Exhibit 10.4

 

TRANSITION SERVICES AGREEMENT

 

THIS TRANSITION SERVICES AGREEMENT is entered into on November 25, 2014, to be
effective for all purposes as of the Effective Time, by and between Occidental
Petroleum Corporation, a Delaware corporation (“OPC”), and California Resources
Corporation, a Delaware corporation (“CRC”).

 

RECITALS

 

The board of directors of OPC has determined that it is in the best interests of
OPC and its stockholders to create a new publicly traded company that shall
operate the CRC Business.

 

OPC and CRC have entered into a Separation and Distribution Agreement dated as
of the date hereof (the “Separation Agreement”).

 

OPC and CRC deem it to be appropriate and in the best interests of OPC and CRC
that OPC provide certain Services to CRC and CRC provide certain Services to
OPC, on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the forgoing and the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1                                   Definitions.  Unless otherwise
defined herein, each capitalized term shall have the meaning specified for such
term in the Separation Agreement.  As used in this Agreement:

 

(a)                                 “Additional Services” means the Additional
OPC Services (as defined in Section 3.2(a)) or the Additional CRC Services (as
defined in Section 3.2(b)), individually, or the Additional OPC Services and the
Additional CRC Services, collectively, as the context may indicate.  Any
Additional Services provided pursuant to this Agreement shall be deemed to be
“Services” under this Agreement.

 

(b)                                 “Agreement” means this Transition Services
Agreement together with those portions of the Separation Agreement referenced
herein and all Annexes attached hereto and incorporated herein by this reference
and all amendments, modifications and changes hereto and thereto.

 

(c)                                  “Authorized Representative” means, for each
Party, any of the individuals listed on Annex A under the name of such Party.

 

(d)                                 “Availed Party” has the meaning set forth in
Section 9.2(a).

 

(e)                                  “Billing Period” has the meaning set forth
in Section 6.1.

 

(f)                                   “Building” has the meaning set forth in
Annex B, Part VII, Section A.

 

(g)                                  “CRC Services” means the Services generally
described on Annex C and any other Service provided by CRC or any of its
Subsidiaries pursuant to this Agreement.

 

(h)                                 “CRC Space” has the meaning set forth in
Annex B, Part VII, Section A.

 

(i)                                     “Effective Time” means 11:59 p.m.,
Eastern Time, on November 30, 2014.

 

(j)                                    “Fee” or “Fees” has the meaning set forth
in Section 5.1.

 

(k)                                 “Gross Rental Fee” has the meaning set forth
in Annex B, Part VII, Section A.

 

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(l)                                     “Office Term” has the meaning set forth
in Annex B, Part VII, Section A.

 

(m)                             “OPC Services” means the Services generally
described on Annex B and any other Service provided by OPC or any of its
Subsidiaries pursuant to this Agreement.

 

(n)                                 “Oxy Westwood” has the meaning set forth in
Annex B, Part VII, Section A.

 

(o)                                 “Partial Termination” has the meaning set
forth in Section 3.3(a).

 

(p)                                 “Party” means OPC or CRC, as applicable. 
“Parties” means OPC and CRC.

 

(q)                                 “Security Regulations” has the meaning set
forth in Section 9.2(a).

 

(r)                                    “Services” means the OPC Services or the
CRC Services, individually, or the OPC Services and the CRC Services,
collectively, as the context may indicate.

 

(s)                                   “Subject Party” has the meaning set forth
in Section 3.4(d).

 

(t)                                    “Systems” has the meaning set forth in
Section 9.2(a).

 

(u)                                 “Term” has the meaning set forth
Section 2.1.

 

Section 1.2                                   Interpretation.  In this
Agreement, unless the context clearly indicates otherwise:

 

(a)                                 words used in the singular include the
plural and words used in the plural include the singular;

 

(b)                                 references to any Person include such
Person’s successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement, and a reference to such Person’s
“Subsidiaries” shall be deemed to mean such Person’s Subsidiaries following the
Initial Distribution;

 

(c)                                  any reference to any gender includes the
other gender and the neuter;

 

(d)                                 the words “include,” “includes” and
“including” shall be deemed to be followed by the words “without limitation”;

 

(e)                                  the words “shall” and “will” are used
interchangeably and have the same meaning;

 

(f)                                   the word “or” shall have the inclusive
meaning represented by the phrase “and/or”;

 

(g)                                  any reference to any Article, Section or
Annex means such Article or Section of, or such Annex to, this Agreement, as the
case may be, and references in any Section or definition to any clause means
such clause of such Section or definition;

 

(h)                                 the words “herein,” “hereunder,” “hereof,”
“hereto” and words of similar import shall be deemed references to this
Agreement as a whole and not to any particular Section or other provision of
this Agreement;

 

(i)                                     any reference to any agreement,
instrument or other document means such agreement, instrument or other document
as amended, supplemented and modified from time to time to the extent permitted
by the provisions thereof and by this Agreement;

 

(j)                                    any reference to any law (including
statutes and ordinances) means such law (including all rules and regulations
promulgated thereunder) as amended, modified, codified or reenacted, in whole or
in part, and in effect at the time of determining compliance or applicability;

 

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(k)                                 relative to the determination of any period
of time, “from” means “from and including,” “to” means “to but excluding” and
“through” means “through and including”;

 

(l)                                     accounting terms used herein shall have
the meanings historically ascribed to them by OPC and its Subsidiaries,
including CRC and its Subsidiaries, in its and their internal accounting and
financial policies and procedures in effect as of the date of this Agreement;

 

(m)                             if there is any conflict between the provisions
of the Separation Agreement and this Agreement, the provisions of this Agreement
shall control with respect to the subject matter hereof; if there is any
conflict between the provisions of the main body of this Agreement and the
Annexes hereto, the provisions of the main body of this Agreement shall control
unless explicitly stated otherwise in such Annex;

 

(n)                                 the titles to Articles and headings of
Sections contained in this Agreement have been inserted for convenience of
reference only and shall not be deemed to be a part of or to affect the meaning
or interpretation of this Agreement;

 

(o)                                 any portion of this Agreement obligating a
Party to take any action or refrain from taking any action, as the case may be,
shall mean that such Party shall also be obligated to cause its relevant
Subsidiaries to take such action or refrain from taking such action, as the case
may be (and, accordingly, if Services are provided by Subsidiaries of OPC,
references to “OPC” shall be deemed to be references to such Subsidiaries which
provide the Services under this Agreement; if Services are provided by
Subsidiaries of CRC, references to “CRC” shall be deemed to be references to
such Subsidiaries which provide the Services under this Agreement);

 

(p)                                 unless otherwise specified in this
Agreement, all references to dollar amounts herein shall be in respect of lawful
currency of the United States; and

 

(q)                                 the language of this Agreement shall be
deemed to be the language the Parties hereto have chosen to express their mutual
intent, and no rule of strict construction shall be applied against either
Party.

 

ARTICLE II
TERM

 

Section 2.1                                   Term.  The term of this Agreement
shall commence as of the Effective Time and end on the second anniversary of the
Effective Time (the “Term”).

 

ARTICLE III
PERFORMANCE OF SERVICES

 

Section 3.1                                   General.

 

(a)                                 During the Term, and subject to the terms
and conditions of this Agreement, OPC will use commercially reasonable efforts
to provide, or cause to be provided, the OPC Services to CRC and its
Subsidiaries and to otherwise comply with its obligations as stated in Annex B
and Annex C (as applicable).

 

(b)                                 During the Term, and subject to the terms
and conditions of this Agreement, CRC will use commercially reasonable efforts
to provide, or cause to be provided, the CRC Services to OPC and its
Subsidiaries and to otherwise comply with its obligations as stated in Annex B
and Annex C (as applicable).

 

(c)                                  Notwithstanding anything to the contrary in
this Agreement, neither OPC nor CRC (nor any of their respective Subsidiaries)
shall be required to perform Services hereunder or take any actions relating
thereto that would conflict with, breach or violate any applicable law,
contract, license, sublicense, authorization, certification or permit.

 

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Section 3.2                                   Additional Services.

 

(a)                                 If CRC reasonably determines that additional
transition services (not listed on Annex B) of the type previously provided by
OPC and its Subsidiaries to the CRC Business are necessary to conduct the CRC
Business and CRC and its Subsidiaries are not able to provide such services to
the CRC Business, and if OPC is willing, in its sole discretion, to provide such
additional service during the Term, the Parties may negotiate an amendment to
Annex B setting forth the additional service (each such service an “Additional
OPC Service”), the terms and conditions for the provision of such Additional OPC
Service.  Unless otherwise agreed by the Parties, the fees payable for such
Additional OPC Service shall be the same as the Fees set forth in Section 5.1.

