EXHIBIT 4
OPTION TO PURCHASE
THIS OPTION TO PURCHASE is dated as of the 20th day of March, 1998, by
and among Royal Xxxx Minerals, Inc., a Delaware corporation ("RSMI"); and
Xxxxxxx Xxxxx ("KT"), Xxxxxxx Xxxxx Oil Company, a Colorado corporation
("KTOC"), and Art and Music Outreach for Kids, a Colorado nonprofit corporation
("AMOK") (KT, KTOC, and AMOK are each a "Stockholder" and collectively, the
"Stockholders").
Recitals
A. The authorized capital stock of American Rivers Oil Company (the
"Company"), a Wyoming corporation consists of 33,000,000 shares of capital
stock, of which 20,000,000 shares are designated as Class A common, 8,000,000
shares are designated as Class B common, and 5,000,000 are designated as
preferred stock. The total issued and outstanding Class A shares as of September
30, 1997 was 3,615,770, and the total issued and outstanding Class B shares is
7,267,820. There are no shares of preferred stock issued and outstanding. There
are no outstanding options, warrants, or rights to acquire the capital stock of
the Company, except as provided in Exhibit A.
B. KT owns 1,228,457 Class B shares of the issued and outstanding
shares of the capital stock of the Company (the "KT Shares"). KT desires to
grant an option to RSMI to purchase the KT Shares.
C. KTOC owns 3,749,565 Class B shares of the issued and outstanding
shares of the capital stock of the Company ("KTOC Shares"). KTOC desires to
grant an option to RSMI to purchase the KTOC Shares, provided any such purchase
would be subject to the obligation burdening the KTOC shares pursuant to the
Francarep Agreement (as defined below).
D. AMOK owns 250,000 Class B shares of the issued and outstanding
shares of the capital stock of the Company (individually the "AMOK Shares" and
collectively with the KT Shares and KTOC Shares, the "Shares"). AMOK desires to
grant RSMI an option to purchase the AMOK Shares.
E. KTOC is a party to that certain Option Agreement dated as of October
16, 1995, by and between Francarep, Inc., a Delaware corporation ("Francarep")
and KTOC, as amended by that certain Option Agreement dated as of June 6, 1997
(collectively the "Francarep Agreement") which is included as Exhibit F. KTOC is
obligated to purchase 275,000 shares of Class A common stock of the Company from
Francarep pursuant to the terms of the Francarep Agreement. In addition, KTOC
has the right to purchase 330,000 shares of Class B common stock and 68,750
shares of Xxxxxx Capital Corporation common stock from Francarep (the 275,000
Class A shares, 330,000 Class B shares, and 68,750 shares of Xxxxxx common stock
are collectively, the "Francarep Shares"). KTOC desires to grant RSMI an option
to purchase the Francarep Shares
Ex. 4-1
F. As consideration for the Options (as defined below) RSMI will pay
the Stockholders $200,000.00. The Options to purchase the KT Shares, KTOC
Shares, AMOK Shares and Francarep Shares (collectively, the "Shares") will have
an exercise price of $650,000.00.
IN CONSIDERATION of the mutual covenants set forth below and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Agreement
ARTICLE I: OPTION
1.01 Option Premium. RSMI agrees to pay the Stockholders and the Escrow
Agent (as defined below) a total of $200,000.00 in cash or other immediately
available funds on or before March 31, 1998 (the "Option Premium") in exchange
for the Options (as defined below). RSMI agrees to pay the Option Premium as
follows:
(a) One hundred thousand dollars to the Stockholders, whereby
each Stockholder will be entitled to the portion of the Option Premium as
specified in Exhibit B; and
(b) One hundred thousand dollars to the Escrow Agent (as
defined below).
1.02 Grant of Option. The Stockholders hereby grant to RSMI irrevocable
and exclusive options (the "Options") to purchase the Shares on the terms and
conditions set forth below.
1.03 Term of Option. The term of the Options shall be until 5:00 p.m.
September 15, 1998 (the "Expiration Date").
1.04 Exercise of Option. The Options may be exercised by RSMI at any
time prior to the Expiration Date by executing and delivering to the
Stockholders written notice of such exercise.
