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CRUDE OIL MARKETING AGREEMENT
among
PLAINS RESOURCES INC.
PLAINS ILLINOIS INC.
▇▇▇▇▇▇▇ RESOURCES, L.P.
CALUMET FLORIDA, INC.
and
PLAINS MARKETING, L.P.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS -5-
1.1 Definitions -5-
ARTICLE II
PURCHASE AND SALE -3-
2.1 Purchase and Sale -3-
2.2 Addition or Release of Properties or Sellers -4-
2.3 Delivery -5-
2.4 Price -5-
2.5 Payment -5-
2.6 General Provisions -6-
2.7 No Restrictions -6-
ARTICLE III
RENEGOTIATION -6-
ARTICLE IV
ADDITIONAL SERVICES -7-
4.1 Additional Services -7-
4.2 Sellers Indemnity -7-
ARTICLE V
TERM -8-
ARTICLE VI
REPRESENTATIONS AND WARRANTIES -8-
6.1 Representations and Warranties of Sellers -8-
6.2 Representations and Warranties of Buyer -9-
ARTICLE VII
CREDIT REQUIREMENTS -9-
ARTICLE VIII
SPECIFIED EVENTS -10-
8.1 Buyer Specified Events -10-
8.2 Seller Specified Events -11-
8.3 Early Termination -12-
8.4 Specified Damages -12-
ARTICLE IX
FORCE MAJEURE -12-
9.1 Excuse for Nonperformance -12-
9.2 Definition -12-
9.3 Notice and Cure -13-
ARTICLE X
GENERAL PROVISIONS -13-
10.1 No Survival of Representations and Warranties -13-
10.2 Headings -13-
10.3 Rights and Remedies Cumulative -13-
10.4 Entire Agreement; Supersedure -13-
10.5 Severability -13-
10.6 Choice of Law; Submission to Jurisdiction -13-
10.7 Binding Agreement -14-
10.8 No Agency -14-
10.9 Notice -14-
10.10 Effect of Waiver or Consent -14-
10.11 Assignment -14-
10.12 Counterparts -14-
10.13 Amendment or Modification -15-
10.14 Further Assurances -15-
10.15 Withholding or Granting of Consent -15-
10.16 U.S. Currency -15-
10.17 Laws and Regulations -15-
10.18 Construction of Agreement -15-
CRUDE OIL MARKETING AGREEMENT
This CRUDE OIL MARKETING AGREEMENT (this "Agreement"), dated November ___,
1998, is by and between PLAINS RESOURCES INC., a Delaware corporation ("Plains
Resources"), PLAINS ILLINOIS INC., a Delaware corporation ("Plains Illinois"),
▇▇▇▇▇▇▇ RESOURCES, L.P., a California limited partnership ("▇▇▇▇▇▇▇"), CALUMET
FLORIDA, INC., a Delaware corporation ("Calumet"), and PLAINS MARKETING, L.P., a
Delaware limited partnership ("Buyer"). Plains Resources, Plains Illinois,
▇▇▇▇▇▇▇, and Calumet are sometimes referred to herein individually as a "Seller"
and collectively as the "Sellers." Sellers and Buyer are sometimes referred to
herein individually as a "Party" and collectively as the "Parties."
R E C I T A L S:
- - - - - - - -
A. Sellers own and produce crude oil from properties located within the
lower ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇. ▇▇▇▇▇▇▇ desire to sell and Buyer desires to purchase all of the crude
oil which is produced and owned by Sellers from such properties.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreement" means this Agreement and all exhibits, schedules, amendments,
modifications, and supplements to this Agreement.
"Anniversary Date" has the meaning assigned in Article III.
"Barrel" means forty-two (42) United States gallons of Crude Oil measured
in accordance with the General Provisions.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States of
America or the states of New York or Texas shall not be regarded as a Business
Day.
"Buyer Specified Event" has the meaning assigned in Section 8.1.
"Change of Control" has the meaning assigned in that certain Omnibus
Agreement, dated as of the Closing Date (as defined therein), among Plains
Resources, Buyer, General Partner, Plains All American Pipeline, L.P., a
Delaware limited partnership, and All American, L.P., a Texas limited
partnership.
"Conflicts Committee" means a committee of the Board of Directors of the
General Partner composed entirely of two or more directors who are neither
securityholders, officers nor employees of the General Partner nor officers,
directors or employees of any Affiliate of the General Partner.
"Corporate Governance Documents" means, with respect to any Person, the
Certificate or Articles of Incorporation, or Partnership Agreement (or their
equivalents), the by-laws (or their equivalents), and the other corporate
governance documents of such Person.
"Crude Oil" means crude oil meeting the specifications set forth in the
General Provisions.
"Defaulting Party" means (a) in the case of a Buyer Specified Event,
Buyer, and (b) in the case of a Seller Specified Event, any Seller affected by
such Seller Specified Event.
"Delivery Point" has the meaning assigned in Section 2.3.
"Effective Date" means the date of execution of this Agreement.
"Existing Contract" has the meaning assigned in Section 2.2(g).