 

(b)                                 If OPC reasonably determines that additional
transition services (not listed on Annex C) of the type previously provided by
CRC and its Subsidiaries to the OPC Business are necessary to conduct the OPC
Business and OPC and its Subsidiaries are not able to provide such services to
the OPC Business, and if CRC is willing, in its sole discretion, to provide such
additional service during the Term, the Parties may negotiate an amendment to
Annex C setting forth the additional service (each such service an “Additional
CRC Service”), the terms and conditions for the provision of such Additional CRC
Service.  Unless otherwise agreed by the Parties, the fees payable for such
Additional CRC Service shall be the same as the Fees set forth in Section 5.1.

 

(c)                                  Unless expressly set forth in Annex B or
Annex C, any transfer or conversion of data (regardless of the form or the media
on which such data is stored) to a format different from the format in which
such data existed immediately prior to the Effective Time will be considered an
Additional Service.

 

Section 3.3                                   Procedure.

 

(a)                                 Any requests by a Party to the other Party
regarding any modification or alteration to the provision of the Services must
be made by an Authorized Representative (it being understood that the receiving
Party shall not be obligated to agree to any modification or alteration
requested thereby).  A Party receiving Services shall provide no less than 30
days written notice (unless a shorter time is mutually agreed upon by the
Parties) to the other Party of any Services that, prior to the expiration of the
Term, are no longer needed from the other Party, in which case this Agreement
shall terminate as to such Services (a “Partial Termination”).  The Parties
shall mutually agree as to the effective date of any Partial Termination.  In
the event of any termination prior to the scheduled expiration of the Term or of
any Partial Termination hereunder, with respect to any terminated Services in
which the Fee for such terminated Services is charged as a flat monthly rate, if
termination occurs other than the end of the month, the Fee for that month shall
be pro-rated to reflect a partial month.  Notwithstanding the immediately
preceding sentence, to the extent any amounts due or advances made hereunder
relate to costs or expenses that have been or will be incurred and that cannot
be recovered by the Party providing Services, such amounts due or advances made
shall not be pro-rated or reduced and the Party providing such Services shall
not be required to refund to the other Party any pro-rated amount for such costs
or expenses; and the terminating Party shall reimburse the Party providing such
Services for any Third-Party cancellation or similar charges incurred as a
result of such early termination.  Notwithstanding anything to the contrary
hereunder, each Party may avail itself of the remedies set forth in
Section 3.4(d) and 11.2 without fulfilling the notice requirements of this
Section 3.3(a).

 

(b)                                 In the event of a Partial Termination, this
Agreement shall remain in full force and effect with respect to the Services
which have not been terminated by the Parties as provided herein.

 

(c)                                  Each Party acknowledges and agrees that
certain of the Services to be provided under this Agreement have been, and will
continue to be, provided (in accordance with this Agreement) to the OPC Business
or the CRC Business, as applicable, by Third Parties designated by the Party
responsible for providing such Services hereunder.  The Party to which any Third
Party Service is provided may, in its sole discretion, refuse such Service, in
which case the Parties may agree to designate another service provider or
terminate such Service pursuant to the procedure set forth in Section 3.3(a). 
Subject to the preceding sentence and to the extent so provided, the Party
responsible for providing such Services shall use commercially reasonable
efforts to (i) cause such Third Parties to provide such Services under this
Agreement and/or (ii) enable the Party seeking the benefit of such Services and
its Subsidiaries to avail itself of such Services; provided, if any such Third
Party is unable or unwilling to provide any such Services, the Parties agree to
use their commercially reasonable efforts to determine the manner, if any, in
which such Services can best be provided (it being acknowledged and agreed that
any costs or expenses to be incurred in connection with obtaining a Third Party
to provide any such Services shall be paid by the Party to which such Services
are provided; provided, the Party responsible for providing such Services shall
use commercially

 

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reasonable efforts to communicate the costs or expenses expected to be incurred
in advance of incurring such costs or expenses).

 

Section 3.4                                   Disclaimer of Warranties;
Limitation of Liability; Force Majeure.

 

(a)                                 Each Party acknowledges and agrees that the
other Party makes no warranties of any kind with respect to the Services to be
provided hereunder, and each Party hereby expressly disclaims all warranties,
expressed or implied, of any kind with respect to the Services to be provided
hereunder, including any warranty of non-infringement, merchantability, fitness
for a particular purpose or conformity to any representation or description as
to the Services provided hereunder.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT WILL BE PROVIDED AS
IS, WHERE IS, WITH ALL FAULTS, AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTY OF NON-INFRINGEMENT, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION OR ANY
OTHER WARRANTY WHATSOEVER.

 

(b)                                 NOTWITHSTANDING ANYTHING TO THE CONTRARY, IT
IS EXPRESSLY ACKNOWLEDGED BY THE PARTIES THAT NEITHER OPC, CRC NOR ANY OF THEIR
RESPECTIVE SUBSIDIARIES SHALL HAVE ANY LIABILITY FOR THE SERVICES PROVIDED
HEREUNDER AND FURTHER THAT NEITHER OPC, CRC NOR ANY OF THEIR RESPECTIVE
SUBSIDIARIES SHALL HAVE ANY LIABILITY FOR THE SERVICES PROVIDED BY ANY THIRD
PARTY, UNLESS IN EITHER EVENT SUCH SERVICES ARE PROVIDED IN A MANNER THAT
CONSTITUTES GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF THE PARTY (OR
ITS SUBSIDIARY) PROVIDING SUCH SERVICES.

 

(c)                                  EXCEPT AS SET FORTH IN (OR RESULTING FROM A
BREACH OF) SECTION 3.4(B), ARTICLE V, ARTICLE VI, ARTICLE IX, SECTION 12.3 OR
SECTION 12.4 BUT OTHERWISE NOTWITHSTANDING ANYTHING TO THE CONTRARY, NEITHER OPC
NOR CRC SHALL HAVE ANY LIABILITY TO THE OTHER PARTY UNDER THIS AGREEMENT FOR
LOSSES.

 

(d)                                 If either Party, any of its Subsidiaries or
any Third-Party service provider (each a “Subject Party”) is prevented from or
delayed in complying, either totally or in part, with any of the terms or
provisions of this Agreement by reason of fire, flood, storm, strike, walkout,
lockout or other labor trouble or shortage, delays by unaffiliated suppliers or
carriers, shortages of fuel, power, raw materials or components, equipment
failure, any law, order, proclamation, regulation, ordinance, demand, seizure or
requirement of any Governmental Authority, riot, civil commotion, war,
rebellion, act of terrorism, nuclear or other accident, explosion, casualty,
pandemic, or act of God, or act, omission or delay in acting by any governmental
or military authority or the other Party or any of its Subsidiaries or any other
cause, whether or not of a class or kind listed in this sentence, beyond the
reasonable control and without the fault of the Subject Party, then upon notice
to the other Party, the affected provisions and/or other requirements of this
Agreement shall be suspended during the period of such disability and, unless
otherwise set forth herein to the contrary, the Subject Party shall have no
liability to the other Party, its Subsidiaries or any other Person in connection
therewith; provided, the Subject Party shall not be excused for any obligation
to make payments pursuant to the terms of this Agreement.  Each Party shall use
commercially reasonable efforts to promptly remove such disability as soon as
possible; provided, nothing in this Section 3.4(d) will be construed to require
the settlement of any strike, walkout, lockout or other labor dispute on terms
which, in the reasonable judgment of the Subject Party, are contrary to its
interest.  It is understood that the settlement of a strike, walkout, lockout or
other labor dispute will be entirely within the discretion of the Subject
Party.  If a Party is unable to provide any of the Services due to a disability
described in the first sentence of this Section 3.4(d), each Party shall use
commercially reasonable efforts to cooperatively seek a solution that is
mutually satisfactory to the Parties.  In addition, upon becoming aware of a
disability causing a delay in performance or preventing performance of any
obligations of a Party under this Agreement, the Subject Party shall promptly
notify the other Party in writing of the existence of such disability and the
anticipated duration of the disability.  The Party entitled to the benefit of
the Services shall have the right, but not the obligation, to engage
subcontractors to perform such obligations for the duration of the period during
which such disability delays or prevents the performance of such obligation by
the Subject Party, it being agreed that the Fees paid or payable under this
Agreement with respect to the Service affected by the disability shall be
reduced (or refunded, if applicable) on a dollar-for-dollar basis for all
amounts paid by the

 

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Party entitled to the benefit of the Services to such subcontractors, provided
that the Subject Party shall not be responsible for the amount of fees charged
by any such subcontractors to perform such Services to the extent they exceed
the Fees for the applicable period of disability.  Notwithstanding anything to
the contrary hereunder, each Party shall make the mitigation and resolution of
any disability affecting its ability to perform hereunder a high priority and
shall use efforts of a type, intensity and duration which, taking into account
the type of Services and the significance of such Services to the other Party’s
business, represent a reasonably appropriate response to such disability, but in
any event no less than commercially reasonable efforts.  In addition and
notwithstanding anything hereunder to the contrary, the Parties agree that this
Section 3.4(d) shall not be construed so as to excuse a Party from complying
with any of its obligations under Article IX.

