CONVEYANCE OF OVERRIDING ROYALTY INTEREST

Exhibit 10.36
 
THIS DOCUMENT PREPARED BY AND WHEN RECORDED, PLEASE MAIL TO:

BRACEWELL & XXXXXXXX LLP
SOUTH TOWER, PENNZOIL PLACE
000 XXXXXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XX 00000
ATTN: XXXXXXX X. XXXXXX


This Conveyance of Overriding Royalty Interest (as from time to time supplemented, amended or otherwise modified, this "Conveyance"), dated as of May 11, 2007, but effective as of October 1, 2006 at 12:00 a.m. local time at the location of the property described herein (the "Effective Date") is made by TEKOIL AND GAS GULF COAST, LLC, a Delaware limited liability company (together with its Affiliates, the "Assignor"), whose address is 00000 X-00 Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxx 00000 to and in favor of MTGLQ INVESTORS, L.P., a Delaware limited partnership, whose address is c/o Goldman, Sach & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 ("Assignee"; Assignor and Assignee are referred to collectively herein as the "Parties" and each as a "Party").
 
R E C I T A L S
 
WHEREAS, Assignor owns certain leasehold interests in various properties more fully set forth on Exhibit A; and
 
WHEREAS, pursuant to that certain Credit and Guaranty Agreement by and between Assignor, Tekoil & Gas Corporation, and X. Xxxx & Company as Administrative Agent, dated of even date herewith (the "Credit Agreement"), Assignor has agreed to convey to Assignee an overriding royalty interest in the properties described on Exhibit A;
 
C O N V E Y A N C E
 
NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS:
 
 
Defined Terms
 
 
 
 
 
 
 
"Purchase and Sale Agreement" means that certain Purchase and Sale Agreement dated effective as of October 1, 2006 by and between Masters Resources, LLC, Masters Oil and Gas, LLC and Tekoil & Gas Corporation, together with all amendments, supplements, and assignments thereof.
 
"Reimbursable Expenses" means all costs and expenses paid or incurred by or on behalf of Assignee or its Affiliates which are related to: (a) the negotiation, acquisition, ownership, enforcement, or termination of the ORRI, this Conveyance, or any waivers or amendments hereto or thereto, or (b) any litigation, contest, release or discharge of any adverse claim or demand made or proceeding instituted by any Person affecting in any manner whatsoever the ORRI, any ORRI Hydrocarbons, this Conveyance, the enforcement or defense hereof or thereof, or the defense of Assignee's and its Affiliates' exercise of their rights hereunder or thereunder. Included among the Reimbursable Expenses are (i) all recording and filing fees, (ii) all actual and reasonable fees and expenses of counsel, engineers, accountants and other consultants, experts and advisors for Assignee and its Affiliates and mortgagees, and (iii) all amounts which Assignee is entitled to receive hereunder and all costs of Assignee in exercising any of its remedies hereunder.
 
 
 
 
(a)     All of the leasehold interests and other property interests described in Exhibit A attached hereto (such interests are sometimes referred to herein as the "Leases");
 
 
 
 
2
 
 
 
"Working Interest" means the interest owned in oil and gas leaseholds or other oil and gas interests (including leasehold interests, operating rights interests or other cost-bearing interests, and mineral fee or ownership interests) that determines the percentage share of costs borne by the owner of such interest.
 
"Environmental Laws" means any and all current or future foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (a) environmental matters, including those relating to any Hazardous Materials Activity; (b) the generation, use, storage, transportation or disposal of Hazardous Materials; or (c) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Company or any of its Subsidiaries or any of their respective properties.
 
"Hazardous Materials" means any substances regulated under any Environmental Law, whether as pollutants, contaminants, or chemicals, or as industrial, toxic or hazardous substances or wastes, or otherwise.
 
"Hazardous Materials Activity" means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.
 
"Release" means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.
 