"Force Majeure" has the meaning assigned in Article IX.
"General Partner" means Plains All American Inc., a Delaware corporation,
and its predecessors, successors and permitted assigns as general partner of the
Buyer.
"General Provisions" has the meaning assigned in Section 2.6.
"Governmental Requirements" means all judgments, orders, writs,
injunctions, decrees, awards, laws, ordinances, statutes, regulations, rules,
franchises, permits, certificates, licenses, authorizations, and the like of any
government, or any commission, board, court, agency, instrumentality, or
political subdivision thereof.
"Marketing and Administrative Fee" has the meaning assigned in Section
2.4.
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"Marketing Area" means the lower ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇.
"Non-defaulting Party" means (i) in the case of a Buyer Specified Event,
any Seller which is affected by such Buyer Specified Event, and (ii) in the case
of a Seller Specified Event, Buyer.
"Person" means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.
"▇▇▇▇▇'▇ P+ Average" means the arithmetic average of the ▇▇▇▇▇'▇ Prices
for P-Plus WTI during a Trading Cycle.
"▇▇▇▇▇'▇ Difference" means the arithmetic average for a Trading Cycle of
the difference between the ▇▇▇▇▇'▇ Prices of the applicable grade of crude to be
exchanged (i.e. WTS, LLS, HLS, ▇▇▇▇▇▇ Island, Bonito, etc.) and the prompt month
WTI.
"▇▇▇▇▇'▇ Prices" means the average of the price range of a particular
grade of crude oil as published in the Crude Price Assessments table of ▇▇▇▇▇'▇
Oilgram Price Report.
"Purchase Price" has the meaning assigned in Section 2.4.
"Sales Price" has the meaning assigned in Section 2.4.
"Seller Specified Event" has the meaning assigned in Section 8.2.
"Specified Event" means a Buyer Specified Event or a Seller Specified
Event, as the case may be.
"Trading Cycle" means for a particular month of delivery, a cycle
beginning on the 26/th/ day of the second month preceding such month of delivery
through the 25/th/ day of the month preceding such month of delivery.
"Trade Location" has the meaning assigned in Section 2.4(b).
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale. Buyer hereby agrees to purchase and receive and
Sellers hereby agree to sell and deliver all of the Crude Oil produced and owned
by Sellers from properties located within the Marketing Area. Currently, such
properties are set forth on Exhibit A attached hereto and incorporated herein.
Exhibit A shall be promptly updated to add or delete, as the case may be, Crude
Oil production dedicated to this Agreement.
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2.2 Addition or Release of Properties or Sellers. Crude Oil producing
properties and Sellers shall be added or released from the terms and provisions
of this Agreement upon the occurrence of the following events:
(a) If a Person who owns Crude Oil producing properties within the
Marketing Area becomes an Affiliate of Plains Resources, Plains Resources shall
cause such Affiliate to become a Seller hereunder by executing and delivering a
ratification of this Agreement to Buyer as soon as practicable after the date
such Person became an Affiliate of Plains Resources.
(b) If a Seller acquires additional Crude Oil properties within the
Marketing Area, such additional properties and the Crude Oil owned and produced
therefrom by such Seller shall become subject to this Agreement as soon as
practicable after the date of acquisition of such properties.
(c) If a Seller, other than Plains Resources, ceases to be an Affiliate of
Plains Resources, this Agreement shall terminate with respect to such Seller,
its properties, and the Crude Oil produced therefrom, with such termination to
be effective as soon as practicable following the date such Seller gives written
notice to Buyer that it has ceased to be an Affiliate of Plains Resources.
(d) If a Seller sells, transfers or otherwise disposes of any of its
properties or the interests therein which are within the Marketing Area, such
properties or interests shall cease to be subject to this Agreement as soon as
practicable following the date of such sale, transfer or disposition; but in no
event shall such properties or interests cease to be subject to this Agreement
prior to the termination of any agreement Buyer has previously entered into for
the sale of Crude Oil attributable to production from such properties or
interests.
(e) If a Seller and Buyer determine that it is impracticable for Buyer to
purchase Crude Oil from any property owned by such Seller within the Marketing
Area, such Seller and Buyer may, by mutual written agreement with the
concurrence of the Conflicts Committee, terminate this Agreement with respect to
such properties. Thereafter, neither such Seller nor Buyer shall have any
further obligations under this Agreement with respect to such properties.
(f) Upon the occurrence of any of the foregoing events under subparagraphs
(a), (b), (c), (d) or (e) above, the affected Seller shall give written notice
to Buyer as soon as practicable and Exhibit A shall be revised to reflect the
effect of such event. Upon request by any Party affected by such event, all
Parties hereto shall execute and deliver to the requesting Party such documents
and instruments as may be reasonably necessary to evidence additions or releases
of Parties or properties to this Agreement.
(g) Notwithstanding the provisions of subparagraphs (a) and (b) above, the
addition of any Seller or properties to this Agreement shall be subject to any
crude oil sales contract to which such Seller or properties are bound at the
time such Seller or properties would otherwise become subject to this Agreement
(an "Existing Contract"). Accordingly, no Crude Oil shall be sold
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hereunder in contravention of an Existing Contract by such Seller or from such
properties until the Existing Contract has expired or been terminated.
