OPTION PARTICIPATION AGREEMENT
Exhibit 10.3
OPTION PARTICIPATION AGREEMENT
Xxxxxxxx Partners II LLC, a Louisiana limited liability company (“Xxxxxxxx”) and Dala Petroleum Corp., a Nevada corporation (“Dala”), (Xxxxxxxx and Dala may be referred to herein individually as “Party” and collectively as “Parties”), hereby enter into this Option Participation Agreement (“OPA”), effective May 2014, to wit:
WHEREAS, Xxxxxxxx is in the business of developing and drilling oil and/or gas xxxxx; and
WHEREAS, Dala has capital and desires to participate as a non-operator in the drilling for oil and/or gas;
NOW, THEREFORE, the Parties hereto agree in consideration of the mutual covenants set forth herein, the receipt and sufficiency of which are hereby acknowledged, as follows:
1. Option. Xxxxxxxx hereby grants to Dala the option (the “Option”) to participate for up to twenty-five percent (25%) of Xxxxxxxx’x share of each drilling operation in search of oil and/or gas in the State of Kansas undertaken by Xxxxxxxx on the same basis as Xxxxxxxx; i.e., if Xxxxxxxx acquires a drilling opportunity for $10,000 and Dala elects to participate for 25%, Dala shall pay to Xxxxxxxx twenty-five (25.0%) percent of $10,000 for its interest, which interest shall be subject to 25% of any burdens placed on Xxxxxxxx’x interest.
2. Election. Within five days after Xxxxxxxx elects to participate in any such drilling operation, it shall give Dala written notice thereof, which notice shall include the cost thereof to Dala, and Dala shall have seventy-two (72) hours from receipt of such notice within which to exercise its Option by giving Xxxxxxxx written notice thereof, together with its payment of its proportionate share of the cost charged to Xxxxxxxx to participate in such drilling opportunity. Dala’s failure to timely exercise its option shall be deemed ipso facto a decision not to exercise that Option.
3. Assignment. This OPA may not be assigned by Dala without the written consent of Xxxxxxxx.
4. Governing Law. This OPA is to be considered as having been executed in the State of Colorado and the Parties agree that Colorado law will govern.
5. Termination. This agreement shall terminate and be of no future force and effect one year from the date hereof unless extended by mutual agreement.
6. Notices. All notices to be given with respect to this OPA and applicable participation shall be by email, unless otherwise provided for as follows:
Xxxxxxxx Partners II LLC
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Attention: Managing Director
Phone: (000) 000-0000
Email address: xxxxxx@xxxxx.xxx
Dala Petroleum Corp.
000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
Thus done and signed this _______________ day of May, 2014.
XXXXXXXX PARTNERS II LLC |
| DALA PETROLEUM CORP. | ||
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By: |
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| By: |
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| Xxxxxxx Xxxxx, Managing Director |
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| E. Will Xxxx, CEO |
