EXHIBIT 2.5
CROSS-INDEMNIFICATION AGREEMENT
This Cross-Indemnification Agreement (this "Agreement") is entered into as
of this 2nd day of May, 1996, by and between Snyder Oil Corporation, a Delaware
corporation ("Snyder"), and Patina Oil & Gas Corporation, a Delaware corporation
("Patina").
R E C I T A L S:
WHEREAS, Snyder, Patina, Patina Merger Corporation, a Delaware corporation,
and Gerrity Oil & Gas Corporation, a Delaware corporation ("Gerrity"), have
entered into that certain Amended and Restated Agreement and Plan of Merger
dated as of January 16, 1996 and amended and restated as of March 20, 1996 (the
"Merger Agreement");
WHEREAS, as a result of the transactions contemplated by the Merger
Agreement, Patina and/or its subsidiaries own the Business (as defined in the
Merger Agreement) and Gerrity has become a wholly owned subsidiary of Patina
(the Business and all of the activity of Patina and its subsidiaries after the
Effective Time (as defined below) are collectively referred to hereinafter as
the "Operations");
WHEREAS, in accord with the Merger Agreement, in connection with the
Contribution (as defined in the Merger Agreement), Snyder and Patina desire to
set forth the respective indemnification rights and obligations of each party
with respect to certain liabilities.
NOW THEREFORE, in consideration of the Contribution, of the premises and
mutual covenants hereinafter set forth, and for other good and valuable
consideration, the parties hereto hereby agree as follows:
1. Definitions.
(a) An "Affiliate" of a party shall mean any individual, corporation,
limited liability company, partnership, trust or other legally recognized
entity controlling, controlled by or under common control with such party.
(b) "Business" shall have the meaning assigned that term in the Merger
Agreement.
(c) "Contribution" shall have the meaning assigned that term in the
Merger Agreement.
(d) "Effective Time" shall have the meaning assigned that term in the
Merger Agreement.
-1-
(e) "Field Sub" shall have the meaning assigned that term in the
Merger Agreement.
(f) "Liabilities" shall mean all losses, liabilities, claims, taxes,
damages, costs (including costs of investigation) and expenses (including
reasonable legal fees and expenses).
(g) "Merger Agreement" shall have the meaning assigned that term in
the Recitals above.
(h) "Patina Indemnified Parties" shall mean Patina and its
Subsidiaries and any officer, director, employee, agent or other
representative thereof (individually, a "Patina Indemnified Party").
(i) "Patina Liabilities" shall mean all Liabilities, known or
unknown, absolute, accrued contingent or otherwise, to the extent (A)
directly related to the assets or operations comprising the Business
that are purported to be owned by Patina or its subsidiaries pursuant
to the Contribution, (B) directly or indirectly related to Gerrity or
its subsidiaries or their assets, operations or businesses or (C)
otherwise reflected or reserved in the Patina Balance Sheet (as
defined in the Merger Agreement), in each case regardless of whether
such Liabilities exist or arise before, at or after the Effective
Time; provided, however, that any Liabilities disclosed or required by
GAAP to be disclosed on a balance sheet for Patina as of the Effective
Time (or in the notes thereto) that are not disclosed in the Patina
Balance Sheet shall not constitute Patina Liabilities; provided
further, that (M) Liabilities for income taxes of Patina or the
Business relating to periods prior to the Effective Time (other than
Liabilities for income taxes attributable to Excess Production, as
defined in the Merger Agreement), (N) Liabilities on Section 1.4 of
the SOCO Disclosure Schedule (as defined in the Merger
Agreement)(except to the extent otherwise provided in such Section)
and (O) Liabilities expressly assumed or retained by Snyder on Section
5.11 of the SOCO Disclosure Schedule, shall not constitute Patina
Liabilities; provided further, that, notwithstanding any provision to
the contrary herein, any Liability (X) included in the calculation of
working capital pursuant to Section 7.23 of the Merger Agreement or
(Y) constituting an Expense (within the meaning of the Merger
Agreement) or obligation for which Patina is liable under the terms of
the Merger Agreement shall constitute a Patina Liability.
