership, having an effective date of January 1, 1998, as amended by the
First Amended and Restated Agreement of Limited Partnership dated March 5, 1998,
by and between Shell CO2 LLC, Shell CO2 General LLC, and ▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC.
1.1.24 Limited Partnership Assets means the KM CO2 Assets and the Shell
CO2 Assets.
1.1.25 Limited Partnership Organization Costs shall mean the costs of
each party hereto that are expended or incurred for such matters as the
negotiation of this Transaction, the due diligence process, and other similar
costs relating to the organization of the Limited Partnership.
1.1.26 Permits shall have the meaning defined in the Assumption and
Indemnification Agreement.
1.1.27 Release shall have the meaning defined in the Assumption and
Indemnification Agreement.
1.1.28 Shell CO2 Assets has the meaning set forth in Section 5.
1.1.29 Shell License Agreement means that certain License Agreement by
and between Shell Oil Company, a Delaware corporation, the Limited Partnership,
Shell CO2 General LLC and Shell CO2 LLC, having an effective date of January 1,
1998.
1.1.30 Shell Proprietary Technology has the meaning set forth in the
Shell Technology Agreement.
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1.1.31 Shell Technology Agreement has the meaning described in
Section 5.2.
1.1.32 Taxes means all federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, production, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax or assessment of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not, but excluding any
liability to any employee benefit plan.
1.1.33 Third-Party means any person other than a signatory to this
Master Agreement, their Affiliates, and other than the Limited Partnership.
1.1.34 Third-Party Proprietary Technology has the meaning set forth in
the Shell Technology Agreement.
1.1.35 Transaction means the formation of the Limited Partnership, as
contemplated by this Master Agreement, and the execution of all of the
Transaction Documents.
1.1.36 Transaction Documents means the documents executed
contemporaneous with the formation of the Limited Partnership including, but not
limited to, the Master Agreement, the Limited Partnership Agreement, the Shell
Technology Agreement, the General Conveyance,
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Assignment and ▇▇▇▇ of Sale Agreement for the Shell Parties and the KM Parties,
respectively, the Assumption and Indemnification Agreement, the Assignment and
Conveyance of Partnership Interest, the Guaranty and Indemnification Agreement,
the Shell License Agreement, the Limited Partner Confidentiality Agreement and
the other agreements contemplated hereby or executed as part of the Transaction.
ARTICLE 2
GENERAL PURPOSE
2.1 New Business Entity. Subject to and in accordance with the terms and
conditions of this Master Agreement, the Shell Parties and the KM Parties have
organized, and have agreed to contribute assets to, a new business entity, a
limited partnership, the purpose of which is to engage in those activities as
specified in the Limited Partnership Agreement (the "CO2 Business") including,
but not limited to, the marketing of CO2, the exploration and production of CO2,
the transportation of CO2, and to engage in other CO2 related operations and
services in the onshore continental United States, subject to certain existing,
conflicting contractual obligations and/or restrictions as provided in the
Limited Partnership Agreement.
ARTICLE 3
CONTRIBUTIONS, CONVEYANCES, LICENSES AND ASSIGNMENTS
3.1 CO2 Assets. On and subject to the terms and conditions set forth in
this Master Agreement and subject to all requirements of any Governmental
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Authority and as a capital contribution to the Limited Partnership, as of the
Closing Date each Contributor shall convey and deliver its interest in the Shell
CO2 Assets and the KM CO2 Assets, as applicable, to the Limited Partnership and
the Limited Partnership shall acquire and accept from the Contributors all of
the Shell CO2 Assets and KM CO2 Assets (collectively referred to herein as the
"CO2 Assets"). Except as described below, and as a capital contribution to the
Limited Partnership, and as of the Closing Date, each Contributor shall convey
and deliver its interest in the CO2 Assets to the Limited Partnership and the
Limited Partnership shall acquire and accept from the Contributors all of the
CO2 Assets. To the extent that any valid preferential rights, nonassignability
provisions, requirements of any governmental authority, or other restrictions
would preclude an interest in CO2 Assets from being conveyed or assigned
hereunder, this Master Agreement shall not constitute an agreement to assign the
same if an attempted assignment would constitute a breach thereof. Instead each
Contributor will, at its own expense, use its commercially reasonable efforts to
obtain or perform prior to the Closing Date, all authorizations, consents,
approvals, and notices required to assign or convey the CO2 Assets to the
Limited Partnership, and if such authorizations, consents, or approvals cannot
be obtained in respect of any of the CO2 Assets, the Contributors will cooperate
in reasonable arrangements to deliver to the Limited Partnership the benefits
intended to be conveyed by such CO2 Assets at the same cost and expense to the
Limited Partnership as it would have borne if such CO2 Assets had been assigned
to it at Closing. Each Contributor
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shall attach as Schedule 3.1S (with regard to the Shell Assets) or Schedule 3.1K
(with regard to the KM CO2 Assets), as applicable, a list of the CO2 Assets
which are known, as of the Closing Date, to be subject to such rights,
provisions, or restrictions. In consideration therefor, the Shell Parties and
the KM Parties shall receive their respective ownership interest in the Limited
Partnership specified in Article 4.1 below.
3.2 Technology. On and subject to the terms and conditions set forth in
this Master Agreement and the Shell Technology Agreement, and as of the Closing
Date, each of the Contributors shall make available to the Limited Partnership
the technology and associated rights required to be made available hereunder or
by the Shell Technology Agreement.
3.3 Cash. At the Closing Date, KM shall cause to be contributed to the
Limited Partnership the KM Cash Contribution.
3.4 Form of General Conveyance, Assignment and ▇▇▇▇ of Sale Agreement. The
contributions, assignments and conveyances contemplated by this Master Agreement
will be effected by documents of assignment and conveyance including without
limitation, the General Conveyance, Assignment, and ▇▇▇▇ of Sale Agreement to be
executed by the Shell Parties and the General Conveyance, Assignment, and ▇▇▇▇
of Sale to be executed by the KM Parties, each of which shall be subject to the
terms contained herein.
