Document:

Exhibit 10.8

 

EXECUTION VERSION

 

 

 

GULF OF MEXICO PROGRAM

MANAGEMENT

AND

AMI AGREEMENT

 

by and between

 

COBALT INTERNATIONAL ENERGY, L.P.,

a Delaware Limited Partnership

 

and

 

TOTAL E&P USA, INC.,

a Delaware corporation

 

 

 

 

 

INDEX

 

	
  ARTICLE
  1. DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2. GoM PROGRAM

  	
  6

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  GoM
  Program

  	
  6

  
	
  2.2

  	
  Combined
  Operations Team

  	
  6

  
	
  2.3

  	
  Combined
  Operations Council

  	
  6

  
	
  2.4

  	
  Meetings
  of Principals

  	
  7

  
	
  2.5

  	
  Joint
  Data

  	
  7

  
	
  2.6

  	
  Operatorship

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3. GoM PROGRAM COST SHARING

  	
  8

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  GoM
  Program Costs

  	
  8

  
	
  3.2

  	
  Annual
  Program and Budget

  	
  8

  
	
  3.3

  	
  Payment

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4. SECONDMENTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Secondments

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5. AREA OF MUTUAL INTEREST

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Area
  of Mutual Interest

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6. TRANSFER OF INTEREST IN JOINT LEASES

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Transfers
  of Interest

  	
  14

  
	
  6.2

  	
  Tag
  Along

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7. TERM AND TERMINATION

  	
  16

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Term

  	
  16

  
	
  7.2

  	
  Event
  of Default

  	
  16

  
	
  7.3

  	
  Change
  of Control Election

  	
  17

  
	
  7.4

  	
  Effect
  of Termination

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  8. MISCELLANEOUS

  	
  18

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Conflict/Priority
  of Agreements

  	
  18

  
	
  8.2

  	
  Confidentiality

  	
  18

  

 

 

 

	
  8.3

  	
  Severability

  	
  18

  
	
  8.4

  	
  Notices

  	
  18

  
	
  8.5

  	
  Further Assurances

  	
  19

  
	
  8.6

  	
  No Waiver

  	
  19

  
	
  8.7

  	
  Waiver of Certain Damages

  	
  19

  
	
  8.8

  	
  Construction

  	
  20

  
	
  8.9

  	
  Entire Agreement

  	
  20

  
	
  8.10

  	
  Binding Effect

  	
  20

  
	
  8.11

  	
  GOVERNING LAW

  	
  20

  
	
  8.12

  	
  Dispute Resolution

  	
  20

  
	
  8.13

  	
  Drafting of Agreement

  	
  20

  
	
  8.14

  	
  Multiple Originals

  	
  20

  

 

 

ii

 

EXHIBITS

 

	
  EXHIBIT
  “A”

  	
   

  	
  Form JOA

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  “B”

  	
   

  	
  2009
  Work Program and Budget

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  “C”

  	
   

  	
  Prior
  AMIs between the Parties

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  “D”

  	
   

  	
  Existing
  Third Party AMIs

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  “E”

  	
   

  	
  Dispute
  Resolution Procedures

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  “F”

  	
   

  	
  Confidentiality
  Agreement

  

 

 

iii

 

GULF OF MEXICO PROGRAM

MANAGEMENT AND AMI AGREEMENT

 

This
Gulf of Mexico Program Management and AMI Agreement (the “Agreement”) is entered
into by and between Cobalt International Energy, L.P., a Delaware limited
partnership (“Cobalt”), and TOTAL E&P USA, INC., a Delaware
corporation (“Total”) on 6th April, 2009
(the “Effective Date”). Cobalt and Total are each
referred to in this Agreement individually as a “Party” and, together, as the
“Parties.”

 

RECITALS

 

A.                                   On even date
herewith, Cobalt and Total have entered into a Simultaneous Exchange Agreement
(the “Exchange Agreement”) and two Purchase and Sale
Agreements (the “PSAs”), as a result of which the Parties shall, subject
to required governmental approvals, on the Effective Date jointly own interests
in certain offshore federal leases located in the Gulf of Mexico; and

 

B.                                     Cobalt and
Total desire to participate in the GoM Program (defined below) and to establish
the AMI (as defined below), all in the manner described in this Agreement and
subject to the provisions hereof.

 

Therefore,
in consideration of the premises and the respective agreements contained in
this Agreement, the benefits to be derived by each Party hereto and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

 

ARTICLE 1. DEFINITIONS

 

1.1                                 Definitions.

 

Unless
provided otherwise in this Agreement, each capitalized term in this Agreement
has the meaning given to it in this Article.

 

1.1.1                        “Acquired
Interest” has the meaning specified in Section 5.1.2.

 

1.1.2                        “Acquiring
Party” has the meaning specified in Section 5.1.2.

 

1.1.3                        “Acquisition
Cost” has the meaning specified in Section 5.1.5.

 

1.1.4                        “Administrative Costs” means
all of the following costs incurred by Cobalt in managing the GoM Program: (i) salaries,
wages and related costs, including benefits and travel for personnel (excluding
the salary, benefits and other costs of Secondees), (ii) lease and
maintenance costs related to office facilities, (iii) legal, accounting
and other services and (iv) all other direct costs of an administrative
nature.

 

 

 

1.1.5                        “Affiliate” means any Person
that:

 

(a)                                       is owned or
controlled by a Party;

 

(b)                                      is owned or
controlled by any other Person that is owned or controlled by a Party;

 

(c)                                       owns or
controls a Party; or

 

(d)                                      is owned or
controlled by any Person that owns or controls a Party.

 

For
the purposes of this definition, ownership or control means (i) the
ownership or control, directly or indirectly, of fifty percent (50%) or more of
the shares, voting rights, or interest (or similar rights to direct the
management and policies of) in any Person and (ii) the general partner in
any limited partnership. Notwithstanding the foregoing, no private equity fund
or its affiliate will be deemed to be an “Affiliate” as long as such private
equity fund is not a private equity fund (x) controlled by a Person whose
primary business is oil and gas operations or (y) qualified by the
Minerals Management Service to hold oil and gas leases in the Gulf of Mexico.
For the avoidance of doubt, as of the Effective Date, none of the current
limited partners of Cobalt are controlled by a Person whose primary business is
oil and gas operations.

 

1.1.6                        “Agreement” has the meaning
specified in the opening paragraph of this Agreement.

 

1.1.7                        “Agreement Term” has the meaning
specified in Section 7.1.

 

1.1.8                        “AMI” has the meaning
specified in Section 5.1.1.

 

1.1.9                        “AMI Share” means an
undivided sixty percent (60%) as to Cobalt and an undivided forty percent (40%)
as to Total.

 

1.1.10                  “AMI Term” has the meaning specified in
Section 5.1.1.

 

1.1.11                  “Authorization for Expenditure” or “AFE” has
the meaning provided in the applicable Operating Agreement.

 

1.1.12                  “BHP Block” means Green Canyon Block 187.

 

1.1.13                  “BHP Interest” means 50% of all of the oil
and gas leasehold interests held by Cobalt or any of its Affiliates as of the
Effective Date with respect to the Lease covering the BHP Block.

 

 

2

 

1.1.14                  “business day” means a day other than a
Saturday, a Sunday, a federal holiday or a day on which commercial banks in the
jurisdiction of receipt are authorized by law to close.

 

1.1.15                  “Change of Control Election” has the meaning
specified in Section 7.3.

