PURCHASE AND SALE AGREEMENT
Exhibit 10.1
THIS PURCHASE AND SALE AGREEMENT (the “Agreement”) is made and as of this 8th day
of September, 2011 by and between Whitney Exploration, LLC, a Louisiana limited liability company
(“Seller”), Xx. Xxxxxxx X. Xxxxxxxx, a resident of the State of Louisiana and sole member of Seller
(“Xxxxxxxx”), on the one hand, and McMoRan Oil & Gas LLC, a Delaware limited liability company
(“Buyer”), on the other hand. McMoRan Exploration Co., a Delaware corporation and the corporate
parent of Buyer (“MMR”), has joined as a party to this Agreement in connection with its undertaking
to issue shares of MMR common stock to Seller as part of the consideration for the transaction
described herein, including to make certain representations in connection with such issuance.
RECITALS
WHEREAS, Buyer and Seller are parties to that certain letter agreement dated May 1, 2009,
which letter agreement has been amended on two subsequent occasions (as so amended, the “Letter
Agreement”), pursuant to which Seller agreed to provide funds to Buyer in exchange for Buyer’s
grant of certain rights and interests with respect to four prospects specified in the Letter
Agreement and with respect to two subsequently identified and agreed prospects (collectively, the
"Subject Properties”); and
WHEREAS, Seller has acquired under the Letter Agreement certain Interests (as defined herein)
with respect to the Subject Properties; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, all of Seller’s Interests (as
defined herein) on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations,
warranties, covenants, conditions and agreements contained herein, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE 1
PURCHASE AND SALE
PURCHASE AND SALE
1.1 Purchase and Sale. Subject to the terms and conditions set forth in this Agreement,
Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Interests (as defined
below) free and clear of all liens, security interests and encumbrances.
1.2 Certain Definitions. As used herein:
(a) “Governmental Authority” means any federal, state, local or foreign government and/or any
political subdivision thereof, including departments, courts, commissions, boards, bureaus,
ministries, agencies or other instrumentalities, including the MMS and the Louisiana Department of
Natural Resources.
(b) “Interests” means any and all rights, title or interests in or to the Subject Properties
that Seller or Xxxxxxxx has or may have acquired under or by reason of the Letter Agreement
(whether by assignment by the Buyer or otherwise), including, without limitation, any rights, title
or interests in the Subject Properties (i) that Seller owns; (ii) that are held on behalf of
Seller, including beneficial interests; (iii) pursuant to which Seller has made or committed to
make a financial contribution; or (iv) that vest Seller with the right to participate in
exploration and development. The term Interests also includes, without limitation, any and all
property rights, contract rights, participation rights, rights to proceeds, rights with respect to
advance xxxxxxxx, rights to work-in-process or tangible assets procured in connection with the
drilling, exploration, completion, and development activities on the Subject Properties, rights in
operating agreements and any other agreements respecting the Subject Properties and/or the sale of
production realized therefrom, any and all claims related to the Subject Properties, any facilities
on, related to, or servicing the Subject Properties (including xxxxx, platforms, platform
equipment, and pipelines), and any and all other rights that Buyer assigned to Seller, or Seller
acquired, under the Letter Agreement.
(c) “Laws” means all laws, statutes, rules, regulations, ordinances, orders, decrees,
requirements, judgments and codes of Governmental Authorities.
(d) “MMS” means the Bureau of Ocean Energy Management, Regulation and Enforcement, formerly
known as the Minerals Management Service, Department of Labor, United States of America, and any
successor thereto.
(e) “Person” means any individual, corporation, partnership, limited liability company, trust,
estate, Governmental Authority or any other entity.
(f) “Securities Act” means the Securities Act of 1933, as amended.
(g) “Subject Properties” has the meaning ascribed to it in the recitals and shall include, but
not be limited to those properties described in Exhibit A hereto.