Section 1.2     Rules of Construction. All references in this Conveyance to articles, sections, subsections and other subdivisions refer to corresponding articles, sections, subsections and other subdivisions of this Conveyance unless expressly provided otherwise. Titles appearing at the beginning of any of such subdivisions are for convenience only and shall not constitute part of such subdivisions and shall be disregarded in construing the language contained in such subdivisions. The words "this Conveyance", "this instrument", "herein", "hereof", "hereunder" and words of similar import refer to this Conveyance as a whole and not to any particular subdivision unless expressly so limited. Unless the context otherwise requires: "including" and its grammatical variations mean "including without limitation"; "or" is not exclusive; words in the singular form shall be construed to include the plural and vice versa; words in any gender include all other genders; references herein to any instrument or agreement refer to such instrument or agreement 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 Conveyance to exhibits and schedules refer to exhibits and schedules to this Conveyance unless expressly provided otherwise, and all such exhibits and schedules are hereby incorporated herein by reference and made a part hereof for all purposes.
 
 
3
 
 
Granting Provisions
 
Section 2.1     Granting Clause. For and in consideration of the sum of ONE HUNDRED AND NO/100 DOLLARS ($100.00) and other good and valuable consideration to Assignor in hand paid by Assignee, the receipt and sufficiency of which is hereby acknowledged, Assignor does hereby BARGAIN, TRANSFER, GRANT, ASSIGN, SELL, WARRANT, CONVEY, SET OVER and DELIVER and by these presents has hereby BARGAINED, TRANSFERRED, GRANTED, ASSIGNED, SOLD, WARRANTED, CONVEYED, SET OVER and DELIVERED unto Assignee, effective as of the Effective Date, an overriding royalty interest of 2% of 8/8ths (the "ORRI Percentage") of all of the (i) oil, (ii) gas, (iii) associated hydrocarbons, and (iv) other minerals of every type and description (collectively, the "Subject Hydrocarbons"; the portion of the Subject Hydrocarbons attributable to the ORRI are referred to herein as the "ORRI Hydrocarbons") that inure to the benefit Assignor under the Subject Interests, subject to the terms and provisions set forth herein.
 
 
 
Section 2.2     Non-Operating, Non-Cost-Bearing Interest. Except for Specified Taxes (which are for the account of Assignee), the ORRI and the ORRI Hydrocarbons shall be free and clear of (a) all taxes of any kind, (b) all costs and expenses associated with acquiring, exploring, developing, maintaining, producing, operating, reworking, recompleting, and remediating the Subject Interests, (c) all royalties, overriding royalties, production payments, and similar charges burdening the Subject Interests, and (d) all costs for separating, gathering, compressing, treating, processing or marketing ORRI Hydrocarbons or for transporting ORRI Hydrocarbons from the wellhead to the point of sale in a condition to meet pipeline or transporter specifications and qualifications. All of the foregoing taxes (other than Specified Taxes), costs and expenses, royalties, overriding royalties, production payments, and similar charges shall be paid by Assignor promptly, on or before the dates the same become delinquent (unless being disputed in good faith by appropriate proceedings being diligently pursued and for which adequate reserves have been established). In addition, Assignor will promptly (and in any event within 30 days after receiving any notice or statement for the same) pay all Reimbursable Expenses which have been incurred and are unpaid and reimburse Assignee for any Reimbursable Expenses which have been paid by or on behalf of Assignee. Each amount which is to be paid by Assignor pursuant to this Section 2.2 which is instead paid by or on behalf of Assignee shall bear interest at the Fixed Rate on each day from and including the date of such payment until but not including the date repaid by Assignor.
 
 
4
 
Section 2.3     Measurement of ORRI. Assignee, and its successors and assigns, shall have the right to take in kind the ORRI Hydrocarbons. In the event that Assignee does not elect to take the ORRI Hydrocarbons in kind, Assignor shall account to Assignee for the ORRI Hydrocarbons on the following basis:
 
(a)     On oil, condensate, and other liquid hydrocarbons recovered by conventional, field-type separation processes (collectively, the "Liquids"), produced pursuant to the Subject Interests, (i) when sold, the ORRI Percentage of the proceeds received by Assignor from such sale, or (ii) when used off the Lease premises, the ORRI Percentage of the amount so used payable in the same manner as if said Liquids have been sold under the contract then in existence between Assignor and the purchaser of Liquids from the subject Lease or Leases, or in the event there is no such contract, the Override Percentage of the market value thereof at the wellhead, in each case free of all costs and expenses of production, treating, and transportation prior to the point of delivery to the purchaser thereof or its agent; and
 
