Exhibit 99
November 14, 2005
VIA HAND DELIVERY
The Xxxxx Company
Attn: Xxxx Xxx, Xx., President
X.X. Xxxxx, Chairman
Enterprise Plaza, Suite 000
0000 X. Xxx Xxx.
Oklahoma City, OK 73112
Gentlemen:
Reference is made to that certain Call Option Agreement dated April 10,
1996 between The Xxxxx Company ("Xxxxx") and Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxxx, and Xxxxxxx X. Xxxxx (collectively, the "Shareholders") pursuant to
which Xxxxx granted the Shareholders an option (the "Option") to purchase
144,000 shares of the voting common stock (the "Shares") of Cibola Corporation,
a Wyoming corporation ("Cibola").
Please allow this letter to serve as the notice contemplated under Section
3(a)(iii) of the Call Option Agreement of our election to exercise the Option
for all of the Shares. This election is being made in reliance upon and in
accordance with the agreements made in our letter agreement dated November 4,
2005, a copy of which is attached.
The Shares will be purchased by us (or our designees to be named prior to
the closing) in the percentages set forth on Exhibit "A" hereto.
In accordance with the Call Option Agreement, we each severally represent
to Xxxxx that we will be acquiring the Shares for our own account, not as a
nominee or agent, and not with a view toward, or for resale in connection with,
any redistribution thereof, and we jointly and severally hereby guarantee the
prompt and full payment of any obligations of Cibola under the Tax Sharing
Agreement.
Payment of the option price shall be Cibola's cancellation of the
Nonrecourse Secured Promissory Note dated April 10, 1996 (the "Note"); that is,
it shall be treated as if we had paid to Xxxxx whatever the outstanding balance
of the Note is, with Xxxxx then paying that amount to Cibola in satisfaction and
cancellation of Xxxxx'x obligations under the Note, and upon such cancellation
of the Note, we agree that the security interest created by that certain
Security Agreement dated April 10, 1996 between Cibola, as Secured Party, and
Xxxxx, as Debtor, shall be terminated, and we shall cause Cibola to execute such
documents as Xxxxx may reasonably request evidencing the cancellation of the
Note and the termination of such security interest.
To consummate the transactions contemplated by the exercise of the Option,
we will require that (i) Xxxxx deliver to us original Stock Certificate No. 004
for 144,000 shares, duly endorsed, and accompanied by a duly executed stock
power, and (ii) Messrs. Xxx and Xxxxx deliver to Cibola their respective
resignations from the Cibola board of directors. For your convenience, we have
enclosed execution versions of the Stock Assignments and Powers of Attorney that
we will require, as well as the referenced resignations.
The exercise of the Option, the transfer of Shares and the resignation
described above shall be effective as of 12:01 a.m. on December 1, 2005.
We further agree that (i) this letter may be executed in two or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same letter, and the signature of
any party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart, and (ii) any counterpart hereof signed and
transmitted by any party hereto (or their counsel) by facsimile machine,
telecopier or electronic mail shall be treated as an original provided that any
such transmission by electronic mail shall be effective only if transmitted in
..pdf format, .tif format or other format in which the text is not readily
modifiable by any recipient thereof.
* * * * *
Sincerely,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, individually and on
behalf of the general partner of
Xxxxxxx Family Limited Partnership
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, individually
and as Trustee of the
Xxxxxxx X. Xxxxx Revocable Trust
AGREED TO AND ACCEPTED
THIS 28th DAY OF November, 2005:
The Xxxxx Company
By: /s/Xxxx Xxx, Xx.
Name: Xxxx Xxx, Xx.