(j) "Snyder Indemnified Parties" shall mean Snyder and its Affiliates,
other than Patina and its subsidiaries, and any officer, director, employee,
agent or other representative thereof (individually, a "Snyder Indemnified
Party").
(k) "Snyder Liabilities" shall mean all Liabilities known or unknown,
absolute, accrued, contingent or otherwise, arising out of or associated with
the affairs or operations of Snyder and any of its subsidiaries and which are
not Patina Liabilities.
-2-
2. Indemnification.
(a) Patina shall defend, indemnify and hold harmless the Snyder
Indemnified Parties against any and all Patina Liabilities, whether or not
the result of the sole or partial negligence or otherwise culpable conduct
or fault of one or more of the Snyder Indemnified Parties.
(b) Snyder shall defend, indemnify and hold harmless the Patina
Indemnified Parties against any and all Snyder Liabilities, whether or not
the result of the sole or partial negligence or otherwise culpable conduct
or fault of one or more of the Patina Indemnified Parties.
3. Indemnification Procedure. Each person to be indemnified pursuant to
this Agreement (an "Indemnified Party") agrees to give prompt notice to the
indemnifying party of the assertion of any claim, or the commencement of any
suit, action or proceeding, brought against or sought to be collected from such
Indemnified Party (each a "Third Party Claim"), in respect of which indemnity
may be sought by such Indemnified Party under this Agreement; provided that the
omission so to promptly notify the indemnifying party with respect to a Third
Party Claim brought against or sought to be collected from such Indemnified
Party will not relieve the indemnifying party from any Liability that it may
have to such Indemnified Party under this Agreement except to the extent that
such failure has materially prejudiced such indemnifying party with respect to
the defense of such Third Party Claim. If any Indemnified Party shall seek
indemnity under this Agreement with respect to a Third Party Claim brought
against or sought to be collected from such Indemnified Party, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, to assume and direct the defense and settlement thereof with counsel
satisfactory to such Indemnified Party. After notice from the indemnifying party
to an Indemnified Party of its election to assume and direct the defense and
settlement of a Third Party Claim brought against or sought to be collected from
such Indemnified Party that such indemnifying party is entitled to assume and
direct under the terms hereof, the indemnifying party shall not be liable to
such Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation, unless the Indemnifying
Party and the Indemnified Party are both named parties to any such action, claim
or demand and representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest between them.
Notwithstanding the foregoing provisions of this Section 3, the indemnifying
party shall not (A) without the prior written consent of an Indemnified Party,
effect any settlement of any pending or threatened proceeding in respect of
which such Indemnified Party is, or with reasonable foreseeability, could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party for a Third Party Claim brought against or sought to be collected from
such Indemnified Party, unless such settlement includes an unconditional
release, in form and substance satisfactory to the Indemnified Party, of such
Indemnified Party from all Liability arising out of such proceeding (provided
that, whether or not such a release is required to be obtained, the indemnifying
party shall remain liable to such Indemnified Party in accordance with this
Agreement in the event that a Third Party Claim is subsequently brought against
or sought to be collected from such Indemnified Party) or (B) be liable for any
settlement of any Third Party Claim brought against or sought to be
-3-
collected from an Indemnified Party effected without such indemnifying party's
written consent (which shall not be unreasonably withheld), but if settled with
such indemnifying party's written con sent, or if there is a final judgment for
the plaintiff in any such Third Party Claim, such indemnifying party agrees (to
the extent stated above) to indemnify the Indemnified Party from and against any
loss, liability, claim, damage or expense by reason or such settlement or
judgment. The indemnification required by this Agreement shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or loss, liability, claim, damage or
expense is incurred.
4. Insurance.
(a) Notwithstanding any provision to the contrary herein, an indemnifying
party hereunder shall have no obligation for a liability or any part thereof
sought to be indemnified by an Indemnified Party pursuant to this Agreement to
the extent that the Indemnified Party has received payment from an insurer on
account of such liability, which payment has not been offset through a matching
deductible or premium adjustments made on account of such payment.
