ASSET SALE AGREEMENT
MAIN PASS BLOCK 299
THIS AGREEMENT, dated May 2, 1990, between:
CHEVRON U.S.A. INC., a Pennsylvania corporation with its principal place of
business in Louisiana at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Seller); and
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a Delaware limited
partnership ("Freeport"), with its principal place of business in Louisiana
at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, referred to herein as
"Buyer",
W I T N E S S E T H:
That Seller desires to sell to Buyer and Buyer desires to purchase from
Seller on the terms set forth in this Agreement those certain oil and gas
interests and associated assets identified in Exhibits "A" and "B" attached
hereto and made a part hereof. Accordingly, Seller and Buyer agree as
follows:
1. SALE AND PURCHASE OF ASSETS
1.1 ASSETS TO BE SOLD. Seller shall sell, transfer, and assign, or cause
others to sell, transfer and assign to Buyer, and Buyer shall purchase
and receive the following, to-wit:
1.1.1 All of Seller's right, title and interests in and to the
Segregated Lease, as defined in Exhibit "A". Seller reserves
all other rights in the "Lease" (as identified in
Exhibit "A"), such other rights being the "Retained Lease".
1.1.2 All of Seller's right, title and interest in and to the
materials, equipment, services and contract rights described
in Exhibit "B" ("Physical Assets").
The Segregated Lease and Physical Assets are hereinafter collectively
referred to as "the Assets". Such transfer of interests will be made
and be effective at Closing.
1.2 INSTRUMENTS. Except as may be otherwise noted in this Agreement, the
Assets to be conveyed by Seller to Buyer Pursuant to Section 1.1
shall be conveyed by instruments in form and substance similar to
Exhibits "F-1" and "F-2," provided that the Physical Assets shall
be conveyed on an "as is" basis. Seller shall execute such other
Bills of Sale as may be required by Buyer for the Physical Assets.
The interests to be conveyed by Buyer to Seller shall be conveyed
by an instrument in form and substance similar to Exhibit "F-3" or
"F-4", as applicable.
1.3 SELLER'S ELECTION TO EFFECT IRC Section 1031 EXCHANGE. In the event
Seller so elects, Buyer agrees to attempt in good faith to
accommodate Seller in effecting a tax-deferred exchange of the
properties identified in Section 1.1.1, at the value referred to in
Section 2.1.1, under Internal Revenue Code Section 1031, as
amended. Seller shall have the right to elect this tax-deferred
exchange at any time prior to the date of Closing. If Seller elects
to effect a tax-deferred exchange, Buyer agrees to execute
additional escrow instructions, documents, agreements, or
instruments to effect the exchange, provided that Buyer shall incur
no additional costs, expenses, fees, taxes (including any state or
local sales, use or transfer taxes) or liabilities as a result of
or connected with the exchange. Further, in the event Seller elects
to effect a tax-deferred exchange, such transaction shall be
subject to the terms and provisions of Section 7.3 hereof and of an
agreement similar in form and substance to that attached hereto as
Exhibit "F-5."
In connection with any such exchange, Buyer does not warrant or
represent that any such property selected by Seller will be
suitable for Sellers purpose nor that such exchange will qualify
for tax deferred treatment under Internal Revenue Code Section
1031. Seller will indemnify Buyer for any costs, expenses, fees,
taxes or liabilities arising from or in connection with any such
exchange, and for any claims made by any third party relating to
such exchange.
2. TERMS OF SALE
2.1 PRICE. As consideration for the sale of the Assets, Buyer shall pay
to Seller or its designee the following amounts:
2.1.1 For the Segregated Lease, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ dollars ($137,000,000).
2.1.2 For the Physical Assets, the amounts set forth in said
Exhibit "B" (as adjusted for the costs and expenses incurred
up to the Closing).
The amounts set forth in Sections 2.1.1 shall be paid at Closing by
wire transfer in Federal Funds to a bank account to be designated
by Seller. An invoice with supplier's documentation for the items
identified in Section 2.1.2 will be forwarded to Freeport under
separate cover within thirty (30) days after Closing. This invoice
will contain payment instructions and information as to the status
and condition of the materials and equipment being transferred.
2.2 ASSUMPTION OF OBLIGATIONS AND LIABILITIES. As additional
consideration for the sale of the Assets, Buyer shall assume all
obligations and liabilities relating to the ownership or use of the
Assets, including but by no means limited to the payment of
Production Payments, overriding royalty payments or the Final
Payment (if applicable) owing to Seller hereunder, and reclamation
and the plugging and abandonment of all ▇▇▇▇▇ drilled on the
Segregated Lease (but not including ▇▇▇▇▇ heretofore drilled
through the Segregated Lease to depths deeper than a subsea depth
of 1,900 feet), whether now or hereafter located on the Segregated
Lease. Buyer shall also assume all accounting and reporting duties
and obligations associated with use and ownership of the Assets
subsequent to the Closing. Such reclamation and plugging and
abandonment shall be performed in a good and workmanlike manner and
in accordance with the rules and regulations of the Minerals
Management Service and all other applicable laws. The sale will be
made subject to, and Buyer assumes all rights and obligations
arising under and in accordance with, the terms of the Segregated
Lease, and the agreements listed on Exhibit "A" hereto which affect
the Segregated Lease. Buyer shall assume and be responsible for
all obligations of Seller accruing under such agreements after the
Closing, to the extent such agreements apply to the Segregated
Lease.
2.3 INDEMNIFICATION BY BUYER. Buyer shall defend and indemnify Seller, and
shall save and hold Seller (and Sellers assignee under an exchange
agreement) free and harmless, from and against any and all liabilities,
penalties, fines, losses, injuries including death, demands, damages,
claims and causes of action, of any nature whatsoever, arising directly
or indirectly from or in connection with:
2.3.1 Seller's #11 well, previously drilled within the Segregated
Lease and which Seller represents was properly plugged and
abandoned by Seller;
2.3.2 Buyer's ownership or use of the Segregated Lease, or
operations conducted or caused to be conducted by or on
behalf of Buyer on, in, under or adjacent to the Segregated
Lease for the exploration for or development and production,
gathering, transportation, processing or treatment of oil or
gas or sulphur or any other mineral or substance from or
allocable to the Segregated Lease,
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except to the extent that such liabilities, losses, injuries
including death, demands, damages, claims and causes of action are
finally established, in a ruling from a court of competent
jurisdiction not subject to appeal, to be the result of Seller's
(or, pursuant to an exchange agreement, Seller's assignee's)
negligence or other legal fault.