 

Section 3.5                                   Transition of Responsibilities. 
Each Party agrees to use commercially reasonable efforts to reduce or eliminate
its and its Subsidiaries’ dependency on each Service as soon as is reasonably
practicable.  Each Party agrees to cooperate with the other Party to facilitate
the smooth transition of the Services being provided to such Party by the other
Party.

 

Section 3.6                                   Employee Status.  During the Term
of this Agreement:

 

(a)                                 No employee of a Party shall be deemed an
employee of the other Party by reason of such employee’s involvement in
providing Services provided hereunder.  The employing Party shall bear the sole
responsibility for payment of each such employee’s wages, benefits, all
withholding obligations to federal, state and local taxation and insurance
authorities and all other costs and expenses associated with such employee.

 

(b)                                 No workers’ compensation insurance shall be
obtained by either Party for the employees of the other Party in connection with
the Services provided hereunder.

 

(c)                                  Each Party shall retain control over the
time, manner and method of the employment of its employees.  This retained
control shall include the right to review employees’ performance, determine
employees’ compensation and benefits, discipline employees and determine whether
or not to continue employees’ employment.

 

(d)                                 This Agreement shall not be construed as an
agreement granting employees any employment rights for a specific duration, and
shall not constrain a Party’s right to terminate the employment relationship
with any of its employees.

 

(e)                                  Each employee shall be entitled to take
vacation and other time off in accordance with the policies of his or her
employer, including sick leave and military leave.

 

ARTICLE IV
COOPERATION

 

Section 4.1                                   Cooperation.  Each Party shall,
and shall cause its Subsidiaries to, provide reasonable cooperation to the other
Party in all matters relating to the provision and receipt of the Services,
including providing information and documentation reasonably requested by the
other Party, other than information and documentation protected by
attorney-client privilege, sufficient for the other Party to provide the
Services and making available, as reasonably requested by the other Party,
timely decisions, approvals and acceptances in order that the other Party and
its Subsidiaries may perform their respective obligations under this Agreement
in a timely manner.

 

Section 4.2                                   Consents.

 

(a)                                 If the provision of the Services by a Party
requires or triggers the consent of any Third Party or any Governmental
Approval, such Party shall use reasonable efforts to acquire such consent or
approval; provided, neither Party shall be obligated under this Agreement to pay
any consideration, grant any concession or incur any Liability to any Third
Party to obtain any such Third-Party consent.

 

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(b)                                 In the event that any Third-Party consent or
any Governmental Approval required for the provision of Services hereunder is
not obtained, then, unless and until such Third-Party consent or Governmental
Approval is obtained, the Parties shall, to the extent practicable, provide
reasonable cooperation to each other in achieving a reasonable alternative
arrangement for the Party entitled to the benefit of the Services to continue to
process its work and for the Party providing the Services to perform such
Services.

 

ARTICLE V
FEES

 

Section 5.1                                   Fees.  For each Billing Period and
in accordance with provisions of Article VI, each Party shall pay the other
Party a fee for Services provided by such other Party under this Agreement, and
unless explicitly stated otherwise in Annex B or Annex C, such “Fee” paid by
such Party shall be an amount equal to $175 multiplied by the number of total
hours worked during such relevant Billing Period by employees of the other Party
involved in the provision of Services to the paying Party plus any amounts
invoiced pursuant to Section 3.3(c).  In addition, for each Billing Period CRC
shall pay to OPC the Gross Rental Fee for the use of the CRC Space, and OPC
shall pay to CRC the charge for mailroom, loading dock and related services
provided by CRC in accordance with Annex C, Part V.

 

Section 5.2                                   Taxes.  To the extent required or
permitted by applicable law, there shall be added to any Fees due under this
Agreement, and each Party agrees to pay to the other, amounts equal to any
taxes, however designated or levied, based upon such Fees, or upon this
Agreement or the Services provided under the Agreement, or their use, including
state and local privilege or excise taxes based on gross revenue and any taxes
or amounts in lieu thereof paid or payable by the Party providing Services
hereunder.  In the event taxes are not added to an invoice from the Party
providing Services hereunder, the Party being provided such Services is
responsible to remit to the appropriate tax jurisdiction any additional amounts
due including tax, interest and penalty.  The Parties shall cooperate with each
other to minimize any of these taxes to the extent reasonable.  If additional
amounts are determined to be due on the Services provided hereunder as a result
of an audit by a tax jurisdiction, the Party provided the Services hereunder
agrees to reimburse the Party who provided the Services for the additional
amounts due including tax, interest and penalty.  The Party obligated to make
such reimbursement shall have the right to contest the assessment with the tax
jurisdiction at its own expense.  The Party providing Services hereunder will be
responsible for penalty or interest associated with its failure to remit
invoiced taxes.  The Parties further agree that, notwithstanding the foregoing,
neither Party shall be required to pay any franchise taxes, taxes based on the
net income of the other Party or personal property taxes on property owned or
leased by a Party and used by such Party to provide Services.  Notwithstanding
anything else in this Agreement to the contrary, the obligations of this
Section 5.2 shall remain in effect until the expiration of the relevant statutes
of limitation.

 

ARTICLE VI
INVOICE AND PAYMENT; AUDIT

 

Section 6.1                                   Invoices and Payment.  Each Party
providing a Service shall maintain records reflecting each employee of such
Party involved, and the number of hours worked by such employee, in the
provision of such Service.  Within 20 days following the period beginning on
December 1, 2014 and ending on March 31, 2015, and following the end of each
calendar quarter thereafter during the Term (or within 20 days after receipt of
a Third Party supplier’s invoice in the case of Services that are provided by a
Third-Party supplier pursuant to Section 3.3(c)) (each such period, a “Billing
Period”), each Party will submit to the other Party for payment a written
statement of amounts due under this Agreement for such Billing Period or such
Third Party supplier’s invoice, as applicable.  The statement will set forth the
Fees and will reflect the number of hours worked by each employee involved in
providing Services to the paying Party during such Billing Period (and include
the descriptions set forth on Annex B or Annex C, if appropriate).  Each
statement will specify the nature of any amounts due for any Fee and will
contain reasonably satisfactory documentation in support of such amounts and
such other supporting detail as the other Party may reasonably require to
validate such amounts due.

 

Section 6.2                                   Timing of Payment; No Offsets. 
Each Party will pay all amounts due by such Party pursuant to this Agreement
within 10 days after the date upon which each such statement that is required to
be provided hereunder is received by such Party.  Neither Party shall offset any
amounts owing to it by the other Party

 

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or any of its Subsidiaries against amounts payable by such Party hereunder or
any other agreement or arrangement.  All timely payments under this Agreement
shall be made without early payment discount.

 

Section 6.3                                   Non-Payment.  If either Party
fails to pay the full amount of any invoice within 30 days after its receipt of
the invoice, such failure shall be considered a material default under this
Agreement.  The remedies provided to each Party by this Section 6.3 and by
Section 11.2 shall be without limitation of any other applicable provisions of
this Agreement.  Payments made after the date they are due shall bear interest
at a rate per annum equal to the Prime Rate plus 2.0% (compounded monthly).

 

Section 6.4                                   Payment Disputes.  Either Party
may object to any amounts for any Service invoiced to it at any time before, at
the time of, or after payment is made, provided such objection is made in
writing to the other Party within 150 days following the termination of such
Service.  The disputing Party shall timely pay the disputed items in full while
resolution of the dispute is pending; provided, the other Party shall pay
interest at a rate per annum equal to the Prime Rate plus 2.0% (compounded
monthly) on any amounts it is required to return to the disputing Party upon
resolution of the dispute.  Payment of any amount shall not constitute approval
thereof.  Any dispute under this Section 6.4 shall be resolved in accordance
with the provisions set forth in Article IV of the Separation Agreement.