3.5 No Warranty. Except as set forth elsewhere in this Master
Agreement, conveyance of the CO2 Assets shall be, and is, WITHOUT
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WARRANTY WHATSOEVER, EXPRESS, STATUTORY, OR IMPLIED AS TO TITLE, OWNERSHIP,
PHYSICAL CONDITION, ENVIRONMENTAL CONDITION, QUALITY, FITNESS FOR A PARTICULAR
PURPOSE, MERCHANTABILITY, OR OTHERWISE. The Limited Partnership shall have, and
each Contributor hereby grants to it, the right of full substitution and
subrogation in and to any and all rights and actions of warranty that such
Contributor has or may have against all and any preceding owners (excepting the
Shell Parties and the KM Parties), manufacturers and vendors of the CO2 Assets.
3.6 No Trademark Use. Except as expressly provided in the Shell License
Agreement, no right, express or implied, is granted by this Master Agreement to
the Limited Partnership to use in any manner the trademarks or the name of any
of the Contributors or any trade name, service ▇▇▇▇ or trademark owned by, or
licensed to, any of the Contributors, including the Pecten trademark of Shell
Oil Company.
3.7 Conflicting Terms. To the extent that the terms of this Master
Agreement or any other Transaction Documents conflict with the terms of the
Shell Technology Agreement, Shell License Agreement, or the Assumption and
Indemnification Agreement, the terms of the relevant Technology Agreement,
License Agreement or the Assumption and Indemnification Agreement (as the case
may be) shall control. As to conflicts between the Shell Technology Agreement
and the Shell License Agreement, on the one hand, and the Assumption and
Indemnification Agreement, on the other hand, the Assumption
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and Indemnification Agreement shall control, provided, however, it being
understood that, except as expressly provided in the Shell Technology Agreement
or the Shell License Agreement (if any), there are no representations or
warranties regarding the infringement or misappropriation of any patents,
copyrights, trade secrets or other proprietary rights of any Third Party.
ARTICLE 4
GENERAL PARTNER
4.1 Ownership. Shell CO2 General LLC, a Delaware limited liability company
("Shell CO2 General"), shall be the sole General Partner ("General Partner")of
the Limited Partnership. Shell CO2 LLC, a Delaware limited liability company
("Shell CO2"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC shall be the Limited Partners of the
Limited Partnership. The ownership interests and profits interests of the
Partners in the Limited Partnership shall be as follows:
Shell CO2 LLC 78%
---
Shell CO2 General LLC 2%
--
▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC 20%
---
4.2 Organization. The Limited Partnership shall be organized as a limited
partnership under the laws of the State of Texas and shall be structured and
organized so as to qualify for treatment as a partnership for federal (and
state, if applicable) income tax purposes. Subject to the terms and conditions
hereof, at Closing, the General Partner and all of the Limited Partners shall
execute the Limited Partnership Agreement in their respective capacities. Shell
CO2 General LLC shall promptly, if it has not already done so, cause the L.P.
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Certificate to be filed in the office of the Secretary of State of Texas and
shall exercise all reasonable efforts to qualify the Limited Partnership to do
business in the states of New Mexico, Colorado, and in such other states as the
Partnership is conducting business as a foreign Limited Partnership. In
addition, the General Partner and the Limited Partners shall contribute to the
Limited Partnership the CO2 Assets and the KM Cash Contribution and other
contributions, if any, provided for in the Limited Partnership Agreement.
Limited Partnership Organization Costs shall be borne solely by the party
incurring them.
ARTICLE 5
SHELL CO2 ASSETS
5.1 Shell CO2 Assets. The Shell CO2 Assets consist of any and all assets or
interests owned or held by any one or more of the Shell Parties and historically
used by such Party primarily in its CO2 business and necessary for the continued
operation of the CO2 Assets by the Limited Partnership including, but not
limited to, the following properties and assets:
(a) Leases. Leases and leasehold interests in all oil and gas leases of
the Shell Parties, to the extent such leases convey or grant an interest in and
to those unitized strata or depths believed to contain CO2 and those oil and gas
interests in the West ▇▇▇▇▇▇▇▇ and Mid Cross units, as shown on Exhibit "A" to
the General Conveyance, Assignment, and ▇▇▇▇ of Sale Agreement executed by the
Shell Parties.
(b) Fee interests. All fee interests of the Shell Parties to the
surface and in CO2 rights included under deeds, conveyances or assignments as
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shown on Exhibit "A" to the General Conveyance, Assignment, and ▇▇▇▇ of Sale
Agreement executed by the Shell Parties.
(c) Contracts and Unit Agreements. All rights and interests of the
Shell Parties in and to or under or by virtue of the contracts, unit agreements
and other agreements (as they relate to CO2 , West ▇▇▇▇▇▇▇▇ and/or Mid Cross)
incl shown on Exhibit "A" to the General Conveyance, Assignment, and ▇▇▇▇ of
Sale executed by the Shell Parties. For purposes of this Master Agreement, such
rights and interests shall include, by way of illustration and not by way of
limitation, all future proceeds, benefits, income or revenues, if any, for any
overages or shortages with respect to any gas balancing agreements,
transportation agreements, operating agre, operating agre, operating agreements,
unit agreements, unit orders, purchase and sale agreements, gas processing
agreements, overage/shortage agreements or any other agreements, but only if the
same first become properly due and payable, or available as a credit or refund
after the Effective Date.
(d) Easements. All easements, rights-of-way, (including rights-of-way
agreements), pipelines, surface leases, licenses and servitudes as shown on
Exhibit "A" to the General Conveyance, Assignment, and ▇▇▇▇ of Sale Agreement
executed by the Shell Parties.
(e) Equipment. All fixtures, facilities, equipment and personal
property directly related to and used in connection with the above described
properties and all computers, furniture and other equipment utilized by the
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employees of Shell CO2 Company, a division of Shell, primarily in the operation
of the Shell CO2 Assets prior to the Effective Date.
(f) CO2 Unit Rights. All other rights and interests of the Shell
Parties however held in and to CO2 rights to the McElmo Dome, Bravo Dome, and
Doe Canyon Units, and in and to oil and gas rights to the West ▇▇▇▇▇▇▇▇ and Mid
Cross Units, whether as working interest owners, unit operators, or otherwise.
