EXHIBIT 10.1
CONTRIBUTION AND ASSUMPTION AGREEMENT
This CONTRIBUTION AND ASSUMPTION AGREEMENT is entered into as of August 31,
1996 by and among CHEVRON U.S.A. INC., a Pennsylvania corporation ("Chevron"),
CHEVRON PIPE LINE COMPANY, a Delaware corporation ("CPL"), CHEVRON CHEMICAL
COMPANY, a Delaware corporation ("CCC")(Chevron, CPL and CCC are hereinafter
sometimes referred to collectively as the "Contributing Parties") and MIDSTREAM
COMBINATION CORP., a Delaware corporation ("Newco").
W I T N E S S E T H:
WHEREAS, Chevron, Newco and NGC Corporation, a Delaware corporation
("NGC"), have entered into a Combination Agreement and Plan of Merger dated as
of May 22, 1996 (the "Combination Agreement"), pursuant to which the
Contributing Parties will contribute the Contributed Businesses (hereinafter
defined) and the Contributed West Texas LPG Pipeline Business (as hereinafter
defined) to Newco in exchange for shares of Common Stock and Preferred Stock of
Newco and the assumption by Newco of liabilities relating to the Contributed
Businesses, including the indebtedness described in paragraph 4 hereof, as
hereinafter in this Agreement provided;
NOW THEREFORE, in consideration of the mutual promises contained herein,
the mutual benefits to be derived for each party hereunder and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Contributing Parties and Newco hereby agree as follows:
1. Contribution of ▇▇▇▇▇▇ Business. The Contributing Parties hereby
contribute, assign, transfer, convey and deliver to Newco the following assets,
properties, contracts and other rights, titles and interests (all such assets
and rights other than the Excluded ▇▇▇▇▇▇ Assets described below are hereinafter
collectively referred to as the "Contributed ▇▇▇▇▇▇ Business"):
a. Facilities. The natural gas and natural gas liquids ("NGLs")
processing facilities, NGL fractionation facilities, pipelines, gathering lines
and systems, storage facilities, terminaling facilities, transportation
facilities and other facilities relating to the purchase, sale, exchange,
gathering, processing or fractionating of natural gas and NGLs which are more
particularly described on Schedule 1A hereto, including all leases, subleases,
fee estates and leaseholds, easements, permits, access licenses, servitudes,
rights-of-way, surface leases and other real property and real property
interests related or pertaining thereto (collectively, the "Facilities");
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b. Contracts. All rights in or derived from the contracts listed on
Schedule 1B hereto, including without limitation all rights to receive payment
for products sold and/or services rendered and all rights to receive goods and
services purchased pursuant to such contracts and to assert claims and take such
other actions in respect of breaches, defaults or other violations thereof and
otherwise; provided, however, that the foregoing shall not include any contracts
associated with the Excluded ▇▇▇▇▇▇ Assets or any employment or severance
agreements or an employee benefit plan, policy, program, agreement or
arrangement of Chevron or any of its Subsidiaries or Affiliates;
c. Personal Property and Fixtures. All of the Contributing Parties'
right, title and interest in all fixtures, personal property and improvements
which are located on, used or held for use in connection with the Facilities,
including without limitation, the boilers, buildings, compression facilities,
machinery, equipment, furnishings, automobiles, trucks and other vehicles and
rolling stock, tools, telephone and telegraph lines, and other facilities and
similar property located on such Facilities which are owned or leased by ▇▇▇▇▇▇
Petroleum Company (other than those assets described on Schedule 1EX);
d. Inventories. All of Chevron's right, title and interest in (i) the
inventories of materials (including, without limitation, natural gas and NGLs),
raw materials, work in process and finished products of ▇▇▇▇▇▇ Petroleum Company
("Inventory"), but excluding any such inventory relating to the Excluded ▇▇▇▇▇▇
Assets as identified on Schedule 1EX, and (ii) spare parts, replacement and
component parts, and office and other supplies which are used or held for use by
Chevron or any of its Subsidiaries or Affiliates in connection with the
operation of the Facilities (but excluding any such inventory related to the
Excluded ▇▇▇▇▇▇ Assets);
e. Books and Records. All contract files, gas processing files, division
order files, abstracts, product design data, plans, blueprints, specifications,
manuals, designs, drawings, surveys, engineering reports, equipment and parts
lists, test reports, materials standards, catalogues, performance and quality
control standards, procedures and records, price lists, mailing lists,
photographs, production data, sales and purchase records, sales order files,
records, data, media materials and plates, advertising, marketing, promotional
and sales materials, files and materials relating to suppliers, vendors and
other service providers, and all other books, records, files, maps, accounting