1.05 Francarep Shares. Upon the payment of the $100,000.00 to the
Escrow Agent pursuant to Section 1.01(b) above, Xxxxxxx Xxxxx agrees to take all
necessary actions to have Francarep transfer the Francarep Shares to the Escrow
Agent in exchange for the $100,000.00.
1.06 Definitions. The term "Escrow Agreement" shall mean an escrow
agreement that is substantially in the form attached hereto as Exhibit E. The
term "Escrow Agent" shall mean the escrow agent that serves under the Escrow
Agreement.
ARTICLE II: EXERCISE
2.01 Exercise Price. The purchase price for the Shares shall be
$650,000.00 (the "Exercise Price") payable as described in Section 4.03 below.
The Option Premium shall not be considered as a payment of a portion of the
Exercise Price.
Ex. 4-2
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
3.01 Stock. The Stockholders own a total of 5,228,022 of the issued and
outstanding shares of the capital stock of the Company free and clear of all
liens, encumbrances, restrictions, claims, options, warrants, calls and
commitments of every kind, except that the KTOC Shares are pledged pursuant to
the Francarep Agreement.
3.02 Rights to Stock. KTOC is obligated to purchase the Francarep Shares.
3.03 Power and Authority. The Stockholders have full legal right, power and
authority to enter into this Option to Purchase and to exchange, assign, and
transfer the Shares to RSMI.
ARTICLE IV: CLOSING
4.01 Closing. The closing shall take place at the offices of Holme Xxxxxxx
& Xxxx, 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx, no later than 30 days
after receipt by the Stockholders of the written notice described in Section
1.04 above, or at such other place and time as the parties may agree.
4.02 Obligations of Stockholders. The events described in this Section 4.02
shall be a condition precedent to the Closing:
(a) The Stockholders agree to (i) deliver to RSMI stock
certificates representing their ownership of the KT Shares, KTOC Shares, and
AMOK Shares, duly endorsed in blank or accompanied by stock powers duly endorsed
in blank, and (ii) execute, acknowledge, and deliver any and all other documents
that are necessary to transfer the KT Shares, KTOC Shares, and AMOK Shares; and
(b) Xxxxxxx Xxxxx agrees to take all necessary actions to
assure that the Francarep Shares are transferred from the Escrow Agent to RSMI.
4.03 Obligations of RSMI. The events described in this Section 4.03 shall
be a condition precedent to the Closing.
(a) RSMI agrees to (i) pay the Stockholders a total of
$100,000.00 in cash or other immediately available funds and (ii) deliver to the
Stockholders a duly executed promissory note in the amount of $300,000.00,
payable over three years in accordance with terms of a promissory note
substantially in the form attached hereto as Exhibit C. Each Stockholder will be
entitled to the portion of the proceeds as specified in Exhibit B;
(b) RSMI agrees to deliver to the Escrow Agent a total of
$250,000.00 in cash or other immediately available funds; and
(c) RSMI agrees to execute a stock pledge and security
agreement substantially in the form attached hereto as Exhibit D.
ARTICLE V: NOTICES
Ex. 4-3
5.01 Notices. All notices and other communications required or permitted
hereunder shall be deemed sufficiently given or served for all purposes herein
set forth when received, provided such notice is hand delivered, mailed by first
class mail, or sent via facsimile. Notices or other communications shall be
delivered as follows:
To Stockholders at:
Xx. Xxxxxxx Xxxxx
000 Xxxx 0xx Xxxxxx; Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
To RSMI at:
Xx. XX Xxxxx
The Xxxxx Mine
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
ARTICLE VI: MISCELLANEOUS
6.01 Entire Agreement. This Option to Purchase embodies the entire
understanding and agreement among the parties and supersedes any and all prior
negotiations, understandings or agreements in regard thereto.
6.02 Amendment. This Option to Purchase may only be amended by the written
consent of all parties. No rights hereunder may be waived except by an
instrument in writing signed by the party sought to be charged with such waiver.
6.03 Applicable Law. This Option to Purchase shall be construed in
accordance with and governed by the laws of the State of Colorado.