2.4 INDEMNIFICATION BY SELLER. Seller shall save and hold Buyer free and
harmless from and against any and all liabilities, penalties,
fines, losses, injuries including death, demands, damages, claims
and causes of action, of any nature whatsoever, arising directly or
indirectly from or in connection with Seller's ownership or use of
the Retained Lease, or operations conducted or caused to be
conducted by or on behalf of Seller on, in, or under the Retained
Lease for the exploration for or development and production,
gathering, transportation, processing or treatment of oil or gas or
sulphur or any other mineral or substance from or allocable to the
Retained Lease, except to the extent that such liabilities, losses,
injuries including death, demands, damages, claims and causes of
action are finally established, in a ruling from a court of
competent jurisdiction not subject to appeal, to be the result of
Buyer's negligence or other legal fault.
2.5 CLOSING. The Closing of the transactions contemplated herein and the
transfer of the Assets shall occur on or before June 1, 1990 (unless
additional time is required to satisfy the conditions precedent to
Closing, as provided in Section 7 hereof), at Chevron's office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, at 10:00 a.m., local time, or
such other date, time, and place as Seller and Buyer may agree in
writing.
3. INTERESTS TO BE GRANTED TO BUYER BY SELLER
3.1 PRODUCTION PAYMENT.
3.1.1 Buyer shall grant, transfer, assign and convey to Seller a
"Production Payment" with regard to Buyer's oil production
from or attributable to the Segregated Lease (or any
extension, renewal or replacement of the Segregated Lease
acquired hereafter by Buyer or a parent, subsidiary or
affiliate of Buyer). Said Production Payment shall be
conveyed by an instrument in form and substance similar
either to Exhibit "F-3" or Exhibit "F-4" hereto, as
applicable pursuant to Section 3.2 or 3.3, and is to be
calculated on a calendar year basis, in accordance with
Exhibits "C" and "D" attached hereto. Buyer shall pay such
Production Payment to Seller on or before a date thirty (30)
days after the end of the calendar year to which such payment
applies, or on or before a date sixty (60) days after the
discontinuation of Production Payments as provided in
Section 3.2 hereof.
3.1.2 Concurrently with any such payment made pursuant to Section
3.1.1, Buyer shall furnish Seller a statement which shall
include information and data supporting and verifying the
amount of the Production Payment being tendered. Said
payment and said statement shall be sent to the following
address:
Chevron U.S.A. Inc.
P. 0. Box J, Section 724E
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3.1.3 If Buyer does not make such a payment as required by Section
3.1.1 by the date such payment is due, the amount owed to
Seller shall accrue interest from the due date at the prime
interest rate posted from time to time by Chase Manhattan
Bank, New York, New York, or by such other bank as the
parties may hereafter mutually select in writing, plus two
percent (2%).
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3.2 OVERRIDING ROYALTY INTEREST - NO EXCHANGE.
3.2.1 This Section 3.2 shall apply only in the event Seller elects
not to effect a tax-deferred exchange as provided in
Section 1.3.
3.2.2 After cumulative oil production from or allocable to the
Segregated Lease produced, saved or used equals or exceeds
36 million stock tank barrels of oil, measured at Buyer's
production facility platform located on or adjacent to the
Segregated Lease (the ability to produce and save such
volumes of oil not being guaranteed by Buyer), or after a
date twenty (20) years from the date of first such oil
production, whichever occurs first, Seller's Production
Payment as provided for in Section 3.1.1 above shall convert
to an overriding royalty of 25% of the value of oil and gas
production thereafter produced and saved or used from or
allocable to the Segregated Lease. Such conversion shall be
set forth in an instrument similar in form and substance to
that attached hereto as Exhibit "F-3." Notwithstanding
anything foregoing in this Section 3.2 to the contrary, said
overriding royalty shall be calculated, determined and paid
on the same volumes of production on which the lessors
royalty is calculated, determined and paid; provided, this
25% overriding royalty due in any one month shall never
exceed 50% of the "net operating revenue" for such month. For
purposes of this Section 3.2, "net operating revenue" is
defined as gross value realized by the Buyer on production
saved and sold or used in the calendar month, less the
lessor's royalty and normal operating expenses as outlined in
Exhibit "E" attached hereto (excluding major workover
expenses (i.e., well work requiring a drilling or workover
rig), plugging and abandoning costs, and other expenditures
of a capital nature). Said overriding royalty shall be
calculated on the same basis as the lessors royalties as
provided for in the Segregated Lease and, based on such
calculation, shall be paid concurrently with payment of
royalties under the lease covering the Segregated Lease.
Additionally, said overriding royalty shall bear its
proportionate share of present or future severance, windfall
profits, excise or similar taxes. Any adjustments to the
overriding royalties so paid required by the 50% of net
operating revenue limitation set forth above shall be based
on accrued expenses in accordance with generally accepted
accounting principles adjusted to actual expenses in
succeeding months and as consistently applied. Resulting
adjustments to the 25% overriding royalty interest payment
shall be made during such succeeding month or by direct
payment (after confirmation of the appropriate adjustments)
to the party due such payment.
3.3 OVERRIDING ROYALTY INTEREST AND FINAL PAYMENT - EXCHANGE.
3.3.1 This Section 3.3 shall apply only if Seller elects to effect
a tax-deferred exchange as provided in Section ?.
3.3.2 After a date twenty (20) years from the date of first oil
production from or allocable to the Segregated Lease,
Seller's Production Payment as provided for in Section ?
above shall convert to an overriding royalty of 25% of the
value of oil and gas production thereafter produced and saved
or used from or allocable to the Segregated Lease. Such
conversion shall be set forth in an instrument similar in
form and substance to that attached hereto as Exhibit "F-4."
Notwithstanding anything foregoing in this Section 3.3 to the
contrary, said overriding royalty shall be calculated,
determined and paid on the same volumes of production on
which the lessor's royalty is calculated, determined and
paid; provided, this 25% overriding royalty due in any one
month shall never exceed 50% of the "net operating revenue"
for such month. For purposes of this Section ?, "net
operating revenue" is defined as gross value realized by
the Buyer on production saved and sold or used in the
calendar month, less the lessor's royalty and normal
operating expenses as outlined in Exhibit 'E' attached
hereto (excluding major workover expenses (i.e., well work
requiring a drilling or workover rig), plugging and
abandoning costs, and other expenditures of a capital
nature).
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Said overriding royalty shall be calculated on the same basis
as the lessor's royalties as provided for in the
Segregated Lease and, based on such calculation, shall be
paid concurrently with payment of royalties under the lease
covering the Segregated Lease. Additionally, said overriding
royalty shall bear its proportionate share of present or
future severance, windfall profits, excise or similar taxes.
