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EXHIBIT 2.6
ASSIGNMENT AND BILL OF SALE
In consideration of the sum of $10.00 and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, SAVOY
OIL & GAS, INC., a Delaware corporation, of 000 Xxx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx 00000, ("Assignor"), conveys, assigns and warrants to KCS MICHIGAN
RESOURCES, INC., a Delaware corporation, of 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx
Xxxxxx 00000 ("Assignee"), the interests in real and personal property
described below (collectively the "Subject Interests"):
Undivided interests equal to the Specified Percentage in effect from
time to time in and to each of the following types and categories of properties
and interests:
1. All of Assignor's rights, titles and interests in and to the
oil and gas leases (including overriding royalties and other
interests derived therefrom) described in Exhibit "A" attached
hereto (collectively, the "Leases"), to the extent the same
are included within the Drilling Unit(s) described therein
which are applicable to such Leases, subject to the depth and
other limitations, if any, set forth in such Exhibit "A"; and
2. All of Assignor's rights, titles and interests in and to the
xxxxx described in Exhibit "A" (collectively, the "Xxxxx"),
and all well equipment, production equipment, flowlines and
other personal property or fixtures associated with such Xxxxx
which are used or obtained in connection with the production,
treatment or delivery of oil or gas from such Xxxxx, including
equipment, if any, held in storage; and
3. All of Assignor's rights, titles and interest in and to all
permits, pooling declarations, operating agreements, gas
purchase contracts, right-of-way agreements and other
agreements and contracts to the extent that the same apply to
the Leases, Xxxxx and interests above assigned, including but
not limited to the Other Agreements described in Exhibit "A".
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For the purposes of this Assignment, the following terms shall have
the meaning set forth below:
"Current Interest" shall mean, with respect to each of the Xxxxx
identified in Exhibit "A" and the lands described in the Drilling Unit
attributable thereto, the applicable Working Interest and Net Revenue Interest
set forth in Exhibit "A".
"Final Interest" shall mean, with respect to each of the Xxxxx
identified in Exhibit "A" and the lands described in the Drilling Unit
attributable thereto, the applicable Working Interest and Net Revenue Interest
set forth in Exhibit "A".
"Increased Interest" shall mean, with respect to each of the Xxxxx
identified in Exhibit "A" and the lands described in the Drilling Unit
attributable thereto, the applicable Working Interest and Net Revenue Interest
set forth in Exhibit "A".
"Initial Interest" shall mean, with respect to each of the Xxxxx
identified in Exhibit "A" and the lands described in the Drilling Unit
attributable thereto, the applicable Working Interest and Net Revenue Interest
set forth in Exhibit "A".
"Net Revenue Interest" shall mean with respect to each Lease, Well and
Drilling Unit the ownership interest (expressed as a percentage) in and to all
oil, gas and other hydrocarbons produced from or allocated or attributable to
such Lease, Well or drilling Unit, as the case may be, and of the proceeds of
such production, after giving effect to and deducting all applicable production
burdens.
"Payout One" shall mean 7:00 a.m. on the day immediately following the
time when the difference between (a) the sum of proceeds of production on and
after October 1, 1995, attributable to the Net Revenue Interests in all of the
Subject Properties hereby assigned to Assignee, less Assignor's share of
production, severance and similar taxes attributable to the Subject Properties,
less (b) the sum of the costs attributable to the operation and development of
the Subject Interests (including, but not limited to, costs of drilling or
recompleting xxxxx located on lands covered by the Leases) on and after October
1, 1995, equals $75,000.
"Payout Two" shall mean 7:00 a.m. on the day immediately following the
time when the difference between (a) the sum of proceeds of production on and
after October 1, 1995, attributable to the Net Revenue Interests in all of the
Subject Properties hereby assigned to Assignee, less Assignor's share of
production, severance and similar taxes attributable to the Subject Properties,
less (b) the sum of the costs attributable to the operation and development of
the Subject Interests (including, but not limited to, costs of drilling or
recompleting xxxxx located on lands covered by the Leases) on and after October
1, 1995, equals $550,000.
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"Specified Percentage" shall mean:
a. During the period of time from the Effective Date until Payout
One, an undivided ten percent (10%);
b. During the period of time from Payout One until Payout Two, an
undivided fifteen percent (15%); and
c. For all periods of time on and after Payout Two, an undivided
thirty percent (30%).