6.04 Counterparts. This Option to Purchase may be executed in any number of
counterparts each of which shall be considered an original.
6.05 Severability of Provisions. Any provision of this Option to Purchase
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforcability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
6.06 Headings. The section headings used in this Option to Purchase are for
convenience of reference only and shall not affect the construction of this
Option to Purchase.
IN WITNESS WHEREOF, the parties have executed and delivered
this Option to Purchase as of the day and year first written above.
Ex. 4-4
ROYAL XXXX MINERALS, INC, a
Delaware corporation
By: /s/ Xxxxx Xxxx
Xxxxx Xxxx, President
/s/ Xxxxxxx Xxxxx
XXXXXXX XXXXX
XXXXXXX XXXXX OIL COMPANY, a
Colorado corporation
By: /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, President
ART AND MUSIC OUTREACH FOR KIDS, a
Colorado nonprofit corporation
By: /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, President
Ex. 4-5
EXHIBIT A
OPTIONS Shares Price Expiration
Xxxxxx X. Xxxxxxxxxx 20,000 $1.31 Aug-01
Xxxx X. Xxxxx 25,000 $1.31 Aug-01
Xxxxxx X. Xxxxxxxxxx 50,000 $0.68 Sep-99
Xxxxxx X. Xxxxxxxxxx 25,000 $1.65 Oct-00
Xxxx X. Xxxxx 15,000 $0.62 Sep-04
Xxxx X. Xxxxx 15,000 $1.50 Oct-05
Xxxxxx X. Xxxxxxxxxx 10,000 $0.62 Sep-04
Xxxxxx X. Xxxxxxxxxx 10,000 $1.50 Oct-05
Xxxxxx Xxxxx 5,000 $0.62 Sep-04
Xxxx Xxxxxxx 60,000 $2.00
Consult & Assist 275,000 $1.10 11/14/97
LMU 400,000 $1.00 03/15/01
Xxxxxx X. Xxxxxxxxxx 45,000 $1.38 07/31/98
Weston Capital Group 150,000 $1.00 2 yrs from issue
1,105,000
Ex. 4-6
EXHIBIT B
ALLOCATION OF OPTION PREMIUM
Xxxxxxx Xxxxx Oil Company $ 50,000
AMOK $ 25,000
Xxxxxxx Xxxxx $ 25,000
---------
TOTAL $100,000
DIVISION OF EXERCISE PRICE
Xxxxxxx Xxxxx Oil Company $280,000
AMOK $ 20,000
Xxxxxxx Xxxxx $100,000
TOTAL $400,000
Ex. 4-7
EXHIBIT C
PROMISSORY NOTE
$300,000.00 __________ __, 1998
FOR VALUE RECEIVED, the undersigned, Royal Xxxx Minerals, Inc., a
Delaware corporation ("Maker"), having an address of The Xxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxxxx, 00000, promises to pay to the order of Xxxxxxx Xxxxx ("KT"),
Xxxxxxx Xxxxx Oil Company, a Colorado corporation ("KTOC"), and Art and Music
Outreach for Kids, a Colorado nonprofit corporation ("AMOK") (KT, KTOC, and AMOK
are collectively the "Payee"), each with an address 000 Xxxx 0xx Xxxxxx; Xxxxx
000, Xxxxxx, XX 00000, the sum of Three Hundred Thousand DOLLARS and 00 CENTS
($300,000.00) (the "Principal Sum"), together with interest on the unpaid
Principal Sum at a rate of 6.5% per annum, compounded annually, payable as
follows:
(a) One hundred thousand dollars together with any and all
accrued and unpaid interest hereunder shall be due and
payable on or before September 15, 1999;
(b) One hundred thousand dollars together with any and all
accrued and unpaid interest hereunder shall be due and
payable on or before September 15, 2000; and
(c) One hundred thousand dollars together with any and all
accrued and unpaid interest hereunder shall be due and
payable on or before September 15, 2001 ("Maturity").
All interest hereunder shall be calculated on the basis of a 365-day
year, actual days elapsed.
This Note may be prepaid, either in whole or in part, at any time
without premium or penalty and without the consent of Payee.
