Document:

EE EX_10.07 Amendment No. 15 Arizona Nuclear Power Project Participation

Exhibit 10.07

LAW DEPARTMENT

MICHAEL G. GREEN
ASSOCIATE GENERAL COUNSEL*
(602) 250·3513 Direct Line

TO:    Palo Verde Participant Members

FROM:    Michael G. Green

DATE:    December 3, 2010

RE:    Amendment Number 15 to the Arizona Nuclear Power Project Participation Agreement
	
					
	 
	 
	 
	 
	 

Dear Members,

Enclosed is a copy of the fully executed Amendment Number 15 for your records, along with a Notary Public Copy Certification attesting that the enclosed is a true, exact, complete and unaltered color copy of the original Agreement.

If you have any further questions, please contact me.

MGG:bjd
Enclosure

APS - APS Energy Services - SunCor - El Dorado

400 NORTH FIFTH STREET - P.O. BOX 53999 - MAIL STATION 8695 - PHOENIX, ARIZONA 85072-3999
Phone: (602) 250-3630 - Fax: (602) 250-3393 - E-Mail: Michael.Green@pinnaclewest.com

*Admitted to practice law in the State of California and District of Columbia only

COPY CERTIFICATION

State of Arizona        )
)
County of Maricopa         )

I, Barbara J. Dubishar, a Notary Public, do certify that, on the 3rd  day of December, 2010, I personally photocopied AMENDMENT NUMBER 15 TO THE ARIZONA NUCLEAR POWER PROJECT PARTICIPATION AGREEMENT (pages numbered 1-13, and additionally two unnumbered notary acknowledgment pages for a total of 15 pages), and it is a true, exact, complete and unaltered copy and each participant member's copy has been individually addressed and deposited in the U.S. Mail this date.

        
    
                         	
	
	/s/ Barbara J. Dubishar

	BARBARA J. DUBISHAR

	NOTARY PUBLIC

My Commission Expires:

[Notarial Stamp]

AMENDMENT NUMBER 15
TO THE ARIZONA NUCLEAR POWER PROJECT
PARTICIPATION AGREEMENT

1.       PARTIES:

The Parties to this Amendment Number 15 to the Arizona Nuclear Power Project Participation Agreement, hereinafter referred to as "Amendment Number 15," are:  ARIZONA PUBLIC SERVICE COMPANY, a corporation organized and existing under and by virtue of the laws of the State of Arizona, hereinafter referred to as "Arizona"; SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district organized and existing under and by virtue of the laws of the State of Arizona, hereinafter referred to as "Salt River Project"; SOUTHERN CALIFORNIA EDISON COMPANY, a corporation organized. and existing under and by virtue of the laws of the State of California, hereinafter referred to as "Edison"; PUBLIC SERVICE COMPANY OF NEW MEXICO, a corporation organized and existing under and by virtue of the laws of the State of New Mexico, hereinafter referred to as "PNM"; EL PASO ELECTRIC COMPANY, a corporation organized and existing under and by virtue of the laws of the State of Texas, hereinafter referred to as "El Paso"; SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, a joint powers agency organized and existing under and by virtue of the laws of the State of California, doing business in the State of Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION, hereinafter referred to as "SCPPA"; and DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, a municipal corporation organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as "LADWP;" all hereinafter individually referred to as "Party" and collectively as "Parties."

2.    RECITALS:

2.1.   Arizona, Salt River Project, Edison, PNM, El Paso, SCPPA and LADWP are parties to a certain agreement entitled Arizona Nuclear Power Project Participation Agreement, dated as of August 23, 1973, as amended by:  Amendment Number 1, dated as of January 1, 1974; Amendment Number 2, dated as of August 28, 1975; Amendment Number 3, dated as of July 22, 1976; Amendment Number 4, dated as of December 15, 1977; Amendment Number 5, dated as of December 5, 1979; Amendment Number 6, effective as of October 16, 1981; Amendment Number 7, effective as of April 1, 1982; Amendment Number 8, executed as of September 12. 1983; Amendment Number 9, executed as of June 12, 1984; Amendment Number 10, executed as of November 21, 1985; Amendment Number 11, effective January 10, 1987; Amendment Number 12, effective August 5, 1988; Amendment Number 13, effective June 15, 1991; and, Amendment Number 14, effective June 20, 2000, retroactive to January 1, 1993, hereinafter, as so amended, referred to as the "Participation Agreement."

