ACQUISITION AND PARTICIPATION AGREEMENT
This Acquisition and Participation Agreement (this "Agreement") is executed
as of the 21st day of October, 1999, by Xxxxxxx Oil & Gas, L.P. ("BOG") and
Aspect Resources LLC ("Aspect") (BOG and Aspect are herein collectively called
"Parties" or "Participants" and individually called a "Party" or a
"Participant").
Recitals:
(a) BOG currently owns interests in and to the oil and gas leases described in
Exhibit A hereto (such leases, insofar only as they cover the lands described in
Exhibit A hereto, and further as heretofore amended or extended, are herein
called the "BOG Leases") and proprietary interpretations of certain geological
and/or geophysical information relating to the AMI Lands, as hereinafter defined
(the "G & G Data").
(b) Aspect desires to acquire from BOG, and BOG agrees to assign to Aspect, a
share of the undivided interest of BOG in the BOG Leases and the right to use
the G & G Data, all upon and subject to the terms and conditions hereof.
(c) BOG and Aspect further desire to establish an area of mutual interest
covering all of the AMI Lands, and agree upon a scheme of joint operation
thereof, all upon and subject to the terms and conditions hereof.
Defined Terms:
"Acquired Interest" shall have the meaning assigned to it in Section 2.2.
"Affiliate" means (a) any Person directly or indirectly owning, controlling
or holding with power to vote 50% or more of the outstanding voting securities
of any other Person, (b) any Person 50% or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held with power to
vote by any other Person, (c) any Person directly or indirectly controlling,
controlled by or under common control with any other Person, and (d) any
officer, director, partner or sanguinal or affinal kin of any other Person or
any Person described in subsection (c) of this paragraph; as used in this
definition, the term "Person" means an individual, an estate, a corporation, a
partnership, an association, a joint stock company, a limited liability company,
a joint venture, a trust and any other legally recognized entity.
"AMI" shall have the meaning assigned to it in Section 2.1(a).
"AMI Lands" shall mean the lands described in Exhibit A hereto.
"AMI Party" and "AMI Parties" shall have the meaning(s) assigned to them in
Article II.
"AMI Term" shall have the meaning assigned to it in Section 2.1(b).
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"BOG Leases" has the meaning assigned to it in the Recitals.
"BOG/Aspect Assignment" shall have the meaning assigned to it in Section
3.1.
"Business Days" means all days of the week, other than Saturday, Sunday or
any legal holiday on which commercial banks in Texas are closed for business.
"Code" shall have the meaning assigned to it in Section 1.1.
"Xxxxxxx Prospect" has the meaning assigned to it in Section 4.1.
"Effective Date" shall have the meaning assigned to it in the BOG/Aspect
Assignment.
"Farm-In" means a farm-in or any other agreement, other than a Lease or
Option, that affords the holder the right to earn or otherwise acquire an
interest in oil, gas or other minerals, whether leasehold, fee, royalty,
overriding royalty or otherwise.
"G & G Data" has the meaning assigned to it in the Recitals.
"Initial Well" means, as to any particular Prospect Area, the first well
drilled hereunder in such Prospect Area.
"JOA" means an Operating Agreement in substantially the form attached
hereto as Exhibit E, with each Prospect Area to be covered by a separate JOA.
"Lease" means an oil, gas and/or mineral lease, fee interest or mineral
servitude affording the holder the right to explore for, develop and produce
oil, gas and/or other minerals.
"Option" means an agreement affording the holder an option, exercisable
upon certain circumstances, to acquire a Lease.
"Ownership Interest Share" or "Participation Share" shall mean, relative to
any particular Prospect Area and unless expressly provided otherwise herein, the
respective interests set out for each of BOG and Aspect in Exhibit C hereto;
provided that, in the event fewer than all of the AMI Parties elect to
participate in any particular Acquired Interest within a Prospect Area, the
Ownership Interest Shares and Participation Shares shall be adjusted as to such
Acquired Interest as more particularly described in Article II, below.
"Participant(s)" shall have the meaning assigned to it in the introductory
paragraph.
"Party" shall have the meaning assigned to it in the introductory
paragraph.
