MASTER Lease Agreement
dated as of
October 18, 1996
between
Enserch Exploration Holdings, Inc.,
as Head Lessor
and
The Cit Group/COMMERCIAL SERVICES, Inc.,
as Head Lessee
Mississippi Canyon
Block 441
Production System
TABLE OF CONTENTS
Page
SECTION 1. DEFINITION 1
SECTION 2. LEASE OF UNDIVIDED INTEREST 2
Section 2.1 Undivided Interest 2
Section 2.2 Personal Property 2
SECTION 3. TERM AND RENT 2
Section 3.1 Basic Term 2
Section 3.2 Renewal Term 3
Section 3.3 Head Lease Rent 3
Section 3.4 Nonterminability 3
SECTION 4. DISCLAIMER OF WARRANTIES 4
SECTION 5. RIGHT OF QUIET ENJOYMENT 4
SECTION 6. RETURN OF UNDIVIDED INTEREST 5
SECTION 7. LIENS 5
SECTION 8. OPERATION AND MAINTENANCE; REPLACEMENT COMPONENTS 5
Section 8.1 Operation and Maintenance 5
Section 8.2 Replacement Components 5
SECTION 9. MODIFICATIONS 6
SECTION 10. EARLY TERMINATION OF HEAD LEASE TERM 6
Section 10.1 Early Termination During the Sublease Term 6
Section 10.2 Early Termination; Purchase Option 6
SECTION 11. INSPECTION 7
SECTION 12. REPRESENTATIONS AND WARRANTIES OF THE HEAD LESSOR 7
Section 12.1 Due Organization 7
Section 12.2 Authorization 7
Section 12.3 Execution; Enforceability 7
Section 12.4 No Violation 8
Section 12.5 Consents and Approvals 8
Section 12.6 Litigation 8
Section 12.7 Investment Company Act 9
Section 12.8 Holding Company 9
SECTION 13. REPRESENTATIONS AND WARRANTIES OF THE HEAD LESSEE 9
Section 13.1 Due Organization 9
Section 13.2 Authorization; Execution; Enforceability 9
Section 13.3 No Violation 10
Section 13.4 Investment Company Act 11
Section 13.5 Litigation 11
Section 13.5 ERISA 11
SECTION 14. MISCELLANEOUS 11
Section 14.1 Amendments and Waivers 11
Section14.2 Notices 11
Section 14.3 Survival 12
Section 14.4 Successors and Assigns 12
Section 14.6 Governing Law 12
Section 14.7 Severability 13
Section 14.8 Counterparts 13
Section 14.9 Headings and Table of Contents 13
Section 14.10 Further Assurances 13
Section 14.11 Effectiveness of Head Lease 13
Exhibit A - Description of Production System
MASTER LEASE AGREEMENT
This MASTER LEASE AGREEMENT, dated as of October18, 1996 (this "Head
Lease"), between ENSERCH EXPLORATION HOLDINGS, INC., a Delaware corporation,
as lessor (the "Head Lessor"), and THE CIT GROUP/COMMERCIAL SERVICES, INC., a
New York corporation, as lessee (the "Head Lessee").
WHEREAS, the Head Lessor is the owner of a 37.5% undivided interest
in the Production System described on Exhibit A to this Head Lease;
WHEREAS, pursuant to the Operating Agreement, Enserch Exploration,
Inc. ("Enserch") (as successor to EP Operating Limited Partnership) and
Petrofina Delaware, Incorporated and Agip Petroleum Co. Inc., as owners of the
balance of the undivided interest in the Production System, established their
respective rights and obligations in respect of the Production System and
appointed Enserch, as successor to EP Operating Limited Partnership, as the
operator of the Production System;
WHEREAS, pursuant to this Head Lease, the Head Lessor proposes to
lease to the Head Lessee a 37.5% undivided interest in the Production System
on terms and conditions set forth herein; and
WHEREAS, pursuant to the Sublease, the Head Lessee will lease the
Production System to Enserch Exploration, Inc., a Texas corporation, for a
term which shall end prior to the expiration of the term of this Head Lease;
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Head Lease and not otherwise defined
herein shall have the respective meanings set forth in Appendix A to the
Sublease Agreement dated as of October 18, 1996, between The CIT
Group/Commercial Services, Inc., as Sublessor, and Enserch Exploration, Inc.,
as Sublessee. All references to sections, paragraphs, clauses and exhibits
are to sections, paragraphs, clauses and exhibits in this Head Lease unless
otherwise indicated and the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Head Lease as a whole and not to any
particular section or other subdivision.