 

Section 6.5                                   Audit Rights.

 

(a)                                 Each Party may, at its own cost and expense,
audit (or cause an independent Third Party auditor to audit) the books, records
and facilities of the other Party to the extent necessary to determine the other
Party’s compliance with this Agreement with respect to Fees paid or payable
pursuant to this Article VI or the performance of its other obligations set
forth in this Agreement.  For any given Service, each Party shall have the right
to audit the books, records and facilities of the other Party pertaining to such
Service once for each twelve-month period during which payment obligations are
due (and at such other times as may be required by applicable law); provided,
any such audit shall not be commenced later than 90 days after the termination
of such Service.

 

(b)                                 Any audit shall be conducted during regular
business hours and in a manner that complies with the building and security
requirements of, and does not unreasonably interfere with the operations of, the
Party being audited.  The Party desiring to conduct an audit shall provide
notice to the Party to be audited not less than 30 days prior to the
commencement of the audit and shall specify the date on which the audit will
commence.  If the audit concludes that an overpayment or underpayment has
occurred during the audited period, then the Party that conducted the audit may
raise an objection pursuant to the provisions of Section 6.4.

 

ARTICLE VII
INDEPENDENCE; OWNERSHIP OF ASSETS

 

Section 7.1                                   Independence.  The Parties are
independent contractors.  All employees and representatives of a Party and any
of its Subsidiaries involved in providing services shall be under the exclusive
direction, control and supervision of the Party or its Subsidiaries (or their
subcontractors) providing such Services, and not of the Party receiving such
Services.  In accordance with Section 3.6, the Party or its Subsidiaries (or
their subcontractors) providing the Services will have the sole right to
exercise all authority with respect to the employment (including termination of
employment), assignment and compensation of such employees and representatives. 
This Agreement is a purely commercial transaction between the Parties and
nothing stated in this Agreement shall operate to create any implied or
fiduciary duty between the Parties.

 

Section 7.2                                   Assets.  All procedures, methods,
systems, strategies, tools, equipment, facilities and other resources used by a
Party, any of its Subsidiaries or any Third-Party service provider in connection
with the provision of the Services hereunder shall remain the property of such
Party, its Subsidiaries or such service providers and, except as otherwise
provided herein, shall at all times be under the sole direction and control of
such Party, its Subsidiaries or such Third-Party service provider.

 

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ARTICLE VIII
TECHNOLOGY AND PROPRIETARY RIGHTS

 

Section 8.1                                   Intellectual Property Ownership.

 

(a)                                 Except as expressly provided in the
Separation Agreement, nothing in this Agreement shall transfer any rights, title
or interests in any Intellectual Property invented, created, conceived, or
reduced-to-practice before or after the Effective Time by or on behalf of any
member of either Group or otherwise controlled by or licensed to any member of
such Group.

 

(b)                                 Subject to Article IX of this Agreement and
Article VII of the Separation Agreement (relating to Exchange of Information;
Confidentiality), as between the Parties, all Intellectual Property acquired by
or for any member of either Group in connection with providing the Services
shall be owned by such member of such Group. However, nothing in this Agreement
obligates either Party to assign any licenses or contracts to the other Party.

 

Section 8.2                                   No Implied Licenses.  Except as
expressly specified in this Agreement, nothing in this Agreement will be deemed
to grant to any member of either Group, by implication, estoppel or otherwise,
license rights, ownership rights or any other Intellectual Property in any
technology, work processes or Software owned by any member of the other Group. 
However, nothing in this Section 8.2 is intended to alter the terms of any grant
of any rights, title or interests in any Intellectual Property from OPC to CRC
pursuant to the Separation Agreement or Intellectual Property License Agreement.

 

ARTICLE IX
CONFIDENTIALITY AND SYSTEM SECURITY

 

Section 9.1                                   Confidentiality.  Each Party
agrees that the specific terms and conditions of this Agreement and any
information conveyed or otherwise received by or on behalf of a Party in
conjunction herewith are confidential and are subject to the terms of the
confidentiality provisions set forth in Section 7.7 of the Separation Agreement.

 

Section 9.2                                   System Security.

 

(a)                                 If any Party is given access to the other
Party’s computer systems, networks or software (collectively, “Systems”) in
connection with the Transition Services, the Party given access (the “Availed
Party”) shall comply with all of the other Party’s system security and other
company policies, procedures and requirements that have been provided to the
Availed Party in advance and in writing (collectively, “Security Regulations”),
and shall not tamper with, compromise or circumvent any security or audit
measures employed by such other Party.  The Availed Party shall access and use
only those Systems of the other Party for which it has been granted the right to
access and use.

 

(b)                                 Each Party shall use commercially reasonable
efforts to ensure that only those of its personnel who are specifically
authorized to have access to the Systems of the other Party gain such access,
and use commercially reasonable efforts to prevent unauthorized access, use,
destruction, alteration or loss of information contained therein, including
notifying its personnel of the restrictions set forth in this Agreement and of
the Security Regulations.

 

(c)                                  Each Party shall use commercially
reasonable efforts to ensure that its personnel will access the Systems of the
other Party only for the purpose of providing the Services and, when accessing
or using the Systems of the other Party, shall not (i) introduce any viruses,
worms, Trojan horses or other bugs or errors in the Systems or (ii) open or
forward any executable “ready to run” files or other files which may cause
damage to such Systems.  Each Party reserves the right to monitor the other
Party’s use of the Internet and other activities on its own Systems.

 

9

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(d)                                 If, at any time, the Availed Party
determines that any of its personnel has sought to circumvent, or has
circumvented, the Security Regulations, that any unauthorized Availed Party
personnel has accessed the Systems, or that any of its personnel has engaged in
activities that may lead to the unauthorized access, use, destruction,
alteration or loss of data, information or software of the other Party, the
Availed Party shall promptly terminate any such person’s access to the Systems
and promptly notify the other Party.  In addition, such other Party shall have
the right to deny personnel of the Availed Party access to its Systems upon
notice to the Availed Party in the event that the other Party reasonably
believes that such personnel have engaged in any of the activities set forth
above in this Section 9.2(d) or otherwise pose a legitimate security concern. 
The Availed Party shall use commercially reasonable efforts to cooperate with
the other Party in investigating any apparent unauthorized access to such other
Party’s Systems.

 

(e)                                  Each Party shall be responsible and liable
for all damages or unauthorized access resulting from the actions of its
personnel in violation of this Section 9.2.

 

ARTICLE X
NO PARTNERSHIP OR AGENCY RELATIONSHIP

 

Section 10.1                            No Partnership or Agency Relationship. 
Nothing in this Agreement is intended or shall be deemed to constitute a
partnership, agency, franchise or joint venture relationship between the Parties
or any of their Subsidiaries.  Neither Party shall have power to control the
activities and operations of the other Party or its Subsidiaries, nor to bind or
commit the other Party or its Subsidiaries.

 

ARTICLE XI
TERMINATION

 

Section 11.1                            General.  Subject to the provisions of
Section 11.4, this Agreement shall terminate, and the obligation of each Party
to provide all Services shall cease, on the earliest to occur of (i) the date on
which the provision of all Services has been terminated by the Parties pursuant
to Section 3.3, subject to the terms of Section 3.3, or (ii) the date on which
the Term of this Agreement has ended pursuant to Section 2.1 or 11.2.

 

Section 11.2                            Termination of Entire Agreement. 
Subject to the provisions of Section 11.4, a Party shall have the right to
terminate this Agreement or effect a Partial Termination effective upon delivery
of written notice to the other Party if the other Party: (a) makes an assignment
for the benefit of creditors, or becomes bankrupt or insolvent, or is petitioned
into bankruptcy, or takes advantage of any state, federal or foreign bankruptcy
or insolvency act, or if a receiver or receiver/manager is appointed for all or
any substantial part of its property and business and such receiver or
receiver/manager remains undischarged for a period of 30 days; or (b) materially
defaults in the performance of any of its covenants or obligations contained in
this Agreement (or, in the case of a Partial Termination, with respect to the
Services being terminated) and such default is not remedied to the nondefaulting
Party’s reasonable satisfaction within 45 days after receipt of written notice
by the defaulting Party informing such Party of such default, or if such default
is not capable of being cured within 45 days, if the defaulting Party has not
promptly begun to cure the default within such 45-day period and thereafter
proceeded with all diligence to cure the same.

