Exhibit 10.14
Execution Copy
AMENDMENT NO. 1 TO JOINT OPERATING AGREEMENT
THIS AMENDMENT NO. 1 TO JOINT OPERATING AGREEMENT
("Amendment"), dated as of July 1, 1993, is entered into between
FREEPORT-McMORAN RESOURCE PARTNERS, Limited Partnership, a Delaware
limited partnership ("Freeport"), IMC FERTILIZER, INC., a Delaware
corporation ("IMC") and HOMESTAKE SULPHUR COMPANY, a Delaware
corporation ("Homestake"). Capitalized terms used herein without
definition shall have the meanings given them in the Joint
Operating Agreement (as defined below).
W I T N E S S E T H:
WHEREAS:
A. Freeport, IMC and Homestake (by assignment from Felmont
Oil Corporation ) are parties to that certain Joint Operating
Agreement dated as of May 1, 1988, as amended ("Joint Operating
Agreement").
B. Freeport, IMC and Homestake desire to amend certain
provisions of Attachment 3 to the Joint Operating Agreement as set
forth herein.
NOW, THEREFORE, Freeport, IMC and Homestake hereby agree as
follows:
1. Amendment to Joint Operating Agreement.
1.1 Definitions. Article I of Attachment 3 to the Joint
Operating Agreement is hereby amended by adding thereto the
following defined terms:
"CTI" shall mean Crescent Technology, Inc.
"FSCO" shall mean the Freeport Sulphur Company Division of
Freeport.
"FM" shall mean Freeport-McMoRan, Inc.
"Production Ratio" shall mean for any accounting period the
ratio of total sulphur production from Joint Operations for
that period to the sum of total sulphur production from Joint
Operations plus total sulphur production from all other mines
operated by FSCO for that period.
"Sulphur Local G&A" shall mean personnel and related costs of
the President's Staff of FSCO, the Commercial Marketing, Mine
Planning and Purchasing Departments of FSCO, and any other
departments that FSCO may maintain from time to time that
provide local G&A services consistent with those provided as
of June 30, 1993, including cash compensation, benefits,
payroll overhead, office rent, office supplies, communications
and other department costs, but excluding costs associated
with the Commercial Marketing Department and Recovered Sulphur
Purchasing activities of FSCO, costs associated with the FSCO
Purchasing Department's activities related to P.T. Freeport
Indonesia's copper and gold operations, and costs relating to
any other non-sulphur activities of FSCO departments.
"Adjustment Period" shall mean the period from July 1, 1996 to
June 30, 1999, and each consecutive three-year period
thereafter.
"GNP Deflator Index" shall mean the GNP Deflator Index (final)
as published by the U.S. Department of Commerce.
"Corporate G & A Charge" shall mean (i) for 1993 and 1994
$12,736,000 and (ii) for each calendar year after 1994 the sum
of (x) the Corporate G&A Charge for the immediately preceding
calendar year plus (y) the product of the Corporate G & A
Charge for the immediately preceding calendar year multiplied
by the percentage change in the GNP Deflator Index from the
immediately preceding calendar year (in every case subject to
adjustment as necessary to reasonably reflect any increase in
FTX Corporate Personnel and FTX Service Costs that result from
increases in government mandated taxes and charges imposed on
employers to cover employee and retiree health care costs and
subject to Section 5(B) of this Attachment 3).
1.2 Amendment to Article IV of Attachment 3. Article IV of
Attachment 3 to the Joint Operating Agreement is amended to read in
its entirety as follows:
IV. INDIRECT CHARGES
1. Sulphur Local G&A. Sulphur Local G&A will be
charged to the Joint Operations at actual cost allocated to
the Joint Operations on the basis of the Production Ratio.
2. Other Costs. The following will be charged to Joint
Operations at actual cost allocated to the Joint Operations on
the basis of the Production Ratio: (i) CTI charges to FSCO
for contract engineering, environmental, safety and analytical
services and FSCO's allocation of costs incurred by FM on
CTI's behalf under the Services Agreement dated February 1,
1993 between FM and CTI, including facilities costs, MIS
contract costs and other costs as provided therein; and (ii)
FM Hydrocarbon costs allocated to FSCO for securing and
administering supplies of natural gas to the Joint Operations.
3. Aircraft. Fully loaded costs of aircraft (except
"Mallard") owned by or chartered to FM will be charged to the
Joint Operations on the basis of actual usage by FSCO
allocated to the Joint Operations on the basis of the
Production Ratio. Fully loaded costs of the "Mallard" (or
other aircraft dedicated exclusively to mine operations) will
be allocated to the Joint Operations on the basis of the
Production Ratio (excluding, however, from the calculation of
the Production Ratio in determining such allocation any
sulphur production from mines not serviced by the Mallard or
such other aircraft). "Fully loaded costs" include all costs
of ownership and operation of aircraft including hangering,
maintenance and depreciation.
4. Outside Legal. Outside legal costs directly related
to FSCO sulphur business will be allocated to the Joint
Operations on the basis of the Production Ratio, excluding any
such costs that are directly related to another mine operated
by FSCO. Outside legal costs directly related to the Joint
Operations will be charged 100% to the Joint Operations.
