EXHIBIT 10.126
STATE OF TEXAS )
)
COUNTY OF DALLAS )
OPTION AGREEMENT
THIS OPTION AGREEMENT is entered into and shall be effective as of
12:01 a.m., May 1, 1995 (hereinafter referred to as the "Effective Date"),
by and between READING & XXXXX DEVELOPMENT CO., a Delaware corporation,
federal taxpayer identification no. 00-0000000, whose mailing address is
000 Xxxxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 ("Assignor") and ENSERCH
EXPLORATION, INC., a Texas corporation, federal taxpayer identification
no. 00-0000000, whose mailing address is 0000 Xxxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000 ("Assignee").
In consideration of the payment of the sum of One Thousand
($1,000.00) Dollars and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor does hereby grant in
favor of Assignee the option to purchase, upon the occurrence of a Change
in Control of the Company, as hereinbelow defined, and on the terms and
conditions described hereinbelow, the undivided right, title and interest
reflected in Exhibit 1, Part (a) hereof, together with any and all right,
title and interest which may be hereinafter acquired by Assignor pursuant
to the terms of the Operating Agreement, dated effective May 1, 1995,
entered into by Assignor and Assignee and third parties (the "Operating
Agreement"), in and to the following described properties (the
"Property"):
(a) The oil, gas and mineral leases described on Exhibit 1, Part
(a) (the "Leases"), together with a like interest with respect
to the Leases in and to any and all (i) mineral interests,
(ii) overriding or landowners' royalty interests, (iii) surface
and subsurface interests and rights, (iv) beneficial,
convertible or reversionary interests, (v) interest owned,
claimed or acquired, or to be owned, claimed or acquired, by
agreement, (vi) production payments, (vii) contractual
interests owned pursuant to participation agreements, operating
agreements or similar agreements, and (viii) any and all like
or unlike interests, including without limitation those
specific items identified on Exhibit 1, Part (a). This shall
include any contractual rights providing for the acquisition or
earning of any of the foregoing, and Assignor's rights in
respect of any pooled, communitized or unitized acreage of
which any of the foregoing is a part. (All of the foregoing
shall be called collectively the "Leasehold Interests.")
(b) Any and all xxxxx, wellbores, pipe, gathering lines,
compressors, facilities, equipment, platforms, pipelines and
any and all other personal, real, movable and immovable
property, fixtures or equipment which are located on or used
directly in connection with the production, treatment or
transportation of oil and gas from the Leasehold Interests,
including, without limitation, those items specifically
identified on Exhibit 1, Part (b) (the "Equipment").
(c) Any and all easements, rights-of-way, and subsurface and
surface rights associated or used in connection with any such
easements or rights-of-way, which easements, rights-of-way and
subsurface and surface rights have been obtained for use in
connection with the Leasehold Interests (the "Gathering
Facilities").
(d) To the extent the same are assignable or transferable by
Assignor and to the extent and only to the extent that the same
relate to the ownership or operation of the Leasehold
Interests, the Gathering Facilities or the Equipment on or
after the Effective Date, a like interest in and to all orders,
contracts, agreements (including without limitation all
operating agreements, transportation agreements, unit
agreements, participation agreements and processing
agreements), instruments, licenses, authorizations, permits,
audits, claims, liens, suits, settlements and demands, and
other rights, privileges, benefits and powers conferred upon
Assignor.
Assignor and Assignee have heretofore entered into a Purchase and
Sale Agreement, dated October 18, 1995 with Assignor, as Buyer, and
Assignee, as Seller, covering the Leases (the "Purchase and Sale
Agreement") and the Operating Agreement covering the Leases. In
connection with the obligations set forth in the Purchase and Sale
Agreement and Operating Agreement, Assignor and Assignee do hereby agree
that this Option Agreement shall be irrevocable until the occurrence of
(i) ten (10) years from the date hereof; or (ii) the termination date of
the Operating Agreement, as provided in Article 26 thereof, whichever
occurs first.