2.2.  Pursuant to and in accordance Section E.11 of Appendix E to the Participation Agreement, El Paso and PNM filed protests regarding the allocation of certain overhead expenses of Arizona, and its corporate parent Pinnacle West Capital Corporation, to the Arizona Nuclear Power Project Participants, as specified in the Participation Agreement, Appendix E, (the "Protests").

1

2.3.  After analysis and consideration of the Protests by the appropriate Palo Verde Participant committees, the Participants were not able to resolve the Protests to the satisfaction of all of the Participants.

		
	2.4.
	Prior to the call for submission of the Protests to arbitration as specified in Sections 24 and E.11.2 of the Participation Agreement, the Participants referred the Protests to higher authority within each of the respective Participants' organizations in accordance with Section 6.10 of the Participation Agreement.

		
	2.5.
	In December 2009 and January 2010, the Participants' higher authority (i.e. the Chief Executive Officers, or the positional equivalent) met and conferred in an attempt to resolve the Protests.  Following these meetings, PNM agreed to withdraw its protest, and Arizona proposed modifications to certain provisions of the Participation Agreement, Appendix E, to resolve El Paso's protest; El Paso agreed to Arizona's proposed settlement, and agreed to withdraw its protest provided that all Participants execute this Amendment No. 15.

3.  AGREEMENT:

For and in consideration of the premises and the mutual obligations of and undertakings by the Parties as hereinafter provided in this Amendment Number 15 to the Participation Agreement, the Parties agree as follows. 

4.  EFFECTIVE DATE:

This Amendment Number 15 shall become effective forty-five (45) days after the date that the Party which last in time executes this Amendment Number 15.  The amended procedures for allocating costs that are associated with this Amendment Number 15 shall be applied retroactively to January 1, 2010.

5.  DEFINED TERMS:

5.1.   The Capitalized and italicized words and phrases used in this Amendment Number 15 shall have meanings ascribed to them in the Participation Agreement as amended by this Amendment Number 15.

5.2.        All references to a "Section" or "Sections" in this Amendment Number 15 shall mean a Section or Sections of the Participation Agreement unless the text expressly states otherwise.

6.   AMENDMENTS TO THE ARIZONA NUCLEAR POWER PROJECT MADE BY THIS           AMENDMENT NUMBER 15:

6.1.        Delete Section E.1.9.

6.2.        Delete Section E.2.3.

2

		
	6.3.
	Amend Section E.3.1.4, by deleting the strikethrough text and substituting therefor the underlined text:

A portion of the expenses incurred by the Operating Agent's System Electric Operations Department, such portion to be determined by multiplying the total of such expenses by a ratio, the numerator of which is the total payroll for ANPP and the denominator of which is the total payroll supervised by the Executive Vice President, Engineering and Operations the annual total net megawatt-hour generation of the ANPP (known and referred to as the Palo Verde Nuclear Generating Station), and the denominator of which is the annual total net megawatt-hour generation of all Arizona-operated electric generating facilities plus Arizona megawatt-hour power purchases plus Arizona megawatt-hour transmission of power for others.  Such expenses shall include, but not be limited to, the following:

		
	6.4
	Amend Section E.6.1, by deleting the strikethrough text:

The Operation and Maintenance A & G Ratio shall be the percentage computed by dividing (i) the sum of (a) the total amounts charged to FPC Accounts 920 and 921 multiplied by the O & M Ratio computed in accordance with Section E.8 hereof, (b) the total amounts charged to FPC Accounts 923 (except any amounts directly chargeable to ANPP) and 935 (formerly 932), (c) the product of the portion of labor charges included within (a) and (b) above multiplied by the Payroll Tax Ratio computed in accordance with Section E.4 hereof (d) the product of the labor charges included within (a) and (b) above multiplied by the Benefits Ratio computed in accordance with Section E.5 hereof, and (e) the product of the labor charges included within (a) and (b) above multiplied by the Compensation Insurance Ratio computed in accordance with Section E.7 hereof, less (f) the one percent (1%) portion of the administrative and general expenses charged to FPC Accounts 920 and 921 allocable to contract operations and maintenance by (ii) the direct labor (i.e. total labor less labor charge to clearing accounts) chargeable to operation and maintenance accounts (exclusive of A & G), to include O & M labor billed to Participants and the labor portion of Start-Up and Pre-Operation Costs subject to the Operation and Maintenance A & G Ratio pursuant to Section L.1.3, and to exclude the labor portion of Start-Up and Pre-Operation Costs subject to the construction administrative and general expense percentage of one percent (l%) pursuant to Section L.1.3.