information and records and other similar information or data in the possession
of
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Chevron relating to the operation of the Facilities and Chevron's
transferable rights in the computer and automatic machinery software and
programs and source disks that are used by ▇▇▇▇▇▇ Petroleum Company in
connection with the assets described in this Section 1 (together with all
guides, forms, manuals, tapes and other materials employed in connection
therewith); provided, however, that the foregoing shall not include any
proprietary information or manuals of Chevron Corporation or other intellectual
property retained by Chevron but licensed to Newco pursuant to an Intellectual
Property License Agreement of even date herewith;
f. Licenses and Permits. To the extent permitted by law, all of the
Contributing Parties' right, title and interest in all permits, approvals,
licenses, product registrations, safety certifications and other similar
authorizations used in the operation of the Facilities, including, without
limitation, those listed on Schedule 1F hereto;
g. Trademarks and Tradenames. All of Chevron's right, title and interest
in all common law rights and interests in the tradenames "The ▇▇▇▇▇▇ Petroleum
Company," "Warrengas," "▇▇▇▇▇▇ Petroleum," or any derivation of any such name
and the design, tradenames and service marks relating to ▇▇▇▇▇▇ Petroleum
Company other than those expressly excluded pursuant to Section 15.1 of the
Combination Agreement;
h. Rights in Warranties. All rights in, to and under all express or
implied representations, warranties, indemnities, covenants or other agreements
of third parties arising from or attributable to the assets constituting the
Contributed ▇▇▇▇▇▇ Business;
provided, however, that the Contributed ▇▇▇▇▇▇ Business does not include and the
Contributing Parties' shall retain all of their right, title and interest in and
to the assets, properties, rights, titles, interests and contracts relating to
▇▇▇▇▇▇ Petroleum Company that are not expressly described in this Section 1,
including, without limitation, the Venice Complex and the Venice Gas Gathering
Company, the lease covering ▇▇▇▇▇▇ Petroleum Company's Tulsa, Oklahoma
headquarters and those other assets described on Schedule 1EX (collectively, the
"Excluded ▇▇▇▇▇▇ Assets").
2. Contribution of NGBU Business. Chevron hereby contributes, assigns,
transfers, conveys and delivers to Newco the following assets, properties,
contracts and other rights, titles and interests (all such assets and rights
other than the Excluded NGBU Assets defined below are hereinafter collectively
referred to as the "Contributed NGBU Business"):
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a. Contracts. All rights in or derived from the contracts listed on
Schedule 2A hereto, including without limitation all rights to receive payment
for products sold and/or services rendered and all rights to receive goods and
services purchased pursuant to such contracts and to assert claims and take such
other actions in respect of breaches, defaults or other violations thereof and
otherwise;
b. Fixed Assets. The fixtures, personal property, computer hardware and
software used by the employees of the NGBU, as are more specifically identified
on Schedule 2B hereto;
c. Book and Records. All contract files, gas marketing files, division
order files, abstracts, plans, specifications, manuals, materials standards,
catalogues, performance and quality control standards, procedures and records,
price lists, mailing lists, photographs, sales and purchase records, sales order
files, records, data, media materials and plates, advertising, marketing,
promotional and sales materials, files and materials relating to suppliers,
vendors and other service providers, and all other books, records, files, maps,
accounting information and records, and other similar information or data in the
possession of Chevron relating to the Contributed NGBU Business; provided,
however, that the foregoing shall not include any proprietary information or
manuals of Chevron Corporation or other intellectual property retained by
Chevron but licensed to Newco pursuant to an Intellectual Property License
Agreement of even date herewith;
d. Licenses and Permits. To the extent permitted by law, all permits,
approvals, licenses and other similar authorizations used in connection with the
Contributed NGBU Business including, without limitation, those listed on
Schedule 2D hereto;
e. Rights in Warranties. All rights in, to and under all express or
implied representations, warranties, indemnities, covenants or other agreements
of third parties arising from or attributable to the assets constituting the
Contributed NGBU Business;
provided, however, that the Contributed NGBU Business does not include and
Chevron shall retain all of Chevron's right, title and interest in and to the
assets, properties, rights, titles, interests, and contracts relating to the
NGBU that are not expressly described in this Section 2, including, without
limitation, the assets and contracts identified on Schedule 2EX (collectively,
the "Excluded NGBU Assets").