(b)     On gas, including casinghead gas or other gaseous substances, remaining after separation of the associated Liquids ("Gas"), produced pursuant to the Subject Interests, (i) when sold, the ORRI Percentage of the proceeds received by Assignor from such sale, or (ii) when used off the lease premises, the ORRI Percentage of the amount so used, payable in the same manner as if said Gas had been sold under the contract then in existence between Assignor and the purchaser of Gas from the subject lease or leases, or in the event there is no contract, the ORRI Percentage of the market value thereof at the wellhead, in each case free of all costs and expenses of production, treating and transportation prior to the point of delivery to the purchaser thereof or its agent; provided, however, that in the event at any time Assignor elects to process, or have processed, Gas produced from any of the Subject Interests in a gas processing plant, whether or not owned by Assignor, no ORRI will be paid on gasoline or other liquid hydrocarbons or other products manufactured or extracted from such Gas as a result of such processing, and in such event Assignor will install a meter prior to the point at which the gas enters the processing plant, and Assignee will be entitled to receive the ORRI Percentage of the proceeds which Assignor would have received under its applicable gas sales contract if such Gas had not been processed in a plant, or in the event there is no contract, the ORRI Percentage of the market value thereof at the wellhead.
 
Section 2.4     Measurement; Hydrocarbons Lost or Used. The ORRI shall not apply to any oil, gas or other minerals that are unavoidably lost in the production thereof or in the compression or transportation of Subject Hydrocarbons prior to the applicable point of sale or which are used by Assignor or the operator of any Subject Well for the production of Subject Hydrocarbons or for the compression or transportation thereof prior to the applicable point of sale, in each case only to the extent the same are lost or used in the course of operations which are being conducted prudently and in a good and workmanlike manner. Assignor hereby represents, warrants and covenants to Assignee that production from each Subject Well is and will continue to be measured at a point prior to any point where gas or oil from such Subject Well is commingled with gas or oil from any other well or xxxxx that are not Subject Xxxxx.
 
 
5
 
Section 2.5     Proportionate Reduction. In the event that any Lease covers less than the full fee estate in the property subject to the Lease, the ORRI in such Lease conveyed to Assignee hereby shall be reduced in the proportion that the individual fee interest covered by the Lease bears to the full fee estate. In the event that Assignor's interest in any of the Leases is less than the full leasehold working interest in such Lease, the ORRI attributable to such Lease shall be reduced in the proportion that Assignor's interest in such Lease bears to the entire leasehold Working Interest. In the event of a loss or failure in title to any of Assignor's interests in any of the Leases, the ORRI attributable to any such Lease shall be reduced in the same proportion that the interest of Assignor in production from said Lease is reduced.
 
Section 2.6     Renewals and Extensions. This Conveyance and the ORRI shall apply to Assignor's and its Affiliates' interests in all renewals, extensions and other similar arrangements of each Lease (or other determinable interest) which is included in the Subject Interests, whether such renewals, extensions or arrangements have heretofore been obtained by Assignor or are hereafter obtained by or for Assignor or any Affiliate thereof and whether or not the same are described in Exhibit A. For the purposes of the preceding sentence, a new lease that covers the same interest (or any part thereof) covered by a prior lease, and which is acquired within one year after the expiration, termination, or release of such prior lease, shall be treated as a renewal or extension of such prior lease.
 
 
 