"Working Interest" shall mean with respect to each Lease, Well and
Drilling Unit the ownership interest (expressed as a percentage) of each such
Lease, Well and Drilling Unit before giving effect to any applicable production
burdens and the percentage of all costs and expenses associated with the
exploration, drilling, development, operation, maintenance and abandonment of
such Lease, Well or Drilling Unit required to be borne by the holder of such
interest (prior to giving effect to rights of non-consent hereafter exercised
by others).
Assignor expressly represents and covenants to Assignee as follows:
1. That to the best of Assignor's knowledge, information and
belief, as of October 1, 1995 and as of the time of execution
of this Assignment, Assignor is the owner of the Current
Interests specified in Exhibit "A" for each of the properties
described therein, free and clear of all liens, charges and
encumbrances except the Permitted Encumbrances set forth in
Exhibit "A".
2. That to the best of Assignor's knowledge, information and
belief, (a) during the period of time from the Effective Date
until Payout One, this Assignment conveys to Assignee the
Initial Interests, (b) during the period of time from Payout
One until Payout Two, this Assignment conveys to Assignee the
Interim Interests and (c) for all periods of time on and after
Payout Two, this Assignment assigns to Assignee the Final
Interests.
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3. That there is neither pending, nor to the best of Assignor's
knowledge, threatened, any claim, proceeding, action or
litigation affecting the Subject Properties, including, but
not limited to, any condemnation or eminent domain proceeding,
or adverse claims as to leasehold title, royalty payment or
allocation, or environmental matters.
4. That Assignor is a corporation duly incorporated and in good
standing under the laws of the State of Delaware, and is
authorized to do business in the State of Michigan, and that
this Assignment has been duly authorized by all necessary
corporate action, has received all necessary approvals, has
been executed by a duly authorized officer of the Assignor,
and is a valid and binding obligation of Assignor, enforceable
in accordance with its terms.
5. That the Subject Interests are free and clear of all liens,
encumbrances, claims, judgments, former grants, charges,
estates, titles and interests of any persons claiming by,
through or under Assignor, but not otherwise, and further
expressly excepting and subject to the Permitted Encumbrances
set forth on Exhibit "A".
All taxes, including, but not limited to excise taxes, state severance
taxes, ad valorem taxes, and any other local, state, and/or federal taxes or
assessments attributable to the Subject Interests or any part thereof prior to
the Effective Date, shall remain Assignor's responsibility; and all deductions,
credits and refunds pertaining to the aforementioned taxes, attributable to the
Subject Interests or any part thereof prior to the Effective Time (no matter
when received), shall belong to Assignor. All such taxes attributable to the
Subject Interests or any part thereof at and after the Effective Date shall be
Assignee's responsibility, and Assignee shall reimburse Assignor for any such
taxes previously paid by Assignor; and all deductions, credits, and refunds
pertaining thereto at and after the Effective Date (no matter when received)
shall belong to Assignee.
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This Assignment is made with rights of substitution and subrogation of
Assignee in and to all covenants and warranties by others heretofore given or
made with respect to any of the properties or interests hereby conveyed.
Upon the occurrence of Payout Two, Assignor and Assignee shall file a
notice such event in the public records.
This Assignment is subject to the approval of the State of Michigan as
to those Leases, if any, requiring such approval for assignment.
Executed this ____ day of December, 1995, but effective for all
purposes as of 7:00 a.m. on October 1, 1995 (the "Effective Date").
ASSIGNOR:
WITNESSES: SAVOY OIL & GAS, INC.
By:
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Name: Xxxxxxx X. Xxxxxx
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Its: President
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ACKNOWLEDGMENT
STATE OF )
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COUNTY OF )
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Acknowledged before me this ______ day of December, 1995 by Xxxxxxx X.
Xxxxxx, President of Savoy Oil & Gas, Inc., a Delaware corporation, on behalf
of the corporation.
My Commission Expires:
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------------------------------ Notary Public in and for
County
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State of
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Prepared by: Savoy Oil & Gas, Inc., 000 Xxx Xx., Xxxxxxxx Xxxx,
Xxxxxxxx 00000
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