3. Representations. Without limiting any rights it may have under the
Combination Agreement, Chevron warrants title to
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the assets comprising the Contributed Businesses (including those purported to
be conveyed by CPL and CCC) to the extent, BUT ONLY TO THE EXTENT, set forth in
the Combination Agreement, subject to the limitations and conditions regarding
the warranty of title and the remedies contained therein. EXCEPT AS SET FORTH IN
THE COMBINATION AGREEMENT, THE CONTRIBUTING PARTIES MAKE NO WARRANTIES OR
REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
WITH RESPECT TO TITLE, MAINTENANCE, REPAIR, CONDITION, DESIGN, QUALITY,
CONDITION, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, SAFETY OF EQUIPMENT, TITLE
TO PERSONAL PROPERTY, COMPLIANCE WITH GOVERNMENTAL REGULATIONS OR OTHERWISE.
4. Assumption of Indebtedness. Newco, for itself, its successors and
assigns, hereby assumes and from and after the Closing, agrees to duly and
timely pay, perform and discharge $155.373 million in certain related
indebtedness of Chevron to Chevron Capital U.S.A. Inc. (the "Assumed
Indebtedness") described in the Loan Agreement effective as of August 25, 1994
pursuant to the Assumption Agreement in substantially the form of Exhibit 4.
5. Liabilities. Without limiting its rights under the Combination
Agreement, Newco, for itself, its successors and assigns, hereby assumes from
the Contributing Parties from and after the Contribution Time and agrees to pay,
perform and discharge, and shall to the fullest extent permitted by law (but
subject to the further provisions of this paragraph 5), indemnify and hold the
Contributing Parties and their Affiliates harmless against, any and all
liabilities, obligations or claims associated with the ownership and operation
of the Contributed Businesses, whether or not such liabilities, obligations or
claims are known at the date hereof and whether or not such liabilities,
obligations or claims arise from the Contributing Parties ownership and
operation of the Contributed Businesses prior to the date hereof or from Newco's
ownership and operation of the Contributed Businesses subsequent to the date
hereof (all such liabilities, obligations or claims described below are
hereinafter referred to as the "Assumed Liabilities," and together with the
Contributed ▇▇▇▇▇▇ Business and the Contributed NGBU Business, the "Contributed
Businesses"), including without limitation the following:
a. all liabilities, obligations or claims pursuant to the leases,
easements, permits, licenses, contracts and contract rights included in the
Contributed ▇▇▇▇▇▇ Business and the Contributed NGBU Business;
b. all liabilities, obligations or claims arising from litigation or
arising from the ownership or operation of the Contributed ▇▇▇▇▇▇ Business or
the Contributed NGBU Business or any assets thereof, including, without
limitation, the Facilities;
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c. any and all liabilities, obligations or claims arising from the
presence or Release of Hazardous Materials (as such terms are defined in the
Combination Agreement) in or on, or migration or release from, any assets or
properties, included in the Contributed ▇▇▇▇▇▇ Business or the Contributed NGBU
Business; and
d. any and all other liabilities, obligations or claims, contingent or
otherwise, relating to the Contributed ▇▇▇▇▇▇ Business and the Contributed NGBU
Business (but not the Excluded ▇▇▇▇▇▇ Assets and Excluded NGBU Assets).