(g) Interest in Shell ▇▇▇▇▇▇ Partnership. Shell ▇▇▇▇▇▇ Pipeline Company
will transfer, at Closing, a forty-nine percent (49%) interest in the ▇▇▇▇▇▇
Pipeline Company, a Texas general partnership, and the Limited Partnership will
be admitted as a partner under the terms of the Partnership Agreement of ▇▇▇▇▇▇
Pipeline Company dated May 18, 1992, as amended, with respect to such interest;
subject, however, to the requirement that consents required in connection with
debt of ▇▇▇▇▇▇ will have been obtained and that Shell ▇▇▇▇▇▇ Pipeline Company
shall have previously taken such steps as are required to qualify the
disposition of its partnership interest as a "permitted transfer" of its
interest pursuant to Section 14.2 of the Partnership Agreement of ▇▇▇▇▇▇
Pipeline Company dated May 18, 1982, as amended. The remaining one percent (1%)
interest owned by Shell ▇▇▇▇▇▇ Pipeline Company in the ▇▇▇▇▇▇ Pipeline Company
will be transferred, and the Limited Partnership will be admitted as a partner
with respect to such one percent (1%) interest within thirty (30) days of the
conclusion of the twelfth calendar month immediately following the transfer of
the first 49% interest.
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5.2 Proprietary Technology. Shell CO2 Assets do not include Shell
Proprietary Technology or Third-Party Proprietary Technology (as those terms are
defined in the Shell Technology Agreement entered into by and between Shell
Western E&P Inc., a Delaware corporation, the Limited Partnership, Shell CO2
General LLC, and Shell CO2 LLC, and having an effective date of January 1, 1998)
or any trademarks, service marks, or trade names owned or controlled by Shell
Oil Company or any of its subsidiaries. Shell Proprietary Technology shall be
licensed to the Limited Partnership pursuant to the terms and conditions of the
Shell Technology Agreement.
5.3 Excluded Assets. The following properties and assets are specifically
excluded from the definition of Shell CO2 Assets:
(a) Leases and leasehold interest in oil and gas, except for those oil
and gas interests that are identified in Sections 5.1(a) and 5.1(f) and those
that are incidental to the CO2 rights and the strata and depths pertaining
thereto referenced in 5.1(a).
(b) Any refunds from Empire Electric Co-Op attributable to purchases of
electricity made prior to the Closing Date.
(c) Any refunds or amounts recoverable due to overpayment of royalties
attributable to CO2 sales made prior to the Closing Date, even though
discovered, received, or collected after the Closing Date.
(d) Any interests currently owned by Shell Parties in the ▇▇▇▇▇▇▇ Dome
or Choctaw Pipelines.
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(e) Any refunds or amounts recovered from the MMS attributable to
transportation deducts that relate to period of time prior to the Closing Date.
(f) The ▇▇▇▇▇▇ Petroleum Company Board of Directors conference room
table.
ARTICLE 6
KM CO2 ASSETS
6.1 KM CO2 Assets. The "KM CO2 Assets" consist of the following properties
and assets:
(a) Fee Interests. Fee interests to the surface and in all CO2 rights
as shown on Exhibit "A" to KM General Conveyance, Assignment, and ▇▇▇▇ of Sale
Agreement executed by the KM Parties.
(b) Contracts. All rights and interests of the KM Parties in and to or
under or by virtue of the contracts and agreements relating to the KM CO2 Assets
including, but not limited to, those shown on Exhibit "A" to the General
Conveyance, Assignment, and ▇▇▇▇ of Sale Agreement executed by the KM Parties.
For purposes of this Master Agreement, such rights and interests shall include,
by way of illustration and not by way of limitation, all future proceeds,
benefits, income or revenues for any overages or shortages with respect to any
gas balancing agreements, transportation agreements, operating agreements, unit
agreements, unit orders, purchase and sale agreements, gas processing
agreements, overage/shortage agreements or any other agreements, but only if
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the same first become properly due and payable, or available as a credit or
refund after the Effective Date.
(c) Easements. All easements, rights-of-way, (including rights-of-way
agreements), pipelines, surface leases, licenses and servitudes as shown on
Exhibit "A" to the General Conveyance, Assignment, and ▇▇▇▇ of Sale Agreement
executed by the KM Parties.
(d) Equipment. All fixtures, facilities, equipment and personal
property directly related to and used in connection with the above described
properties and all computers, software, furniture and other equipment utilized
by the employees of the KM Parties primarily in the operation of the KM CO2
Assets prior to the Effective Date, as shown on Exhibit "A" to the General
Conveyance, Assignment, and ▇▇▇▇ of Sale Agreement executed by the KM Parties.
(e) The KM Cash Contribution. Twenty-five Million Dollars
($25,000,000) cash.
6.2 Proprietary Technology. KM CO2 Assets do not include any trade secrets
or know-how (including, but not limited to, technical information, methods of
control and software) of the KM Parties or otherwise, except that KM will
deliver to the Limited Partnership a copy (including source code, if available)
of the computer programs that have been internally developed and which assist in
billing customers and other activities related to the operation of the Central
Basin Pipeline (the "Billing Routine"). The Billing Routine may be used by the
Limited Partnership on a non-exclusive basis, without restriction, except that
the Limited
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Partnership shall be solely responsible for obtaining, at its cost, any consents
or licenses which may be required from third parties in order to use or operate
the Billing Routine and the Limited Partnership will obtain all third party
consents required before any further disclosure or distribution of the Billing
Routine to any other person.
6.3 Excluded Assets.
(a) Control Room Facilities. All equipment, software, licenses,
personnel, leases and other properties, whether real or personal, tangible or
intangible, necessary for the use and operation of the control room located at
the KM facilities at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, and at any back-up control
room facilities.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 The Shell Parties. Each of the Shell Parties hereby represents and
warrants that:
(a) Organization. Standing. It is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware and is duly qualified to do business in each jurisdiction
that it is legally required to be (if necessary) and has all requisite power and
authority to own and operate its properties.
(b) Litigation. Except as disclosed on Schedule 7.1(b) hereto, there
are no actions, suits, proceedings or investigations pending or, to its
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knowledge or the knowledge of any of its Affiliates, threatened against or
affecting it or any of its Affiliates or any of their properties, assets or
businesses in any court or before any Governmental Authority, or arbitrator
that, if adversely determined, would materially impair its ability to perform
its obligations under this Master Agreement, would materially adversely affect
the validity of this Master Agreement, any of the other Transaction Documents or
the Transaction or would materially adversely affect the Shell CO2 Assets.