6.5.   Amend Section E.6.2, by deleting the strikethrough text and substituting therefor the underlined text:

The following example sets forth the method to be employed by the Operating Agent to determine the Operation and Maintenance A & G Ratio:

EXAMPLE COMPUTATION OF OPERATIONS
AND MAINTENANCE A & G RATIO
(Based on the Operating Agent's 1984 Experience)
        	
			
	Labor
	 
	Total

	Administrative and General Salaries
	 
	 

3

           	
					
	charged to FPC Account 920
	$17,408,542
	$17,406,779

	Office Supplies and Expenses
	 
	 

	charged to FPC Account 921
	 
	7,208,084
	

	[Line 7] Total
	$17,408,542
	$24,614,863

	Total FPC Accounts 920 and 921,
	 
	 

	multiplied by O & M Ratio @ 68.48%
	$11,921,544
	$16,856,504

	FPC Account 923
	 
	919,166
	

	FPC Account 932 (presently 935)
	1,555,913
	

	3,127,002
	

	[Line 11] Subtotal
	$13,477,457
	$20,902,672

	Payroll Taxes @ 7.126%
	 
	960,404
	

	Pensions and Benefits @ 13.512%
	 
	1,821,074
	

	Compensation Insurance @ 0.451 %
	 
	60,783
	

	Less that 1% portion of A & G allocable
	 
	 

	to Contract Operation and Maintenance         
	 
	1,483,314

	Total administrative and general expenses
	 
	 

	allocable to operations and maintenance
	$22,261,619
	$23,744,933

	 
	 
	 

	Labor Base
	 
	 

	 
	 
	 

	Direct labor charged to system operations and
	 
	 

	maintenance, as further defined in Section E.6.1
	 
	$148,557,953

	Less direct labor charged to administrative and
	 
	 

	general expenses (FPC Accounts 920-931 and 935)
	 
	13,160,635
	

	Labor Base
	 
	$135,397,318

	 
	 
	 

	 
	 
	 

	Operation and Maintenance
	 
	 

	A & G Ratio for 1984 $22,261,619 ÷ $135,397,318=16.442%
	 
	 

	Operation and Maintenance
	 
	 

	A & G Ratio for 1984 $23,744,933 ÷ $135,397,318 = 17.537%
	 
	 

	Note: All labor figures include loading for allowed time.
	 
	 

6.6.  Amend Section E.9.1, by deleting the strikethrough text:

4

The Capital A & G Ratio shall be the percentage computed by dividing (i) the amounts equal to (A) the sum of (a) the total amounts charged to FPC Accounts 920 and 921 multiplied by the Construction Ratio computed in accordance with Section E.8 hereof, and (b) the product of the portion of labor charges included in (a) above multiplied by the sum of the Payroll Tax Ratio, the Benefits Ratio and the Compensation Insurance Ratio less (B) the one percent (l %) portion of administrative and general expenses charged to FPC Accounts 920 and 921 allocable to contract construction (including the administrative and general expenses (i) recovered on Start Up and Pre Operation Costs subject to the construction administrative and general expense percentage of one percent (1%) pursuant to Section L.1.3, (ii) recovered on ANPP construction expenses, and (iii) allocable to other contract construction by (ii) the direct labor in construction accounts (exclusive of A & G), to include construction labor billed to Participants, excluding the labor portion of Start-Up and Pre-Operation Costs subject to the Operation and Maintenance A & G Ratio pursuant to Section L.1.3, less the labor portion of construction expenses to which the one percent (1%) portion of administrative and general expenses is applicable, and less the labor portion of Start-Up and Pre-Operation Costs subject to the construction administrative and general expense percentage of one percent (l %) pursuant to Section L.l.3. 