"Prospect Areas" means all of the lands described in Parts One through Four
of Exhibit A hereto, with the lands described in any one of such parts of
Exhibit A being individually called a "Prospect Area".
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"Subsequent Well" means, relative to any particular Prospect Area, any well
drilled hereunder after the drilling of the Initial Well for such Prospect Area.
ARTICLE I
Relationship of Parties
Section 1.1. Several Liability. The liabilities, covenants and undertakings
of the Parties are several, not joint or collective. Under no circumstances
shall any Party be considered a fiduciary to any other Party, nor shall there
otherwise be a confidential, special or other relationship of trust created
between any one or more Parties under or by virtue of this Agreement.
Section 1.2. No Partnership. It is not the intention of the Parties to
create, nor shall this Agreement be deemed as creating a joint venture or a
mining, tax or other partnership or association or to otherwise render the
Parties liable as co-venturers or partners. However, if for federal income tax
purposes, this Agreement and the operations hereunder are regarded as a
partnership, each Party thereby affected elects to be excluded from the
application of all of the provisions of Subchapter "K," Chapter 1, Subtitle "A,"
of the Internal Revenue Code of 1986, as amended (hereinafter referred to as the
"Code"), as permitted and authorized by Section 761 of the Code and the
regulations promulgated thereunder. Should there be any requirement that each
Party hereby affected give further evidence of this election, each such Party
shall execute such documents and furnish such other evidence as may be required
by the federal Internal Revenue Service or as may be necessary to evidence this
election. No Party shall give any notice or take any other action inconsistent
with the election made hereby. In making the foregoing election, each Party
states that the income derived by such Party from operations hereunder can be
adequately determined without the computation of partnership taxable income.
ARTICLE II
Area of Mutual Interest
Section 2.1. Establishing an Area of Mutual Interest.
(a) BOG and Aspect hereby establish an area of mutual interest ("AMI")
which shall encompass the AMI Lands (as used in this Article II, BOG and Aspect
are herein collectively called the "AMI Parties" and individually called an "AMI
Party").
(b) The AMI shall remain in force for a term of three years, unless sooner
terminated by mutual agreement of the Parties (the "AMI Term ").
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Section 2.2. Notification and Response Procedures. In the event that any
AMI Party acquires or proposes to acquire, at any time during the AMI Term, by
purchase, exchange, gift or otherwise, a Lease, Option or a Farm-In covering
lands, any part of which are located within the AMI (such Leases, Options and
Farm-Ins, insofar and only insofar as they cover lands within the AMI, are
herein called "Acquired Interests"), such AMI Party (the "Acquiring Party")
shall notify the other AMI Parties (the "Notified Parties"), in writing, of such
acquisition or proposed acquisition and the initial consideration paid or to be
paid for the Acquired Interest. Each Notified Party shall, within thirty (30)
days after receipt of such a notice from the Acquiring Party, notify the
Acquiring Party, in writing, whether it wishes to participate in such
acquisition; provided that failure to respond within the time and in the manner
set forth above shall be deemed to be an election to not participate in such
acquisition. However, if a Notified Party reasonably desires additional
information with respect to an Acquired Interest before it makes its election
whether or not to participate in the acquisition of an Acquired Interest, such
Notified Party may notify the Acquiring Party in writing within fifteen (15)
days of its receipt of the Acquiring Party's notice, detailing in such notice to
the Acquiring Party the additional information reasonably desired by such
Notified Party, and such Notified Party shall have fifteen (15) days from the
date of its receipt of the additional information it has reasonably requested
from the Acquiring Party in which to make its election whether to participate in
the acquisition of the Acquired Interest. Payment for a Participating Party's
share of an Acquired Interest is due within 30 days after the participation
election was due. Failure to timely make any portion of such payment as is not
in good faith dispute shall result in a forfeiture of the right to participate
in same. In the event a rig is drilling within one mile of the Prospect Area to
which any particular Acquired Interest relates, the period within which an
election must be made shall be reduced from 30 days to 48 hours (exclusive of
weekends and legal holidays). Notice of the 48-hour election data shall be set
out in the election notification notice. Anything to the contrary contained
herein notwithstanding, a sale, exchange, gift or other disposition of any part
of an AMI Party's interest in any Leases, Options or Farm-Ins to any other AMI
Party hereto shall not be deemed to be an Acquired Interest for purposes of this
Section 2.2, and this Section 2.2 shall not apply to any such sale, exchange,
gift or other disposition.
