CALL OPTION AGREEMENT
This Call Option Agreement (the "Agreement") is entered into this 10th day
of April, 1996, by and between THE ▇▇▇▇▇ COMPANY, an Oklahoma corporation
("▇▇▇▇▇"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. Black (with
said individuals being hereafter referred to collectively as the
"Shareholders"). ▇▇▇▇▇ hereby grants to Shareholders an option (the "Option") to
purchase One Hundred Forty-Four Thousand (144,000) shares of the voting common
stock (the "Shares") of Cibola Corporation, a Wyoming corporation ("Cibola"),
which Shares are currently owned by ▇▇▇▇▇ and represent Eighty Percent (80%) of
the issued and outstanding voting common stock of Cibola, at the price and on
the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the sum of One Thousand Dollars ($1,000) in cash paid by the Shareholders (in
the aggregate) to ▇▇▇▇▇, and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties agree as follows:
1. Date of Grant; Term of Option. The Option is granted as of April 10,
1996, and it may not be exercised later than June 29, 2006 unless extended by
the mutual agreement of ▇▇▇▇▇ and Shareholders.
2. Option Exercise Price. Shareholders may exercise the Option by paying to
▇▇▇▇▇ the following amounts: (i) an amount equal to the greater of (A) the
then-outstanding balance of principal and accrued interest on that certain
Nonrecourse Secured Promissory Note, dated April 10, 1996, and payable by ▇▇▇▇▇
to Cibola (the "Note") or (B) the then fair market value of the Shares,
determined with reference to the amount to which the holder of the Shares would
be entitled in the event Cibola was liquidated on the effective date of the
exercise of the Option, taking into account all amounts necessary to pay all
debts of Cibola and make all required liquidating distributions to preferred
shareholders of Cibola; and (ii) all amounts owed by Cibola to ▇▇▇▇▇ on any
other agreements between the parties hereto, to the extent such amounts are due
and payable within six months after the Option exercise date.
3. Exercise of Option. The Option shall be exercisable during its term only
in accordance with the provisions of this Agreement, as follows:
(a) Right to Exercise. Shareholders shall be entitled to exercise the
Option provided herein upon the occurrence of any one or more of the
following:
(i) If ▇▇▇▇▇ ceases to file consolidated income tax returns for
federal income tax purposes, or if ▇▇▇▇▇ notifies Cibola of its intent
to either cease filing such consolidated returns or voluntarily take
any action which would preclude the filing of such consolidated
returns; notwithstanding any other provision of this Agreement, or any
other agreement between the parties hereto, ▇▇▇▇▇ hereby agrees to
notify Cibola of its intent to cease filing, or to take any action
that would cause ▇▇▇▇▇ to cease qualifying to file, consolidated
federal income tax returns on or before that date which is six (6)
months prior to the last day of the final consolidated return year of
▇▇▇▇▇ that includes the results of Cibola's operations;
(ii) If a Change of Control occurs with regard to ▇▇▇▇▇; for this
purpose, "Change of Control" shall mean (A) the acquisition, in one or
more transactions, by any "person" (as that term is used for purposes
of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended) of the beneficial ownership of 50% or more of the combined
voting power of ▇▇▇▇▇'▇ then-outstanding voting securities, or (B)
approval by shareholders of ▇▇▇▇▇ of a merger, reorganization or
consolidation involving ▇▇▇▇▇ if the shareholders of ▇▇▇▇▇ immediately
before such merger, reorganization or consolidation do not or will not
directly or indirectly, immediately following such merger,
reorganization or consolidation, own more than 50% of the combined
voting power of the outstanding voting securities of ▇▇▇▇▇ resulting
from or surviving such merger, reorganization or consolidation, or (C)
approval by shareholders of ▇▇▇▇▇ of a complete liquidation or
dissolution of ▇▇▇▇▇, or (D) approval by shareholders of ▇▇▇▇▇ of an
agreement for the sale or other disposition of all or substantially
all of the assets of ▇▇▇▇▇, or (E) acceptance by shareholders of ▇▇▇▇▇
of shares in a reorganization or share exchange pursuant to which
shareholders of ▇▇▇▇▇ immediately before such transaction do not or
will not, directly or indirectly, immediately following such
transaction own more than 50% of the combined voting power of the
outstanding voting securities of ▇▇▇▇▇ resulting from or surviving
such transaction; or
(iii) If, regardless of whether any of the above-described events
have occurred or circumstances exist, Shareholders provide ▇▇▇▇▇ five
(5) business days' notice of their intent to exercise the Option
provided for herein.
