EXPLORATION AGREEMENT
Formosa Grande Project
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Counties, Texas
This Exploration Agreement (the "Agreement") is entered into as of
August 1, 1997, by and between Parallel Petroleum Corporation ("Parallel"),
TAC Resources, Inc. ("TAC"), Allegro Investments, Inc. ("Allegro"), Beta Oil &
Gas, Inc. ("Beta"), ▇▇▇▇▇ Oil and Gas Company ("▇▇▇▇▇"), Four-Way Texas L.L.C.
("Four-Way"), ▇▇▇▇▇ Financial Services, Inc. ("▇▇▇▇▇") and ▇▇▇-▇▇▇ Drilling
Corp. ("▇▇▇-▇▇▇") all hereinafter collectively referred to as (the "Parties").
WITNESSETH:
WHEREAS, Parallel has acquired, for itself and for the benefit of TAC
and Allegro, seismic and lease options, oil and gas leases and seismic permits
covering an area of approximately 90,000 acres located in ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
Counties, Texas, as depicted on the plat attached hereto as Exhibit "A".
WHEREAS, Beta, ▇▇▇▇▇, Four-Way, ▇▇▇▇▇ and ▇▇▇-▇▇▇ propose to acquire
undivided interests in and to the rights granted by such agreements, and to
participate in conducting a 3-D seismic program upon the lands covered thereby.
NOW, THEREFORE, in consideration of the premises, the mutual agreements
and obligations set forth herein, and the mutual benefits to be received
hereunder, the Parties agree as follows:
ARTICLE 1. DEFINITIONS
For the purpose of this Agreement, the following terms shall have the
meanings designated below:
1.1 Area of Mutual Interest "AMI" means the lands outlined on the plat
attached hereto as Exhibit "A".
1.2 "AMI Interests" means any interest in the oil, gas or other
minerals in and under the AMI, including leasehold interests under oil and gas
leases, oil and gas lease options, interests of the farmee under farmout
agreement, and other such interests or rights similar or dissimilar to those
mentioned, including, but not limited to, seismic permits. AMI Interest does
not, however, include nonpossessory interests in the oil, gas and other minerals
in and under the AMI, such as royalty interests, overriding royalty interests,
net profits interests, or other such interests whether similar or dissimilar to
those mentioned.
1.3 "Existing AMI Interests" means the Seismic and Lease Options, Oil
and Gas Leases and Seismic Permits which have been acquired by Parallel as of
December 1, 1997.
1.4 "Subsequently Acquired AMI Interests" means all AMI Interests acquired after
December 1, 1997.
1.5 "Contract Lands" means lands located within the AMI which are
covered by AMI Interests.
1.6 "Initial Interest" means a Party's ownership in Existing AMI
Interests, and the amount of interest a party is entitled to acquire in
Subsequently Acquired AMI Interests, subject to the provisions hereof.
1.7 "Jointly Owned AMI Interest" means an AMI Interest in which the
Parties own an interest pursuant to the terms of this Agreement.
1.8 "Lease Burden" means any royalty, overriding royalty interest, net
profits interest, production payment, carried interest, reversionary working
interest or other charges upon a leasehold interest or the production therefrom.
1.9 "Losses" means any and all losses, liabilities, claims, demands,
penalties, fines, settlements, damages, actions, or suits of whatsoever kind and
nature (but expressly excluding consequential damages), whether or not subject
to litigation, including without limitation (I) claims or penalties arising from
products liability, negligence, statutory liability or violation of any
applicable law or in tort (strict, absolute or otherwise) and (ii) loss of or
damage to any property, and all reasonable out-of-pocket costs, disbursements
and expenses (including, without limitation, legal, accounting, consulting and
investigation expenses and litigation costs) imposed on, incurred by or asserted
against an indemnified Party in connection therewith.
1.10 "Operator" shall mean Parallel Petroleum Corporation.
