Rancher Energy Corp. 999-18th Street, Suite 1740 Denver, Colorado 80202 Telephone: (303) 629-1122 Fax: (720) 904-5698
999-18th
Street, Suite 1740
Xxxxxx,
Xxxxxxxx 00000
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
December
13, 2006
|
To:
|
The
holders of options (individually an “Option
Holder”
and collectively the “Option
Holders”)
to purchase shares (the “Shares”)
of common stock, $.0001 par value (the “Common
Stock”)
of Rancher Energy Corp. (the “Company”)
|
Dear
Option Holder:
This
letter agreement (the “Agreement”)
sets
forth the terms and conditions under which certain of the Option Holders who
have acquired one or more Options to purchase Common Stock agree to amend their
option agreement to temporarily delay their ability to exercise any Option
held
by such Option Holder. Capitalized terms used herein and not defined herein
shall have the meanings set forth in the Plan (as defined below).
As
you
may be aware, the Company has entered into agreements to (1) acquire certain
property located in Big Muddy Field (located in the Powder River Basin in
Wyoming), and (2) acquire working interests in Xxxx Xxxxx Xxxxx Xxxxx xxx Xxxxx
Xxxxxxxx X Field (both of which are located in the Powder River Basin), and
is
in the process of obtaining funds through one or more financings (each a
“Financing”)
sufficient to consummate one or more acquisitions (the “Acquisitions”).
The
Company currently has 100,000,000 shares of Common Stock authorized under its
Articles of Incorporation, as amended (the “Articles”),
and
such amount of authorized shares is insufficient to accomplish the financing(s)
required to obtain funds sufficient to consummate the Acquisitions. The Company
intends to amend the Articles to increase its authorized shares of Common Stock
to 225,000,000 shares of Common Stock as promptly as practicable after the
closing of the Financing(s).
Each
Option Holder holds one or more Options pursuant to Awards from the Company
to
such Option Holder and subject to the Company’s 2006 Stock Incentive Plan (the
“Plan”),
which
states in Section 7(d) that each Option shall be exercised in whole or in part
by delivering to the Company written notice of such Option Holder’s intent to
exercise the Option, along with the number of the number of shares with respect
to which the Option is to be exercised.
To
facilitate the Company’s ability to accomplish the Financing(s) and to raise
funds sufficient to consummate the Acquisitions, the undersigned Option Holder
agrees to waive certain rights under the Plan and to enter into certain other
agreements as further described below.
In
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees as follows:
| 1. |
Waiver
and Agreement.
Pursuant to Section 20(b) of the Plan, each of the undersigned Option
Holders hereby consents and agrees to waive such Option Holder’s right and
ability to exercise any Option held by such Option Holder until such
time
as the Company has amended its Articles to increase its authorized
shares
of Common Stock to at least 225,000,000
shares.
|
| 2. |
Governing
Law.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE
INTERNAL LAWS AND DECISIONS OF THE STATE OF COLORADO, WITHOUT REGARD
TO
THE CONFLICT OF LAWS PROVISIONS
THEREOF.
|
| 3. |
Captions.
Section captions and headings used in this Agreement are for convenience
only, and shall not affect the construction of this
Agreement.
|
| 4. |
Severability.
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law,
but if
any provision of this Agreement shall be prohibited by or invalid
under
such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such
provision or the remaining provisions of this
Agreement.
|
| 5. |
Counterparts
and Execution of Agreement.
This Agreement may be executed in any number of counterparts and
by the
different parties hereto on separate counterparts, and each such
counterpart shall be deemed to be an original, but all such counterparts
shall together constitute one and the same agreement. The exchange
of
copies of this Agreement and of signature pages by facsimile transmission
shall constitute effective execution and delivery of this Agreement
as to
the parties and may be used in lieu of the original Agreement for
all
purposes. Signatures of the parties transmitted by facsimile shall
be
deemed to be their original signatures of all
purposes.
|
| 6. |
Successors
and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns, and shall inure to the benefit
of such
parties and their respective successors and
assigns.
|
| 7. |
Enforceability.
The parties further acknowledge and agree that the enforceability
of this
Agreement as it pertains to the undersigned Option Holder shall not
be
dependent upon obtaining an executed Agreement from any other Option
Holder or any other holder of the Company’s securities.
|
| 8. |
Full
Force and Effect.
Except as specifically stated in this Agreement (i) this Agreement
shall not limit, diminish or waive the obligations of the parties
under
the Plan or any Award, and (ii) the parties reaffirm their obligations
under the Plan and each Award to which they are a party and agree
that the
Plan and any such Award remain in full
force.
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-2-
| 9. |
Information.
The Option Holder acknowledges that it has all information needed
to enter
into the agreements and make the waivers contemplated by this Agreement
and if it has requested any information from the Company it acknowledges
receiving the same.
|
[Remainder
of Page Intentionally Left Blank]
-3-
If
you
accept the foregoing terms, please execute in the space provided below and
return one copy to the Company at the above fax number.
Sincerely,
| By: | ||||
|
Xxxx Works
President and Chief Executive Officer
|
AGREED
AND ACCEPTED effective as of the date set forth above:
OPTION
HOLDER:
| Signature of Individual Option Holder: | ___________________________________________ | |
| Printed Name of Individual Option Holder: | ___________________________________________ |
_________________________________________________
Printed
Name of Entity (if applicable)
| By (Signature): | _________________________________ | |||
|
Name (printed)_____________________
Title:_____________________________
|
_________________________________________________
Address
_________________________________________________
City,
State, Postal or Zip Code, Country
[Signature
Page to Option Holder Letter Agreement]