 

1.1.16                  “Cobalt” has the meaning specified in the
opening paragraph of this Agreement.

 

1.1.17                  “Cobalt Non-GoM Program Blocks” means
(i) Walker Ridge Blocks 8, 51 and 52 (the Shenandoah prospect) and Green
Canyon Blocks 816, 859, 860 and 903 (the Heidelberg prospect) and (ii) any
blocks in which an Acquired Interest was offered by Cobalt to Total and which
Total did not elect or was deemed not to elect to acquire in accordance with
Article 5 hereof.

 

1.1.18                  “Combined Operations Council” has the meaning
specified in Section 2.3.

 

1.1.19                  “Combined Operations Team” has the meaning
specified in Section 2.2.

 

1.1.20                  “Confidential Work Product” means all
proprietary geophysical, geochemical, drilling, engineering or other similar
technical data, along with information, reports, studies, analysis, models or
similar data and documents that are produced, acquired or developed by the
Parties during the Agreement Term as part of the GoM Program.

 

1.1.21                  “Effective Date” has the meaning specified in
the opening paragraph of this Agreement.

 

1.1.22                  “Event of Default” has the meaning specified
in Section 7.2.

 

1.1.23                  “Exchange Agreement” has the meaning
specified in the first paragraph of the Recitals.

 

1.1.24                  “Existing Third Party AMIs” has the meaning
specified in Section 5.1.11.

 

1.1.25                  “Form JOA” means a joint operating
agreement in the same form as the operating agreement attached hereto as
Exhibit A.

 

1.1.26                  “GoM Program” means all activities related
generally to the Joint Participation Area (excluding any blocks with respect to
which oil and gas leasehold interests have been acquired by preferential
purchase right holders in connection with either of the PSAs) and all Joint
Leases during the Agreement Term.

 

1.1.27                  “GoM Program Costs” has the meaning specified
in Section 3.1.2.

 

1.1.28                  “include” and “including” mean without
limitation.

 

 

3

 

1.1.29                  “Initial Admin Cost Estimate” has the meaning
specified in Section 3.1.2(a).

 

1.1.30                  “Joint Leases” means any Lease in which both
Cobalt and Total own an undivided interest, as of or after the Effective Date.

 

1.1.31                  “Joint Participation Area” means all federal
blocks within the entire Outer Continental Shelf of the Gulf of Mexico other
than (i) the Cobalt Non-GoM Program Blocks and (ii) the Total Non-GoM
Program Blocks.

 

1.1.32                  “Large Development” means a development that
will require the Parties to design, construct and own a permanently anchored
host facility to collect and transport oil or natural gas from such
development.

 

1.1.33                  “Lease” means any Outer Continental Shelf of
the Gulf of Mexico federal oil and gas lease (or portion thereof).

 

1.1.34                  “Non-Acquiring Party” has the meaning
specified in Section 5.1.2.

 

1.1.35                  “Non-OA/Administrative GoM Expenses” means
all costs of a third party service provider incurred by Cobalt after the
Effective Date in managing the GoM Program, including information technology
support costs, including workstations, software, software licenses, networks,
data storage, data handling and other communication services, but excluding Administrative
Costs and any costs charged under an Operating Agreement.

 

1.1.36                  “Obligation Well” has the meaning given such
term in the Exchange Agreement.

 

1.1.37                  “Obligation Well Program” has the meaning
given such term in the Exchange Agreement.

 

1.1.38                  “Obligation Well Program Term” has the
meaning given such term in the Exchange Agreement.

 

1.1.39                  “Operating Agreement” means the applicable
offshore operating agreement entered into by the Parties governing a Joint
Lease, or, if applicable, any Third Party Operating Agreement.

 

1.1.40                  “Party” has the meaning specified in the
opening paragraph of this Agreement.

 

1.1.41                  “Person” means any individual, corporation,
limited liability company, partnership, limited partnership, trust,
association, or other entity.

 

1.1.42                  “PSAs” has the meaning specified in the first
paragraph of the Recitals.

 

 

4

 

1.1.43                  “Secondees” means any person seconded to
Cobalt pursuant to the Secondment Agreement.

 

1.1.44                  “Secondment Agreement” has the meaning
specified in Section 4.1.5.

 

1.1.45                  “Sonangol Blocks” means those blocks depicted
on Exhibit G to the Exchange Agreement as the “Sonangol Blocks.”

 

1.1.46                  “Sonangol Interest” means 25% of all of the
oil and gas leasehold interests held by Cobalt or any of its Affiliates as of
the Effective Date with respect to the Leases covering the Sonangol Blocks.

 

1.1.47                  “Specified Change of Control” has the meaning
specified in Section 7.3.

 

1.1.48                  “Tag-Along
Notice” has the meaning specified in Section 6.2.1.

 

1.1.49                  “Tag-Along Right” has the meaning specified
in Section 6.2.1.

 

1.1.50                  “Tag Along Share” means that Party’s working
interest divided by the sum of the Parties’ working interest determined on the
date of the Tag Along Notice, expressed as a percentage.

 

1.1.51                  “Tag-Along Transferee” has the meaning
specified in Section 6.2.1.

 

1.1.52                  “Tag Offeree”
has the meaning specified in Section 6.2.1.

 

1.1.53                  “Tariff’ has the meaning specified in
Section 4.1.6.

 

1.1.54                  “Third Party Operating Agreement” means any
operating agreement with any third party to which any oil and gas leasehold
interest that is attributable to a Lease owned by a Party is subject or which a
Party is obligated to enter into or negotiate pursuant to the terms of an
agreement to which a Party is subject as of the Effective Date.

 

1.1.55                  “Total” has the meaning specified in the
opening paragraph of this Agreement.

 

1.1.56                  “Total Non-GoM Program Blocks” means
(i) the blocks listed on Exhibit F to the Exchange Agreement, and
(ii) any blocks in which an Acquired Interest was offered by Total to
Cobalt and which Cobalt did not elect or was deemed not to elect to acquire in
accordance with Article 5 hereof.

 

1.1.57                  “Transfer” has the meaning specified in
Section 6.1.1.

 

1.1.58                  “Transferor” has the meaning specified in
Section 6.2.1.

 

1.1.59                  “Well Costs” has the meaning given such term
in the Exchange Agreement.

 

 

5

 

1.1.60                  “Work Program
and Budget” has the meaning specified in Section 3.2.

 

ARTICLE 2. GoM PROGRAM

 

2.1                                 GoM Program.

 

In
accordance with the terms of this Agreement, the Parties shall work in good
faith with each other as follows with respect to the GoM Program:

 

2.2                                 Combined
Operations Team.

 

Cobalt
and Total shall designate a team of Cobalt employees and Secondees (the “Combined
Operations Team”) necessary to perform the day-to-day activities
associated with the GoM Program and to make recommendations to the Combined
Operations Council (defined below) regarding the GoM Program. The Parties shall
determine the number and skills of the participants on the Combined Operations
Team. The Combined Operations Team shall be under the direct supervision of
Cobalt, but shall neither have any authority to make any decisions with respect
to the GoM Program nor shall it be delegated any authority from Cobalt, Total
or the Combined Operations Council outside of the Combined Operations Team
members’ responsibilities as an employee of Cobalt or as a Secondee. Subject to
applicable confidentiality restrictions and applicable law, members of the
Combined Operations Team shall provide information to one another regarding the
GoM Program in order to make its recommendations to the Combined Operations
Council.