(b) Method of Exercise. The Option shall be exercisable by written
notice, given at least five (5) business days prior to the effective date
of exercise, which shall recite Shareholders' election to exercise the
Option for all of the Shares covered hereby, and shall provide a
representation and agreement by Shareholders as to their investment intent
with respect to the Shares to be purchased pursuant to this Agreement. Such
written notice shall be signed by all of the Shareholders, or by persons
authorized to act on their behalf, and shall be given to ▇▇▇▇▇ in the
manner provided for herein. The written notice shall be accompanied by
payment, or arrangements for payment satisfactory to ▇▇▇▇▇, of the purchase
price provided for herein. The certificates for the Shares as to which the
Option is exercised shall be registered in the name of the Shareholders in
accordance with their respective ownership thereof and shall be legended if
and as required under applicable law.
(c) Restrictions on Exercise. The Option may not be exercised if the
transfer of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities laws or other laws or
regulations. As a condition to the exercise of the Option, ▇▇▇▇▇ may
require Shareholders to make any reasonable representation and warranty
which is required by applicable law.
4. Investment Representations. Unless the Shares have been registered under
the Securities Act of 1933, in connection with the acquisition of the Option,
Shareholders represent and warrant as follows:
(a) Shareholders are acquiring the Option, and upon exercise of the
Option, they will be acquiring the Shares, for investment for their own
account, not as a nominee or agent, and not with a view toward, or for
resale in connection with, any redistribution thereof.
(b) Shareholders have preexisting business relationships and
sufficient business experience to allow Shareholders to be reasonably
assumed to have the capacity to protect their interests in connection with
the acquisition of the Option and the Shares.
5. Assignment of Option. The Option may be assigned by Shareholders without
the prior consent or knowledge of ▇▇▇▇▇.
6. Rights as a Shareholder. Shareholders shall have no rights as owners of
the Shares, and shall not have the right to vote or receive dividends or other
remuneration with regard to the Shares subject to the Option, until the Option
has been exercised.
7. No Obligation to Exercise Option. The granting of the Option shall
impose no obligation upon Shareholders to exercise such Option. No failure of
Shareholders to exercise the Option upon the occurrence of any event described
in Section 3(a) shall be deemed to constitute a waiver of Shareholders' right to
exercise the Option at any time thereafter during the term of this Agreement.
8. Indemnification. In the event Shareholders exercise the Option, they
shall either (i) jointly and severally guarantee the prompt and full payment of
all obligations of Cibola under that certain Tax Sharing Agreement among ▇▇▇▇▇,
Cibola and Shareholders of even date herewith or (ii) provide collateral
security reasonably acceptable to ▇▇▇▇▇.
9. Notices. Any notice given to a party hereto shall be addressed to such
party at the address or facsimile number below, or at such other address as such
party may hereafter designate in writing to the other party hereto. Such notices
may be given personally, by first-class or certified mail (postage prepaid), or
via facsimile transmission. Notice given personally shall be effective upon
delivery to the party to whom addressed; notice given via facsimile shall be
deemed effective upon confirmation of receipt by the transmitting facsimile
machine; notice given by first-class mail shall be deemed effective three (3)
business days after the date of postmark; and notice given by certified mail
shall be effective on the date of receipt. The current notice addresses and
facsimile numbers of the parties are as follows:
(a) If to ▇▇▇▇▇: The ▇▇▇▇▇ Company
Attn: ▇▇▇▇ ▇▇▇, ▇▇., President
and ▇. ▇. ▇▇▇▇▇, Chairman
Enterprise Plaza, Suite 320
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
McAfee & ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Shareholders: Cibola Corporation
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.
Facsimile No.
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
1600 Bank of Oklahoma Plaza
▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Notice of any change in the above addresses shall be given in the manner
set forth above. Whenever the provision of notice is required or contemplated
under this Agreement, such notice may be waived by the party entitled to receive
such notice.
10. Entire Agreement, Etc. This Agreement represents the entire agreement
between the parties hereto with regard to the subject matter hereof. This
Agreement was negotiated and prepared by both parties with advice of counsel to
the extent deemed necessary by each party, and was not prepared by one party to
the exclusion of the other. Accordingly, the Agreement should not be interpreted
or construed against a party by reason of that party's participation in its
preparation.
11. Governing Law, Successors, Etc. This Agreement shall be construed and
enforced in accordance with the laws of the State of Wyoming, and shall be
binding upon the heirs, successors, personal representatives and permitted
assigns of the parties hereto.
12. Amendment. This Agreement may only be amended by a writing signed by
each of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Call Option Agreement
this 10th day of April, 1996.
"▇▇▇▇▇": THE ▇▇▇▇▇ COMPANY,
an Oklahoma corporation
BY: ▇▇▇▇ ▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇, ▇▇., President
"Shareholders": ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. BLACK
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
