ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this "AGREEMENT") is made and
entered into as of the 8th day of February, 2000, by and between Prize Energy
Corp. (formerly known as Vista Energy Resources, Inc.), a Delaware corporation
("NEW PRIZE"), and Prize Natural Resources, Inc. (formerly known as Prize Energy
Corp.), a Delaware corporation ("OLD PRIZE").
A. Old Prize and Pioneer Natural Resources USA, Inc., a Delaware
corporation ("PIONEER"), are parties to that certain Joint Participation
Agreement dated as of June 29, 1999, a copy of which is attached hereto (the
"JOINT PARTICIPATION AGREEMENT").
B. Old Prize, New Prize and PEC Acquisition Corp., a Delaware
corporation ("MERGER SUB"), are parties to that certain Agreement and Plan of
Merger dated as of October 8, 1999, pursuant to which, effective on the date
hereof, Merger Sub has been merged with and into Old Prize (the "MERGER"), such
that Old Prize has become a wholly-owned subsidiary of New Prize (the "MERGER
C. As a result of the Merger, Pioneer's shares of the Preferred Stock
(as defined in the Joint Participation Agreement) have been converted into
shares of New Prize's Series A 6% Convertible Preferred Stock (the "NEW PRIZE
D. In connection with the Merger Agreement, the names of Old Prize and
New Prize were changed as set forth above.
E. Under Section 5.19 of the Merger Agreement, Old Prize is to assign
to New Prize all of the rights, and New Prize is to assume all of the
obligations, of Old Prize under the Joint Participation Agreement.
F. Old Prize and New Prize desire to enter into this Agreement in order
to effect such assignment and assumption.
NOW, THEREFORE, in consideration of the recitals and the mutual
covenants and agreements set forth in this Agreement, Old Prize and New Prize
hereby agree as follows:
1. ASSIGNMENT. Old Prize hereby transfers and assigns to New Prize all
of the right, title and interest of Old Prize, of every kind and character
whatsoever, in and to the Joint Participation Agreement.
2. ASSUMPTION. New Prize hereby accepts the above and foregoing
assignment and agrees to assume and discharge all liabilities and perform all
obligations of Old Prize under and pursuant to the Joint Participation
3. AMENDMENT. Subject to the approval of Pioneer, clause (i) of Section
1 of the Joint Participation Agreement shall be amended such that the Preferred
Stock referred to therein is New Prize Preferred Stock and the reference to
Prize's common stock shall be deemed to be a reference to New Prize's common
4. GOVERNING LAW. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Delaware, regardless of any laws that might otherwise govern under applicable
principles of conflict of laws thereof.
5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.
IN WITNESS WHEREOF, Old Prize and New Prize have caused this Agreement
to be executed by their duly authorized representatives, as of the date first
"OLD PRIZE" "NEW PRIZE"
PRIZE NATURAL RESOURCES, INC. PRIZE ENERGY CORP.
By:/s/ Lon C. Kile By:/s/ Philip B. Smith
Lon C. Kile Philip B. Smith
President Chairman and Chief Executive Officer
Pioneer Natural Resources USA, Inc. hereby consents to the above and
foregoing assignment and assumption and to the amendment set forth in paragraph
3 above, all effective as of the date first set forth above.
PIONEER NATURAL RESOURCES
By: /s/ Mark L. Withrow
Mark L. Withrow
Executive Vice President
JOINT PARTICIPATION AGREEMENT
This Joint Participation Agreement (this "Agreement") is made and
entered into as of the 29th day of June, 1999, by and between Prize Energy
Corp., a Delaware corporation ("Prize"), and Pioneer Natural Resources USA,
Inc., a Delaware corporation ("Pioneer").
A. Prize and Pioneer are parties to that certain Purchase and Sale
Agreement dated May 16, 1999, as amended, by and among Pioneer and Pioneer
Resources Producing, L.P., as sellers, and Prize, as purchaser (the "Purchase
B. The Purchase Agreement provides that the parties shall enter into an
agreement regarding the subject matter hereof upon the closing of the
transactions contemplated by the Purchase Agreement.
C. As part of the consideration payable under the Purchase Agreement,
Prize is to issue to Pioneer 2,307.693 shares of Prize's Series A 6% Convertible
Preferred Stock (the "Preferred Stock").
In consideration of the premises and the mutual promises made herein,
the parties hereby agree as follows:
1. Joint Participation. Pioneer shall have the rights set forth in this
Section 1 during the period commencing on the first day following the date
hereof and ending on the first to occur of the following: (i) the first date on
which Pioneer no longer owns at least 80% of the shares of the Preferred Stock
initially issued to it (or the shares of Prize's common stock into which such
shares of Preferred Stock are convertible), or (ii) the date ten years from the
date hereof (the "Participation Period").