2.3 Delivery. Delivery shall be made from the lease tankage on the
properties, or such other point as is mutually agreed to and reflected on
Exhibit A (a "Delivery Point"), into transportation facilities designated by
Buyer.
2.4 Price. The price to be paid by Buyer for Crude Oil sold hereunder
(the "Purchase Price") shall be equal to the Sales Price for each Barrel as
determined in this Section 2.4, less the sum of (i) a marketing and
administrative fee of $.20 for each Barrel sold (the "Marketing and
Administrative Fee") and (ii) with respect to Crude Oil which is not sold by
Buyer at a Delivery Point, the reasonable out-of-pocket expenses (if any)
incurred by Buyer to transport or exchange each Barrel of such Crude Oil.
(a) For Crude Oil which Buyer resells at a Delivery Point, the Sales Price
shall be the price received by Buyer for each Barrel sold at the Delivery Point.
(b) For Crude Oil which Buyer either (i) transports to a location other
than a Delivery Point (a "Trade Location") or (ii) exchanges for other Crude Oil
at a Trade Location, the Sales Price shall be determined as follows:
(x) if such Crude Oil is not aggregated with other Crude Oil owned by
Buyer, the Sales Price shall be equal to the price received by Buyer
for each Barrel sold at the Trade Location; or
(y) if such Crude Oil is aggregated with other Crude Oil owned by
Buyer, the Sales Price shall be equal to the sum of (i) the posted
price received by Buyer for each Barrel sold at the Trade Location and
(ii) a premium equal to the ▇▇▇▇▇'▇ P+ Average and plus or minus, as
applicable, the ▇▇▇▇▇'▇ Difference at the Trade Location. If the
▇▇▇▇▇'▇ P+ Average or the ▇▇▇▇▇'▇ Difference is not published, then
the price shall be the weighted average for each Barrel of Buyer's
sales at such Trade Location.
2.5 Payment. Payments by Buyer for Crude Oil purchased hereunder shall
be based on the applicable Purchase Price, the volumes delivered by Sellers, and
100% of the interest shown on Exhibit A attached hereto, less state taxes which
are withheld by Buyer. All payments shall be wired to Plains Resources for the
account of the Sellers in accordance with written instructions from Plains
Resources. Such wire transfers shall be made on the twentieth day of the month
following the month of actual receipt of Crude Oil; provided that, if the
twentieth day of the month falls on a Sunday or a banking holiday, payment will
be made on the following Business Day, or if the twentieth day of the month
falls on a Saturday, payment will be made on the preceding Business Day.
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2.6 General Provisions. Plains Marketing, L.P.'s General Provisions
dated November 1, 1998, is attached hereto as Exhibit B and is incorporated by
reference and made a part of this Agreement. If any conflict should arise
between the General Provisions and the information stated herein, this Agreement
shall apply.
2.7 No Restrictions. No provision contained in this Agreement shall in
any way be interpreted as being a restriction on the ability of any Seller to
convey or transfer Crude Oil to any other Seller, or to any of their
subsidiaries. However, all such Crude Oil conveyed or transferred to a Seller
or subsidiary is and shall remain subject to this Agreement including the
obligations contained in this Article II.
ARTICLE III
RENEGOTIATION
Prior to the third anniversary of this Agreement, and the end of each
successive three-year period thereafter (an "Anniversary Date"), either the
Sellers or Buyer may request, in writing, to renegotiate the Marketing and
Administrative Fee. Any such renegotiation request must be accompanied with
documentation supporting the request to either increase or decrease the
Marketing and Administrative Fee, and shall be in accordance with the following
procedures:
(a) At least 120 days prior to the applicable Anniversary Date, either the
Sellers or Buyer may request, in writing, to renegotiate the Marketing and
Administrative Fee.
(b) Sellers and Buyer shall renegotiate the Marketing and Administrative
Fee in good faith. If a revised Marketing and Administrative Fee has not been
agreed upon at least 75 days prior to the applicable Anniversary Date, then
Sellers may enter into negotiations for the sale of their Crude Oil with any
Person who is not an Affiliate of Sellers. If Sellers do not reach an agreement
with such non-affiliated Person at least 30 days prior to applicable
Anniversary Date, then this Agreement shall continue and the Marketing and
Administrative Fee shall be revised, effective the first day after the
applicable Anniversary Date, to equal the Marketing and Administrative Fee last
offered by Buyer.
(c) If Sellers are successful in reaching agreement with such non-
affiliated Person which provides for (i) a term of not less than one year nor
more than three years; (ii) a Marketing and Administrative Fee which is less
than the Marketing and Administrative Fee last offered by Buyer; and (iii)
additional services substantially similar to those provided for in Article IV
below, this Agreement shall terminate. Such termination shall be effective on
the next Anniversary Date and, thereafter, Sellers may sell their Crude Oil to
such non-affiliated Person during the term of their agreement with such Person.