(b) To the extent that an Indemnified Party may have insurance for a
liability or any part thereof sought to be indemnified under this Agreement,
until an insurer makes payment on account thereof, the parties shall proceed
with indemnification under this Agreement as if the Indemnified Party is not
covered by such insurance. An indemnifying party which has paid all or any part
of an indemnification claim shall then be reimbursed by the Indemnified Party
from insurance payment later received, if any, which payment has not been offset
through a matching deductible or premium adjustments made on account of such
payment.
5. Assignment.
Except by operation of law or in connection with the sale of all or
substantially all the assets of a party hereto, this Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any party hereto
without the written consent of the other party; and any attempt to assign any
rights or obligations arising under this Agreement without such consent shall be
void; provided, however, that the provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
6. Further Assurances.
Subject to the provisions hereof, the parties hereto shall make, execute,
acknowledge and deliver such other instruments and documents, and take all such
other actions, as may be reasonably required in order to effectuate the purposes
of this Agreement and to consummate the transactions contemplated hereby.
Subject to the provisions hereof, each of the parties shall, in connection with
entering into this Agreement, performing its obligations hereunder and taking
any and all actions relating hereto, comply with all applicable laws,
regulations, orders and decrees, obtain all required
-4-
consents and approvals and make all required filings with any governmental
agency, other regulatory or administrative agency, commission or similar
authority and promptly provide the other parties with all such information as
they may reasonably request in order to be able to comply with the provisions of
this sentence.
7. Parties in Interest.
Except as herein otherwise specifically provided, nothing in this Agreement
expressed or implied is intended to confer any right or benefit upon any person,
firm or corporation other than the parties, the Snyder Indemnified Parties, the
Patina Indemnified Parties and their respective successors and permitted
assigns.
8. Waivers, Etc.
No failure or delay on the part of the parties in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. No
modification or waiver of any provision of this Agreement nor consent to any
departure by the parties therefrom shall in any event be effective unless the
same shall be in writing, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
9. Severability.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any thereof which may be hereafter declared
invalid, void or unenforceable. In the event that any such term, provision,
covenant or restriction is held to be invalid, void or unenforceable, the
parties hereto shall use their reasonable efforts to find and employ an
alternate means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction.
10. Change of Law.
If, due to any change in applicable law or regulations or the
interpretation thereof by a court of law or other governing body having
jurisdiction subsequent to the date of this Agreement, performance of any
provision of this Agreement or any transaction contemplated hereby shall become
impracticable or impossible, the parties hereto shall use their reasonable
efforts to find and employ
-5-
an alternative means to achieve the same or substantially the same result as the
contemplated by such provision.
11. Notice.
Any notices to be given hereunder shall be in writing and shall be deemed
to be sufficiently given when delivered personally or sent certified or
registered mail, postage prepaid and return receipt requested, or by telecopy,
and if intended for Patina addressed to:
Patina Oil & Gas Corporation
1625 Broadway
Denver, Colorado 80202
Attention: Rodney L. Waller
Telecopy No.: (303) 592-8600
or if intended for Snyder addressed to:
Snyder Oil Corporation
777 Main Street, Suite 2500
Fort Worth, Texas 76012
Attention: General Counsel
Telecopy No.: (817) 882-5982
Either party may change the address for receiving notice upon notice to the
other party given in the manner set forth in this Section 11.
12. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof.
13. Amendment.
This Agreement may be amended or otherwise modified only by a writing duly
executed by each of the parties hereto.
14. Waiver.
No waiver of any of the provisions of this Agreement shall (a) be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), or (b) constitute a continuing waiver, unless otherwise expressly
provided in such waiver.
-6-
15. Headings.
The section headings used in this Agreement are for convenience only and
shall not be considered a part of, or affect the construction or interpretation
of, any provisions of this Agreement.
16. Execution of Counterparts.
This Agreement may be executed in counterparts, and each such counterpart
shall be deemed to be an original instrument, but all such counterparts together
for all purposes shall constitute one agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
SNYDER OIL CORPORATION
By: \s\ Thomas J. Edelman
Thomas J. Edelman
President
PATINA OIL & GAS CORPORATION
By: \s\ Rodney Waller
Rodney Waller
Vice President
-7-