EXHIBIT 10.53
AMENDMENT AND PARTIAL TERMINATION
OF AGREEMENT AND ASSIGNMENT OF
INTEREST IN GEOPHYSICAL EXPLORATION AGREEMENT
XXXXXXXX DOME PROJECT
LIBERTY AND XXXXXX COUNTIES, TEXAS
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This Amendment and Partial Termination of Agreement and Assignment of
Interest in Geophysical Exploration Agreement, Xxxxxxxx Dome Project, Liberty
and Xxxxxx Counties, Texas (the "Amendment and Partial Termination") is made and
entered into effective as of the 12th day of February, 2003, by and between
XXXXXXX OIL & GAS, L.P. ("BOG") and VAQUERO GAS COMPANY INCORPORATED ("Vaquero")
(BOG and Vaquero are sometimes individually referred to herein as a "Party" and
collectively referred to herein as the "Parties").
W I T N E S S E T H:
WHEREAS, BOG, Ameritex Minerals and Exploration, Ltd., Bright and Company,
DDD Energy, Inc., RIMCO Production Company, Inc., RIMCO Exploration Partners,
L.P.I, RIMCO Exploration Partners, X.X.XX and Xxxxxx Oil & Gas, Inc. entered
into that certain Geophysical Exploration Agreement, Xxxxxxxx Dome Project,
Liberty and Xxxxxx Counties, Texas, dated November 1, 1994, (the "Exploration
Agreement"), regarding the exploration and development of an area of mutual
interest (as more particularly described in the Exploration Agreement and
referred to herein as the "AMI") in Liberty and Xxxxxx Counties, Texas (such
lands as from time to time may be included within the AMI are referred to herein
as the "Subject Lands"); and
WHEREAS, BOG and Vaquero entered into that certain Agreement and Assignment
of Interest in Geophysical Exploration Agreement, Xxxxxxxx Dome Project, Liberty
and Xxxxxx Counties, Texas, dated effective November 1, 1994 (the "Agreement");
and
WHEREAS, under the terms of the Agreement, BOG assigned to Vaquero, all of
BOG's interest in the Subject Lands and Exploration Agreement, and reserved unto
itself a net profits overriding royalty interest (the "NPORRI"), convertible to
an undivided forty percent (40%) of Vaquero's interest in the Subject Lands upon
"Payout #1," as defined in the Agreement, and an additional undivided ten
percent (10%) of Vaquero's interest in the Subject Lands upon "Payout #2," as
defined in the Agreement; and
WHEREAS, the AMI created pursuant to the terms of the Exploration Agreement
has been revised, amended and extended until September 1, 2004 by the parties to
the Exploration Agreement by: (1) notice letter from BOG dated March 11, 1996
revising the geographical limits of the AMI; (2) Amendment effective as of
August 25, 1998 extending the term of the AMI until September 1, 2001; and (3)
Amendment effective as of September 1, 2000 extending the term of the AMI until
September 1, 2004; and
WHEREAS, by Assignment of Interest dated effective May 1, 2001, Vaquero
assigned to BOG, an undivided forty percent (40%) of Vaquero's interest in the
Subject Lands, and producing xxxxx situated thereon drilled pursuant to the
terms of the Exploration Agreement (the "Assignment") pursuant to Vaquero's
belief that Payout #1, as defined in the Agreement, had occurred during April of
2001; and
WHEREAS, BOG disputed the occurrence of Payout #1 in April of 2001, upon
the belief that Payout #1 occurred in November of 2000, and thus should have
been effective December 1, 2000 pursuant to the terms of the Agreement; and
WHEREAS, the dispute has resulted in litigation between the Parties styled
Cause No. 2002-07142; Vaquero Gas Company Incorporated x. Xxxxxxx Oil & Gas,
L.P., in the 000xx Xxxxxxxx Xxxxx xx Xxxxxx Xxxxxx, Xxxxx (the "Lawsuit"); and
WHEREAS, the Parties have agreed to settle the Lawsuit pursuant to the
terms of that certain Settlement Agreement, Release and Compromise of
Litigation, Claims and Causes of Action (the "Settlement Agreement") being
executed contemporaneously with this Amendment and Partial Termination by the
Parties; and
WHEREAS, as part of the settlement, the Parties have agreed to amend and
partially terminate the Agreement upon the following terms and conditions.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein and in the Settlement Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree to the following:
1. Payout #1, as defined in the Agreement, was effective May 1, 2001.
2. Sections 1.2 and 1.4 of the Agreement are amended to add the following
sentence at the end of both sections: "Vaquero's indemnity obligations
to BOG set forth in this section shall be binding upon and be
obligations of Vaquero's successors and assigns."
3. Except for the obligation of Vaquero to make assignments to BOG in
connection with Payout #1 pursuant to Section 2.2 of the Agreement,
the Agreement is hereby terminated and is thus no longer in force and
effect. This partial termination, among other thing, obviates
Vaquero's obligation to account for and make any additional assignment
to BOG upon Payout #2 pursuant to Sections 2.3 and 2.5 of the
Agreement.
4. The foregoing partial termination of the Agreement, however, is not
intended as, and shall not operate as, a termination or impairment of:
(a) the rights acquired by Vaquero as a result of BOG's initial
assignment of its interest in the Subject Lands and Exploration
Agreement to Vaquero pursuant to Section 1.1 of the Agreement;
(b) the rights acquired by BOG as a result of the Assignment from
Vaquero pursuant to Section 2.1 of the Agreement;
(c) the respective rights of the Parties pursuant to the terms of the
Exploration Agreement;
(d) the respective rights of the Parties pursuant to the AMI;
(e) the individual Prospect Area AMI's established for each of the
Prospect Areas for the xxxxx identified on the attached Exhibit
1, pursuant to Section 5.4 of the Exploration Agreement; and
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(f) Vaquero's indemnity obligations to Xxxxxxx pursuant to Sections
1.2 and 1.4 of the Agreement.
5. The Parties shall execute a Memorandum of Amendment and Partial
Termination of Agreement and Assignment to reflect the terms hereof
(the "Memorandum"). Counsel for Vaquero shall record the Memorandum in
the appropriate real property records of Liberty and Xxxxxx Counties,
Texas.
ACCEPTED AND AGREED to by each of the Parties hereto on the date set forth
below under the signature of each, but effective February 12, 2003.
VAQUERO GAS COMPANY
INCORPORATED
By: /s/ A. Xxx Xxxxxx
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A. Xxx Xxxxxx, President
Date Signed: March 14, 2003
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THE STATE OF TEXAS /
/
COUNTY OF XXXXXX /
This instrument was acknowledged before me on this 14th day of March, 2003,
by A. Xxx Xxxxxx, President of Vaquero Gas Company Incorporated, a Texas
corporation, on behalf of said corporation.
/s/ Xxxxxx X. Xxxxxx
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Notary Public in and for the State of Texas
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XXXXXXX OIL & GAS, L.P. BY
XXXXXXX EXPLORATION COMPANY,
ITS MANAGING GENERAL PARTNER
By: /s/ Xxxxx X. Xxxxxxx
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Printed Name: Xxxxx X. Xxxxxxx
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Title: Executive Vice President
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Date Signed: March 13, 2003
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THE STATE OF TEXAS /
/
COUNTY OF XXXXXX /
This instrument was acknowledged before me on this 13 day of March, 2003,
by Xxxxx X. Xxxxxxx, Executive Vice President of Xxxxxxx Exploration Company,
Managing General Partner of Xxxxxxx Oil & Gas, L.P., a Delaware limited
partnership, on behalf of said limited partnership.
/s/ Xxxx X. Xxxxx
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Notary Public in and for the State of Texas
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