 

2.3                                 Combined
Operations Council.

 

Cobalt
and Total shall designate a council (the “Combined Operations
Council”) comprised of a small group of executives made up of
Cobalt employees and Total employees (Secondees or non-Secondees) to develop
short, medium and long term objectives for and evaluate the results of the GoM
Program. The Combined Operations Council shall be a non-decision making body
that will rely on input from the Combined Operations Team, Cobalt and Total, as
appropriate. As such, no action taken by the Combined Operations Council shall
be binding upon the Parties. It is anticipated that Total would have three
(3) representatives on the Combined Operations Council and Cobalt would
have a sufficient number of representatives on the Combined Operations Council
to provide for the discussion and exchange of information relating to the GoM
Program that would enable each Party to make informed decisions regarding the
GoM Program. Each Party is entitled to invite any of its employees to a
specific Combined Operations Council meeting where such employee’s expertise
would provide valuable input to any matters discussed or proposed to be
discussed by the Combined Operations Council. Subject to applicable law, the
Combined Operations Council shall consider the following matters regarding the
GoM Program: strategy adherence, staffing, competition in the Gulf of Mexico,
the external environment, technology application and advances, non-decisional
input on the current and future year plans, well results, operational

 

 

6

 

activities
and developmental planning. The Combined Operations Council shall meet monthly
in Cobalt’s Houston office and on an ad hoc basis as necessary as called for by
either Cobalt or Total. The members of the Combined Operations Council may
attend any meeting in person or by telephone. The Combined Operations Council
shall hear and review the recommendations of the Combined Operations Team and
any other issues raised by Cobalt or Total. Members of the Combined Operations
Team and other technical experts of either Party shall participate in meetings
of the Combined Operations Council as appropriate. The Combined Operations
Council shall have a Cobalt designated Chairman and Secretary. The Chairman
shall report solely to Cobalt’s Chief Executive Officer. The Secretary shall
develop meeting agendas and record minutes of the meetings.

 

2.4                                 Meetings of
Principals.

 

In
addition to the meetings of the Combined Operations Council, Cobalt’s Chief
Executive Officer and/or members of Cobalt’s executive management and members
of Total’s executive management shall meet at least semi-annually to consider
strategy for and results of the GoM Program.

 

2.5                                 Joint Data.

 

Subject
to Section 3.2, the Parties shall own all technical or scientific
information developed or acquired by Cobalt and/or Total in the course of the
GoM Program (including know-how, confidential information, trade secrets,
computer programs, utility models, patents, inventions, copyrights, rights in
design (whether registered or unregistered) and any other intellectual property
rights) in the same proportion to which each Party paid for such technical or
scientific information, except to the extent such information is jointly owned
under an Operating Agreement, or except to the extent such information is
subject to other third party restrictions. To the extent Cobalt acquires a base
license for data after the Effective Date, Cobalt shall use commercially reasonable
efforts to acquire, on behalf of the Parties, joint rights to use the data
covered by such license.

 

2.6                                 Operatorship.

 

Cobalt
shall be designated as operator for all exploratory and appraisal operations.
Upon completion of appraisal operations (as defined under the relevant
Operating Agreement), operatorship shall be determined by the Parties with the
greatest importance being placed on majority (or largest) working interest
ownership and the respective experience of Large Developments.

 

 

7

 

ARTICLE 3. GoM PROGRAM COST SHARING

 

3.1                                 GoM Program
Costs.

 

3.1.1                        Total agrees to pay Cobalt
an amount equal to forty percent (40%) of all of the GoM Program Costs.

 

3.1.2                        For the purposes of this
Agreement, the “GoM Program Costs” shall be, for costs incurred from the
Effective Date through the termination date of this Agreement:

 

(a)                                  $21,300,000 per year, which
approximates the Parties’ initial estimate of the annual Administrative Costs
as of the Effective Date (“Initial Admin Cost Estimate”), as adjusted
pursuant to Section 3.1.3 and to be reduced during each year by any
amounts charged as overhead under any applicable Operating Agreement; plus

 

(b)                                 Subject to Total’s right to
elect not to participate under Section 3.2, Non-OA/Administrative GoM
Expenses directly incurred in conducting the GoM Program.

 

3.1.3                        The dollar amount to be paid
pursuant to Section 3.1.2(a) for Administrative Costs shall be
prorated for the first calendar year of this Agreement, and the Initial Admin
Cost Estimate shall be adjusted every two (2) years to reflect any trend
in historic and anticipated costs, with the first such adjustment taking place
two (2) years after the Effective Date.

 

3.1.4                        The GoM Program Costs shall
not include any amounts for which Total has been charged by Cobalt under an
Operating Agreement. This Agreement does not limit or reduce the amounts
payable by Total under the applicable Operating Agreement.

 

3.2                                 Annual Program
and Budget.

 

For
information purposes, the estimated program and budget for the GoM Program for
the remainder of the 2009 calendar year is as set out in Exhibit B. After
discussion at the Combined Operations Council and on or before the first day of
September of each calendar year, Cobalt shall deliver to Total, a proposed
budget for the following calendar year outlining the GoM Program’s forecasts of
the Administrative Costs, the Non-OA/Administrative GoM Expenses and, to the
extent then developed, a work program and budget of Well Costs to be included
on AFEs (the “Work Program and Budget”). Within twenty (20) days of such
delivery, the Combined Operations Council shall meet to review and discuss the
Work Program and Budget, and within thirty (30) days after such meeting, Total
shall notify Cobalt as to any line item cost on the Work Program and Budget
relating to Non-OA/Administrative GoM Expenses in which Total elects not to
participate. If Total does not agree to participate in any
Non-OA/Administrative GoM Expenses, then Total shall not be entitled to the
benefits of such Non-OA/Administrative GoM Expenses to which it elected not to
participate and shall not have ownership rights or access to any technical or
scientific information developed, acquired or produced as a result of the
incurrence by Cobalt of such Non-OA/Administrative GoM Expenses. On

 

 

8

 

or
before the first day of July of each year, Cobalt shall deliver to the
Combined Operations Council a progress report comparing and reconciling the
Work Program and Budget to actual costs and activities. In addition, Cobalt
shall promptly notify Total if any line item on the Work Program and Budget is
exceeded by more than ten percent (10%). The Work Program and Budget shall not
require the approval of either Party, but, subject to the Exchange Agreement,
each Party shall retain its rights under the applicable Operating Agreement to
elect whether or not to participate in such work.

 

3.3                                 Payment.

 

Cobalt
shall bill Total on or before the last day of each month for Total’s
proportionate share of the GoM Program Costs for the preceding month. Such
bills shall be accompanied by statements identifying credits and expenditures
in the same categories as the Work Program and Budget so that the actual monthly
expenditure can be compared against the budgeted monthly expenditure. Total
shall pay Cobalt the amount set forth in each such bill within fifteen (15)
business days after receipt of such bill.

 

ARTICLE 4. SECONDMENTS

 

4.1                                 Secondments.

 

4.1.1                        The Parties shall diligently
and in good faith undertake the following secondment process.

 

4.1.2                        Cobalt shall offer
secondment positions for experienced Total personnel in senior technical
positions in areas such as geosciences, drilling and engineering in support of the
GoM Program to be located in Cobalt’s offices in Houston. The number of
secondment positions offered at any one time shall not be less than eight (8).
Cobalt shall provide Total, for each secondment, the following information:

 

(a)                                  The job level, job description,
scope of responsibility and deliverables; and

 

(b)                                 The duration of the
secondment.