Where any provision in this Head Lease refers to action to be taken
by any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by
such Person.
SECTION 2. LEASE OF UNDIVIDED INTEREST.
2.1. Undivided Interest. The Head Lessor hereby leases a 37.5%
undivided interest in the Production System (the "Undivided Interest") to the
Head Lessee, and the Head Lessee hereby leases the Undivided Interest from the
Head Lessor. The Head Lessor and the Head Lessee understand and acknowledge
that legal title to the Undivided Interest remains vested in the Head Lessor.
This Head Lease has been entered into with the intention that the Head Lessee
will be treated as owner of the Undivided Interest for federal income tax
purposes.
2.2. Personal Property. The parties hereto stipulate and agree that
the Production System, the Undivided Interest and all Modifications to the
Production System and every portion thereof is severed, and shall be and
remain severed, to the maximum extent permitted by law, from any real estate
underneath the Production System, even if physically attached thereto. To the
maximum extent permitted by law, the parties agree that the Production System,
the Undivided Interest and all such Modifications shall constitute personal
property and shall not be or become fixtures or otherwise part of the real
estate underneath the Production System or of any other real property.
SECTION 3. TERM AND RENT.
3.1. Basic Term. The term of this Head Lease shall commence on the
Closing Date and shall terminate at 11:59 p.m. (New York City time) on October
10, 2040 (the "Head Lease Basic Term"), unless earlier terminated pursuant to
the provisions of Section 10 hereof.
3.2. Renewal Term. At the expiration of the Head Lease Basic Term
or any Head Lease Renewal Term, the Head Lessee may renew this Head Lease for
an additional term or terms of not less than 1 year each (each an "Head Lease
Renewal Term" and, together with the Head Lease Basic Term, the "Head Lease
Term") by giving to the Head Lessor 180 days prior written notice; provided
that the Head Lessee shall be permitted to renew the term of this Head Lease
for a Head Lease Renewal Term only if on the date that notice of such renewal
is given and at the commencement of such Head Lease Renewal Term, no
determination has been made in accordance with Article 17 of the Operating
Agreement to retire or abandon the Production System.
3.3. Head Lease Rent. The Head Lessee hereby agrees to pay the Head
Lessor rent for the Head Lease Basic Term in a single installment in the
amount of $16,142,000 (the "Head Lease Basic Rent"), which amount will be paid
on the Closing Date. The Head Lessor acknowledges receipt of such amount in
full satisfaction of the Head Lessee's obligation to pay rent during the Head
Lease Basic Term. If the Head Lessee elects to renew the term of the Head
Lease for a Head Lease Renewal Term or Terms, pursuant to Section 3.2 hereof,
the Head Lessee agrees to pay to the Head Lessor annual nominal rent during
each Head Lease Renewal Term of $100, which amount shall be due and payable in
advance on each October 11 of each year during such Head Lease Renewal Term.
3.4. Nonterminability. Subject to Section 10 hereof, this Head
Lease shall not terminate, nor shall any of the rights granted and conveyed
hereunder to the Head Lessee be extinguished, lost or otherwise impaired, in
whole or in part, by any circumstances of any character or for any reason
whatsoever, including, without limitation, the following: (a) any damage to
or loss or destruction of all or any part of the Production System for any
reason whatsoever and of whatever duration, (b) the condemnation, requisition
(by eminent domain or otherwise), seizure or other taking of title or use of
the Production System by any Governmental Authority or otherwise, (c) any
prohibition, limitation or restriction on the use by any Person of all or any
part of its property or the interference with such use by any Person, or any
eviction by paramount title or otherwise, (d) any inadequacy, incorrectness or
failure of the description of the Production System or any part thereof or any
rights or property in which an interest is intended to be granted or conveyed
by this Head Lease, (e) the insolvency, bankruptcy, reorganization or similar
proceedings by or against the Head Lessor or the Head Lessee or any other
Person, (f)failure by the Head Lessee to comply with Section 6, 7 or 8 hereof
or (g)any other reason whatsoever, whether similar or dissimilar to any of the
foregoing.