Section 3.1     Nature of Marketing Arrangements. Subject to the right of Assignee to take the ORRI Hydrocarbons in kind described in Section 2.3 hereof, Assignor shall prudently market, or cause to be prudently marketed, the ORRI Hydrocarbons on behalf of and for the account of Assignee in arm's-length transactions with reputable purchasers, with each such marketing arrangement (including all arrangements relating to sales, treating, transportation, compression and processing) to be made upon terms and conditions that (a) are at least as favorable as Assignor or any Affiliate of Assignor obtains for Assignor's share of oil, gas or other minerals attributable to the Subject Interests or attributable to any other properties in the same field or general area, (b) are in accordance with the provisions of the Leases, (c) give due regard to the interests of Assignee, and (d) unless otherwise agreed by Assignee from time to time, provide for floating prices generally based on spot-market prices plus or minus a basis differential; provided, however, that no ORRI Hydrocarbons are or will become subject to any sales arrangement (i) whereby payment for ORRI Hydrocarbons is or can be deferred in excess of 30 days in the case of oil and in excess of 60 days in the case of gas after the month in which the ORRI Hydrocarbons are delivered; (ii) whereby payments may be made other than by checks, drafts, wire transfer or similar communications for the immediate payment of money; (iii) that is for a term in excess of 1 year or is not cancelable on less than or equal to sixty days notice. Assignor shall duly and prudently perform all obligations performable by it under any arrangements by which ORRI Hydrocarbons are sold or otherwise marketed and shall take all appropriate measures to enforce the performance under each such arrangement of the obligations of the other parties thereto. As to any third parties, all acts of Assignor in marketing the ORRI Hydrocarbons and all sales or other marketing agreements executed by Assignor in accordance herewith shall be binding on Assignee and the ORRI, it being understood and agreed hereby that the right and obligation to market the ORRI Hydrocarbons shall be at all times vested in Assignor, and Assignee shall not have any such right or obligation. Accordingly, it shall not be necessary for Assignee to join in any production sales or marketing agreements or any amendments to existing production sales or marketing agreements. Amounts received by Assignor as payments from a purchaser of Minerals pursuant to a contractual provision providing for "take-or-pay" payments (including pre-initial delivery payments but excluding penalty amounts) shall be considered amounts received from the sale of ORRI Hydrocarbons. As used in this Section 3.1, the term "penalty amounts" means amounts in excess of (i) the then current contract price multiplied by (ii) the difference between the amount of Minerals required to be taken under the contract and the amount actually taken.
 
 
6
 
Section 3.2     Distribution of Funds. Until notified by Assignee to the contrary, Assignor shall receive all payments for (or on account of) ORRI Hydrocarbons and shall, on or before noon on the last Business Day of each calendar month (the "Monthly Record Date"), distribute any such payments received during such calendar month (a "Monthly ORRI Payment") to Assignee, net only of Specified Taxes, by wire transfer (or, if consented to by Assignee, by check) to such accounts or locations as Assignee may direct from time to time in writing. Assignee shall have the right at all times, upon written notice sent to Assignor, to immediately begin receiving payment for (or on account of) all ORRI Hydrocarbons directly from the purchasers thereof or from any other parties obligated to make payment therefor. In the event Assignee exercises its right to receive payment for (or on account of) ORRI Hydrocarbons directly, Assignor shall immediately cause to be prepared and executed such division orders, transfer orders, or instructions in lieu thereof, as Assignee (or any third party) may require from time to time to cause payments to be made directly to Assignee. In the event that, for any reason, Assignee cannot (or does not) receive such payments directly, the same shall be collected by Assignor and shall constitute trust funds in Assignor's hands, to be immediately paid over to Assignee by wire transfer or check to such account or location as Assignee may direct from time to time in writing (or by such other form of transfer reasonably specified by Assignee). If, at any time, Assignor pays the ORRI based upon Monthly ORRI Payments as to which Assignor is subsequently required to make any refund payment (including any such refund payments made pursuant to settlements entered into by Assignor as a result of an overpayment made to Assignor in connection with the sale or sales of Subject Hydrocarbons) and Assignor has remitted the Monthly ORRI Payment to which such refund payment pertains to Assignee, Assignee shall not be obligated to return any of such Monthly ORRI Payment to Assignor, but the ORRI shall not be payable to Assignee on the succeeding Monthly Record Dates following the calendar month in which Assignor is so required to make such refund payments to the extent that Assignor has not recovered the portion of such refund payments attributable to the ORRI. With respect to such refund payments, Assignor may only recover the portion thereof attributable to the ORRI from succeeding Monthly ORRI Payments received from Assignor to which such refund payment obligation relates.
 
 
7
 
Section 3.3     Production Records, Statements and Payments. Assignor shall keep full, true, and correct records of the oil, gas, and other hydrocarbons produced from or attributable to the Leases, and the portion thereof attributable to the ORRI. Such records may be inspected by Assignee or its authorized representatives and copies made thereof at all reasonable times. On or before the Monthly Record Date for each calendar month, Assignor shall send to Assignee a statement setting forth (i) the production from the Subject Interests for the current calendar month, (ii) the portion of such production attributable to the ORRI, (iii) to the extent Assignee does not receive direct payment of proceeds from sale of ORRI Hydrocarbons pursuant to Section 3.2 above, the gross proceeds attributable to the sale of ORRI Hydrocarbons and any Specified Taxes deducted therefrom, and (iv) such other data as Assignee may reasonably request, in such form as Assignee may reasonably request.
 