Maker shall make all payments due under the terms of this Note to Payee
at the above address or at such other place as may be designated to Maker in
writing by Payee.
Whenever Payee shall sustain or incur any losses or out-of-pocket
expenses with respect to the Note in connection with (a) repayment of overdue
amounts under this Note, or (b) failure by Maker to pay all principal and
interest of this Note, when due hereunder (whether at maturity, by reason of
acceleration, or otherwise), Maker shall pay, on demand, to Payee, in addition
to any other penalties or premiums hereunder, an amount sufficient to compensate
Payee for all such losses or out-of-pocket expenses, including, without
limitation, all costs and expenses of a suit or proceeding, (or any appeal
thereof) brought for recovery of all or any part of or for protection
Ex. 4-8
of the indebtedness evidenced by this Note or to enforce Payee's rights
hereunder, including reasonable attorney's fees.
Time is of the essence hereof. At the option of the Payee, payment of
the Principal Sum and any and all accrued interest thereon may be accelerated,
and such amounts shall be immediately due and payable without further notice or
demand upon the occurrence (and continuation as hereinafter specified) of any of
the following:
(1) Failure to make any payment of any and all amounts required to be
paid hereunder when due or declared due.
(2) Dissolution, termination of existence, insolvency, business failure,
appointment of a receiver of any part of the property of, assignment for the
benefit of creditors by, or commencement of any proceeding under any bankruptcy
or insolvency laws by, or against Maker which remains uncured or undismissed for
sixty (60) days after the occurrence of such event.
Unpaid principal and interest due and payable hereunder shall bear
interest at the rate of 10 percent per annum (the "Default Interest Rate") from
the due date until paid.
The remedies provided in this Note shall be cumulative, and shall be in
addition to any other rights or remedies now or hereafter provided by law or
equity. No delay, failure or omission by any holder of this Note, in respect of
any default by the Maker, to exercise any right or remedy shall constitute a
waiver of the right to exercise the right or remedy upon any such default or
subsequent default.
Makers and any endorser herein waives presentment, demand, notice of
dishonor, notice of acceleration and protest and assents to any extension of
time with respect to any payment due under this Note, to any substitution or
release of collateral and to the addition or release of any party. No waiver of
any payment or other right under this Note shall operate as a waiver of any
other payment or right.
This Note may not be changed orally, but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
If any of the provisions of this Note shall be held to be invalid or
unenforceable, the determination of invalidity or unenforceability of any such
provision shall not affect the validity or enforceability of any other provision
or provisions hereof.
This Note shall be binding upon Maker and its successors and assigns and
shall inure to the benefit of and be enforceable by the Payee and its successors
and assigns.
At the option of the holder hereof, an action may be brought to enforce
this Note in the District Court in and for the County of Boulder, State of
Colorado, or in any other court in which venue and jurisdiction are proper.
Maker and all signers or endorsers hereof consent to
Ex. 4-9
such venue and jurisdiction and to service of process under Colorado Revised
Statutes (1973) Sections 13-1-124(1)(a) and 13-1-125, in any action commenced to
enforce this Note.
This Note shall be construed and enforced in accordance with the laws of
the State of Colorado.
IN WITNESS WHEREOF, Maker has caused this instrument to be executed as
of the day and year first above written.
MAKER:
Royal Xxxx Minerals, Inc.,
a Delaware corporation
By: ________________________
Name: Xxxxxx Xxxx
Title: President
Ex. 4-10
EXHIBIT D
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT (this "Agreement") dated as of
_____________ __, 1998, is between Royal Xxxx Minerals, Inc., a Delaware
corporation ("Debtor"), and Xxxxxxx Xxxxx ("KT"), Xxxxxxx Xxxxx Oil Company, a
Colorado corporation ("KTOC"), and Art and Music Outreach for Kids, a Colorado
nonprofit corporation ("AMOK") (KT, KTOC, and AMOK are collectively the "Secured
Party").
RECITALS
A. Debtor owns 5,228,022 shares of the Class B common stock of American
Rivers Oil Company, Inc. ("AROC"), a Wyoming corporation (the "Shares").