SECTION 4. DISCLAIMER OF WARRANTIES.
WITHOUT WAIVING ANY CLAIM THE HEAD LESSEE MAY HAVE AGAINST ANY
MANUFACTURER, VENDOR OR CONTRACTOR, THE HEAD LESSEE ACKNOWLEDGES AND AGREES
SOLELY FOR THE BENEFIT OF THE HEAD LESSOR THAT (a)THE PRODUCTION SYSTEM AND
EACH COMPONENT THEREOF ARE OF A SIZE, DESIGN, CAPACITY AND MANUFACTURE
ACCEPTABLE TO THE HEAD LESSEE, (b)THE HEAD LESSEE IS SATISFIED THAT THE
PRODUCTION SYSTEM AND EACH COMPONENT THEREOF ARE SUITABLE FOR THEIR RESPECTIVE
PURPOSES, (c)THE HEAD LESSOR IS NOT A MANUFACTURER OR A DEALER IN PROPERTY OF
SUCH KIND, (d) THE PRODUCTION SYSTEM AND EACH COMPONENT THEREOF ARE LEASED
HEREUNDER SUBJECT TO ALL APPLICABLE LAWS NOW IN EFFECT OR HEREAFTER ADOPTED
AND IN THE STATE AND CONDITION OF EVERY PART THEREOF WHEN THE SAME FIRST
BECAME SUBJECT TO THIS HEAD LEASE WITHOUT REPRESENTATION OR WARRANTY OF ANY
KIND BY THE HEAD LESSOR AND (e) THE HEAD LESSOR LEASES AND THE HEAD LESSEE
TAKES THE UNDIVIDED INTEREST UNDER THIS HEAD LEASE "AS-IS", "WHERE-IS" AND
"WITH ALL FAULTS", AND THE HEAD LESSEE ACKNOWLEDGES THAT THE HEAD LESSOR MAKES
NO, NOR SHALL BE DEEMED TO HAVE MADE, AND EXPRESSLY DISCLAIMS, ANY AND ALL
RIGHTS, CLAIMS, WARRANTIES OR REPRESENTATIONS, EITHER EXPRESS OR IMPLIED, AS
TO THE VALUE, CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN,
OPERATION, OR MERCHANTABILITY THEREOF OR AS TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, FREEDOM FROM
PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT, THE ABSENCE OF ANY LATENT OR
OTHER DEFECT, WHETHER OR NOT DISCOVERABLE, OR AS TO THE ABSENCE OF ANY
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT THERETO, except that the
Head Lessor represents and warrants to the Head Lessee that the Head Lessor
has good and valid title to the Undivided Interest, free and clear of all
Liens other than Permitted Liens.
SECTION 5. RIGHT OF QUIET ENJOYMENT.
The Head Lessor agrees that, notwithstanding any other provision of
any of the Operative Documents, so long as this Head Lease has not been
terminated pursuant to the express provisions of Section 10 hereof, it shall
not through its own actions or inactions interfere with or interrupt the quiet
enjoyment of the use and possession by the Head Lessee of the Undivided
Interest subject to the terms hereof.
SECTION 6. RETURN OF UNDIVIDED INTEREST.
Upon termination of this Head Lease pursuant to Section 10.2 or,
subject to Section 10.1, on the last day of the Head Lease Term, the Head
Lessee shall return the Undivided Interest by delivering constructive
possession of the same to the Head Lessor as is and where is without
representation or warranty other than that the Undivided Interest is free and
clear of all Sublessor's Liens, without any other liability or cost to the
Head Lessee. The obligations of the Head Lessee under this Section 6 shall
survive termination of this Head Lease.
SECTION 7. LIENS.
