A G R E E M E N T
THIS AGREEMENT, made and entered into as of the 3rd day of December,
1991, by and between COASTAL CARIBBEAN OILS & MINERALS, LTD., a Bermuda
corporation with its principal office at Hamilton, Bermuda (the "CCO") and
COASTAL PETROLEUM COMPANY, a Florida corporation with its principal office at
Tallahassee, Florida ("CPC")
WITNESSETH:
WHEREAS CCO has entered into an agreement (the "Purchase Agreement") of
even date herewith with Xxxx X. X'Xxxxxxxxxx, M.D., F.A.C.S. (the "Purchaser")
for the sale to Purchaser of shares of CPC presently owned by CCO; and
WHEREAS the Purchase Agreement provides for the exchange by Purchaser,
at his option, of some or all of the shares of CPC purchased by Purchaser
pursuant to the Purchase Agreement for a royalty as more fully set forth in the
Purchase Agreement; and
WHEREAS CCO desires to acquire from CPC a royalty suitable for transfer
to Purchaser pursuant to the Purchase Agreement in exchange for one-half of the
gross proceeds received from Purchaser pursuant to the Purchase Agreement or
such other consideration as the parties hereto may agree; and
WHEREAS CPC desires to grant such royalty to CCO in order to obtain the
funds necessary to pursue a suitable oil and gas exploration program and to fund
CPC's other business activities;
NOW, THEREFORE, in consideration of the covenants and premises set
forth herein the parties hereby agree as follows:
1. CPC shall upon demand and upon delivery of the amounts set forth in
Section 2 hereof deliver to CCO a fully executed royalty agreement substantially
in the form attached hereto as Exhibit A on each and every occasion that CCO
shall make such demand in connection with the sale by CCO of shares of CPC
common stock to Xx. Xxxx X. X'Xxxxxxxxxx pursuant to the Purchase Agreement.
Each royalty so delivered shall grant to CCO a royalty interest in the leases of
CPC no greater and no less than required to satisfy the obligations of CCO to
Purchaser in the event that he shall request the transfer to him of the royalty
in exchange for shares of the common stock of CPC.
2. CCO shall pay to CPC on each such occasion one-half of the gross
proceeds received from Purchaser pursuant to the Purchase Agreement, or such
other consideration as the parties hereto shall agree, in exchange for the
issuance to CCO of the royalty from CPC.
3. CCO may not grant, bargain, sell, convey, assign, or otherwise
transfer the royalty interest or any part thereof granted hereby to any person
without the prior written consent of CPC, except that CCO may grant, bargain,
sell, convey, assign or otherwise transfer said royalty interests to Purchaser
freely and without the consent of CPC provided that such transfers are in
accordance with the provisions of the Purchase Agreement.
4. Upon acquisition of any such royalty, CCO shall promptly file such
royalty on the appropriate land records of the State of Florida.
IN WITNESS WHEREOF, CCO and CPC have caused these presents to be duly
executed by their proper officers as of the day and year first written above.
COASTAL PETROLEUM COMPANY
By: /s/Xxxxxx X. X'Xxxxxxx
Xxxxxx X. X'Xxxxxxx
Its Vice President
ATTEST:
/s/ Xxxxx X. Xxxxxxxx
Its Secretary
COASTAL CARIBBEAN OILS
& MINERALS, LTD.
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Its Vice President
ATTEST:
/s/ Xxxxx X. Xxxxxxxx
Its Assistant Secretary
EXHIBIT A
INDENTURE
THIS INDENTURE made and entered into this the ___ day of _________,
199__, by and between COASTAL PETROLEUM COMPANY, a Florida corporation with its
principal office at Gainesville, Florida (the "Grantor") and COASTAL CARIBBEAN
OILS & MINERALS, LTD., a Bermuda corporation with its principal office at
Hamilton, Bermuda (the "Grantee").