(a) During the Participation Period, Prize shall promptly
notify Pioneer of the following:
(i) Any opportunity that Prize acquires or develops
after the date hereof that pertains to an acquisition of, or
investment in, Oil and Gas Assets (as hereinafter defined) or
securities of a company (together with its affiliates) that is
engaged in the production of oil and natural gas and the
acquisition, exploitation, exploration and development of Oil
and Gas Assets if (A) such opportunity has been disclosed to
the Board of Directors of Prize for its consideration, and (B)
the aggregate consideration that Prize reasonably estimates is
likely to be required to make such acquisition or
investment, pursuant to a single transaction or in a series of
related transactions, is at least $50 million (a "Significant
Acquisition Opportunity"); and
(ii) Any decision of the Board of Directors of Prize
to offer to sell to third parties not affiliated with Prize or
its shareholders, direct property interests in an Exploration
Project (as hereinafter defined) (whether through an
assignment, farm-in or other similar conveyance) or equity
ownership interests (such as a joint venture interest,
partnership interest, limited liability interest or other
shares of equity securities) in an entity owned or controlled
by Prize that owns such Exploration Project (a "Significant
Exploration Project"), in either case for the purpose of
financing all or a portion of such Exploration Project.
Each notice shall set forth in detail the circumstances of the
intended Significant Acquisition Opportunity or Significant Exploration
Project, the name and address of the proposed seller of the Significant
Acquisition Opportunity, the location and a description of the
Significant Acquisition Opportunity or Significant Exploration Project,
and the proposed consideration (if any) for (and, if the proposed
consideration is to be wholly or partly for consideration other than
cash, the amount of the monetary consideration, if any, plus the fair
market value of the other consideration) and terms of the Significant
Acquisition Opportunity or Significant Exploration Project.
Contemporaneously with the giving of the notice, Prize shall provide to
Pioneer a copy of all information then in the possession of, or
reasonably accessible to, Prize regarding the Significant Acquisition
Opportunity or Significant Exploration Project, including the forms of
definitive agreements (if any) required to be executed in connection
For purposes hereof, "Oil and Gas Assets" means any rights,
estates, titles, or interests in and to oil or natural gas, or any
royalty interest therein and or any real and personal property
For purposes hereof, "Exploration Project" means a proposed
project to explore for oil or natural gas on an Oil and Gas Asset that
is acquired by Prize during the Participation Period and includes,
without limitation, the acquisition of leasehold interests and seismic
data, the drilling of exploratory wells and costs of related
completions, but excludes any developmental drilling of proved oil and
(b) Upon the delivery by Prize of a notice pursuant to Section
1(a)(i) above, Prize shall be deemed to have offered to Pioneer the
prior and preferential right and opportunity to acquire, or otherwise
participate in, up to 50% of the Significant Acquisition Opportunity
described in such notice at the same price and upon the same terms and
conditions as Prize (adjusted proportionately to reflect the percentage
interest that Pioneer chooses to acquire), without reservation by Prize
of any carried interest, back-in or other promoted interest with
respect to Pioneer's interest.
(c) Upon the delivery by Prize of a notice pursuant to Section
1(a)(ii) above, Prize shall be deemed to have offered to Pioneer the
prior and preferential right and opportunity to participate in up to a
50% interest in the Significant Exploration Project described in such
notice, upon substantially the same price and the same terms and
conditions as that offered to third parties (adjusted proportionately
to reflect the percentage interest that Pioneer chooses to acquire),
but without reservation by Prize of any carried interest, back-in or
other promoted interest with respect to Pioneer's interest.
(d) Pioneer shall have the right to accept an offer described
in Section 1(b) or 1(c) above (an "Offer") by notifying Prize of
Pioneer's acceptance within 10 business days after Pioneer's receipt of
the applicable notice. The acceptance by Pioneer shall specify the
portion of the Significant Acquisition Opportunity or Significant
Exploration Project which Pioneer elects to acquire. If Pioneer fails
to notify Prize of acceptance of an Offer within such 10 business day
period, that Offer shall terminate and Prize shall no longer be
obligated to afford or offer Pioneer the right or opportunity to
participate with Prize in that opportunity or project; provided,
however, that if the price or terms and conditions of the Significant
Acquisition Opportunity change after the date of the original notice to
Pioneer to be more favorable to Prize, or if the price or terms and
conditions of the Significant Exploration Opportunity change after the
date of the previous notice to Pioneer to be more favorable to third
parties, then Prize shall be required to re-offer that Significant
Acquisition Opportunity or Significant Exploration Opportunity to
Pioneer pursuant to a notice that complies with Section 1(a).
