Exhibit
10.1


 


FIRST AMENDMENT


TO


OMNIBUS AGREEMENT


 


First Amendment (this “Amendment”) to Omnibus
Agreement dated as of July 2, 2004, by and among Freeport LNG Development,
L.P., a Delaware limited partnership (“Freeport LNG”), Freeport LNG-GP, Inc.,
a Delaware corporation and the general partner of Freeport LNG (the “General
Partner”), and ConocoPhillips Company, a Delaware corporation (“COP”).  Each of Freeport LNG, the General Partner
and COP is sometimes referred to herein as a “Party,” and all of
them together are sometimes referred to herein as the “Parties.”


 


RECITALS


 


WHEREAS, the Parties executed the Omnibus Agreement
dated as of December 20, 2003 (the “Omnibus Agreement”) (capitalized terms
used herein and not otherwise defined herein shall have the same meaning
assigned to them in the Omnibus Agreement); and


 


WHEREAS, as a result of the formation of FLNG Land,
Inc., a wholly-owned subsidiary of Freeport LNG, which entity is the tenant
under the Leases, the Parties believe it is in their best interests to amend
the Omnibus Agreement as set forth herein.


 


NOW, THEREFORE, in consideration of the mutual covenants
and promises contained in this Amendment and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
Parties agree as follows:


 


AGREEMENT


 


1.             Amendments.  The Omnibus Agreement is hereby amended as
follows:


 


1.1           The following
definitions contained in Article I of the Omnibus Agreement are hereby
deleted and replaced in their entirety with the corresponding definition below:


 


“Agreement”
means this Omnibus Agreement, as amended by the First Amendment to Omnibus
Agreement dated as of July 2, 2004 (the “Amendment”), as may be
further amended or modified from time to time.


 


“Freeport
Entities” means Freeport LNG, the General Partner and FLNG Land.


 


“Leases”
means (i) the Ground Lease and Development Agreement dated
December 12, 2002, between Freeport LNG and the Brazos River Harbor
Navigation District of Brazoria County, Texas (the “District”), as amended
and assigned to FLNG Land pursuant to the Assignment, Consent and Amendment
Agreement dated January 28, 2004 among Freeport LNG, FLNG Land and the
District, (ii) the Ground Lease and Slip Development Agreement dated
January 19, 2004 between FLNG Land and the District, and (iii) the
Ground Lease and Dock Development Agreement dated January 28, 2004 between
FLNG Land and the District, in each case as the same may be amended or modified
from time to time.


 


“Partnership
Leased Property” means any real property and interests in real
property leased by Freeport LNG and FLNG Land, including pursuant to the
Leases.


 

















 


“Partnership
Owned Property” means any real property and interests in real
property owned in fee by Freeport LNG and FLNG Land.


 


1.2           The following
definition is hereby added to Article I of the Omnibus Agreement (in its
appropriate alphabetical position):


 


“FLNG Land”
means FLNG Land, Inc., a Delaware corporation.


 


1.3           The following
subsections of Section 3.2 of the Omnibus Agreement are hereby deleted and
replaced in their entirety with the corresponding subsection below:


 


(d)           No Consents.  No Governmental Approval of, or
registration, declaration or filing with, any Governmental Entity, or the
consent or approval of any other Person, is required to be obtained or made by
or with respect to any Freeport Entity or any of its Affiliates in connection
with (i) the execution, delivery and performance of the Transaction Documents
or the consummation of the transactions contemplated thereby or (ii) the
conduct of the business of the Freeport Entities following the Closing, with
respect to Freeport LNG and the General Partner, as conducted on the Effective
Date, and with respect to FLNG Land, as conducted on the Closing Date; except
to the extent failure to obtain such Governmental Approval could not reasonably
be expected to have a Freeport Material Adverse Effect, and except those
Governmental Approvals that have not been obtained, but will be obtained by the
time such Governmental Approvals are required for the construction of the
Facility and for which Freeport LNG has no reason to believe that any such
Governmental Approvals will not be obtained in due course prior to the time
required.


 


(f)            Litigation.  There are no Actions pending or, to the
Knowledge of Freeport LNG, threatened against Freeport LNG that have questioned
or could reasonably be expected to question the validity of this Agreement or
enjoin or prohibit any action taken or to be taken pursuant to or in connection
with any of the provisions of the Transaction Documents.  There are no Claims pending, or to the
Knowledge of Freeport LNG or the General Partner, threatened against any
Freeport Entity.  No Freeport Entity is
a party or subject to or in default under any judgment, order, injunction or
decree of any Governmental Entity or arbitration tribunal applicable to it or
any of its properties, assets, operations or business.  There is no pending, or, to the Knowledge of
Freeport LNG or the General Partner, threatened, investigation of or affecting
any Freeport Entity by any Governmental Entity.  This Section 3.2(f) does not relate to matters concerning
Taxes, such items being the subject of Section 3.2(m).