 

Section 11.3                            Procedures on Termination.  Following
any termination of this Agreement or Partial Termination, each Party will
cooperate with the other Party as reasonably necessary to avoid disruption of
the ordinary course of the other Party’s and its Subsidiaries’ businesses. 
Termination shall not affect any right to payment for Services provided prior to
termination.

 

Section 11.4                            Effect of Termination.  Article V (with
respect to Fees and Taxes attributable to periods prior to termination),
Sections 6.1, 6.2, 6.4, 6.5 and 11.3, this Section 11.4 and Articles I, VII, IX,
XII and XIII shall survive any termination of this Agreement.  For the avoidance
of doubt, neither (a) termination of a particular Service hereunder nor
(b) termination of this Agreement with respect to the Services provided under
one Annex, but not the other Annex, shall be a termination of this Agreement.

 

10

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ARTICLE XII
INDEMNIFICATION

 

Section 12.1                            IN THIS ARTICLE XII AND IN
SECTION 13.12, THE PHRASE “REGARDLESS OF FAULT” MEANS WITH RESPECT TO ANY
INDEMNITY OR RELEASE PROVISION THAT THE INDEMNITY OR RELEASE IS BEING GIVEN
WITHOUT REGARD TO THE FAULT OF THE PARTY OR PERSON BEING RELEASED OR INDEMNIFIED
AND THAT THE INDEMNITY OR RELEASE WILL BE ENFORCEABLE EVEN IF THE LIABILITY
BEING RELEASED OR INDEMNIFIED AGAINST WAS CAUSED BY THE NEGLIGENCE (OF ANY
DEGREE OR CHARACTER), STRICT LIABILITY,  BREACH OF DUTY OR ANY OTHER FAULT ON
THE PART OF THE PARTY OR PERSON BEING RELEASED OR INDEMNIFIED.

 

Section 12.2                            IT IS THE INTENTION OF THE PARTIES THAT
THE INDEMNITIES AND RELEASES IN THIS ARTICLE XII AND IN SECTION 13.12 COMPLY
WITH BOTH THE EXPRESS NEGLIGENCE DOCTRINE AND THE CLEAR AND CONSPICUOUS RULE AND
THAT WHEREVER “REGARDLESS OF FAULT” APPEARS IN THIS ARTICLE XII, THE DEFINITION
SET OUT IN SECTION 12.1 IS INCORPORATED AS THOUGH FULLY SET OUT THEREIN.

 

Section 12.3                            Indemnification by CRC.  CRC shall
REGARDLESS OF FAULT indemnify, defend and hold harmless each of the OPC
Indemnitees for any Losses incurred by them in connection with or arising out of
any: (a) CRC’s, its Subsidiaries’, employees’, suppliers’ or contractors’ gross
negligence or willful misconduct in the provision of the CRC Services by CRC,
its Subsidiaries, employees, suppliers or contractors pursuant to this
Agreement; (b) any Action that determines that the provision by CRC or its
Subsidiaries and/or the receipt by any of the OPC Indemnitees of any CRC
Services infringes upon or misappropriates the Intellectual Property of any
Third Party, to the extent that any such Losses are determined to have resulted
from CRC’s, its Subsidiaries’, employees’, suppliers’ or contractors’ gross
negligence or willful misconduct; and (c) Third-Party claims arising out of the
provision of the OPC Services, except to the extent that such Third-Party claims
for Losses are finally determined by a final non-appealable decision of a court
having jurisdiction over CRC and OPC or pursuant to Article IV of the Separation
Agreement to have arisen out of the gross negligence or willful misconduct of
OPC or its Subsidiaries or their respective employees, suppliers or contractors
in providing the OPC Services.

 

Section 12.4                            Indemnification by OPC.  OPC shall
REGARDLESS OF FAULT indemnify, defend and hold harmless the CRC Indemnitees for
any Losses incurred by them in connection with or arising out of: (a) OPC’s, its
Subsidiaries’, employees’, suppliers’ or contractors’ gross negligence or
willful misconduct in the provision of the OPC Services by OPC, its
Subsidiaries, employees, suppliers or contractors pursuant to this Agreement;
(b) any Action that determines that the provision by OPC or its Subsidiaries
and/or the receipt by any of the CRC Indemnitees of any OPC Services infringes
upon or misappropriates the Intellectual Property of any Third Party, to the
extent that any such Losses are determined to have resulted from OPC’s, its
Subsidiaries’, employees’, suppliers’ or contractors’ gross negligence or
willful misconduct; and (c) Third-Party claims arising out of the provision of
the CRC Services, except to the extent that such Losses are finally determined
by a final non-appealable decision of a court having jurisdiction over OPC and
CRC or pursuant to Article IV of the Separation Agreement to have arisen out of
the gross negligence or willful misconduct of CRC or its Subsidiaries or their
respective employees, suppliers or contractors in providing the CRC Services.

 

Section 12.5                            Waiver of Consequential Damages;
Professional Opinions.

 

(a)                                 Each Party shall have a duty to mitigate the
Losses for which the other is responsible hereunder.  IN NO EVENT SHALL EITHER
PARTY OR ANY OF THEIR RESPECTIVE SUBSIDIARIES BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL (INCLUDING LOSS OF REVENUES OR
PROFITS, LOSS OF DATA, LOSS OF GOODWILL AND LOSS OF CAPITAL, WHETHER OR NOT SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), EXEMPLARY OR
PUNITIVE DAMAGES OR THE LIKE ARISING UNDER ANY LEGAL OR EQUITABLE THEORY OR
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT (OR THE PROVISION OF SERVICES
HEREUNDER), ALL OF WHICH ARE HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES
REGARDLESS OF WHETHER OR NOT ANY PARTY TO THIS AGREEMENT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES; PROVIDED, THE FOREGOING SHALL NOT APPLY TO ANY

 

11

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SUCH DAMAGES OWED TO A THIRD PARTY UNDER A CLAIM MADE BY SUCH THIRD PARTY FOR
WHICH AN INDEMNITY IS OWED PURSUANT TO SECTION 12.3 OR 12.4.  THESE LIMITATIONS
SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY.

 

(b)                                 It is not the intent of either Party to
receive from the other Party, or any of its officers, employees, Subsidiaries or
representatives, professional opinions, whether with regard to tax, legal,
treasury, finance, employment or other business and financial matters, or
technical advice, whether with regard to information technology or other
matters; neither Party shall rely on, or construe, any Service provided to it as
such professional advice or opinions or technical advice; and each Party shall
seek all third-party professional advice and opinions or technical advice as it
may desire or need in connection with its business and operations.

 

Section 12.6                            Indemnification Is Exclusive Remedy. 
Except for equitable relief and rights pursuant to Section 5.2, Section 6.3 or
Article IX, the indemnification provisions of this Article XII shall be the
exclusive remedy for breach of this Agreement.

 

Section 12.7                            Risk Allocation.  Each Party agrees that
the Fees charged under this Agreement reflect the allocation of risk between the
Parties, including the disclaimer of warranties in Section 3.4(a) and the
limitations on liability in Section 3.4(b), Section 3.4(c) and Section 12.5. 
Modifying the allocation of risk from what is stated here would affect the Fees
that each Party charges, and in consideration of those Fees, each Party agrees
to the stated allocation of risk.

 

Section 12.8                            Insurance.  Each Party (as to itself)
shall insure or self-insure liabilities it assumes under this Agreement and
shall procure insurance coverage consistent with peer companies of similar size
and industry.

 

Section 12.9                            Indemnification Procedures.  All claims
for indemnification pursuant to this Article XII shall be made in accordance
with the provisions set forth in Section 5.7 of the Separation Agreement. 
Notwithstanding anything to the contrary hereunder, no cause of action, dispute
or claim for indemnification may be asserted against either Party or submitted
to arbitration or legal proceedings which accrued more than two years after the
later of (i) the occurrence of the act or event giving rise to the underlying
cause of action, dispute or claim and (ii) the date on which such act or event
was, or should have been, in the exercise of reasonable due diligence,
discovered by the Party asserting the cause of action, dispute or claim.

 

ARTICLE XIII
MISCELLANEOUS

 

Section 13.1                            Entire Agreement.  Without limiting
Section 1.2(m), this Agreement, including the Annexes hereto and the sections of
the Separation Agreement referenced herein, constitutes the entire agreement
between the Parties with respect to the subject matter of this Agreement, and
supersedes all prior agreements, negotiations, discussions, understandings and
commitments, written or oral, between the Parties with respect to such subject
matter.

 

Section 13.2                            Choice of Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS
OF THE STATE OF TEXAS, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION OR RULE
THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.