1.11 "Party" or "Parties" means Parallel, TAC, Allegro, Beta, ▇▇▇▇▇,
Four-Way, ▇▇▇▇▇, ▇▇▇-Tex and any other person or entity, singularly or as a
group, which hereafter becomes a party hereto or is otherwise subject to the
terms hereof.
1.12 "Pre-Existing Data" means such data which includes, but is not
limited to: seismic records and related seismic data, electronic and mud logs,
cores and core analyses, field studies (less and except any proprietary
methodology or process used by any Party in such studies), production tests,
engineering, geological, geophysical, paleontological data, interpretive data
and maps prepared by any Party in existence as of the date of this Agreement.
1.13 "Proportionate Share" except as otherwise provided for herein,
shall be calculated by dividing a Party's Initial Interest by the aggregate of
the Initial Interests of all Parties who are to share an interest or an
obligation pursuant to the terms hereof.
1.14 "Prospect" means an area within the AMI which is designated as a
Prospect pursuant to Article 6.3 hereof and within which there is expected to
occur, based on information developed as a result of 3-D Seismic Operations, a
commercial accumulation of oil and/or gas in a specific structural or
stratigraphic trap.
1.15 "Subsequently Created Burden" means a lease burden which is
created by a party subsequent to its acquisition of the interest which is
subject to the burden.
1.16 "Costs Prior to Leasehold Acquisition" means all costs of any type
whatsoever which pertain to this project, covering lands located within or
outside the AMI, including, but not limited to costs of seismic permits, seismic
and lease options, oil and gas leases, and renewals and/or extensions thereof,
land brokerage, legal costs, surface damages, surveying, seismic acquisition,
processing and interpretation, etc., which are incurred prior to Leasehold
Acquisition conducted under the provisions of Article 4 hereof.
1.17 Other terms are defined elsewhere in this Agreement.
ARTICLE 2. INTERESTS AND SHARE OF COSTS OF THE PARTIES
2.1 Area of Mutual Interest. The Parties hereby establish an Area of
Mutual Interest "AMI", same to be comprised of the area outlined on the attached
Exhibit "A", and which shall cover AMI Interests located therein. This AMI shall
continue for a term of seven (7) years, or the expiration of the last Jointly
Owned AMI Interest, whichever is earlier.
2.2 "Interests and Share of Costs of the Parties" The Parties hereby
agree to own, as their Initial Interest, and agree to bear the costs set out
below, as follows:
Party Initial Interest Share of Costs Share of Costs
Prior to Leasehold for Leasehold
Acquisition Acquisition and
Subsequent Operations
Parallel .5312500 .5000000 .5312500
TAC .0625000 .0000000 .0625000
Allegro .0312500 .0000000 .0312500
Beta .2000000 .2666666 .2000000
▇▇▇▇▇ .1250000 .1666667 .1250000
Four-Way .0200000 .0266667 .0200000
▇▇▇▇▇ .0100000 .0133333 .0100000
▇▇▇-▇▇▇ .0200000 .0266667 .0200000
Parallel, TAC and Allegro have acquired and presently own the Existing AMI
Interests. Beta, ▇▇▇▇▇, Four-Way, ▇▇▇▇▇ and ▇▇▇-▇▇▇ agree that their respective
costs in the Existing AMI Interests shall be based on $100.00 per net mineral
acre on seismic and lease options, and cost plus 33.33333% on oil and gas leases
and seismic permits. The Existing AMI Interests are presently comprised of
approximately 73,102.116 net mineral acres covered by seismic and lease option,
522.896 net mineral acres covered by seismic permit where cost was $5,228.96,
and 146.890 net mineral acres covered by oil and gas lease where cost was
$7,344.50. Based on the foregoing, the current total cost of Existing AMI
Interests is Seven million three hundred twenty-two thousand seven hundred
eighty-five and 06/100 Dollars ($7,322,785.06). Beta, ▇▇▇▇▇, Four-Way, ▇▇▇▇▇ and
▇▇▇-▇▇▇ agree to pay Parallel their Proportionate Share of such cost, as
referenced above, in the Existing AMI Interests upon execution of this
Agreement. Beta, ▇▇▇▇▇, Four-Way, ▇▇▇▇▇ and ▇▇▇-▇▇▇ hereby agree that Parallel
shall have the exclusive right to acquire AMI Interests through December 1,
1997, and that same shall be treated in all respects as Existing AMI Interests.
