EXHIBIT 10.2
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (this
"Amendment"), dated January 30, 1998, by and between Occidental
Petroleum Corporation, a Delaware corporation (the "Seller"), and
KN Energy, Inc., a Kansas corporation (the "Buyer"), amending
that certain Stock Purchase Agreement (the "Original SPA"), dated
as of December 18, 1997, by and between the Seller and the Buyer.
Capitalized terms used but not otherwise defined herein shall
have the respective meanings ascribed thereto in the Original
SPA.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller and the Buyer have entered into the
Original SPA pursuant to which the Buyer is purchasing all of the
issued and outstanding Common Stock of MidCon; and
WHEREAS, the Original SPA has previously been amended by
that certain Supplemental Agreement dated January 20, 1998 (the
"Supplemental Agreement"), between the Buyer and the Seller,
providing for, among other things, the dividend of MPSC from
MidCon to the Seller, on the terms and subject to the conditions
provided therein (the Original SPA, as amended by the
Supplemental Agreement and this Amendment is referred to herein
as the "SPA");
WHEREAS, the Buyer and the Seller have agreed to amend the
Original SPA as provided herein in order to resolve certain
issues that have arisen under the SPA in view of the passage of
time and certain interests of the Buyer and the Seller.
NOW, THEREFORE, in consideration of, and subject to, the
mutual covenants, agreements, terms and conditions herein
contained, the Parties hereto hereby agree as follows:
1. Delivery Date.
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(a) Sections 1.2, 4.2 (excluding Sections 4.2.5 and
4.2.7), 4.3, 4.4, 5.2.5, 5.3.3 and 5.3.6 of the Original SPA are
hereby amended by (i) deleting therefrom the words "at the
Closing" and inserting, in lieu thereof, the words "on the
Delivery Date," and (ii) after giving effect to the amendment
provided for in the immediately preceding clause (i), deleting
therefrom the words "Closing" and "Closing Date" and inserting,
in lieu thereof, the words "Delivery Date."
(b) Section 4.1 of the Original SPA is hereby amended
and restated in its entirety to read as follows:
"4.1 Time and Place of the Closing. Subject
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to the satisfaction or waiver of the conditions precedent
set forth herein, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take
place at the offices of the Seller, 10889 Wilshire
Boulevard, Los Angeles, California, at 11:59 p.m., Los
Angeles time, on January 31, 1998."
(c) Section 4.2.7 of the Original SPA is hereby
amended by deleting therefrom the words "Closing Date" and
inserting, in lieu thereof, the words "Delivery Date."
(d) Section 9.16 of the Original SPA is hereby amended
and restated in its entirety to read as follows:
"9.16 'Closing Date' shall mean January 31,
1998."
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(e) Article IX of the Original SPA is hereby amended
by inserting, immediately following Section 9.25, a new Section
9.25(a), which shall read in its entirety as follows:
"9.25(a) 'Delivery Date' shall mean the date
immediately preceding the Closing Date."
2. Cash Management Agreement (Section 5.1.2(b)).
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Section 5.1.2(b) of the Original SPA shall be deleted in its
entirety and the following shall be substituted therefor:
"(b) Loan Balances at Closing. The balance
------------------------
of each of the OPC Loans and the MidCon Loans as at the
Closing shall be calculated by including all amounts accrued
but not yet payable (other than cash payments which have
been settled directly notwithstanding the terms of the Cash
Management Agreement) for the period elapsed up to the
Closing, which amounts will include (i) the payment by, or
on behalf of, MidCon to the MidCon ESOP Trustee and its
advisors, (ii) the amount of Taxes of all sorts accrued
pursuant to Article VI , (iii) $5,928,000, representing the
amount by which (A) Taxes credited to MidCon during the
calendar year ending December 31, 1997, exceed (B) the
amount of Taxes which would have ultimately been credited to
MidCon for the calendar year ending December 31, 1997,
pursuant to the Tax Sharing Agreement, if it were not
terminated and (iv) any tax benefit pursuant to the Tax
Sharing Agreement for the period prior to the Closing
resulting from the payment of $5,970,000 under the Bonus
Agreements referenced in the Letter Agreement dated December
18, 1997."