 

4.1.3                        Total shall nominate Total
personnel that it considers reasonably qualified to fulfill the designated
purpose and scope of such secondment(s). Cobalt shall evaluate each such
proposed secondee by considering (i) the expertise and experience required
for the position and the expertise and experience of the proposed personnel,
and (ii) Cobalt’s view as to how such proposed personnel would work with
Cobalt personnel as a team. Cobalt shall notify Total which, if any, nominated
personnel are approved, which approval shall not be unreasonably withheld.

 

 

9

 

4.1.4                        All Secondees shall execute
a confidentiality agreement agreeing to keep in the strictest confidence
(i) to the same extent Cobalt employees are subject to a confidentiality
obligation, any information covered by a data license or other agreement which
so binds Cobalt, (ii) the Confidential Work Product and (iii) all
proprietary confidential data of Cobalt. Any Cobalt employees that are provided
Total proprietary confidential data or Confidential Work Product prepared by
the Parties shall likewise sign a confidentiality agreement in favor of Total.

 

4.1.5                        Any secondment under this
Agreement shall be in accordance with a secondment agreement to be negotiated
by the Parties and entered into within thirty (30) days after the Effective
Date (the “Secondment Agreement”).

 

4.1.6                        Pursuant to an
agreed upon tariff (the “Tariff”):

 

(a)                                  The initial Tariff shall be
$300,000 per Secondee, which approximates the Parties’ initial estimate of the
annual costs related to secondments and Secondees, including the salary and
benefits of such Secondees but excluding the cost of travel to expatriate to
Houston, visas, moving expenses, housing allowances, tax equalization payments,
currency adjustments, and any other foreign assignment costs/allowances.
Business expenses of Secondees shall be paid by Cobalt in the same manner as Cobalt
personnel.

 

(b)                                 The Tariff to be paid
pursuant to this Section 4.1.6 shall be prorated for the first calendar
quarter that any Secondee begins or exits his or her secondment.

 

(c)                                  The Tariff shall be adjusted
every two (2) years to reflect any trend in historic and anticipated
costs, with the first such adjustment taking place two (2) years from the
Effective Date.

 

(d)                                 On or before the last day of
each fiscal quarter, Total shall bill Cobalt for sixty percent (60%) of the
Tariff and Cobalt shall pay Total the amount set forth in each such bill within
fifteen (15) business days after receipt of such bill.

 

ARTICLE 5. AREA OF MUTUAL INTEREST

 

5.1                                 Area of Mutual
Interest.

 

5.1.1                        The Parties hereby establish
an area of mutual interest (“AMI”) which shall cover the Joint
Participation Area. The term of the AMI shall be for a period commencing on the
Effective Date and ending (a) on the tenth anniversary of the Effective
Date, (b) the date of termination of this Article 5 in accordance
with

 

 

10

 

Section 5.1.12
or (c) the date of termination of this Agreement, whichever is the
earliest (“AMI Term”). This AMI shall replace all of the prior AMIs
between the Parties listed on Exhibit C which are hereby terminated.

 

5.1.2                        During the AMI Term, if
(other than through a joint bid with the other Party or its Affiliate) a Party
or its Affiliate (the “Acquiring Party”) acquires any interest in an oil
and/or gas lease in one or more blocks within the Joint Participation Area,
whether by cash sale, property swap, or farm-in by which an interest may be
earned or otherwise acquired by conducting drilling, seismic, or other
operations, or otherwise (“Acquired Interest”), then the Acquiring Party
shall notify the other Party (“Non-Acquiring Party”), in writing, within
thirty (30) days of such acquisition. Notwithstanding the immediately preceding
sentence, a sale or other disposition of equity in a Party or other change of
control in a Party shall not be deemed to be such an acquisition.

 

5.1.3                        If a Party or its Affiliate
seeks to acquire an Acquired Interest that would be subject to a preferential
right to purchase upon a subsequent transfer to the other Party, the first
Party will use commercially reasonable efforts to offer the other Party the
opportunity to participate in the offer and to jointly acquire title to such
Acquired Interest in proportion to each Party’s AMI Share.

 

5.1.4                        The Non-Acquiring Party
shall then have the right and option, but not the obligation, for a period of
thirty (30) days from the receipt of such notice, to elect to acquire its AMI
Share of the Acquired Interest by providing written notice of its election to
the Acquiring Party prior to the expiration of such thirty (30) day period.
Failure of the Non-Acquiring Party to provide written notice to the Acquiring
Party prior to the expiration of such time period shall be deemed an election
by the Non-Acquiring Party not to acquire any interest in the Acquired
Interest.

 

5.1.5                        The notice from the
Acquiring Party provided for in Section 5.1.2 shall contain all
information and copies of Leases (to the extent the Acquiring Party has such
Leases in its possession), agreements by which the Acquired Interest may be
acquired, and all other documents to be entered into with respect thereto. Such
notice shall also state in reasonable detail the out-of-pocket cost and expense
of such acquisition and the full consideration for such Acquired Interest
(collectively, the “Acquisition Cost”). In the case of an acquisition of
a package of oil and gas interests that includes interests outside the AMI, or
if the proposed acquisition is structured as an exchange of property, the
Acquired Interest shall be separately valued, and the notice provided for in
Section 5.1.2 shall state the monetary value attributed to the Acquired
Interest.

 

5.1.6                        If the Non-Acquiring Party
properly makes an election to acquire its AMI Share of such Acquired Interest,
the Acquiring Party shall, within thirty (30) days after

 

 

11

 

receipt
of the Non-Acquiring Party’s election, assign to the Non-Acquiring Party the
Non-Acquiring Party’s AMI Share of such Acquired Interest, free and clear of
any and all burdens created by the Acquiring Party other than those burdens, if
any, associated with the acquisition of such Acquired Interest.

 

5.1.7                        Contemporaneously with the
receipt of the assignment referred to in Section 5.1.6, the Non-Acquiring
Party shall promptly reimburse the Acquiring Party for and assume the Non-Acquiring
Party’s AMI Share of all Acquisition Costs incurred in acquiring the Acquired
Interest (which, in the case of a package or exchange transaction described in
Section 5.1.5, shall be the monetary value attributed to the Acquired
Interest plus a proportionate share of out-of-pocket costs and expenses of such
acquisition).

 

5.1.8                        If the Non-Acquiring Party
elects or is deemed to have elected not to acquire such Acquired Interest, the
Acquiring Party shall have no further obligation to the Non-Acquiring Party
under the terms of this Article 5 with respect to such Acquired Interest
and such Acquired Interest shall not be subject to the terms of this Agreement
and shall be deemed excluded from the provisions of this Agreement for all
purposes.

 

5.1.9                        If the Non-Acquiring Party
elects to acquire such Acquired Interest, such Acquired Interest will be a
Joint Lease for the purposes of this Agreement and if such Joint Lease is not
subject to an operating agreement, the Parties shall enter into an operating
agreement in the form of the Form JOA.