Neither it nor any of its Affiliates has received any notice of any current
default, and neither it nor any of its Affiliates is in default, under any
applicable order, writ, injunction, decree, permit, determination or award of
any Governmental Authority or any arbitrator that could reasonably be expected
to impair its ability to perform its obligations under this Master Agreement, or
any of the other Transaction Documents, or could reasonably be expected to
materially adversely affect the validity of this Master Agreement, the other
Transaction Documents, the Transaction, or would materially adversely affect the
Shell CO2 Assets. As used in this Section 7.1(b), "material" means having a
value of $1,000,000 or more in diminution of value or damages.
(c) Due Authorization. It has all requisite power and authority to
accept, execute and deliver this Master Agreement and to accept, execute and
deliver the Limited Partnership Agreement and the other Transaction Documents to
which it is an indicated party or signatory, and the consummation by it of the
Transaction has been duly authorized by all necessary corporate or partnership
action on its part and no other action for authorization is necessary in
connection
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with the consummation of the Transaction. This Master Agreement has been, and
the Transaction Documents to which it is an indicated Party or a signatory at
Closing will have been, duly executed, authorized and accepted by it and, in
each case, constitutes, or will constitute, the legal, valid and binding
obligation of it, enforceable against it in accordance with its terms.
(d) Labor Matters. Except as disclosed on Schedule 7.1(d) hereto, to
the knowledge of each of the Shell Parties, each of the Shell Parties and their
Affiliates are in substantial compliance with all applicable Legal Requirements
respecting its employment practices, terms and conditions of employment, wages
and hours of its or any Affiliate's employees and is not engaged in any unfair
labor practice. To the knowledge of each of the Shell Parties and their
Affiliates, all employees of any Shell Party or Affiliate are lawfully
authorized to work in the United States in accordance with federal immigration
laws. There is no labor strike or labor disturbance pending, or, to the
knowledge of each of the Shell Parties and their Affiliates, threatened against
any one or more of the Shell Parties with respect to activities in Texas,
Colorado, or New Mexico, nor has any work stoppage or other significant labor
difficulty been experienced with respect to Shell operations in Texas, Colorado,
or New Mexico since January 1, 1997.
(e) Interests Acquired for Investment. The interest in the Limited
Partnership to be acquired by the Shell Parties pursuant to this Master
Agreement is being acquired by such Parties for their own investment and is not
being acquired by a Shell Party for or with a view to the sale or distribution
of such
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interest. Each Shell Party, in making the acquisition of such interest
hereunder, is acting in the conduct of its own business and not under any
contractual commitment to any Third Party, or any nominee agreement with any
Third Party, to transfer to, or to hold title on behalf of, such Third Party,
any portion of or interest in such interest.
(f) Taxes. To the knowledge of each of the Shell Parties and their
Affiliates:
(i) All tax returns that were required to be filed in respect of
the Shell CO2 Assets or any business in which the Shell CO2 Assets have been
utilized for any period ending on or prior to the Closing Date have been duly
and timely filed, and all of those Taxes constituting ad valorem, property,
excise, production, severance, and similar taxes and assessments based on or
measured by the ownership of the Shell CO2 Assets or the production of oil and
gas and other materials from the Shell CO2 Assets or the receipt of proceeds
therefrom which are due and payable have been properly paid;
(ii)There are no existing liens for Taxes on any of
the Shell CO2 Assets, except incipient liens for Taxes not yet due
or payable;
(iii) Except as disclosed in Schedule 7.1(f)(iii) hereto, none of
the Shell CO2 Assets is subject to a Tax Partnership;
(iv)Certifications under Section 43(c) of the Code
have been filed for the properties listed in Schedule 7.1(f)(iv);
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(v) No election under Section 43(e) of the Code is in effect for
any of the properties referenced in Schedule 7.1(f)(v); and
(vi)Except as set forth in Schedule 7.1(f)(vi), neither the Shell
Parties nor their Affiliates have requests for rulings in respect of any Taxes
or any proposed transaction pending before any federal or state income taxing
authority regarding Shell CO2 Assets or employees of the Shell Parties (the
"Shell Employees") or tax attributes of Shell CO2 Assets or Shell Employees.
(g) Environmental Liabilities and Requirements. None of the Shell
Parties or their Affiliates has knowledge of any material Environmental Claims
or Environmental Cleanup Liabilities or similar non-compliance with
Environmental Laws in connection with the Shell CO2 Assets other than as
disclosed on Schedule 7.1(g) hereto. As used in this Section 7.1(g), material
means having a value of $1,000,000 or more in diminution of value or damages
(including costs and expenses).
(h) Non-Foreign Affidavit. Each of the Shell Parties conveying real
property interests to the Limited Partnership is authorized to and capable of
executing and delivering the Non-Foreign Affidavits attached hereto as Exhibit
"A".
(i) No Conflict or Breach. Except as disclosed on Schedule 7.1(i), the
execution, delivery and performance of this Master Agreement and the other
Transaction Documents do not and will not: (i) conflict with or constitute a
violation of the articles of incorporation, bylaws, partnership agreements or
other organizational documents of any of the Shell Parties; or (ii) conflict or
constitute a
22
violation of any law, statute, judgment, order, decree or regulation of any
legislative body, court, administrative agency, governmental authority or
arbitrator applicable to or relating to any one or more of the Shell Parties or
the CO2 Assets.
7.2 The KM Parties. Each of the KM Parties hereby represents and warrants
that:
(a) Organization; Standing. It is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware and is duly qualified to do business in each jurisdiction
that it is legally required to be (if necessary) and has all requisite power and
authority to own and operate its properties.
(b) Litigation. Except as disclosed on Schedule 7.2(b) hereto, there
are no actions, suits, proceedings or investigations pending or, to its
knowledge or the knowledge of any of its Affiliates, threatened against or
affecting it or any of its Affiliates or any of their properties, assets or
businesses in any court or before any Governmental Authority or arbitrator that,
if adversely determined, would materially impair its ability to perform its
obligations under this Master Agreement, would materially adversely affect the
validity of this Master Agreement, any of the other Transaction Documents or the
Transaction or would materially adversely affect the KM CO2 Assets. Neither it
nor any of its Affiliates has received any currently effective notice of any
default, and neither it nor any of its Affiliates is in default, under any
applicable order, writ, injunction, decree, permit, determination or award of
any Governmental Authority or any arbitrator that could
23
reasonably be expected to impair its ability to perform its obligations under
this Master Agreement, or to materially adversely affect the validity of this
Master Agreement or the Transaction or to materially adversely affect the KM CO2
Assets. As used in this Section 7.2(b), "material" means having a value of
$250,000 or more in diminution of value or damages.