The Head Lessee agrees that it will not, directly or indirectly create, incur,
assume or suffer to exist any Sublessor's Liens on or with respect to the
Undivided Interest or the Production System, and the Head Lessee shall
promptly notify the Head Lessor of the imposition of any such Lien of which
the Head Lessee is aware and shall promptly, at its own expense, take such
action as may be necessary to discharge any such Lien.
SECTION 8. OPERATION AND MAINTENANCE; REPLACEMENT COMPONENTS.
8.1. Operation and Maintenance. The Head Lessee covenants and
agrees to maintain and insure the Undivided Interest, or cause the Undivided
Interest to be maintained and insured, in accordance with the Operating
Agreement. The execution and delivery of the Sublease shall be deemed
compliance by the Head Lessee with its covenants set forth in this Section 8.1
during the Sublease Term without any further action by the Head Lessee,
whether or not the Sublessee shall comply with the corresponding obligations
under the Sublease.
8.2. Replacement Components. An undivided interest equal to the
Sublessor's Share in all Replacement Components incorporated in the
Production System during the Head Lease Term in accordance with the Sublease
or the Operating Agreement shall automatically become subject
to this Head Lease without any action by any Person whatsoever and shall be
deemed to be a part of the Production System and the Undivided Interest for all
purposes of this Head Lease.
SECTION 9. MODIFICATIONS.
An undivided interest equal to the Sublessor's Share in all
Modifications to the Production System referred to in Section 11.5(b) of the
Sublease and made during the Head Lease Term shall automatically become
subject to this Head Lease without any action by any Person whatsoever and
shall be deemed to be a part of the Production System and the Undivided
Interest for all purposes of this Head Lease.
SECTION 10. EARLY TERMINATION OF HEAD LEASE TERM.
10.1. Early Termination During the Sublease Term. The Head Lease
Term in respect of the Undivided Interest or any Significant Portion shall
terminate prior to the scheduled expiration date of the Head Lease Basic Term
if the Sublease as it relates to the Undivided Interest or such Significant
Portion is terminated pursuant to Section 7 or 12 thereof or if the Sublessee
purchases the Undivided Interest pursuant to Section 6 of the Sublease. Upon
satisfaction of the requirements of the relevant section of the Sublease, the
Head Lease Term shall terminate without any action of any Person whatsoever
and the Head Lessor and the Head Lessee agree to comply with the provisions of
the applicable section of the Sublease in connection with such termination.
10.2. Early Termination; Purchase Option. At any time following the
expiration or termination of the Sublease Term, the Head Lessee shall have the
right to terminate the Head Lease and return the Undivided Interest to the
Head Lessor by delivering constructive possession thereof to the Head Lessor
in accordance with Section 6. At any time after the Closing Date, the Head
Lessee shall have the right to purchase from the Head Lessor all of its right,
title and interest in and to the Production System for $1.00. If the Head
Lessee shall exercise its option to purchase such interest pursuant to this
Section 10.2, on the purchase date the Head Lessor shall transfer to the Head
Lessee all of the Head Lessor's right, title and interest in and to the
Production System, as is and where is and without any representation or
warranty, upon payment to the Head Lessor of the purchase price therefor, and
the Head Lessor shall, at the Head Lessee's expense, execute and deliver to
the Head Lessee a ▇▇▇▇ of sale or assignment and such other instruments and
documents as the Head Lessee may reasonably request to evidence the valid
consummation of such transfer.
SECTION 11. INSPECTION.
During the Sublease Term, the rights of the Head Lessee to inspect
the Production System shall be governed by Section 11.2 of the Sublease.
SECTION 12. REPRESENTATIONS AND WARRANTIES OF THE HEAD LESSOR
The Head Lessor represents and warrants to the Head Lessee that on
the Closing Date:
12.1. Due Organization. The Head Lessor is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has the corporate power and authority to carry on its business
as presently conducted and as it is contemplated it will be conducted in
connection with the Undivided Interest, to own or hold under lease its
properties, and to enter into and perform its obligations under this Head
Lease.
12.2. Authorization. The execution, delivery and performance by the
Head Lessor of this Head Lease and of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Head Lessor and do not and will not require the consent or approval of any
shareholder of the Head Lessor or any trustee or holder of any indebtedness or
other obligation of the Head Lessor.