 

5.1.10                  The provisions of this Article 5 shall
not apply to:

 

(a)                                  the Cobalt Non-GoM Program
Blocks or the Total Non-GoM Program Blocks; or

 

(b)                                 Acquired Interests acquired
through a merger, corporate reorganization, consolidation, scheme of
arrangement or other corporate transaction; or

 

(c)                                  Acquisitions of a package of
oil and gas interests or exchanges of property that includes leasehold
interests or other interests both within the AMI and outside of the AMI, where
the leasehold interests or other interests within the AMI represent less than
fifty percent (50%) of the consideration being paid by the Acquiring Party for
such acquisition; or

 

(d)                                 Acquired Interests in
respect of any block within an area for which material Non-OA/Administrative
GoM Expenses were incurred in respect of such block or area by Cobalt and not
Total due to Total’s election not to participate in such Non-OA/Administrative
GoM Expenses, pursuant to Section 3.2; or

 

 

12

 

(e)                                  Acquired Interests in
respect of any block within an area for which material expenses were incurred
by Total to conduct activities in respect of such block or area after Total
proposed in writing that Cobalt conduct such activities as part of the GoM Program
and which activities Cobalt elected not to perform; or

 

(f)                                    Acquired Interests acquired
in a property or like-kind exchange transaction where the Non-Acquiring Party
did not elect to exercise its Tag-Along Right pursuant to Section 6.2.1;

 

(g)                                 Acquired Interests acquired
by a Party or its Affiliate pursuant to any preferential right to purchase in
an Operating Agreement; or

 

(h)                                 the initial acquisition of
Acquired Interests in Walker Ridge Blocks 90 and 133 pursuant to the Minerals
Management Service’s Central Gulf of Mexico Lease Sale 208.

 

5.1.11                  The application of this Article 5 is
subject to the AMIs and offer-back obligations in respect of the leases listed
in Exhibit D concerning a third party (“Existing Third Party
AMIs”). Where an Acquired Interest is subject to this Article 5 and an
Existing Third Party AMI, the Acquiring Party shall first offer the Acquired
Interest to all relevant third parties under the Existing Third Party AMI
before offering the Acquired Interest (or part thereof after the exercise of
the rights under the Existing Third Party AMI) to the Non-Acquiring Party under
this Article 5. Neither Party shall extend an Existing Third Party AMI
without the written consent of the other Party.

 

5.1.12                  It is not the intention of the Parties to
restrict the right of any Party or its Affiliate to submit a bid at any OCS
lease sale as to any block offered at any OCS lease sale or otherwise acquire
an interest in any blocks within the Joint Participation Area. Notwithstanding
anything to the contrary in this Agreement, if at any time during the Agreement
Term, more than one of the Parties or its Affiliates (i) are on the list
of restricted joint bidders for OCS lease sales as issued by the Minerals
Management Service pursuant to 30 CFR 256.41 (or under any successor
regulations) or (ii) otherwise would have been qualified to be on the list
described in clause (i) above based on the aggregate worldwide average
daily production of such Party and its Affiliates for any six month period
ending after the Effective Date (if such list were produced on the last day of
such six month period with respect to such period), then this Article 5
(other than the confidentiality obligation under Section 5.1.13) shall
immediately terminate and be of no further effect. Furthermore, if at anytime
during the Agreement Term, the AMI together with any Existing Third Party AMI
involves two or more companies described in clause (i) or (ii) above,
then in such instance, an provision hereof that would cause bids at any lease
sale to be disqualified under 30 CFR 256.44 shall be deemed not

 

 

13

 

to
apply to the extent but only to the extent necessary to avoid such
disqualification.

 

5.1.13                  If a Non-Acquiring Party elects not to
participate in an acquisition of an Acquired Interest, the Non-Acquiring Party
will nevertheless continue to be bound by the confidentiality obligations of
this Agreement with respect to such Acquired Interest.

 

ARTICLE 6. TRANSFER OF INTEREST IN JOINT LEASES

 

6.1                                 Transfers of Interest.

 

6.1.1                        Neither Party may assign,
transfer or convey by assignment, sale, farmout, exchange or otherwise
(collectively, a “Transfer”) in whole or in part this
Agreement or any of its oil and gas leasehold interests in any Joint Lease,
except in accordance with this Article 6. Notwithstanding the immediately
preceding sentence, a sale or other disposition of equity in a Party or other
change of control in a Party shall not be deemed a Transfer.

 

6.1.2                        Any assignment permitted
hereunder shall be subject to all of the terms and conditions of this Agreement
and any applicable Operating Agreement.

 

6.1.3                        The foregoing
notwithstanding, subject to Section 24.1.3 of the Form JOA and other
similar maintenance of interest obligations in an Operating Agreement, either
Party shall be entitled to Transfer an interest in this Agreement and its oil
and gas leasehold interests in the Joint Leases to an Affiliate without the
consent of the other Party, but the transferring Party shall remain liable for
the performance of its obligations hereunder notwithstanding such transfer, and
the Affiliate shall be bound by its transferor’s transfer restrictions
hereunder. Notwithstanding the foregoing, if any transferee Affiliate ceases to
be an Affiliate of the transferring Party within two (2) years of the
Transfer to such Affiliate, then such transferred interest in this Agreement or
the oil and gas leasehold interests in the Joint Leases shall be immediately
reassigned to the original transferring Party before the transferee Affiliate
ceases to be an Affiliate of the original transferring Party.

 

6.1.4                        Except for the oil and gas
leasehold interests in the Joint Leases comprising prospects associated with
wells in the Obligation Well Program, Cobalt shall have the right (subject to
any transfer restrictions and preferential rights to purchase imposed by any
applicable Operating Agreement) to freely Transfer any of its interests in the
oil and gas leasehold interests in the Joint Leases. Cobalt shall have the
right (subject to any transfer restrictions imposed by any applicable Operating
Agreement) to freely Transfer any of its interests in the oil and gas leasehold
interests in the Joint Leases comprising prospects associated with a well

 

 

14

 

in
the Obligation Well Program after such applicable Obligation Well has been
drilled.

 

6.1.5                        Until the second anniversary
of the Effective Date, Total shall not have the right to Transfer any of its
oil and gas leasehold interests in any Joint Lease except (i) to the
extent Total is exercising its rights under Section 6.2.1 as a Tag Offeree
or (ii) for Transfers of oil and gas leasehold interests in the Joint
Leases on which a well has been drilled. After the second anniversary of the
Effective Date, Total shall have the right (subject to any transfer
restrictions imposed by any applicable Operating Agreement) to freely Transfer
any of its interests in the oil and gas leasehold interests in the Joint
Leases.

 

6.2                                 Tag Along

 

6.2.1                        If a Party or any of its
Affiliates (the “Transferor”) proposes to Transfer any of
its oil and gas leasehold interests in any Joint Lease (other than with respect
to the Sonangol Interest or the BHP Interest) to any Person (other than to an
Affiliate) (the “Tag-Along Transferee”), then such
Transferor shall send written notice of such proposed Transfer (which shall
include a time and place designated for the closing of such purchase) of such
third party offer (the “Tag-Along Notice”) to the other
Party (the “Tag Offeree”) at least thirty (30) business days prior to
effecting such Transfer. The Tag Offeree shall then have the irrevocable right
(a “Tag-Along Right”), exercisable by delivery of
an irrevocable notice to the Transferor at any time within twenty (20) business
days after receipt of the Tag- Along Notice, to participate in such Transfer by
selling the Tag Offeree’s Tag Along Share of the applicable oil and gas
leasehold interests proposed to be Transferred, on substantially the same terms
(including with respect to representations, warranties and indemnification) as
the Transferor.

 

6.2.2                        If the Tag Offeree has
exercised its Tag-Along Right and the Tag-Along Transferee is unwilling to
purchase all of the oil and gas leasehold interests proposed to be Transferred
by the Transferor and the exercising Tag Offeree, then the Transferor and the
exercising Tag Offeree shall reduce, based on their respective Tag Along Share,
the oil and gas leasehold interests that each otherwise would have sold so as
to permit the Transferor and the exercising Tag Offeree to sell that portion of
the oil and gas leasehold interests (determined in accordance with their Tag
Along Share) that the proposed Tag-Along Transferee is willing to purchase.