3. Revision to the Schedules to the SPA (Section 5.3.3).
----------------------------------------------------
The Buyer and the Seller have agreed to amend and restate all of
the Schedules in their entirety as attached hereto and
incorporated by this reference herein. The Schedules attached to
the Original SPA shall have no further force or effect from and
after the date hereof. The Buyer hereby waives any breach of the
Seller's representations and warranties in Section 2.16 arising
as a result of the contract between MidCon and Kamine/Besicorp
("Kamine") listed in clause (d) of Schedule 2.16.5, including
Kamine's bankruptcy and failure to perform thereunder. The Buyer
and the Seller hereby amend
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Section 5.3.3 to delete the five (5) Business Days' notice
requirement for any further Schedule revisions pursuant to
Section 5.3.3 of the Original SPA.
4. Insurance Matters (Section 5.1.5). The Buyer and the
---------------------------------
Seller hereby agree that the Novation Agreement effective on the
Closing, by and among National Union Fire Insurance Company of
Pittsburgh, PA., acting on its own behalf and on behalf of its
affiliated insurance companies (collectively, the "Insurer"), the
Buyer and the Seller, together with the related Hold Harmless
Agreement by and between the Insurer and the Buyer effective on
the Closing, have been delivered in satisfaction of the
requirement for a Novation Agreement, in substantially the form
of Exhibit 5.1.5(b) to the Original SPA, and in satisfaction of
the undertaking set forth in Section 5.1.5 of the Original SPA.
5. Substitute Note.
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(a) Section 9.83 of the Original SPA is hereby amended
and restated in its entirety to read as follows:
"9.83 'Substitute Note' shall mean a note
substantially in the form of Exhibit 9.83 hereto."
------------
(b) Exhibit 9.83 to the Original SPA is hereby amended
------------
and restated in its entirety to read as set forth on Exhibit 9.83
to this Amendment.
6. Financing Arrangements (Section 5.3.4). Section 5.3.4
--------------------------------------
of the Original SPA shall be deleted in its entirety and the
following shall be substituted therefor:
"5.3.4 Substitute Note. On the Delivery Date,
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the Seller shall assign to the Buyer (a) the ESOP Note, and
(b) by execution and delivery to the Buyer of the Term
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Loan Assignment Agreement, all of the Seller's rights and
obligations under the Term Loan Agreement and, in exchange
therefor, on the Delivery Date the Buyer shall execute and
deliver to the Seller the Term Loan Assignment Agreement and
shall issue to the Seller a Substitute Note, which entitles
the holder thereof to the benefit of one or more letters of
credit that entitle the holder to draw up to $1,418,434,132
in the aggregate in the event that the Buyer fails to make a
payment of principal or interest under the Substitute Note,
which letters of credit shall be in form and substance
satisfactory to the Seller, and shall be issued by a bank or
group of banks with each such bank either (a) having an
investment grade credit rating by either Standard & Poor's
Corporation ("S&P") or Moody's Investors Service, Inc.
("Moody's"), so long as neither of the above rating agencies
has provided a credit rating below investment grade,
(b) having been agreed to by the Seller or (c) if a bank is
not such an investment grade credit, its portion of the
letter of credit can be fronted by a bank having such
investment grade credit."
7. MC Panhandle Indemnity (Section 8.3.1).
--------------------------------------
Section 8.3.1(d) of the Original SPA shall be deleted in its
entirety and the following shall be substituted therefor:
"(d) any loss, claim, damage, liability, cost
or expense arising out of or relating to any claims by
Persons which own interests in the assets assigned by MidCon
Gas Services Corp. ("MGS") to MC Panhandle Inc. ("MCP")
pursuant to the Assignment and Assumption Agreement dated
December 31, 1996 by and between MGS and MCP (the
"Assignment"), including those cases referred to on
Schedule 2.13, but only to the extent such losses, claims,
damages, liabilities, costs and expenses (i) relate to the
liability of MidCon or its Subsidiaries in such matter and
(ii) exceed $10 million; provided, however, that the Seller
shall be entitled to defend, in accordance with the
procedures set forth in Section 8.4.5, all actions, suits,
proceedings or claims referenced in this clause (d).