W I T N E S S E T H:
For and in consideration of the sum of Ten Dollars ($10.00) and other
good and valuable consideration in hand paid by Grantee to Grantor, the receipt
whereof is hereby acknowledged, Grantor has and does hereby grant, bargain,
sell, convey, assign, transfer, set over and deliver unto Grantee in fee simple
forever a royalty (the "Royalty") as more fully set forth below. The Royalty
shall entitle grantee to receive _______ percent (____%) of the gross amounts
received by Grantor or its successors in interest from the sale of all oil, gas,
casinghead gas or other gaseous substances and sulphur, and each of them,
produced and saved from any and all of the so-called "working interest" areas of
Grantor's Drilling Leases 224-A, 224-B and 248 executed by and between Grantor
and the Trustees of the Internal Improvement Trust Fund of the State of Florida
(the "Trustees"), all as modified and amended to the date hereof (the "Leases"),
and _______ percent (____%) of all amounts received by Grantor or its successor
in interest as a royalty ("the "Trustees' Payments") pursuant to Section 4,
Paragraph 2 of that certain Memorandum of Settlement dated January 6, 1976 by
and between the Trustees and Grantor. Copies of the Leases and said Memorandum
of Settlement are hereto attached and by this reference made a part hereof as
fully and completely as if incorporated herein, it being the intention of
Grantor hereby to convey to Grantee an absolute interest in and to (i) all oil,
gas, casinghead gas or other gaseous substances and sulphur produced and saved
from said lands and premises of the Leases, and any and all extensions,
modifications or renewals of any or all of the Leases and (ii) the Trustees'
Payments. The Royalty, as it relates to such oil, gas, casinghead gas and other
gaseous substances and sulphur produced and saved from said premises shall be
made free of all burdens and costs, except the Grantee's proportionate part of
the severance or production taxes which may be assessed against said production,
and to be deposited to the credit of Grantee into the storage tanks or pipe
lines to which the xxxxx on said premises may be connected, said tanks and pipe
line to be provided by Grantor without cost to Grantee. At the option of
Grantor, the Royalty may be paid at current market prices therefor as an
overriding royalty over and above the rents and royalties to be paid the
Trustees. Said overriding royalty shall be accounted for, paid and delivered to
Grantee, together with that portion, if any, of the Royalty that is payable with
respect to the Trustees' Payments, on or before the 15th day of January, April,
July and October for the production during the calendar quarter ended on the
last day of the immediately preceding month, it being understood that said
overriding royalty of oil, gas, casinghead gas or other gaseous substances and
sulphur, and each of them, shall be computed as to the net quantity thereof
produced and saved after deducting any that may be used as fuel for Grantor's
operations on said premises.
TO HAVE AND TO HOLD the Royalty forever, or so long as the Leases or
any extensions, modifications or renewals thereof, or any future leases covering
said lands between the Trustees and Grantor, its successors, assigns, successive
assigns, or distributees are in effect and owned by Grantor, its successors,
assigns, successive assigns or distributees, and until all products, materials,
equipment, supplies and properties shall have been salvaged and disposed of.
In the event the Leases or any of them are modified to provide a
unitizing clause, then any portion of the lands covered by Leases may be pooled
or combined with a lease or portion thereof covering other lands in the same
general area and state of development, such other lands having an area not
greater than the total area of lands covered by the Leases which are included in
the unit included within a pooling agreement or agreements which may be entered
into by Coastal Petroleum Company, its successors or assigns with other persons,
firms or corporations. Grantee shall then receive on production of oil, gas,
casinghead gas, and other gaseous substances and sulphur only such portion of
the overriding royalty stipulated herein as the acreage in which Grantee has an
overriding royalty interest and which is included in such unit bears to the
total acreage so pooled in the particular unit or units so pooled. When a
pooling agreement is entered into, then within thirty days from the execution
thereof, Grantor shall provide to Grantee herein or to the representative
designated to receive quarterly statements, a copy of such pooling agreement and
within a reasonable time shall cause the same to be recorded in the County
wherein the land is situated.
Grantor is wholly responsible for the payment of all rentals to the
Trustees to be paid under the terms and provisions of the Leases or any
extensions, modifications or renewals thereof, and Grantor agrees to pay said
rentals so as not to permit any default or any forfeiture to occur as to any
drilling blocks in the Leases described on account of non-payment of rentals.
Grantee shall not be responsible for the payment of any rentals or
other performances under the Leases or any extensions, modifications or renewals
thereof.
Said overriding royalty shall be payable to Grantee on the dates
aforesaid free and clear of all cost of drilling, development, operations, taxes
or otherwise, except that Grantee shall pay its proportionate part of the
severance or production taxes which may be assessed against said production.