Any adjustments to the overriding royalties so paid required
by the 50% of net operating revenue limitation set forth
above shall be based on accrued expenses in accordance with
generally accepted accounting principles adjusted to actual
expenses in succeeding months and as consistently applied.
Resulting adjustments to the 25% overriding royalty interest
payment shall be made during such succeeding month or by
direct payment ( after confirmation of the appropriate
adjustments) to the party due such payment.
3.3.3 If, prior to a date twenty (20) years from the date of first
oil production from or allocable to the Segregated Lease, oil
production from or allocable to the Segregated Lease equals
or exceeds 36 million stock tank barrels, as measured at
Buyer's production facility platform located on or adjacent
to the Segregated Lease, then Section 3.3.2 shall be
inapplicable, and Section 3.3.4 shall apply .
3.3.4 After cumulative oil production from or allocable to the
Segregated Lease produced, saved or used equals or exceeds
36 million stock tank barrels of oil, measured at Buyer's
production facility platform located on or adjacent to the
Segregated Lease (the ability to produce and save such
volumes of oil not being guaranteed by Buyer, and the date
of such point in time being referred to as the "Final Payment
Determination Date"), Seller's Production Payment or
overriding royalty, as applicable, shall terminate, and in
lieu thereof the "Final Payment," as defined hereafter, from
Buyer to Seller shall be due. Within thirty (30) days after
the Final Payment Determination Date, the parties hereto
shall meet and agree on the total cumulative recoverable oil
reserves ("Recoverable Reserves") which will be produced and
saved from or attributable to the Segregated Lease during its
economically productive life. If the parties cannot agree on
the Recoverable Reserves within ten (10) days after their
initial meeting on the matter, then ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇,
or another mutually acceptable consultant, shall conclusively
determine such Recoverable Reserves, with Seller and Buyer
equally sharing the fees and expenses of such determination.
Following determination of Recoverable Reserves, the parties
shall determine Seller's "Final Payment" due from Buyer. The
Final Payment shall be calculated as set forth in Exhibit
"G," attached hereto and made a part hereof. Once the Final
Payment has been made by Buyer to Seller, Seller shall have
no further interest in the Segregated Lease or the production
therefrom.
3.4 MANNER OF DEVELOPMENT AND PRODUCTION. The parties recognize the
unique nature, risks and rewards of the simultaneous exploitation
of sulphur and oil and gas reserves from the same geologic trap.
Buyer shall have the exclusive right to determine the manner of
development and production of the Segregated Lease and Buyer's
sulphur lease.
4. TAXES
PAYMENT OF TAXES. All ad valorem, property, and other similar forms of
taxes for 1990 allocable to the Assets, which have been paid by Seller
or which have accrued on or before the Closing, shall be prorated
between Seller and Buyer as of the Closing. Buyer shall be responsible
for all oil and gas production taxes, and any other similar taxes
applicable to oil and gas production occurring on and after the Closing,
except as otherwise provided for in this Agreement. Buyer shall be
responsible for all sales, use and similar taxes arising out of the sale
of the Assets. Buyer shall provide Seller with an offshore exemption
certificate or any other documentation if required under applicable law.
Buyer shall hold harmless and shall indemnify Seller for any sales or
use taxes
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assessed against Seller by any taxing authority in respect of this sale,
including the amounts of any penalties, interest and attorneys' fees.
The parties expect that this purchase and sale will constitute an
isolated or occasional sale and will not be subject to sales or use tax
with any of the taxing authorities having jurisdiction over this
transaction, and as such, no sales tax will be collected by Seller from
Buyer at the date of Closing. Seller agrees to cooperate with Buyer in
demonstrating that the requirements for an isolated or occasional sale
or any other sales tax exemption have been met.
5. REPRESENTATIONS AND WARRANTIES
5.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants:
5.1.1 Seller is a corporation duly organized and validly existing,
in good standing, under the laws of the Commonwealth of
Pennsylvania. Seller has the corporate power and authority to
own its property and to carry on its business as now
conducted and to enter into and to carry out the terms of
this Agreement.
5.1.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on
behalf of Seller and Seller is not subject to any charter,
by-law, lien, or encumbrance of any kind, agreement,
instrument, order, or decree of any court or governmental
body (other than any governmental approval required) which
would prevent consummation of the transactions contemplated
by this Agreement.
5.1.3 The Segregated Lease is not subject to any preferential right
to purchase or right of first refusal in favor of any third
party.
5.1.4 Seller's operations on the Segregated Lease have been
conducted as a prudent operator and in accord with all
applicable rules or regulations of governmental bodies.
5.1.5 Seller has the right to assign the Physical Assets, except as
to contract rights of which it has previously advised Buyer.
5.1.6 Seller has incurred no liability, contingent or otherwise,
for brokers' or finders' fees in respect of this transaction
for which Buyer shall have any responsibility whatsoever.
5.1.7 No suit, action or other proceeding is pending or threatened
before any court or governmental agency which might result in
impairment or loss of Seller's title to any part of the
Assets or the value thereof or which might hinder or impede
the operation of the Assets, and Seller shall promptly
notify Buyer of any such proceeding arising or threatened
prior to the Closing.
5.1.8 Seller shall use its best efforts to take or cause to be
taken all such actions as may be necessary and advisable to
consummate and make effective the sale of the Assets and
the other transactions contemplated by this Agreement and
to assure that as of the date of the Closing it will not be
under any material corporate, legal or contractual
restriction that would prohibit or delay the timely
consummation of such transactions.
5.1.9 The assignment of the Segregated Lease shall be made without
any warranty of title of any kind, express or implied,
except that Seller shall warrant and defend good and
defensible title to the Segregated Lease unto Buyer against
every person whomsoever lawfully claiming or to claim the
Segregated Lease, or a portion thereof by, through or under
Seller, but not
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otherwise, and such assignment shall be made with full
substitution and subrogation of Buyer in and to all covenants
and warranties by others heretofore given.
5.1.10 Seller shall warrant title to the Physical Assets solely to
the extent delivery and acceptance (actual or constructive)
of any such Physical Assets by Seller have occurred, and to
the extent Seller has rights and entitlements to receive
Physical Assets under the existing service contracts and
purchase orders pertinent to such Physical Assets.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PHYSICAL ASSETS
ARE TO BE SOLD AS IS, AND SELLER MAKES NO WARRANTY, EXPRESS OR
IMPLIED IN FACT OR BY LAW WHETHER OF OPERATING CONDITION, SAFETY,
COMPLIANCE WITH GOVERNMENT REGULATIONS, MERCHANTABILITY, FITNESS FOR
ANY PARTICULAR PURPOSES, CONDITION OR OTHERWISE, CONCERNING ANY OF
THE PHYSICAL ASSETS. ALL ▇▇▇▇▇, PERSONAL PROPERTY, MACHINERY,
EQUIPMENT AND FACILITIES THEREIN, THEREON AND APPURTENANT THERETO
ARE TO BE CONVEYED BY SELLER AND ACCEPTED BY BUYER PRECISELY AND
ONLY "AS IS, WHERE IS." SELLER DOES NOT WARRANT THE PHYSICAL ASSETS
FREE FROM REDHIBITORY VICES OR DEFECTS.