6.7.  Amend Section E.9.2, by deleting the strikethrough text and substituting therefor the underlined text: 

The following example sets forth the method to be employed by the Operating Agent to determine the Capital A & G Ratio: 
EXAMPLE COMPUTATION OF CAPITAL A & G RATIO
(Based on the Operating Agent's 1984 Experience)	
				
	Labor
	 
	Total
	

	Administrative and General Salaries
	 
	 

	charged to FPC Account 920
	$17,408,542
	$17,406,779

	Office Supplies and Expenses
	 
	 

	Charged to FPC Account 921
	 
	7,208,084
	

	[Line 7] Total
	$17,408,542
	$24,614,863

	 
	 
	 

	Total FPC Accounts 920 and 921, multiplied
	 
	 

	[Line 9] by Construction ratio
	 
	 

	@ 28.355%
	$4,936,192
	$6,979,544

	Payroll Taxes @ 7.126%
	 
	351,753
	

	Pensions and Benefits @ 13.512%
	 
	666,978
	

	Compensation Insurance @ 0.451%
	 
	22,262
	

	Less that 1% portion of A&G allocable
	 
	 

5

	
				
	to Contract Construction, as further
	 
	 

	defined in Section E.9.1                                                                                          
	3,634,919
	

	Total A&G Expense allocable
	 
	 

	to Construction
	$4,386,618
	8,020,537
	

	Construction Direct Labor
	 
	56,061,726
	

	Less the labor portion of Construction Work,
	 
	 

	Start-Up and Pre-Operational Costs subject
	 
	 

	to the construction administrative and
	 
	 

	general expense percentage of one percent (1%)
	 
	13,496,824
	

	Total Construction Direct Labor Base
	 
	$42,564,902

	 
	 
	 

	Capital A&G Ratio for 1984 $4,385,618 ÷ $42,564,902 = 10.303%
	 
	 

	Capital A&G Ratio for 1984 $8,020,537 ÷ $42,564,902 = 18.834%
	 
	 

	 
	 
	 

	Note:  All labor figures include loading for allowed time.
	 
	 

		
	7.
	EXECUTION BY COUNTERPARTS: 

This Amendment Number 15 may be executed in any number of counterparts, and upon execution by all Participants, each executed counterpart shall have the same force and effect as an original instrument and as if all Participants had signed the same instrument. Any signature page of this Amendment Number 15 may be detached from any counterpart of the Amendment Number 15 without impairing the legal effect of any signature thereon, and may be attached to another counterpart of this Amendment Number 15 identical in form hereto but having attached to it one or more signature pages. 

[Remainder of page intentionally left blank. This page is followed by seven consecutive execution pages.] 

6

8.      SIGNATURE CLAUSE: 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 15 on behalf of the Party for which he/she signs. 

ARIZONA PUBLIC SERVICE COMPANY

By:    /s/Donald Robinson                                           

Its:    President & COO                                               

Date:    11/29/10                                                             

STATE OF ARIZONA    )
) ss.
County of Maricopa        )

On this 29 day of November, 2010, before me, the undersigned Notary Public, personally appeared DONALD ROBINSON who acknowledged him/herself to be the President & COO of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such President & COO.  

IN WITNESS WHEREOF, I hereunto set my hand and official seal. 

[Notarial Stamp]
      /s/KAREN McLOUGHLIN        
Notary Public

My Commission Expires:

10/15/2014    

7

8.    SIGNATURE CLAUSE: 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 15 on behalf of the Party for which he/she signs. 

	
				
	Reviewed by SRP Legal Services Dept.
	 
	SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT

	/s/ Ken Lee
	 
	By:           /s/John R. Hoopes                                    

	(Signed Name)
	 
	 

	Ken Lee
	 
	Its:          SRP Vice President                                  

	(Printed Name)
	 
	 

	Date:
	        6/14/10
	 
	Date:             6/14/2010                                            

	 
	 
	 
	 

ATTEST AND COUNTERSIGN:

By: /s/ Terrill A. Lonon            

Its:        Corporate Secretary        

Date:     6/14/10                                

STATE OF ARIZONA    )
) ss.
County of Maricopa        )

On this 14th day of   June   , 2010, before me, the undersigned Notary Public, personally appeared       JOHN R. HOOPES          who acknowledged him/herself to be the    SRP Vice President       of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an Arizona corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such    SRP VICE President            .  