Section 3.4     Initial Monthly ORRI Payment. On or before the Monthly Record Date for the month ending May 31, 2007, and in accordance with the terms of Section 3.2 hereof, Assignor shall pay to Assignee the Monthly ORRI Payment for the calendar months ending October 31, 2006; November 30, 2006; December 31, 2006; January 31, 2007; February 28, 2007; March 31, 2007; and April 30, 2007 (collectively, "Accrued ORRI Payment"), which Accrued ORRI Payment shall be calculated as set forth in Article II hereof based upon any and all Subject Hydrocarbons, proceeds from the sale thereof, or any other amounts to which Assignor is or becomes entitled pursuant to the Purchase and Sale Agreement for the period beginning on the Effective Date and ending on April 30, 2007. For the avoidance of doubt, the payment by Assignor of the Accrued ORRI Payment shall not modify Assignee's right to receive (and Assignee shall be entitled to receive) the Monthly ORRI Payment for the calendar month ending May 31, 2007 based upon the full calendar month of May, 2007, on the Monthly Record Date for the month of May, 2007.
 
 
 
 
 
 
 
8
 
Section 4.3     Pooling and Unitization. Assignor, at its option, shall have the right and power (provided that such power is exercised in good faith) to pool or combine the acreage covered by any portion of the Subject Interests as to the Hydrocarbons or any part thereof, with other land or leases to the fullest extent provided in the underlying leases comprising the portion of the Subject Interests pooled, and Assignee does hereby consent to such pooling and agrees that Assignee's ORRI shall be subject to any such pooled unit, provided, however, that such consent and agreement of Assignee shall not apply to any such pooling or combination of Subject Interests with other acreage owned by Assignor or any of its Affiliates and Assignor agrees that, unless Assignee otherwise consents in writing at the time in question, Assignor will not make any such pooling or combination of Subject Interests with any other acreage owned by Assignor or any of its Affiliates.
 
Section 4.4     Gas Balancing.
 
(a)     Definitions. As used herein, "undertake" means that an owner of production from a Subject Well takes a lesser share of oil or gas produced from such Subject Well than the share which such owner is entitled to take by virtue of its ownership interest, determined without regard to any rights under any production balancing agreement or similar arrangement or any rights under common law with respect to production balancing, and "overtake" means that an owner of production from a Subject Well takes a greater share of oil or gas produced from such Subject Well than the share which such owner is entitled to take by virtue of its ownership interest, again determined without regard to any rights under any production balancing agreement or similar arrangement or any rights under common law with respect to production balancing. If an owner undertakes, the amount of production not taken is "underproduction" and if an owner overtakes, the extra share of production taken is "overproduction".
 
(b)     Gas Balancing Agreements. The interests of Assignor in the leasehold working interests in the Leases currently may be subject to gas balancing agreements that permit an owner of the leasehold working interest to store its proportionate share of Gas while the other owners are permitted to take gas that is greater than their proportionate share (a "Gas Balancing Arrangement"). Subject to the terms of this Section 4.4, Assignor shall have the right and power to commit its leasehold working interests in the Leases to future Gas Balancing Arrangements. The ORRI is and shall be bound by and subject to the terms of and provisions thereof. In the event that Assignor is or becomes an underproduced party under any present or future Gas Balancing Arrangement, the ORRI shall not be payable to Assignee with respect to any Gas attributable to the interest of Assignor that is deemed to be stored under the terms of such Gas Balancing Arrangement. In addition, in the event that Assignor becomes an overproduced party under any present or future Gas Balancing Arrangement, then the ORRI shall not be payable to Assignee with respect to any portion of the Gas taken by an underproduced party as "make-up" Gas that would otherwise be attributable to the interest of Assignor. The ORRI shall be payable with respect to any "make-up" Gas taken by Assignor as a result of its underproduction, any cash received by Assignor as a balancing of accounts either as an interim balancing or at the depletion of the reservoir, and any overproduction that Assignor receives as an underproduced party.
 