 

6.2.3                        The Tag Offeree and the
Transferor shall sell to the Tag-Along Transferee all of the oil and gas
leasehold interests proposed to be Transferred by them, at not less than the
price and upon terms and conditions, if any, not more favorable, individually
and in the aggregate, to the Tag-Along Transferee than those in the Tag-Along
Notice at the time and place provided for the closing in the Tag-Along

 

 

15

 

Notice,
or at such other time and place as the Tag Offerees, the Transferor and the
Tag-Along Transferee shall agree.

 

6.2.4                        If the Tag Offeree has
exercised its Tag-Along Right, neither Party shall exercise its preferential
right to purchase under the applicable Operating Agreement with respect to the
oil and gas leasehold interests in the subject Joint Lease.

 

ARTICLE 7. TERM AND TERMINATION

 

7.1                                 Term.

 

The
term of this Agreement (the “Agreement Term”) shall commence
on the Effective Date and shall continue until the tenth anniversary of the
Effective Date, and thereafter this Agreement shall continue for successive
one-year periods unless either Party notifies the other Party at least thirty
(30) days prior to the end of any such one-year period ending on an anniversary
of the Effective Date that it elects for this Agreement not to continue;
provided, that this Agreement shall terminate earlier upon an Event of Default
or a Change of Control Election (defined below) under this Agreement.

 

7.2                                 Event of
Default.

 

For
the purposes of this Agreement, an “Event of Default” means:

 

(a)                                  a default by any Party in
the observance or performance in any material respect of any of its material
obligations hereunder with such default continuing for thirty (30) days after
written notice is received from the other Party specifying the default and
demanding that the same be remedied; or

 

(b)                                 an entry of a decree or
order which remains in force, undischarged or unstayed for sixty (60) days
relating to any Party by a court having jurisdiction (i) granting relief
under Title 11 of the United States Code; (ii) approving as properly filed
a petition seeking reorganization of such Party under Title 11 of the United
States Code, or any other state or federal law; (iii) for the appointment
of a receiver or liquidator or trustee in bankruptcy or insolvency of such
Party or its property; (iv) appointing a custodian, trustee, receiver or
agent with authorization to take charge of a material portion of such Party’s
property for the purpose of enforcing a lien against such property; or (v) for
the winding up or liquidation of the affairs of such Party; or

 

(c)                                  any Party having taken any
of the following actions: (A) taking steps to institute proceedings or
consenting to the institution of proceedings under any state or federal law
relating to debtor rehabilitation, insolvency, bankruptcy, liquidation or
reorganization, including specifically Title 11 of the United States Code; (B) consenting to
the appointment of a receiver,

 

 

16

 

liquidator
or trustee in bankruptcy or other insolvency proceedings of it or of its
property or any substantial portion of its property; (C) procuring,
permitting or suffering the appointment of a custodian, trustee, receiver or
agent with authorization to take charge of a material portion of its property
or for the purposes of enforcing a lien against such property; (D) making
an assignment for the benefit of creditors, or admitting it is generally not
able to pay its debts as they become due; or (E) failing to pay its
material debts as they become due; or

 

(d)                                 with respect to Cobalt only,
and at Total’s option, at least of two of Joseph H. Bryant, James W. Farnsworth
and James H. Painter cease to be employed by Cobalt; or

 

(e)                                  with respect to Total only,
and at Cobalt’s option, for any period of three (3) consecutive years
after the Obligation Well Program Term:

 

(i) if Total has made different elections than
Cobalt on more than fifty percent (50%) of all AFEs issued under any applicable
Operating Agreement; or

 

(ii) if Total has elected not to participate in more
than fifty percent (50%) of the activities that require a material expenditure
of Non-OA/Administrative GoM Expenses on the Work Program and Budget, and
Cobalt performed such activities and incurred all of the related Non-OA/Administrative
GoM Expenses; or

 

(iii) if Total has failed to reasonably nominate
experienced Secondees for at least the minimum number of Secondee positions
offered by Cobalt in the Combined Operations Team pursuant to
Section 4.1.2; or

 

(g)                                 if an event of default under
and as defined in the Exchange Agreement has occurred and is continuing, and a
Party is not in default thereunder, at the option of such non-defaulting Party.

 

7.3                                 Change of
Control Election.

 

If
any company whose primary business is exploration and production of oil and gas
acquires (directly or indirectly through one or more Affiliates) more than 50%
(whether in one or more transactions) of the voting interests (or similar
rights granting the acquiring entity power to direct the management or policies
of Cobalt) in Cobalt (a “Specified Change of Control”), then at Total’s
option, Total shall have the right to elect to terminate this Agreement by
notice to the acquiring company, such termination to be effective immediately
upon receipt of such notice (a “Change of Control Election”).

 

 

17

 

7.4                                 Effect of Termination.

 

7.4.1                        Termination of the Agreement
Term for any reason shall not relieve any Party of any obligation arising prior
to such termination or as a result of any operation or activity conducted prior
to such termination.

 

7.4.2                        Notwithstanding the
preceding, the provisions of Section 6.1.5 and Article 8
(Miscellaneous) shall survive the termination of this Agreement until fully performed.

 

ARTICLE 8. MISCELLANEOUS

 

8.1                                 Conflict/Priority of
Agreements. If there is a conflict between this Agreement
and/or the Exchange Agreement and applicable Operating Agreement, the Exchange
Agreement controls first. Then, this Agreement controls as between the Parties
over the applicable Operating Agreement.

 

8.2                                 Confidentiality. Each Party
agrees to maintain, and to cause its respective Affiliates to maintain, as
strictly confidential and not to disclose to any third party the existence of
this Agreement, the terms hereof and the Confidential Work Product, except as
expressly provided hereunder but subject to any applicable Operating Agreement
or applicable law, for a period commencing on the Effective Date and extending
for an additional period of two (2) years after the termination of the
Agreement unless disclosed by the mutual agreement of the Parties; provided,
however, that (i) either Party may disclose Confidential Work Product to
any potential bona fide purchaser that has agreed in writing to hold such
information confidential, and (ii) Cobalt may disclose to any third party
Confidential Work Product that is produced, acquired or developed as a result
of the incurrence by Cobalt of Non-OA/Administrative GoM Expenses in which
Total elected not to participate pursuant to Section 3.2 of this
Agreement. Each Party agrees to treat the disclosure of the Confidential Work
Product in the same manner as it treats its own confidential information.
Cobalt shall obtain from its limited partners (other than members of Cobalt’s
executive management team) properly executed confidentiality agreements in the
form attached as Exhibit “F” hereto.

 

8.3                                 Severability. If any term or
other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of applicable law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the greatest extent possible.

 

8.4                                 Notices. All notices or
other written communication required between the Parties and required by any of
the provisions of this Agreement, unless otherwise specifically

 

 

18

 

provided,
shall be given in writing by mail, postage or charges prepaid, and addressed to
the Party to whom the notice is given as follows:

 

If
to Cobalt:

 

Cobalt
International Energy, L.P.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Houston,
Texas 77056

Attention:
Lynne L. Hackedorn, Land Manager

 

If
to Total:

 

TOTAL
E&P USA, INC.

