Exhibit 10.7
MASTER OFFSET AGREEMENT
This Master Offset Agreement (this "Agreement") is entered into and shall
be effective as of January 31, 2001 among IP PETROLEUM COMPANY, INC., a Delaware
corporation, and SOUTHLAND ENERGY COMPANY, a Texas corporation (collectively,
the "Limited Partners"), THE BRANIGAR ORGANIZATION, INC., an Illinois
corporation, and PURE PARTNERS, L.P. ("Pure Partners"), a Delaware limited
partnership.
Reference is made to the Amended and Restated Agreement of Limited
Partnership of Pure Partners, dated January 31, 2001, between the Limited
Partners, International Paper Realty Corporation, Transtates Properties
Incorporated, PK I, L.P., XX XX, L.P., PK III, L.P., XX XX, L.P., all as limited
partners, and Pure Resources I, Inc., as general partner (the "LP Agreement")
and the other Operative Documents. Capitalized terms used herein and not
defined herein shall have the meanings given such terms in the LP Agreement.
In consideration of the mutual promises, covenants and agreements set
forth in the LP Agreement, the parties hereto hereby agree as follows:
1. Distributions for Claims. In connection with any Redemption of the
Limited Partners' Partnership Interests by Pure Partners, a Liquidation
of Pure Partners or the maturity of other amounts due and payable from
Pure Partners under the LP Agreement with respect to such Redemption or
Liquidation (any such amount due from Pure Partners to a Limited Partner
under the LP Agreement being sometimes hereinafter referred to as
"Limited Partner Receivables"), Pure Partners shall have the legally
enforceable right to require the Limited Partner holding such Limited
Partner Receivables to relinquish its claim against Pure Partners with
respect to such Limited Partner Receivables by (i) distributing or
transferring to such Limited Partner all or a portion of the BOI Note (or
any obligation arising therefrom) or its right to other amounts due from
the Limited Partner (such BOI Note and other amounts due from the Limited
Partner to Pure Partners being sometimes hereinafter referred to as
"Limited Partner Payables"), and (ii) to the extent required by the LP
Agreement, tendering a payment to such Limited Partner equal to the
amount by which the contractual balance due on such Limited Partner
Receivables exceeds the contractual balance due on such Limited Partner
Payables.
2. Rights of Holders of Limited Partner Receivables. Upon the maturity of
any Limited Partner Payables, a Limited Partner holding Limited Partner
Receivables shall have the legally enforceable right to require Pure
Partners to relinquish its claim with respect to any such Limited Partner
Payables by requiring or causing (i) satisfaction by offset of its
Limited Partner Receivables against such Limited Partner Payables to the
extent that the contractual balance due on such Limited Partner Payables
does not exceed the contractual balance due on such Limited Partner
Receivables, and (ii) the obligor under such Limited Partner Payables to
tender to Pure Partners a payment equal to the amount by which the
contractual balance due on such Limited Partner Payables exceeds the
contractual balance due on such Limited Partner Receivables. In the event
that the amounts due from Pure
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Partners on the Limited Partner Receivables satisfied in accordance
herewith exceed amounts due to Pure Partners on the Limited Partner
Payables distributed or transferred in accordance herewith, Pure Partners
shall be required, to the extent required by the LP Agreement, to make a
payment to the Limited Partner in the amount of such difference.
3. Valuation of Limited Partner Receivables and Limited Partner Payables.
For purposes hereof, the contractual balance due on any Limited Partner
Payables or Limited Partner Receivables shall be determined based on the
governing documents and shall equal the value thereof at any time the
contractual balance must be determined prior to the maturity of any such
Limited Partner Payable or Limited Partner Receivable. Specifically, (i)
the contractual balance due at any time on the Class A Limited
Partnership Interests shall equal its Capital Account balance as adjusted
from time to time in accordance with the terms of the LP Agreement, and
(ii) the contractual balance due on the BOI Note shall equal the Carrying
Value thereof as determined in accordance with the LP Agreement.
4. Governing Law. The laws of the State of New York shall govern the
validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties hereto.
5. Severability. Every provision of this Agreement is intended to be
serverable, and, if any terms or provision of this Agreement is illegal
or invalid for any reason whatsoever, such illegality or invalidity shall
not affect the validity or legality of the remainder of this Agreement.
The preceding sentence of this Section 5 shall be of no force or effect
if the consequence of enforcing the remainder of this Agreement without
such illegal or invalid term or provision would cause any party hereto to
lose the benefit of its economic bargain.
6. Successors and Assigns. This Agreement shall be binding upon the parties
hereto and their successors and permitted assigns (including, without
limitation, assignees of the Limited Partners).
7. Counterpart Execution. This Agreement may be executed in any number of
counterparts with the same effect as if all the other parties had signed
the same document. All counterparts shall be construed together and
shall constitute one agreement.
8. Entire Agreement. This Agreement (i) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof and
(ii) is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
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IN WITNESS WHEREOF, the parties named below have caused this Agreement to
be executed by their duly authorized officers and representatives on the
date first above written.
IP PETROLEUM COMPANY, INC.
By: /s/ XXXXX X. XXXXXXXX
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Name: Xxxxx X. Xxxxxxxx
Title: Agent and Attorney-in-Fact
SOUTHLAND ENERGY COMPANY
By: /s/ XXXXX X. XXXXXXXX
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Name: Xxxxx X. Xxxxxxxx
Title: Agent and Attorney-in-Fact
THE BRANIGAR ORGANIZATION, INC.
By: /s/ XXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Agent and Attorney-in-Fact
PURE PARTNERS, L.P.
By: /s/ XXXX XXXXXXXXX
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Name: Xxxx Xxxxxxxxx
Title: President
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