 
 
9
 
 
Section 4.5     Title. Assignor has good and defensible title to the Subject Interests free and clear of all liens, security interests, and encumbrances. Assignor hereby binds itself to WARRANT and FOREVER DEFEND all and singular title to the ORRI unto Assignee and its successors and assigns, against every person lawfully claiming or to claim the same or any part thereof. This Conveyance is made with full substitution and subrogation of Assignee in and to all covenants, representations and warranties by others heretofore given or made with respect to the Subject Interests.
 
Section 4.6     Compliance with Laws. The Subject Lands, and Assignor's present and proposed operations thereon, are in compliance in all material respects with all applicable Laws, including all Environmental Laws; (b) Assignor has taken all steps reasonably necessary to determine and has determined that no Release of Hazardous Materials has occurred on the Subject Lands or as a result of operations on the Subject Lands, and the use which Assignor makes and intends to make of the Subject Lands will not result in any such Release; (c) to the best of Assignor's knowledge, none of such operations of Assignor, and none of the Subject Lands, is the subject of any federal, state or local investigation evaluating whether any remedial action is needed to respond to a Release of any Hazardous Materials into the environment or to the improper storage or disposal (including storage or disposal at offsite locations) of any Hazardous Materials; (d) neither Assignor nor, to the best knowledge of Assignor, any other Person has filed any notice under any Environmental Law indicating that Assignor is responsible for the Release into the environment, or the improper storage or disposal, of any Hazardous Materials that are now located on, were removed from, or are in any way related to any Subject Lands, or that any Hazardous Materials have been Released, or are improperly stored or disposed of, upon any Subject Lands; and (e) neither Assignor nor any of its Affiliates otherwise has any material contingent liability in connection with operations on any Subject Lands for the Release into the environment, or the improper storage or disposal, of any Hazardous Materials. Assignor will not cause or permit the Subject Lands or Assignor to be in violation of any Environmental Laws or other Laws with respect to the Subject Lands or do anything or permit anything to be done which will subject Assignor, Assignee or the Subject Lands to any material remedial obligations under any Environmental Laws, assuming in each case disclosure to the applicable governmental authorities of all relevant facts, conditions and circumstances, if any, pertaining to the Subject Lands, and Assignor will promptly notify Assignee in writing of any existing, pending or, to the best knowledge of Assignor, threatened investigation or inquiry of a material nature affecting any Subject Lands by any private party or governmental authority in connection with any Environmental Laws. Assignor will take all steps reasonably necessary to determine that no Hazardous Materials are disposed of or otherwise Released on or to the Subject Lands in violation of any Environmental Laws. Assignor will not cause or permit the Release of any Hazardous Materials on or to the Subject Lands in violation of any Environmental Law and covenants and agrees to remove or remediate any Hazardous Materials which has been Released on the Subject Lands in amounts which would violate any Environmental Laws.
 
 
10
 
ARTICLE V
 
[RESERVED]
 
 
 
Section 6.1     Assignment and Transfer by Assignee. Assignee may, and nothing herein contained shall in any way limit or restrict the right of Assignee to, sell, convey, assign, mortgage or otherwise dispose of the ORRI (including its rights, titles, interests, estates, remedies, powers and privileges appurtenant or incident to the ORRI under this Conveyance), in whole or in part. No change of ownership of the ORRI shall be binding upon Assignor, however, until Assignor is furnished with copies of the documents evidencing such change. Upon receipt by Assignor of copies of the documents evidencing a sale, conveyance, assignment, mortgage or other disposition of the ORRI, Assignor shall thereafter deal with the transferee Assignee in place of the transferring Assignee and references herein to the "Assignee" shall thereafter be deemed to be references to such transferee Assignee, provided that the transferring Assignee shall continue to have, and benefit from, all rights to indemnification and reimbursement that are provided herein.
 