1201
Louisiana, Suite 1800

Houston,
Texas 77002

Attention:
Eric Bonnin, Vice President Business Development & Strategy

 

or
to such other address within the continental limits of the United States
specified by a Party giving the other Party hereto written notice in accordance
with this Section. Alternatively, notice may be given by personal delivery in
writing to the Parties at their respective addresses as set forth above. Notice
shall be deemed given on the date of service or transmission if personally
served; provided, that if such service is not on a business
day or is after normal business hours, then such notice shall be deemed given
on the next business day. Notice otherwise sent as provided herein shall be
deemed given on the next business day following timely delivery of such notice
to a reputable air courier service with an order for next day delivery.

 

8.5                                 Further Assurances. Each Party hereto shall,
from time to time, do and perform such further acts and execute and deliver
such further instruments, assignments and documents as may be required or
reasonably requested by the other Party to establish, maintain or protect the
respective rights and remedies of the Parties hereto and to carry out and
effect the intentions and purposes of this Agreement.

 

8.6                                 No Waiver. The failure
of any Party hereto to insist upon strict performance of any provision hereof
shall not constitute a waiver of, or estoppel against asserting, the right to
require such performance in the future, nor shall a waiver or estoppel in any
one instance constitute a waiver or estoppel with respect to a later breach of
a similar nature or otherwise.

 

8.7                                 Waiver of Certain Damages. Each Party irrevocably waives and agrees not to seek indirect,
consequential, punitive or exemplary damages of any kind in connection with any
dispute arising out of or related to this Agreement or the breach hereof.

 

 

19

 

8.8                                 Construction. The headings
in this Agreement are inserted for convenience and identification only and are
not intended to describe, interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof. Whenever the context
requires, the gender of all words used in this Agreement shall include the
masculine, feminine, and neuter, and the number of all words shall include the
singular and the plural. In the event of a conflict between this Agreement and
the exhibits, this Agreement shall control.

 

8.9                                 Entire Agreement. This Agreement
(including the exhibits to this Agreement), the Exchange Agreement and any
applicable Operating Agreement, which incorporates all prior understandings
relating to the subject matter hereof, set forth the entire agreement of the
Parties with respect to the matters set forth herein and shall not be modified
except by written instrument executed by all Parties.

 

8.10                           Binding Effect. Subject to the
other provisions of this Agreement, all of the terms and provisions hereof
shall be binding upon and inure to the use and benefit of the Parties and their
respective heirs, successors, legal representatives and assigns.

 

8.11                           GOVERNING LAW. THE PROVISIONS
OF THIS AGREEMENT AND THE RELATIONSHIP OF THE PARTIES SHALL BE GOVERNED AND
INTERPRETED ACCORDING TO FEDERAL LAWS AND LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD REFER THE MATTER TO THE
LAWS OF ANOTHER JURISDICTION.

 

8.12                           Dispute Resolution. Any dispute,
controversy or claim between the Parties arising out of or in connection with
this Agreement, including any question as to its existence, enforceability,
validity, interpretation or termination, shall be resolved pursuant to the
dispute resolution procedures set forth in Exhibit E.

 

8.13                           Drafting of Agreement. Each Party
acknowledges that it and its attorneys have contributed to the drafting of this
Agreement. It is expressly agreed that this Agreement shall not be construed
against any Party on the basis of who drafted this Agreement or who supplied
the form of Agreement. Each Party agrees that this Agreement has been
purposefully drawn and correctly reflects its understanding of the transactions
contemplated hereby. Each Party further acknowledges that it has been advised
and represented by its own counsel in negotiating and entering into this
Agreement.

 

8.14                           Multiple Originals. This Agreement
may be executed in multiple originals, each of which shall be deemed an
original but all of which shall constitute but one Agreement.

 

[Remainder of Page Left Blank]

 

 

20

 

COBALT INTERNATIONAL ENERGY, L.P.

 

	
  By:

  	
  /s/
  Joseph H. Bryant

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Joseph
  H. Bryant

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chairman
  & CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TOTAL E&P USA, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Jean-Michel Lavergne

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Jean-Michel
  Lavergne

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  

 

Signature
Page to

Gulf
of Mexico Program Management and AMI AgreementFiled by sedaredgar.com - Caleco Pharma Corp. - Exhibit 10.1

Evergreen Marketing, Inc. 
2035 Westwood Blvd.
#210
Los Angeles, CA 90025 
(310)470-7788

THIS SERVICE AGREEMENT is entered into on 10/06/09
(herein the "Effective Date") between Evergreen Marketing, Inc.
and Caleco Pharma Corp. for shareholder awareness services related to Caleco
Pharma Corp.(OTCBB: CAEH). Caleco Pharma Corp. herein may be referred to as
“CLIENT.”

A. Evergreen Marketing, Inc. provides consulting
and marketing services in connection with CLIENT’s ongoing business
activities.

B. CLIENT employs the services of Evergreen
Marketing, Inc. to provide consulting and marketing services, as defined
below, and Evergreen Marketing, Inc. to provide such services to
CLIENT.

NOW, THEREFORE, for the mutual promises,
representations, warranties and covenants contained herein, the parties agree as
follows:

AGREEMENT

1. Consulting and Marketing Services. Evergreen
Marketing, Inc. shall provide the following services throughout the term of
this Agreement (collectively the "Consulting and Marketing
Services”):

1.1 Corporate consulting and promotion including, but
not limited to, e-mail database distribution and at least two (2) taped Green
Baron CEO webcasts available at www.thegreenbaron.com.

1.2 Evergreen Marketing will conduct the webcast
interviews with a senior director or representative of Caleco Pharma Corp. at a
time to be determined within the next 90 days. The webcast interviews are
typically about 10 to 20 minutes in length, and it is preferable that the
interviews are conducted with the CEO, President, Chairman, or founder.
Evergreen Marketing will provide a list of suggested webcast interview questions
prior to each interview. 

1.3 Evergreen Marketing will furnish the CLIENT or
Public Relations representative associated with CLIENT suggested press releases
to announce details of the webcast. Evergreen Marketing will also alert its
opted in members of The Green Baron Report of the webcast through a
separate email and on the marquee of its website(s). 

1.4 Evergreen Marketing plans to introduce Caleco Pharma
Corp. (BB: CAEH) to its members in The Green Baron Report as its
81st Green Baron “Stock Pick” on or about Tuesday, October 13, 2009
and the stock will be added to its list of previously fully profiled “Stock
Picks” on the home page at TheGreenBaron.com. The profile report will focus on
the positive developments of the Company and its business plan, and will be
emailed to all opt in members in Evergreen Marketing’s databases.

1

1.5 Evergreen Marketing will update its members on
newsworthy developments of Caleco Pharma Corp. through email distributions to
its members and updates in the marquee on the website for a period that will
last at least 90 days from the date of our initial profile. 

1.6 All webcast interviews with CLIENT will also be
available on Evergreen Marketing’s affiliated stock awareness website at
www.strictlystocks.com for at least 180
days.

1.7 Evergreen Marketing will contract independently with
a third party to ensure that accurate positive information is disseminated on
financial message boards for a period no less than two weeks. 

1.8 In performing its services under this Agreement,
Evergreen Marketing, Inc. will not make use of spam e-mails or spam faxes or any
other improper or manipulative promotional methods or activities and shall not
engage any subcontractor involved in such activities. 