 

Section 13.3                            Amendment.  This Agreement shall not be
amended, modified or supplemented except by a written instrument signed by an
authorized representative of each of OPC and CRC.

 

Section 13.4                            Waiver.  Any term or provision of this
Agreement may be waived, or the time for its performance may be extended, by the
Party or Parties entitled to the benefit thereof.  Any such waiver shall be
validly and sufficiently given for the purposes of this Agreement if, as to
either Party, it is in writing signed by an authorized representative of such
Party.  The failure of either Party to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, or in any way
to affect the validity of this

 

12

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Agreement or any part hereof or the right of either Party thereafter to enforce
each and every such provision.  No waiver of any breach of this Agreement shall
be held to constitute a waiver of any other or subsequent breach.

 

Section 13.5                            Partial Invalidity.  Wherever possible,
each provision hereof shall be interpreted in such a manner as to be effective
and valid under applicable law, but in case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such provision or provisions shall be ineffective
to the extent, but only to the extent, of such invalidity, illegality or
unenforceability without invalidating the remainder of such provision or
provisions or any other provisions hereof, unless such a construction would be
unreasonable.

 

Section 13.6                            Execution in Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original instrument, but all of which shall be considered one and the
same agreement, and shall become binding when one or more counterparts have been
signed by and delivered to each of the Parties.

 

Section 13.7                            Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the Parties and their
successors and permitted assigns; provided, however, that the rights and
obligations of either Party under this Agreement shall not be assignable by such
Party without the prior written consent of the other Party.  The successors and
permitted assigns hereunder shall include any permitted assignee as well as the
successors in interest to such permitted assignee (whether by merger,
liquidation (including successive mergers or liquidations) or otherwise).

 

Section 13.8                            Third-Party Beneficiaries.  Except to
the extent otherwise provided in Article XII and Section 13.12, the provisions
of this Agreement are solely for the benefit of the Parties and their respective
Subsidiaries, successors and permitted assigns and shall not confer upon any
Third Party any remedy, claim, liability, reimbursement or other right in excess
of those existing without reference to this Agreement.

 

Section 13.9                            Notices.  All notices or other
communications under this Agreement shall be in writing and shall be deemed to
be duly given when delivered or mailed in accordance with the provisions of
Section 10.5 of the Separation Agreement.

 

Section 13.10                     Performance.  Each Party shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such Party.

 

Section 13.11                     No Public Announcement.  Neither OPC nor CRC
shall, without the approval of the other, make any press release or other public
announcement concerning the transactions contemplated by this Agreement, except
as and to the extent that either Party shall be so obligated by law or the
rules of any regulatory body, stock exchange or quotation system, in which case
the other Party shall be advised and the Parties shall use commercially
reasonable efforts to cause a mutually agreeable release or announcement to be
issued; provided, however, that the foregoing shall not preclude communications
or disclosures necessary to implement the provisions of this Agreement or to
comply with applicable law, accounting and SEC disclosure obligations or the
rules of any stock exchange.

 

Section 13.12                     Limited Liability.  Notwithstanding any other
provision of this Agreement, no individual who is a stockholder, director,
employee, officer, agent or representative of CRC or OPC, in such individual’s
capacity as such, shall, REGARDLESS OF FAULT, have any liability in respect of
or relating to the covenants or obligations of such Party under this Agreement
and, to the fullest extent legally permissible, each of CRC and OPC, for itself
and its respective stockholders, directors, employees, officers and
Subsidiaries, waives and agrees not to seek to assert or enforce any such
liability that any such Person otherwise might have pursuant to applicable law.

 

Section 13.13                     Dispute Resolution.  The Parties agree that
any dispute, controversy or claim between them with respect to the matters
covered hereby shall be governed by and resolved in accordance with the
procedures set forth in Article IV of the Separation Agreement.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
authorized representatives as of the date first above written.

 

 

OCCIDENTAL PETROLEUM CORPORATION

 

 

 

 

 

By:

/s/ Marcia E. Backus

 

Name:

Marcia E. Backus

 

Title:

Vice President and General Counsel

 

SIGNATURE PAGE TO TRANSITION SERVICES AGREEMENT

 

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CALIFORNIA RESOURCES CORPORATION

 

 

 

 

 

By:

/s/ Todd A. Stevens

 

Name:

Todd A. Stevens

 

Title:

President and Chief Executive Officer

 

SIGNATURE PAGE TO TRANSITION SERVICES AGREEMENT

 

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ANNEX A

 

AUTHORIZED REPRESENTATIVES

 

Authorized Representatives of OPC:

 

Authorized Representatives of CRC:

·                  Marcia Backus

 

·                  Jody Johnson

·                  Jennifer Kirk

 

·                  Roy Pineci

 

ANNEX A

 

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ANNEX B

 

DESCRIPTION OF OPC SERVICES

 

Part I — Accounting

 

1.              Overall general consulting needs based on historical knowledge
embedded in either company

 

2.              Support, as needed, and information for regulatory inquiries,
including state escheat audits, etc.

 

3.              Training and support for the Marketing back office activities
for CRC Marketing

 

4.              Access to records and information to complete regulatory
filings, including the Proxy statement

 

5.              Assistance with HFM Planning Module, including setting up new
forms and templates

 

6.              Payroll training from OPC

 

a.              Including but not limited to assistance with changing payroll
frequency of all CRC employees to bi-weekly

 

7.              Land Administration

 

a.              General consulting needs based on historical knowledge embedded
in OPC

 

b.              File room location & staff — File room and staff (both scanning
and filing) are needed until new space is obtained and staffed

 

i.                  Scanning services are limited to scanning of files and
emailing to CRC personnel making the request.

 

ii.               Scanning services do not include scanning to network connected
systems such as Insight or FileNet as OPC Records Management personnel will not
have CRC network access; however, the digital scan output will be transferred to
CRC in a format facilitating direct input to CRC systems.

 

iii.            There are approximately 3900 linear feet of CRC records housed
in Houston (324 boxes).  The equivalent of 1 person will be needed to support
ongoing CRC needs up to the point the records are transferred to CRC. OPC
Records Management will provide assistance to prepare records for shipment.

 

c.               Office space — 1 office in Houston near the files for CRC Land
Admin staff while the files are still in Houston

 

d.              Continuing owner relations and accounting support for DOI
related activities

 

8.              Revenue and Regulatory

 

a.              Owner Services — assistance to help gather the information such
as detailed suspense loads and checkwrite details

 

b.              Revenue — Audits: assistance from OEMI to help pull any purchase
statements, third party invoices and pricing

 

ANNEX B

 

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c.               Regulatory — assistance to pull historical data (royalty
payments to MMS/ONRR) when needed for future audits

 

9.              OneOxy/Business Support

 

a.              Consultation and assistance from Phil Limos’ finance support
groups for a period of 6 months (several groups - OneOxy, JVA, Fixed Assets,
Projects)

 

b.              Access to Shannon Grossman’s group for a period of 6 months (for
OneOxy/OneCal Supply Chain Systems support)

 

c.               Training and consultation with the financial and operational
database and management reporting software (SSAS Cube) post-separation from
Jayce Roundtree or someone from the OPC Financial Reporting team.  This is where
most of the management reports will be generated from and there are no current
“heavy users” in CA.

 

10.       Accounts Payable

 

a.              Escheat preparation and information (historical information) for
issues that go back a number of years

 

b.              Third Party/Internal Audit — will need historical information
(historical information) for issues that go back a number of years

 

c.               Regulatory or Government filings & requests — preparation and
information (historical information) for issues that go back a number of years
(includes Forms 1099, California Resident and Non-Resident Withholding (Forms
592), Annual Withholding Tax Returns for U.S. Source Income of Foreign Persons
(For 1042) and related Forms W-8, Proxy reporting, etc.)

 

d.              Assistance with Concur and OAS systems/process

 

e.               Assistance with iSupplier — process/system support

 

f.                Assistance with Bottom-line system

 

g.               Assistance with invoice scanning system

 

h.              For the avoidance of doubt, Accounts Payable support will not
include any IT systems or application support.