B. Pursuant to that certain Promissory Note of even date herewith among
Secured Party and Debtor (the "Promissory Note"), Debtor has agreed to pay the
Secured Party $300,000.00 as set forth in the Promissory Note.
C. To secure Debtor's obligation to make the payments under the
Promissory Note, Debtor has agreed to execute and deliver this Agreement to
Secured Party in order (i) to pledge the Shares to Secured Party, and (ii) to
grant and assign to Secured Party a first priority lien on, and security
interest in, the Shares.
AGREEMENT
In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Debtor hereby agrees as follows for the benefit of Secured Party:
1. Certain Definitions. As used herein, the following terms shall
have the following respective meanings:
"Collateral" has the meaning set forth in Section 2 below.
An "Event of Default" shall occur if (i) Debtor fails to make
any payments required by the Promissory Note or (ii) Debtor fails to perform or
observe any obligation or condition to be performed or observed by it hereunder
and such failure remains uncured or unwaived for ten days.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
Ex. 4-11
"Proceeds" means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, the
Collateral, or any portion thereof.
"Secured Obligations" has the meaning given to such term in Section 3
below.
"Security Interests" means the security interests in the Collateral granted
hereunder.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of Colorado; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or nonperfection of the Security
Interests in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than Colorado, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or nonperfection.
2. The Security Interests. To secure the full and punctual payment or
other performance of the Secured Obligations in accordance with the terms
thereof, and to secure the performance of all of the obligations of Debtor
hereunder, Debtor, to the fullest extent permitted by law, hereby assigns and
pledges to Secured Party, and grants to Secured Party a continuing security
interest in and to, all of the following property of Debtor, whether now owned
or existing or hereafter acquired or arising, regardless of where located (all
being collectively referred to as the "Collateral"):
(i) the Shares and the certificates representing the
Shares and any interest of Debtor in the entries on the books of any
financial intermediary pertaining to the Shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the Shares;
(ii) any substitute shares of the capital stock of any
class issued by AROC to Debtor in exchange for or substitution of any of
the Shares and the certificates representing such shares and any
interest of Debtor in the entries on the books of any financial
intermediary pertaining to such shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares;
(iii) all Proceeds of all or any of the Collateral
described in clauses (i) and (ii) above.
3. Security for Obligations. This Agreement secures, and the Collateral
is collateral security for, the prompt payment or performance in full when due
of all obligations and liabilities of Debtor to make payments existing under or
arising out of or in connection with the Promissory Note, and all obligations of
every nature of Debtor now or hereafter existing under this Agreement (all such
obligations of Debtor being the "Secured Obligations").
Ex. 4-12
4. Delivery of the Collateral. Upon the execution hereof, Debtor shall
immediately deliver the stock certificates representing the Shares to Secured
Party.
5. Transfers and Other Liens. Debtor shall not, without the prior
written consent of Secured Party (which shall not be unreasonably withheld):
(a) sell, transfer, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral;
(b) create or suffer to exist at any time any Lien, security interest or
other charge or encumbrance upon or with respect to the Collateral, except for
the Security Interests; or
(c) take any other action in connection with the Collateral that would (i)
impair the interests or rights of Secured Party under this Agreement or (ii)
impair or otherwise adversely affect the value of the Collateral.
6. Further Assurances. Debtor agrees that from time to time, at the
expense of Debtor, Debtor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may request, in order to perfect and protect
the Security Interests or to enable Secured Party to exercise and enforce its
rights and remedies hereunder with respect to any Collateral.
7. Voting Rights; Dividends, Etc. (a) So long as no Event of Default
shall have occurred and be continuing:
(i) Debtor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement.
(ii) Debtor shall be entitled to receive all dividends
and interest paid in respect of the Collateral.
(b) Upon the occurrence and during the continuation of an Event
of Default, upon written notice from Secured Party to Debtor, all rights of
Debtor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to clause 7(a) above shall cease, and
all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right, but not the obligation, to exercise, or to
appoint any person to exercise on its behalf, such voting and other consensual
rights.