12.3. Execution; Enforceability. This Head Lease has been duly
executed and delivered by the Head Lessor and, assuming the due authorization,
execution and delivery hereof by the Head Lessee, is a legal, valid and
binding obligation of the Head Lessor, enforceable against the Head Lessor in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, liquidation, moratorium or
similar laws affecting creditors' or lessors' rights generally and by the
application of general equitable principles which may limit the availability
of certain remedies.
12.4. No Violation. The execution and delivery by the Head Lessor
of this Head Lease do not and will not, and the performance by the Head Lessor
of its obligations hereunder do not and will not, (i)violate or be
inconsistent with its charter documents or by-laws, (ii)contravene any
material Governmental Rule or Governmental Action applicable to it; provided
that no representation or warranty is made with respect to ERISA,
(iii) contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other agreement or instrument to which the
Head Lessor is a party or by which it or any of its properties are bound, and
(iv) result in, or require the creation or imposition of, any Lien (other than
Permitted Liens) upon any of its properties or assets.
12.5. Consents and Approvals. All Governmental Actions which are
required to have been taken, given, obtained, filed or recorded, as the case
may be, on or prior to the Closing Date by, from or with any Governmental
Authority and all other consents, filings or approvals which are required to
have been taken, given, obtained, filed or recorded, as the case may be, on or
prior to the Closing Date by, from or with any other Person, in each case, in
connection with the transactions contemplated by this Head Lease, or to
authorize the execution, delivery and performance by the Head Lessor of this
Head Lease, or the legality, validity, binding effect or enforceability
thereof as against the Head Lessor, have been duly taken, given, obtained,
filed or recorded, as the case may be, except where the failure to have
obtained such Governmental Actions, consents, filings and approvals by the
Closing Date would not materially adversely affect the Undivided Interest or
the ability of the Head Lessor to perform its obligations under this Head
Lease.
12.6. Litigation. There is no action, suit, investigation or
proceeding pending or, to the Actual Knowledge of the Head Lessor, threatened
against the Head Lessor or affecting its properties or rights before any
Governmental Authority that questions the validity of this Head Lease which,
individually or in the aggregate, is reasonably likely materially and
adversely to affect (x) the consummation of the transactions under this Head
Lease or (y) the business, operations or properties of the Head Lessor, or its
ability to perform its obligations under this Head Lease.
12.7. Investment Company Act. The Head Lessor is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
12.8. Holding Company. The Head Lessor is not subject to regulation
as a "holding company," an "affiliate" of a "holding company," or a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN ON IN ANY OTHER OPERATIVE
DOCUMENT, THE HEAD LESSOR DOES NOT MAKE NOR SHALL THE HEAD LESSOR BE DEEMED TO
HAVE MADE, AND THE HEAD LESSOR HEREBY DISCLAIMS, ANY REPRESENTATION OR
WARRANTY OTHER THAN THOSE REFERRED TO IN THIS SECTION, IN ANY OFFICER'S
CERTIFICATE OF THE HEAD LESSOR OR EXPRESSLY MADE IN ANY OTHER OPERATIVE
DOCUMENT, EITHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE
PRODUCTION SYSTEM OR ANY PART THEREOF, THE MERCHANTABILITY THEREOF OR THE
FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, THE ABILITY OF THE PRODUCTION
SYSTEM TO PERFORM ANY FUNCTION, THE QUALITY OF THE MATERIALS OR WORKMANSHIP
THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF
ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE; PROVIDED THAT THE
FOREGOING SHALL NOT EXCUSE THE PERFORMANCE BY THE HEAD LESSOR OF ITS
OBLIGATIONS UNDER THIS HEAD LEASE.
SECTION 13. REPRESENTATIONS AND WARRANTIES OF THE HEAD LESSEE
The Head Lessee represents and warrants to the Head Lessor that on the Closing
Date:
13.1. Due Organization. The Head Lessee is a corporation duly
organized, validly existing and in good standing under the laws of the State
of New York and has the corporate power and authority to enter into and
perform its obligations under this Head Lease.