1.9 Evergreen Marketing, Inc. shall not distribute any
materials or make any representations about the Client, its business or
prospects other than as set out in the public filings of the Client without the
prior written approval of a representative of the Client 

2. Evergreen Marketing, Inc. may disseminate a
corporate profile of CLIENT’s corporation and operational practices to potential
shareholders, the investment community, including, but not limited to The Green
Baron Investors Society database and The Green Baron Report database.

2.1 For the period commencing upon the date of this
agreement report and continuing for a period of at least 90 days (herein
"Consulting Term") from the release date of email referencing CAEH to its
databases and posting on TheGreenBaron.com website. Evergreen Marketing,
Inc. shall render Consulting and Marketing Services, as directed, verbally
or in writing, to CLIENT in connection with said CLIENT's business.

2.2 During the term of this Agreement Evergreen
Marketing, Inc. has no and shall not assert any ownership interest to the
business names or trademarks of CLIENT.

3. Nondisclosure.

3.1 Evergreen Marketing, Inc. covenants and
agrees to use any Confidential Information, as described below, released to
Evergreen Marketing, Inc. from client solely for the purpose of
performing its consulting services hereunder. Evergreen Marketing, Inc.
covenants and agrees not to use the Confidential Information for any competitive
purpose or in any manner that may damage Client and shall protect the disclosed
Confidential Information by using the same degree of care, but no less than a
reasonable degree of care, to prevent unauthorized use, dissemination, or
publication as Evergreen Marketing, Inc. uses to protect its own
proprietary confidential information. This covenant not to disclose Confidential
Information shall be effective during and for one (1) year after the termination
of this Agreement.

3.2 "Confidential Information" shall include any
information transferred from Client to Evergreen Marketing, Inc. in
connection with its Consulting and Marketing Services, in written form, in code
or electronically including any information concerning TECHNICAL DATA, PROCESSES
and PROCEDURES, DESIGN SPECIFICATIONS, DATABASE INFRASTRUCTURE, BUSINESS MODELS,
MARKET STRATEGIES, SOFTWARE AND FIRMWARE, TRADE SECRETS OR 

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KNOW-HOW.

3.3 Confidential Information does not include
information that:

3.3.1 Evergreen Marketing, Inc. can prove was in
its possession at the time of the disclosure by the disclosing party, or

3.3.2 is currently, or becomes publicly known through no
fault of Evergreen Marketing, Inc., or

3.3.3 is received from a third party without similar
restrictions and without breach of this Agreement, or

3.3.4 is approved for release by written authorization
of client subsequent to this Agreement, or

3.3.5 is independently developed by Evergreen
Marketing, Inc. without the use of any Confidential Information.

4. Compensation. Evergreen Marketing, Inc.
shall receive as compensation for its Consulting and Marketing Services the
following:

4.1 It is agreed that Evergreen Marketing, Inc. will
receive U.S.$10,000 cash and 60,000 common shares (the "Shares") of Caleco
Pharma Corp. (BB: CAEH) for services listed in this agreement. All compensation
must be received prior to release of the initial profile to databases. Cash
should be wired to the following account: 

U.S. Bank
 98 South Galena 
Dixon, IL 61021 
(815)
288-3315 
FBO Account title: Evergreen Marketing, Inc. 

  Acct. #XXXXXXXXXXXX

  Routing # XXXXXXXXX

Restricted shares should be titled Evergreen Marketing,
Inc. and express mailed to: 

Evergreen Marketing, Inc.
 2035 Westwood Blvd. #210

Los Angeles, CA 90025 

4.2 Evergreen Marketing, Inc. Accredited Investor Status

(a) Evergreen Marketing, Inc. acknowledges and agrees that the
Shares are being issued pursuant to an exemption from the registration
requirements of the Securities Act and as such will be restricted shares and
will bear the following legend. 

  “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
    NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE
    BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
    OF THE ACT PROVIDED BY REGULATION D PROMULGATED 

3

  UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE
    OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
    UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
    ACT.” 

(b) Evergreen Marketing, Inc. represents that it is an
“accredited investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act. 

(c) Evergreen Marketing, Inc. acknowledges that it has had full
opportunity to review the Client's periodic filings with the SEC and has
experience in investing in speculative securities. 

5. Termination. Either party prior to the
expiration of the Consulting and Marketing Term may terminate this Agreement as
follows:

5.1 Immediately at anytime so long at it is by mutual
written consent of both parties.

6. Relationship of the Parties. Evergreen Marketing,
Inc. shall be an independent contractor and not an employee or agent of
CLIENT or CLIENT’s Company. Nothing herein contained, or otherwise, shall be
deemed to place or is intended to have the effect of rendering Evergreen
Marketing, Inc. in a relationship with CLIENT or CLIENT’s Company as one
other than an independent contractor, and for no purpose shall CLIENT or
CLIENT’s Company and Evergreen Marketing, Inc. be deemed, respectively,
employer and employee. Subject to consultation with Client, Evergreen
Marketing, Inc. shall at all times have full power and control respecting
the mode and details of performing the services described in this Agreement. It
is understood by the parties that no duty on the part of CLIENT shall arise to
pay any sums on behalf of or for the benefit of Evergreen Marketing, Inc.
relating to withholding taxes, unemployment compensation insurance, disability
insurance, Social Security contributions or any other similar amounts or
contributions customarily payable by virtue of an employment relationship.
Evergreen Marketing, Inc. shall be responsible for all such obligations
described in the preceding sentence, shall be responsible for making any
required reports or disclosures to federal, state or local taxing authorities
regarding Evergreen Marketing, Inc's income and expenses and shall
defend, indemnify and save harmless CLIENT from any and all liability arising
from Evergreen Marketing, Inc's failure to make such payments and reports
in a timely and proper fashion.

7. Indemnification. Evergreen Marketing,
Inc. and CLIENT for each of themselves hereby agrees to indemnify and hold
harmless each other and each of their officers, directors, shareholders, agents,
representations and employees ("Indemnities") for any suit, claim a, action,
obligation or liability affecting the Indemnities arising from the negligent
acts of the other or their agents or arising from any intellectual property
infringement by the other or their agents in connection with this Agreement.

8. Severability. If any provision of this
Consulting and Marketing Agreement is for any reason unenforceable or void as
set forth herein, such provision shall be deemed modified and severed from the
balance of this Agreement to the extent required to eliminate only such portions
or applications as are either unenforceable or void, but otherwise shall remain
in full force and effect.

9. Notice. Any notice required or permitted to be
given under this Agreement shall be sufficient if in writing, and if sent by
registered or certified mail, postage prepaid, to the following address:

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Evergreen Marketing, Inc. 
2035 Westwood Blvd. 
#210
Los Angeles, CA 90025 

Either party may change the address for giving of notices by
notice given pursuant to this Paragraph. Should a dispute arise that requires
litigation or arbitration, it shall take place in the state of California. 

10. Further Assurances. Each party agrees to
cooperate with the other, and to execute and deliver, or cause to be executed
and delivered, all such other instruments and documents, and to take all such
other actions as may be reasonably requested of it from time to time, in order
to effectuate the provisions and purposes of this Agreement.

IN WITNESS WHEREOF, the parties have executed this
Agreement as October 6, 2009 

Caleco Pharma Corp. 

Print name: John
Boschert         Date. 10/06/09

Authorized Signature: /s/ John Boschert

Title: President

Evergreen Marketing, Inc.

Print name: Matthew Chipman     
Date. 10/06/09 

Authorized Signature: /s/ Matthew Chipman 

Title: VP / Editor in Chief

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