This contribution is made expressly subject to all such agreements, leases,
easements and other contracts relating to the Contributed Businesses or any of
their constituent assets, including the Facilities, whether or not the same are
herein specifically identified. Notwithstanding the foregoing, the assumption
of the Assumed Liabilities shall not waive any valid defense (a "Defense") that
was available to any Contributing Party, as applicable, with respect to the
Assumed Liabilities, cause any other party to be a third party beneficiary
thereunder or otherwise enlarge any rights or remedies of any third party under
or with respect to any of the Assumed Liabilities. Upon execution and delivery
of this Agreement by the parties hereto, any Defense to the Assumed Liabilities
shall inure to the benefit of Newco or its designees and, upon consummation of
the Combination, any such Defense shall inure to the benefit of the Surviving
Corporation or its Subsidiaries or Affiliates (as applicable), in each case to
the fullest extent permissible under applicable law.
Newco will not assume and Chevron shall retain, and shall to the fullest
extent permitted by law, indemnify and hold Newco and its Affiliates harmless
against, any and all liabilities, obligations or claims associated with (i) the
offsite disposal of Hazardous Materials (as such term is defined in the
Contribution Agreement) from the operation of the Contributed Businesses prior
to the Contribution Time, (ii) underpayment of royalties on the production of
natural gas prior to the Contribution Time, (iii) the litigation described on
Schedule 5 hereto, (iv) Excluded ▇▇▇▇▇▇ Assets and (v) Excluded NGBU Assets
(collectively, (i) through (v), the "Retained Liabilities").
6. Contributed West Texas LPG Pipeline Business. CPL hereby contributes,
assigns, transfers, conveys and delivers to Newco an undivided 49% interest in
and to those assets identified on Schedule 6 hereto (such interest collectively,
the "Contributed West Texas LPG Pipeline Business"), including all rights in, to
and under all express or implied representations, warranties, indemnities,
covenants or other agreements of third parties arising from or attributable to
the assets constituting the Contributed West Texas LPG Pipeline Business. CPL
represents that such assets are free and clear of any lien,
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mortgage, security interest or other encumbrance arising by, through or under
CPL, and that such assets, when combined with the 51% interest in those assets
identified on Schedule 6 to be retained by CPL, are in all material respects
adequate for the purposes for which such assets are presently used. CPL, for
itself, its successors and assigns, hereby agrees to pay, perform and discharge,
and shall to the fullest extent permitted by law, indemnify and hold Newco, its
Affiliates and their respective successors and assigns harmless against, any and
all liabilities, obligations or claims (including, without limitation, those
arising from the presence or Release of Hazardous Materials) arising out of or
in any way associated with the Contributed West Texas LPG Pipeline Business, but
only to the extent such liabilities, obligations or claims arise out of CPL's
ownership or operation of the Contributed West Texas LPG Pipeline Business prior
to the Contribution Time, whether or not such liabilities, obligations or claims
are known as of the date hereof. Newco, for itself, its successors and assigns,
hereby agrees that from and after the Contribution Time, it shall be responsible
for, and shall to the fullest extent permitted by law, indemnify and hold CPL
and its Affiliates harmless against, any and all liabilities, obligations or
claims associated with the Contributed West Texas LPG Pipeline Business but only
to the extent such liabilities, obligations or claims arise out of the Surviving
Corporation's ownership of the Contributed West Texas LPG Pipeline Business
subsequent to the Contribution Time.
7. Consents to Assignment; Transfer Restrictions. Should any asset
included in the Contributed Businesses or the Contributed West Texas LPG
Pipeline Business be subject to a valid consent to assign or other restriction
on transfer as to which the contribution hereunder would be a breach of such
obligation or result in the forfeiture, termination or significant loss of use
of such asset, then such asset may be excluded herefrom and from the assignment
and shall be deemed not transferred unless and until any obligation to a third
party is fulfilled. The exclusion of less than all the assets included in the
Contributed Businesses and the Contributed West Texas LPG Pipeline Business
pursuant to this provision shall not affect the validity of the transfer of the
non-excluded assets.
8. Issuance of Shares; Investment. In exchange for the contribution of
the Contributed Businesses and the Contributed West Texas LPG Pipeline Business,
Newco will issue (i) 38,623,210 shares of Newco Common Stock to Chevron, (ii)
7,815,363 shares of Newco Series A Participating Preferred Stock to Chevron and
(iii) a promissory note in favor of Chevron on behalf of itself, CCC and CPL in
the amount of $138.4 million. Chevron hereby represents to Newco that it is
acquiring the shares of Common Stock and Preferred Stock of Newco for its own
account and not for the account of any other person. Chevron is acquiring such
shares for investment to continue its involvement in the combined midstream
businesses of
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Chevron and NGC and not with a view to distribution or resale thereof.
