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EXHIBIT 6.17
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is effective as of
May 1, 1999 between XxXxxxx Resources Company, Inc., a Utah corporation,
("GRANTOR") and Conoco Inc., a Delaware corporation, ("GRANTEE").
RECITALS
GRANTOR has purchased interests in certain oil and gas leases located
in the Abbeville Field, Vermilion Parish, Louisiana, including the ownership of
.95136884 working interest and .72640065 net revenue interest from the Xxxxxxx
Well located on such leases.
GRANTOR desires to sell and assign to GRANTEE, upon the terms and
conditions herein set forth, a Production Payment under a Production Payment
Assignment to be made by GRANTOR to GRANTEE in the form attached hereto as
Exhibit A (the "Assignment").
GRANTEE desires to purchase the Production Payment upon the terms and
conditions set forth in this Agreement.
Accordingly, in consideration of the mutual promises contained herein,
GRANTOR and GRANTEE agree as follows:
ARTICLE 1. PURCHASE AND SALE
1.1 Agreement of Purchase and Sale. Upon the terms and conditions of
this Agreement, GRANTOR agrees to sell the Production Payment to GRANTEE, and
GRANTEE agrees to purchase the Production Payment from GRANTOR.
1.2 The Purchase Price. In consideration of GRANTOR's sale of the
Production Payment to GRANTEE, GRANTEE shall pay GRANTOR $450,000 (the "Purchase
Price"). GRANTEE shall pay the Purchase Price by wire transfer of immediately
available funds to The Business Bank of Baton Rouge, Escrow Account No.
00000000, ABA No. 000000000 for the account of Xxxxxxx Xxxxxx (Tax I.D. No.
00-0000000) of the law firm of Xxxxxx, Xxxxxx, Xxxxxxx and Xxxxx, 000 Xx.
Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxx, 00000, as escrow agent:
ARTICLE 2. CLOSING DATE AND CLOSING
2.1 Time and Place of Closing. The closing of the sale and purchase of
the Production Payment (the "Closing") will take place at such place (or places)
and on such date as may be agreed to by GRANTOR and GRANTEE (the "Closing
Date").
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2.2 Conditions to Closing; Documents. The obligation of GRANTEE to pay
the Purchase Price is subject to GRANTEE's receipt of each of the following, in
form and substance satisfactory to GRANTEE.
2.2.1 A certificate of the Secretary or Assistant Secretary
of Grantor containing the names and signatures of the officers of
Grantor authorized to execute this Agreement and the Assignment and
authorizing the execution of these documents and the consummation of
the transactions contemplated therein.
2.2.2 Evidence that all Current Ad Valorem Taxes have been
paid.
2.2.3 A legal opinion of counsel to GRANTOR, dated the
Closing Date and in the form of Exhibit B hereto.
2.2.4 The Assignment.
2.3 General Conditions to Closing. In addition to the receipt of the
foregoing documents and instruments, the obligation of GRANTEE to pay the
Purchase Price is subject to the satisfaction (or waiver by GRANTEE) on the
Closing Date of the following conditions:
2.3.1 All representations and warranties made by GRANTOR in
any Production Payment Document are true and correct as of the Closing
Date.
2.3.2 GRANTOR has performed all agreements, covenants, and
conditions required by any Production Payment Document to be performed
on or prior to the Closing Date.
2.3.3 The Closing is not prohibited by any law or any
regulation or order of any court or governmental authority and will
not subject GRANTOR or GRANTEE to any penalty or other onerous
condition under or pursuant to any such law, regulation or order.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of GRANTOR. To induce GRANTEE to
enter into this Agreement and to pay the Purchase Price, GRANTOR represents and
warrants:
3.1.1 GRANTOR is a corporation duly formed and validly
existing and in good standing under the laws of the State of Utah and
has all requisite power and authority to own and operate oil and gas
producing assets in the state of Louisiana, to execute and deliver the
Production Payment Documents, and to perform all of its obligations
thereunder.