For purposes of this Option Agreement, a "Change in Control of the
Company" shall mean a change in control of a nature that would be required
to be reported in response to Item 1(a) of the Current Report on Form 8-K,
as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") or would have
been required to be so reported but for the fact that such event had been
"previously reported" as that term is defined in Rule 12b-2 of Regulation
12B of the Exchange Act; provided that, without limitation, such a change
in control shall be deemed to have occurred if (a) any Person is or
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing
40% or more of the combined voting power of the Company's then outstanding
securities ordinarily (apart from rights accruing under special
circumstances) having the right to vote at elections of directors ("Voting
Securities"), or (b) individuals who constitute the Board on the Effective
Date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least three-
quarters of the directors comprising the Incumbent Board (either by
specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without objection to
such nomination) shall be, for purposes of this clause (b), considered as
though such person were a member of the Incumbent Board, or (c) a
recapitalization of the Company occurs which results in either a decrease
by 33% or more in the aggregate percentage ownership of Voting Securities
held by Independent Shareholders (on a primary basis or on a fully diluted
basis after giving effect to the exercise of stock options and warrants)
or an increase in the aggregate percentage ownership of Voting Securities
held by non-Independent Shareholders (on a primary basis or on a fully
diluted basis after giving effect to the exercise of stock options and
warrants) to greater than 50%. For purposes of this Option Agreement,
"Company" shall be deemed to mean Assignor and the parent of Assignor
and/or any other entity controlling a majority of the voting stock of
Assignor. Furthermore, for purposes of this Option Agreement, the term
"Person" shall mean and include any individual, corporation, partnership,
group, association or other "person," as such term is used in Section
14(d) of the Exchange Act, other than the Company, a subsidiary of the
Company or any employee benefit plan(s) sponsored or maintained by the
Company or any subsidiary thereof, and the term "Independent Shareholder"
shall mean any shareholder of the Company except any employee(s) or
director(s) of the Company or any employee benefit plan(s) sponsored or
maintained by the Company or any subsidiary thereof. For purposes of this
Option Agreement, a "change in control of the Company" shall not be deemed
to occur solely as the result of a spin-off or other distribution of the
outstanding stock of the Buyer (or assignee or transferee of the Buyer to
which Seller has consented under the provisions of Article 8.14 of the
Operating Agreement, hereinafter a "permitted assignee") to the
stockholders of the ultimate parent corporation controlling a majority of
the voting stock of Buyer or any permitted assignee.
Upon the occurrence of a Change in Control of the Company, Assignor
shall give written notice to Assignee of such occurrence and Assignee
shall have sixty (60) days from receipt of such notice within which to
elect to acquire this interest. If Assignee elects to acquire the
Property, written notice will be sent to Assignor prior to the expiration
of ten (10) business days following the expiration of the aforenoted sixty
(60) day period.
The consideration for this conveyance shall be the sum of (i) that
portion of the Purchase Price, as defined in the Purchase and Sale
Agreement, heretofore paid by Assignor to Assignee, less and except any
interest paid, and (ii) actual out-of-pocket expenditures made by Assignor
with respect to the Property which were incurred and paid by Assignor
("Purchase Price"). The Purchase Price shall be paid in cash at the time
of the passing of the act of sale, which shall occur at the offices of the
Assignee within ten (10) business days of Assignor's receipt of
notification of Assignee's election to purchase.
Assignor shall convey the Property to Assignee, free and clear of any
and all liens, mortgages, claims, overriding royalty interests, production
payments or other burdens which may have been created by, through or under
Assignor.
Any notice provided or permitted to be given under this Option
Agreement shall be in writing, and may be served by personal delivery, by
depositing same in the mail, addressed to the party to be notified,
postage prepaid, and registered or certified with a return receipt
requested or by facsimile transmission. Notice deposited in the mail in
the manner hereinabove described shall be deemed to have been given and
received on the date of the delivery as shown on the return receipt.