8. General Authority. To the extent permitted by law, Debtor hereby
irrevocably appoints Secured Party its true and lawful attorney, with full power
of substitution, in the name of Debtor, Secured Party or otherwise, for the sole
use and benefit of Secured Party, but at Debtor's expense, to exercise, at any
time and from time to time after an Event of Default has
Ex. 4-13
first occurred and is continuing, all or any of the following powers with
respect to all or any of the Collateral:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Collateral without the
signature of Debtor;
(b) to ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for monies due and to become due under or in
respect of any of the Collateral;
(c) to receive, endorse and collect any instruments made payable
to Debtor representing any dividend, principal or interest payment or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral; and
(e) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if Secured
Party were the absolute owner thereof; provided that Secured Party shall give
Debtor not less than ten days' prior written notice of the time and place of any
sale or other intended disposition of any of the Collateral, except any
Collateral which is perishable or threatens to decline speedily in value or is
of a type customarily sold on a recognized market. Debtor agrees that such
notice constitutes "reasonable notification" within the meaning of Section
9-504(3) of the UCC.
9. Remedies upon an Event of Default. (a) If an Event of Default has
occurred and is continuing, Secured Party may exercise all rights of a secured
party under the UCC (whether or not in effect in the jurisdiction where such
rights are exercised) and, in addition, Secured Party may, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, sell the Collateral or any part thereof at public
or private sale, for cash, upon credit or for future delivery, at such price or
prices as Secured Party may deem satisfactory. Secured Party may be the
purchaser of any or all of the Collateral so sold at any public sale or private
sale. Debtor will execute and deliver such documents and take such other action
as Secured Party deems necessary or advisable so that any such sale may be made
in compliance with law. Upon any such sale Secured Party shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely and free from any claim or right of Debtor of whatsoever kind,
including any equity or right of redemption of Debtor. Debtor, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted. Secured Party, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction. Provided that
if the default
Ex. 4-14
has been remedied before the Secured Party has taken any action with respect to
the Collateral, all rights under this Agreement will be restored to the Debtor.
10. Application of Proceeds. Except as expressly provided elsewhere in
this Agreement, all proceeds received by Secured Party in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Secured Party, be held by Secured Party as Collateral
for, and/or then, or at any time thereafter, applied in full or in part by
Secured Party against, the Secured Obligations in the following order of
priority:
FIRST: to the payment of all costs and expenses of such sale, collection or
other realization, including reasonable compensation to Secured Party and its
agents and counsel, and all other expenses, liabilities and advances made or
incurred by Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to payment hereunder and all advances made by Secured
Party hereunder for the account of Debtor, and to the payment of all costs and
expenses paid or incurred by Secured Party in connection with the exercise of
any right or remedy hereunder, all in accordance with Section 11 below;
SECOND: to the payment of all other Secured Obligations in such order as
Secured Party shall elect; and
THIRD: to the payment to or upon the order of Debtor, or to whomsoever may
be lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.
11. Expenses. Debtor shall, on demand, pay to Secured Party the amount
of any and all out-of-pocket expenses, including the fees and disbursements of
counsel and any other experts, which Secured Party may incur in connection with
(a) the administration or enforcement of this Agreement, including, but not
limited to, such expenses as Secured Party incurs to preserve the value of the
Collateral and the validity, perfection, rank and value of any Security
Interests; (b) the custody, preservation, collection, sale or other disposition
of any of the Collateral; (c) the exercise by Secured Party of any of the rights
conferred upon it hereunder; or (d) any Event of Default. All sums so paid or
incurred by Secured Party for any of the foregoing and any and all other sums
for which Debtor may become liable hereunder and all costs and expenses
(including attorneys' fees, legal expenses and court costs) reasonably incurred
by Secured Party in enforcing or protecting the Security Interests or any of its
rights or remedies under this Agreement, shall, together with interest thereon
until paid at the rate of 18 percent per annum, be additional Secured
Obligations hereunder.
12. Termination of Security Interests; Release of Collateral. Upon the
payment in full of all of the Secured Obligations, the Security Interests shall
terminate and all rights to the Collateral shall revert to Debtor. Upon any such
termination of such Security Interests and release of the Collateral, Secured
Party shall, at the expense of Debtor, (a) execute and deliver to Debtor such
documents as are reasonably necessary to evidence the termination of such
Security Interests and the release of such Collateral and (b) deliver any
certificates evidencing the Shares and any other Collateral held by Secured
Party or its nominees to Debtor.