Beta, ▇▇▇▇▇, Four-Way, ▇▇▇▇▇ and ▇▇▇-▇▇▇ agree that they shall be obligated to
accept such interests in the same percentages and pay Parallel for such
interests at the same terms stated herein. Payment for such interests shall be
due within fifteen (15) days after receipt of written notice as set out in
Article 2.4. Interests available to Parallel which costs exceed those stated
above shall be offered to the other Parties as per the procedure set forth in
Article 2.4 below.
2.3 Recording. Parallel agrees to file for record in the office of the
▇▇▇▇▇▇▇ County Clerk, all Memorandums of Seismic and Lease Options covering the
Existing AMI Interests within fifteen (15) days of the date this Agreement is
executed by all Parties.
2.4 Subsequently Acquired AMI Interests. Any Party acquiring a
Subsequently Acquired AMI Interest, directly or indirectly, shall notify the
other Parties hereto. Such notice shall set forth (i) a description of the
interest acquired, (ii) the total cost of the interest, including all land and
legal costs associated with the acquisition thereof, (iii) the Proportionate
Share of the notified Party and its cost therein, and (iv) any other pertinent
terms of such acquisition, including, but not limited to, copies of the
instruments of conveyance, copies of leases, assignments, subleases, farmout and
other contracts affecting the AMI Interests, copies of paid drafts or checks,
itemized invoices of actual costs incurred by the acquiring Party. Parties shall
have fifteen (15) days from the receipt of this notice to acquire their
Proportionate Share of the Subsequently Acquired AMI Interest. A Party's
election to acquire shall be given in writing and accompanied by Party's payment
of its total cost for such interest. If a Party's election and payment are not
received within such fifteen (15) day period, it shall be conclusively presumed
that such Party has elected not to acquire its Proportionate Share of the
Subsequently Acquired AMI Interest and has forfeited its right thereto. A
Party's failure to exercise its option as to any particular notice shall not
constitute a waiver or release of its right to acquire any interest described in
any subsequent notice delivered hereunder.
2.5 Existing Burdens. Each Party's interest under this agreement in the
AMI Interests, and oil and gas leases which may be acquired thereunder, shall be
subject to and burdened by its proportionate share of all existing operating
agreements, existing and pending pooling and spacing orders and all Lease
Burdens other than Subsequently Created Burdens. Parallel, TAC and Allegro
represent that they have not burdened the Existing AMI Interests acquired or to
be acquired with any liens or Subsequently Created Burdens. Each Party agrees to
perform its Proportionate Share of the obligations under the AMI Interests
acquired pursuant to this Agreement and the other obligations described in this
Article, but only to the extent that such obligations arise after the
acquisition of such AMI Interests by such Party.
2.6 Expiring Options. If any lease options covered hereby will expire
prior to completion of the Seismic Operations contemplated herein, Operator
shall use its best efforts to renew and/or extend such option for a sufficient
period of time to complete the proposed 3-D Seismic Operations thereon and
exercise the lease option thereunder. Payment for extensions and/or renewals
shall be due within fifteen (15) days after receipt of an invoice therefore.
2.7 Assignments. Upon receipt of payment for AMI Interests, Parallel
shall assign to the Parties hereto their Initial Interest in such AMI Interests.
Such assignment shall be recordable in form, shall be subject to this agreement,
shall provide for warranty by, through and under Parallel, but not otherwise,
and shall be subject to the terms and provisions of the AMI Interests assigned.