5.2 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants:
5.2.1 Freeport is a limited partnership validly existing, in good
standing, under the laws of the State of Delaware and has the
power and authority to own its property and to carry on its
business as now conducted and to enter into and to carry out
the terms of this Agreement. Freeport Administrative
Managing General Partner is Freeport-McMoRan Inc., a
corporation validly existing, in good standing, under the
laws of the State of Delaware, and has the power and
authority, by virtue of its articles of incorporation,
by-laws, articles of partnership or other applicable
documents, to enter into this Agreement on behalf of
Freeport.
5.2.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly authorized by all necessary partnership or
corporate action on behalf of Buyer and Buyer is not
subject to any articles, charter, by-law, lien or
encumbrance of any kind, agreement, instrument, order or
decree of any court or governmental body which would
prevent consummation of the actions contemplated by this
Agreement.
5.2.3 Buyer is in all respects qualified to own and operate the
Segregated Lease under applicable laws, rules, regulations
and order of any governmental body or agency having
jurisdiction.
5.2.4 Buyer is not a party to, or in any way obligated under, nor
does Buyer have any knowledge of any contract or outstanding
claim for the payment of any brokers or finders fee in
connection with the origin, negotiation, execution, or
performance of this Agreement.
5.2.5 Buyer shall be fully responsible for compliance with all
applicable laws, ordinances, rules and regulations and shall
promptly obtain and maintain all permits required by public
authorities in connection with the Assets purchased.
5.2.6 Buyer has made or arranged for others to make an inspection
of the Assets. Subject to Seller's foregoing representations
and warranties, Buyer accepts all Physical Assets in "as
is and where is" condition, with an express acceptance and
understanding of the representations and disclaimers
contained herein.
5.2.7 Buyer acknowledges that the Physical Assets have been used or
planned for use for oil and gas drilling and producing
operations, related oil field operations and possibly the
storage
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and disposal of waste materials incidental to or occurring
in connection with such operations, and that Buyer has
entered into this Agreement on the basis of Buyer's own
investigation of the physical condition of the Physical
Assets. Buyer hereby agrees to assume full responsibility
for compliance with all obligations or regulations concerning
all of such conditions, known or unknown, and further agrees
to indemnify Seller for same.
6. ADDITIONAL COVENANTS
6.1 APPROVALS AND CONSENTS.
6.1.1 FORM OF TITLE OF ASSIGNED LEASEHOLD RIGHTS. The transfer and
assignment of the Segregated Lease, in the manner intended by
Seller and Buyer hereunder, are subject to the approval by
the Minerals Management Service ("MMS"), United States
Department of the Interior. It is the intent and desire of
the parties that the Segregated Lease will be effectively
segregated by the MMS from the Retained Lease, it being
contemplated by Seller and Buyer that the Segregated Lease
and Retained Lease will become separate and distinct
leases and that the anticipated segregation will be
approved by the appropriate officer of the MMS
simultaneously with, and effective as of the Closing.
Seller and Buyer shall work together to obtain such
approvals as appropriate, and will attempt to obtain
concurrence in such segregation from the Secretary of the
Interior ("Secretary"); provided, however, that such
approval by the Secretary shall not be a condition
precedent to Closing, but rather a condition subsequent to
which Section 6.1.3 shall apply if such Secretary's
approval is not granted. Seller shall execute and deliver
to Buyer such instruments, subject to the provisions of
this Agreement, as may be required by the MMS to induce
the MMS to segregate the Segregated Lease. It is the
intent of the parties hereto that Seller shall retain no
obligation or responsibility to operate the Segregated
Lease after same has been assigned to Buyer, that Seller
shall execute any and all necessary Designations of
Operator to a company designated by Buyer and acceptable
to the parties; and that such Designations of Operator
shall be approved by the appropriate officer of the MMS
simultaneously with, and effective as of, the Closing.
6.1.2 DISAPPROVAL BY MMS. If the MMS will not, or does not,
approve the segregation of the Segregated Lease from the
Retained Lean as contemplated in Section 6.1.1, after
Seller's and Buyer's good faith attempts to obtain such
approval, the parties shall meet and determine whether an
alternative means can be found which would provide Buyer
with the intended rights in the Segregated Lease, as
defined herein, and be acceptable in form and effect to
Seller, Buyer and the MMS under its delegated authority.
If an alternative which is acceptable to Seller, Buyer and
the MMS cannot be found to the contemplated transfer as
set forth in Section 6.1.1, within six (6) months after
the rejection by the MMS of the contemplated segregating
assignment and transfer of the Segregated Lease, this
Agreement will terminate without liability or obligation
on the part of Seller or Buyer, except for (a) the
obligation of Buyer to reassign the Segregated Lease to
Seller, (b) the obligation of the Seller to return the
purchase price to Buyer, and (c) other settlement of
accounts provided for herein, or necessary and appropriate
under the circumstances.
6.1.3 DISAPPROVAL BY SECRETARY. If the MMS approves the
segregation of the Segregated Lease from the Retained
Lease as contemplated in Section 6.1.1, and the Secretary
does not approve such segregation, after Seller's and
Buyer's good faith attempts to obtain such approval, then
at Buyer's request the parties shall meet and determine
(1) whether the transfer instruments theretofore executed,
as interpreted by the Secretary, effect a form of transfer
and assignment which is acceptable to the parties under
the circumstances, or (2) whether additional documents or
agreements need be executed to effect the intended
transfer more perfectly, or (3) whether an alternative
means can be found which would provide
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Buyer with the intended rights in the Segregated Lease, as
defined herein, and be acceptable in form and effect to
Seller, Buyer and the applicable governmental authority
(i.e., the MMS or the Secretary). If an alternative which
is acceptable to Seller, Buyer and the applicable
governmental authority cannot be found to the contemplated
transfer as set forth in Section 6.1.1, within six (6)
months after the rejection by the Secretary of the
contemplated segregating assignment and transfer of the
Segregated Lease, this Agreement will terminate without
liability or obligation on the part of Seller or Buyer,
except for (a) the obligation of Buyer to reassign the
Segregated Lease to Seller, (b) the obligation of the
Seller to return the purchase price to Buyer, and (c)
other settlement of accounts provided for herein, or
necessary and appropriate under the circumstances.
6.2 SERVICE CONTRACTS, PURCHASE ORDERS. Certain of the service contracts
and purchase orders entered into by Seller, with respect to the
Physical Assets listed in Exhibit B, are not assignable by Seller;
consequently, Buyer and Seller shall work together in good faith to
the end that Buyer receive the benefit of such service contracts and
purchase orders, including all warranties, to the extent that such
affect the materials, equipment and services to be received by Buyer
pursuant hereto; provided, however, it is not the intent hereof that
Seller shall undertake any obligation or warranty in lieu of the
obligations of any vendor or contractor. Seller and Buyer shall
execute appropriate documentation required by either vendors,
contractors or Seller to effectuate a substitution of Buyer for
Seller under such service contracts and purchase orders.
6.3 OPERATIONS PRIOR TO CLOSING. After the date of this Agreement and
prior to the Closing, Seller shall use and maintain the Assets in
substantially the same manner in which they have been used and
maintained prior to this Agreement The parties have previously
agreed and by this Agreement confirm and establish that as of
February 19, 1990, all obligations, liabilities, duties, rights and
benefits associated with the physical Assets and their existing
purchase orders and service contracts as set forth in Exhibit "B"
shall be assumed by and same shall inure to the benefit of Buyer The
parties further agree that, if for any reason the Closing under this
Agreement is not consummated, they will use their good faith efforts
to release, exchange and balance the costs incurred by the parties
as a result of the allocation of costs before and after such date,
by payment to Buyer or Seller (as required), within sixty (60) days
following the termination of this Agreement, of an agreed-upon
amount of money, along with execution and delivery of such documents
as are required.
6.4 SELLER'S OPERATIONS AFTER CLOSING. From and after the Closing, Seller
shall not conduct thereafter any oil and gas exploration and
development operations on Block 299, Main Pass Area, by drilling or
producing through the horizons and formations from the surface down
to a subsea depth of 1900 feet on the Segregated Lease. Accordingly,
unless otherwise consented to or waived by Buyer, which consent
shall not be unreasonably withheld, Seller shall conduct all oil and
gas exploration, development and production operations on the
Retained Lease below the subsea depth of 1900 feet under the
Segregated Lease by drilling directional ▇▇▇▇▇ from surface
locations totally outside the area covered by the Segregated Lease
to bottomhole locations below the subsea depth of 1900 feet under
the Segregated Lease. Such ▇▇▇▇▇ shall not at any point intersect
the Segregated Lease. If through inadvertence any portion of a well
drilled by Seller does penetrate the Segregated Lease at any depth,
then upon discovery of such penetration Seller shall advise Buyer in
writing, and unless waived by Buyer, Seller shall sidetrack such
well out of the Segregated Lease and into the Retained Lease. Waiver
by Buyer of such sidetracking shall not be construed a waiver of
Seller's indemnity hereunder, but an attempt by Buyer to mitigate
Seller's damages.
6.5 ACCESS TO ASSETS. At all times prior to the Closing, if this Agreement
shall not have first been terminated, Buyer and the employees and
agents of Buyer shall have access to the Assets at Buyer's sole
cost, risk and expense, and during normal business hours. Seller
shall have the right to regulate reasonably the hours and frequency
of Buyer's access to the Assets, so as not to interfere unreasonably
with Seller's other business and so as to allow Seller to have a
representative present
9
(at Seller's option) during Buyer's access. Buyer shall give Seller
at least forty-eight (48) hours' notice, during normal business hours,
of Buyer's desire to access the Assets.
6.6 CASUALTY LOSS. In the event any Physical Asset, including fixtures and
improvements, to be sold hereunder is damaged by fire or other calamity
before Closing, Seller may repair the damage at its cost or, at its
sole option, either reduce the purchase price by the cost of the
damage or withdraw the damaged Physical Asset from the sale and
reduce the purchase price by the undamaged value thereof.
7. CONDITIONS PRECEDENT TO CLOSING
7.1 SELLER'S CONDITIONS PRECEDENT. The obligations of Seller to consummate
the transactions contemplated by this Agreement are subject to each of
the following conditions:
7.1.1 Buyer shall have performed and complied with all terms of
this Agreement required to be performed or complied with by
Buyer prior to Closing.
7.1.2 No action or proceeding by or before any governmental
authority shall have been instituted or threatened (and
not subsequently dismissed, settled or otherwise
terminated) which might restrain, prohibit or invalidate
any of the transactions contemplated by this Agreement,
other than an action or proceeding instituted or
threatened by Seller or any of its affiliates.
7.1.3 Seller shall have executed appropriate amendments to the
existing federal unit agreement and unit operating
agreement to delete and exclude the Segregated Lease from
such unit agreement and unit operating agreement. It is
anticipated that such amendments will be approved by the
MMS simultaneously with, and effective as of the Closing.
The parties intend and desire that the Segregated Lease
will be owned by Buyer, subject to the terms and
provisions of this Agreement, but not subject to the
existing federal unit agreement or any existing operating
agreement, and that Seller shall retain no obligation or
responsibility to operate the Segregated Lease.
7.1.4 Pursuant to application therefor by Buyer, and simultaneously
with segregation of the Segregated Lease from the Retained
Lease, the MMS shall have approved a Suspension of
Production or a Suspension of Operations, such that the
Segregated Lease can be maintained in force and effect for
a period of at least two (2) years, or until actual
production of oil and/or gas can be established, whichever
occurs first.
7.1.5 All necessary parties shall have executed instruments, in
forms substantially similar to those attached as Exhibits
"F-1," "F-2," either "F-3" or "F-4," and "F-5," whereby
Seller transfers its right, title and interest in the
Assets to Buyer, and whereby Buyer assigns to Seller, the
interests contemplated in Sections 3.1.1, 3.2 and/or 3.3.
Further, if required by any vendor, contractor or either
party hereto, all necessary parties shall execute separate
Bills of Sale with respect to Physical Assets.
7.2 BUYER'S CONDITIONS PRECEDENT. The obligations of Buyer to consummate
the transactions contemplated by this Agreement are subject to each of
the following conditions:
7.2.1 Seller shall have performed and complied with all terms of
this Agreement required to be performed or complied with by
Seller prior to Closing.
7.2.2 Buyer and Chevron Pipe Line Company shall have reached a
mutually satisfactory agreement with regard to transportation
of the oil produced from or allocable to the Segregated
Lease.
10
7.2.3 No action or proceeding by or before any governmental
authority shall have been instituted or threatened (and not
subsequently dismissed, settled, or otherwise terminated)
which might restrain, prohibit or invalidate any of the
transactions contemplated by this Agreement, other than an
action or proceeding instituted or threatened by Buyer or any
of its affiliates.