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3.1.2 The execution, delivery and performance by GRANTOR of
the Production Payment Documents and the transactions contemplated
herein have been duly authorized by all necessary actions by GRANTOR
and do not (i) violate any material provision of any law, rule,
regulation, order, writ, judgment, decree, determination or award
presently in effect having applicability to GRANTOR or (ii) result in
a breach of, or constitute a default under, any contract, indenture,
instrument, or agreement to which GRANTOR is a party or by which it or
its property may be presently bound or affected (including the oil and
gas leases under which GRANTOR holds the Subject Interests), or result
in or require the creation or imposition of any lien or encumbrance
under any such contract, indenture, instrument, or agreement. GRANTOR
has obtained, all consents, authorizations and waivers necessary under
any such contract, indenture, instrument or agreement or under any
such material provision of law, rule, regulation, order, writ,
judgment, decree, determination or award in order to permit the valid
execution, delivery and performance by GRANTOR of the Production
Payment Documents.
3.1.3 The Production Payment Documents to which GRANTOR is a
party have been duly executed and delivered by GRANTOR and constitute
the legal, valid and binding acts and obligations of GRANTOR,
enforceable against GRANTOR in accordance with their respective terms
except as such enforcement may be limited by bankruptcy, insolvency,
moratorium and other similar laws applicable to creditors' rights
generally or by general principles of equity. The grant of the
Production Payment under the Assignment is a presently vested grant of
a real property interest that is neither void nor voidable.
3.1.4 The information furnished by or on behalf of GRANTOR
to GRANTEE in connection with the negotiation of the Production
Payment Documents (taken as a whole, and taking into account all
corrections and supplements to such information heretofore delivered)
do not contain any material misstatement of fact or omit to state a
material fact necessary to make the statements contained therein not
misleading. There is no fact known to GRANTOR that has not been
disclosed to GRANTEE that could materially and adversely affect the
value of the Production Payment. The information referred to in this
Section 3.1.4 includes any factual information furnished by GRANTOR
for incorporation or use in any reserve or production reports or
estimates furnished by GRANTOR or its
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independent engineers to GRANTEE, but GRANTOR is not representing and
warranting that any reserve or production estimates made by GRANTOR or
such engineers will ultimately prove to have been accurate.
3.1.5 There is no litigation or administrative proceeding
pending against GRANTOR or GRANTOR's predecessors in interest
involving (i) a dispute or claim concerning title to any of the
Subject Interests, (ii) any actual or purported lien, security
interest, charge or burden upon any of the Subject Interests or any
lease making up any part of the Subject Interests, or (iii) any other
claim that would affect a transferee of the Subject Interests. There
is no other litigation or proceeding pending or, to the best knowledge
of GRANTOR, threatened against GRANTOR or GRANTOR's predecessors in
interest that would, if determined adversely to GRANTOR, have a
material adverse effect on the financial condition of GRANTOR, the
value of the Production Payment, the ability of GRANTOR to convey the
Production Payment pursuant to the Production Payment Documents, or
the ability of GRANTOR to perform its obligations under the Production
Payment Documents.
3.1.6 GRANTOR has good and defensible title to the Subject
Interests, in each case free and clear of all liens, security
interests, and encumbrances.
3.1.7 The oil, gas or mineral leases, contracts, servitudes
and other agreements forming a part of the Subject Interests, to the
extent the same cover or otherwise relate to the Subject Interests,
are in full force and effect.
3.1.8 The Subject Interests are not dedicated or otherwise
subject to any contractual or other arrangement (other than the Gas
Purchase Contract) for the sale, processing or transportation of Gas
produced therefrom (or otherwise related to the marketing of such Gas)
that would bind GRANTEE as owner of the Production Payment Gas, or
would otherwise restrict the rights of GRANTEE under the Assignment to
take possession of Production Payment Gas. Neither GRANTOR, nor any
of its predecessors in title, has received prepayments (including
payments for gas not taken pursuant to "take or pay" or other similar
arrangements) for any Gas produced or to be produced from the Subject
Interests after the Effective Date. Neither GRANTOR, nor its
predecessors in title, has, prior to the date hereof, taken more
("overproduction"), or less ("underproduction"), Gas from the Subject
Interests than its (or its predecessors in title's)
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ownership interest in such Subject Interest would entitle it to take,
which overproduction or underproduction has not been recouped as of
the date hereof. The Subject Interests are not subject to any
production balancing arrangement under which a third person may take a
portion of the production attributable to such Subject Interest
without payment (or without full payment) therefor.