IN WITNESS WHEREOF, I hereunto set my hand and official seal. 

    
        /s/Stephanie K. Reed           
Notary Public
                                            
My Commission Expires:
                        
            Aug 5, 2011                                 [Notarial Stamp]

8

8.      SIGNATURE CLAUSE: 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 15 on behalf of the Party for which he/she signs. 

SOUTHERN CALIFORNIA EDISION COMPANY

By:      /s/ Alan J. Fohrer                                       

Its:    Chairman & Chief Executive Officer        
        
Date:    September 2, 2010                              

STATE OF CALIFORNIA        )
) ss.
County of Los Angeles        )

On this ____ day of ________, 2010, before me, the undersigned Notary Public, personally appeared _______________ who acknowledged him/herself to be the _______________ of SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such _______________.  

IN WITNESS WHEREOF, I hereunto set my hand and official seal. 

                                                                   
Notary Public

My Commission Expires:

                                          

9

8.      SIGNATURE CLAUSE: 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 15 on behalf of the Party for which he/she signs. 

PUBLIC SERVICE COMPANY OF 
NEW MEXICO

By:     /s/PATRICK THEMIG                      

Its:    VP Generation                                   

Date:    10/4/10                                               

STATE OF NEW MEXICO    )
) ss.
County of Bernalillo        )

On this 4th day of October, 2010, before me, the undersigned Notary Public, personally appeared PATRICK THEMIG who acknowledged him/herself to be the VP Generation of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such VP Generation.  

IN WITNESS WHEREOF, I hereunto set my hand and official seal. 

 /s/ G. Marcella Kercher                                    
Notary Public

My Commission Expires:
                                    
12-17-2011           

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8.      SIGNATURE CLAUSE: 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 15 on behalf of the Party for which he/she signs. 

EL PASO ELECTRIC COMPANY

By:          /s/DAVID W. STEVENS                       

Its:    C. E. O.                                                  

Date:    September 10, 2010                             

STATE OF TEXAS        )
) ss.
County of El Paso        )

On this 10 day of September, 2010, before me, the undersigned Notary Public, personally appeared DAVID W. STEVENS who acknowledged him/herself to be the C. E. O. of EL PASO ELECTRIC COMPANY, a Texas corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such David W. Stevens.  

IN WITNESS WHEREOF, I hereunto set my hand and official seal. 

   /s/Valerie J. Pugh                  
Notary Public

My Commission Expires:
[Notarial Stamp]
12-9-2012           
                        

11

8.      SIGNATURE CLAUSE: 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 15 on behalf of the Party for which he/she signs. 

SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY, doing business in the State of Arizona as SOUTHERN 
CALIFORNIA PUBLIC POWER 
AUTHORITY ASSOCIATION

By:          /s/Bill D. Carnahan                            

Its:    Executive Director                              

Date:  9/28/10                                           

        

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8.      SIGNATURE CLAUSE: 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 15 on behalf of the Party for which he/she signs. 

DEPARTMENT OF WATER AND 
POWER OF THE CITY OF LOS 
ANGELES

By:   /s/ARAM BENYAMIN                                     

Its:    SR. Asst. General Mgr.                              

Date:    06/02/10                                     

STATE OF CALIFORNIA    )
) ss.
County of Los Angeles    )

On this 2nd day of June, 2010, before me, the undersigned Notary Public, personally appeared ARAM BENYAMIN who acknowledged him/herself to be the SR. Asst. Gen. Mgr. of DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, a California joint powers agency, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such __________________________.  

IN WITNESS WHEREOF, I hereunto set my hand and official seal. 