7.2.4 All necessary parties shall have executed instruments, in
forms substantially similar to those attached as Exhibits
"F-1," "F-2," either "F-3" or "F-4," and "F-5," whereby
Seller transfers its right, title and interest in the
Assets to Buyer, and whereby Buyer assigns to Seller, the
interests contemplated in Sections 3.1.1, 3.2 and/or 3.3.
Further, if required by any vendor, contractor or either
party hereto, all necessary parties shall execute separate
Bills of Sale with respect to Physical Assets.
7.3 EFFECTS OF TAX-DEFERRED EXCHANGE. If Seller elects to effect a
tax-deferred exchange pursuant to Section 1.3, Buyer and Seller agree
to cooperate and execute additional assignments as prudently
required to effect the exchange, and in such event Seller shall
guarantee the performance of any intermediary corporation used as a
part of such exchange transaction. The parties contemplate execution
of a direct assignment from Seller to Buyer in the form attached
hereto as Exhibit "F-1", at the direction of the intermediary
corporation as set forth in Exhibit "F-5," which assignment shall be
filed for approval by the MMS and the Secretary of the Interior as
set forth in Section 6.1.1.
8. MISCELLANEOUS
8.1 PAYMENT OF EXPENSES AND FEES. Buyer and Seller shall each bear its own
costs and expenses, including but not limited to attorney's fees
incurred in connection with the transactions contemplated in this
Agreement; provided, however; Buyer shall pay all recording fees or
transfer taxes in connection with the recording of any instrument of
transfer of Assets from Seller to Buyer hereunder.
8.2 NORM. Any assignment of the Physical Assets shall contain the
following provision:
8.2.1 It is expressly recognized and acknowledged that naturally
occurring radioactive material ("NORM") is normally
associated with oil and gas producing operations, and as a
result the Physical Assets transferred herein may be
contaminated by NORM in that certain of the Physical
Assets have previously been used in oil and gas producing
operations. Accordingly, Buyer shall comply with
applicable federal and applicable state laws and
regulations governing NORM and governing Physical Assets
contaminated by or containing NORM.
8.2.2 The Physical Assets herein transferred which have previously
been used in oil and gas producing operations shall be
used only in connection with oil and gas producing
activities, and shall not be subsequently transferred for
unrestricted use unless the concentrations of NORM
associated therewith are below the levels specified as
allowable for unrestricted transfer as set forth in the
Louisiana Radiation Regulations and subsequent amendments
thereto, as adopted by the Louisiana Department of
Environmental Quality.
8.2.3 Buyer shall comply with all provisions of the Louisiana
Radiation Regulations and all subsequent amendments
thereto to the extent that the regulations are applicable
to the Physical Assets herein transferred.
8.2.4 Buyer shall include the provisions of this Section 8.2 in any
subsequent sale or assignment of the Physical Assets herein
transferred which have previously been used in oil and gas
producing operations.
8.3 TRANSPORTATION OF OIL. Subject to partial reimbursement by Seller of
certain costs as provided herein, and except as may be negotiated
between Buyer and the purchaser of the oil produced and saved from
11
the Segregated Lease, Buyer shall be responsible for all costs
associated with transporting oil from or attributable to the
Segregated Lease to the designated sales point. If such oil is
transported through the common carrier pipeline system owned and
operated by Chevron Pipe Line Company ("CPL") from Main Pass 299B to
Main Pass 69 to the outermost flange of the Empire Terminal located
in Plaquemines Parish, Louisiana, then Buyer or the purchaser of
such oil will bear any and all costs and expenses associated with
the metering and transportation of production through such system to
the outermost flange of the Empire Terminal, including but not
limited to the following:
8.3.1 Costs of pipeline installation, tie-in and maintenance
associated with Buyer's connection of its production to
Chevron Pipe Line Company's facilities on Seller's Main
Pass 299B platform, it being understood and agreed that
any plans or drawings for such installation or tie-in, and
the actual work ultimately performed, shall be subject to
Seller's prior review and approval, and subject to such
further notice, oversight and considerations of safety as
customarily apply under such circumstances; and
8.3.2 Transportation charges and terminal exit fees associated with
transport of oil from or attributable to the Segregated Lease
through Chevron Pipe Line Company's common carrier pipeline
system from Main Pass 299B platform to Main Pass 69 into and
through Chevron Pipe Line Company's Empire Terminal. Seller,
however, agrees to reimburse Buyer for a certain portion of
transportation charges and exit fees, in the manner and in
the amounts set forth in Exhibit "H" attached hereto.
The parties understand and agree that Buyer, separately and
independently of this transaction, shall make its own arrangements
with Chevron Pipe Line Company for metering, transportation and
delivery of production through the said system and for tying into
said system.
8.4 PIPELINE ACCESS.
8.4.1 For purposes of this Section 8.4, the terms "sweet crude oil"
and "sour crude oil" are used to describe oil produced
from the Retained Lease and from the Segregated Lease,
respectively The parties do not intend to indicate any
particular characteristics of either oil, the terms being
merely a convenient means of relative comparison and
reference.
8.4.2 If requested by Chevron Pipe Line Company ("CPL"), Seller
will notify CPL in writing that Seller has no objection to
CPL's use of the existing 10-inch O.D. pipeline from Main
Pass 299B platform to Main Pass 69 for transportation of
the sour crude oil to be produced from the Segregated
Lease. Further, Seller agrees to provide Buyer with such
platform space on Main Pass 299B platform as is reasonably
required for the tie-in of production to CPL's pipeline
system, subject to such mutually agreeable terms and
conditions as customarily apply under such circumstances.
8.4.3 The parties contemplate that sweet crude oil produced and
saved from the Retained Lease and other leases in the
area, and sour crude oil produced and saved from the
Segregated Lease, will be transported by CPL in separate
pipelines from platforms on Main Pass Block 299 to Main
Pass 69, and that the sour crude oil will be "batched"
from Main Pass 69 to the Empire Terminal. The parties
further understand and acknowledge CPL's role in the
determination of which facilities shall be used for
transportation of crude oil.