13.2. Authorization; Execution; Enforceability. The execution,
delivery and performance by the Head Lessee of this Head Lease and of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Head Lessee and do not and will not
require the consent or approval of any shareholder of the Head Lessee. This
Head Lease has been duly authorized, executed and delivered by the Head Lessee
and, assuming the due authorization, execution and delivery hereof by the Head
Lessor, is a legal, valid and binding obligation of the Head Lessee,
enforceable against the Head Lessee in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, liquidation, moratorium or similar laws affecting creditors'
and lessors' rights generally and by the application of general equitable
principles which may limit the availability of certain remedies.
13.3. No Violation. The execution and delivery by the Head Lessee
of this Head Lease do not and will not, and the performance by the Head Lessee
of its obligations hereunder do not and will not, (i) violate or be
inconsistent with or in violation of its charter documents or by-laws,
(ii)contravene any provision of any Governmental Rule or Governmental Action
applicable to it or require any Governmental Action, provided that no
representation or warranty is made with respect to ERISA (except as set forth
in Section 13.6 below), and (iii) contravene any provision of, or constitute
any default or require any consent under, any provision of any indenture,
mortgage, contract or other instrument to which the Head Lessee is a party or
by which it or any of its property is bound.
13.4. Investment Company Act. The Head Lessee is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
13.5. Litigation. There is no action, suit, investigation or
proceeding pending or, to the Actual Knowledge of the Head Lessee, threatened
against the Head Lessee or its properties before any Governmental Authority
which, individually or in the aggregate, is reasonably likely materially and
adversely to affect the ability of the Head Lessee to perform its obligations
under this Head Lease.
13.6. ERISA. No part of the funds to be used by the Head Lessee to
acquire the interests in the Undivided Interest constitutes assets (within the
meaning of ERISA and any rules and regulations thereunder) of an employee
benefit plan subject to Title I of ERISA or of an individual retirement
account or an employee benefit plan subject to Section 4975 of the Code, or
any trust established under any such plan or account or of a "governmental
plan," as defined in Section 3(32) of ERISA or in Section 414(d) of the Code,
organized in a jurisdiction having prohibitions on transactions with such
governmental plan substantially similar to those contained in Section 406 of
ERISA or Section 4975 of the Code.
SECTION 14. MISCELLANEOUS.
14.1. Amendments and Waivers. No term, covenant, agreement or
condition of this Head Lease may be terminated, amended or compliance
therewith waived (either generally or in a particular instance, retroactively
or prospectively) except by an instrument or instruments in writing executed
by each party hereto.
14.2. Notices. Unless otherwise expressly specified or permitted by
the terms of this Head Lease, all communications and notices provided for
herein to a party hereto shall be in writing or by a telecommunications device
capable of creating a written record, and any such notice shall become
effective (a) upon personal delivery thereof, including, without limitation,
by overnight mail or courier service, (b) in the case of notice by United
States mail, certified or registered, postage prepaid, return receipt
requested, upon receipt thereof, or (c) in the case of notice by such a
telecommunications device, upon transmission thereof, provided such
transmission is promptly confirmed by either of the methods set forth in
clauses (a) or (b) above, in each case addressed to such party at its address
set forth below or at such other address as such party may from time to time
designate by written notice to the other party hereto:
If to the Head Lessor:
Enserch Exploration Holdings, Inc.
c/o Enserch Exploration, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to the Head Lessee:
The CIT Group/Commercial Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ Sheer
14.3. Survival. All warranties, representations, indemnities and
covenants made by either party hereto, herein or in any certificate or other
instrument delivered by either such party or on the behalf of either such
party under this Head Lease, shall be considered to have been relied upon by
the other party hereto and shall survive the consummation of the transactions
contemplated hereby on the Closing Date regardless of any investigation made
by either party or on behalf of either party.
14.4. Successors and Assigns. (a) This Head Lease shall be binding
upon and shall inure to the benefit of, and shall be enforceable by, the
parties hereto and their respective successors and assigns as permitted by and
in accordance with the terms hereof.
(b) Except as expressly provided herein or in any other Operative
Document, the Head Lessor may not assign its interests herein without the
consent of the Head Lessee. Except as expressly provided in the Operative
Documents or in connection with the enforcement of remedies thereunder, the
Head Lessee may not assign its interests herein during the Sublease Term
without the consent of the Head Lessor.