                        
    
   /s/Chere D. Lott                  
Notary Public

My Commission Expires:
                                    
9-21-2012           
                    

[Notarial Stamp]

13exhibit10_1.htm

Exhibit 10.1

FIRST AMENDMENT

 

TO

 

CREDIT AGREEMENT

 

DATED AS OF JULY 25, 2012

 

AMONG

 

McMoRan Exploration Co.,

As Parent,

 

McMoRan Oil & Gas LLC,

as Borrower,

JPMorgan Chase Bank, N.A.,

as Administrative Agent,

and

The Lenders Party Hereto

 

 

Sole Lead Arranger and Sole Book runner

 

J.P. Morgan Securities LLC

 

  

  

  

First Amendment to Credit Agreement

 

This First Amendment to Credit Agreement (this “First Amendment”) dated as of July 25, 2012, is among McMoRan Exploration Co., a Delaware corporation (the “Parent”), McMoRan Oil & Gas LLC, a Delaware limited liability company (the “Borrower”), each of the Lenders from time to time party hereto, and JPMorgan Chase Bank, N.A. (in its individual capacity, “JPMorgan”), as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

R E C I T A L S

A.           The Parent, the Borrower, the Administrative Agent, the Lenders and the other Agents party thereto are parties to that certain Credit Agreement dated as of June 30, 2011 (the “Credit Agreement”), pursuant to which the Lenders have made certain credit and other financial accommodations available to and on behalf of the Borrower and its Subsidiaries.

 

B.           The Borrower has requested and the Administrative Agent and the Lenders have agreed to amend certain provisions of the Credit Agreement.

 

C.           Now, therefore, to induce the Administrative Agent and the Required Lenders to enter into this First Amendment and in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1. Defined Terms.  Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this First Amendment.  Unless otherwise indicated, all section references in this First Amendment refer to sections of the Credit Agreement.

 

Section 2. Amendments to Credit Agreement.

 

2.1 Amendment to Section 1.02.

 

(a)           Section 1.02 is hereby amended by deleting the defined term “Agreement” and replacing it with the following:

 

“Agreement” means this Credit Agreement, as amended by that certain First Amendment dated as of July 25, 2012, and as the same may from time to time be further amended, modified, supplemented or restated.

 

(b)           Section 1.02 is hereby amended by adding the following definitions in the appropriate alphabetical order:

 

  

Page 1

  

“Account” means any one or more deposit accounts or securities accounts of the Borrower designated in writing to the Administrative Agent into which cash or investment securities have been deposited and on which the Administrative Agent has a valid and perfect first priority Lien.

 

“First Amendment” means that certain First Amendment to Credit Agreement dated as of July 25, 2012 among the Parent, the Borrower, the Administrative Agent and the Lenders party thereto.

 

Section 3. Confirmation of Borrowing Base and Redetermination of Borrowing Base.

 

3.1           Upon the effectiveness of this Agreement, the Borrowing Base shall be, and hereby is, affirmed at $150,000,000, which Borrowing Base shall remain in effect until the Borrowing Base is otherwise redetermined or adjusted in accordance with the Credit Agreement.

 

3.2           Both the Parent and the Borrower, on the one hand, and the Administrative Agent and the Lenders, on the other hand, agree that the redetermination of the Borrowing Base described in this Section 3 constitutes the regularly scheduled Spring 2012 redetermination of the Borrowing Base (and shall not constitute an Interim Redetermination of the Borrowing Base).

 

3.3           The Parent and the Borrower agree that if the amount in the Account is less than $35,000,000 (the “Threshold Amount”) at any time prior to completion of the next redetermination of the Borrowing Base (whether at the next Scheduled Redetermination anticipated to occur in October 2012 or any earlier Interim Redetermination) (the “Release Date”), then the Borrowing Base shall be reduced on a dollar for dollar basis in an amount equal to the difference between the amount in the Account and the Threshold Amount.  After the Release Date, the foregoing requirements shall no longer apply.

 

3.4           Both the Parent and the Borrower, on the one hand, and the Administrative Agent and the Lenders, on the other hand, agree that as of the Release Date, the requirements to (i) maintain the Threshold Amount in the Account and (ii) grant a first priority Lien on the Account shall cease.   At such time, the Administrative Agent is authorized to take all steps necessary to release such Lien, including filing any Lien terminations or providing other documentation to evidence such Lien release.

 

 

  

Page 2

  

 

Section 4. Conditions Precedent.  This First Amendment shall become effective on the date, on or before July 31, 2012 (such date, the “First Amendment Effective Date”), when each of the following conditions is satisfied (or waived in accordance with Section 12.02):

 

4.1 The Administrative Agent shall have received from the Required Lenders, the Parent, the Borrower and each other Guarantor, counterparts (in such number as may be requested by the Administrative Agent) of this First Amendment signed on behalf of such Person.