9. Real Property Disclosures. In connection with the transfer of real
property constituting part of the Contributed Businesses and the Contributed
West Texas LPG Pipeline Business located in the State of Texas, the Contributing
Parties hereby affirm the disclosures set forth in Section 16.14 of the
Combination Agreement as amended by Exhibit 9 to this Agreement. Newco
represents that it is aware that the disclosures contained in Exhibit 9 may be
incomplete and agrees that Chevron may amend such disclosures from time to time
prior to the conveyance of the real property to comply with disclosure generally
applicable to the transfer of real estate in the State of Texas ("General
Disclosures"). Newco further waives any rights it may have arising out of the
incompleteness of any General Disclosure given in the Combination Agreement or
Exhibit 9 or the failure to give any additional General Disclosure required to
be given by any state or local law, statute or ordinance including, but not
limited to, Section 230.005 of the Texas Local Government Code, Section 257.004
of the Texas Transportation Code, Section 61.025 of the Texas Natural Resources
Code, Section 33.135 of the Texas Natural Resources Code and Section 49.452 of
the Texas Water Code.
10. Further Assurances. The Contributing Parties shall execute Deeds and
a ▇▇▇▇ of Sale in the forms attached hereto as Exhibit 10(a) and Exhibit 10(b),
respectively, and made a part hereof. Chevron and Newco shall execute an
Assignment of Rights and Obligations Under Agreements, Assignment of Leases and
Intellectual Property License Agreement in the forms attached hereto as Exhibit
10(c), Exhibit 10(d) and Exhibit 10(e) and made a part hereof. The Contributing
Parties and Newco will cause to be executed and delivered from time to time at
the request of the other such other all such further instruments of conveyance,
assignments and further assurances as may be required to transfer and assign the
title of the Contributing Parties to the assets included in the Contributed
Businesses and the Contributed West Texas LPG Pipeline Business to Newco and the
Surviving Corporation and to effect the provisions of this Agreement.
11. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no party hereto shall assign any of its rights, duties or
privileges under this Agreement without the prior written consent of the other,
but no such consent is required for any further transfer of the Contributed
Businesses or the Contributed West Texas LPG Pipeline Business.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, as if both parties hereto
were resident and doing
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business in such state, except to the extent that the law of the states in which
any of the assets are located necessarily apply to the construction of this
Agreement as it applies to the portion of the assets located in such states.
13. Headings; Terms. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meanings of the
provisions hereof. Unless otherwise indicated herein, capitalized terms shall
have the meanings set forth in the Combination Agreement.
IN WITNESS WHEREOF, Chevron, CPL, CCC and Newco have duly executed this
Agreement as of the date set forth above, but effective for all purposes as of
11:58 p.m., Houston, Texas time on August 31, 1996 (the "Contribution Time").
CHEVRON U.S.A. INC.
By --------------------------------
Title -----------------------------
CHEVRON PIPE LINE COMPANY
By --------------------------------
Title -----------------------------
CHEVRON CHEMICAL COMPANY
By --------------------------------
Title -----------------------------
MIDSTREAM COMBINATION CORP.
By --------------------------------
Title -----------------------------
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LIST OF SCHEDULES AND EXHIBITS
Schedules
Schedule 1A ▇▇▇▇▇▇ Contributed Assets
Schedule 1B ▇▇▇▇▇▇ Contracts
Schedule 1EX ▇▇▇▇▇▇ Excluded Assets
Schedule 1F ▇▇▇▇▇▇ Licenses and Permits
Schedule ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ Contributed Assets
Schedule 2D NGBU Licenses and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ Excluded Assets
Schedule 5 Chevron Retained Litigation
Schedule 6 West Texas LPG Pipeline Assets
Exhibits
Exhibit 4 Note Assumption Agreement
Exhibit 8 Real Property Disclosures
Exhibit 10(a) Deeds (fee and pipeline)
Exhibit 10(b) ▇▇▇▇ of Sale
Exhibit 10(c) Assignment of Rights and Obligations Under Agreements
Exhibit 10(d) Assignment of Leases
Exhibit 10(e) Intellectual Property License Agreement
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