Within 120 days prior to the end of the term of such other agreement, either the
Sellers or Buyer may request negotiations to resume this Agreement and to
negotiate a revised Marketing and Administrative Fee in accordance with the
procedures set forth above.
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(d) Sellers' and Buyer's right to request a renegotiation of the Marketing
and Administrative Fee in order to resume this Agreement shall continue until
such time that this Agreement terminates pursuant to Article V, or until such
time that Sellers have sold their Crude Oil production to a Person who is not an
Affiliate of Sellers for a period of five (5) consecutive years.
ARTICLE IV
ADDITIONAL SERVICES
4.1 Additional Services. Upon request, Buyer agrees to provide Sellers
with the following services which shall be provided at no additional cost to
Sellers except for reimbursement of all reasonable out-of-pocket costs incurred
by Buyer to provide such services:
(a) Provide Sellers with (i) historical information related to crude oil
and natural gas prices in the possession of, or accessible to, Buyer,
and (ii) Buyer's assessment of crude oil and natural gas prices to
assist Sellers in their hedging strategies and decisions.
(b) Execute ▇▇▇▇▇▇ on behalf of, or for the benefit of, Sellers' crude oil
and natural gas production.
(c) Assist Sellers in their evaluation of potential acquisitions of oil
and gas properties.
(d) Assist Sellers in preparing information relating to their potential
disposition of any of their crude oil and natural gas properties.
(e) Market the production of their natural gas and natural gas liquids
produced in association with Sellers' crude oil production.
(f) Negotiate natural gas purchase agreements required for the operation
of Sellers' properties.
(g) Provide royalty distribution services.
4.2 SELLERS INDEMNITY. SELLERS AGREE TO RELEASE, PROTECT, DEFEND,
INDEMNIFY AND HOLD BUYER, THE GENERAL PARTNER, AND THEIR PARENTS, SUBSIDIARIES,
AFFILIATES, SUCCESSORS AND ASSIGNS, AND THEIR AGENTS, OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES AND CONTRACTORS (HEREINAFTER COLLECTIVELY REFERRED TO
AS THE "BUYER GROUP") HARMLESS FROM AND AGAINST ALL CLAIMS, LOSSES, COSTS,
DEMANDS, DAMAGES, SUITS, JUDGMENTS, PENALTIES, LIABILITIES, DEBTS, EXPENSES AND
CAUSES OF ACTION OF WHATSOEVER NATURE OR CHARACTER, INCLUDING BUT NOT LIMITED TO
REASONABLE ATTORNEY'S FEES AND OTHER COSTS AND EXPENSES, WHICH IN ANY WAY ARISE
OUT OF OR ARE RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, (I) THE
PERFORMANCE OR SUBJECT MATTER OF THIS AGREEMENT, (II) THE PERFORMANCE OF THE
SERVICES IN SECTION 4.1, (III) THE BREACH BY SELLERS OF ANY TERMS OF THIS
AGREEMENT, OR (IV) THE INGRESS, EGRESS OR PRESENCE ON ANY PREMISES, WHETHER
LAND, BUILDINGS, OR OTHERWISE, IN CONJUNCTION WITH THIS AGREEMENT (COLLECTIVELY,
THE "CLAIMS"), INCLUDING CLAIMS DUE TO PERSONAL INJURY, DEATH, OR LOSS OR DAMAGE
OF PROPERTY, WHETHER OR NOT CAUSED BY THE SOLE, JOINT AND/OR CONCURRENT
NEGLIGENCE, FAULT OR STRICT LIABILITY OF ANY MEMBER
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OF THE BUYER GROUP, BUT IN NO EVENT DOES THIS INDEMNITY INCLUDE CLAIMS CAUSED BY
THE BUYER GROUP'S OWN GROSS NEGLIGENCE OR WILFUL MISCONDUCT.
ARTICLE V
TERM
The term of this Agreement shall commence on the date of this Agreement,
and unless sooner terminated as provided herein, shall continue in effect until
the earlier to occur of: (i) the time at which any Affiliate of Plains Resources
ceases to be the general partner of Buyer, or (ii) a Change of Control of Plains
Resources.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of Sellers. Each Seller represents
and warrants to Buyer as of the date hereof that:
(a) Each Seller is a corporation or limited partnership duly organized,
validly existing, and in good standing under the laws of the state of their
respective formation, and has all requisite corporate or partnership power and
authority to execute, deliver, and perform this Agreement.
(b) The execution, delivery, and performance by each Seller of this
Agreement, and the consummation of the transactions contemplated herein, are
within its corporate or partnership power and authority and have been duly
authorized by all necessary corporate or partnership action.
(c) No authorization, consent, or approval of, or other action by, or
notice to, or filing with, any governmental authority, regulatory body, or any
other Person is required for the due authorization, execution, delivery, or
performance by any Seller of this Agreement, or the consummation of the
transactions contemplated herein, except those authorizations, consents, and
approvals which have been obtained and remain in full force and effect, and
those notices and filings which have been made and remain in full force and
effect.