ARTICLE 2
PURCHASE PRICE
PURCHASE PRICE
2.1 Purchase Price. As consideration for its acquisition of the Interests, at the Closing
Buyer shall (i) pay to Seller cash in the amount of Ten Million Dollars ($10,000,000), (ii)
deliver to Seller 2,835,158 shares of MMR common stock (the “Shares”) in the name of Seller (the
Shares and cash together being the “Purchase Price”) and (iii) assume any past or future payment or
reimbursement obligations of Seller under the Letter Agreement (or, to the extent such obligations
are owed by Seller to Buyer, to release Seller from such payment or reimbursement obligations).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
3.1 Seller Representations. Seller as to itself, and Xxxxxxxx on his own behalf and on behalf
of Seller, represent and warrant to Buyer that:
(a) Existence and Qualification. Seller is a limited liability company organized,
existing and in good standing under the laws of the State of Louisiana and is duly qualified to do
business in, and is in good standing under, the laws of each jurisdiction where it conducts
business. Seller has all necessary qualifications under applicable laws and regulations to own the
Interests.
(b) Authority and Power. Seller has the full legal authority and power to carry on
its business as presently conducted, and each of Seller and Xxxxxxxx have the full legal power and
authority to enter into this Agreement and to perform their respective obligations under this
Agreement and the transactions contemplated hereby.
(c) Sole Member. Xxxxxxxx is the sole member of Seller and Seller has never had any
other members.
(d) Authorization, Enforceability and No Conflicts. The execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated hereby (i) have
been duly and validly authorized by all necessary action on the part of Seller and (ii) do not, and
the consummation of the transactions contemplated by this Agreement will not, violate or be in
conflict with Seller’s articles of organization or operating agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated hereby will not
violate or be in conflict with any agreement, instrument, judgment, order, decree, law or
regulation by which Seller or Xxxxxxxx is bound or to which the Interests are subject. This
Agreement constitutes a valid and binding obligation of each of Seller and Xxxxxxxx and is
enforceable according to its terms.
(e) Brokers’ Fees. Neither Seller nor Xxxxxxxx has incurred any obligation or
liability, contingent or otherwise, for brokers’ or finders’ fees related to the transactions
contemplated by this Agreement for which Buyer may be liable.
(f) Litigation. There are no actions, lawsuits or proceedings before any court,
tribunal or governmental authority that are pending or, to the knowledge of Seller or Whitney,
threatened against Seller that could be reasonably expected to (i) affect or burden the Interests
in any material respect or (ii) adversely affect the ability of Seller or Xxxxxxxx to execute and
deliver this Agreement or consummate the transactions contemplated hereby. There are no bankruptcy
or reorganization proceedings pending or threatened against Seller or Xxxxxxxx.
(g) No Encumbrances. Neither Seller nor Xxxxxxxx has taken any action, or permitted
knowingly any action to be taken, that has subjected the Interests to any liens, security interests
or encumbrances, and such Interests are held by Seller and are being conveyed to Buyer free and
clear of any liens, security interests and encumbrances.
(h) No Transfers. Neither Seller nor Xxxxxxxx has conveyed, sold, transferred or
assigned to any third party any of the Interests acquired by either of them under the Letter
Agreement.
(i) Consents, Approvals and Waivers. None of the Interests are subject to any
restrictions on assignment or any preferential rights to purchase, nor does the assignment or
transfer thereof require the consent of any third party. The execution, delivery and performance
of this Agreement by Seller is not subject to any consent, approval or waiver from any
Governmental Authority or other Person.
(j) Investment Intent. (i) Seller is acquiring the Shares for its own account and not
with a view to their distribution, within the meaning of Section 2(11) of the Securities Act, in
violation of the Securities Act (except for any distribution of the Shares by Seller to Xxxxxxxx in
connection with a liquidating distribution, in which case Seller shall procure an undertaking from
Xxxxxxxx agreeing to be bound by the restrictions on transfer stated herein).
(ii) Seller understands that (A) the Shares (x) have not been registered under the Securities
Act or any state securities Laws, (y) will be issued in reliance upon an exemption from the
registration and prospectus delivery requirements of the Securities Act pursuant to Regulation D
thereof or another available exemption and (z) will be issued in reliance upon exemptions from the
registration and prospectus delivery requirements of state securities Laws which relate to private
offerings, and (B) Seller must bear the economic risk of such investment indefinitely unless a
subsequent disposition by Seller thereof is made in conformity with federal and state securities
laws.