3.1.9 The Subject Interests are not subject to any tax or
common law partnership or to any joint venture, except that certain
Joint Operating Agreement dated April 16, 1968, among The Xxxxxxx &
Xxxxxxx Corporation, Xxxxxxx Oil Company, Continental Oil Company,
Gulf Oil Corporation, Union Texas Petroleum, Xxxxxxx X. Xxxxxx and
Xxxxxxx X. Xxxxxx.
3.1.10 The Subject Interests are not subject to a
preferential right to purchase (a "Preferential Right") or a
requirement that a consent to assignment be obtained from a third
party.
3.1.11 The Xxxxxxx Well is equipped for production and
connected to GRANTEE's gathering system, in keeping with GRANTOR's
standard operating practices, to permit the continuing delivery of
Production Payment Gas.
3.1.12 No bankruptcy or insolvency proceeding is presently
pending or contemplated (or, to GRANTOR's best knowledge, threatened)
by or against GRANTOR under any applicable bankruptcy, insolvency or
other similar law of any jurisdiction, and GRANTOR has not made a
general assignment for the benefit of creditors.
3.2. Representations and Warranties of GRANTEE. To induce GRANTOR to
enter into this Agreement and to grant the Production Payment, GRANTEE
represents and warrants:
3.2.1 GRANTEE is a corporation duly formed, validly existing
and in good standing under the laws of the State of Delaware. GRANTEE
has all requisite power and authority, corporate or otherwise, to own
and operate assets in Louisiana, to execute and deliver this
Agreement, and perform all of its obligations hereunder.
3.2.2 This Agreement constitutes the legal, valid and
binding act and obligation of GRANTEE, enforceable against GRANTEE in
accordance with its terms, except as such enforcement may be limited
by bankruptcy, insolvency, moratorium and other similar laws
applicable to creditors' rights generally or by general principles of
equity.
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3.2.3 No bankruptcy or insolvency proceeding is presently
pending or contemplated (or, to GRANTEE's best knowledge, threatened)
by or against GRANTEE under any applicable bankruptcy, insolvency or
other similar law of any jurisdiction, and GRANTEE has not made a
general assignment for the benefit of creditors.
ARTICLE 4. COVENANTS
4.1. Title Covenants of GRANTOR. To induce GRANTEE to enter into this
Agreement and to pay the Purchase Price, GRANTOR warrants, covenants and agrees
with GRANTEE that until the Termination Time, unless GRANTEE has previously
agreed otherwise:
4.1.1 GRANTOR shall perform all of its covenants and duties
under the Production Payment Documents.
4.1.2 If any person ever challenges or attacks (i) the
validity or priority of any Production Payment Document or of any
rights, titles, or interests created or evidenced thereby or (ii) the
title of GRANTOR to any Subject Interest or of GRANTEE to any part of
the Production Payment, then GRANTOR will give prompt written notice
thereof to GRANTEE and at GRANTOR's cost and expense will diligently
endeavor to defeat such challenge or attack and to cure any defect
that may be developed or claimed, and GRANTOR will take all necessary
and proper steps for the defense of any legal proceedings with respect
thereto.
4.1.3 Without limitation of GRANTEE's remedies for breach of
the representations or warranties contained in Section 3.1.10, if a
third party properly exercises a Preferential Right after the Closing,
GRANTEE will either (i) join in any required conveyance of the
affected Subject Interest to such third party, or (ii) make a
conveyance of the affected Subject Interest to GRANTOR in order that
GRANTOR may make the necessary conveyance to such third party. Upon
making a conveyance in accordance with (i) or (ii), above, GRANTEE
shall be entitled to receive -- either from the exercising third
party, assuming that GRANTEE exercised option (i), or from GRANTOR,
assuming that GRANTEE exercised option (ii) -- the entire amount of
consideration attributable to GRANTEE's interest in the particular
Subject Interest covered by such Preferential Right. GRANTEE shall
not incur any liabilities with respect to any such reconveyance that
may be required in accordance with this subsection or otherwise with
respect to any exercise of a Preferential Right, and GRANTOR shall
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indemnify and hold harmless GRANTEE from any liabilities (including
reasonable attorneys' fees) with respect thereto.