(c) Due Authorization. It has all requisite power and authority to
accept and execute this Master Agreement and to accept and deliver the Limited
Partnership Agreement and the Transaction Documents to which it is an indicated
party or signatory, and the consummation by it of the Transaction have been duly
authorized by all necessary corporate or partnership action on its part and no
other action for authorization, is necessary in connection with the consummation
of the Transaction. This Master Agreement has been, and the other Transaction
Documents to which it is an indicated Party or a signatory at Closing will have
been, duly executed and accepted by it and, in each case, constitutes the legal,
valid and binding obligation of it, enforceable against it in accordance with
its terms.
(d) Labor Matters. Except as disclosed on Schedule 7.2(d) hereto, to
the knowledge of each of the KM Parties, each of the KM Parties and their
Affiliates are in substantial compliance with all applicable Legal Requirements
respecting the employment and employment practices, terms and conditions of
employment and wages and hours of its or any Affiliate's employees and is not
engaged in any unfair labor practice. To the knowledge of each of the KM Parties
24
and their Affiliates, all the KM Parties or any KM Party Affiliates' employees
are lawfully authorized to work in the United States in accordance with federal
immigration laws. There is no labor strike or labor disturbance pending, or, to
the knowledge of each of the KM Parties and their Affiliates, threatened against
any one or more of the KM Parties with respect to activities in Texas, Colorado
or New Mexico, nor has any work stoppage or other significant labor difficulty
been experienced with respect to KM operations in Texas, Colorado or New Mexico,
since January 1, 1997.
(e) Interests Acquired for Investment. The interest in the Limited
Partnership to be acquired by the KM Parties pursuant to this Master Agreement
is being acquired by such Parties for their own investment and is not being
acquired by a KM Party for or with a view to the sale or distribution of such
interest. Each KM Party, in making the acquisition of such interest hereunder,
is acting in the conduct of its own business and not under any contractual
commitment to any Third Party, or any nominee agreement with any Third Party, to
transfer to, or to hold title on behalf of, such Third Party, any portion of or
interest in such interest.
(f) Taxes. To the knowledge of KM and its Affiliates,
(i) All tax returns that were required to be filed in
respect of the KM CO2 Assets or any businesses in which the KM CO2 Assets have
been utilized for any period ending on or prior to the Closing Date have been
duly and timely filed, and all of those Taxes constituting ad valorem, property,
excise, production, severance, and similar taxes and assessments based on or
measured
25
by the ownership of the KM CO2 Assets or the production of oil and gas and other
materials from the KM CO2 Assets or the receipt of proceeds therefrom which are
due and payable have been properly paid;
(ii)There are no existing liens for Taxes on any of
the KM CO2 Assets, except incipient liens for Taxes not yet due or
payable;
(iii) Except as disclosed in Schedule 7.2(f)(iii) hereto, none of
the KM CO2 Assets is subject to a Tax Partnership;
(iv)Certifications under section 43(c) of the Code
have been filed for the properties listed in Schedule 7.2(f)(iv);
(v) No election under section 43(e) of the Code is in effect for
any of the properties referenced in Schedule 7.2(f)(v); and
(vi)Except as set forth in Schedule 7.2(f)(vi), neither the KM
Parties nor their Affiliates have requests for rulings in respect of any Taxes
or any proposed transaction pending before any federal or state income taxing
authority regarding KM CO2 Assets or employees of the KM Parties (the "KM
Employees") or tax attributes of KM CO2 Assets or KM Employees.
(g) Environmental Liabilities and Requirements. None of the KM Parties
or their Affiliates has knowledge of any material Environmental Claims or
Environmental Cleanup Liabilities or similar non-compliance with Environmental
Laws in connection with the KM CO2 Assets other than as disclosed on Schedule
7.2(g) hereto. As used in this Section 7.2(g), "material" means having a value
of $250,000 or more in diminution of value or damages.
26
(h) Non-Foreign Affidavit. Each of the KM Parties conveying real
property interests to the Limited Partnership is authorized to and capable of
executing and delivering the Non-Foreign Affidavits attached hereto as Exhibit
"A".
(i) No Conflict or Breach. Except as disclosed on Schedule 7.2(i), the
execution, delivery and performance of this Master Agreement and the other
Transaction Documents do not and will not: (i) conflict with or constitute a
violation of the articles of incorporation, bylaws, partnership agreements or
other organizational documents of any of the KM Parties; (ii) conflict or
constitute a violation of any law, statute, judgment, order, decree or
regulation of any legislative body, court, administrative agency, governmental
authority or arbitrator applicable to or relating to any one or more of the KM
Parties or the KM CO2 Assets; or (iii) result in the creation or imposition of
any lien, charge or encumbrance of any nature whatsoever on any of the KM CO2
Assets.
ARTICLE 8
CERTAIN COVENANTS
8.1 Waiver of Bulk Sales Compliance. Each of the Shell Parties and each of
the KM Parties respectively waives compliance by the other with the notice
provisions under the Uniform Commercial Code of every applicable state relating
to bulk transfers or under similar provisions of other applicable jurisdictions.
27
8.2 Due Diligence Process; Title Curative Period.
(a) The Shell Parties have made available to the KM
Parties certain information contained within its files relating to the
ownership, condition, of the Shell CO2 Assets. THE SHELL PARTIES MAKE NO
WARRANTY OR REPRESENTATION AS TO THE ACCURACY, COMPLETENESS OR CORRECTNESS OF
ANY INFORMATION FURNISHED TO THE KM PARTIES. ANY RELIANCE BY THE KM PARTIES UPON
SUCH INFORMATION IS AT THE KM PARTIES' SOLE RISK AND THE SHELL PARTIES SHALL
HAVE NO LIABILITY WHATEVER TO THE KM PARTIES IN CONNECTION THEREWITH. To the
extent that the due diligence review conducted by the KM Parties prior to
Closing identifies defects in title that can be cured prior to closing, or if
diligently pursued within a period of one year thereafter, Shell Parties agree
to attempt to cure such defects by the use of reasonable commercial efforts.