Notice served in any other manner shall be deemed to have been given and
received only in and when actually received by the addressee. For
purposes of notice, the addresses of the parties shall be as follows:
Assignor's Mailing Address:
Reading & Xxxxx Development Co.
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Assignee's Mailing Address:
Enserch Exploration, Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Each party shall have the right, upon giving ten (10) days prior notice to
the other in the manner hereinabove provided, to change its address for
purposes of notice.
IN WITNESS WHEREOF, this Assignment is executed in multiple originals
and in the presence of the undersigned witnesses on this 18th day of
October, 1995, but to be effective as of the Effective Date.
WITNESSES: ASSIGNOR:
READING & XXXXX DEVELOPMENT CO.
_____________________________________ By:_______________________________
X. X. Xxxxxxx
Name:________________________________ President
(Please Print)
______________________________________
Name:_________________________________
(Please Print)
ASSIGNEE:
ENSERCH EXPLORATION, INC.
_______________________________________ By:______________________________
X. X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxx, Xx. Senior Vice President
Offshore and International
_______________________________________
Name:__________________________________
(Please Print)
STATE OF TEXAS
COUNTY OF DALLAS
BEFORE ME, the undersigned authority, duly commissioned and qualified
within and for the State and County aforesaid, personally came and
appeared:
X. X. XXXXXXX, to me personally known to be the person whose name is
subscribed to the foregoing instrument, who declared and acknowledged to
me, notary, in the presence of the undersigned competent witnesses, that
he executed the above and foregoing instrument in his capacity as
President of Reading & Xxxxx Development Co., a Delaware corporation, on
behalf of said corporation with full authority, and that the said
instrument is the free act and deed of the said corporation, and was
executed for the uses, purposes and benefits therein expressed.
THUS DONE, READ AND SIGNED in the State and County aforesaid, in the
presence of _________________________________ and
____________________________, competent witnesses, on the 18th day of
October, 1995.
WITNESSES:
__________________________________ ___________________________________
X. X. Xxxxxxx
__________________________________
___________________________________
Notary Public
in and for State of Texas
My Commission expires:______________
STATE OF TEXAS
COUNTY OF DALLAS
BEFORE ME, the undersigned authority, duly commissioned and qualified
within and for the State and County aforesaid, personally came and
appeared:
X. X. XXXXXXXXX, to me personally known to be the person whose name
is subscribed to the foregoing instrument, who declared and acknowledged
to me, notary, in the presence of the undersigned competent witnesses,
that he executed the above and foregoing instrument in his capacity as
Senior Vice President, Offshore and International of Enserch Exploration,
Inc., a Texas corporation, on behalf of said corporation with full
authority, and that the said instrument is the free act and deed of the
said corporation, and was executed for the uses, purposes and benefits
therein expressed.
THUS DONE, READ AND SIGNED in the State and County aforesaid, in the
presence of Xxxxx X. Xxxxxxx, Xx. and ___________________________,
competent witnesses, on the 18th day of October, 1995.
WITNESSES:
___________________________________ _________________________________
Xxxxx X. Xxxxxxx, Xx. X. X. Xxxxxxxxx
__________________________________
______________________________________________
Notary Public
in and for State of Texas
My Commission expires:______________
EXHIBIT 1 TO OPTION AGREEMENT
PART (a)
LEASEHOLD INTERESTS
1. LEASE OCS-G 8504. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
June 1, 1986, by and between the United States of America, as Lessor,
and Placid Oil Company, et al., as Lessees, bearing Serial No. OCS-G
8504 covering all of Block 209, Green Canyon, OCS Official
Protraction Diagram, NG 15-3.