Notwithstanding anything to the contrary contained in this
Agreement or in the Assignment, the Parties hereby agree
that to avoid any dispute regarding the interpretation of
any of the other relevant provisions of this Agreement or
the Assignment, the Buyer shall, or shall cause MidCon or
MGS to, pay for, and the Seller shall, or shall cause MCP
to, charge MidCon or MGS for, all amounts payable to
discharge all losses, claims, damages, liabilities, costs
and expenses incurred by the Seller or its Subsidiaries,
including MCP (in each case, directly or on behalf of MidCon
and its subsidiaries), to defend, to discharge judgments and
to pay the cash portion of settlements relating to or
arising from the ownership or operation of the assets
assigned pursuant to the Assignment, regardless of whether
or not the payments are specifically made to discharge
claims for the period prior to December 31, 1996; provided,
however, that such amounts shall under no circumstances
exceed $10 million. The Buyer shall, or shall cause MidCon
and MGS, to pay the foregoing amounts ten (10) days after
receipt of information properly documenting that the amounts
were incurred after the Closing. None of the obligations of
the Buyer, MidCon or MGS to reimburse the Seller for such
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amounts shall be terminated by reason of the limitations or
survival provisions set forth in Section 8.1 of the SPA."
8. Orders of Federal Energy Regulatory Commission
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Regarding the Complaint Filed by Amoco. The Buyer hereby waives
- --------------------------------------
all claims it may have, now or in the future, against the Seller
arising directly or indirectly from the penalties imposed by the
FERC in its January 16, 1998, orders or the settlement of the
Amoco matter identified in Schedule 2.13 to the SPA.
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9. Financial Information (Section 10.1). From time to
------------------------------------
time, the Seller may require financial information or other
information regarding MidCon's business and operations through
January 31, 1998, in order to (a) review the Loan Balances at the
Closing, (b) prepare Tax returns including any periods ending on
or prior to January 31, 1998, or (c) to satisfy legal or
operational requirements, including financial reporting
requirements, or to obtain any revenue or SIC Code information
which may be required by the HSR Act. The Buyer hereby agrees
that it shall promptly furnish such information upon the request
of the Seller.
10. Entire Agreement; Third Party Beneficiaries (Section
----------------------------------------------------
10.10). This Amendment, taken together with (i) the Original
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SPA, as amended by this Amendment and the Supplemental Agreement,
(ii) those certain Confidentiality Agreements by and between the
Seller and the Buyer (including the documents and the instruments
referred to herein and therein) as more fully described in
Section 10.3 of the SPA, (iii) those certain letter agreements
from the Seller to the Buyer dated December 18, 1997, and the
date hereof, respectively, regarding compensation of certain
officers of MidCon and (iv) the Supplemental Agreement
(a) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof, and (b) except
as provided under
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Section 5.2.3, Section 5.2.6, Section 8.2 and Section 8.3 of the
SPA, are not intended to confer upon any person other than the
Parties any rights or remedies hereunder.
11. Effect of Amendment and Modification. Except as
------------------------------------
amended by this Amendment and the Supplemental Agreement, the
Original SPA shall continue in full force and effect.
12. Counterparts. This Amendment may be executed in two or
------------
more counterparts, each of which shall be deemed an original but
all of which shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the Seller and the Buyer have caused
this Amendment to be signed by their respective officers
thereunder duly authorized, all as of the date first written
above.
OCCIDENTAL PETROLEUM CORPORATION
("Seller")
By: STEPHEN I. CHAZEN
-----------------------------
Name: Stephen I. Chazen
Title: Executive Vice
President - Corporate
Development
KN ENERGY, INC.
