OPTION AGREEMENT
EXHIBIT
99.1
THIS AGREEMENT (the "Agreement") is
made as of the 3rd day of August, 2009 (the "Effective Date"), by and between
Xxxxx X. Xxxxxx, located at 0000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxx Xxxxx, Xxxxxx,
00000 ("Optionor") and Signature Exploration & Production Corp., a Delaware
corporation ("Optionee").
WITNESSETH:
WHEREAS,
the Optionor owns a certain 2,087 acres located on Medicine Lodge, Kansas known
as the Medicine River Ranch and Oil Company, LLC and Optionor desires to enter
into the oil and gas development business, and Optionor seeks a partner for the
oil and gas development business. and the Optionor desires to grant the Optionee
an option;
WHEREAS,
the Optionee is engaged in the oil and gas exploration and development business
and Optionee seeks to partner with mineral rights owners to develop oil and gas
prospects and the Optionee desires to option from the Optionor;
NOW, THEREFORE, THIS AGREEMENT
WITNESSES in consideration of the premises and 25,000 shares of SXLP restricted
common stock paid upon execution of this agreement and an additional 75,000
shares of SXLP restricted common stock will be issued upon acceptance of a
Definitive Participation Agreement, the sufficiency of which is hereby
acknowledged, the Optionor hereby grants to the Optionee the
Option:
1. Description
of Option. Optionor share grant to Optionee an option to purchase up
to a fifty (50%) percent working interest participation in the oil and gas
exploration and development activities on the 2,087 acres known as Medicine
River Ranch and Oil Company, LLC.
2. Term. The
term of the Option shall be a period of one year from the date of this agreement
or until the date a Definitive Participation Agreement has been executed or
rejected by the parties or the Definitive Participation Agreement expires,
whichever shall be the first to occur.
3. Definitive
Participation Agreement. A Definitive Participation Agreement shall be
constructed by both parties that will include all aspects of the participation
agreement including, but not limited to, the land bonus payment, royalty
payment, participation costs, all details related to pre-drill activity
expenses, drilling activity expenses and post drilling activity expenses,
revenue management and all other normal and customary items found in a
participation agreement. A plan for the development of the total
2,087 acres shall be agreement upon in the Definitive Participation
Agreement.
4. Exercise
of Option. The Optionee shall for the purposes of exercising the
option, give the Optionor notice in writing thereof by delivering the Definitive
Participation Agreement accompanied by a certified check or bank draft payable
to the Optionor in the amount of representing the Optionee's percentage level of
participation.
5. Restriction
of Option. Optionee may not exercise any level of participation until
Optionee has received a Definitive Purchase Agreement containing all terms and
condition of participation acceptable to the Optionor. Optionor has
no obligation to grant any level of participation to Optionee without Optionee's
acceptance of all of the Optionor's terms and conditions described on the
Definitive Purchase Agreement.
6. Assignability
of Option. The option is personal to the
Optionee. Accordingly, the Optionee may not sell, assign, or
otherwise transfer the option or any of its rights with prior written consent of
the Optionor.
7. Restriction
on Common Stock. The 25,000 shares of restricted common stock issued
in conjunction with this agreement shall be deemed restricted stock as defined
by the Securities and Exchange Commission, and therefore may not be transferred
or sold until the appropriate restriction period has
passed. Additionally, after the shares become freely tradable, the
Optionor agrees to sell no more than 2,500 shares per day in either public
market or private transaction for as long as the Optionor may hold the
shares.
8. Additional
Share Issuance. An additional 75,000 shares of restricted common
stock will be issued to the Optionor upon the acceptance of the Definitive
Purchase Agreement. These shares will be subject to the same sale
limitations as discussed in Section 7 above.
9. Entire
Agreement. This agreement expresses the entire agreement between the
parties concerning the subject matter hereof and supersedes all previous
agreements, whether writing or oral, between the parties respecting the subject
matter hereof.
10. Successors
and Assigns. This agreement shall be binding upon the parties hereto
and their respective heirs, executors, administrators and successors, and
permitted assigns.
11. Governing
Law. This agreement shall be governed by and construed in accordance
with the laws of the State of Florida.
IN
WITNESS WHEROF, the parties hereto have executed the agreement as of the date
first above written.
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/s/ Xxxxx Xxxxxx
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Signature
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Optionor: Medicine River Ranch and Oil Company, LLC
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By: Xxxxx X. Xxxxxx
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/s/ Xxxxxx Xxxxxx
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Signature
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Optionee: Signature Exploration and Production Corp.
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By: Xxxxxx Xxxxxx, Chief Financial Officer and Director
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