(e) Prize shall retain all rights to act as operator with
respect to all properties in connection with any Significant
Acquisition Opportunity or Significant Exploration Project offered to
Pioneer hereunder, unless Pioneer and Prize agree otherwise.
(f) With respect to any Significant Acquisition Opportunity or
Significant Exploration Project in which Pioneer elects to participate,
it will be a condition to Pioneer's participation that it enter into
all such acquisition agreements, joint operating agreements,
conveyances, assignments and other documents reasonably required to
evidence such participation.
2. Confidentiality. In the event Pioneer does not accept an Offer,
Pioneer agrees (i) to return to Prize any data, information and materials
obtained by Pioneer from Prize relating to the Offer, (ii) to hold all
information received by Pioneer from Prize relating to the Offer in confidence,
(iii) not to disclose such information unless judicial process obligates Pioneer
to do so, and (iv) not to make use of such information, directly or indirectly.
The term "information" as used in this Section 2 shall not include any
information which Pioneer can show: (i) to have been in its possession prior to
receipt thereof from Prize; (ii) to be now or to later become generally
available to the public through no fault of Pioneer; or (iii) to have been
received separately by Pioneer in an unrestricted manner from a person entitled
to disclose such information. The parties agree that Prize would not have
adequate remedies in damages and that Prize would be irreparably harmed in the
event that any of the provisions of this Section 2 were not performed in
accordance with their terms. Accordingly, the parties agree that Prize shall be
entitled to injunctive relief to prevent a breach of this Section 2 and to
specifically enforce its terms in addition to any other remedy to which Prize
may be entitled in law or in equity.
3. Relationship of the Parties. The obligations and liabilities of the
parties hereto shall be several and not joint or collective. This Agreement
shall not be construed as creating a mining or other partnership or association,
or to render the parties liable as partners. This Agreement shall not obligate
Pioneer to offer Prize a participation in any project or opportunity of
Pioneer's. This Agreement shall not preclude Pioneer from pursuing,
participating in, or acquiring any project or opportunity known to it now or
hereafter or, notwithstanding Pioneer's previous decision not to participate and
notwithstanding Section 2, any Significant Acquisition Opportunity as to which
(i) Prize fails to sign an acquisition agreement or fails to close after such
signing, and (ii) Prize has ceased all efforts to acquire.
4. Investment Representation. Pioneer represents that any interest
acquired by Pioneer in any Significant Acquisition Opportunity or Significant
Exploration Project shall be acquired for investment purposes only and not with
a view to, or for resale in connection with, any distribution thereof.
(a) Notices. All notices and communications required or
permitted under this Agreement shall be in writing and any such notice
or communication shall be deemed to have been duly given or made if
personally delivered, or if mailed by registered or certified mail,
postage and certification charges prepaid, or sent by a nationally
recognized commercial delivery service, charges prepaid, return receipt
requested, or by facsimile, addressed as follows:
If to Prize:
Prize Energy Corp.
Attention: Philip B. Smith
20 East 5th Street, Suite 1400
Tulsa, Oklahoma 74103
Facsimile No.: (918)582-1547
If to Pioneer:
Pioneer Natural Resources USA, Inc.
1400 Williams Square West
5205 North O'Conner Blvd.
Irving, Texas 75039-3746
Facsimile No.: (972)969-3570
The effective date of notice shall be the date of actual receipt. Any
party may, by notice to the other hereunder, change the address or
facsimile number to which delivery shall thereafter be made.
(b) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that this
Agreement may not be assigned in whole or in part by either party
without the prior written consent of the other party.
(c) Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which shall be
deemed an original instrument for all purposes and all of which
together shall constitute one agreement.
(d) Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed
by, the laws of the State of Delaware.
(e) Other. This Agreement may not be amended nor any rights
hereunder be waived except by an instrument in writing signed by the
party to be charged with such amendment or waiver. The headings of the
sections of this Agreement are for convenience and shall not limit or
otherwise affect any of the provisions of this Agreement. This
Agreement constitutes the entire understanding between the parties with
respect to the subject matter hereof, superseding all negotiations,
prior discussions and prior agreements and understandings relating to
such subject matter. Except as otherwise expressly stated in this
Agreement, this Agreement is not for the benefit of any third person.
The parties acknowledge that they and their respective counsel have
negotiated and drafted this Agreement jointly and agree that the rule
of construction that ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation or
construction of this Agreement.
EXECUTED as of the date first set forth above.
PRIZE ENERGY CORP.
By: /s/ Philip B. Smith
Philip B. Smith
PIONEER NATURAL RESOURCES USA,
By: /s/ W. T. Howard
W. T. Howard
Senior Vice President Land