("Buyer")
By: LARRY D. HALL
-----------------------------
Name: Larry D. Hall
Title: Chairman, President
and Chief Executive
Officer
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EXHIBIT 9.83
To Amendment No. 1 To Stock Purchase Agreement
KN ENERGY, INC.
PROMISSORY NOTE
$1,394,846,122 January 30, 1998
1. Payment of Principal and Interest. FOR VALUE RECEIVED,
the undersigned, KN Energy, Inc., a Kansas corporation
("Obligor"), promises to pay to the order of Occidental Petroleum
Corporation, a Delaware corporation (together with its successors
and assigns, the "Lender"), the principal sum of one billion,
three hundred ninety four million, eight hundred forty six
thousand, one hundred and twenty two dollars ($1,394,846,122) on
the Maturity Date, and to pay interest on the unpaid principal
amount hereof from time to time outstanding under this Promissory
Note, at the rate of 5.798% per annum, from the date hereof,
payable quarterly on each Interest Payment Date; provided,
however, that if any Interest Payment Date is not a Business Day,
interest shall be paid on the next succeeding Business Day. Any
amount of principal of, or interest on, this Promissory Note
which is not paid when due (whether by acceleration or otherwise)
shall be payable on demand and shall bear interest from the date
when due until paid, at a rate per annum equal to the interest
rate set forth above plus two percent (2%) per annum. All
computations of interest under this Promissory Note shall be made
on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) elapsed.
All interest which shall be accrued under this Promissory Note
shall become due and payable as set forth above and upon the
acceleration (as hereinafter set forth) of this Promissory Note.
The rate of interest payable on this Promissory Note shall in no
event exceed the maximum rate of interest permitted by applicable
law.
2. Definitions. As used herein, the following terms shall
have the following respective meanings:
"Business Day" shall mean any day except a Saturday, Sunday
or other day on which commercial banks in New York City are
authorized by law to close.
"Interest Payment Date" shall mean January 1, April 1,
July 1 and October 1 of each year.
"Maturity Date" shall mean January 4, 1999.
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3. Representations and Warranties. Obligor represents and
warrants as follows:
(a) Obligor is a corporation duly incorporated, validly
existing and in good standing under the laws of the
state of Kansas and has all requisite corporate power to
issue and deliver this Promissory Note. The execution,
delivery and performance by Obligor of this Promissory
Note have been duly authorized by all necessary
corporate action on the part of Obligor.
(b) Neither the issuance of this Promissory Note nor
the performance by Obligor of its obligations hereunder
will violate any provision of law, regulation, judgment
or order or any contract, agreement, indenture, note or
other instrument binding upon Obligor or its charter or
by-laws or give cause for acceleration of any
indebtedness of Obligor.
(c) No authority from, or approval by, any governmental
body, commission or agency, state or federal, is
required for the execution, delivery or performance by
Obligor of this Promissory Note.
4. Security. In the event of any failure of Obligor to
make any payment of interest under this Promissory Note, the
Lender shall be entitled to draw on that certain Irrevocable
Standby Letter of Credit No. S-868480, dated January 30, 1998,
issued by Morgan Guaranty Trust Company of New York, or any
letter or letters of credit issued in replacement thereof (such
letter of credit and any such replacements, the "Interest Letter
of Credit"). In the event of any failure of Obligor to make any
payment of principal under this Promissory Note, the Lender shall
be entitled to draw on those certain Irrevocable Standby Letter
of Credit Nos. S-868479, C7345582, P-353345 and 950161, dated
January 30, 1998, issued by Morgan Guaranty Trust Company of New
York, Bank of America National Trust and Savings Association, The
Chase Manhattan Bank and NationsBank N.A., respectively, or any
letter or letters of credit issued in replacement thereof (such
letter of credit and any such replacements, the "Principal Letter
of Credit" and, together with the Interest Letter of Credit, the
"Letters of Credit"). Under certain circumstances, including the
consent of the Lender, Obligor may, from time to time, pledge
collateral to secure payment of all or a portion of the payments
of interest or principal required by Obligor under this
Promissory Note (each such pledge, a "Pledge") pursuant to one or
more security agreements or one or more securities account
control agreements (each, a "Security Agreement").