4.2 Reporting Covenants of GRANTOR. To induce GRANTEE to enter into
this Agreement and to pay the Purchase Price, GRANTOR warrants, covenants and
agrees with GRANTEE that until the Termination Time GRANTOR will furnish the
following statements and reports to GRANTEE at GRANTOR's expense:
4.2.1 Upon request of GRANTEE, but not more often than
annually, GRANTOR shall furnish reports, in detail reasonably
acceptable to GRANTEE, concerning any change in methods of operation
of the Xxxxxxx Well, any new recompletion or rework, any method of
secondary recovery by repressuring or otherwise, or any other action
with respect to the Subject Interests, which may increase or reduce
the quantity of Gas ultimately recoverable from the Subject Interests,
or the rate of production therefrom.
4.2.2 In addition to any reports and information
specifically required by the terms of this Agreement or the
Assignment, GRANTOR agrees to furnish to GRANTEE full information, at
all reasonable times, that GRANTEE may reasonably request concerning
any covenant, provision or condition of the Production Payment
Documents or any matter or records in connection with such documents
or with the operation of, reserve engineering for, production from, or
accounting for the Subject Interests.
4.3. Operating Covenants of GRANTOR. To induce GRANTEE to
enter into this Agreement and to pay the Purchase Price, GRANTOR
warrants, covenants and agrees with GRANTEE that until the Termination
Time GRANTOR will prudently operate the Xxxxxxx Well and will act in
good faith to produce all the reserves available from the Xxxxxxx
Well, including recompleting all potential producing zones. If at
any time prior to the Termination Time GRANTEE, in its good faith
judgment, believes that GRANTOR has failed to recomplete or rework a
potentially economic producing zone in the Xxxxxxx Well, GRANTEE will
have the right to propose a workover or recompletion project
("Project"), including a reasonably detailed description of the work
to be performed. Within 30 days after receipt of GRANTEE's proposal,
GRANTOR must advise GRANTEE whether GRANTOR will perform the Project
at GRANTOR's expense. If GRANTOR declines to perform the Project at
its own expense, GRANTEE may elect to cause GRANTOR to perform the
Project at GRANTEE's expense. If
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GRANTEE elects to provide funding for the Project, GRANTOR and GRANTEE
will mutually agree on the drilling and other contractors to perform
the Project, GRANTOR will contract with the selected contractor(s) for
the Project, and GRANTEE will reimburse GRANTOR for the service
charges paid to the contractor(s) for performance of the Project;
provided that GRANTEE will not be liable for any losses of the well or
any contractor's equipment. If GRANTEE provides funding for the
Project, the Termination Time will be extended as required to permit
GRANTEE to recover payout of the Project in addition to the total
cumulative volume of 400,000 MCF described in Sections 1.1 and 1.4 of
the Assignment. Production Payment Gas attributable to payout of the
Project will be delivered after delivery of the cumulative volume of
400,000 MCF and will be valued each month at the price paid by GRANTEE
for Gas delivered under the Gas Purchase Contract.
ARTICLE 5. MISCELLANEOUS
5.1 Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by GRANTEE in exercising any right, power or remedy that
GRANTEE may have under any of the Production Payment Documents operates as a
waiver thereof or of any other right, power or remedy. No single or partial
exercise by GRANTEE of any such right, power or remedy precludes any other or
further exercise thereof or of any other right, power or remedy. No waiver of
any provision of any Production Payment Document and no consent to any departure
therefrom will be effective unless it is in writing and signed by GRANTEE, and
then such waiver or consent will be effective only in the specific instances and
for the purposes for which given and to the extent specified in such writing. No
notice or demand to GRANTOR will entitle GRANTOR to receive any similar notice
or demand thereafter. This Agreement and the other Production Payment Documents
set forth the entire understanding and agreement of the parties hereto and
thereto with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the subject
matter hereof and thereof, and no modification or amendment of or supplement to
this Agreement or the other Production Payment Documents is valid or effective
unless made in writing and signed by the party against whom it is sought to be
enforced.