Notwithstanding such assignments, the Parties hereby grant Operator full right
and authority to conduct Leasehold Acquisition on their behalf under the
provisions of Article 4 hereof.
2.8 AMI Interests Located In and Out of Existing AMI. If an AMI
Interest is found to cover lands located both within and outside the existing
AMI, the entirety of such AMI Interest shall be offered to the other Parties
under the acquisition, notice and election provisions of Article 2.4, and if the
other Parties elect to participate in the acquisition thereof, the description
of the lands comprising the AMI shall be deemed to be amended to extend and
cover all of the lands covered by such interest. The option of the Parties to
participate in the acquisition of such interests shall be limited to the
entirety of the interest acquired.
2.9 Option to Cash Call: Notwithstanding the provisions for the
payments required in Articles 2.2, 2.4, 2.6 and 4, Operator shall the right to
require the other Parties to pay their Proportionate Share of the estimated
costs as provided in such Articles in advance. Such advanced payment shall be
paid within fifteen (15) days of receipt of an invoice therefor.
ARTICLE 3. SEISMIC OPERATIONS
3.1 Existing Seismic, Geologic and Other Subsurface Data. Except as
prohibited by law or by agreements with third parties, upon request, each Party
owning existing seismic data pertaining to lands located within the AMI shall
furnish copies of all such data to the other Parties, together with any geologic
or other subsurface data that could be useful in the interpretation thereof. The
Party receiving such data shall bear the expense of copying it. The Party owning
any seismic or other data which may not be copied, due to legal prohibitions or
by agreements with third parties, shall, upon request, make such data available
to the Party requesting such data during normal business hours.
3.2 Ownership of Pre-Existing Data. Ownership of the Pre-Existing Data
and all reprocessed Pre-Existing Data shall at all times remain vested in the
Party who contributes the Pre-Existing Data for use by the Parties, and the
Parties agree to acknowledge such ownership, including, but not limited to, the
filing with any appropriate governmental authority of such acknowledgment. The
Parties expressly reserve the right to sell, license, or trade the Pre-Existing
Data which it contributes hereunder, to the extent that it has such right to
sell, license or trade the Pre-Existing Data, through its own efforts, or
through the efforts of others duly authorized by such Party and the benefits and
advantages, including monetary consideration, which such Party receives as a
result of such activities shall be the sole property of such Party.
3.3 Management of the 3-D Seismic Operations. Operator shall
exclusively manage and conduct the 3-D Seismic Operations contemplated hereunder
and all operations incident thereto, including, but not limited to, the
acquisition of all geoscientific data, the performance of all 3-D seismic
surveys and other geoscientific work incident thereto, and, subject to the
Operating Agreements, the drilling of all ▇▇▇▇▇ on the Prospects. Operator shall
perform all such work through employees, representatives, and contractors of its
selection, and Operator shall and does hereby agree to utilize reasonable
prudence and economic judgment in contracting with third party contractors or
subcontractors. As manager of 3-D Seismic Operations, Operator shall devote such
of its time, attention and efforts to the conduct thereof as it shall in good
faith determine reasonably necessary, but shall otherwise be free to engage in
and pursue all other current and future business projects, programs, prospects,
opportunities, investments and activities without obligation of any kind to or
right of participation therein by the other Parties hereto. In performing its
duties under this Agreement, Operator shall serve as an independent contractor
and not as an agent or employee of the other Parties hereto. Operator shall
utilize reasonable prudence and economic judgment in incurring costs, and shall
further conduct the 3-D Seismic Operations and perform all of its duties under
this Agreement as a reasonable, prudent operator, in a good and workmanlike
manner with due diligence and dispatch, in accordance with good oilfield and
exploratory practice, and in compliance with all applicable laws and
regulations, BUT SHALL HAVE NO LIABILITY TO THE OTHER PARTIES HERETO OR ANY
OTHER OWNER OF RIGHTS OR INTERESTS UNDER THIS AGREEMENT FOR ANY LOSSES SUSTAINED
OR LIABILITIES INCURRED IN CONNECTION WITH THE 3-D SEISMIC OPERATIONS AND/OR THE
CONDUCT OF ANY ACTIVITIES UNDER OR CONTEMPLATED BY THIS AGREEMENT, SAVE AND
EXCEPT AS MAY BE OCCASIONED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
OPERATOR. EACH OF THE OTHER PARTIES HERETO ACKNOWLEDGES THAT (A) IT HAS READ AND
AGREED TO THE FOREGOING EXCULPATION OF OPERATOR AS A NEGOTIATED AND BARGAINED
FOR ASPECT OF THIS TRANSACTION, (B) THIS EXCULPATION PROVISION IS CONSPICUOUS.
