Partial Settlement and Conversion Agreement - Joseph F. Langston Jr. and Search Exploration Inc.
This Partial Settlement and Conversion Agreement (the 'Agreement') is
entered into as of _____________, 1995, between Joseph F. Langston, Jr.
('Langston'), and Search Exploration, Inc., a Delaware corporation ('Search').
W I T N E S S E T H
WHEREAS, Search and Langston are parties to that certain employment
agreement dated July 23, 1991 (the 'Employment Agreement') a copy of which is
attached hereto as Exhibit 'B';
WHEREAS, Search has agreed to compensate Langston pursuant to the
Employment Agreement for services rendered as its President and Chief Executive
Officer, (i) a base salary at the annual rate of One Hundred Thirty Two
Thousand Dollars ($132,000), (ii) any annual increase in addition to the Base
Salary, annual bonuses, and transactional bonuses which may be awarded to
Langston by Search's board of directors pursuant to the Employment Agreement,
and (iv) termination and severance compensation as described in Section 7
therein (such total amount due to Langston pursuant to the Employment Agreement
is collectively referred to herein as the 'Employment Compensation');
WHEREAS, Search has previously entered into that certain Agreement and
Plan of Merger dated November 8, 1994, and amended on March ___, 1995 (as
amended, the 'Merger Agreement') by and among Search, Harken Energy
Corporation, a Delaware corporation ('Harken'), and Search Acquisition Corp., a
WHEREAS, Search and Langston desire to enter into this agreement in
order to facilitate the transactions contemplated by the Merger Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
1. In consideration of full settlement and resolution of any and
all Employment Compensation due under the Employment Agreement, including but
not limited to, any accrued but unpaid salary or bonuses, rights under any
employee benefit plan, rights under any disability, medical, life or other
insurance, or rights upon termination or severance of employment, Langston
shall be entitled to receive from Search an amount equal to $280,000.
2. Search's obligation to pay the amount set forth in Section 1
above shall be evidenced
and payable in accordance with an unsecured, non-interest bearing promissory
note, substantially in the form and substance of Exhibit A attached hereto (the
3. Pursuant to Section 1.07 of the Merger Agreement, at the
Effective Time, the obligations evidenced by the Promissory Note shall be
converted automatically into and shall thereafter only represent the right to
receive and shall be exchangeable for shares of common stock, $.01 par value
per share, of Harken (the 'Harken Common Stock').
4. Upon the conversion of the Promissory Note as provided in
Section 3 above, Search shall be released from any and all obligations under
the Employment Agreement and the Promissory Note: provided, however, this
Agreement is not intended to and shall not be deemed as a release of any
obligations of Search to indemnify Langston against certain events as provided
for by Section 10 of the Employment Agreement.
5. This Agreement and the Promissory Note hereto are expressly
conditioned upon the consummation of the transactions contemplated by the
Merger Agreement and the occurrence of the Effective Time, and the failure to
consummate the Merger ( as defined therein) in accordance with the Merger
Agreement shall render this Agreement and the Promissory Note void and shall
release the parties hereto and thereto of any and all obligations hereunder and
thereunder, and in such event the terms and provisions of the Employment
Agreement shall remain and continue in full force and effect.
6. The rights and obligations under this Agreement shall be
binding upon and inure to the benefit of Search and Langston and their
respective successors and assigns.
7. This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter hereof and supersedes all
prior discussions and undertakings.
8. This Agreement shall be governed by the laws of the State of
Texas as to all matters, including but not limited to, matters of validity,
construction, effect, performance, and remedies.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SEARCH EXPLORATION, INC.
Joseph F. Langston, Jr.
JOINED HEREIN FOR PURPOSES OF SECTION 3 HEREOF:
HARKEN ENERGY CORPORATION
FORM OF PROMISSORY NOTE
$__________ Dallas, Texas_________, 199___
FOR VALUE RECEIVED, Search Exploration, Inc., a Delaware corporation
('Maker'), promises to pay to the order of Joseph F. Langston, Jr.
('Langston'), at 1500 Three Lincoln Centre, 5430 LBJ Freeway, Dallas, Dallas
County, Texas 75240-2387, the principal sum of $__________, in accordance with
and subject to the terms of the Conversion Agreement (hereinafter defined ) and
1. Reference to Partial Settlement and Conversion Agreement.
This Note is the Promissory Note referred to in that certain Partial Settlement
and Conversion Agreement between Maker and Langston of even date herewith (the
'Conversion Agreement'), and the terms and provisions of the Conversion
Agreement (including the defined terms used therein), are incorporated by
reference herein and made a part hereof.
2. Payment. The principal sum evidenced hereby is payable in
full at Langston's address set forth above, ninety (90) days following the day
and year first written above (the 'Due Date'). If the Due Date falls on a day
which is considered a legal holiday in the State of Texas, Maker shall be
entitled to delay such payment until the succeeding regular business day.
3. Interest. This Note shall be non-interest bearing.
4. Security. This Note shall be unsecured.
5. Conversion of Note. In accordance with Section 3 of the
Conversion Agreement hereto, the obligations evidenced by this Note will be,
under certain conditions, converted into and represent the right to receive the
number of shares of Harken Common Stock ( as defined therein) pursuant to the
terms of the Conversion Agreement.
6. Conditions. The obligations of Maker evidenced by this Note
are expressly contingent upon the consummation of the transactions contemplated
by that certain agreement and plan of merger (as amended, the 'Merger
Agreement') by and among Maker, Harken Energy Corporation, a Delaware
corporation ('Harken'), and Search Acquisition Corp., a Delaware corporation
('Merger Sub'), and the occurrence of the Effective Time (defined therein).
7. Successors and Assigns. All of the covenants, stipulations,
promises and agreements in this Note contained by or on behalf of Maker shall
bind its successors and assigns.
8. Headings. The headings of the paragraphs of this Note are
inserted for convenience only and shall not be deemed to constitute a part
9. Governing Law. This Note is being executed and delivered,
and is intended to be performed in the State of Texas, and the substantive laws
of such state shall govern the validity, construction, enforcement and
interpretation of this Note except insofar as federal laws shall have
10. Nontransferability. This Note may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution. Any attempted assignment,
transfer, pledge, hypothecation, or other encumbrance of this Note contrary to
the provisions hereof, any execution, attachment, or similar process upon this
Note, will be null, void and of no effect.
EXECUTED as of the day and year first written above.
SEARCH EXPLORATION, INC.