THIS AGREEMENT AND THE OTHER PRODUCTION PAYMENT DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES
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AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
5.2 Survival of Agreements: Cumulative Nature. All of the various
representations, warranties, indemnities, covenants and agreements in the
Production Payment Documents survive the execution and delivery of this
Agreement and the other Production Payment Documents and the performance
thereof. The representations, warranties, indemnities, and covenants made by the
parties in the Production Payment Documents, and the rights, powers, and
privileges granted to the parties in the Production Payment Documents, are
cumulative.
5.3 Notices. All communications (in this section, collectively called
"notices") required or permitted under any Production Payment Document must be
in writing, unless otherwise specifically provided in such Production Payment
Document, and sufficiently given or furnished by personal delivery, by telecopy,
by delivery service with proof of delivery, or by first class United States
mail, postage prepaid, to GRANTOR and GRANTEE at the following addresses:
GRANTOR: Xx. Xxxxx X. XxXxxxx
XxXxxxx Resources Company, Inc.
000 Xxxxxxx Xxxxx Xxxxxxxx Xxxxxx, Xxx. 000
Xxxxxx, XX 00000
Tele: (000) 000-0000
Fax: (000)000-0000
GRANTEE: Conoco Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, Xx. 00000
Tele: (000) 000-0000
Fax: (000) 000-0000
Any such notice will be deemed to have been given (a) in the case of personal
delivery or delivery service, as of the date of first attempted delivery at the
address and in the manner provided herein, (b) in the case of telecopy, upon
receipt, or (c) in the case of United States mail, three days after deposit in
the mail. GRANTOR and GRANTEE may change their respective addresses from time to
time by sending a notice of the new address, in the manner provided for in this
section, to the other.
5.4 Parties in Interest. All grants, covenants and agreements
contained in the Production Payment Documents bind and inure to the benefit of
the parties thereto and their respective
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successors and assigns; provided that any assignment of any party's rights and
duties hereunder must be made in accordance with Article 4 of the Assignment.
5.5 Governing Law. The Production Payment Documents are contracts and
instruments made under the laws of the State of Louisiana and shall be construed
and enforced in accordance with and governed by the laws of the State of
Louisiana and the laws of the United States of America, without regard to
principles of conflicts of law.
5.6 Termination: Limited Survival. Exct as extended pursuant to
Section 4.3, the Production Payment will terminate upon the cumulative delivery
of 400,000 MCF of Gas to GRANTEE under the terms set out in the Assignment (the
"Termination Time"). Notwithstanding the foregoing or anything to the contrary
in any Production Payment Document, all obligations that any GRANTOR may have to
indemnify or compensate GRANTEE survive any termination of this Agreement or any
other Production Payment Document. At the request and expense of GRANTOR,
GRANTEE shall prepare, execute and deliver all necessary instruments (in proper
recordable form, if applicable) to reflect and effect such termination of the
Production Payment and limited survival of the Production Payment Documents.
5.7 Severability. If any term or provision of any Production Payment
Document is determined to be illegal or unenforceable, all other terms and
provisions of the Production Payment Documents nevertheless remain effective and
enforceable to the fullest extent permitted by applicable law.
5.8 Arbitration.
5.8.1 As used in this section:
(I) "AAA" means the American Arbitration
Association (or any successor thereto),
(ii) "Claims" means all claims by either party
hereto against the other with respect to the Production
Payment or any of the Production Payment Documents
(including among others any claims with respect to the
interpretation or validity of any Production Payment
Document, the existence or scope of any duties owed
thereunder, whether or not any such duties have been
performed or breached in any circumstances, or the extent or
enforcement of any property rights created thereunder or
subject thereto), and
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(iii) "Disputed Matters" means all Claims, all
defenses against any Claims, and all controversies relating
thereto.