(d) This Agreement has been duly executed and delivered by each Seller, and
is the legal, valid, and binding obligation of each Seller enforceable against
it in accordance with its terms, except that enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws affecting the rights of creditors generally, and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
(e) Neither the execution, delivery, or performance by any Seller of this
Agreement, nor the consummation of the transactions contemplated herein, will
violate any provision of any Seller's Corporate Governance Documents, or any
agreement, indenture, or instrument to which any Seller
-8-
is a party or by which any of its property or assets are bound, or any provision
of any existing Governmental Requirement.
6.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Sellers as of the date hereof that:
(a) Buyer is a limited partnership duly organized, validly existing, and in
good standing under the laws of the state of Delaware, and has all requisite
power and authority to execute, deliver, and perform this Agreement.
(b) The execution, delivery, and performance by Buyer of this Agreement,
and the consummation of the transactions contemplated herein, are within Buyer's
partnership power and authority and have been duly authorized by all necessary
partnership action.
(c) No authorization, consent, or approval of, or other action by, or
notice to, or filing with, any governmental authority, regulatory body, or any
other Person is required for the due authorization, execution, delivery, or
performance by Buyer of this Agreement, or the consummation of the transactions
contemplated by this Agreement, except those authorizations, consents, and
approvals which have been obtained and remain in full force and effect, and
those notices and filings which have been made and remain in full force and
effect.
(d) This Agreement has been duly executed and delivered by Buyer, and is
the legal, valid, and binding obligation of Buyer enforceable against Buyer in
accordance with its terms, except that enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws affecting the rights of creditors generally, and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
(e) Neither the execution, delivery, or performance by Buyer of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any provision of Buyer's Corporate Governance Documents, or any
agreement, indenture, or instrument to which Buyer is a party or by which any of
its property or assets are bound, or any provision of any existing Governmental
Requirement.
ARTICLE VII
CREDIT REQUIREMENTS
Purchases made by Buyer hereunder shall be on open account provided that:
(a) Buyer or its Affiliates are not in default in the payment when due of
any of its indebtedness in excess of $2,500,000 in the aggregate; and
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(b) Buyer's sales of Crude Oil hereunder are in accordance with the credit
policies set forth by Plains Resources' chief financial officer.
ARTICLE VIII
SPECIFIED EVENTS
8.1 Buyer Specified Events. Each of the following shall constitute a
Buyer Specified Event for all purposes of this Agreement:
(a) Any amount due hereunder for the purchase of Crude Oil shall not be
paid in full when due and Buyer does not cause the cure of such failure on or
before the fifteenth (15th) Business Day after notice from a Seller of such
failure is received by Buyer;
(b) Buyer fails to receive and purchase Crude Oil production dedicated to
this Agreement for reasons other than Force Majeure or any action or inaction of
a Seller, and such failure is not remedied on or before the earlier of the
thirtieth (30th) day after (i) any officer of the General Partner becomes aware
of such failure or (ii) a Seller has given written notice of such failure to
Buyer;
(c) any representation and warranty made in Section 6.2 shall prove to have
been incorrect in any material respect when made, and (i) such default or breach
shall continue unremedied for a period of thirty (30) days after the earlier of
(x) any officer of the General Partner becomes aware of such default or (y) a
Seller has given written notice of such default to Buyer, and (ii) a Seller
reasonably determines that the continuation of such default or breach may
materially and adversely affect Buyer's ability to satisfy its obligations
hereunder;
(d) Buyer and Sellers fail to agree upon a revised Marketing and
Administrative Fee as provided in Article III;
(e) Buyer (i) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as they
become due; (iii) makes a general assignment, arrangement or composition with or
for the benefit of its creditors; (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment or insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within thirty (30) days of the institution or
presentation thereof, (v) has a resolution passed for its winding-up or
liquidation (other than pursuant to a consolidation, amalgamation or merger);
(vi) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar
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official for it, or for all or substantially all its assets; (vii) has a secured
party take possession of all or substantially all of its assets or has an
execution, attachment, sequestration or other legal process levied, enforced or
sued on or against all or substantially all of its assets and such secured party
maintains possession or any such process is not dismissed, discharged, stayed or
restrained in each case within thirty (30) days thereafter; (viii) causes or is
subject to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
(i) to (vii) (inclusive); or (ix) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts.