 

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Part II — HR

 

1.              Benefits accounting through the preparation of 2014 financial
reports

 

2.              Occupational Health Services

 

a.              Complete STD cases open at Effective Time

 

b.              Ongoing consulting on prior cases

 

c.               Ongoing drug testing for random, DOT, post-accident and
probable suspicion until CRC sets up

 

3.              HRIS Operations — for months of December 2014 and January 2015,
HRIS operational support and training of CRC’s HRIS personnel

 

4.              HRIS Support — Ongoing consulting and sharing of technical
specifications through YE2015

 

5.              Consulting and provision of data related to OPC’s Compensation,
Benefits and Executive Compensation programs as needed to complete transitions
to CRC and for preparation of CRC’s proxy statement

 

6.              “Contractor” access to Taleo applicant tracking system

 

a.              Access required through December 31, 2014

 

7.              Relocation Services

 

a.              Complete in-process relocations active at Effective Time

 

b.              Provide assistance in year-end tax calculations

 

c.               Consulting with CRC HR staff and relocated employees through YE
2015

 

8.              Technical Training — Ongoing consulting with the internal
authors of technical training and competency assurance programs with respect to
the design and development of those programs

 

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Part III — IT

 

1.              General system support

 

a.              OPC Group IT will provide general application support services
to CRC Group IT through the first month’s closing cycle after the Effective
Time.  This would include general system support by working with CRC Group IT
staff to troubleshoot and resolve errors related to the month end closing
activities.  However, the scope of transition services will not include
implementation services, training or systems consulting.

 

2.              PeopleSoft HCM application

 

a.              OPC Group IT will provide IT support for the PeopleSoft HCM
application(s) for the first two (2) pay cycles following the Effective Time;
provide year-end support for calendar year 2014; and provide interfaces support
through December 31, 2014.  These transition services will include working with
CRC Group IT staff to troubleshoot and resolve errors related to the pay cycle,
year-end activities and interfaces associated with the PeopleSoft HCM
application(s).

 

b.              OPC Group IT will also provide consultancy services for the
designated CRC Group PeopleSoft Administrator through December 31, 2014.  These
transition services will include working with CRC Group IT support on
environment troubleshooting, tax updates, and MasterTax software support.

 

3.              Services related to Marketing — OPC Group IT will provide
assistance with the first monthly close process post-separation.

 

4.              Revenue 1099 application — upon final implementation of the OPC
OneOxy system, OPC Group IT will provide support through December 31, 2014 as
necessary to CRC Group IT to implement and test the system.

 

5.              PowerPlan application — upon final implementation of the OPC
PowerPlan system, OPC Group IT will provide support and training through
December 31, 2014 as necessary to CRC Group IT to implement and test the system.

 

6.              Data Transfer from OPC Systems to CRC Systems — OPC Group IT
will provide support as necessary to CRC Group IT to ensure that data is fully
transferred to CRC.  Data may encompass physical and electronic records, both
general archives and system-specific data.  Specifically, General Ledger and
Revenue data are to be transferred upon completion of business process
activities for November activity processed in December.

 

7.              Wilshire Office PBX Support — OPC Group IT will continue to
provide basic PBX support for the Wilshire office building (including the Hammer
Museum since there is a single PBX system for both facilities) until the
expiration of the Office Term under Annex B, Part VII, Section A.

 

8.              Wilshire Office Printers — CRC Group personnel will continue to
be able to use the Ricoh and Lanier printers at the Wilshire office building
until the expiration of the Office Term under Annex B, Part VII, Section A.

 

9.              Wilshire Office Network Equipment — CRC Group IT will utilize
the Cisco 6509 core switches in the 5th Floor data/network center, network
cabling between the 5th Floor data/network center and the CRC Space (defined in
Annex B, Part VII, Section A) within the Wilshire office building, and the floor
switches, wireless access points, and associated cabling on each floor (or
portion thereof) of the CRC Space.  This will allow for a CRC Group network that
is separate from the OPC Group network.  All of the foregoing equipment will
continue to be owned by the OPC Group, but CRC Group IT will be entitled to
utilize such equipment until the expiration of the Office Term under Annex B,
Part VII, Section A.

 

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Part IV — Marketing

 

1.              Regulatory/Access to Information — OPC will provide such data,
technical and other information for pre-spin periods as CRC may reasonably
request for purposes of making required regulatory filings during 2015, and
responding to regulatory requests for data following the separation.

 

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Part V — Tax

 

1.              Property Tax

 

a.              Assistance with the annual California property tax filings to
the State Board of Equalization and the County Assessor’s office using
California Rendition and assistance with the testing of California Rendition

 

b.              Assistance with the Change in Ownership filings resulting from
the Internal Restructuring

 

c.               Assistance with Power Plan and remitting California property
tax payments and accounting for secured and unsecured regular, supplemental, and
escaped assessments

 

d.              Assistance with property tax examinations

 

2.              Sales and Use Tax

 

a.              Retrieval and processing of data using Second Decimal

 

b.              Assistance with Power Plan and remitting sales and use tax
payments and accounting

 

c.               Assistance with State Board of Equalization examinations

 

3.              Excise Tax and Business Tax

 

a.              Assist in monthly, quarterly, and annual Federal, State, and
Local excise and business tax compliance reporting and payments

 

b.              Advise and assist in Federal and State registration and  tax
audits

 

4.              Income and Franchise Tax

 

a.              Assistance (including data migration and training) with Oracle’s
tax fixed asset module. Beginning balance information (as of November 30, 2014)
will be available to be loaded into CRC’s instance of the Oracle tax fixed asset
module beginning in the week of January 26, 2015.

 

b.              Assistance with Corptax Compliance including data migration,
testing and set-up through February 28, 2015

 

c.               Assistance with the preparation of the short year December 2014
income/franchise tax returns and the 2014 income tax provision

 

i.                  Assistance with the preparation of the 2014 income tax
provision using the November 30, 2014 stub period information provided by OPC.
The preliminary November 30 current tax calculation and cumulative temporary
differences will be available to CRC on or before January 6, 2015.  Final
cumulative temporary differences of November 30, 2014 to be provided by OPC to
CRC by March 17, 2015.

 

ii.               Assistance with the preparation of the short year
December 2014 income/franchise tax returns as contemplated by Section 2.2(i) of
the Tax Sharing Agreement.  OPC will provide assistance with respect to
historical balances, historical elections, historical accounting methods, and
historical compliance practices until September 15, 2015.

 

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Part VI — Technical Reserves Review

 

1.              CRC will be following the established OPC reserves review
process for the 2014 cycle, which will require maintaining the services of the
OPC Technical Reserves Review Team (“TRRT”) and the OPC Reserves staff through
March 2015.

 

a.              Approve change records

 

b.              Compile Petrolook data

 

c.               Prepare summary numbers for Form 10-K filing and Board of
Directors meetings

 

d.              Support CRC through KPMG audit

 

2.              In addition to providing 2014 reserve reviews, the TRRT will
need to effect the transfer of all electronic California reserves information
from the current Houston servers to CRC servers. This would occur following the
close of the 2014 cycle (ca. January 30, 2015).

 

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Part VII — Miscellaneous

 

A.  Use of Wilshire Office Space

 

1.              Through June 30, 2015 (the “Office Term”), CRC shall be entitled
to occupy the entirety of floors 6, 7, 10 and 11 and 75% of floor 14 (the “CRC
Space”) of 10889 Wilshire Boulevard, Los Angeles, California (the “Building”),
which is currently owned by Oxy Westwood Corporation, a California corporation
(“Oxy Westwood”), a wholly owned subsidiary of OPC.

 

a.              CRC shall give 30 days’ notice to Oxy Westwood and OPC prior to
vacating all or any portion of the CRC Space.  CRC shall be deemed to have
vacated the CRC Space when it has surrendered possession of such space in a
“broom-clean” condition and removed its personal property therefrom.

 

b.              CRC shall not be entitled to occupy or use any portion of the
Building other than the CRC Space without the prior written consent of Donald P.
de Brier, the President of Oxy Westwood.

 

c.               CRC shall pay a monthly gross rental fee (the “Gross Rental
Fee”) for its use of the CRC Space during the Office Term, which will equal an
amount per month of $3.25 per net rentable square foot of space in the CRC
Space.

 

d.              The Gross Rental Fee will cover charges for water, gas, heat,
electricity, other forms of power, sewage, office telephone and other charges
for public utilities that are shared with Oxy Westwood during the Office Term,
except that CRC shall be directly responsible for all internet, wireless
internet, cable and satellite television services for the CRC Space.

 

e.               Oxy Westwood shall continue to provide cleaning services for
the CRC Space as has been customarily provided in the past, except that carpet
cleaning service shall be reduced to two times per month.  The charges for such
services are covered by the Gross Rental Fee.