 


(g)           Absence of
Undisclosed Liabilities.  Neither
Freeport LNG nor the General Partner has any Liabilities that are of a nature
required under GAAP to be disclosed, reflected or reserved against on the
applicable Freeport Financial Statements except (i) Liabilities disclosed,
reflected or reserved against on the applicable Freeport Financial Statements
or (ii) Liabilities arising in the ordinary course of business or as
contemplated by the Transaction Documents. 
FLNG Land has no Liabilities, except Liabilities pursuant to the terms
of the Leases, that would be required under GAAP to be disclosed.


 


(j)            Real Property.  Freeport LNG and FLNG Land have (i) good and
insurable fee title to all Partnership Owned Property and (ii) good and valid
title to the leasehold estates in all Partnership Leased Property, in each case
free and clear of all Liens, leases, assignments, subleases, Easements,
covenants and other similar restrictions of any nature whatsoever, except (i)
such as could not reasonably be expected to have a Freeport Material


 


2

















 


Adverse Effect, (ii) Permitted Liens, and
(iii) all land use (including environmental and wetlands) zoning, building and
other similar restrictions.


 


(m)          Taxes.


 


(i)            All Returns
required to be filed by any Freeport Entity or with respect to any Tax for
which any Freeport Entity is liable or that relates to the business of any
Freeport Entity have been duly and timely filed in a proper manner with the
appropriate Governmental Entity, each such Return is true, correct and complete
in all material respects, each Tax shown to be payable on each such Return has
been timely paid in full, each Tax payable by or with respect to any Freeport
Entity (or Seller, as a result of owning an interest in the General Partner) by
assessment has been timely paid in the amount assessed and adequate reserves
have been established on the books of the applicable Freeport Entity, as the
case may be, for all Taxes for which such Freeport Entity, as the case may be,
is liable or that relate to the business of any Freeport Entity, but the
payment of which is not yet due. No Freeport Entity is, or ever has been,
liable for any Tax payable by reason of the income or property of a Person
other than a Freeport Entity. Each Freeport Entity, as applicable, has timely
filed true, correct and complete declarations of estimated Tax with respect to
each Freeport Entity and/or the business of each Freeport Entity in each
jurisdiction in which any such declaration is required to be filed by it.  No Liens for Taxes exist upon the property
or other assets of any Freeport Entity, except liens for Taxes which are not
yet due. No Freeport Entity (nor Seller, as a result of owning an interest in
the General Partner) is, nor has been, subject to Tax in any jurisdiction
outside of the United States.  No claim
has ever been made by any Governmental Entity in any jurisdiction where no
Freeport Entity (nor Seller on their behalf) files Tax returns that any
Freeport Entity is or may be subject to taxation in that jurisdiction.


 


(ii)           No litigation with
respect to any Tax for which any Freeport Entity is asserted to be liable (or
is asserted to relate to the business of any Freeport Entity) is pending or, to
the Knowledge of any Freeport Entity, threatened and there is no basis on which
any material deficiency in Tax can be asserted against any Freeport Entity,
insofar as such deficiency relates to any Freeport Entity or the business of
any Freeport Entity.  No requests for
rulings or determinations in respect of any Taxes are pending between any
Freeport Entity and any Governmental Entity. 
No extension of any period during which any Tax may be assessed or
collected and for which any Freeport Entity is or may be liable has been
granted to any Governmental Entity.  No
audit or similar proceeding with respect to any Tax for which any Freeport
Entity is or may be liable is pending or, to the Knowledge of each Freeport
Entity, threatened.  No Freeport Entity
has executed any closing agreement pursuant to IRC Section 7121 (or any
predecessor provision) or any similar provision of state or local law with
respect to itself or any other Freeport Entity.


 


(iii)          No Freeport Entity
is, or has been, a party to any tax allocation or sharing agreement.  All amounts required to be withheld by any
Freeport Entity or with respect to the business of any Freeport Entity and paid
to Governmental Entities for income, social security, unemployment insurance,
sales, excise, use and other Taxes (including in respect of any employees,
directors and non-resident Persons) have been collected or withheld and paid to
the proper Governmental Entity.  Each
Freeport Entity has made all deposits required by applicable Law to be made
with respect to employees’ withholding and other employment Taxes relating to
employees of any Freeport Entity or the business of any Freeport Entity.