(b) The KM Parties have made available to the Shell Parties certain
information contained within its files relating to the ownership, condition, of
the KM CO2 Assets. THE KM PARTIES MAKE NO WARRANTY OR REPRESENTATION AS TO THE
ACCURACY, COMPLETENESS OR CORRECTNESS OF ANY INFORMATION FURNISHED TO THE SHELL
PARTIES. ANY RELIANCE BY THE SHELL PARTIES UPON SUCH INFORMATION IS AT THE SHELL
PARTIES' SOLE RISK AND THE KM PARTIES SHALL HAVE NO LIABILITY WHATEVER TO THE
SHELL PARTIES IN CONNECTION THEREWITH. To the extent that the due diligence
review
28
conducted by the Shell Parties identifies defects in title that can be
cured prior to closing, or if diligently pursued within a period of one year
thereafter, the KM Parties agree to attempt to cure such defects by the use of
reasonable commercial efforts.
ARTICLE 9
POST CLOSING COVENANTS
9.1 Further Assurances. The KM Parties and the Shell Parties each agree to
execute and deliver to the Limited Partnership all division orders, transfer
orders and all other instruments and documents necessary to fully vest in the
Limited Partnership the rights and assets to be transferred pursuant to the
Master Agreement. The Limited Partnership will make all appropriate filings and
record all appropriate instruments with all Governmental Authorities as the
Limited Partnership reasonably determines are necessary to vest in the Limited
Partnership title and rights to all of the CO2 Assets.
9.2 Further Conveyances. If at any time subsequent to the Closing Date it
shall be determined, discovered or otherwise become known that a Contributor did
not, or otherwise failed to, convey and transfer to the Limited Partnership all
of the interests held by it or its Affiliates on the Closing Date in the Shell
CO2 Assets or the KM CO2 Assets, other than Excluded Assets, such Contributor
shall forthwith execute and deliver to the Limited Partnership all assignments,
transfer orders, conveyances and all other instruments and documents necessary
to fully vest in the Limited Partnership such interests.
29
9.3 Consents and Authorizations. Each Contributor has elsewhere herein
undertaken to use diligent effort to obtain the consents, licenses, and
authorizations of non-Parties and any Permits which are necessary to give effect
to the Transaction, but if such cannot be obtained after a diligent effort prior
to the Closing Date, each affected Contributor shall negotiate in good faith in
an effort to secure a mutually satisfactory agreement regarding the use or
possession by the Limited Partnership of the portion of the CO2 Assets which may
not be transferred, operated or otherwise utilized until such consents,
licenses, Permits or authorizations have been obtained.
9.4 Access to Properties and Records. From and after the Closing Date, the
Limited Partnership will afford to each Contributor and its authorized
representatives reasonable access during normal business hours to the former
officers and employees of any Contributor or its Affiliates who are at such time
employees of the Limited Partnership and to books and records which were
transferred to the Limited Partnership by such Contributor, and will furnish to
any Contributor such additional information, and will cooperate with any
Contributor in such other respects, including the making available to each
Contributor at such Contributor's expense as a witness or deponent such former
employees of any Contributor who are at the time employees of the Limited
Partnership, as any Contributor may reasonably request for (a) financial
reporting, (b) tax or similar purposes, or (c) purposes of investigating claims,
or conducting litigation or administrative proceedings with Third Parties or
government agencies. The
30
Limited Partnership will keep and maintain the books and records which the
Contributors' have transferred to the Limited Partnership and as to which the
Contributors, the Limited Partnership or their representatives may request
access pursuant to this Section 9.4, for a period of three (3) years from the
Effective Date in the case of all records or such longer period as may be
required by law, reasonably requested in writing by any Contributor or provided
in the records retention policy of the Limited Partnership.
9.5 Sign Removal. The Contributors shall have up to one hundred twenty
(120) days after the Closing Date to remove at their expense all of their
emblems, signs and logos from the CO2 Assets, failing which, the Limited
Partnership may remove such and the Contributors shall have no recourse;
provided, that nothing in this Section 9.5 shall be construed to allow or
require Limited Partnership to, nor shall Limited Partnership, remove markings
that designate that an item, equipment, process, or work is covered by a United
States Patent or copyright, or remove markings that indicate that the item,
equipment, process, or work is or contains proprietary technology or know-how.
9.6 Permit Transfer. It is recognized by the Parties that as of the Closing
Date certain Permits necessary for the Limited Partnership to operate certain of
the CO2 Assets in its own name will not have been transferred to the name of the
Limited Partnership. The KM Parties and the Shell Parties agree to use due
diligence in effectuating a transfer of such Permits to the Limited Partnership,
and in furtherance of such, required Permits will be applied for by
31
the Limited Partnership immediately after the Closing Date. In the Limited
Partnership, each Contributor hereby grants, insofar as is not prohibited by
law, permission to the Limited Partnership to use such Contributor's existing
Permits to carry out the business associated with the CO2 Assets.
9.7 Cash Management Agreement. The Limited Partnership shall enter into by
the Closing Date an agreement with Shell Oil Company for the management of the
Limited Partnership's cash.
ARTICLE 10
CLOSING
10.1 Closing. Subject to the terms and conditions of this Master Agreement,
the Closing contemplated in this Article 10 means the execution of the
Transaction Documents (the "Closing"). The Closing shall be held at a mutually
agreeable office in Houston, Texas or at another mutually agreeable location in
Texas, not later than March 6, 1998, as the Parties may mutually agree in
writing (the "Closing Date").
ARTICLE 11
EMPLOYEES
The Shell Parties agree to make available to the Limited Partnership the
services of any officers and employees who may be offered employment by the
Limited Partnership after Closing. The KM Parties agree to make available to the
Limited Partnership the services of those officers and employees who are listed
on Schedule 11 hereto. For a period of time following Closing, the Central Basin
Pipeline will be operated by KM pursuant to the Operating and Maintenance
32
Agreement dated March 5, 1998, with the Limited Partnership. Following this
period, the Limited Partnership will operate the pipeline either through its
internal resources or by contracting with a third party (including Affiliates of
the Limited Partnership). In the event that an election is made to operate the
pipeline with internal resources, those KM officers or employees shown on
Schedule 11 hereto will be offered employment by the Limited Partnership,
subject to satisfactory compliance with the customary employee screening and
testing requirement of the Shell Parties. Such offers of employment shall be for
similar positions and compensation levels as were enjoyed by said KM officers
and employees immediately prior to receipt of such offers to the extent such
positions and compensation levels are consistent with the practices and
procedures of the Shell Parties for similar functions and experience levels. If
an election is made to operate the pipeline through Third Party personnel, KM
will be given not less than ninety (90) days prior written notice that its
officers and employees will not be offered employment by the Limited
Partnership.
