LATERAL FOOTAGE OBLIGATION REQUIREMENTS Clause Samples

LATERAL FOOTAGE OBLIGATION REQUIREMENTS i. For all purposes of this Agreement, each Annual LFO shall be met as lateral footage is actually Completed and production comes on-line. As an example, if Developer is performing Completion Operations at the end of a given calendar year and Completion Operations continue into the succeeding calendar year, the lateral footage actually Completed shall be credited entirely to the succeeding calendar year in which Completion of Completion Operations and establishment of production occurred. ii. If Developer Completes between Eighty-Five percent (85%) (the “Minimum LFO”) and One Hundred percent (100%) of the required Annual LFO for a calendar year as provided in Article 3.a, the difference between (1) the required Annual LFO in that calendar year pursuant to Article 3.a, and (2) the actual LFO Completed in that calendar year, shall be added to the Annual LFO required for the next successive calendar year, and Developer shall pay University Lands the Non-Performance Fee with respect to such difference by January 31 of the year following that calendar year. If Developer fails to meet the Minimum LFO in any given calendar year, this Agreement shall automatically terminate effective December 31st of said year and Developer shall file a Release of Agreement as required in Article 7. Should this Agreement terminate pursuant to the foregoing sentence, Developer must pay a Non-Performance Fee to University Lands for the positive difference of (y) the total Annual LFO for such calendar year pursuant to Article 3.a. and (z) the amount of Annual LFO Completed by Developer for such calendar year as of the date of such termination. Such Non-Performance Fee must be paid within thirty (30) days after early termination of this Agreement. iii. If, after a year when Developer Completes more than the Minimum LFO but less than One Hundred percent (100%) of the required Annual LFO for such calendar year, the next succeeding year shall be a “True-Up Year”. This Agreement shall automatically terminate on December 31st of a True-Up Year and Developer shall file a Release of Agreement as required in Article 7 unless Developer Completes (i) the entire Annual LFO as described in Article 3.a for such True-Up Year and (ii) the prior year’s Annual LFO deficit. Should this Agreement terminate pursuant to the foregoing sentence, Developer must pay a Non-Performance Fee to University Lands for the positive difference of the total Annual LFO for such calendar year pursuant to Article 3.a. and...