MARKETING AND RELATED SERVICES AGREEMENT
This
Marketing and Related Services Agreement (“Marketing
Agreement”), dated the 1st day of July, 2007, by
and between Rosetta Resources Operating LP, a Delaware limited
partnership (successor by merger with Rosetta Resources
California, LLC, a Delaware limited liability Company, Rosetta
Resources Texas LP, a Delaware limited partnership, and
Rosetta Resources Rockies, LLC, a Delaware limited liability
company) (“RROLP”) and Rosetta Resources Offshore,
LLC, a Delaware limited liability company
(“RROLLC”), RROLP and RROLLC (collectively,
“Rosetta”) and Calpine Producer Services, L.P., a
Texas limited partnership, hereinafter called
(“CPS”). Rosetta and CPS are sometimes
collectively referred to herein as Parties, and individually
as a Party.
WITNESSETH
WHEREAS,
Rosetta desires to enter into a Marketing Agreement with an
experienced, skilled and qualified, full service marketing
agent with front office, mid-office and back office support
and comprehensive report generation. The services
(“Services”) desired by Rosetta are described in
greater detail in Article 1 below and the attached Schedules 1
through 11;
WHEREAS,
CPS desires to provide the Services to Rosetta on the basis as
set forth herein;
WHEREAS,
CPS is in the business of performing and providing the
Services desired by Rosetta and is in a position to make
available such Services in an efficient, competent, and
professional manner for competitive, market-based fees and
rates.
NOW
THEREFORE, in consideration of the foregoing and of the
covenants and promises herein contained, IT IS AGREED by and
between the Parties:
ARTICLE 1
SERVICES TO BE PERFORMED
This
Marketing Agreement in its entirety, including the various
documents executed by the Parties pursuant to this Agreement
are expressly subject to and contingent upon approval, by
entry of a signed order of the Bankruptcy Court in accordance
with that certain Partial Transfer and Release Agreement dated
August 3, 2007. Subject to the foregoing, from and
after the Effective Date of this Marketing Agreement, CPS
shall, subject to the overall direction of the Rosetta
Authorized Representatives” (as this term is defined
below), furnish for and on behalf of Rosetta the Services in
connection with certain of Rosetta’s owned or controlled
production of crude oil, condensate, natural gas or natural
gas liquids, as applicable, located in the continental United
States and the Shelf of the Gulf of Mexico, such owned or
controlled production as set forth and scheduled on
Exhibit A , which may be modified, from time
to time, by mutual agreement in writing of the Rosetta
designated personnel identified on Schedule 10 hereto or as
may be designated or otherwise subsequently revised in writing
by any Rosetta officer (the “Rosetta Authorized
Representative”) and the CPS designated personnel
identified on Schedule 10 hereto or as may be designated or
otherwise subsequently revised in writing by and CPS officer
(the “CPS Designated Representative”)
(hereinafter, the “Rosetta
Production”).
The
Services shall include, but not be limited to, the subject
matters set forth in the following Schedules:
Schedule
1 - Rosetta Production
Schedule
2 - Information Access
Schedule
3 - Meetings, Schedules and Reporting
Schedule
4 - Contract Preparation, Negotiation and
Administration
Schedule
5 - Royalty Issues
Schedule
6 - Payment from Purchasers of Rosetta Production
Schedule
7 - Rosetta Working Interest Owners
Schedule
8 - Pricing and Credit Issues
Schedule
9 - Hourly Rate for Services Not Listed on Other
Schedules
Schedule
10 - Authorized Representatives
Schedule 11 – Transition Services
“Schedules
1 through 11” are attached and fully incorporated
herein. In the event Rosetta and CPS agree in the
future that CPS will perform additional Services not
identified in this Marketing Agreement or in an attached
Schedule hereto, additional Schedules will be added to this
Marketing Agreement or existing Schedules will be amended in
order to identify and describe the new Services to be
performed for Rosetta by CPS. Any additional
Services which are not included in the Schedules performed at
the written request of the Rosetta Authorized Representative
will be charged at the hourly rate specified in Schedule 9 or
any other rate or fee as may be mutually agreed upon in
writing by the Parties and added to this Marketing Agreement
by a signed written amendment. CPS agrees to
perform the Services in a workmanlike manner with due
diligence and without undue delays or
interruptions. CPS further agrees that the Services
shall be performed in a commercially reasonable
manner. As an independent contractor, CPS shall not
have any fiduciary obligation to Rosetta in connection with
the services provided pursuant to this Marketing Agreement;
provided however, that CPS will faithfully comply with its
obligations to Rosetta under this Marketing
Agreement. CPS and Rosetta shall cooperate with
each other and assist each other to facilitate CPS’
performance of the Services. To this end, Rosetta
agrees to timely furnish CPS with information reasonably
requested by CPS in writing that Rosetta may have that is
pertinent to the Services, but which CPS does not possess or
have access to through Rosetta systems.