8.5 CALL ON OIL. From time to time and at any time, Seller shall have the
option, but not the obligation, to purchase or designate a purchaser
financially acceptable to Buyer of the oil produced from or
attributable to the Segregated Lease. If purchased by Seller or a
designee, such crude oil would be delivered to a sales point
designated by Seller or its designee, which sales point shall be on
CPL's system and shall never be beyond the outermost flange of CPL's
Empire Terminal located in
12
Plaquemines Parish, Louisiana, unless the parties mutually agree
otherwise. The price to be paid to Buyer shall be the higher of (1)
fair market value for oil of like gravity and quality, or (2) the
price offered to Buyer from a bona fide third party in a written
offer by a third party, non-affiliated purchaser ready and able to
purchase, which offer Buyer is willing to accept, with comparable
terms and conditions. Buyer shall notify Seller in writing of any
such bona fide offer, giving the terms and conditions of such
acceptable offer. Upon receiving such notice, Seller shall have ten
(10) days to elect to purchase such oil on the same terms and
conditions as contained in the bona fide offer. Further, Seller and
Buyer agree that in the event Buyer receives at any time and from
time to time such a bona fide offer from a third party to purchase
Buyer's crude oil at a price higher than that otherwise provided for
pursuant to this Section 8.5, Buyer may furnish Seller a copy of
such offer, and Seller shall have ten (10) days from receipt of such
offer either to agree to pay said higher price or to release Buyer's
oil production for sale to such third party in accordance with such
offer, including the term thereof. In no event, however, shall
Seller be obligated to discontinue purchase of such crude oil sooner
than the first day of the month on or following the thirtieth (30th)
day following receipt of such bona fide offer. If at any time and
from time to ▇▇▇▇ ▇▇▇▇▇▇ is purchasing such crude oil hereunder, the
purchase of such crude oil by Seller shall be terminable at Seller's
option with at least ninety (90) days' prior written notice to
Buyer, such termination to be effective on the first day of the
calendar month on or following the end of such 90-day notice period,
or upon the expiration of the term theretofore offered by a third
party and matched by Seller, whichever is later: If purchased by
Seller or a designee, Buyer shall be obligated, at its sole cost and
expense, to deliver the oil to Seller at standard sour crude
pipeline quality, limited to three percent (3%) sulphur by weight
and fifty parts per million (50 ppm) hydrogen sulphide.
8.6 ANTITRUST REVIEW. Seller and Buyer recognize that they have been
advised that the Federal Trade Commission has granted an early
termination of the thirty (30) day waiting period required under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976. Each party
hereto acknowledges that it has satisfied itself that its
obligations under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976 have been fulfilled.
8.7 GAS CONTRACT. Gas production from the Segregated Lease has been
permanently released by Southern Natural Gas Company ("Southern") from
an Omnibus Contract entered into between Southern and Seller
effective January 1, 1988. The Omnibus Contract covered gas
previously sold to Southern under long-term interstate contract
which were terminated and abandoned under FERC Order No. 490.
8.8 F.E.R.C. 500. Any assignment of the Segregated Lease shall be subject
to the following provision:
It is understood that interstate pipelines may refuse to transport
under 18 C.F.R. Part 284 gas produced from the properties hereby
assigned unless Seller agrees to offer take-or-pay or take-and-pay
credit to such pipelines, and the parties hereby agree that Seller
may withhold such an offer at its sole discretion, even if the
result is to completely bar Buyer's gas from the interests hereby
assigned from open access transportation in such pipelines.
Notwithstanding the foregoing, Seller agrees to execute offers of
credit necessary to render the assigned gas eligible for open access
transportation if Seller determines, in its sole discretion, that
such gas is exempt from crediting pursuant to FERC rules and
regulations or that Seller can otherwise execute such offers of
credit without risk of adverse economic consequences to Seller. Any
offers of credit executed by Seller pursuant to this provision shall
be limited in scope or term as Seller deems necessary.
8.9 PROVISION OF DATA. Seller shall have the right to receive from Buyer,
at no charge to Seller, all basic data and test results obtained in
the course of drilling, testing, evaluating and producing on, in or
under the Segregated Lease, to which no proprietary interpretive
notes, marks or comments have been added and exclusive of any
proprietary extrapolations derived therefrom ("Data"). Seller shall
furnish Buyer, at no charge to Buyer, any such Data obtained from
Seller's test well drilled on and in the
13
Segregated Lease, which is reasonably necessary to qualify said well
as producible under 30 CFR Section 250.11. All such Data which is
provided by one party to the other party pursuant to the provisions
of this Section 8.9 shall be maintained by the receiving party on a
confidential basis in accordance with the provision of Section 8.18.
8.10 LOCATION AND/OR RELOCATION OF FLOWLINES OR FACILITIES.
8.10.1 Should any of Buyer's operations require or reasonably
necessitate the removal, replacement, modification or
relocation of any presently existing flowlines or
facilities owned and operated by Seller or an affiliate of
Seller; including but not limited to CPL, then such
removal, replacement, modification or relocation shall be
accomplished at Buyer's sole cost, risk and expense.
8.10.2 Seller shall not locate any new flowlines or facilities on
the surface area extent encompassed by the Segregated
Lease without Buyer's prior written consent.
8.10.3 It is understood that it will be necessary for Buyer to
install flowlines and facilities on the surface area
encompassed by the Retained Lease. Prior to installation
of any such flowlines or facilities, Buyer shall consult
with Seller in an effort to minimize interference with
Seller's current and future operations. Seller shall not
unreasonably withhold consent to such installations, it
being understood that final approval for any such
installations is vested in the MMS.
8.11 PUBLICITY. Except as modified by Section 8.18, Seller and Buyer shall
jointly coordinate the timing and substance of any press releases or
publicity concerning the transactions contemplated by this Agreement.
8.12 ASSIGNMENT. Buyer or Seller may not assign this Agreement or delegate
any duties hereunder without the prior written consent of the other,
which consent shall not be unreasonably withheld. Such assignment or
delegation shall not relieve the assigning party of liability for
the performance of its duties and obligations hereunder, and any
such assignment shall contain the express assumption by the assignee
of all duties and obligations incumbent on its assignor pursuant to
this Agreement, the performance of which such assignor guarantees.
The terms and conditions of this Agreement shall be real rights
attached to and appendages running with the interests in the
Segregated Lease and Physical Assets covered and affected by this
Agreement, and shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and assigns, and their
successors and assigns.
The following shall not be considered a violation of this Section 8.12:
8.12.1 The assignment by Freeport of an undivided one-fourth (1/4th)
interest in this Agreement to IMC Fertilizer, Inc., a
Delaware corporation ("IMC"), and the assignment by
Freeport of an undivided one-sixth (1/6th) interest in
this Agreement to Felmont Oil Corporation, a Delaware
corporation ("Felmont"). In the event of such assignments,
Freeport, IMC and Felmont shall assume, solidarily with
each other, all obligations and liabilities provided for
in Section 2.2 hereof except as may be otherwise provided
with respect to Section 2.3 hereof and such parties,
severally and to the extent of their respective interests,
shall defend and indemnify Seller in accordance with the
provisions of Section 2.3 hereof.