5.8.2 If either GRANTOR or GRANTEE ever desires to assert a
Claim against the other, the party asserting such Claim will give
written notice thereof to the other party. During the 30 day period
following receipt of such notice by the other party, both parties will
discuss such Claim and the validity thereof. If the parties cannot
come to agreement about such Claim by the end of such 30 day period
(as such period may be extended by mutual agreement), then within 15
days after the end of such period either party may by written notice
to the other invoke the arbitration provisions of this Agreement. In
this event, GRANTEE and GRANTOR shall submit such Claim and all
Disputed Matters in any way related thereto to arbitration under the
procedures in the Section 5.8.3.
5.8.3 All Disputed Matters shall be resolved by arbitration
conducted by three arbitrators in accordance with this Section 5.8
and, to the extent not in conflict herewith, the Commercial
Arbitration Rules of the AAA then in effect. Each such arbitrator must
be independent and impartial with at least ten years experience in the
financing of oil and gas properties. Within ten days after the notice
invoking arbitration as provided in Section 5.8.2, each of GRANTOR and
GRANTEE shall specify (by notice to the other) the name and address of
an arbitrator appointed by it. At the end of such ten days, if one
party has appointed its arbitrator but has not received notice of a
similar specification by the other party, then the party having made a
specification shall give notice to the other party that it has not
received a specification from the other party. If the other party does
not act to specify its arbitrator within an additional seven days
after the giving of such notice, the party who has made its
specification may appoint the second arbitrator in place of the party
who has failed to do so. Within 15 days after the first two
arbitrators have been appointed, they shall select the third
arbitrator. If a third arbitrator has not been selected within such
period, either party hereto may petition the Administrative Judge
presiding over the Xxxxx Xxxxxxxx Xxxxxx xx Xxxxxx Xxxxxx, Xxxxx to
appoint such third arbitrator, whereupon such judge (or any person
designated by such judge to make such appointment) may make such
appointment unless the first two arbitrators have come to agreement on
the third arbitrator. Consistent with the expedited nature of
arbitration,
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each party will provide the other with copies of documents relevant to
the issues raised by the Disputed Matter. Other discovery may be
ordered by the arbitrators to the extent they deem relevant and
appropriate, and any dispute regarding discovery, including disputes
as to the need thereof or the relevance or scope thereof, shall be
determined by the arbitrators, whose determination shall be
conclusive. Unless GRANTEE and GRANTOR agree otherwise, all
arbitrations hereunder shall be held in Houston, Texas. GRANTEE and
GRANTOR shall proceed expeditiously with any such arbitration and
shall conclude all proceedings thereunder, including any hearing, in
order to allow a decision based on applicable law to be rendered
within 90 days after the appointment of the third arbitrator. The
decision of any two such arbitrators on the issues before them shall
be final, and any award or order so decided may be enforced in any
court having personal jurisdiction over the party against whom
enforcement is sought. Each party shall bear its own expenses,
including attorneys' fees and expenses of arbitration, in connection
with any such arbitration. Although the foregoing arbitrations shall
be conducted under the rules of the AAA, the AAA itself shall not
conduct such arbitrations, nor shall such arbitrations be considered
under the auspices of the AAA, nor shall any fee be due the AAA. The
arbitrators shall honor GRANTOR's and GRANTEE's election of the laws
of the State of Louisiana as set out in the various Production Payment
Documents, provided that each arbitration proceeding shall also be
subject to the United States Arbitration Act, 9 U.S.C., Chapter 1,
Sections 1 et seq, to the extent applicable. The arbitrators are not
empowered to award special, consequential, punitive or exemplary
damages on any Claim, and EACH OF GRANTOR AND GRANTEE HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO RECOVER SPECIAL,
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES ON ANY CLAIM. It is
expressly agreed that any compensation awarded to GRANTEE for
production not received in accordance with the terms of the
Production Payment Documents shall not be deemed to be special,
consequential, punitive or exemplary damages.