 

4.2 The Administrative Agent shall have received (a) a security agreement granting to the Administrative Agent a Lien on the Account and (b) such other agreements or instruments as may be reasonably necessary or desirable to permit the Lien on the Account under applicable law.

 

4.3 No Default shall have occurred and be continuing as of the date hereof, after giving effect to the terms of this First Amendment.

 

The Administrative Agent is hereby authorized and directed to declare this First Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 4 or the waiver of such conditions as permitted in Section 12.02.  Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.

 

Section 5. Miscellaneous.

 

5.1 Confirmation. The provisions of the Credit Agreement, as amended by this First Amendment, shall remain in full force and effect following the effectiveness of this First Amendment.

 

5.2 Ratification and Affirmation; Representations and Warranties.  Each of the Borrower and the Guarantors hereby (a) acknowledges the terms of this First Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby and (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this First Amendment:

 

(i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (except those which have a materiality qualifier, which shall be true and correct as so qualified), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date,

 

  

Page 3

  

(ii) no Default or Event of Default has occurred and is continuing, and

 

(iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

5.3 Loan Document.  This First Amendment is a Loan Document.

 

5.4 Counterparts. This First Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this First Amendment by facsimile transmission or email shall be effective as delivery of a manually executed counterpart hereof.

 

5.5 NO ORAL AGREEMENT.  THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

 

5.6 GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED.  CHAPTER 346 OF THE TEXAS FINANCE CODE (RELATING TO REVOLVING LOAN AND REVOLVING TRIPARTY ACCOUNTS), SHALL NOT APPLY TO THIS AGREEMENT OR ANY LOANS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

5.7 Payment of Expenses.  In accordance with Section 12.03, the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of- pocket costs and reasonable expenses incurred in connection with this First Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.

 

5.8 Severability.  Any provision of this First Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

  

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5.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[SIGNATURES BEGIN NEXT PAGE]

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first written above.

 

 

BORROWER:                                                                MCMORAN OIL & GAS LLC

 

By:           /s/ Kathleen L. Quirk 

Kathleen L. Quirk, Vice President

	
PARENT:

	
                                                                         MCMORAN EXPLORATION CO.

 

By:           /s/ Kathleen L. Quirk 

Kathleen L. Quirk, Senior Vice

President & Treasurer

GUARANTORS:                                                               MCMORAN EXPLORATION CO.

By:           /s/ Kathleen L. Quirk 

Kathleen L. Quirk

    Senior Vice President & Treasurer

K-MC VENTURE I LLC

By:           MCMORAN OIL & GAS LLC,

its sole member

By:           /s/ Kathleen L. Quirk 

Kathleen L. Quirk

Vice President

Signature Page – MMR 1st Amendment

S - 1

  

  

  

FREEPORT CANADIAN

EXPLORATION COMPANY

By:           MCMORAN OIL & GAS LLC,

its sole member

By:           /s/ Kathleen L. Quirk 

Kathleen L. Quirk

Vice President

MCMORAN INTERNATIONAL INC.

By:           MCMORAN OIL & GAS LLC,

its sole member

By:           /s/ Kathleen L. Quirk 

Kathleen L. Quirk

    Vice President

 

 

Signature Page – MMR 1st Amendment

S - 2

  

  

  

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and as a Lender

 

By:         /s/ Jo Linda Papadakis                                         

                                                                Name:          Jo Linda Papadakis

Title:           Authorized Officer

TORONTO DOMINION (NEW YORK) LLC, as a Lender

By:        /s/ Bebi Yasin                                                                

                                                                Name:          Bebe Yasin

Title:           Authorized Signatory

 

  WELLS FARGO BANK, NATIONAL ASSOCATION, as a Lender

 

By:       /s/ Douglas R. Liftman                                                                

                                                                Name:         Douglas R. Liftman

Title:           Managing Director

CAPITAL ONE, N.A., as a Lender

By:        /s/ Matthew L. Molero                                                                

                                                                Name:         Matthew L. Molero

Title:           Vice President

  U.S. BANK NATIONAL ASSOCIATION,      as a Lender

By:       /s/ Daria Mahoney                                                                

                                                                Name:          Daria Mahoney

Title:           Vice President

 

Signature Page – MMR 1st Amendment

S - 3

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