8.2 Seller Specified Events. Each of the following shall constitute a
Seller Specified Event for all purposes of this Agreement:
(a) A Seller shall fail to deliver Crude Oil production subject to this
Agreement and such failure is not remedied by such Seller on or before the
fifteenth (15th) Business Day after notice from Buyer of such failure is
received by the Seller;
(b) Any representation and warranty made in Section 6.1 shall prove to have
been incorrect in any material respect when made, and (i) such default or breach
shall continue unremedied for a period of thirty (30) days after the earlier of
(x) any officer of a Seller becomes aware of such default or (y) Buyer has given
written notice of such default to a Seller, and (ii) Buyer reasonably determines
that the continuation of such default or breach may materially adversely affect
Seller's ability to satisfy its obligations hereunder;
(c) A Seller (i) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as they
become due; (iii) makes a general assignment, arrangement or composition with or
for the benefit of its creditors; (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment or insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within thirty (30) days of the institution or
presentation thereof, (v) has a resolution passed for its winding-up or
liquidation (other than pursuant to a consolidation, amalgamation or merger);
(vi) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets; (vii) has a
secured party take possession of all or substantially all of its assets or has
an execution, attachment, sequestration or other legal process levied, enforced
or sued on or against all or substantially all its assets and such secured party
maintains possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within thirty (30) days thereafter; (viii) causes or
is subject to any event with respect to it which, under the applicable laws of
any jurisdiction, had an analogous effect to any of the events specified
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in clauses (i) to (vii) (inclusive); or (ix) takes any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
foregoing acts;
(d) Sellers and Buyer fail to agree upon a revised Marketing and
Administrative Fee as provided in Article III.
8.3 Early Termination. If any Specified Event shall have occurred and be
continuing, then the Non-defaulting Party may by notice to the Defaulting Party
designate a date (which date shall not be earlier than 60 days after receipt of
such notice) on which this Agreement shall terminate as between the Non-
defaulting Party and the Defaulting Party, and this Agreement shall terminate as
between the Non-defaulting Party and the Defaulting Party on such designated
date whether or not such Specified Event is then continuing; provided that the
provisions of Section 8.4 shall survive such termination.
8.4 Specified Damages. The Defaulting Party shall pay all damages and
expenses incurred by the Non-defaulting Party as a result of the termination of
this Agreement under Section 8.3 arising out of or in connection with any
collection, bankruptcy, insolvency, or other enforcement proceedings resulting
from the occurrence of the Specified Event giving rise to such termination.
Payment of such damages and expenses shall be the Defaulting Party's only
liability, and the Non-defaulting Party's sole remedy and exclusive claim, as a
result of the Specified Event and the resulting termination of this Agreement
under Section 8.3 as between the Non-defaulting Party and the Defaulting Party.
ARTICLE IX
FORCE MAJEURE
9.1 Excuse for Nonperformance. Subject to the other provisions of this
Agreement, the obligations of a Party under this Agreement (including the
obligation of Sellers to deliver Crude Oil), except the obligation to pay money
to the other Party, may be suspended for a reasonable period as a result of an
event of Force Majeure, to the extent that nonperformance is caused by Force
Majeure, and the affected Party shall be relieved of liability for failing to
perform from the inception of such event and during the continuance thereof and
the time of any such suspension of obligations shall be added to the term of
this Agreement.
9.2 Definition. An event of "Force Majeure" means war, riots,
insurrections, fire, explosions, sabotage, strikes, and other labor or
industrial disturbances, acts of God or the elements, Governmental Requirements,
disruption or breakdown of production or transportation facilities, delays of
pipeline carrier in receiving and delivering crude oil tendered, or any other
cause, whether similar or not, reasonably beyond the control of the affected
Party.
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9.3 Notice and Cure. A Party affected by Force Majeure shall, as a
condition to invoking Force Majeure as an excuse for nonperformance under this
Agreement, promptly give notice of the occurrence of Force Majeure to the other
Party, with reasonably detailed information about the event of Force Majeure and
the effect it has had, and is anticipated to have, on the performance of the
invoking Party, and shall confirm such notice of Force Majeure and its
consequences in writing no later than two (2) Business Days after the occurrence
of such event of Force Majeure. The invoking Party shall exercise due diligence
in good faith to remedy the Force Majeure and resume full performance under this
Agreement as soon as reasonably practicable.
ARTICLE X
GENERAL PROVISIONS
10.1 No Survival of Representations and Warranties. Notwithstanding
anything to the contrary herein, all representations and warranties provided by
Sellers and Buyer in Article VI shall not survive the termination of this
Agreement.
10.2 Headings. The headings, captions, and arrangements contained in this
Agreement have been inserted for convenience only and shall not be deemed in any
manner to modify, explain, enlarge, or restrict any of the provisions hereof.
10.3 Rights and Remedies Cumulative. Except as provided in Section 8.4,
the rights and remedies of each of the Parties under this Agreement shall be
cumulative and non-exclusive of any other rights or remedies which each Party
may have under any other agreement or instrument, by operation of law, or
otherwise.
10.4 Entire Agreement; Supersedure. This Agreement constitutes the entire
agreement of the parties relating to the matters contained herein, superseding
all prior contracts or agreements, whether oral or written, relating to the
matters contained herein.
10.5 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.
10.6 Choice of Law; Submission to Jurisdiction. This Agreement shall be
subject to and governed by the laws of the State of Texas, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another state. Each party
hereby submits to the jurisdiction of the state and federal courts in the State
of Texas and to venue in Houston, ▇▇▇▇▇▇ County, Texas.
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10.7 Binding Agreement. This Agreement is entered into for the benefit of
the Parties and their permitted successors and assigns. It shall be binding upon
and shall inure to the benefit of such Parties and their successors and assigns.
