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EXHIBIT 10.16
ADMINISTRATIVE SERVICES CONTRACT
This Administrative Services Contract (this "Contract") dated March 31,
1995, is made between XXXXXX OPERATING CO., a Texas corporation ("Xxxxxx"), and
TITAN RESOURCES, L.P., a Texas limited partnership (the "Company").
Recitals
Xxxxxx is the current operator under the following operating agreements:
a. Operating Agreement dated December 14, 1979, between
Florida Exploration Company as operator and X.X. Xxxxxxxxxxxx et al as
non-operators;
b. Operating Agreement dated July 12, 1982, between Florida
Exploration Company as operator and X.X. Xxxxxxxxxxxx et al as non-
operators;
c. Operating Agreement dated July 10, 1985, between Xxxxxx as
operator and Xxxxxx Oil Company, Inc. et al as non-operators; and
d. Operating Agreement dated March 23, 1993, between Xxxxxx
as operator and Xxxx X. Xxxxxxx et al as non-operators.
Said Operating Agreements, together with all amendments, supplements and
modifications thereof, are hereinafter individually called an "Operating
Agreement" and collectively called the "Operating Agreements."
Xxxxxx desires that the Company perform certain administrative,
engineering, geological, accounting and other office and technical services to
be performed by the operator under the Operating Agreements.
The Company is willing to perform such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and other mutual
covenants and obligations specific herein, the parties hereto agree as follows:
1. Terms Defined Above. As used herein, the terms "Company,"
"Operating Agreement" and "Xxxxxx" shall have the meanings indicated above.
2. Other Definitions. As used herein, the following terms shall
have the following meanings:
"Non-Operator" shall mean any party to an Operating Agreement
other than the Operator under such Operating Agreement.
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"Operator" shall mean the party designated as such under an
Operating Agreement or its duly elected successor.
"Overhead Provisions" shall mean the overhead provisions of
Section III of Exhibit "C" to an Operating Agreement.
3. Performance of Services. The Company shall perform all
administrative, engineering, geological, accounting and other office and
technical services (the "Services") to be performed by the Operator under the
Overhead Provisions of each Operating Agreement. The Company will provide all
office space, equipment, materials, supplies and labor necessary to perform the
Services.
4. Compensation. In consideration of the performance of the
Services, the Company shall receive the amount charged by the Operator to each
Non-Operator for the Services as provided in the Overhead Provisions of each
Operating Agreement. The Company shall invoice Xxxxxx for such amount 30 days
after the end of the month in which the Services are performed. Xxxxxx shall
pay each invoice within five business days of its receipt.
5. Term. The Company shall commence performance of the Services on
April 1, 1995 and continue performance of the Services under each Operating
Agreement until the earlier of (i) the first date on which Xxxxxx is no longer
the Operator or (ii) the date on which such Operating Agreement terminates in
accordance with its terms; provided, however, that this Contract may be
terminated by the Company as to any Operating Agreement effective as of the end
of any calendar month if the Company provides written notice to Xxxxxx of its
election to terminate this Contract as to such Operating Agreement not less
than 30 days before the date on which such termination is to be effective;
provided, further, that this Contract may be terminated by Xxxxxx as to any
Operating Agreement effective as of the end of any calendar month if Xxxxxx X.
Xxxxxx shall cease to be employed by the Company or shall be employed by the
Company in a lesser capacity or for less compensation than as of the date of
this Contract and Xxxxxx provides written notice to the Company of its election
to terminate this Contract as to such Operating Agreement not less than 30 days
before the date such termination is to be effective. Upon termination of this
contract as to any Operating Agreement, neither party will have any further
obligation under this Contract as to such Operating Agreement, except for (i)
the Company's obligation to invoice Xxxxxx for the Services performed under
such Operating Agreement before the effective date of such termination as
provided in Section 4 above, and (ii) Xxxxxx'x obligation to pay such invoice
as provided in Section 4 above.
6. No Amendment of Operating Agreements. Subject to the rights of
other parties to each Operating Agreement, Xxxxxx shall not amend, supplement
or modify any Operating Agreement to decrease the compensation to be received
by the Company hereunder or increase the scope of the Services to be performed
by the Company hereunder without the prior written consent of the Company.
7. Advance. From time to time upon request by Xxxxxx, the Company
may, in its sole discretion, advance to Xxxxxx an amount to enable Xxxxxx to
pay vendors (other than the Company) providing materials, supplies and services
with respect to a property subject to an Operating Agreement before Xxxxxx is
reimbursed for same by the Non-Operators to such
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Operating Agreement. As Xxxxxx is reimbursed by the Non-Operators, Xxxxxx
shall repay such advance to the Company.
8. Governing Law. THE VALIDITY AND INTERPRETATION OF THIS CONTRACT
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS APPLICABLE TO
CONTRACTS MADE AND TO BE FULLY PERFORMED THEREIN.
9. No Assignment. This Contract may not be assigned by any party
hereto without the express written consent of the other party hereto.
10. Notices. All communications under this Contract shall be in
writing and shall be delivered personally or sent by certified mail, return
receipt requested or by telecopy as follows:
If to Xxxxxx: Xxxxxx Operating Co.
000 Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
If to the Company: Titan Resources, L.P.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
Either party may change its address or telecopy number set forth above by
giving the other party notice of such change in accordance with the provisions
of this Section 10. A notice shall be deemed given, if by personal delivery,
on the date of such delivery to such address, if by certified mail, on the date
shown on the applicable return receipt, or if by telecopy, on the date of
receipt of the transmission of such notice at such telecopy number.
11. Nature of Relationship. The parties hereto intend that the
Company's relationship to Xxxxxx and the relationship of each employee or agent
of the Company to Xxxxxx shall be that of an independent contractor. Nothing
contained in this Contract shall constitute or be construed to be or create a
partnership or joint venture between the Company and Xxxxxx or their respective
successors or assigns. Neither the Company nor any partner, employee or agent
of the Company shall ever be considered to be an employee of Xxxxxx.
12. Captions. The section headings herein are for reference purposes
only and do not control or affect the meaning or interpretation of any term or
provision hereof.
13. Amendment. No alteration, amendment, change or addition hereto
shall be binding or effective unless the same is set forth in writing signed by
a duly authorized representative of each party.
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14. Partial Invalidity. If the final determination of a court of
competent jurisdiction declares, after the expiration of the time within which
judicial review (if permitted) of such determination may be perfected, that any
term or provision hereof is invalid or unenforceable, (i) the remaining terms
and provisions hereof shall be unimpaired and (ii) the invalid or unenforceable
term or provision shall be replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid
or unenforceable term or provision.
15. Entire Contract. THIS CONTRACT AND THE EXHIBITS HERETO EMBODY
THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE PARTIES AND SUPERSEDE ANY AND ALL
PRIOR AGREEMENTS, ARRANGEMENTS AND UNDERSTANDINGS RELATING TO MATTERS PROVIDED
FOR HEREIN.
16. Counterparts. This Contract may be executed in one or more
counterparts, each of which shall be an original, but all of which together
shall be considered one and the same agreement.
This Contract is executed as of the date first written above by a duly
authorized representative of each of Xxxxxx and the Company.
XXXXXX OPERATING CO.
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx,
President
TITAN RESOURCES, L.P.
By: Titan Resources I, Inc.,
General Partner
By:/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx,
President
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