REVENUE PAYMENT AGREEMENT
Exhibit 10.19
This REVENUE PAYMENT AGREEMENT (“Agreement”) is made this 18th day of April, 2007, but effective January 5, 2007, by and between NAMI RESOURCES COMPANY L.L.C. a Kentucky limited liability company with an address of 000 Xxxx Xxxxx, Xxxxx 0, Xxxxxx, Xxxxxxxx 00000 (hereinafter referred to as “Payor”) and TRUST ENERGY COMPANY, LLC, a Kentucky limited liability company with an address of 0000 Xxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (“Payee”).
WHEREAS, Payor is the operator of the xxxxx listed on Exhibit A hereto (the “Xxxxx”) and is the current lessee of the leases referenced on Exhibit A (the “Leases”); and
WHEREAS, the Xxxxx and Leases are subject to certain mortgages and other liens; and
WHEREAS, as part of the restructuring of the business of Payor and related companies, Payor has agreed to make certain payments to Payee; and
WHEREAS, the holders of the mortgages and liens on the Xxxxx and the Leases have agreed to release the mortgages and liens on the Xxxxx and the Leases;
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration (including the release of the mortgages and liens on the Xxxxx and the Leases), the receipt and sufficiency of which consideration is hereby acknowledged, the parties agree as follows:
1. Payor agrees to pay to Payee an amount equal to the Net Proceeds (as defined herein), of the sale of oil and/or gas from the Xxxxx (the “Oil and Gas”). Said payment shall be made on or before the thirty (30) days following the end of the month during which the Oil and Gas was produced and sold.
2. As used herein, the term “Net Proceeds” shall mean the amount of money equal to the Gross Proceeds (as defined herein) minus the Expenses (as defined herein).
As used herein, the term “Gross Proceeds” shall mean the amount of money received by Payor from the sale of the Oil and Gas in the ordinary course of Payor’s business. Payor agrees that any gas sold from the Xxxxx will be marketed and sold at not less than the monthly Columbia Gas Transmission Corp. Appalachia index price as published monthly in the Inside F.E.R.C. Gas Market Report. .
As used herein, the term “Expenses” shall mean the following:
(a) All landowner royalties and other burdens on production payable in connection with the Oil and Gas;
(b) All severance taxes payable in connection with the Oil and Gas;
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(c) All third party transportation costs and marketing fees associated with the sale of the Oil and Gas;
(d) All costs of the operation of said Xxxxx, including any repair costs which Payor may incur in the maintenance or repair of the Xxxxx; and
(e) Overhead costs, which for the purposes hereof, shall be deemed to be $60.00 per month for each Well that is producing all or any part of a calendar month.
The Expenses shall be determined in accordance with the provisions of the Well Services Agreement and the related Accounting Procedure relating to the Xxxxx.
3. The parties acknowledge and agree that by this Agreement the Payee does not and will not have, or under any circumstances be deemed to have, any interest in the Leases or the Oil & Gas produced from the Xxxxx. Payor shall remain the lessee of the Leases and the operator of the Xxxxx, and Payor shall be solely responsible for the performance of the Leases and the operation of the Xxxxx.
4. This Agreement applies only to the Xxxxx listed on Exhibit A and the Oil and Gas produced from those Xxxxx, and it shall not apply to any other or subsequent well or xxxxx drilled on the Leases, except for a well drilled in substantially the same location as one of the Xxxxx to replace such Well.
5. This Agreement is binding on the parties and their successors and assigns. Should the Payor assign the Leases or the Xxxxx, or any of them, to a third-party, this Agreement and the obligations of the Payor hereunder shall be binding upon such Assignee.
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PAYOR: |
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NAMI RESOURCES COMPANY, LLC |
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BY: NAMI SERVICE COMPANY, LLC |
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ITS: MANAGER |
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By: |
/s/ Majeed S. Xxxx |
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Xxxxxx S. Nami |
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Its: Manager |
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PAYEE: |
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TRUST ENERGY COMPANY, LLC |
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BY: VANGUARD NATURAL GAS, LLC |
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ITS: MANAGER |
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By: |
/s/ Xxxxx X. Xxxxx |
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Xxxxx X. Xxxxx |
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Its: Manager |
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EXHIBIT A
Oil and Gas Leases subject to the Revenue Payment Agreement:
1. Oil and Gas Lease dated July 18, 1929 from Xxxxx Coal Mining Company, as Lessor, to X.X. Xxxxxxxxx, as Lessee, covering 1770 acres and as recorded in Lease Book 9, Page 242 of the records of Xxxx County, Kentucky.
2. Oil and Gas Lease dated December 16, 1952 from Xxxxx Coal Mining Company, as Lessor, to North American Petroleum Company, as Lessee, covering 460 acres and as recorded in Lease Book 16, Page 14 of the records of Xxxx County, Kentucky.
3. Oil and Gas Lease dated March 9, 1953 from Xxxxx Coal Mining Company, as Lessor, to North American Petroleum Company, as Lessee, covering 2500 acres and as recorded in Lease Book 16, Page 197 of the records of Xxxx County, Kentucky.
Xxxxx Subject to the Revenue Payment Agreement:
Well Name
Xxxxx 1
Xxxxx 2
Xxxxx 11
Xxxxx 12, 14B, 15, 20, 24, 25, 26, 27
28,29,30,31,32,33,34,35,36,37
Xxxxx 00
Xxxxxx Xxxxxx #0
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