 

f.                All real estate taxes assessed upon the Building will be borne
by Oxy Westwood and (as to CRC) are covered by the Gross Rental Fee.  Each of
Oxy Westwood, OPC and CRC shall pay and be responsible for all taxes on their
respective personal property in the Building.

 

g.               Oxy Westwood shall maintain such fire and casualty insurance
with respect to the Building, which it shall determine is satisfactory in its
sole discretion, and the premiums and other charges for such insurance will be
covered (as to CRC) by the Gross Rental Fee.  CRC shall maintain fire and
casualty insurance with respect to its personal property in the CRC Space and
comprehensive general liability insurance against claims for bodily injury or
death, and property damage occurring on, in or about the CRC Space.

 

h.              The CRC space has been provided to CRC furnished, including
office equipment, by OPC, and CRC acknowledges and agrees that OPC owns all
right and title to all furnishings, office equipment and fixtures in the CRC
Space and that CRC has no right, title or interest in such furnishings, office
equipment and fixtures.  CRC will not remove or cause to be removed any
furnishings, office equipment or fixtures in the CRC Space without the prior
written consent of Donald P. de Brier, President of Oxy Westwood.  CRC shall
keep and maintain such furnishings, office equipment and fixtures in good and
usable condition, reasonable wear and tear excepted.  Any CRC or other personal
property remaining in the CRC Space after CRC surrenders such CRC Space shall,
at the option of OPC and Oxy Westwood, be deemed to have been abandoned by CRC
and may be retained or disposed of by OPC or Oxy Westwood without obligation to
CRC.  Notwithstanding the foregoing, the Parties acknowledge and agree that
“office equipment” does not include certain IT-related assets transferred from
Oxy Inc. to CRC Services, LLC pursuant to the Purchase and Sale Agreement
between such parties.

 

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i.                  The Parties acknowledge and agree that CRC has assumed the
OPC leases for certain office equipment in the copy room and the mailroom in the
CRC Space and that Oxy Westwood and OPC have no right, title or interest in such
equipment and are not responsible for the servicing or maintenance of such
equipment.

 

j.                 Through the Office Term, Oxy Westwood and OPC will continue
to provide bottled water, water cooler and coffee service throughout the CRC
Space and vending machine supplies and services customarily provided by Oxy
Westwood and OPC in the break room on the 4th floor of the Building.  All other
beverage and food service will be discontinued as of December 31, 2014.

 

k.              CRC will not install any signage on or in the Building,
including the CRC Space, or on or in the common areas of the floors of the
Building in which the CRC Space is located.

 

l.                  CRC shall not transfer, assign or sublet its entitlement to
occupy the CRC Space, and any such purported transfer, assignment or sublease
shall be null, void, and without effect.

 

m.          Oxy Westwood and OPC shall be entitled to enter the CRC Space at all
times for the purposes of inspecting the space, making repairs and allowing
buyers, potential buyers, and potential tenants of the CRC Space and the
Building, and their agents, representatives and consultants, to inspect the CRC
Space.

 

n.              Oxy Westwood and OPC will continue to provide security services
for the Building as customarily provided in the past with such modifications as
they deem appropriate in their sole discretion.

 

o.              Oxy Westwood and OPC will continue to provide document
destruction services as customarily provided in the past and the charge for the
same will be covered (as to CRC) by the Gross Rental Fee.

 

B.  Treasury

 

1.              OPC Treasury will be working with CRC Treasury and CRC Marketing
on transitioning Letters of Credit and Parent Guarantees issued by OPC over to
CRC.

 

C.  CRC Supply Chain Management Employee

 

1.              Due to visa issues, Juan Pablo Tamayo has not been transferred
to CRC and will not be transferred until a visa is issued.  J.P. Tamayo will
continue to be employed by OOGC and work supply chain issues on behalf of CRC
during the transition period.  The transition period will be for approximately 2
months until the end of January (it is anticipated the visa issue will be
resolved at that time).  J.P. Tamayo is a member to the CRC Strategic Sourcing
team.

 

D.  Use of Long Beach Office Space

 

1.              CRC will continue to use OPC’s office space in the office
building located at 301 East Ocean Boulevard, Long Beach, CA 90802, until
approximately mid-December 2014.  CRC will continue to use only the portions of
OPC’s office space as are being used by CRC personnel at the time of the
Effective Time.

 

E.  Elk Hills Regulatory Employee

 

1.              Ken Goltz, an Elk Hills employee who has been transferred to OPC
payroll due to deferred compensation issues, will continue to work on Elk Hills
regulatory issues on a part time basis until his retirement at YE2015.

 

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F.  Risk Management Services

 

1.              OPC insurance and risk management personnel will assist Greg
Hodgson and his team via telephone or e-mail regarding any risk management
inquiries.

 

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ANNEX C

 

DESCRIPTION OF CRC SERVICES

 

Part I — Accounting

 

1.              HFM support and consultations (Significant knowledge resides in
CRC retained employees)  (12-18 months)

 

2.              Overall general consulting needs based on historical knowledge
embedded in either company

 

3.              Marketing/November Settlement and Pre-Effective Time True-Ups:
Assistance from CRC personnel to reconcile commodity purchase and sale accruals
with actual purchase and sale data

 

4.              OPC will require Larry Dale’s assistance in Houston for a period
of 2 or more weeks in February, after the year-end close.

 

a.              Larry Dale will train Houston personnel in year-end closing
procedures such as equity pick-up entries and pass-back adjustments (if any).

 

b.              Larry Dale will instruct both accounting and HFM/PLN
administrative personnel on realigning the legal entity tree, to reflect all the
2014 changes to the current parent / sub hierarchy, and will train them on the
four parent / sub hierarchal trees in HFM and how to keep the hierarchal trees
in sync.

 

ANNEX C

 

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Part II — HR

 

1.              Ongoing consulting relating to OPC’s Compensation, Benefits, and
Executive Compensation programs

 

a.              Through year end 2015

 

b.              Volume expected to be major through the 2015 Proxy preparation
period

 

2.              Internal legal services related to the above-mentioned
Compensation, Benefits, and Executive Compensation programs

 

a.              Through year end 2015

 

b.              Volume will be sporadic and tied to regulatory filings,
corporate Committee issues and discontinued programs

 

3.              Generalist HR support for Los Angeles based OPC personnel

 

a.              Through June 30, 2015

 

b.              Includes processing employees as they leave OPC employment
(agreements, close out activities, etc.)

 

c.               Volume expected to be moderate through March 31, 2015

 

4.              Benefits accounting through the preparation of 2014 financial
reports

 

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Part III — Marketing

 

1.              Regulatory/Access to Information — CRC will provide such data,
technical and other information for pre-spin periods as OPC may reasonably
request for purposes of making required regulatory filings during 2015, and
responding to regulatory requests for data following the separation.

 

2.              Phibro — CRC will make available employees who handled Phibro
issues to assist OPC until such time as Phibro ceases to be an affiliate of OPC
(approx end of Q2 2015).

 

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Part IV — IT

 

1.              Desktop Support — CRC Group IT will provide basic IT-related
support for the OPC Group personnel (including CBRE as part of the “Office of
the Building”) at the Wilshire office building through December 31, 2014, and
Van Nuys Airport flight support personnel until such flight operations have
relocated to Houston (anticipated to be no later than the end of Q2 2015). 
Commencing on January 1, 2015, (a) OPC Group IT will provide all IT and network
support for the OPC Group personnel (including CBRE as part of the “Office of
the Building”) at the Wilshire office building, and (b) CRC Group IT will
provide all IT and network support for the CRC Group personnel at the Wilshire
office building until the expiration of the Office Term under Annex B, Part VII,
Section A.

 

2.              Data Transfer from CRC Systems to OPC Systems — CRC Group IT
will provide support as necessary to ensure that all data related to pre-spin
production operations data is transferred to OPC Group IT (e.g.,
November natural gas actual volumes received in December).

 

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Part V — Miscellaneous

 

A.  Use of Wilshire Office Space

 

1.              During the Office Term, CRC shall staff and manage the mailroom
and the loading dock of the Building and continue to provide the same services,
including mail, package and other deliveries, on the same terms and in the same
manner and standards as has been customary in the Building.  CRC has established
UPS, Federal Express and other mail and package delivery accounts and has
assumed OPC’s agreement for the pick-up of outgoing USPS mail.  OPC shall pay
20% of the cost and CRC shall pay 80% of the cost of such services during the
Office Term.

 

B.  Support for Steve Chazen

 

1.              CRC will provide OPC with access to Karen Plotts to assist
Steven Chazen with preparation for meetings and dinners relating to the OPC
Board of Directors.

 

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