3.4 Ongoing and Future Seismic Operations. The Parties agree to conduct
such operations on all or substantially all of the Contract Lands. The Parties
may, subject to their unanimous written consent, agree to reduce or increase the
acreage on which such operations will be conducted when technical, legal or
operational considerations indicate that such reduction or increase is
warranted. In any event, the Parties agree to pay Operator their respective
shares of the total costs of the 3-D Seismic Operations conducted on all land
covered by AMI Interests as set forth in Article 2.2 hereof. Payment for 3-D
Seismic Operations shall be due within fifteen (15) days after receipt of each
invoice therefore. Operator shall furnish the other Parties hereto with copies
of all applicable contracts and other information pertaining to all 3-D Seismic
Operations conducted hereunder. The Parties shall own their Proportionate Share
of the geophysical data obtained by and resulting from the 3-D Seismic
Operations conducted on the Contract Lands, including, but not limited to all
tapes, seismic sections and any and all other data generated by such 3-D Seismic
Operations. Each Party shall have access to such data and shall receive copies
thereof. The Parties agree to work together in a spirit of cooperation and in
good faith in planning and causing the 3-D Seismic Operations to be conducted as
contemplated herein as well as in sharing the data collected therefrom and the
interpretations thereof. Such interpretations, by any Party, shall in no way be
deemed a representation to any other Party that such interpretations are
accurate or correct. Such interpretations shall be given merely as a means of
sharing such Party's analysis and ideas regarding such data.
3.5 Confidentiality of Seismic Data. Except as provided below, each
Party agrees to keep all seismic data obtained pursuant to Article 3.3
confidential for a period of seven (7) years from the date hereof. After the
expiration of five (5) years from the date hereof any Party may sell the data it
acquired pursuant to Article 3.3. Each Party owning an interest in such data
shall receive its Proportionate Share of the proceeds of any such sale. Any data
acquired from another Party pursuant to Article 3.1 shall forever be kept
confidential by the Parties; provided, however, that the Party who originally
contributed such data may share, sell or otherwise dispose of such data that
does not pertain to a Prospect to a third party after the expiration of one (1)
year from the date hereof, and the other Parties shall have no interest in the
proceeds from such sale. Notwithstanding the foregoing, a Party may disclose
seismic data to (A) a prospective purchaser or farmee of such Party's interest,
provided (i) such disclosure is limited to the Prospect under consideration for
sale or farmout, (ii) the prospective purchaser or farmee must review such data
in the affected Party's offices and may not copy such data until such time as it
has acquired or earned an interest in the Contract Lands, and (iii) such
prospective purchaser or farmee must execute a confidentiality agreement to
prevent further disclosure and unauthorized use of such data; or (B) a third
party who is entitled thereto pursuant to the terms of a lease, lease option or
seismic permit. Any Party may disclose such data to its agents, staff,
representatives and consultants in the normal conduct of its business.
3.6 Review of Seismic Data. The Parties agree to cooperate in good
faith in reviewing the seismic data acquired hereunder. Such data should be
reviewed by the Parties as soon as practicable after the data is available so
that the Parties can make decisions regarding the exercise of lease options.