(iii) Each of Xxxxxxxx and Seller (through Xxxxxxxx as its sole member) is an “accredited
investor” as defined in Regulation D under the Securities Act and by reason of its business and
financial experience it has such knowledge, sophistication and experience in making similar
investments and in business and financial matters generally so as to be capable of evaluating the
merits and risks of the prospective investment in the MMR Shares and Seller is able to bear the
economic risk of such investment.
3.2 Buyer Representations. Buyer represents and warrants to Seller as follows:
(a) Existence and Qualification. Buyer is a limited liability company organized,
existing and in good standing under the laws of the State of Delaware. Buyer is qualified under
applicable law and regulation to own the Interests and, in particular, Buyer is qualified to do
business and is in good standing in each of the jurisdictions where it conducts its business.
(c) Authority and Power. Buyer has the authority and power to carry on its business
as presently conducted, to enter into this Agreement and to perform its obligations under this
Agreement and the transactions contemplated hereby.
(d) Authorization, Enforceability and No Conflicts. The execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated hereby (i) have
been duly and validly authorized by all necessary action on the part of Buyer and (ii) do not, and
the consummation of the transactions contemplated by this Agreement will not, violate or be in
conflict with Buyer’s certificate of formation or limited liability company agreement or any
agreement, instrument, judgment, order, decree, law or regulation by which Buyer is bound. This
Agreement constitutes a valid and binding obligation of Buyer enforceable according to its terms.
(e) Brokers’ Fees. Buyer has incurred no obligation or liability, contingent or
otherwise, for brokers’ or finders’ fees related to the transactions contemplated by this Agreement
for which Seller may be liable.
(f) Litigation. There are no pending suits, actions or other proceedings in which
Buyer is a party (or which have been threatened to be instituted against Buyer) which affect the
execution and delivery of this Agreement or the consummation of the transactions contemplated
hereby.
(g) Consents, Approvals and Waivers. The execution, delivery and performance of this
Agreement by Buyer will not be subject to any consent, approval or waiver from any Governmental
Authority or other Person.
3.3 MMR Representations.
(a) Existence and Qualification. MMR is a corporation organized, existing and in
good standing under the laws of the State of Delaware. MMR is qualified to do business and is in
good standing in each of the jurisdictions where it conducts its business.
(c) Authorization, Enforceability and No Conflicts. The execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated hereby (i) have
been duly and validly authorized by all necessary action on the part of MMR and (ii) do not, and
the consummation of the transactions contemplated by this Agreement will not, violate or be in
conflict with MMR’s certificate of incorporation or bylaws or any agreement, instrument, judgment,
order, decree, law or regulation by which MMR is bound. This Agreement constitutes a valid and
binding obligation of MMR enforceable according to its terms.
(d) Shares. The Shares will be duly and validly authorized and issued and will be
fully paid and non-assessable upon the issuance thereof and will not be subject to any preemptive
or similar rights.
ARTICLE 4
CLOSING
CLOSING
4.1 Closing. The closing of the transaction contemplated by this Agreement (the “Closing”)
shall take place at the offices of Buyer, 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000 on the
date this Agreement is executed and delivered.
4.2 Obligations of Seller at Closing. At the Closing, upon the terms and subject to the
conditions of this Agreement, and subject to the simultaneous performance by Purchaser of its
obligations pursuant to Section 4.3, Seller shall deliver or cause to be delivered to
Purchaser the following:
(a) an executed copy of the Assignment, in substantially the form attached hereto as
Exhibit B, pursuant to which the Seller and Xxxxxxxx sell, convey and assign all the
Interests to Buyer (the “Assignment”);
(b) evidence of releases of all, if any, liens, security interests and encumbrances affecting
the Interests;
(c) a receipt evidencing the delivery of the Shares; and
(d) an executed copy of the Registration Rights Agreement, in substantially the form attached
hereto as Exhibit C.