5. Event of Default. The occurrence of any of the
following events, acts or occurrences shall constitute an "Event
of Default" hereunder:
(i) either (a) Obligor shall generally fail to pay, or
admit in writing its inability to pay, its debts as they become
due, or shall voluntarily commence any case or proceeding or file
any petition under any bankruptcy, insolvency or similar law or
seeking dissolution, liquidation or reorganization or the
appointment of a receiver, trustee, custodian or liquidator for
itself or a
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substantial portion of its property, assets or business or to
effect a plan or other arrangement with its creditors, or shall
file any answer admitting the jurisdiction of the court and the
material allegations of any involuntary petition filed against it
in any bankruptcy, insolvency or similar case or proceeding, or
shall be adjudicated bankrupt, or shall make a general assignment
for the benefit of creditors, or shall consent to, or acquiesce
in the appointment of, a receiver, trustee, custodian or
liquidator for itself or a substantial portion of its property,
assets or business, or (b) corporate action shall be taken by
Obligor for the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary petition
shall be commenced or filed against Obligor under any bankruptcy,
insolvency or similar law or seeking the dissolution, liquidation
or reorganization of Obligor or the appointment of a receiver,
trustee, custodian or liquidator for Obligor or of a substantial
part of the property, assets or business of Obligor, or any writ,
judgment, warrant of attachment, execution or similar process
shall be issued or levied against a substantial part of the
property, assets or business of Obligor, and such proceedings or
petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be
released, vacated or fully bonded, within sixty (60) days after
commencement, filing or levy, as the case may be; or
(iii) Obligor shall default in any payment of principal
or interest under this Promissory Note and such default shall
continue unremedied; or
(iv) Any representation by Obligor contained in this
Promissory Note may prove at any time to be incorrect in any
material respect when made; or
(v) Obligor shall default in the performance or observance
of any other term, covenant or agreement contained in this
Promissory Note and such default shall continue unremedied; or
(vi) Either (a) the Principal Letter of Credit shall cease
to be in full force and effect, other than as a result of the
Letter of Credit Amount (as defined in the Principal Letter of
Credit) being reduced to zero in accordance with the terms of
paragraph 2 of the Principal Letter of Credit, or (B) the
Interest Letter of Credit shall cease to be in full force and
effect, other than as a result of the Letter of Credit Amount (as
defined in the Interest Letter of Credit) being reduced to zero
in accordance with the terms of paragraph 2 of the Interest
Letter of Credit; or
(vii) Any Pledge or any Security Agreement relating
thereto shall cease to be in full force and effect.
6. Notice of Event of Default. Obligor shall notify the
Lender within five (5) days after the occurrence of any Event of
Default of which Obligor acquires knowledge.
7. Remedies. Upon the occurrence of an Event of Default
hereunder (unless all Events of Default have been cured or waived
by the Lender), the Lender may, at its option, (i) by
3
written notice to Obligor, declare the entire unpaid principal
balance of this Promissory Note, together with all accrued
interest thereon, immediately due and payable regardless of any
prior forbearance, and (ii) exercise any and all rights and
remedies available to it under applicable law, including, without
limitation, the right to collect from Obligor all sums due under
this Promissory Note.
8. Payments. Payments of the principal of, interest on,
and any other sums owing under, this Promissory Note shall be
made in lawful money of the United States of America in Federal
Reserve Bank funds or other immediately available funds. All
such payments shall be made at such place or places in the United
States of America, and in such manner, as may be specified by
Lender to Obligor in writing.
9. No Prepayments. Obligor may not prepay all or any part
of any outstanding principal amount.
