PURSUANT TO THE ADMINISTRATIVE SERVICES AGREEMENT BY AND AMONG OWNER, SURFACE
OPERATOR AND BREITBURN MANAGEMENT COMPANY, LLC, OR ITS EQUIVALENT, AS AMENDED
FROM TIME TO TIME.
IF SURFACE OPERATOR REASONABLY INCURS ANY DIRECT
OUT-OF-POCKET EXPENSES IN CONNECTION WITH CONDUCTING THE SURFACE OPERATIONS
DURING A GIVEN MONTH, OWNER SHALL REIMBURSE SURFACE OPERATOR AS FOLLOWS.
WITH
RESPECT TO THE REIMBURSEMENT OF OPERATING COSTS OR OUT-OF-POCKET EXPENSES,
SURFACE OPERATOR SHALL, WITHIN 30 DAYS FOLLOWING THE END OF SUCH MONTH, PREPARE
AND DELIVER TO OWNER AN INVOICE SETTING FORTH THE AMOUNT OF SUCH EXPENSES,
INCLUDING SUCH SUPPORTING MATERIAL AS IS REASONABLY NECESSARY TO DOCUMENT SAME,
OR AS OWNER MAY REASONABLY REQUEST.
OWNER SHALL PAY SURFACE OPERATOR, WITHIN 15
DAYS FOLLOWING RECEIPT OF SUCH INVOICE, ALL AMOUNTS SET FORTH THEREIN OTHER THAN
AMOUNTS SUBJECT TO A GOOD FAITH DISPUTE AMONG THE PARTIES.
ALL PAYMENTS TO
SURFACE OPERATOR HEREUNDER SHALL BE TO THE ACCOUNT IT DESIGNATES IN WRITING FROM
TIME TO TIME.
3
ARTICLE III
REPORTING
3.1
REPORTING.
SURFACE OPERATOR SHALL TIMELY PROVIDE OWNER SUCH
INFORMATION AS IT MAY REASONABLY NEED (AS DETERMINED BY SURFACE OPERATOR ACTING
IN GOOD FAITH), OR AS OWNER MAY REASONABLY REQUEST FROM TIME TO TIME, IN ORDER
TO (I) BE FULLY AND FAIRLY INFORMED AS TO THE SURFACE OPERATIONS, (II) MAKE
REASONABLY INFORMED DECISIONS WITH RESPECT TO INSTRUCTIONS FOR CHANGES TO OR
ADDITIONAL SURFACE OPERATIONS, AND (III) FULLY DOCUMENT SURFACE OPERATIONS,
OPERATING FEE, THIRD PARTY INVOICES AND DIRECT EXPENSES HEREUNDER.
WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, OPERATOR SHALL, AS SOON AS REASONABLY
PRACTICABLE FOLLOWING BECOMING AWARE OF SAME IN CONNECTION WITH CONDUCTING THE
SURFACE OPERATIONS, NOTIFY OWNER OF:
(A)
ANY MATERIAL ADVERSE CHANGE TO THE LEASE ASSETS OR ANY EVENT THAT,
WITH THE PASSAGE OF TIME OR OTHERWISE, IS REASONABLY LIKELY TO RESULT IN A
MATERIAL ADVERSE CHANGE TO THE LEASE ASSETS;
(B)
ANY VIOLATION OF LAW OR BREACH OF CONTRACT (OR ASSERTION ALLEGING
SAME) INVOLVING THE LEASE ASSETS OR SURFACE OPERATIONS; AND
(C)
ANY ASSERTED CLAIM OR DEMAND WITH RESPECT TO THE LEASE ASSETS OR
SURFACE OPERATIONS OR FOR WHICH OWNER COULD BEAR ULTIMATE FINANCIAL
RESPONSIBILITY OR LIABILITY UNDER THE TERMS HEREOF OR OTHERWISE.
ARTICLE IV
SURFACE USE ASSIGNMENT
4.1
CONSENT.
SURFACE OPERATOR SHALL TAKE SUCH STEPS AS THE PARTIES
SHALL MUTUALLY AGREE FOR THE PURPOSES OF OBTAINING ALL NECESSARY CONSENTS TO
ASSIGN THE SURFACE USE AGREEMENT TO OWNER.
4.2
NO-CONVEYANCE.
NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS
CONVEYING THE SURFACE USE AGREEMENT TO OWNER, WHICH, UNTIL SUCH TIME AS ALL
NECESSARY CONSENTS HAVE BEEN RECEIVED, SHALL REMAIN SOLELY WITH SURFACE
OPERATOR.
SHOULD ANY PROVISION OF THIS AGREEMENT BE CONSTRUED AS CONVEYING THE
SURFACE USE AGREEMENT, WHERE SUCH CONSTRUCTION WOULD RESULT IN A TERMINATION,
BREACH OR RELEASE OF THE SURFACE USE AGREEMENT, THEN SUCH PROVISION SHALL BE
NULL AND VOID AB INITIO AND OF NO FORCE OR EFFECT.
IF ANY SUCH NULLIFIED
PROVISION ALTERS THE OVERALL ECONOMIC EFFECT BETWEEN THE PARTIES HEREUNDER, THE
PARTIES SHALL USE GOOD FAITH EFFORTS TO AMEND THIS AGREEMENT TO CREATE THE
ECONOMIC