 
 
 
11
 
 
Miscellaneous Provisions
 
 
 
 
 
 
 
 
 
12
 
Section 7.6     Indemnity. Assignor agrees to indemnify and hold each Assignee Indemnitee harmless from and against all costs, expenses, losses and liabilities incurred by any Assignee Indemnitee (i) pursuant to Section 7.5 hereof, (ii) in connection with the ORRI, this Conveyance, or the transactions and events (including the enforcement or defense thereof or hereof) at any time associated with or contemplated in any of the foregoing, or (iii) in connection with any tax partnership burdening any of the Subject Interests. Such indemnity shall also cover all reasonable costs and expenses of any Assignee Indemnitee, including reasonable legal fees and expenses, which are incurred incident to the matters indemnified against. As used in this Article VII, "Assignee Indemnitees" means Assignee and Assignee's successors and assigns and purchasers (including any Person who at any time purchases ORRI Hydrocarbons), all of their respective Affiliates, and all of their officers, directors, agents, beneficiaries, trustees, attorneys and employees.
 
 
 
Section 7.9     Partition. Assignor and Assignee acknowledge that neither has any right or interest that would permit it to partition any portion of the Subject Interests as against the other, and each waives any such right.
 
Section 7.10     Perpetuities. It is not the intent of Assignor or Assignee that any provision herein violate any applicable law regarding the rule against perpetuities, the suspension of the absolute power of alienation, or other rules regarding the vesting or duration of estates, and this Conveyance shall be construed as not violating such rule to the extent the same can be so construed consistently with the intent of the parties. In the event, however, that any provision hereof is determined to violate such rule, then such provision shall nevertheless be effective for the maximum period (but not longer than the maximum period) permitted by such rule that will result in no violation. To the extent that maximum period is permitted to be determined by reference to "lives in being", Assignor and Assignee agree that "lives in being" shall refer to the lifetime of the last to die of the living lineal descendants of the late Xxxxxx X. Xxxxxxx (father of the late President of the United States of America).
 
 
13
 
Section 7.11     Credit Agreement. This Conveyance is hereby made expressly subject to the terms of the Credit Agreement. In the event of a conflict between the Credit Agreement and the terms hereof, the terms of the Credit Agreement shall control.
 
Section 7.12     Incorporation by Reference. The terms of the Credit Agreement are incorporated herein by reference, including, without limitation, the representations and warranties made by Assignor therein.
 
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
 
 
 
 
 
 
 
 
14


IN WITNESS WHEREOF, THIS CONVEYANCE IS EXECUTED on the date set forth in the acknowledgments below, to be effective for all purposes as of the Effective Date.
 
     
  ASSIGNOR:
   
  TEKOIL AND GAS GULF COAST, LLC
   
 
By: Tekoil & Gas Corporation, its Managing Member
 
 		  
 		  
 
  By:   /s/ Xxxx Xxxxxxx
 
Name: Xxxx Xxxxxxx
 
Title: CEO and Chairman of the Board of Directors

 
 
 
 

 


STATE OF TEXAS  §
                                                 §
COUNTY OF XXXXXX         §

This instrument was acknowledged before me on May 11, 2007, by Xxxx Xxxxxxx, the CEO and Chairman of the Board of Directors of Tekoil & Gas Corporation, a Delaware corporation, Managing Member of Tekoil and Gas Gulf Coast, LLC., a Delaware limited liability company, on behalf of such limited liability company.

/s/ Xxxxxxx X. Xxxxx  
Notary Public in and for the State of Texas
XXXXXXX X. XXXXX
Notary Public, State of Texas
My Commission Expires
April 26, 2009

[AFFIX SEAL]

 
 
 
     
  ASSIGNEE:
   
  MTGLQ INVESTORS, L.P.
     
By: MLQ, L.L.C.,
 
 		  
 		 its general partner
 
  By:   /s/ Xxxxxx X. Xxxxxxx
 
Xxxxxx X. Xxxxxxx
  Authorized Signatory

 
 




STATE OF NEW YORK      §
                                                 §


Notary Public in and for the State of Texas

XXXX X. XXXXXX
Notary Public, State of New York
No. 00-0000000
Qualified in Kings County
Commission Expires August 18, 2010

[AFFIX SEAL]
 
 
 
 
 
 
 




















































AutoNDA by SimpleDocs

Document Metadata

Filed: May 23rd, 2007
Draft better contracts in just 5 minutes Get the weekly Law Insider newsletter packed with expert videos, webinars, ebooks, and more!