10. Obligations Absolute and Unconditional. The Obligor's
obligations hereunder are absolute and unconditional and shall
not be affected by any circumstances whatsoever. The Obligor
hereby agrees to make or cause to be made all payments hereunder
in full when due, whether in respect of principal, interest or
any other amount owed hereunder without notice, demand,
counterclaim, set-off, deduction, defense, abatement, suspension,
limitation, deferment, diminution, recoupment or other right that
the Obligor may have against the Lender or any other Person and
hereby waives and agrees with respect to any payment hereunder
not to assert any defense or right of counterclaim, set-off or
recoupment, or other right that it may have against the Lender or
any other Person.
11. Assignment, Etc. Without the consent of the Obligor,
the Lender may assign, pledge or grant to one or more assignees,
all or a portion of its interests and rights under this Note.
12. Notices. All notices, demands and other communications
required or permitted by this Promissory Note to be given to, or
made upon, Obligor or Lender shall be in writing and shall be
personally delivered or sent by registered or certified mail,
postage prepaid, return receipt requested, or by telecopier, to
the following address of Obligor or Lender, as the case may be,
or to such other address with respect to Obligor or Lender as
Obligor or Lender shall notify the other in writing:
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If to Obligor:
KN Energy, Inc.
P.O. Box 281304
370 Van Gordon
Lakewood, Colorado 80228-8304
Attention: Treasurer
Facsimile No.: (303) 763-3155
If to Lender:
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
Attention: Vice President and Treasurer
Facsimile No.: (310) 443-6661
Each such notice, demand or other communication shall be deemed
to be given for the purposes of this Promissory Note on the day
on which such notice, demand or other communication is delivered
or sent to the intended recipient thereof in accordance with the
provisions of this Promissory Note.
13. Fees and Expenses. In addition to, and not in
limitation of, any rights which Lender may have under this
Promissory Note, any agreement or applicable law, Obligor agrees,
subject only to any limitation imposed by applicable law, to pay
all expenses, including reasonable attorneys' fees and legal
expenses, paid or incurred by Lender in endeavoring to collect
any amounts payable hereunder which are not paid when due,
whether by acceleration or otherwise.
14. Waiver. The rights and remedies of the Lender under
this Promissory Note shall be cumulative and not alternative. No
waiver by the Lender of any right or remedy under this Promissory
Note shall be effective unless in a writing signed by the Lender.
Neither the failure nor any delay in exercising any right, power
or privilege under this Promissory Note will operate as a waiver
of such right, power or privilege and no single or partial
exercise of any such right, power or privilege by the Lender will
preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
To the maximum extent permitted by applicable law: (a) no claim
or right of the Lender arising out of this Promissory Note can be
discharged by the Lender, in whole or in part, by a waiver or
renunciation of the claim or right unless in a writing, signed by
the Lender; (b) no waiver that may be given by the Lender will be
applicable except in the specific instance for which it is given;
and (c) no notice to or demand on Obligor will be deemed to be a
waiver of any obligation of Obligor or of the right of the Lender
to take further action without notice or demand as provided in
this Promissory
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Note. Obligor hereby waives diligence, presentment, demand,
protest, notice of dishonor and protest and any other notice of
any kind whatsoever.
15. Severability. If any provision in this Promissory Note
is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Promissory Note will
remain in full force and effect. Any provision of this
Promissory Note held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not
held invalid or unenforceable.
16. Successors and Assigns. This Promissory Note shall
bind Obligor and its successors and assigns.
17. Section Headings, Construction. The headings of
Sections in this Promissory Note are provided for convenience
only and will not affect its construction or interpretation. All
words used in this Promissory Note will be construed to be of
such gender or number as the circumstances require. Unless
otherwise expressly provided, the words "hereof" and "hereunder"
and similar references refer to this Promissory Note in its
entirety and not to any specific section or subsection hereof.
18. Governing Law. This Promissory Note shall be governed
by, and construed in accordance with, the laws of the State of
New York.
KN ENERGY, INC.
By:
--------------------
Name:
Title:
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