EXHIBIT 2
OPTION AGREEMENT
THIS AGREEMENT, made and entered into this 16th day of October, 1995, by and
between Francarep, Inc., 00 Xx. xxx Xxxxxx-Xxxxxxx, 00000 Xxxxx, Xxxxxx
("Francarep") and Xxxxxxx Xxxxx Oil Company, 000 X. 0xx Xxxxxx #000, Xxxxxx, XX
00000 ("KTOC").
WHEREAS, Francarep owns working interests in oil and gas properties as described
and set forth on Exhibit A hereto, which is expressly made a part hereof (the
"Interests"); and
WHEREAS, KTOC is a party to an Asset Purchase Agreement with Metro Capital
Corporation, a NASDAQ listed company ("Metro"), which among other things,
requires that KTOC obtain and transfer the Interests to Metro and pursuant to
which, KTOC is to receive shares of Metro common stock (the "Stock"); and
WHEREAS, Francarep desires to sell the Interests to KTOC for a purchase price
which includes the Stock.
NOW, THEREFORE, for and in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledge, the parties hereto
covenant and agree as follows:
1. OPTION. Francarep hereby grants KTOC an exclusive option to purchase the
interests (the "Option"). This Option Agreement will be effective only upon
completion of the merger between KTOC and Metro Capital and the transfer of
Francarep's assets to KTOC will be effective only when the purchase price (as
defined below) has been delivered to Francarep.
2. TERM. The Option shall be exercisable until January 1, 1996. Prior to such
date, Francarep shall make no disposition of the Interests.
3. PURCHASE PRICE. The purchase price for the Interests is: (a) $350,000 cash;
(b) 275,000 shares of Stock; and, (c) 330,000 shares of Metro Class B Common
Stock issued at closing of the Asset Purchase Agreement (the "Closing"). The
275,000 shares of Stock shall be subject to (i) a mandatory purchase by KTOC as
set forth in Paragraph 4; and (ii) a one time demand registration right to be
exercised by Francarep 6 months from Closing.
4. MANDATORY REPURCHASE. KTOC (or its assigns) is required to purchase all of
the Stock set forth in Paragraph 3.(b) hereof at any time within but no later
than 18 months after Closing (the "Repurchase Period") for a purchase price of
$1.50 per share. Such purchase may be completed in one or more transactions over
the Repurchase Period. KTOC shall provide as collateral for its repurchase
obligation as many shares of Metro Class B Common Stock (the "Collateral") as
necessary to match, when sold on the market, the repurchase price of $412,500
and Francarep shall have recourse solely against the Collateral as follows:
To the extent that KTOC does not repurchase all of the Stock, then Francarep
shall take title to that number of shares of Class B Common Stock which, when
converted to Stock and sold on the market, equals the balance of that purchase
price amount due from KTOC.
Ex. 2-1
5. NOTICE OF EXERCISE. KTOC shall have the right to exercise this option at any
time prior to expiration of its term by notifying Francarep in writing at its
above stated address, Attention: Xxxxxxx XXXXXXXXX.
6. CLOSING. The closing shall be handled through Xxxxxxx, Key & Xxxxxxxx, P.C.,
0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 ("BKB"), as follows: Francarep
shall cause appropriate Assignments to be delivered to BKB. KTOC shall deliver
the purchase price to BKB. Once the Assignments are properly prepared and
executed for recording purposes, BKB will deliver the purchase price to
Francarep.
7. WARRANTIES. Francarep, for itself, its successors and assigns, represents,
warrants and agrees to and with KTOC, its successors and assigns, that the
Interests are not burdened by liens, encumbrances, burdens or defects of title
arising by, through or under Francarep.
8. AUTHORIZATION. The execution and performance of this agreement has been
authorized by the Board of Directors of Francarep; Francarep has taken all
required and appropriate action for the performance of this agreement; and, this
agreement is a binding and enforceable obligation of Francarep.
9. DEVELOPMENTS. KTOC agrees to keep Francarep advised of developments with
regard to the transaction with Metro.
10. NOTICE. Any notice shall be in writing, mailed or delivered to the parties
at its respective address as above set forth.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the
date set forth above.
FRANCAREP
By: /s/ Xxxxxxx Xxxxxxx(*)
Xxxxxxx Xxxxxxx, an Officer
XXXXXXX XXXXX OIL COMPANY
By: /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, President
(*) Subject to the approval of the wording of Paragraph 4 by Metro Capital
and Xxxxxxx Key & Xxxxxxxx, P.C.
Ex. 2-2