 


(iv)          Freeport LNG has
been, at all times from its formation, and will be, at all times through the
Closing, classified as a partnership for federal Income Tax purposes.


 


3

















 


The General Partner has been, at all times
from its organization, and will be, at all times through the Closing,
classified as a corporation as defined in Treasury Regulation
301.7701-2(b)(1).  The General Partner
is the “tax matters partner” of Freeport LNG within the meaning of
Section 6231 of the IRC and the regulations thereunder for all federal
Income Tax periods of the General Partner ending on or before the Closing
Date.  FLNG Land has been, at all times
from its organization, and will be, at all times through the Closing,
classified as a corporation as defined in Treasury Regulation 301.7701-2(b)(1).


 


(n)           Licenses; Permits.  To the Knowledge of each Freeport Person,
except for FERC Approval, each Freeport Entity shall be able to timely obtain
all Governmental Approvals (i) necessary for the ownership, operation or
leasing of the Partnership Property and each Freeport Entity’s personal
property and (ii) that are necessary or useful for the conduct of the business
of the Freeport Entities, except where the failure to have such Governmental
Approvals would not have a Freeport Material Adverse Effect.  To the Knowledge of each Freeport Person,
the transactions contemplated hereby shall not adversely affect Freeport LNG’s
rights under any such Governmental Approvals.


 


(o)           Compliance with
Laws.  To the Knowledge of each
Freeport Entity, each Freeport Entity is in material compliance with all Laws,
including those relating to occupational health and safety.  No Freeport Entity has received any written
communication since its formation that has not been satisfactorily resolved
from a Governmental Entity that alleges that any Freeport Entity is not in
compliance in any material respect with any Laws, and no Freeport Entity has
Knowledge of any investigation or review pending or threatened by any
Governmental Entity relating to any alleged violation.  This Section 3.2(o) does not relate to
matters with respect to Taxes or to environmental matters, which are the
subject of Section 3.2(m) and Section 3.2(p), respectively.


 


(q)           Benefit Plans.


 


(i)            No Freeport Entity
has any “employee pension benefit plans” (as defined in Section 3(2) of
ERISA) (sometimes referred to herein as “Company Pension Plans”), “employee
welfare benefit plans” (as defined in Section 3(1) of ERISA), stock
option, stock purchase, or deferred compensation plans or arrangements or other
benefit plans maintained, or contributed to, by any Freeport Person for the
benefit of any employee of any Freeport Entity (all the foregoing being herein
referred to as “Freeport Benefit Plans”).


 


(ii)           Each Freeport
Entity is in compliance in all material respects with the applicable provisions
of ERISA and the IRC.


 


(iii)          At no time since
the inception of Freeport LNG has any Freeport Person been required to
contribute to any “multiemployer plan” (as defined in Section 4001(a)(3)
of ERISA) for the benefit of any employee of any Freeport Entity or incurred
any withdrawal liability, within the meaning of Section 4201 of ERISA,
with respect to any such multiemployer plan, which liability has not been fully
paid as of the date hereof, or announced an intention to withdraw, but not yet
completed such withdrawal, from any such multiemployer plan.


 


(iv)          No employee or
former employee of any Freeport Entity will become entitled to receive from COP
any bonus, retirement, severance, job security or similar benefit or any
enhanced benefit as a result of the transactions contemplated hereby; provided,


 


4

















 


however, that Freeport LNG shall be entitled
to pay any bonus set forth in or permitted by the four employment agreements of
Freeport LNG previously provided to COP.


 


(v)           No plan, program
or arrangement maintained by any Freeport Person provides for post-retirement
medical benefits, post-retirement death benefits or other post-retirement
welfare benefits, except to the extent of the continuation coverage rules as
provided under the provisions of Section 4980B of the IRC and Sections 601
through 608 of ERISA.


 


(r)            Regulatory
Authority.  No Freeport Entity is
regulated as a pipeline company by the State of Texas.  No Freeport Entity is subject to regulation
as (i) a “holding company,” an “affiliate” of a “holding company” or a
“subsidiary company” of a “holding company” or a “public utility,” as each of
such terms is defined in the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations thereunder or (ii) an “investment
company,” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended.


 


(s)           Certain
Transactions.   Except as otherwise set forth in the Loan Documents, no
Freeport Entity is a surety, guarantor or indemnitor of any indebtedness or
other obligation of any other Person.


 


(t)            Improper Payments.  To the Knowledge of each Freeport Person, no
employee or agent of any Freeport Entity has made any payment of funds or
received or retained any funds in either case in violation of any Law.


 


(v)           Patents.  Freeport
LNG has a perpetual, non-exclusive and royalty-free license to utilize U.S.
Patent Number 6,644,041 B1 in connection with the Facility.