All officers of the Limited Partnership shall be elected by the General
Partner.
After the transition period, benefit plans for employees shall be
established at the discretion of the General Partner.
33
ARTICLE 12
TAXES
Payment of Transfer Taxes; Recording Fee. The Limited Partnership shall
pay all sums required to be paid to any state or local taxing jurisdiction as a
sales tax or real property transfer tax or other transfer tax or similar tax on
account of the consummation of the Transaction and any costs of recording deeds
associated therewith.
ARTICLE 13
ARBITRATION PROCEDURES
This Master Agreement and any and all disputes, claims or controversies
among the Parties with respect to the matters contained herein shall be subject
to the arbitration procedures provided for and specified in the Limited
Partnership Agreement, which terms are incorporated by referenced herein.
ARTICLE 14
MISCELLANEOUS
14.1 Survival of Representations. All representations and warranties
contained in Article 7 made by or on behalf of any Party shall survive the
execution and delivery of this Master Agreement, the contribution of the CO2
Assets, and with respect to any party entitled to indemnification hereunder, the
transfer of any of the CO2 Assets and assigned rights, for a period of one year.
14.2 Successors and Assigns. All covenants and agreements
contained in this Master Agreement by or on behalf of any of the
Parties shall
34
bind the respective successors by operation of law and permitted assigns of such
Parties and shall inure to the benefit of the successors by operation of law and
permitted assigns of such Parties. This Master Agreement may not be assigned in
whole or in part to any non-Party without the written permission of all the
other Parties.
14.3 Amendments. This Master Agreement may be amended only with each
Party's written consent; provided, however, that any schedule or form of exhibit
may be amended, modified or supplemented by inserting into such schedule or form
of exhibit a new page initialed by an authorized representative of each Party
noting thereon that such page has been amended, modified or supplemented and the
date of such insertion.
14.4 Waiver. Any failure of any Party to comply with any of its
obligations, agreements, or conditions herein contained may be waived (either
generally or in particular instances and either retroactively or prospectively)
in writing, but not in any other manner, by the Party to whom such compliance is
owed. Any such waiver shall operate as a bar to any claim for indemnification
under the Assumption and Indemnification Agreement or otherwise for damages
arising from the obligation, agreement or condition so waived. No waiver of any
provision of this Master Agreement shall constitute a waiver of any other
provision hereof.
14.5 Notices. All notices and other communications provided for
in this Master Agreement shall be delivered and sent by registered
or certified mail
35
return receipt requested, by overnight courier or by electronic or facsimile
transmission, and shall be considered to have been given when delivered to the
Party to whom directed.
(a) If to Shell Western E&P, Inc.:
200 N. Dairy Ashford
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇▇▇
Phone: 281/▇▇▇-▇▇▇▇
Fax: 281/▇▇▇-▇▇▇▇
(b) If to Shell ▇▇▇▇▇▇ Pipeline Company:
200 N. Dairy Ashford
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇▇▇
Phone: 281/▇▇▇-▇▇▇▇
Fax: 281/▇▇▇-▇▇▇▇
(c) If to Shell Land & Energy Company:
200 N. Dairy Ashford
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇▇▇
Phone: 281/▇▇▇-▇▇▇▇
Fax: 281/▇▇▇-▇▇▇▇
(d) If to Shell Western Pipeline Inc.:
200 N. Dairy Ashford
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇▇▇
Phone: 281/▇▇▇-▇▇▇▇
Fax: 281/▇▇▇-▇▇▇▇
36
(e) If to Shell CO2 LLC:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇▇▇▇▇▇
Phone: 213/▇▇▇-▇▇▇▇
Fax: 213/▇▇▇-▇▇▇▇
(f) If to Shell CO2 General LLC
200 N. Dairy Ashford
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇▇▇
Phone: 281/▇▇▇-▇▇▇▇
Fax: 281/▇▇▇-▇▇▇▇
(g) If to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "A":
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
(h) If to ▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Phone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
14.6 Governing Law. This Master Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Texas without regard to rules concerning conflicts of law.
14.7 Descriptive Headings. The division of this Master Agreement into
articles, sections, paragraphs and other portions and the insertion of headings
are for convenience of reference only and shall not effect the construction or
interpretation of this Master Agreement. The terms "this Master Agreement,"
37
"hereof," hereunder," and similar expressions refer to this Master Agreement and
not to any particular article, section, paragraph or other portion hereof. All
references to "Article," "Section" or "paragraph" shall mean an article, section
or paragraph, respectively, of this Master Agreement.
14.8 Counterparts. This Master Agreement may be executed in separate and
several counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Master Agreement to produce or account
for more than one such counterpart.
14.9 No Third-Party Beneficiaries. This Master Agreement inures solely to
the benefit of each of the Parties and their permitted successors and assigns,
and nothing in this Master Agreement, express or implied, including the
provisions of Article 11, is intended to, nor does it, confer upon any person
any rights or remedies of any nature whatsoever under or by reason of this
Master Agreement, except for those sections, which are intended to be for the
benefit of the Limited Partnership and may be enforced by such Limited
Partnership.
14.10 Severability. If any one or more of the provisions contained in this
Master Agreement or any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality, and enforceability of the remaining provisions contained
herein or therein shall not in any way be affected or impaired. In the case of
any such invalidity, illegality or unenforceability, the Parties hereto agree to
use their best
38
efforts to achieve the purpose of such provision by a new legally
valid and enforceable stipulation.
14.11 Unsigned Exhibits. No form of instrument attached hereto as an
Exhibit which purports to require signatures shall become operative solely by
its attachment hereto as an Exhibit, and any such instrument shall become
operative only upon its proper execution apart from this Master Agreement.