4.3 Obligations of Purchaser at Closing. At the Closing, upon the terms and subject to the
conditions of this Agreement, and subject to the simultaneous performance by Seller of its
obligations pursuant to Section 4.2, Buyer shall deliver or cause to be delivered to
Seller, the following:
(a) the cash portion of the Purchase Price in same-day funds to Seller by direct bank or wire
transfer to an account directed by Seller;
(b) an executed copy of the Assignment;
(c) certificates representing the Shares to Seller; provided, that, at Seller’s request, in
lieu of delivery of physical certificates, Buyer and MMR agree that MMR’s transfer agent shall be
instructed to electronically transmit the Shares to Seller by crediting the account of the Seller’s
prime broker with the Depository Trust Company (“DTC”) through the Deposit Withdrawal Agent
Commission system of DTC;
(d) an executed copy of the Registration Rights Agreement in substantially the form attached
hereto as Exhibit B.
4.4 Obligations of Seller. Upon the Closing, Seller shall not have any liabilities or
obligations under the Letter Agreement or with respect to the Subject Properties, including but not
limited to any amounts billed to Seller but not paid, amounts incurred but not billed and all
future costs associates with the Interests.
ARTICLE 5
INDEMNIFICATION
INDEMNIFICATION
5.1 Survival. The representations, warranties, covenants and agreements of or by Seller and
Buyer shall survive the Closing.
5.2 Indemnification.
(a) From and after Closing, Seller and Xxxxxxxx, jointly and severally, shall protect, defend,
indemnify and hold Buyer harmless from and against any and all damages, claims, losses, demands,
fines, penalties, judgments (including interest), costs, expenses and liabilities (direct,
contingent or otherwise) including consulting and attorneys’ fees and costs of court (“Damages”)
incurred or suffered by Buyer caused by or arising out of or resulting from (i) a breach by Seller
or Xxxxxxxx of any of the representations or warranties made by Seller and Xxxxxxxx contained in
Section 3.1, or (ii) any actions or omissions by Seller or Xxxxxxxx at any
time prior to the Closing that relate in any material way to the Subject Properties or the
Interests owned by Seller and being conveyed to Buyer.
(b) From and after Closing, Buyer shall protect, defend, indemnify and hold Seller and
Xxxxxxxx harmless from and against any and all Damages incurred or suffered by Seller or Xxxxxxxx
caused by or arising out of or resulting from Buyer’s breach of any of the representations or
warranties made by Buyer contained in Section 3.2 or for any actions or omissions by Buyer
or MMR at any time prior to the Closing that relate in any material way to the Subject Properties
or the Interests owned by Seller and being conveyed to Buyer.
5.3 Claims. All claims for indemnification under Section 5.2 shall be asserted and
resolved pursuant to this Section 5.3. Any person claiming under Section 5.2 is
hereinafter referred to as the “Indemnified Party” and any person against whom such claims are
asserted hereunder is hereinafter referred to as the “Indemnifying Party.” If any Damages are
asserted against or sought to be collected from an Indemnified Party by a third person, said
Indemnified Party shall with reasonable promptness provide to the Indemnifying Party a written
notice of claim specifying in reasonable detail the specific nature of and specific basis of the
Damages and the estimated amount of such Damages (“Claim Notice”). Notwithstanding the preceding
sentence, failure of the Indemnified Party to give notice hereunder shall not release the
Indemnifying Party from its obligations under Section 5.2, except to the extent the
Indemnifying Party is actually prejudiced by such failure to give notice. The Indemnifying Party
shall have 30 days from the personal delivery or receipt of the Claim Notice (the “Notice Period”)
to notify the Indemnified Party (a) whether or not it disputes the liability of the Indemnifying
Party to the Indemnified Party hereunder with respect to such Damages and (b) whether or not it
desires, at the sole cost and expense of the Indemnifying Party, to defend the Indemnified Party
against such Damages; provided, however, that any Indemnified Party is hereby authorized prior to
and during the Notice Period to file any motion, answer or other pleading that it deems necessary
or appropriate to protect its interests or those of the Indemnifying Party (and of which it shall
have given notice and opportunity to comment to the Indemnifying Party) and not prejudicial to the
Indemnifying Party. If the Indemnifying Party notifies the Indemnified Party within the Notice
Period that it desires to defend the Indemnified Party against such Damages, the Indemnifying Party
shall have the right to defend all appropriate proceedings, and with counsel of its own choosing,
which proceedings shall be promptly settled or prosecuted by them to a final conclusion. If the
Indemnified Party desires to participate in, but not control, any such defense or settlement it may
do so at its sole cost and expense. If requested by the Indemnifying Party, the Indemnified Party
agrees to cooperate with the Indemnifying Party and its counsel in contesting any Damages that the
Indemnifying Party elects to contest. No claim may be settled or otherwise compromised without the
prior written consent of the Indemnifying Party.