 


(w)          Securities.  Except for the general and limited
partnership interests set forth in the Partnership Agreement, there are no
other equity securities or interests of Freeport LNG or any securities or
interests in Freeport LNG reserved for issuance.  All of the general and limited partnership interests in Freeport
LNG were issued in compliance with all applicable federal and state securities
laws.  Except for its ownership of all
of the issued and outstanding common stock of FLNG Land, Freeport LNG does not
directly or indirectly own any capital stock of, or other equity interests in,
any corporation, partnership, limited liability company or other Person, and
Freeport LNG is not a member of, or a participant in, any limited liability
company, partnership, joint venture, strategic alliance or any other Person,
association or business arrangement, and Freeport LNG has not entered into any
agreement or commitment to do any of the foregoing.


 


(x)            Disclosure.  No representation or warranty of Freeport
LNG contained in this Agreement or any other Transaction Document, and no
statement contained in any letter, certificate or other document signed by or
on behalf of any Freeport Entity and addressed or directed to any of the COP
Participants or any of their representatives pursuant to any Transaction
Document or in connection with the subject matter of any Transaction Document,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact necessary, in light of the circumstances
under which it was or will be made, in order to make the statements contained
herein and therein not misleading or necessary in order to fully and fairly provide
the information required to be provided in any such Transaction Document,
letter, certificate or other document.


 


5

















 


1.4           Section 5.2(a)
of the Omnibus Agreement is hereby deleted and replaced in its entirety with
the following:


 


(a)           Representations and Warranties.  The representations and warranties set forth
in Sections 3.2 and 3.3 qualified as to materiality shall be true and correct,
and those not so qualified shall be true and correct in all material respects,
in each case when made and as of the Closing Date; provided that in the event
that any representation and warranty is not true and correct as of the Closing
as a result of any action approved by COP under Section 4.2(c), such
representation and warranty shall be deemed to be true and correct as of the
Closing; provided further that the Parties acknowledge (i) the representations
and warranties set forth in Section 3.2 (without taking into account the
modifications thereto made by the Amendment) are made only as of the Effective
Date, and (ii) the representations and warranties set forth in Section 3.2
that are modified by the Amendment are made as of the Closing Date and not as
of any earlier date.


 


1.5           Section 9.1
of the Omnibus Agreement is hereby deleted and replaced in its entirety with
the following:


 


9.1           Arbitration.  Any Dispute between (i) COP, COP Lender
and/or COP LNG and (ii) Freeport LNG and/or the General Partner (except for any
Dispute under the Loan Documents) shall be exclusively and definitively
resolved through final and binding arbitration under the terms of
Section 22.1 of the TUA in the form that is in effect on the Closing Date,
and the provisions of Section 22.1 of the TUA in the form that is in
effect on the Closing Date are hereby incorporated herein by reference and
shall apply in such form, mutatis
mutandis, notwithstanding any
amendment, modification or termination of the TUA.


 


2.             The Omnibus
Agreement as modified by this Amendment shall continue in full force and
effect.


 


3.             This Amendment may
be executed in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same
instrument.  Each Party agrees to accept
the facsimile signature of the other Parties and to be bound by its own
facsimile signature; provided, however, that the Parties shall exchange
original signatures by overnight mail.


 


4.             GOVERNING
LAW.    THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) TO THE EXTENT SUCH
PROVISIONS OR RULES WOULD APPLY THE LAW OF ANOTHER JURISDICTION.


 


5.             The rules of interpretation and construction contained in Sections 8.6
and 8.14 of the Omnibus Agreement, respectively, shall apply to this Amendment
and are incorporated herein by reference.


 


[Remainder of Page Intentionally Left Blank]


 


6

















 


IN WITNESS WHEREOF, the Parties have caused this
Agreement to be executed individually or by their duly authorized officers on
the date first above written.


 


 


	
  COP:

  	
  CONOCOPHILLIPS
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ S.L.
  Cornelius

  	
   

  
	
   

  	
  Name:

  	
   S.L. Cornelius

  	
   

  
	
   

  	
  Title:

  	
   Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  FREEPORT LNG:

  	
  FREEPORT
  LNG DEVELOPMENT, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 
  Freeport LNG-GP, Inc.

  
	
   

  	
  Its: 
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael S. Smith

  	
   

  
	
   

  	
  Name: Michael S. Smith

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  GENERAL PARTNER:

  	
  FREEPORT
  LNG-GP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael S. Smith

  	
   

  
	
   

  	
  Name: Michael S. Smith

  
	
   

  	
  Title: Chief Executive Officer

  
							



 


7