(c) Immediately following the closing, the Head Lessor will assign
its interest in this Head Lease to Enserch. The Head Lessee hereby consents
to such assignment, and the parties hereto agree that upon effectiveness of
such assignment Enserch shall be treated as the Head Lessor for all purposes
hereof. Upon effectiveness of such assignment, the Head Lessor shall be
released and discharged from any and all claims, demands, obligations and
liabilities existing, found to have existed or which may arise in the future
under or in connection with this Head Lease.
14.5. Business Day. Notwithstanding anything herein to the
contrary, if the date on which any payment is to be made pursuant to this Head
Lease is not a Business Day, the payment otherwise payable on such date shall
be payable on the next succeeding Business Day with the same force and effect
as if made on such scheduled date and (provided such payment is made on such
succeeding Business Day) no interest shall accrue on the amount of such
payment from and after such scheduled date to the time of such payment on such
next succeeding Business Day.
14.6. Governing Law. This Head Lease shall be governed by, and
construed in accordance with, the laws of the State of New York, other than
conflict of laws principles that would apply the laws of another jurisdiction
and except to the extent that the laws of any other jurisdiction may be
manditorily applicable.
14.7. Severability. Whenever possible, each provision of this Head
Lease shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Head Lease shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Head Lease.
14.8. Counterparts. This Head Lease may be executed in any number
of counterparts, each executed counterpart constituting an original but all
together only one agreement.
14.9. Headings and Table of Contents. The headings of the sections
of this Head Lease and the Table of Contents are inserted for purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
14.10. Further Assurances. Each party hereto will promptly and duly
execute and deliver such further documents to make such further assurances for
and take such further action reasonably requested by the other party hereto,
all as may be reasonably necessary to carry out more effectively the intent
and purpose of this Head Lease.
14.11. Effectiveness of Head Lease. This Head Lease has been dated
as of the date first above written for convenience only. This Head Lease
shall be effective on the date of execution and delivery by each of the Head
Lessor and the Head Lessee.
IN WITNESS WHEREOF, the Head Lessor and the Head Lessee have caused
this Head Lease to be duly executed and delivered by their respective officers
hereunto duly authorized.
ENSERCH EXPLORATION HOLDINGS, INC.,
as Head Lessor
By:/s/ ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
Date: As of October 18, 1996
THE CIT GROUP/COMMERCIAL SERVICES, INC.,
as Head Lessee
By:/s/ ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Date: As of October 18, 1996
EXHIBIT A
Description of Production System
A. Platform
Fire Water System
Engine Generator Systems
Production Skid
Wellstream Heating System
Compressed Air Systems
Pig Launchers/Receivers
Production Manifold
Water Treatment System
Vent System
Platform Control System
Fire and Gas Protection System
Chemical Injection Systems
Sewage Treater System
Methanol Storage Tank
Control Building/Switchgear (Electrical
Distribution and Instrumentation)
Jacket
Boat Landing/Barge Bumpers
Pilings
Deck/Deck Systems
Condensate Meter and Sampler
Safety Equipment
Crane
Pigging Gas Compressor
Condensate Surge Tank and Pumps
Control and Quarters Building
Interconnect Piping Systems
B. Templates
"A" Drilling Template
"B" Drilling Template
"A" Production Template
"B" Production Template
Subsea Xmas Tree Assembly "A-1"
Subsea Xmas Tree Assembly "A4"
Subsea Xmas Tree Assembly "A-9"
Subsea Xmas Tree Assembly "B-6"
Subsea Xmas Tree Assembly "B-7"
Subsea Xmas Tree Assembly "B-8"
Well Control System
C.Flowline Bundles
Flowline/Control Umbilical Bundle "A-1"
Flowline/Control Umbilical Bundle "A-4"
Flowline/Control Umbilical Bundle "A-9"
Flowline/Control Umbilical Bundle "B-6"
Flowline/Control Umbilical Bundle "B-7"
Flowline/Control Umbilical Bundle "B-8"
"A" Connector Sleds
"B" Connector Sleds
"A" Flowline Riser
"B" Flowline Riser