Ex. 4-15
13. Miscellaneous.
(a) Waivers; Non-Exclusive Remedies. No failure on the part of
Secured Party to exercise, and no delay in exercising and no course of dealing
with respect to, any right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise by Secured Party of any right
under this Agreement or any other document preclude any other or further
exercise thereof or the exercise of any other right. The rights and remedies set
forth in this Agreement and the Shareholders Agreement are cumulative and are
not exclusive of any other remedies available at law or in equity.
(b) Successors and Assigns. This Agreement is for the benefit of
Secured Party and its successors and assigns. This Agreement shall be binding on
Debtor and its successors and assigns.
(c) Changes in Writing. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated, except by a written
agreement signed by Debtor and Secured Party.
(d) Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be construed to carry out the intentions of the parties
hereto as nearly as may be possible and (b) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
(e) Headings. Section and subsection headings in this Agreement
are included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any substantive effect.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF COLORADO, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(g) Counterparts. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
IN WITNESS WHEREOF, Debtor and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
Ex. 4-16
DEBTOR:
ROYAL XXXX MINERALS, INC., a Delaware
corporation
By: ______________________________
Xxxxxx Xxxx, President
SECURED PARTY:
----------------------------------
XXXXXXX XXXXX
XXXXXXX XXXXX OIL COMPANY, a
Colorado corporation
By: ______________________________
Xxxxxxx Xxxxx, President
ART AND MUSIC OUTREACH FOR KIDS, a
Colorado nonprofit corporation
By: _________________________________
Xxxxxxx Xxxxx, President
Ex. 4-17
EXHIBIT E
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is dated this 20th day of March,
1998, by and among Xxxxxxx Xxxxx Oil Company, a Colorado corporation ("KTOC"),
Royal Xxxx Minerals, Inc., a Delaware corporation ("RSMI"), Francarep, Inc., a
Wyoming corporation ("Francarep"), and Holme Xxxxxxx & Xxxx, a Colorado limited
liability partnership (the "Escrow Agent").
Recitals
A. Francarep is the owner of (i) 275,000 shares of Class A common stock
and 330,000 shares of Class B common stock of American Rivers Oil Company, and
(ii) 68,750 shares of Xxxxxx common stock (the 275,000 Class A shares, 330,000
Class B Shares, and 68,750 shares of Xxxxxx are collectively, the "Francarep
Shares").
B. KTOC and RSMI are parties to that certain Option to Purchase dated
March 20, 1998 (the "Option to Purchase (KTOC)") pursuant to which KTOC granted
RSMI an option to purchase the Francarep Shares. The Option to Purchase (KTOC)
requires RSMI to place in escrow $100,000.00 upon the grant of the option and
$250,000.00 upon the exercise of the option.
C. KTOC and Francarep are parties to that certain Option to Purchase
Agreement dated March 20, 1998, pursuant to which KTOC has the right to acquire
the Francarep Shares.
D. The parties wish to place the $100,000.00 and the Francarep Shares in
escrow until the time specified herein.
E. If RSMI exercises its option under the Option to Purchase (KTOC), the
parties wish to place the $250,000.00 in escrow until the time specified herein.
IN CONSIDERATION of the mutual covenants set forth below and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Agreement
1. Appointment of Escrow Agent. The parties hereby appoint the Escrow Agent
to act as escrow agent under this Agreement.
2. Deposits. The parties agree to make deposits with the Escrow Agent as
follows:
Ex. 4-18
(a) RSMI agrees to deposit $100,000.00 in cash or other immediately
available funds;
(b) Francarep agrees to deposit the Francarep Shares; and
(c) If RSMI elects to exercise its option under the Option to Purchase
(KTOC), RSMI agrees to deposit $250,000.00 in cash or other immediately
available funds.