ARTICLE 2
TERM
This
Marketing Agreement shall be effective on July 1, 2007
(“Effective Date”) and shall continue through the
earlier of (i) June 30, 2009; (ii) the date CPS receives
written notice from Rosetta of immediate expiration of the New
Marketing Agreement on account of the first to occur of the
following: (a) the entry by a court of competent jurisdiction
of a final, nonappealable order avoiding the Sale
Transaction as a fraudulent or similar transfer; or
(b) the Bankruptcy Court authorizing
Calpine to reject the PSA in
whole or in part, unless Rosetta obtains a
stay of the effect of such rejection order from a court of
competent jurisdiction, in which case, upon the entry of a
final nonappealable order authorizing Calpine
to reject the PSA in whole or in part (and,
in either case, Calpine exercising its
authority pursuant to such rejection order, hereinafter, the
“Term”). The bold and capitalized terms
used in the prior sentence shall have the same meaning as
defined by that certain Partial Transfer and Release Agreement
dated August 3, 2007. Whether the triggering events
defined in subparts (ii) or (iii) above result in an
expiration shall be at Rosetta’s sole discretion, which
discretion shall be exercised and memorialized by the written
notice of immediate expiration to CPS (any such expiration to
be effective on notice receipt). At Rosetta’s
option to be exercised in writing at any time before
expiration of the Term, CPS shall provide “Transition
Services” as more fully described in Schedule 11,
thereafter for an additional ninety (90) day period following
the expiration of the Term in addition to and under the same
terms and conditions of this Marketing
Agreement. Following any termination or expiration
of this Marketing Agreement for whatever reason, including
during and following the final expiration of any additional
ninety (90) day Transition Services period for which Rosetta
has exercised its option, each Party shall remain subject to
and comply with the continuing obligation of confidentiality
in Article 11 and the Audit and Overpayment provisions of
Article 5. Upon expiration or termination of this
Marketing Agreement and the Transition Services period if so
exercised, all Services shall terminate except as otherwise
specifically provided herein, and each Party shall have no
further access to or use of any programs or materials utilized
by the other Party in connection with this Marketing
Agreement. In the event of a material failure of a
Party to perform in accordance with the terms of this
Marketing Agreement or Schedule (“Non-Performing
Party”) through no fault of the other Party, the other
Party (“Complaining Party”) shall have the right
to terminate this Marketing Agreement, subject to
Rosetta’s option to require CPS to provide Transition
Services for an additional ninety (90) days after any
termination, if within twenty (20) days after Non-Performing
Party’s receipt of written notice from the Complaining
Party, the Non-Performing Party does not cure or commence and
continuously maintain the cure of the performance defects
complained of in such written notice. Any such
termination shall be effective on receipt of the complaining
Party’s written termination notice to the Non-Performing
Party after the expiration of such cure period, unless Rosetta
exercises is option to require CPS to provide Transition
Services, which right shall survive any default of
Rosetta. The term “Sale Transaction” as
used in this Marketing Agreement shall mean the sale to
Rosetta of ultimate ownership and control of all or
substantially all of the assets comprising Calpine
Corporation’s oil and gas business as provided for in
the PSA.
ARTICLE 3
DESIGNATION OF REPRESENTATIVES
CPS
Authorized Representative and Rosetta Authorized
Representatives shall be identified on Schedule 10 of this
Marketing Agreement and may be modified by the relevant Party
from time to time by notifying the other Party of changes in
writing executed by any officer of said Party. The
Rosetta Authorized Representative may authorize additional
Services to be performed hereunder or may terminate
Services. A CPS Authorized Representative shall be
authorized to receive notice of a proposed amendment to the
Services, or requests by Rosetta for Services to be performed
as per Schedule 9. CPS personnel performing the
Services and Rosetta personnel shall freely communicate with
one another related to CPS’ performance of the Services
and any additional Services as may be requested or authorized
by the Rosetta Authorized Representative; provided that any
Rosetta personnel having a performance issue with CPS will
notify the CPS Authorized Representative who shall then be
responsible for resolving any issues with the Rosetta
Authorized Representative.
ARTICLE 4
CHARGES AND TERMS OF PAYMENT
CPS
shall charge Rosetta a monthly fee (the “Monthly
Fee”) for the Services provided pursuant to this
Marketing Agreement to be paid monthly in
arrears. The Monthly Fee shall be an amount equal
to .5% of the “net proceeds” actually received by
Rosetta for the sale of all Rosetta Production during the
Term, as well as any ninety (90) day Transition Services
period, if applicable, excluding all actual charges and
expenses incurred by Rosetta, including but not limited to
transportation, gathering, treating, blending, quality,
treating or processing fees, or similar charges, as well as
expenses and charges for postproduction compression fuel and
line loss. For further clarification, the term
“net proceeds” does not include deductions for any
and all severance taxes or similar taxes levied upon Rosetta
Production, the Monthly Fee or extra charges under this
Marketing Agreement. CPS will invoice Rosetta for
the Monthly Fee on or before the twenty-fifth (25th) day of
each month following the month of Service. Rosetta
shall either pay such invoices by the last business day of the
month or ten (10) days from the date of the invoice, whichever
is later, or net such payment from amounts due and payable to
Rosetta resulting from any monthly gas sales to Calpine Energy
Services, L.P. (“CES”), Calpine Corporation or any
Calpine affiliate for the applicable month the Monthly Fee is
earned. CPS agrees to provide Rosetta with detail
and supporting documentation for any extra charges pursuant to
Schedule 9 as may be requested by a Rosetta Authorized
Representative and performed by CPS during any month during
the Term of this Marketing Agreement.
The
aggregate total of the Monthly Fees for each of Year 1 (July
1, 2007 through June 30, 2008) and Year 2 (July 1, 2008
through June 30, 2009) of this Marketing Agreement (or as may
be pro-rated for a partial year in the event the Term is less
than a two-year period) shall be subject to a $1 million
minimum aggregate annual floor (“Annual Fee
Floor”) and a maximum aggregate annual cap (the
“Annual Fee Cap”) in an amount not to exceed the
amounts set forth on the chart below, which correspond to the
actual annual volume of the Rosetta Production invoiced with
the Monthly Fee for that annual or pro rata period, expressed
in BTUs. For purposes of the computation of the
Annual Fee Cap, sales of oil production shall be converted to
MMBtu on the basis of one (1) barrel of oil being equivalent
to 6 MMBtu.
|
Annual Fee Cap
|
|
Annual Volume
|
|
(MMBtus)
|
|
$2,000,000
|
|
0 thru
|
|
54,750,000
|
|
$2,500,000
|
|
54,750,001
thru
|
|
65,700,000
|
|
$3,000,000
|
|
65,700,001
thru
|
|
73,000,000
|
|
$3,500,000
|
|
73,000,001
thru
|
|
83,950,000
|
|
$4,000,000
|
|
83,950,001
thru
|
|
unlimited
|
The
Parties shall “true up” or reconcile the aggregate
total of the Monthly Fees for each of Year 1 and Year 2 of the
Marketing Agreement (or the pro rata portion of such year in
the event the Term is less than two years), and Rosetta shall
pay CPS any positive difference between the Annual Fee Floor
and the amount actually paid for that period or CPS shall pay
Rosetta any positive difference between the Monthly Fees
actually paid for that period and the applicable Annual Fee
Cap no later than the sixty (60) days following the
conclusion of Year 1 or Year 2 (or end of the Term if less
than two years), respectively.
In
the event the Term is less than a two-year period, Rosetta
shall pay CPS the Annual Fee Floor less any undisputed Monthly
Fees for the applicable year paid by Rosetta to
CPS.
ARTICLE 5
AUDITS AND OVERPAYMENTS
During
the term of this Marketing Agreement and for a period of two
(2) years following expiration or termination of this
Marketing Agreement (for whatever cause), each Party shall
have the right to audit the other Party’s books and
records for verification of the basis of any compensation paid
or owed by Rosetta to CPS hereunder, and in the event a Party
determines that an adjustment is needed, that Party shall
invoice the other Party for any amount of overpayment,
underpayment or adjustment it determines to be owed
(“Adjusted Invoice”), any such Adjusted Invoice to
include reasonable supporting documentation. Except as to any
portion of an Adjusted Invoice disputed in good faith, the
Party invoiced shall provide payment to the other Party within
thirty (30) days of receipt of the Adjusted Invoice of the
undisputed amount for any such overpayments, underpayments or
adjustments. All Parties agree that each Party shall have the
right to set-off against any future payments owed under this
Marketing Agreement any undisputed portion of an Adjusted
Invoice which is not refunded within such thirty (30) day
period.
ARTICLE 6
INDEPENDENT CONTRACTOR
It
is understood and agreed that CPS is an independent contractor
in the performance of each and every part of this Marketing
Agreement and that CPS’ employees shall not be deemed to
be the employees of Rosetta. Rosetta shall have the
right to inspect the performance of the Services to ensure
satisfactory completion thereof, it being distinctly
understood that Rosetta is in no way associated or otherwise
connected with the actual performance and details of the
Services, as Rosetta is interested in and looking only to the
end result to be accomplished. CPS is solely and individually
liable for all labor and expenses in connection with rendering
the Services. Rosetta authorizes CPS to act as
it’s seller’s representative when performing the
Services contracted for in this Marketing Agreement in
accordance with Rosetta Authorized Representative’s
prior written instructions in this regard.
ARTICLE 7
MARKETING AGREEMENTS WITH THIRD PARTIES
All
agreements between Rosetta and third parties shall be entered
into in the name of RROLP or RROLLC, as appropriate, executed
by an authorized Rosetta officer. CPS is prohibited
from buying or selling hydrocarbons, including settling
imbalances, processing elections, executing midstream and
gathering agreements on behalf of Rosetta without the prior
written approval of a Rosetta officer.
ARTICLE 8
NO WARRANTIES OR REPRESENTATIONS WITHOUT PRIOR
APPROVAL
Unless
expressly authorized in this Marketing Agreement or by prior
written authority, CPS shall have no authority to make
warranties or representations on behalf of or in the name of
Rosetta and Rosetta shall have no authority to make any
warranties or representations on behalf of or in the name of
CPS.
ARTICLE 9
TAXES
CPS
shall be responsible for payment of all taxes arising out of
or associated with its remuneration earned in connection with
this Marketing Agreement, including without limitation,
CPS’ federal, state and local income tax, social
security tax, unemployment insurance tax, and any other taxes
or business license fees required of any nature
whatsoever. Rosetta shall be responsible for
payment of all taxes arising out of or associated with Rosetta
Production and its business activities. In
performing the Services, specifically those pursuant to the
attached Schedule 3 , CPS will provide
information it maintains to assist Rosetta in the preparation
and payment of all applicable severance or similar taxes
attributable to Rosetta Production.
ARTICLE 10
LIABILITY AND INDEMNITY
CPS
shall not be liable for any action taken or omitted to be
taken by it under or pursuant to this Marketing Agreement if
done in a commercially reasonable manner so as to satisfy
CPS’ obligations hereunder and reasonably believed by
CPS to be in accordance with the Rosetta Authorized
Representative’s prior written
direction. Rosetta shall indemnify and hold
harmless CPS from and against any and all third-party claims,
liens, demands, causes of actions or expenses arising out of,
or incidental to, the operations under this Marketing
Agreement when arising out of the joint or concurrent
negligence of CPS and Rosetta, except to the extent the same
arises out of or is in connection with CPS’ willful
misconduct, sole or gross negligence. If Rosetta or
CPS receives a claim or demand related to this Marketing
Agreement, Rosetta or CPS shall notify the respective other
Party promptly in writing and give such Party all available
information and assistance to evaluate, defend and settle such
claim. Rosetta shall defend each claim asserted and
suit brought involving any matter for which Rosetta has an
obligation to indemnify CPS hereunder, Rosetta shall be
entitled to select and retain defense counsel of its choosing
in such circumstances, and Rosetta shall pay all costs,
expenses and attorney fees incidental thereto and all
judgments resulting therefrom. If it is determined
that Rosetta is not obligated to indemnify CPS, CPS will fully
reimburse Rosetta for all costs and expenses, including
attorneys fees and judgments. CPS shall have the
right, at its option and sole expense, to participate in the
defense of each such claim or suit without relieving Rosetta
of any obligations hereunder.
ANY
STATUTORY LIMITATIONS NOW OR HEREAFTER IN EFFECT WHICH AFFECT
THE VALIDITY OR ENFORCEABILITY OF THE INDEMNIFICATION
PROVISIONS IN THIS MARKETING AGREEMENT ARE MADE A PART HEREOF
IN THE RESPECTIVE JURISDICTION WHERE THE STATUTE APPLIES AND
ANY SUCH STATUTORY LIMITATIONS SHALL OPERATE TO AMEND THE
INDEMNITY PROVISIONS HEREOF TO THE MINIMUM EXTENT NECESSARY TO
BRING SUCH PROVISIONS INTO CONFORMITY WITH THE REQUIREMENTS OF
THE STATUTE. SO MODIFIED, THE INDEMNITY PROVISIONS OF
T