Section 2.3. Effect of a Party's Election Regarding Participation. Should
all of the AMI Parties elect to participate in an acquisition of an Acquired
Interest, upon payment of its Ownership Interest Share of the acquisition costs
(or to the extent not yet due, upon agreement to pay when due), each AMI Party
shall be entitled to its Ownership Interest Share of the Acquired Interest, and
the Acquiring Party shall execute an Assignment, in substantially the form
attached hereto as Exhibit B, in favor of the Notified Parties. If any AMI Party
elects not to participate in any particular Acquired Interest, the Ownership
Interest Share for each AMI Party electing to participate shall, unless all of
the Parties electing to participate agree otherwise, be the percentage
determined by dividing, for each participating AMI Party, the Ownership Interest
Share otherwise applicable (if all Parties had participated) to such
participating AMI Party by the total Ownership Interest Share for all
participating AMI Parties; the Acquiring Party shall then execute in favor of
those Notified Parties electing to participate in such Acquired Interest an
Assignment, in substantially the form attached hereto as Exhibit B, with
appropriate adjustments for relative quantum of interest being transferred. The
AMI Parties that acquire part of a non-participating AMI Party's Ownership
Interest Share in an Acquired Interest shall be responsible for a proportionate
share of such non-participating AMI Party's share of the costs of such Acquired
Interest. An Acquired Interest shall be subject to one or more JOA's, depending
upon the Prospect Area(s) within which such Acquired Interest is situated, all
as more particularly described in Section 2.5, below. Notwithstanding any
provision hereof to the contrary, in the event an Acquired Interest also covers
lands outside the AMI, the Acquiring Party shall be obligated to offer the
Notified Parties the right to participate in the subject acquisition only
insofar as it relates to the Acquired Interest (i.e., as limited to the extent
it covers lands in the AMI). In the event the Acquiring Party voluntarily elects
to authorize a Notified Party or Parties to participate in the entire
acquisition (i.e., insofar as it covers lands within and without the AMI), any
lands outside the AMI shall not become a part of the AMI and shall not otherwise
be subject to the provisions of the Agreement.
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Section 2.4. Election as to Participation in Maintenance or Extension
Costs. In the event maintenance or extension costs are incurred with respect to
an Acquired Interest, each AMI Party that owns an Ownership Interest Share in
such Lease, Option or Farm-In shall have the right to elect whether to
participate in such maintenance or extension cost for the Lease, Option or
Farm-In, utilizing the same procedures set forth in Sections 2.2 and 2.3 above
for Acquired Interests; provided, however, that in the event that an AMI Party
elects not to participate in a maintenance or extension cost, such AMI Party
shall promptly relinquish and assign to the AMI Parties participating in such
maintenance or extension cost (in proportion to their relative Ownership
Interest Shares) all of such non-participating AMI Party's Ownership Interest
Share in the Acquired Interest that would have been relinquished or lost if the
maintenance or extension cost had not been paid.
Section 2.5. JOA's. Immediately upon execution hereof, each Prospect Area
within which both AMI Parties own a Lease, Option and/or Farm-In interest shall
be deemed subject to a separate JOA in substantially the form attached hereto as
Exhibit E. Within thirty (30) days after written request by either AMI Party,
the other AMI Party shall formally execute a JOA covering any Prospect Area
within which both AMI Parties own a Lease, Option or Farm-In interest. Aspect
agrees that BOG shall be named as the Operator under each JOA. In the event
there is any irreconcilable conflict between the terms hereof and the terms of
any JOA, the terms hereof shall control.
ARTICLE III
Acquisition by Aspect of Interest in BOG Leases and Use of G & G Data.
Section 3.1. Conveyance and Payment of Consideration. Immediately upon
execution of this Agreement, BOG shall execute in favor of Aspect an Assignment
in substantially the form attached hereto as Exhibit D (the "BOG/Aspect
Assignment"), and Aspect shall pay over to BOG the sum of $397,890, as full
consideration for the properties covered thereby (herein and therein called the
"Interests"). For a period of thirty (30) days from and after the date hereof,
BOG shall, at its sole discretion, have the right to remove the Prospect Area
described in Part Four of Exhibit A hereto ("Xxxxx Prospect Area") from the
operation of this Agreement; failure to affirmatively so elect removal shall be
deemed an election to maintain the Xxxxx Prospect Area under operation of this
Agreement. If BOG elects to remove the Xxxxx Prospect Area from operation of
this Agreement, (a) Aspect shall reassign to BOG all of its right, title and
interest that was acquired pursuant hereto in the Xxxxx Prospect Area, together
with its right to review and use any G & G Data related thereto, and (b) BOG
shall immediately refund to Aspect the sum of $46,800 (being the portion of the
consideration allocable to the Xxxxx Prospect Area and its allocable G & G
Data), and thereafter the Xxxxx Prospect Area shall no longer be included in the
AMI Lands or otherwise subject to this Agreement. The Prospect Area described in
Part Two of Exhibit A hereto (the Xxxxxxx Prospect Area") was prepared based
upon the best information currently available to BOG. In the event, however,
that the Xxxxxxx Prospect Area is reconfigured under the terms of that certain
Geophysical Exploration Agreement, SW Danbury Project, dated as of July 1, 1996,
such that BOG and Aspect are collectively entitled to less than a 40% working
interest in the Initial Well to be drilled in the Xxxxxxx Prospect Area, Aspect
shall have the right to remove the Xxxxxxx Prospect Area from the operation of
this Agreement; failure to affirmatively so elect removal within 10 days after
the date the prospect designation becomes effective shall be deemed an election
to maintain the Xxxxxxx Prospect Area under this Agreement. If Aspect elects to
remove the Xxxxxxx Prospect Area from operation of this Agreement, (a) Aspect
shall reassign to BOG all of its right, title and interest in the Xxxxxxx
Prospect Area that was acquired by Aspect pursuant hereto, together with its
right to review and use any G & G Data related thereto, and (b) BOG shall
immediately refund to Aspect the sum of $132,490 (being the portion of the
consideration allocable to the Xxxxxxx Prospect Area and its allocable G & G
Data), and thereafter the Xxxxxxx Prospect Area shall no longer be included in
the AMI Lands or otherwise subject to this Agreement.
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Section 3.2 Seismic Licenses.Notwithstanding any provision hereof to the
contrary, neither this Agreement in general nor the defined term "G & G Data" in
particular is intended to or shall be construed to cover any seismic or related
data that is covered by a license or similar agreement in favor of BOG, it being
recognized that interpretations of such data created by or on behalf of BOG are
not covered by any such license or similar agreement and thus are covered hereby
and expressly included in the defined term "G & G Data".
Section 3.3 G & G Data. With respect to any G & G Data covered hereby, the
following provisions shall apply:
(a) During the term of this Agreement, Aspect shall have the right to
review and use the G & G Data for its own purposes in evaluating the Prospect
Areas; legal ownership of such G & G Data, however, shall remain solely vested
in BOG.
(b) Aspect shall keep and maintain the G & G Data strictly confidential and
shall not disclose any G & G Data to any third party, except (i) employees,
officers or directors of any such Party or employees, officers, directors or
consultants of any lender or other supplier of material debt or similar
proceeds, (ii) any third parties (including without limitation any governmental
authority) to whom such G & G Data must be disclosed pursuant to applicable
laws, rules, orders and/or regulations, (iii) third parties engaged in bona
fide, good faith negotiations with any such Party to (A) acquire or be acquired
by such Party(by merger, consolidation or stock acquisition), (B) acquire all or
substantially all of the assets of such Party, including all of its interests in
the AMI Lands, (C) participate with such Party in the exploration and/or
development of the AMI Lands, (D) acquire all or a part of such Party's
interests under this Agreement and in the AMI Lands, (E) consult with such Party
in order to aid in analyzing or interpreting the G & G Data or in preparing
reserve estimates, (F) invest in such Party by acquiring a material part of such
Party's stock (or by having a material part of such third party's stock acquired
by such Party) or by advancing material loan funds or some other form of debt
proceeds, and/or (G) farm-out or otherwise transfer to such Party all or a
portion of the third party's interest in the AMI Lands; provided that, prior to
any such disclosure, the disclosee must execute a Confidentiality Agreement
wherein it expressly recognizes and agrees to be bound by the confidentiality
provisions hereof.
(c) Aspect hereby releases BOG from any liability or obligations arising in
relation to the G & G Data (or the processing or interpretation thereof),
WHETHER OR NOT ANY SUCH LIABILITY OR OBLIGATIONS AROSE OR ARISE OUT OF OR
OTHERWISE IN RELATION TO BOG'S SOLE OR CONCURRENT NEGLIGENCE OR STRICT
LIABILITY.
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(d) THE PARTIES UNDERSTAND THAT NONE OF BOG AND ITS OFFICERS, EMPLOYEES,
AGENTS, CONSULTANTS AND SHAREHOLDERS (hereinafter collectively referred to as
the "BOG GROUP") MAKE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND AS TO THE G
& G DATA, INCLUDING WITHOUT LIMITATION, ITS FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY OR ACCURACY, AND THE BOG GROUP HEREBY DISCLAIMS ANY AND ALL SUCH
REPRESENTATIONS OR WARRANTIES, AND ANY USE OF THE G & G DATA BY THE PARTIES OR
THEIR SUCCESSORS OR ASSIGNS, OR ANY ACTION TAKEN BY THE PARTIES OR THEIR
SUCCESSORS OR ASSIGNS SHALL BE BASED SOLELY ON THEIR OWN JUDGMENT, AND NO MEMBER
OF THE BOG GROUP SHALL BE LIABLE OR RESPONSIBLE TO THE OTHER PARTIES OR THEIR
SUCCESSORS OR ASSIGNS FOR ANY LOSS, COST, DAMAGES, OR EXPENSE WHATSOEVER,
INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCURRED OR SUSTAINED AS A RESULT
OF THE USE OF OR RELIANCE UPON THE G & G DATA, REGARDLESS OF WHETHER OR NOT SUCH
LOSS, COST, DAMAGE OR EXPENSE IS FOUND TO RESULT IN WHOLE OR IN PART FROM THE
SOLE OR CONCURRENT NEGLIGENCE OR OTHER FAULT OF ANY MEMBER OF THE BOG GROUP.
Each Party hereto waives all of the provisions of any applicable Deceptive Trade
Practices or Consumer Protection Act ("DTPA"), other than Section 17.555 of the
Texas DTPA, and expressly agrees and acknowledges that it (i) has assets of
twenty-five million dollars or more, and (ii) has knowledge and experience in
financial and business matters that enable it to evaluate the merits and risks
of the transaction and operations contemplated by this Agreement, (iii) has been
represented by counsel of its choosing, and (iv) is not in a significantly
disparate bargaining position relative to each other Party to this Agreement,
but has agreed to this provision in negotiations involving real choice on the
part of each Party.
ARTICLE IV
Participation in Xxxxx
Section 4.1. Limitation on Well Proposals. BOG and Aspect hereby agree
that, until December 31, 1999, and notwithstanding any provision of any JOA to
the contrary, Aspect shall not be authorized to propose the drilling of any
Initial Well or Subsequent Well, except for the Initial Well to be drilled on
the Prospect Area described in Part One of Exhibit A hereto (the "Xxxxxxx
Prospect").
Section 4.2 Elections.
(i) Initial Xxxxx. In the event that a Party elects not to participate in
the drilling of the Initial Well proposed and then actually drilled within any
particular Prospect Area, anything to the contrary contained herein or in the
applicable JOA to the contrary, such Party (A) must permanently relinquish and
assign (without reimbursement for costs) all of its right, title, interest and
properties (whether legal or equitable, vested or contingent and whether
real/immovable, personal/movable or mixed), other than the G & G Data in the
case of BOG, in the applicable Prospect Area to the Parties participating in the
drilling of such well (in the ratio that each participating Party's leasehold
working interest in the acreage included within the Prospect Area for such well
bears to the total of the leasehold working interests of all of the Parties
hereto participating in the operation), (B) shall no longer (as of the date it
elects not to participate in the drilling of the well) be deemed a party to the
applicable JOA, and (C) shall not own or acquire, whether directly or
indirectly, itself or through any Affiliate, representative, agent or broker,
any Lease, Option, Farm-In or other interest in oil, gas and/or other minerals
within such Prospect Area for a period of three (3) years from the date of this
Agreement.
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(ii) Subsequent Xxxxx. In the event a Party that elected to participate in
the Initial Well drilled within any particular Prospect Area, thereafter elects
not to participate in any Subsequent Well proposed and then drilled within such
Prospect Area, anything to the contrary contained herein or in the applicable
JOA to the contrary, such Party (A) must permanently relinquish and assign
(without reimbursement for costs) all of its right, title, and interest and
properties (whether legal or equitable, vested or contingent and whether
real/immovable, personal/movable or mixed) in the wellbore of the Subsequent
Well and a sufficient interest in the Leases, Options and Farm-Ins allocable to
such Subsequent Well to afford the relinquishing party its full allowable share
of production from the Subsequent Well (the "Subsequent Well Interests"), to the
Parties participating in the drilling of such Subsequent Well (in the ratio that
each participating Party's leasehold working interest in the acreage included
within the Prospect Area for such well bears to the total of the leasehold
working interests of all of the Parties hereto participating in the operation),
(B) shall no longer (as of the date it elects not to participate in the drilling
of the Subsequent Well) be deemed a party to the applicable JOA insofar as it
pertains to the Subsequent Well Interests, and (C) shall not own or acquire,
whether directly or indirectly, itself or through any Affiliate, representative,
agent or broker, any Lease, Option, Farm-In, Permit or other interest in oil,
gas and/or other minerals directly relating to the Subsequent Well Interests for
a period of three (3) years from the date of this Agreement.
(iii) Completion Elections. In the event that a Party has participated in
the drilling of the Initial Well in any particular Prospect Area, and then
elects not to participate in a completion operation proposed for such well, such
Party (A) must permanently relinquish (without reimbursement for costs) and
assign all of its right, title, interest and properties (whether legal or
equitable, vested or contingent and whether real/immovable, personal/movable or
mixed) in the completed formation, insofar as it can be produced out of the
wellbore of such well, (B) shall relinquish (as of the date it elects not to
participate in the completion operation) all of its rights and interests under
the JOA, insofar as it covers the relinquished completed formation, insofar as
such completed formation can be produced out of the wellbore of such well, and
(C) shall not, for a period of three (3) years from the date of this Agreement,
own or acquire, whether directly or indirectly, itself or through any Affiliate,
representative, agent or broker, any Lease, Option, Farm-In, or other interest
in oil, gas and/or other minerals located within the completed formation,
insofar as such completed formation can be produced out of the wellbore of such
well. In each of the foregoing cases, such relinquishment and assignment is to
be made to the Parties participating in such completion in the ratio that each
participating Party's leasehold working interest in the acreage included within
the Prospect for such well bears to the total of the leasehold working interests
of all of the Parties hereto participating in the operation. Where the
completion election relates to a Subsequent Well in such Drilling Unit, the
non-consent and other operative provisions of the applicable JOA shall govern
completion point elections. If a Party has elected to participate in the
drilling of a well and then elects not to participate in a proposed completion
operation within the well, but then subsequently participates in the completion
of another formation within the same well, such Party will be obligated to pay
for its proportionate share of the completion operation costs which were
previously incurred in completing the other formation in accordance with the
drilling footage ratio method set forth in XXXXX Bulletin No. 2 in paragraph
B.1(b) for intangible costs and in paragraphs B.1 and B.2 for tangible costs.
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(iv) Any well drilled to replace a well drilled within a Prospect Area
because of drilling or mechanical difficulties incurred in the drilling of such
well shall be deemed to be the same well for purposes of the relinquishment and
assignment provisions of this Section 4.2; provided, however, that only the
Parties that participated in the original drilling of the well shall have the
right to participate in the drilling of a replacement well for such well.