ARTICLE 4. LEASEHOLD ACQUISITION
As soon as is practicable after the 3-D seismic data has been processed
and interpreted, Operator shall, in its sole discretion, acquire leases within
the AMI, and the Parties agree to pay their Proportionate Share of cost therein,
including all land and legal costs associated with the acquisition thereof. Upon
receipt of payment, which shall be due within fifteen (15) days after receipt of
each invoice therefore, Operator shall promptly execute and deliver recordable
assignments to the Parties reflecting their respective interests in the leases
acquired.
ARTICLE 5. FORFEITURE
Payments due hereunder for Existing AMI Interests under Article 2.2,
renewals and/or extensions acquired under Article 2.6, Seismic Operations under
Article 3.4, and Lease Acquisition under Article 4 shall be mandatory. A Party
failing to timely make any such payment shall be in breach of this Agreement;
and, in the event such payment is not received by Operator, or other Party
entitled thereto, within sixty (60) days after written demand therefore has been
received, such Party shall, without the necessity of any further proceeding,
forfeit all of its right, title and interest under this Agreement to Operator.
Any Party so forfeiting its interest hereunder, hereby appoints Operator as its
Agent and Attorney-in-Fact for the sole and limited purpose of executing an
instrument of conveyance vesting title to the forfeited interest in Operator and
filing same in the appropriate public records.
ARTICLE 6. SALE, FARMOUT OR OTHER DISPOSITION
OF AMI INTERESTS TO A THIRD PARTY
Any Party may sell, assign, farmout or otherwise dispose of all or any
portion of its interest acquired pursuant to or in connection with this
Agreement without consent of any other Party. Operator shall be furnished with a
copy of the assignment or other instrument disposing of such interest within ten
(10) days from the date thereof.
ARTICLE 7. SUBSEQUENT OPERATIONS
7.1 Operator. Operator shall have the right, subject to the terms and
provisions of the attached Operating Agreement, to be the Operator for all
operations conducted within the AMI, and the Parties hereby agree to execute
separate Operating Agreements designating Operator, as Operator, as required.
7.2 Operating Agreement. Except as provided herein, all operations
conducted within the AMI shall be conducted in accordance with the terms of an
Operating Agreement substantially in the form attached hereto as Exhibit "B". A
separate Operating Agreement shall be executed for each Prospect, with the first
well drilled in such Prospect to be designated as the "Initial Well". The share
of costs which each Party must bear and the interest of each Party in the
production from each well drilled under the Prospect Operating Agreement will be
determined on a well-by-well basis in accordance with the terms hereof as
modified by the terms of the Operating Agreement. In the event of conflict
between the terms and provisions hereof and those contained in the Operating
Agreement, the terms and provisions hereof shall prevail.
7.3 Designation of Prospects. As soon as practicable after the data has
been processed and interpreted, Operator shall furnish the other Parties with
maps which reflect designated Prospects, together with a description of the
seismic data, prospective feature and any interpretative data or other maps upon
which such Prospect is based.
7.4 Non-Consent Election on Initial Well. If a Party elects not to
participate in the drilling of the Initial Well in a Prospect, such Party shall
relinquish all of its rights and interests in that Prospect to the Parties
participating in the drilling of such well which elect to acquire their
Proportionate Share of the relinquished interest. A condition precedent to such
relinquishment shall be the reimbursement of the relinquishing Party's leasehold
cost in the relinquished interest by the Parties electing to participate in such
interest, which cost shall be specifically limited to that incurred by such
Party under Article 4 hereof. A Party so relinquishing its interest shall
promptly execute a recordable assignment of its relinquished interest to the
Parties entitled thereto, which interest shall be free of any Subsequently
Created Burdens. Upon receipt of such assignment the Parties receiving the
relinquished interest shall reimburse the relinquishing Party their respective
Proportionate Share of the relinquishing Party's cost in the interest so
assigned.