Working Interest 13.333333%
Net Revenue Interest 11.616868%
2. LEASE OCS-G 7049. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
June 1, 1984, by and between the United States of America, as Lessor,
and Placid Oil Company, et al., as Lessees, bearing Serial No. OCS-G
7049 covering all of Block 254, Green Canyon, OCS Official
Protraction Diagram, NG 15-3.
Working Interest 20.000000%
Net Revenue Interest 17.3506665%
3. LEASE OCS-G 8010. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
July 1, 1985, by and between the United States of America, as Lessor,
and Placid Oil Company, et al., as Lessees, bearing Serial No. OCS-G
8010 covering all of Block 298, Green Canyon, OCS Official
Protraction Diagram, NG 15-3.
Working Interest 20.00000%
Net Revenue Interest 17.35066%
4. LEASE OCS-G 8012. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
July 1, 1985, by and between the United States of America, as Lessor,
and Placid Oil Company, et al., as Lessees, bearing Serial No. OCS-G
8012 covering all of Block 342, Green Canyon, OCS Official
Protraction Diagram, NG 15-3.
Working Interest 20.00000%
Net Revenue Interest 17.35066%
5. LEASE OCS-G 8876. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
June 1, 1987, by and between the United States of America, as Lessor,
and Xxxx Petroleum Corporation, et al., as Lessees, bearing Serial
No. OCS-G 8876 covering all of Block 297, Green Canyon, OCS Official
Protraction Diagram, NG 15-3.
Working Interest 20.000000%
Net Revenue Interest 16.833333%
6. LEASE OCS-G 13171. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
May 1, 1991, by and between the United States of America, as Lessor,
and Exxon Corporation, as Lessees, bearing Serial No. OCS-G 13171
covering all of Block 341, Green Canyon, OCS Official Protraction
Diagram, NG 15-3.
Working Interest 20.000000%
Net Revenue Interest 17.500000%
7. LEASE OCS-G 13696. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
July 1, 1992, by and between the United States of America, as Lessor,
and Exxon Corporation, as Lessees, bearing Serial No. OCS-G 13696
covering all of Block 210, Green Canyon, OCS Official Protraction
Diagram, NG 15-3.
Working Interest 20.000000%
Net Revenue Interest 17.500000%
8. LEASE OCS-G 8000. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
July 1, 1985, by and between the United States of America, as Lessor,
and Placid Oil Company, et al., as Lessees, bearing Serial No. OCS-G
8000 covering all of Block 213, Green Canyon, OCS Official
Protraction Diagram, NG 15-3.
Working Interest 20.00000%
Net Revenue Interest 17.35066%
9. LEASE OCS-G 8006. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
July 1, 1985, by and between the United States of America, as Lessor,
and Placid Oil Company, et al., as Lessees, bearing Serial No. OCS-G
8006 covering all of Block 258, Green Canyon, OCS Official
Protraction Diagram, NG 15-3.
Working Interest 20.00000%
Net Revenue Interest 17.35066%
10. LEASE OCS-G 8005. That certain Oil and Gas Lease of Submerged Lands
under the Outer Continental Shelf Lands Act made and effective as of
July 1, 1985, by and between the United States of America, as Lessor,
and Amerada Xxxx, et al., as Lessees, bearing Serial No. OCS-G 8005
covering all of Block 253, Green Canyon, OCS Official Protraction
Diagram, NG 15-3.
Working Interest 20.000000%
Net Revenue Interest 16.500000%
PART (b)
EQUIPMENT
1. XXXXX:
WORKING REVENUE
INTEREST INTEREST
A. OCS-G 7049 #3 20.00000% 17.350665%
B. OCS-G 7049 #4 20.00000% 17.350665%
C. 0CS-G 7049 #4ST1 20.00000% 17.350665%
D. OCS-G 7049 #5 20.00000% 17.350665%
2. TEMPLATE:
That certain three well drilling template acquired, inter alia, by
Seller for use in connection with the drilling of the OCS-G 7049 #5
Well.