(iv) In the event of any required relinquishment and assignment of
interests as provided in this Section 4.2, the relinquishing Party shall
promptly execute all conveyance instruments necessary to effectuate such
relinquishment and assignment.
ARTICLE V.
Miscellaneous
Section 5.1. Assignments. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and assigns;
provided, however, that the conveyance, assignment or other instrument of
transfer vesting such transferee with all or part of such rights, interests and
unaccrued obligations must expressly provide that the assignment, conveyance or
other instrument of transfer is made subject to the terms and conditions
contained in this Agreement and in the absence of such language any such
attempted transfer shall be void and of no legal force and effect. In addition,
in any such assignment, conveyance or other instrument of transfer, the
transferee shall expressly agree to assume and be responsible for any
liabilities, damages, obligations, covenants and agreements arising from and
after the date of such assignment, conveyance or other instrument of transfer,
in relation to or otherwise out of the properties, rights and interests that are
the subject of this Agreement and/or such assignment, conveyance or other
instrument of transfer, and the transferor shall remain responsible for any of
the foregoing arising prior to the date of such assignment, conveyance or other
instrument of transfer and in the absence of such language, any such attempted
transfer shall be void and of no force and effect. Any subsequent assignment,
conveyance or other instrument of transfer shall likewise contain express
language so allocating responsibility as between transferor and transferee, and
in the absence of such language any such attempted transfer shall be void and of
no force and effect.
Section 5.2. Termination. This Agreement shall terminate at the expiration
of the AMI Term except as to any Prospect Area covered or deemed covered at such
time by a JOA between the Parties, and as to each such Prospect Area the terms
hereof, other than those set out in Sections 2.1 through 2.4, shall remain in
force and effect for so long as the applicable JOA remains in force and effect.
Section 5.3. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing, and unless otherwise
specifically provided, shall be delivered personally, or by mail, telecopier or
delivery service, to the addresses set forth opposite the signatures of the
Parties below, and shall be considered delivered upon the date of receipt. Each
Party may specify its proper address or any other post office address within the
continental limits of the United States by giving notice to other Parties, in
the manner provided in this section, at least ten (10) days prior to the
effective date of such change of address.
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Section 5.4. Merger. This Agreement supersedes any and all prior and
existing agreements, whether oral or in writing, between the Parties hereto with
respect to the subject matter hereof and contains all of the covenants and
agreements between the Parties with respect to the subject matter hereof. Each
Party acknowledges that no Party to this Agreement or anyone on their behalf has
made any representations, inducements, promises or agreements, orally or
otherwise, relating to the subject matter of this Agreement that are not
embodied herein.
Section 5.5. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be binding upon the signing Party or Parties
thereto as fully as if all Parties had executed one instrument, and all of such
counterparts shall constitute one and the same instrument. If counterparts of
this Agreement are executed, the signatures of the Parties, as affixed hereto,
may be combined in and treated and given effect for all purposes as a single
instrument. However, anything to the contrary contained herein notwithstanding,
this Agreement shall not be binding upon any Party hereto unless and until all
of the Parties sign a counterpart thereof.
Section 5.6. CHOICE OF LAW/VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
This Agreement is executed by the Parties the dates set forth opposite
their respective signatures below but is effective for all purposes as on of the
date first set forth above.
Address: XXXXXXX OIL & GAS, L.P.
0000 Xxxxxx Xxxxx Xxxxxxx By: Xxxxxxx, Inc., its
Xxxxxxxx 0, Xxxxx 000 Managing General Partner
Xxxxxx, Xxxxx 00000
(000) 000-0000
Fax: (000) 000-0000 By: /s/ Xxxxx X. Xxxxx
--------------------
Name: Xxxxx X. Xxxxx
Dated: October 21, 1999 Title: Vice President
Address: ASPECT RESOURCES LLC
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
(000) 000-0000 By: /s/ Xxxx X. Xxxxxxxx
---------------------
Fax: (000) 000-0000 Name: Xxxx X. Xxxxxxxx
---------------------
Title: Vice President
Dated: October 18, 1999
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