7.5 Limitation on Number of ▇▇▇▇▇ Drilling. Not more than three (3)
▇▇▇▇▇ shall be drilling on the Contract Lands at any time unless it is necessary
to commence a well in order to perpetuate a lease or otherwise satisfy the terms
of a continuous drilling obligation.
ARTICLE 8. MISCELLANEOUS
8.1 Legal Relationship. This agreement is not intended to create, and
shall not be construed to create, a partnership or other relationship whereby
one party is liable for the actions or debts of another party; it being
understood and agreed that the rights and liabilities of all parties are several
and not joint or collective.
8.2 Entire Agreement. This agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, superseding
any and all prior agreements, understandings, discussions, negotiations and
commitments of any kind.
8.3 Amendment. The provisions of this agreement may be amended,
supplemented, or waived only if in writing signed by all parties hereto.
8.4 Construction. The parties to this agreement all acknowledge and
agree that this agreement was drafted jointly by them, and that in the event of
any ambiguity, this agreement shall not be construed against any of them on the
basis of the fact or presumption that one party had a greater or lesser hand in
the drafting of the agreement than another party, but rather the terms shall be
given a reasonable interpretation.
8.5 Governing Law. Except to the extent preempted by federal law, this
agreement is to be construed and interpreted in accordance with, and governed
by, the laws of the State of Texas.
8.6 Binding Agreement. This agreement shall bind and inure to the
benefit of the parties hereto and their respective heirs, successors, legal
representatives and assigns.
8.7 Section and Subsection Headings. The article, section and
subsection headings contained in this agreement are for the purpose of
convenience only and are not intended to define or limit the contents hereof or
otherwise be considered in construing and enforcing this agreement.
8.8 Waivers. Any failure by any party hereto to comply with any of its
obligations, agreements or conditions herein contained may be waived in writing,
but not in any other manner, by the party to whom such compliance is owed. No
waiver of, or consent to a change in, any provision of this agreement shall be
deemed to be, or shall constitute, a waiver of or consent to a change in the
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless expressly provided.
8.9 Further Assurances. The parties hereto agree to deliver or cause to
be delivered to each other at all such times as shall be reasonably required,
all such additional instruments, agreements, and other documents, and to perform
all such actions, as any of them may reasonably request for the purpose of
performing any provision of this agreement or evidencing the transactions
contemplated by this agreement.
8.10 Severability. If any term or provision of this agreement or any
application of this agreement is held invalid or unenforceable, the remainder of
this agreement and any other application of the terms and provisions of this
agreement shall not be affected by that holding, but shall be valid and
enforceable.
8.11 Exhibits. All exhibits attached hereto or referred to in this
agreement are incorporated herein and made a part of this agreement.
8.12 Term. The term of this agreement shall be seven (7) years from the
date hereof or until the last expiration of the last Jointly Owned AMI Interest
acquired hereunder, whichever is earlier, with the exception of the
confidentiality requirements of Article 3.5 which shall survive and extend past
that period.
8.13 Notices. All notices, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a)
when delivered by hand, (b) when sent by facsimile (with receipt confirmed),
provided that a copy is promptly mailed thereafter by first class postage
prepaid registered or certified mail, return receipt requested, (c) when
received by the addressee, if sent by Express Mail, Federal Express, other
express delivery service (receipt requested) or by such other means as the
Parties named below may agree from time to time or (d) five (5) days after being
mailed in the USA, by first class postage prepaid registered or certified mail,
return receipt requested; in each case to the appropriate address and telecopier
number set forth below (or to such other address or telecopier number as a Party
may designate as to itself by notice to the other Parties).
Parallel Petroleum Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇)▇▇▇-▇▇▇▇
TAC Resources, Inc.
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇)▇▇▇-▇▇▇▇
Allegro Investments, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇)▇▇▇-▇▇▇▇
Beta Oil & Gas, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
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▇▇▇▇▇ Oil and Gas Company
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Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇)▇▇▇-▇▇▇▇
Four-Way Texas L.L.C.
c/o Kissing Bridge Company
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Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇)▇▇▇-▇▇▇▇
▇▇▇▇▇ Financial Services, Inc.