14.12 Incorporation of Schedules. The Schedules attached to this Master
Agreement are incorporated into this Master Agreement and shall be deemed a part
hereof as if set forth herein in full. If there is any conflict between the main
body of the Agreement and any Schedule, unless explicitly stated otherwise in a
Schedule, the provisions of the main body of the Master Agreement shall prevail.
14.13 Publicity. The Parties shall not and shall cause their respective
Affiliates not to issue or make any press release or announcement concerning the
Transaction without the prior written agreement of all Parties with respect to
the form, substance and timing thereof, except any Party may make any such press
release and announcement when the releasing Party is advised by its legal
counsel that such a press release or announcement is required by law, regulation
or stock exchange rules, but in such event the Parties shall use their
reasonably good faith efforts to agree as to the form, timing, and substance of
such release or announcement.
39
14.14 Entire Agreement; Supersedure. This Master Agreement and the
Transaction Documents entered into by the Parties or some of them set forth the
entire understanding and agreement between the Parties as to the matters covered
herein and therein and supersede and replace any prior understanding, agreement
or statement (written or oral) with respect thereto.
14.15 Construction and Representation by Counsel. Each Party has been
represented and has relied upon counsel of its choice during the negotiations
and drafting of this Master Agreement. Each Party affirms that its counsel had a
substantial role in the drafting of this Master Agreement and, therefore, the
rules of construction, which could apply to the effect that any ambiguities are
to be resolved against the drafting party, shall not be employed in the
interpretation of this Master Agreement.
14.16 Interpretation. In construing this Master Agreement, (a) examples
shall not be construed to limit, expressly or by implication, the matter
illustrated; (b) the word "includes" and its derivatives means "includes, but is
not limited to" and corresponding derivative expressions; (c) a defined term has
its defined meaning throughout this Master Agreement and each Exhibit and
Schedule to this Master Agreement, (unless explicitly given a different
definition within a Section or Article) regardless of whether it appears before
or after the place where it is defined.
14.17 No Exemplary, Punitive, Special or Consequential Damages. The Parties
shall only be entitled to recover actual damages for a breach or
40
violation of this Master Agreement. No Party shall be entitled to recover
exemplary, punitive, special or consequential damages from the other Parties in
any arbitration proceeding, court proceeding, or otherwise, and each Party
hereby waives any claim or right to exemplary, punitive, special or
consequential damages hereunder.
EXECUTED as of the Effective Date stated herein.
[SIGNATURE PAGES TO FOLLOW]
41
SHELL WESTERN E&P INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Attorney-in-Fact for ▇. ▇. ▇▇▇▇▇▇
---------------------------------
[ADDITIONAL SIGNATURE PAGES TO FOLLOW]
SHELL WESTERN PIPELINES INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: President
----------------------------
[ADDITIONAL SIGNATURE PAGES TO FOLLOW]
SHELL ▇▇▇▇▇▇ PIPELINE COMPANY
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
----------------------------
Title: President
----------------------------
[ADDITIONAL SIGNATURE PAGES TO FOLLOW]
SHELL LAND & ENERGY COMPANY
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
----------------------------
Title: Attorney-in-Fact for ▇.▇. ▇▇▇▇▇▇
----------------------------
[ADDITIONAL SIGNATURE PAGES TO FOLLOW]
SHELL CO2 LLC
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Title: President
---------------------------
[ADDITIONAL SIGNATURE PAGES TO FOLLOW]
SHELL CO2 GENERAL LLC
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
----------------------------
Title: President
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[ADDITIONAL SIGNATURE PAGES TO FOLLOW]
▇▇▇▇▇▇ ▇▇▇▇▇▇ OPERATING, L.P. "A"
By: Kinder ▇▇▇▇▇▇ ▇.▇., Inc., its sole general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice Chairman
[ADDITIONAL SIGNATURE PAGES TO FOLLOW]
▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating, L.P. "A", as the sole member and
Manager of ▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC; By
Kinder ▇▇▇▇▇▇ ▇.▇., Inc., the sole general partner of
▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "A"
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice Chairman
EXHIBIT A
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NON-FOREIGN AFFIDAVIT
The Mineral Lands Leasing Act requires that federal oil and gas leases may only
be held by qualified persons as set out in said Act and the regulations
contained in 43 CFR Part 3100. 43 CFR Section 3102.1 provides that leases or
interests therein may be acquired and held only by citizens of the United
States; associations (including partnerships and trusts) of such citizens;
corporations organized under the laws of the United States or of any State or
Territory thereof; and municipalities. With knowledge of the foregoing,
________________ ("_________"), the undersigned hereby certifies the following:
1) _________ is eligible to hold federal leases under 43 CFR Part 3100 and
the other relevant portions of the Mineral Lands Leasing Act.
2) _________'s home or office address is ____________________;
_________ understands that this certification may be disclosed to the
Bureau of Land Management and other federal or state agencies and that any
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false statement contained herein could be punished by fine,
imprisonment, or both.
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete,
and I further declare I have authority to sign this document.
_______________________________________
__________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
STATE OF ____________ ss.
ss.
COUNTY OF ___________ ss.
This instrument was acknowledged before me on March 5, 1998, by
_______________, as __________ of __________________, a ________________, and on
behalf of said ____________.
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NON-FOREIGN AFFIDAVIT
Exemption from Withholding of Tax
For
Dispositions of U.S. Real Property Interests
Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person.
To inform Shell CO2 Company, Ltd. that withholding of tax is not required upon
the disposition of a U.S. real property interest by ___________________
("_______"), the undersigned hereby certifies the following:
1) _______ is not a nonresident alien, foreign corporation, foreign
partnership, foreign trust, or foreign estate for purposes of U. S. income
taxation;
2) _______'s taxpayer identifying number is _______________; and
3) _______'s home or office address is ____________________; _______
understands that this certification may be
disclosed to the Internal Revenue Service by Shell CO2 Company, Ltd., and that
any false statement contained herein could be punished by fine, imprisonment, or
both.
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete,
and I further
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declare I have authority to sign this document.
_________________________________________
_________________________________
By:______________________________________
Name:____________________________________
Title:___________________________________
STATE OF _____________ ss.
ss.
COUNTY OF ____________ ss.
This instrument was acknowledged before me on March 5, 1998, by
_______________, as ____________________________________, a _______________, and
on behalf of said _______________.
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