8.12.2 The designation and appointment of Freeport as operator and
of Freeport-McMoRan Oil & Gas Company as acting operator.
8.12.3 The assignment by Buyer or Seller to an affiliate or
subsidiary, or the execution of a mortgage, deed of trust,
financing statement or other instrument for borrowing
purposes,
14
provided that any such instrument for financing purposes
shall be subordinate to the terms and provisions of this
Agreement.
8.13 RIGHT TO AUDIT. Seller shall have the right to question the
appropriateness of the payments made to Seller by Buyer pursuant to
Section 3 hereof and of charges for partial reimbursement of
transportation costs incurred by Buyer pursuant to Section 8.3.2
hereof including without limitation the figures on which such
payments or charges were based, the amounts deducted therefrom, and
the calculation thereof. Seller shall have the right, either itself
or by an accounting firm of Seller's choosing, to audit Buyer's
books and records to confirm or question the correctness of such
payments or charges, together with subsequent adjustments thereto,
during normal business hours and with no less than thirty (30) days'
prior written notice to Buyer. It is provided, however, that any
payment, charge or adjustment shall be considered correct and
appropriate if not challenged by Seller in writing within two (2)
years after the date the payment or invoice for the charge was
received by Seller, or within two (2) years after Seller's receipt
of notice of a payment adjustment, as applicable. All statements and
records shall be maintained for two (2) years after payments have
been made.
Buyer shall have the right to audit Seller's books and records,
within the above time frame, to confirm the accuracy and
appropriateness of those costs estimated on Exhibit "B" and billed
to Buyer in accordance with Section 2.1.2 of this Agreement.
8.14 CONFLICT OF INTEREST. Buyer and Seller, for themselves and their
directors, employees and agents, acknowledge that they are familiar
with and will comply with each other's Conflict of Interest
policies. Each party shall promptly notify the other party of any
violation of this Section 8.14, and any consideration received by a
party as a result of such violation shall be paid over or credited
to the other party. Each party, or its designated representative(s),
may audit, for reasonable cause, any pertinent records of the other
party for the sole purpose of determining whether there has been
compliance with this Section 8.14.
8.15 TERM. This Agreement shall remain in force and effect for so long as
the Segregated Lease, or any extension, renewal or replacement
thereof remains in effect, and as long thereafter as necessary to
achieve full performance of all obligations assumed by the Buyer and
Seller hereunder.
8.16 ENTIRE AGREEMENT. As used herein, the term "this Agreement" includes
not only this Asset Sale Agreement but also all exhibits referred to
herein, which exhibits are hereby incorporated by reference for all
purposes. This Agreement constitutes the entire agreement between
Seller and Buyer with respect to the transactions contemplated
herein, and supersedes all prior oral or written agreements,
commitments, understandings, or information otherwise furnished by
Seller to Buyer with respect to such matters; provided, however,
that certain Agreement of Indemnity dated as. of the date of
Closing, by and between Chevron U.S.A. Inc. and Freeport-McMoRan
Inc. is not merged herein and survives the execution hereof. No
amendment shall be binding unless in writing and signed by
representatives of both parties. Headings used in this Agreement are
only for convenience of reference and shall not be used to define
the meaning of any provision. This Agreement is for the benefit of
Seller and Buyer only and not for the benefit of any other party.
8.17 SURVIVAL. The terms and provisions of this Agreement shall survive any
assignment, pledge or delegation of any right, duty or obligation
covered and affected hereby.
8.18 CONFIDENTIALITY . The contents of this Agreement, and any notes,
summaries, compilations, analyses or other material derived from
this Agreement, are confidential, and neither party shall release
any of such contents, notes, summaries, compilations, analyses or
other material to a third party without first obtaining the express
written consent of the other party hereto, except that this
prohibition shall not apply to disclosures:
15
8.18.1 To any parent corporation, any subsidiary of any parent
corporation of or any subsidiary of either party hereto, or
to any banking, accounting, engineering or other
consultant firms to any party hereto, provided that any
such recipient shall have first agreed in writing to be
bound by the provisions of this Section 8.18;
8.18.2 Required by law (including the rules and regulations of the
appropriate stock exchange);
8.18.3 Of information that is already in the public domain through
no fault of the party then disclosing it;
8.18.4 Of information which either Buyer or Seller may have or
hereafter lawfully may obtain from any party or parties who
are legally entitled to such data.
The parties furthermore agree that a party may disclose any of such
information to courts, governmental bodies or agencies or stock
exchanges if the disclosing party believes in good faith that such
disclosure is required by applicable law, regulation or regulatory
body policy. The parties acknowledge that the press release or
publicity under Section 8.11 will render this Section 8.18 moot as
to the content thereof.
8.19 NOTICES. All notices and consents to be given hereunder shall be in
writing and shall be deemed to have been duly given if delivered
personally telexed with receipt acknowledged, mailed by registered
mail, or delivered by a recognized commercial courier to the party
at the address set forth on the first page of this Agreement or such
other address as any party shall have designated by ten days' notice
to the other parties.
8.20 GOVERNING LAW. This Agreement shall be governed by the law of the State
of Louisiana, without regard to rules concerning conflicts of law.
IN WITNESS WHEREOF, this Agreement is executed on the date first above
written.
WITNESSES: CHEVRON U.S.A. INC., Seller
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ F. ▇▇▇▇▇
----------------------------------- --------------------------
F. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Regional Vice-President
-----------------------------------
FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP, Buyer
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------- --------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. Gateshall Senior Vice-President
-----------------------------------
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇ this 2nd day of May, 1990, before me appeared F. ▇▇▇▇▇, to me
personally known, who being by me duly sworn, did say that he is the Regional
Vice-President of CHEVRON U.S.A. INC., a Pennsylvania corporation, and that
the seal affixed to said instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation by authority of its Board of Directors, and said appearer
acknowledged that he executed the same as the free act and deed of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.
/s/ signed but illegible
----------------------------------
Notary Public in and for
Orleans Parish, Louisiana
My Commission expires at death.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇ this 2nd day of May, 1990, before me appeared ▇▇▇▇' ▇. ▇▇▇▇▇▇▇▇▇, to
me personally known, who being by me duly sworn did say that he is the Senior
Vice-President of Freeport-McMoRan Inc., a Delaware corporation, as
Administrative Managing General Partner of FREEPORT-McMoRan RESOURCE
PARTNERS, LIMITED PARTNERSHIP, a Delaware limited partnership, and that the
foregoing instrument was signed on behalf of and as duly authorized by, said
limited partnership acting through the aforesaid corporation with the
authority of its Board of Directors, and said appearer acknowledged said
instrument to be the free act and deed of said partnership.
IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Notary Public in and for
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana
My Commission expires at death.
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