10.8 No Agency. Except as otherwise provided in this Agreement, nothing
herein shall serve to create any agency, employment, master and servant
relationship, partnership, or joint venture between Sellers and Buyer, their
Affiliates, or any officer, director, employee or agent thereof.
10.9 Notice. All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the United States mail, addressed to the Person to
be notified, postpaid, and registered or certified with return receipt requested
or by delivering such notice in person or by telecopier or telegram to such
party. Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a party
pursuant to this Agreement shall be sent to or made at the address set forth
below, or at such other address as such party may stipulate to the other parties
in the manner provided in this Section 10.9.
If to Buyer: If to Sellers:
Plains Marketing, L.P. Plains Resources Inc.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 500 Dallas, Suite 700
Houston, Texas 77002 ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President of Attention: President
Plains All American Inc.
10.10 Effect of Waiver or Consent. No waiver or consent, express or
implied, by any party to or of any breach or default by any Person in the
performance by such Person of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a party to complain of any act of any Person
or to declare any Person in default, irrespective of how long such failure
continues, shall not constitute a waiver by such party of its rights hereunder
until the applicable statute of limitations period has run.
10.11 Assignment. No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.
10.12 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall
constitute one and the same instrument.
-14-
10.13 Amendment or Modification. This Agreement may be amended or modified
from time to time only by the written agreement of all the parties hereto. Each
such instrument shall be reduced to writing and shall be designated on its face
an "Amendment" or an "Addendum" to this Agreement.
10.14 Further Assurances. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
10.15 Withholding or Granting of Consent. Each party may, with respect to
any consent or approval that it is entitled to grant pursuant to this Agreement,
grant or withhold such consent or approval in its sole and uncontrolled
discretion, with or without cause, and subject to such conditions as it shall
deem appropriate.
10.16 U.S. Currency. All sums and amounts payable to or to be payable
pursuant to the provisions of this Agreement shall be payable in coin or
currency of the United States of America that, at the time of payment, is legal
tender for the payment of public and private debts in the United States of
America.
10.17 Laws and Regulations. Notwithstanding any provision of this
Agreement to the contrary, no party hereto shall be required to take any act, or
fail to take any act, under this Agreement if the effect thereof would be to
cause such party to be in violation of any applicable law, statute, rule or
regulation.
10.18 Construction of Agreement. In construing this Agreement:
(a) no consideration shall be given to the fact or presumption that one
Party had a greater or lesser hand in drafting this Agreement;
(b) examples shall not be construed to limit, expressly or by implication,
the matter they illustrate;
(c) the word "includes" and its derivatives means "includes, but is not
limited to" and corresponding derivative expressions;
(d) a defined term has its defined meaning throughout this Agreement,
regardless of whether it appears before or after the place where it is defined;
(e) the plural shall be deemed to include the singular, and vice versa;
(f) each gender shall be deemed to include the other genders;
-15-
(g) each reference to an article, section, or subsection refers to an
article, section, or subsection of this Agreement unless expressly otherwise
provided; and
(h) all references to a party shall include all successors and permitted
assigns of such party.
[The next page is the signature page]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
and year first above written.
BUYER:
PLAINS MARKETING, L.P.
By: Plains All American Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
SELLERS:
PLAINS RESOURCES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
PLAINS ILLINOIS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇ RESOURCES, L.P.
By: ▇▇▇▇▇▇▇ Resources, Inc., its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
CALUMET FLORIDA INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--- ------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
-17-
EXHIBIT A
SELLERS' CRUDE OIL PRODUCING PROPERTIES
WITHIN MARKETING AREA
Delivery
Seller Field State Point
----------------------------- ----------- ---------- ---------
▇▇▇▇▇▇▇ Resources, L.P. Inglewood California Lease Tankage
(including
San ▇▇▇▇▇▇▇
and Packard
drillsites)
Montebello California Lease Tankage
Arroyo Grande California Lease Tankage
Plains Illinois, Inc. Elnora Indiana Lease Tankage
▇▇▇▇▇▇▇▇ Illinois Lease Tankage
St. ▇▇▇▇▇ Illinois Lease Tankage
West Kenner Illinois Lease Tankage
Calumet Florida, Inc. Racoon Point Florida Coastal Fuels
Sunniland Florida Terminal at
Bear Island Florida Point Everglades
South Bear Florida (all fields)
Sunoco Florida
West Felda Florida
EXHIBIT B
PLAINS MARKETING, L.P.
GENERAL PROVISIONS
NOVEMBER 1, 1998
SPECIFIC TERMS: The General Provisions set forth herein are incorporated by
reference and made a part of that certain Crude Oil Marketing Agreement dated
November __, 1998, by and among Buyer and Sellers (the "Agreement"). In the
event there is any inconsistency between these General Provisions and the
Agreement, the Agreement shall prevail. All capitalized terms not otherwise
defined in this Exhibit B shall have the meaning set forth for them in the
Agreement.