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Attn: ▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇)▇▇▇-▇▇▇▇
▇▇▇-▇▇▇ Drilling Corp.
P. O. ▇▇▇ ▇▇▇▇
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone Number: (▇▇▇)▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇)▇▇▇-▇▇▇▇
Each Party shall have the right upon giving thirty (30) days prior written
notice to the other Parties, in the manner herein provided, to change its
address and telecopier number for the purpose of notice.
8.14 Transfers Subject to this Agreement. Any sale, agreement, transfer
or other disposition of an interest in the Contract Lands, however accomplished,
either voluntarily or involuntarily, by operations of law or otherwise, shall be
subject to the terms of this Agreement. Any instruments which convey any
interest in the Contract Lands shall be made expressly subject to the Agreement.
8.15 Counterparts. This agreement may be executed in multiple
counterparts, all of which when taken together shall constitute one and the same
agreement.
8.16 Public Announcements. Each Party hereto agrees that prior to
making any public announcement or statement with respect to the transaction
contemplated in this Agreement, the Party desiring to make such public
announcement or statement shall consult with the other Parties hereto and
exercise their best efforts to (i) agree upon the text of a joint public
announcement or statement to be made by the Parties, (ii) obtain approval of the
other Parties hereto to the extent of a public announcement or statement to be
made solely by one of the Parties, as the case may be. Approval shall be
requested pursuant to Article 8.13 hereof, and any such announcement or
statement shall be deemed approved if no reply to the contrary is received
within twenty-four (24) hours (Saturdays, Sundays and federal legal holidays
excluded) after receipt of such request by the other Parties. Nothing contained
in this paragraph shall be construed to require any Party to obtain approval of
the other Parties hereto to disclose information with respect to the transaction
contemplated by this Agreement to any governmental body to the extent required
by applicable law or by any applicable rules.
8.17 Expenses. Except as specified herein and as the Parties may
otherwise agree, each Party shall be solely responsible for all expenses
incurred by it in connection with any and all transactions that are contemplated
by this Agreement.
8.18 Force Majeure. Should any Party be prevented, wholly or in part,
from complying with any express or implied obligation of this Agreement (other
than the obligation to make money payments), from conducting any operations
provided for under this Agreement, including by way of illustration but not
limitation, the conducting of the 3-D Seismic Operations by reason of scarcity
of or inability to obtain or to use labor, water, equipment or materials in the
open market or transportation thereof from any cause (other than financial)
beyond the control of such Party, or operation of "Force Majeure, any State or
Federal law or any order, ruling or regulation of governmental authority, then
while so prevented, such Party's obligation to comply with such provision or
obligation shall be suspended, and such Party shall not be liable in damages or
otherwise to the other Parties for failure to comply therewith, provided that
the Party claiming suspension shall give written notice and full particulars of
the reason of such inability to perform its obligations to the other Parties
within thirty (30) days after the occurrence of the cause relied on by the Party
claiming suspension.
8.19 Arbitration. The Parties agree that any and all disputes arising
under or relating to this Agreement shall be referred to arbitration pursuant to
the commercial rules of arbitration of the American Arbitration Association.
Venue for such arbitration shall be Houston, Texas USA.
IN WITNESS WHEREOF, this agreement is executed on the date first above written.
Parallel Petroleum Corporation
By:________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
TAC Resources, Inc.
By:________________________________
▇▇▇▇ ▇▇▇▇▇▇, President
Allegro Investments, Inc.
By:________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Beta Oil & Gas, Inc.
By:________________________________
▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇▇▇ Oil and Gas Company
By:________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., President
Four-Way Texas, L.L.C.
By:________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇ Financial Services, Inc.
By:________________________________
▇▇▇▇ ▇▇▇▇▇, President
▇▇▇-▇▇▇ Drilling Corp.
By:________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Chairman of the Board