Title: President
cc: Xxxx X. Xxxxxx, Esq. (McAfee & Xxxx)
EXHIBIT "A"
Xxxxxxx X. Xxxxxxx 61.6%
Xxxxx X. Xxxxxxx 20.8%
Xxxxxxx X. Xxxxx 17.6%
November 4, 2005
COPY
VIA HAND DELIVERY
The Xxxxx Company
Attn: Xxxx Xxx, Xx., President
X.X. Xxxxx, Chairman
Enterprise Plaza, Suite 000
0000 X. Xxx Xxx.
Oklahoma City, OK 73112
Gentlemen:
Reference is made to that certain Call Option Agreement dated April 10,
1996 between The Xxxxx Company ("Xxxxx") and Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxxx, and Xxxxxxx X. Xxxxx (collectively, the "Shareholders") pursuant to
which Xxxxx granted the Shareholders an option (the "Option") to purchase
144,000 shares of the voting common stock (the "Shares") of Cibola Corporation,
a Wyoming corporation ("Cibola").
Upon receipt from Xxxxx of an originally countersigned version of this
letter indicating Xxxxx'x agreement to the terms set forth herein, we will
immediately deliver to Xxxxx the notice contemplated under Section 3(a)(iii) of
the Call Option Agreement of our election to exercise the Option for all of the
Shares. The Shares will be purchased by us (or our designees) in the percentages
set forth on Exhibit "A" hereto. In that notice we will also, in accordance with
the Call Option Agreement, each severally represent to Xxxxx that we are
acquiring the Shares for our own account, not as a nominee or agent, and not
with a view toward, or for resale in connection with, any redistribution
thereof, and jointly and severally agree to guarantee the prompt and full
payment of any obligations of Cibola under the Tax Sharing Agreement. Also, our
notice will include statements that (i) payment of the option price shall be
Cibola's cancellation of the Nonrecourse Secured Promissory Note dated April 10,
1996 (the "Note"); that is, it shall be treated as if we had paid to Xxxxx
whatever the outstanding balance of the Note is, with Xxxxx then paying that
amount to Cibola in satisfaction and cancellation of Xxxxx'x obligations under
the Note, and (ii) upon such cancellation of the Note, we agree that the
security interest created by that certain Security Agreement dated April 10,
1996 between Cibola, as Secured Party, and Xxxxx, as Debtor, shall be
terminated, and we shall cause Cibola to execute such documents as Xxxxx may
reasonably request evidencing the cancellation of the Note and the termination
of such security interest.
To consummate the transactions contemplated by the exercise of the Option,
we will require that (i) Xxxxx deliver to us original Stock Certificate No. 004
for 144,000 shares, duly endorsed, and accompanied by a duly executed stock
power, and (ii) Messrs. Xxx and Xxxxx deliver to Cibola their respective
resignations from the Cibola board of directors.
We will require that the exercise of the Option, the transfer of the Shares
and the resignations described above be effective as of 12:01 a.m. on December
1, 2005.
As stated above, we will send Xxxxx a notice exercising the Option provided
that Xxxxx agrees that, with respect to the Tax Sharing Agreement, all items of
income accruing to Cibola and arising out of either (i) any and all capital
gains realized by Cibola as a result of transactions of its securities between
October 20, 2005 and through and including November 30, 2005, and (ii) any
payments for sales of natural gas occurring on or after September 1, 2005 by
Cibola shall be excluded for purposes of the calculations under the Tax Sharing
Agreement.
We further agree that (i) this letter may be executed in two or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same letter, and the signature of
any party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart, and (ii) any counterpart hereof signed and
transmitted by any party hereto (or their counsel) by facsimile machine,
telecopier or electronic mail shall be treated as an original provided that any
such transmission by electronic mail shall be effective only if transmitted in
..pdf format, .tif format or other format in which the text is not readily
modifiable by any recipient thereof.
Please sign below to indicate your agreement to the terms set forth in this
letter.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, individually and on
behalf of the general partner of
Xxxxxxx Family Limited Partnership
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, individually
and as Trustee of the
Xxxxxxx X. Xxxxx Revocable Trust
AGREED TO AND ACCEPTED
THIS 7th DAY OF November,
The Xxxxx Company
By: /s/Xxxx Xxx, Xx.
Name: Xxxx Xxx, Xx.
Title: President
cc: Xxxx X. Xxxxxx, Esq. (McAfee & Xxxx)
EXHIBIT "A"
Xxxxxxx X. Xxxxxxx 61.6%
Xxxxx X. Xxxxxxx 20.8%
Xxxxxxx X. Xxxxx 17.6%