5. Corporate G&A.
(A) FM corporate general and administrative services
included in the categories FTX Corporate Personnel Costs,
Facilities' Management/Internal Security Costs, FTX Service
Costs and FTX General Corporate Costs as set out in Annex 1
hereto for each year during the term of this Agreement will be
covered by an annual fee calculated by multiplying the
Corporate G & A Charge for that year by the Production Ratio
for that year.
(B) If the Operator or any Non-Operator believes that
the Corporate G&A Charge then in effect no longer reasonably
reflects the actual costs experienced by FM in the categories
set out in paragraph 5(A) above and Annex 1 hereto that
comprise the Corporate G&A Charge, that Party may so notify
the other Parties (which notice shall be in writing) not
earlier than 90 days or later than 30 days prior to the
commencement of an Adjustment Period and request an adjustment
to the Corporate G&A Charge for the ensuing Adjustment Period.
In the event such notice is given the Parties shall have
until the commencement of the ensuing Adjustment Period to
agree upon the amount of Corporate G&A Charge for such an
Adjustment Period. If the Parties are unable to agree upon
the amount of the Corporate G&A Charge for the ensuing
Adjustment Period before the commencement of such Adjustment
Period the Corporate G&A Charge shall be determined through a
proceeding for resolution of dispute submitted to Endispute
Incorporated ("Endispute") in San Francisco, California. The
Non-Operators participating in such proceeding, whether one or
more, shall act as a single party. Not later than 60 days
after commencement of the applicable Adjustment Period,
Operator, on the one hand, and Non-Operator(s), on the other,
each shall submit to Endispute the amount it proposes as the
Corporate G&A Charge for the Adjustment Period. Endispute,
after conducting such investigation and review as it deems
appropriate shall adopt the amount proposed by operator or the
amount proposed by Non-Operator(s), but not any other amount.
The decision of Endispute shall be final and binding on the
Parties and shall establish the Corporate G&A Charge for the
entire Adjustment Period, including retroactively for any
portion of the Adjustment Period that precedes the decision.
The prevailing side in such proceeding shall be entitled to
recover its reasonable attorney's fees and expenses from the
other side. If at the time such proceeding is to commence,
Endispute is not in the business of resolving disputes in San
Francisco, California any Party may ask the Chief Judge of the
United States Court of Appeals for the Ninth Circuit to select
a similar firm located in San Francisco, California.
(C) Section 5(B) above notwithstanding, the Parties
agree that no adjustment will be made pursuant to Section 5(B)
with respect to any increase in the following Corporate G&A
Charge categories at any time: Shareholder Reports and
Meetings - $234,000; Transfer Fees - $97,000; Advertising -
$308,000; Golf Tournament - $385,000; and External Facilities
- $138,000.
6. Conditions Precedent to Effectiveness of this Amendment.
This Amendment shall become effective as of the date first above
written when each of the Parties has delivered to the others duly
executed counterparts hereof.
7. Absence of Waiver. The Parties agree that the amendments
set forth in Section 1 hereof shall be limited precisely as written
and shall not be deemed to:
(a) be a consent to any waiver or modification of any other
term or condition of the Joint Operating Agreement;
(b) be a consent to, or waiver of, any default under the
Joint Operating Agreement;
(c) impose upon any Party any obligation, express or implied,
to consent to any further amendment or modification of the Joint
Operating Agreement; or
(d) prejudice any right or remedy which any Party may now
have under the Joint Operating Agreement or may have in the future
under or in connection with the Joint Operating Agreement
including, without limitation, any right or remedy resulting from
any default.
8. Representations. Each Party hereby represents and
warrants to the other Parties that:
(a) It is a corporation (or in the case of Freeport a limited
partnership) duly organized and validly existing under the laws of
the State of Delaware;
(b) The execution, delivery and performance of this Amendment
by it are within its corporate (or in the case of Freeport
partnership) powers, have been duly authorized by all necessary
corporate (or in the case of Freeport partnership) action, have
received all necessary consents and approvals (if any shall be
required), and do not and will not contravene or conflict with any
provision of law or of its charter or bylaws, or of any agreement
binding upon it or its property; and
(c) This Amendment is its legal, valid and binding
obligation, enforceable against it in accordance with this
Amendment's terms.
9. Miscellaneous.
(a) Section headings used in this Amendment are for
convenience of reference only and shall not affect the construction
of this Agreement.
(b) This Amendment may be executed in any number of
counterparts and by the different Parties on separate counterparts
and each such counterpart shall be deemed to be an original, but
all such counterparts shall together be constituted but one and the
same agreement.
(c) This Amendment is a contract made under and governed by
the laws of the State of Louisiana, without giving effect to
principles of conflicts of laws.
(d) All obligations and rights of the Parties that are
expressed herein, shall be in addition to and not in limitation of
those provided by applicable law.
(e) Whenever possible, each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under
applicable law; but if any provision of this Amendment 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 Amendment.
(f) This Amendment shall be binding upon each of the Parties
and their respective successors and assigns, and shall inure to the
benefit of their respective successors and assigns.
IN WITNESS WHEREOF, the Parties hereto have caused this
Amendment to be executed as of the date first above written.
FREEPORT-McMORAN RESOURCE PARTNERS,
Limited Partnership
By:_______________________________________
Title:______________________________________
IMC FERTILIZER, INC.
By:______________________________________
Title:____________________________________
HOMESTAKE SULPHUR COMPANY
By:_____________________________________
Title:___________________________________