ARTICLE 6
MISCELLANEOUS
MISCELLANEOUS
6.1 Notices. All notices required or permitted under this Agreement shall be effective upon
receipt if personally delivered, if mailed by registered or certified mail, postage prepaid, or if
delivered by telegram, telecopy, facsimile or other electronic transmission if directed to the
Parties as follows:
To Buyer and/or MMR:
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxx, General Counsel
Fax: 000-000-0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxx, General Counsel
Fax: 000-000-0000
To Seller:
X.X. Xxx 000
XxXxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
XxXxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
or
if to Seller via Fed Ex, to the following street address:
00000 Xxxx Xxxx Xxxxxx
Xxx Xxx, Xxxxxxxxx 00000
Xxx Xxx, Xxxxxxxxx 00000
Any party may give written notice of a change in the address or individual to whom delivery shall
be made.
6.2 Expenses. Except as otherwise provided in this Agreement, all fees, costs and expenses
incurred by the Parties in negotiating this Agreement or in consummating the transactions
contemplated by this Agreement shall be paid by the Party incurring them.
6.3 Amendment. This Agreement may not be altered or amended, nor any rights waived, except by
a written instrument executed by the Party to be charged with the amendment or waiver. No waiver of
any provision of this Agreement shall be construed as a continuing waiver of the provision.
6.4 Headings. The headings are for convenience only and do not limit or otherwise affect the
provisions of this Agreement.
6.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be an
original and which, taken together, shall constitute the same instrument.
6.6 Rules of Construction. Unless the context otherwise requires, as used in this Agreement
(a) a term has the meaning ascribed to it; (b) “or” is not exclusive; (c) “including” means
“including, without limitation;” (d) words in the singular include the plural; (e) words in the
plural include the singular; (f) words applicable to one gender shall be construed to apply to each
gender; (g) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer
to this entire Agreement; (h) the terms “Article” or “Section” shall refer to the specified Article
or Section of this Agreement; and (i) the descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
6.7 Governing Law. This Agreement and the transactions contemplated by this Agreement shall
be governed and construed in accordance with the internal laws of the State of Louisiana without
giving effect to any principles of conflicts of laws.
6.8 Waiver of Jury Trial. THE PARTIES HEREBY ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED BY
AND HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE, AND HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY,
AND IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTION DOCUMENTS, ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
6.9 Entire Agreement. This Agreement is the entire understanding between Seller and Buyer
concerning the subject matter of this Agreement. This Agreement supersedes all negotiations,
discussions, representations, prior agreements and understandings, whether oral or written.
6.10 Severance. If any provision of this Agreement is found to be illegal or unenforceable,
the other terms of this Agreement shall remain in effect and this Agreement shall be construed as
if the illegal or unenforceable provision had not been included.
6.11 Third Party Beneficiaries. Nothing in this Agreement shall entitle any Person other than
the parties hereto to any claim, cause of action, remedy or right of any kind.
[Next page is the signature page]
IN WITNESS WHEREOF, this Agreement has been signed by each of the Parties as of the date first
above written.
| Seller: WHITNEY EXPLORATION, LLC |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Sole Member | |||
| Xxxxxxxx: |
||||
| /s/ Xxxxxxx X. Xxxxxxxx | ||||
| Xxxxxxx X. Xxxxxxxx | ||||
| Buyer: MCMORAN OIL & GAS LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Chief Financial Officer and Secretary | |||
| MMR: MCMORAN EXPLORATION CO. |
||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer and Secretary | |||