WARRANTY/INDEMNIFICATION: The Sellers warrant good title to or the right to
sell all Crude Oil delivered pursuant to the Agreement and warrant that such
shall be free from all royalties, liens, encumbrances, and all applicable
foreign, federal, state and local taxes that are imposed upon the production
and/or removal of Crude Oil from the premises through the Delivery Point.
Sellers also warrant that such Crude Oil has been produced, handled and
transported to the Delivery Point in accordance with all applicable laws, rules
and regulations of all local, state and federal authorities. Sellers further
warrant that all Crude Oil will be merchantable. Sellers further agree to
indemnify, defend and hold harmless Buyer, the General Partner, and their
parents, subsidiaries, Affiliates, successors and assigns, and their agents,
officers, directors, employees, representatives and contractors from and against
all loss, costs, damages or expenses of any nature by or on account of Buyer,
the General Partner, or their parents, subsidiaries, Affiliates, successors and
assigns, and their agents, officers, directors, employees, representatives or
contractors having made (i) 100% payment to Sellers or (ii) payment to interest
owners on behalf of Sellers based on information provided by Sellers.
TAXES: Sellers shall be responsible for all production, severance and other
related taxes incurred prior to delivery, provided that Buyer is hereby
authorized to withhold such taxes from payments to Sellers and remit such taxes
to the proper regulatory authority. Buyer shall be responsible for the payment
of any and all taxes now in effect or hereafter imposed on the Crude Oil after
the Delivery Point.
TITLE AND RISK OF LOSS: Title to, possession of and risk of loss of Crude Oil
shall pass to the Buyer as the Crude Oil passes from equipment owned or
controlled by the Sellers, or owned or controlled by a party designated to make
delivery on behalf of the Sellers, into equipment owned or controlled by Buyer,
or owned or controlled by a party designated to take delivery on behalf of
Buyer. Provided, however, that in cases of in line transfers, title to,
possession of and risk of loss of Crude Oil shall pass to Buyer as the Crude Oil
is deemed transferred. Such shall be deemed transferred to Buyer upon
completion of each in line transfer with quantity determined, when available, in
accordance with the transfer statement or other receipt issued by the carrier or
storage facility.
EQUAL DELIVERIES: For purposes of determining price, Crude Oil delivered during
any given month hereunder shall be deemed to have been delivered in equal daily
quantities during such month
except as follows: Deliveries of Crude Oil at lease locations based on meter
tickets shall be deemed to have been delivered in equal daily quantities during
the period covered by the meter ticket and deliveries of Crude Oil at lease
locations based on run tickets, shall be deemed to have been delivered on the
date recorded on each run ticket issued by the designated carrier.
MEASUREMENTS AND TESTS: All measurements hereunder shall represent one hundred
percent (100%) volume with such volume and gravity adjusted to sixty degrees
(60) Fahrenheit temperature. Procedures for measuring and testing, except for
deliveries through positive displacement-type liquid meters, shall be according
to latest ASTM published methods then in effect. Procedures for such metered-
type delivery shall be according to the latest ASME-API published methods then
in effect. The Crude Oil delivered hereunder shall be merchantable and
acceptable to the carriers involved and full deduction shall be made for all
BS&W content according to the latest ASTM standard method then in effect. Any
Party shall have the right to have a representative present to witness all
gauges, tests and measurements; however, should any Party hereto fail to have a
representative present during such measuring and testing, the measurements and
tests of the other Party will be accepted.
CONFIRMATION OF DELIVERY: Confirmation of delivery shall be based on run
tickets evidencing such delivery or allocation statements issued by the carriers
involved.
DIVISION ORDERS: In the event any Party signs a division order in favor of the
other Party pertaining to the object of the Agreement, terms of the Agreement
shall supersede the terms of such division order to the extent that there may be
a conflict between the two.
DISPUTE-WITHHOLDING OF FUNDS: If a suit is filed that affects the interest of a
Seller, written notice shall be given to Buyer by such Seller together with a
copy of the complaint or petition filed. In the event of a claim or dispute
that affects title to the division interest credited to such Seller, Buyer is
authorized to withhold payments accruing to such interest, without interest
unless otherwise required by applicable statute, until the claim of dispute is
settled.
NOTICES: Sellers agree to notify Buyer in writing of any change of Payee,
including changes of interest contingent on payment of money or expiration of
time. No change is binding on Buyer until the recorded copy of the instrument
of change or documents satisfactorily evidencing such change are furnished to
Buyer at the time the change occurs. Any change shall be made effective on the
first day of the month following receipt of such notice by Buyer.
SET-OFF: In the event any Party shall fail to make timely delivery of any Crude
Oil, or other applicable products due and owing to the other Party, or in the
event any Party shall fail to make timely payment of any monies due and owing to
the other Party, the other Party may offset any deliveries or payments due under
this or any other agreement between the parties.
AUDIT: Any Party and their duly authorized representatives shall have access to
the accounting records and other documents maintained by the other Party which
relate to the Agreement, and shall have the right to audit such records at any
reasonable time or times within twenty-four (24) months of the date a statement
is rendered.