5.8.4 All applicable statutes of limitations and defenses
based on the passage of time shall be tolled during the period in
which arbitration has been invoked as set forth in this section (but
not during any period prior to such invocation of arbitration). Each
of
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GRANTOR and GRANTEE is required to continue to perform its obligations
under the Production Payment Documents pending final resolution of any
Disputed Matter.
5.9 Counterparts. This Agreement may be separately executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
Agreement.
5.10 Further Assurances. GRANTOR and GRANTEE, each upon request of the
other shall, (i) promptly correct any defect, error or omission which may be
discovered in the contents, execution or acknowledgment of any Production
Payment Document, (ii) execute, acknowledge, deliver and record or file such
further instruments and do such further acts as may be necessary, desirable or
proper to carry out more effectively the purposes of the Production Payment
Documents and to more fully identify and make subject to the Assignment the
property intended to be covered thereby, and (iii) execute, acknowledge,
deliver, and file or record any document or instrument reasonably requested by
the other to protect its rights, title and interests under the Production
Payment Documents against the rights or interests of third persons.
ARTICLE 6. DEFINITIONS AND REFERENCES
6.1 Defined Terms and References. For purposes of this Agreement, the
following terms have the following meanings:
"Agreement" is defined in the introductory paragraph.
"Assignment" is defined in the Recitals.
"Closing" and "Closing Date" are defined in Section 2.1.
"Xxxxxxx Well" means the X. Xxxxxxx No. 1 well, located in Section 65,
Township 12 South, Range 3 East, in the Abbeville Field, Vermilion Parish,
Louisiana.
"Current Ad Valorem Taxes" means all ad valorem taxes that have been
assessed against any of the Subject Interests for 1999 or any prior year by any
taxing authority.
"Direct Taxes" is defined in Section 7.1 of the Assignment
"Effective Date" means May 1, 1999.
"Gas is defined in Section 7.1 of the Assignment.
"Gas Purchase Contract" means that certain Gas Purchase Contract of
even date herewith, as from time to time supplemented or amended, between
GRANTEE., as buyer, and GRANTOR, as seller, providing for the purchase and sale
of Gas produced from the Subject Interests in excess of Production Payment Gas.
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"MCF" means 1000 Cubic Feet of Gas. A Cubic Foot of Gas is the volume
of Gas contained in one cubic foot of space at a standard pressure base of
15.025 pounds per square inch gauge and at a standard temperature base of 60
degrees Fahrenheit.
"Preferential Right" has the meaning given such term in Section
3.1.10.
"Production Payment" is defined in Section 7.1 of the Assignment.
"Production Payment Gas" is defined in Section 7.1 of the Assignment.
"Production Payment Documents" means this Agreement, the Assignment,
and each amendment, supplement, certificate, agreement, document, or instrument
now or hereafter created by the parties, or their respective successors and
assigns, in connection with the rights, titles and obligations created in the
Agreement or Assignment.
"Purchase Price" is defined in Section 1.2.
"Subject Interests" shall mean all of GRANTOR's right, title and
interest in the oil, gas and/or mineral lease(s) listed in Exhibit C hereto,
INSOFAR AS natural gas is produced from such leases through the wellbore of the
Xxxxxxx Well.
"Termination Time" is defined in the Section 1.4 of the Assignment.
6.2 Rules of Construction. All references in this Agreement to
articles, sections, subsections and other subdivisions refer to corresponding
articles, sections, subsections and other subdivisions of this Agreement unless
expressly provided otherwise. Section headings are for convenience only and do
not constitute part of Sections and must be disregarded in construing the
language contained in such subdivisions. References herein to any instrument or
agreement refer to the same as it may be from time to time amended or
supplemented; and references herein to any person include such person's
successors and assigns. All references in this Agreement to exhibits refer to
exhibits to this Agreement unless expressly provided otherwise, and all such
exhibits are hereby incorporated herein by reference and made a part hereof for
all purposes.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
GRANTOR: XXXXXXX RESOURCES COMPANY, INC.
By: /s/ XXXXX X. XxXXXXX
-------------------------------------
Name: Xxxxx X. XxXxxxx
Title: President
GRANTEE: CONOCO INC.
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By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
Title: Director Gas Supply
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