3. Release of the $100,000.00. The Escrow Agent shall release the
$100,000.00 to Francarep after being furnished with the Francarep Shares. The
Escrow Agent shall release the $100,000.00 to KTOC after ___________ ___, 1998,
if Francarep has not deposited the Francarep Shares on or before ___________
___, 1998, unless the Escrow Agent receives notice from KTOC, RSMI, and
Francarep to extend the terms of this Agreement.
4. Release of the Francarep Shares. The Escrow Agent shall release the
Francarep Shares to RSMI after being furnished with the $250,000.00. The Escrow
Agent shall release the Francarep Shares to Francarep after ___________ ___,
1998, if RSMI has not deposited the $250,000.00 on or before ___________ ___,
1998, unless the Escrow Agent receives notice from KTOC, RSMI, and Francarep to
extend the terms of this Agreement.
5. Release of the $250,000.00. The Escrow Agent shall release the
$250,000.00 to Francarep after the release of the Francarep Shares to RSMI. The
Escrow Agent shall release the $250,000.00 to RSMI after ___________ ___, 1998,
if Francarep has not deposited the Francarep Shares on or before ___________
___, 1998, unless the Escrow Agent receives notice from KTOC, RSMI, and
Francarep to extend the terms of this Agreement.
6. Release Notice. The Escrow Agent shall provide each party hereto with
five days' written notice prior to any release from escrow under Section 3, 4,
and 5. In the event any party objects in writing to any such release prior to
the expiration of such five-day notice, the Escrow Agent shall interplead the
asset or assets in accordance with Section 7(b) below.
7. No Liability. The Escrow Agent shall have no liability for the
performance of its duties hereunder except in the case of its gross negligence
or willful misconduct. The Escrow Agent shall have no duty to determine the
merits of any dispute between the parties. In the event of a dispute between the
parties regarding the release of the assets or the meaning of any term of this
Agreement:
(a) The Escrow Agent shall be under no obligation to act, except
under court order; and
(b) Upon receipt of conflicting notices for the release of the
assets, the Escrow Agent shall interplead the assets with a court of competent
jurisdiction in the State of Colorado. Upon filing of its complaint in
interpleader, the Escrow Agent shall have no further obligations hereunder.
Ex. 4-19
8. Term. This Agreement shall terminate upon the earlier to occur of (i)
the release of the $100,000.00, Francarep Shares, and $250,000.00; (ii) the
deposit of any of the $100,000.00, Francarep Shares, or $250,000.00 with a court
pursuant to Section 7(b) above; or (iii) ____________ ___, 1998.
9. Notices. All notices and other communications called for hereunder shall
be given in writing and shall be deemed given two days after deposit in the
United States mail, postage prepaid, to the parties at the following addresses:
To KTOC:
Xx. Xxxxxxx Xxxxx
000 Xxxx 0xx Xxxxxx; Xxxxx 000
Xxxxxx, XX 00000
To RSMI:
Xx. XX Xxxxx
The Xxxxx Mine
Fern Xxxx, PA 18241
To Francarep:
Francarep Inc.
Attention: Xxxxxxx Xxxxxxx
00 Xx. xxx Xxxxxx-Xxxxxxx 00000
Xxxxx, Xxxxxx
To Escrow Agent:
Holme Xxxxxxx & Xxxx
Attention: Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx; Xxxxx 000
Xxxxxxx, XX 00000
10. Governing Law. This Agreement shall be construed under and governed by
the laws of the State of Colorado.
11. Amendments. All amendments hereto shall be in writing and signed by all
of the parties.
Ex. 4-20
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first written above.
ROYAL XXXX MINERALS, INC., a Delaware
corporation
By: __________________________________
Xxxxxx Xxxx, President
XXXXXXX XXXXX OIL COMPANY, a Colorado
corporation
By: ____________________________________
Xxxxxxx Xxxxx, President
FRANCAREP, INC., a Wyoming corporation
By: ___________________________________
Print Name: ____________________________
Title: __________________________________
HOLME XXXXXXX & XXXX, a Colorado limited
liability partnership
By: ___________________________________
Xxxxxxx X. Xxxxxxx, Partner
Ex. 4-21
EXHIBIT F
[Attach copies of the Francarep Agreements as amended]
Ex. 4-22