Grantor, its successors and assigns retain the right to use the oil and
gas produced from said premises as fuel for operating the premises and for
treating and handling production therefrom, and such quantities so used shall be
deducted before said overriding royalty is computed.
Grantor agrees to provide on the 15th day of January, April, July and
October for the calendar quarter ended the last day of the immediately preceding
month to Grantee, or to its representative designated in writing, an itemized
statement or statements showing (i) the total amount of production of oil, gas,
casinghead gas or other gaseous substances and sulphur produced and saved during
the preceding calendar quarter, (ii) the gross sales price of all such oil, gas,
casinghead gas and other gaseous substances and sulphur for said calendar
quarter and the moneys due to Grantee under the terms of this instrument
computed on the basis of said quarterly statements, and (iii) amounts received
pursuant to the Trustees' Royalty during said calendar quarter.
Grantee hereunder shall have the right, but shall not be obligated to
pay any liens acquired against the interest of the Grantor, its successors and
assigns covered by the Leases and to be subrogated to the rights of the holders
of such liens.
Grantor for itself, its successors, assigns and distributees, hereby
agrees to execute and deliver to Grantee at any time hereafter and from time to
time when requested by Grantee such instrument or instruments as may be
desirable in order to effectively convey and assure unto the Grantee the
absolute and full overriding royalty hereby to it conveyed and assured.
Grantee may not grant, bargain, sell, convey, assign, transfer, set
over and deliver its interest herein or any part thereof to any party prior to
December 31, 1995, except that Grantee may grant, bargain, sell, convey, assign,
transfer, set over and deliver its interest herein or any part thereof to one
Xxxx X. X'Xxxxxxxxxx, his heirs and assigns without the consent of the Grantor
at any time prior to December 31, 1995.
In the event title to part of the lands covered by the Leases shall, by
judicial, legislative process, or otherwise, be vested in the United States of
America, and the rights of the lessee under the Leases, or any of them, are
recognized by the United States of America through the granting of a new lease
or otherwise covering said lands, then the overriding royalty herein conveyed
and granted shall continue to apply to such lands.
This indenture extends to and is binding upon the Grantor and Grantee,
their successors, assigns, personal representatives, and heirs, respectively.
IN WITNESS WHEREOF, Coastal Petroleum Company has caused these presents
to be duly executed by its proper officers and its corporate seal to be hereunto
affixed the day and year first above written.
WITNESSES: COASTAL PETROLEUM COMPANY
______________________________ By ______________________________
Its President
______________________________
ATTEST: ______________________________
Its Secretary
STATE OF FLORIDA :
:
COUNTY OF ________________ :
I HEREBY CERTIFY that on this ____ day of __________ 199__, before me,
the undersigned authority, personally appeared ________________, President of
Coastal Petroleum Company, a corporation, to me well known and known to me to be
such officer of said corporation and the individual who executed the foregoing
instrument as such officer for and on behalf of said corporation, who
acknowledged that he executed the same freely and voluntarily in his official
capacity as such officer for and on behalf of said corporation pursuant to
authority in him vested by the Board of Directors of said corporation for the
uses and purposes therein mentioned.
WITNESS my hand and official seal the date aforesaid.
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Notary Public
My Commission Expires:
STATE OF CONNECTICUT :
:
COUNTY OF NEW HAVEN :
I HEREBY CERTIFY that on this ____ day of __________ 199__, before me,
the undersigned authority, personally appeared ________________, Secretary of
Coastal Petroleum Company, a corporation, to me well known and known to me to be
such officer of said corporation and the individual who executed the foregoing
instrument as such officer for and on behalf of said corporation, who
acknowledged that he executed the same freely and voluntarily in his official
capacity as such officer for and on behalf of said corporation pursuant to
authority in him vested by the Board of Directors of said corporation for the
uses and purposes therein mentioned.
And the said _________________, Secretary, further acknowledged that
the seal affixed to said instrument purporting to be the corporate seal of said
corporation is in truth and in fact the common corporate seal thereof and was
affixed to said instrument by him pursuant to authority in him vested by the
Board of Directors of said corporation.
WITNESS my hand and official seal the date aforesaid.
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Notary Public
My Commission Expires:
