AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 16, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________________________________
GENERAL AMERICAN ROYALTY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
75-2468002
(IRS Employer Identification Number)
4925 GREENVILLE AVENUE, SUITE 717
DALLAS, TEXAS 75206
(Address of principal executive offices)
JAMES F. SMITH
GENERAL AMERICAN ROYALTY, INC.
4925 GREENVILLE AVENUE, SUITE 717
DALLAS, TEXAS 75206
(Name and address of agent for service)
(214) 361-8535
(Telephone number, including area code of agent for service)
CONSULTING AGREEMENTS
(Full title of the Plan)
_____________________________________________________________
COPY TO:
Robert L. Sonfield, Jr.
Sonfield & Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056-1913
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM OFFERING PRICE PER SHARE (1) PROPOSED MAXIMUM
AGGREGATE OFFERING PRICE (1)
TITLE OF SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED
AMOUNT OF REGISTRATION FEE
Common Stock,
$.001 par value 110,000(2) $.01(3) $1,100 $0.36
- ------------------- ---------- ------- ------ -----
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rue 457 under the Securities Act of 1933.
(2) Reflects shares of common stock issuable upon exercise of the
Company's Common Stock Purchase Warrants ("Warrants").
(3) Based on exercise price of the Warrants.
GENERAL AMERICAN ROYALTY, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(B) OF REGULATION S-B
FORM S-8 ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS
-------------------------------- ---------------------
1. Forepart of Registration Statement and Outside Front Cover Page of
Prospectus Facing Page of Registration Statement and Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Pages of Prospectus Inside Cover
Page of Prospectus and Outside Cover Page of Prospectus
3. Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges
Not Applicable
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Not Applicable
9. Description of Securities to be Registered Consulting Agreements
10. Interest of Named Experts and Counsel Not Applicable
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Reference Information
Incorporated by Reference
13. Disclosure of Commission Position on Indemnification
Indemnification for Securities Act Liabilities
PROSPECTUS
GENERAL AMERICAN ROYALTY, INC.
110,000 Shares of Common Stock
($.001 Par Value)
This Prospectus is part of a Registration Statement which registers an
aggregate 110,000 shares of common stock, $.001 par value, common stock of
General American Royalty, Inc. (the "Company") which may be issued as set
forth herein to Russo Securities, Inc. ("Russo"), Howard Bronson & Co.
("Bronson") and Superior Financial Group, Inc. ("Superior") pursuant to common
stock purchase warrants ("Warrants") to purchase up to 110,000 shares of
common stock of the Company. 100,000 of the Warrants were granted to Russo
pursuant to a consulting agreement (the "Russo Consulting Agreement"), 5,000
Warrants were granted to Bronson pursuant to a consulting agreement (the
"Bronson Consulting Agreement") and 5,000 Warrants were granted to Superior
pursuant to a consulting agreement (the "Superior Consulting Agreement"). The
Russo Consulting Agreement, Bronson Consulting Agreement and Superior
Consulting Agreement are collectively referred to as the Consulting
Agreements. The Company has been advised by Russo, Bronson and Superior that
they may sell all or a portion of their shares of common stock from time to
time through securities brokers/dealers. Russo, Bronson and Superior have
advised the Company that they will sell such shares only at current market
prices but in no event for less than $5.00 per share and that no commissions
or compensation will be paid in connection therewith in excess of customary
brokers commissions. Russo, Bronson, Superior and the brokers and dealers
through whom sales of the shares are made may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended, (the "Securities
Act"), and any profits realized by them on the sale of the shares may be
considered to be underwriting compensation.
No other person is authorized to give any information or make any
representation not contained or incorporated by reference in this Prospectus,
in connection with the offer contained in this Prospectus, and, if given or
made, such other information or representation must not be relied upon as
having been authorized by the Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company
since the date hereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE COMPANY IS A CRIMINAL
OFFENSE.
This Prospectus does not constitute an offer to sell or the solicitation
of any offer to buy any security other than the securities covered by this
Prospectus, nor does it constitute an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized, or in
which the person making such offer or solicitation is not qualified to do so,
or to any person to whom it is unlawful to make such offer or solicitation.
The date of this Prospectus is September 16, 1997
i
TABLE OF CONTENTS
AVALIABLE INFORMATION
INFORMATION INCORPORATED BY REFERENCE
THE COMPANY
CONSULTING AGREEMENTS
Warrant Terms and Provisions
Federal Income Tax Effects
Restrictions Under Securities Laws
DESCRIPTION OF CAPITAL STOCK
Common Stock
Registrar and Transfer
Dissenters' Rights
The Callable Common Stock Purchase Warrants
Preferred Stock
LEGAL MATTERS
EXPERTS
STATEMENT OF INDEMNIFICATION
1
AVAILABLE INFORMATION"AVALIABLEINFORMATION"l
General American Royalty, Inc. (the "Company") is subject to the
requirement to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, files
reports and other materials with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other materials filed by the
Company can be inspected and copied (at prescribed rates) at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of all or any part of such material may be
obtained from the Commission upon payment of fees prescribed by the
Commission. The Commission maintains a web site that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission. The address of such web site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to an aggregate of 110,000 shares of the
Company's Common Stock, which may be issued to Russo Securities, Inc.
("Russo"), Howard Bronson & Co. ("Bronson") and Superior Financial Group, Inc.
("Superior") consultants of the Company, upon the exercise of common stock
purchase warrants issued to said consultants, pursuant to written consulting
agreements. This Prospectus does not contain all of the information set forth
in the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the shares of the Common Stock
offered by this Prospectus, reference is made to the Registration Statement,
including the exhibits thereto. Statements in this Prospectus as to any
document are not necessarily complete, and where any such document is an
exhibit to the Registration Statement or is incorporated by reference herein,
each such statement is qualified in all respects by the provisions of such
exhibit or other document, to which reference is hereby made, for a full
statement of the provisions thereof. A copy of the Registration Statement,
with exhibits, may be obtained from the Commission's office in Washington,
D.C. (at the above address) upon payment of the fees prescribed by the rules
and regulations of the Commission, or examined there without charges.
INFORMATION INCORPORATED BY REFERENCE"INFORMATIONINCORPORATEDBYREFERENCE"l
Amendment Number 1 to the Company's Registration Statement on Form 10-SB
dated April 12, 1997 and the Company's Quarterly Report on Form 10-QSB dated
August 12, 1997 for the fiscal quarter ending April 30, 1997, which were
previously filed with the Commission are incorporated herein by reference.
All documents filed by the Company pursuant to Section 13, 14 or 15 (d)
of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is incorporated or deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO FURNISH WITHOUT CHARGE TO EACH PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS DESCRIBED ABOVE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS. REQUESTS SHOULD BE ADDRESSED TO MR. JAMES F.
SMITH, PRESIDENT, GENERAL AMERICAN ROYALTY, INC., ONE ENERGY SQUARE, SUITE
717, 4925 GREENVILLE AVENUE, DALLAS, TEXAS 75206, TELEPHONE NUMBER (214)
361-8535.
9
THE COMPANY"THECOMPANY"l
General American Royalty, Inc. (the "Company") is Delaware corporation
incorporated on December 28, 1992 as Hermes Capital Management, Inc. It
conducted no business activities under that name. On October 23, 1995 it
changed its name to General American Royalty, Inc. It was organized to engage
in the following business activities:
to acquire producing oil and gas royalty, overriding royalty
and mineral interests;
to acquire nonproducing oil and gas royalty, overriding
royalty, and mineral interests;
to purchase units of publicly traded royalty trusts; and
to manage joint ventures with institutional investors to
accomplish the above purposes.
The Company was activated in late 1995 and 1996 through the purchase of
certain producing oil and gas interests in exchange for shares of Common Stock
of the Company, cash, and a promissory note and through the receipt of
$433,129 as the net proceeds from a private sale of Common Stock and from a
public offering of shares of Common Stock and Callable Stock Purchase Warrants
at $5 per unit, each unit consisting of 1 share of Common Stock and 1 Callable
Common Stock Purchase Warrant. See "Description of Securities." The offering
was conducted as a public offering, exempt from federal registration pursuant
to the provisions of Regulation D, Rule 504 (the "Rule 504 offering") .
Purchasers of the units in the Rule 504 Offering acquired 90,000 Callable
Common Stock Purchase Warrants, each warrant entitling the record owner to
purchase one share of the Company's Common Stock for $5. The warrants expired
July 31, 1997. However, during April and May 1997 the Company received net
proceeds of $55,750 from the exercise of 11,500 Warrants. The Company's stock
began trading on the OTC Bulletin Board (Symbol TROY) in February, 1997.
The Company's address is one Energy Square, 4925 Greenville Avenue, Suite
717, Dallas, Texas, 75206. Its telephone number is 214-361-8535. Its fax
number is 214-361-7715.
CONSULTING AGREEMENTS "CONSULTINGAGREEMENTS"l
On September 12, 1997 the Company entered into the Consulting Agreements
with Russo, Bronson and Superior pursuant to which options were issued to
purchase 100,000, 5,000 and 5,000 respectively, shares of Common Stock of the
Company. Under the terms of the Consulting Agreement, Russo will consult with
and advise the Company with respect to matters concerning (i) market makers;
(ii) dissemination of press releases and quarterly and annually reports; (iii)
communications with analysts, broker/dealers and other members of the
financial community; (iv) the Company's strategic goals; and (v) potential
acquisitions. Bronson will consult with and advise the Company with respect
to matters concerning (i) dissemination of press releases and quarterly and
annually reports; (ii) communications with analysts, broker/dealers and other
members of the financial community. Superior will consult with and advise the
Company with respect to matters concerning certain financial matters including
communications with analysts, broker/dealers and other members of the
financial community. The term of the Consulting agreements began on September
12, 1997 and will continue for a period of three (3) years unless sooner
terminated as provided therein.
WARRANT TERMS AND PROVISIONS"WarrantTermsandProvisions"l
In consideration for its agreement to provide such services pursuant to
the Consulting Agreement, the Company issued common stock purchase warrants
("Warrants") to purchase and aggregate of 110,000 shares of the Company's
common stock at $.01 per share. The Warrants were issued on September 12,
1997 and will expire on September 11, 2000.
All of the Warrants were issued pursuant to the Consulting Agreements and
were not issued pursuant to any program or plan being administered by either
the Board of Directors of the Company or any committee of the Board of
Directors organized for that purpose. The specific terms of the Warrants are
as follows:
(a) Warrant Exercise Price. The exercise price per share of the
----------------------
Warrants was established by the Board of Directors at $.01 per share.
(b) Term of Warrants. The Warrants may be exercised in whole or
----------------
in part at any time through September 11, 2000, unless the expiration date of
the Warrant and the term of the Consulting agreements are extended by the
Company in writing to a later date.
(c) Manner of Exercise. All or any whole number of such
--------------------
Warrants may be exercised for cash during the term of the Warrants.
(d) Transferability. The Warrants are not transferable without
---------------
the Company's prior written approval.
(e) Redemption. There are no redemption rights afforded to the
----------
Company in connection with the Warrants.
(f) Adjustments. The number of shares of Common Stock of the
-----------
Company purchasable upon exercise of the Warrants and the exercise price of
the Warrants are subject to adjustment upon the occurrence of specified events
primarily involving stock dividends, stock splits, reorganizations,
reclassifications, consolidations and mergers.
(g) No Right As Stockholder. No Warrant holder is by virtue of
-----------------------
ownership of the Warrants, entitled to any rights whatsoever of a stockholder
of the Company.
FEDERAL INCOME TAX EFFECTS"FederalIncomeTaxEffects"l
A Warrant holder does not recognize taxable income on the date of the
grant of the Warrant, which is a non-statutory option, but recognizes ordinary
income generally at the date of exercise in the amount of the difference
between the Warrant exercise price and the fair market value of the common
Stock on the date of exercise. However, in the event that the holder is, or
may become, subject to the restrictions on resale of common stock under
Section 16 of the Securities Exchange Act of 1934, such person generally
recognizes ordinary income at the end of the six-month period following the
date of exercise in the amount of the difference between the option exercise
price and the fair market value of the common stock at the end of the
six-month period. Nevertheless, such holders may elect within 30 days after
the date of exercise to recognize ordinary income as of the date of exercise.
The amount of ordinary income recognized by the Warrant holder is deductible
by the company in the year that income is recognized. The foregoing is not
intended to be a complete statement of applicable law and Russo should rely on
its own legal counsel with respect thereto.
RESTRICTIONS UNDER SECURITIES LAWS"RestrictionsUnderSecuritiesLaws"l
The sale of any shares of Common Stock acquired upon the exercise of the
Warrants must be made in compliance with federal and state securities laws.
Officers, directors and 10% or greater stockholders of the Company, as well as
certain other persons or parties who may be deemed to be "affiliates" of the
Company under the Federal Securities Laws, should be aware that resales by
affiliates can only be made pursuant to an effective Registration Statement,
Rule 144 or any other applicable exemption. Officers, directors and 10% and
greater stockholders are also subject to the "short swing" profit rule of
Section 16(b) of the Securities Exchange Act of 1934. Section 16(b) of the
Exchange Act generally provides that if an officer, director or 10% and
greater stockholder sold any Common Stock of the Company acquired pursuant to
the exercise of a stock option, he would generally be required to pay any
"profits" resulting from the sale of the stock and receipt of the stock
option. Section 16(b) exempts all warrant exercises from being treated as
purchases and, instead, treats a warrant grant as a purchase of the underlying
security, which grant\purchase may be matched with any sale of the underlying
security within six months of the date of grant. The foregoing is not
intended to be a complete statement of applicable law and Russo should rely on
its own legal counsel with respect thereto.
DESCRIPTION OF CAPITAL STOCK"DESCRIPTIONOFCAPITALSTOCK"l
The Company is authorized to issue 20 million shares of Common Stock,
$0.001 par value, and 5 million shares of Preferred Stock. The presently
outstanding shares of Common Stock are fully paid and nonassessable. There
are no shares of Preferred Stock issued and outstanding.
COMMON STOCK"CommonStock"l
There are presently outstanding 921,500 shares of Common Stock.
Voting Rights. Holders of shares of Common Stock are entitled to one
--------------
vote per share on all matters submitted to a vote of the shareholders. Shares
of Common Stock do not have cumulative voting rights; accordingly, the holders
of a majority of the shareholder votes eligible to vote and voting for the
election of the Board of Directors can elect all members of the Board of
Directors.
Dividend Rights. Holders of record of shares of Common Stock are
----------------
entitled to receive dividends when and if declared by the Board of Directors
--
out of funds of the Company legally available therefor.
Liquidation Rights. Upon any liquidation, dissolution or winding up of
-------------------
the Company, holders of shares of Common Stock are entitled to receive pro
rata all of the assets of the Company available for distribution to
shareholders after distributions are made to the holders of the Company's
Preferred Stock.
Preemptive Rights. Holders of Common Stock do not have any preemptive
rights to subscribe for or to purchase any stock, obligations or other
securities of the Company.
REGISTRAR AND TRANSFER AGENT"RegistrarandTransfer"l
The Company's registrar and transfer agent is Securities Transfer
Corporation, 16910 Dallas Parkway, Suite 100, Dallas, Texas 75248.
DISSENTERS' RIGHTS"Dissenters'Rights"l
Under current Delaware law, a shareholder is afforded dissenters' rights
which, if properly exercised, may require the Company to purchase his shares
dissenters' rights commonly arise in extraordinary transactions such as
mergers, consolidations, reorganizations, substantial asset sales, liquidating
distributions, and certain amendments to the Company's certificate of
incorporation.
THE CALLABLE COMMON STOCK PURCHASE
WARRANTS"TheCallableCommonStockPurchaseWarrants"l
As of July 31, 1997 the 78,500 outstanding Callable Common Stock Purchase
Warrants expired. During April and May 1997 the Company received net proceeds
of $55,750 from the exercise of 11,500 Warrants.
PREFERRED STOCK"PreferredStock"l
The Company is also authorized to issue 5 million shares of Preferred
Stock. The Preferred Stock or any series thereof shall have such
designations, preferences and relative, participating, optional or special
rights and qualifications, limitations or restrictions thereof as shall be
expressed in the resolution or resolutions providing for the issue of such
stock adopted by the board of directors and may be made dependent upon facts
ascertainable outside such resolution or resolutions of the board of
directors, provided that the manner in which such facts shall operate upon
such designations, preferences, rights and qualifications, limitations or
restrictions of such class or series of stock is clearly and expressly set
forth in the resolution or resolutions providing for the issuance of such
stock by the board of directors.
LEGAL MATTERS"LEGALMATTERS"l
Certain legal matters in connection with the securities offered hereby
are being passed upon for the Company by Sonfield & Sonfield, 770 South Post
Oak Lane, Houston, Texas 77056-1913, counsel to the Company.
EXPERTS"EXPERTS"l
The balance sheet as of October 31, 1996 and the statements of income,
retained earnings, and cash flows for the year ended October 31, 1996,
incorporated by reference in this Prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of said firm as experts in accounting and auditing.
STATEMENT OF INDEMNIFICATION"STATEMENTOFINDEMNIFICATION"l
Pursuant to Section 145 of the General Corporation Law of the State of
Delaware, the Company has the power to indemnify any person made a party to
any lawsuit by reason of being a director or officer of the Company, or
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such actions suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
-------------------------------------------
The documents listed in (a) through (c) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by
the Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a posteffective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference in the Registration
Statement and to be part thereof from the date of filing of such documents.
(a) Amendment Number 1 to the Registrant's registration statement on
Form 10-SB dated April 12, 1997 and the Registrant's Quarterly Report on Form
10-QSB dated August 12, 1997 for the fiscal quarter ending April 30, 1997,
which were previously filed with the Commission are incorporated herein by
reference.
(b) All other reports filed pursuant to Section 13 or 15(d) of the
Exchange Act since the end of the fiscal quarter covered by the Registrant's
Form 10-QSB referred to in (a) above.
(c) The class of securities to be offered hereby is registered under
Section 12 of the Exchange Act. A description of the Registrant's securities
is set forth in Item 11 of its Amendment Number 1 to Form 10-SB which is
incorporated as a part of this Registration Statement.
Item 5: Interests of Named Experts and Counsel.
-------------------------------------------
None
Item 6: Indemnification of Directors and Officers.
---------------------------------------------
(a) Section 145 of the Delaware General Corporation Law provides
that:
145. INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE
(1) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such actions suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contenders or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(2) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(3) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection therewith.
(4) Any indemnification under subsections (a) and (b) (unless ordered
by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (a) and (b). Such
determination shall be made (1) by a majority vote of the directors who are
not parties to such action, suit or proceeding, even though less than a
quorum, or (2) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (3) by the stockholders.
(5) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative, or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by the corporation as authorized in this Section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems
appropriate.
(6) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(7) A corporation shall power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee of agent or
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
(8) For purposes of this Section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Section with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence
had continued.
(9) For purposes of this Section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan;
and references to "serving at the request of the corporation" shall include
any service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to
in this Section.
(10) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(11) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees). (As amended by Ch. 186, Laws of 1967,
Ch. 421, Laws of 1970, Ch. 437, Laws of 1974, Ch. 25, Laws of 198 1, Ch. 11 2,
Laws of 1983, Ch. 289, Laws of 1986, Ch. 376, Laws of 1990, and Ch. 26 1, Laws
of 1994.)
(b) Section 102 of the Delaware General Corporation Law includes the
following provisions:
102. CERTIFICATE OF INCORPORATION; CONTENTS
(1) The certificate of incorporation shall set forth:
(2) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section the certificate
of incorporation may also contain any or all of the following matters:
(vii) A provision eliminating or limiting the personal liability of
a director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under section 174 of this Title, or (iv) for
any transaction from which the director derived an improper personal benefit.
No such provision shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision becomes
effective. All references in this paragraph to a director shall also be
deemed to refer (x) to a member of the governing body of a corporation which
is not authorized to issue capital stock and (y) to such other person or
persons, if any, who, pursuant to a provision of the certificate of
incorporation in accordance with subsection (a) of 141 of this title,
exercise or perform any of the powers or duties otherwise conferred or imposed
upon the board of directors by this title.
(c) Article Nine of Registrant's Certificate of Incorporation
provides:
No director of this corporation shall be liable to the corporation
for monetary damages for an act or omission occurring in the director's
capacity as a director, except to the extent the statutes of the State of
Delaware expressly provided that the director's liability may not be
eliminated or limited. Any repeal or amendment of this paragraph that
increases the liability of a director shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
corporation existing at the time of such repeal or amendments.
Item 8: Exhibits
--------
The following documents are filed as Exhibits to this Registration
Statement:
4(a) -- Consulting Agreement with Russo Securities, Inc.
4(b) -- Consulting Agreement with Superior Financial Group,
Inc.
4(c) Consulting Agreement with Howard Bronson & Co.
5 -- Opinion of Sonfield & Sonfield as to the validity of
the shares being registered.
24.1 -- Consent of Sonfield & Sonfield (included in Exhibit
5)
24.2 -- Consent of Coopers & Lybrand L.L.P., Independent
Accountants
25 -- Power of Attorney (following signature page of
Registration Statement)
Item 9: Undertakings
------------
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8, and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas, on the ____
day of September, 1997.
GENERAL AMERICAN ROYALTY, INC. GENERAL AMERICAN ROYALTY,
INC.
By:/s/James F. Smith By:/s/Sam E. Nicholson
------------------- -------------------
James F. Smith, President Sam E.
Nicholson, Treasurer
and Chief Executive Officer and Chief
Financial Officer
EXHIBIT 25
POWER OF ATTORNEY
Each of the undersigned hereby authorizes James F. Smith as his
attorney-in-fact to execute in the name of such person and to file such
amendments (including post-effective amendments) to this Registration
Statement as the Registrant deems appropriate and appoints such person as
attorney-in-fact to sign on his behalf individually and in each capacity
stated below and to file all amendments, exhibits, supplements, post-effective
amendments and acceleration requests to this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE CAPACITY DATE
--------- -------- ----
/s/James F. Smith Director September 15, 1997
-----------------
James F. Smith
/s/James E. Mitschke Director September 15, 1997
--------------------
James E. Mitschke
/s/Malcolm E. Wilson, Jr. Director September 15, 1997
-------------------------
Malcolm E. Wilson, Jr.
/s/Bill L. Bledsoe Director September 15, 1997
------------------
Bill L. Bledsoe
1
EXHIBIT 4(A)
INVESTMENT BANKING AND CONSULTING AGREEMENT
11
THIS INVESTMENT BANKING AND CONSULTING AGREEMENT made this 10th day of
September, 1997 by and between:
Russo Securities, Inc.
128 Sand Lane
Staten Island, NY 10305
(718) 448-2900
a New York Corporation (herein referred to as "Russo"), and;
General American Royalty, Inc.
One Energy Square
Suite 717
4925 Greenville Avenue
Dallas, Texas 75206
(214) 361-8535
(hereinafter, referred to as "Company"), collectively Russo and Company
hereinafter referred to as "the Parties".
W I T N E S S E T H:
-------------------
WHEREAS, Russo is a broker dealer specializing in financing arrangements,
private placements and other related programs, services and products; and
WHEREAS, Company is publicly held with its common stock trading on one or
more exchanges and/or over-the-counter; or Company desires to become a
publicly held company with its common stock trading on more or more stock
exchanges and/or over-the-counter; and
WHEREAS, the Company desires to finance itself with the intention of
making its name and business better known to its shareholders, investors,
brokerage houses, potential investors, potential shareholders and various
media; and
WHEREAS, Russo is willing to accept the Company as a client.
WHEREAS, the Company requires investor relations and investment banking
services and desires to employ and or retain Russo to provide such services as
an independent contractor, and Russo is agreeable to such a relationship and
or arrangement and the parties desire a written document formalizing and
defining their relationship and evidencing the terms of their agreement:
THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, it is agreed as follows:
DEFINITIONS AND INTERPRETATIONS
1. CAPTIONS AND SECTIONS NUMBERS
The heading and section references in this Investment Banking and
Consulting Agreement are for convenience of reference only and do not form a
part of this Investment Banking and Consulting Agreement and are not intended
to interpret, define or limit the extent of the Investment Banking and
Consulting Agreement or any provisions thereof.
2. EXTENDED MEANINGS
The words "herein," "hereunder," "hereto" and similar expressions used in
any clause, paragraph or section of the Investment Banking and Consulting
Agreement and any Addendum's and or Exhibits attached to the Investment
Banking and Consulting Agreement will relate to the whole of this Investment
Banking and Consulting Agreement including any attached Addendum's and or
Exhibits and not to that clause, paragraph or section only, unless otherwise
expressly provided.
3. NUMBER AND GENDER
In this Investment Banking and Consulting Agreement words importing the
masculine gender include the feminine or neuter gender and word in the
singular include the plural, and vice versa.
4. SECTION REFERENCES AND SCHEDULES
Any reference to a particular "article," "section," paragraph or other
subdivision of this Investment Banking/Consulting agreement and any reference
to an exhibit, schedule or addendum by name, number and or letter will mean
the appropriate exhibit, schedule or addendum attached to this Investment
Banking/Consulting Agreement and by such reference is incorporated in and made
part of this Investment Banking/Consulting Agreement.
AGREEMENT
5. APPOINTMENT
The Company hereby appoints and engages Russo as its investor relation's
advisor and hereby retains and employs Russo upon the terms and conditions of
this Investment Banking/Consulting Agreement. Russo accepts such appointment
and agrees to perform the services upon the terms and conditions of said
Investment Banking/Consulting Agreement.
6. ENGAGEMENT
The Company engages Russo to provide advice on publicizing the Company to
brokers, prospective investors and shareholders and as further described below
and subject to the further provisions of this Banking/Consulting Agreement.
Russo hereby accepts said engagement and the Company as a client, and agrees
to publicize Company as further described below and subject to the further
provisions of this Investment Banking/Consulting Agreement.
7. AUTHORITY AND DESCRIPTION OF SERVICES
During the term of this Investment Banking/Consulting Agreement, Russo
shall furnish various professional services and advice as specifically
requested by James F. Smith, who is the authorized representative of the
Company, and holds the position of President with the Company. Said
professional services and advice shall relate to those services, items and/or
subjects described in Addendum "A," which is attached hereto and made a part
hereof by this reference, and or follows:
A) Russo shall act generally as corporate investors relations
advisor, essentially acting, (1) as liaison between Company and its
shareholders; and (2) as advisor to the Company with respect to existing and
potential market makers, broker-dealers, investors as well as being the
liaison between Company and such persons; and (3) as advisor to the Company
with respect to communications and information, which may include, but not
necessarily limited to, review the writing by the Company of corporate profile
and review any research reports.
B) Russo shall assist in establishing and advise the Company with
respect to interviews of the Company officers by the financial media,
interviews of the Company officers by analysis, broker-dealers and other
members of the financial community.
C) Russo shall seek to assist the Company, through its public
relations consultants, its management, its products, and its financial
situation and prospects, known to financial media, financial publications,
broker-dealers, institutional investors, market makers, analysts, investment
advisors and other members of the financial community and the public
generally.
D) Marketing Program: Including, but not necessarily limited to the
following components: (i) Russo reviews and analyzes all aspects of the
Company's goals and makes recommendations on feasibility and achievement of
desired goals, (ii) Russo provides through their network, firms and brokers
interested in participating schedules and conducts the necessary due diligence
and obtains the required approvals necessary for those firms to participate.
Russo interviews and makes determinations on any firms or brokers referred by
the Company with regard to their participation, (iii) Russo shall be available
to field calls from brokers inquiring about the Company.
E) Russo, in providing the foregoing services, shall be responsible
for all costs for providing the services, including, but not limited to,
out-of-pocket expenses for postage, delivery services (e.g. Federal Express),
telephone charges, etc.
F) Russo's compensation under this Banking/Consulting Agreement shall
be deemed to include the above unless expressly provided herein.
8. TERM OF AGREEMENT
This Agreement shall become effective upon execution hereof and shall
continue thereafter for a period of three (3) years and or in the case of
specific services as described in Addendum "A" attached hereto, until such
time as such matters are finalized to the satisfaction of both the Company and
Russo. It is expressly acknowledged and agreed by and between the Parties
hereto that Russo shall not be obligated to provide any services and/or work
related to this Banking/Consulting Agreement until such time any agreed fee
and or specified retainer (deposit, initial fee, down-payment) in U.S. funds,
and/or agreed valuable consideration has been received by Russo.
9. WHERE SERVICES SHALL BE PERFORMED
Russo's services shall be performed at the main office location of Russo,
or other such designated location(s) as Russo and the Company agree are the
most advantageous for the work to be performed.
10. LIMITATIONS ON SERVICES
The Parties hereto recognize that certain responsibilities and
obligations are imposed by federal and state securities laws and by applicable
rules and regulations of stock exchanges, The New York Stock Exchange, the
National Association of Securities Dealers, in house "due diligence" or
"compliance" departments of brokerage houses, etc. Accordingly, Russo agrees
to the following:
A) Russo shall not release any financial or other information of data
about the Company without the consent and approval of the Company.
B) Russo shall not conduct any meetings with financial analysts
without informing the Company in advance of any proposed meeting, the format
or agenda of such meeting. The Company may elect to have a representative of
the Company attend such meeting.
C) Russo shall not release any information or data about the Company
to any selected person(s), entity, or group if Russo is aware that such
information or data has not been generally released or promulgated and the
Company requests that said information or data is not be so released or
promulgated.
D) After notice by the Company of filing for proposed public offering
of securities of the Company, and during any period of restriction on
publicity, Russo shall not engage in any public relations efforts not in the
normal course without approval of the counsel for the Company and of counsel
for the underwriter(s), if any
11. DUTIES OF THE COMPANY
A) The Company will notify Russo in writing a minimum of thirty (30)
days prior to making any private of public offering of securities, including
but not limited to S-8 filing or Regulation S.
B) The Company shall promptly supply Russo with full and complete
copies of all filings with all federal and state agencies, with full and
complete copies of all shareholders reports and communications whether or not
prepared with the assistance of Russo; with all data and information supplied
to any analyst, broker-dealer, market maker, or other member of the financial
community; and with all product service brochures, sales materials, etc. The
Company shall supply to Russo, within fifteen (15) days of execution of this
Banking/Consulting Agreement, with a list of all stockholders. This may be
supplied by the Company on a 3 inch computer disk compatible with Russo's
computer program.
(i) The Company is not presently engaged in a private or public
offering of securities, including S-8 or Regulation S, or including any
continuing distribution, whether or not exempt, that will be included prior to
the issuance of a research report on the Company, and the Company has no
intention of making such and offering during the initial term of this
Banking/Consulting Agreement. An "evergreen prospectus of employee stock
option or other plans will not preclude issuance of research reports when
approved by Russo.
(ii) The Company will notify Russo in writing a minimum of thirty
(30) days prior to making any private or public offering of securities,
including but not limited to S-8 filing or Regulation S.
(iii) The Company will notify Russo prior to any insider selling of
clients stock.
(iv) The Company will not use Russo reports in connection with any
offering of securities without the written consent of Russo.
C) In that Russo relies on information provided by the Company for a
substantial part of its preparations and reports, whether written or verbal,
the Company must represent that said information is neither false nor
misleading, and agrees to hold harmless and indemnify Russo for any breach of
these representations and covenants; and the Company agrees to hold harmless
and indemnify Russo for any claims relating to the purchase and/or sale of the
Company securities occurring out of, or in connection with, Russo's
relationship with the Company, including without limitation, reasonable
attorney's fees and any other costs arising out of any such claims.
D) In that Russo shareholders, officers, employees, members of their
families and or consultants or agents may hold a position in an engage in
transactions with respect to the Company securities, and in light of the fact
that Russo imposes restrictions on such transactions to guard against trading
on the basis of such non-public information the Company shall
contemporaneously notify Russo if any information or data being supplies to
Russo has not been generally released of promulgated.
12. REPRESENTATION AND INDEMNIFICATION
A) The Company shall be deemed to make a continuing representation of
the accuracy of any and all material facts, materials, information and data
which it supplies to Russo and the Company acknowledges its awareness that
Russo will rely upon such continuing representation in disseminating such
information and otherwise performing its services under the terms of this
Investment Banking and Consulting Agreement.
B) Russo, in the absence of notice in writing from the Company, will
rely on the continuing accuracy of materials, information and data supplied by
the Company.
C) The Company hereby agrees to hold harmless and indemnify Russo
against any and all claims, demands, suits, loss, damages, etc. arising out of
Russo' reliance upon the instant accuracy and continuing accuracy of such
facts, materials, information and data, unless Russo has been negligent in
performing its duties and obligations hereunder.
D) The Company hereby authorizes Russo to issue, in Russo's sole
discretion, corrective, amendatory, supplemental or explanatory press
releases, shareholders communications and reports or other data supplied to
analysts, broker-dealers, market makers or other members of the financial
community.
E) The Company shall cooperate fully and timely with Russo to enable
Russo to perform its duties and obligations under this Banking/Consulting
Agreement.
F) The execution and performance of this Banking/Consulting Agreement
by the Company has been duly authorized by the Board of Directors of the
Company in accordance with applicable law, and, to the extent required, by
requisite number of shareholders of the Company.
G) The performance by the Company of this Banking/Consulting
Agreement will not violate any applicable court decree or order, law or
regulations, nor will it violate any provision of the organizational documents
and or bylaws of the Company or any contractual obligations by which the
Company may be bound
H) The Company activities pursuant to this Banking/Consulting
Agreement or as contemplated by this Banking /Consulting Agreement do not
constitute and shall not constitute acting as a securities broker or dealer
under federal or state securities broker or dealer under federal or state
securities laws; any contract between the Company and a potential investor in
the Company shall be such that the Company would be acting merely as a finder
or consultant with respect to such prospective investor obligations under this
agreement.
I) The Company shall promptly deliver to Russo a complete due
diligence package to include latest 10K, latest 10Q, last 6 months of press
releases and all other relevant materials, including but not limited to
corporate reports, brochures, etc., or if not a reporting company, all
financials and reports for the current and past two (2) years.
J) The Company shall promptly deliver to Russo a list of names and
addresses of all shareholders of the Company which it is aware. This
shareholder list shall be upgraded at Russo's request. The Company agrees to
furnish to Russo a copy of all OTC sheets on a weekly basis.
K) The Company shall promptly deliver to Russo a list of all brokers
and market makers of the Companies securities, known to the Company, which
have been following the Company.
L) Because Russo will rely on such information to be supplied it by
the Company, all such information shall be true, accurate, complete and not
misleading, in all respects.
M) The Company shall act diligently and promptly in reviewing
materials submitted to it by Russo to enhance timely distribution of the
materials and shall inform Russo of any inaccuracies contained therein within
a reasonable time prior to the projected or known publication date.
N) The execution and performance of this Banking/Consulting Agreement
by Russo has been duly authorized by the Board of Directors of Russo in
accordance with applicable law, and, to the extent required, by the requisite
number of shareholders of Russo.
O) The performance by Russo of this Banking/Consulting Agreement will
not violate any applicable court decree or order, law or regulation, nor will
it violate any provision of the organizational documents and or bylaws of
Russo or any contractual obligation by which Russo may be bound.
13. COMPENSATION
A) Compensation payable to Russo for all general investor relations
services and other services hereunder, including but not limited to assistance
with acquisition and merger services, shall be paid by the Company to Russo by
the means and in the manner or manners as described in Schedule "A," a copy of
which is attached hereto and incorporated herein by this reference.
B) All moneys payable hereunder shall be in U.S. funds and drawn on
U.S. banks. The parties acknowledge that in negotiating this fee they
recognized that the services will probably not be performed in equal monthly
segments, but may be substantial during the earlier portion of the term and
less thereafter as relationships and communications lines are established.
Thus, part of the compensation for earlier services will be deferred and
therefore any lessening of services shall not constitute a breach or
termination hereof and the level fee shall continue.
C) or all special services, not within the scope of this Banking
Consulting Agreement, the Company shall pay to Russo such fees as when, the
parties shall determine in advance of performance of said special services,
provided the Company has agreed to said special services.
14. FILLING AND PAYMENT
Monthly fees or payments shall be due and payable without billing.
Billing and payments for special services shall be as agreed on a case by case
basis. The Company acknowledges and agrees that deposits, initial payments,
down payments, partial payments, payments for special services, monthly fees
or monthly payments shall be by wire to Russo's bank account upon execution of
any agreement or agreements, or: upon payment due date in the case of monthly
fees or monthly payments, or : in the case of special services by the first
day of the preceding month that work is scheduled to be performed, unless
expressly provided otherwise in writing, and that if such funds are not
received by Russo by said date the Company shall pay to Russo an additional
operations charge equal to 1% for each day said funds are not received.
15. RUSSO AS AN INDEPENDENT CONTRACTOR
Russo shall provide said services as an independent contractor, and not
as an employee of the Company or of any company affiliated with the Company.
Russo has no authority to bind the Company or any affiliate of the Company to
any legal action, contract or agreement.
16. RUSSO NOT TO ENGAGE IN CONFLICTING ACTIVITIES
During the term of this agreement, Russo shall not engage in any
activities that directly conflicts with the interest of the Company, the
Company hereby acknowledges notification by Russo and understands that Russo
does, and shall, represent and service other and multiple clients in the same
manner as it does the Company, and that the Company is not an exclusive client
of Russo.
17. TRADE SECRETS AND INVENTIONS
Russo shall treat as proprietary any and all information belonging to the
Company, it's affiliates, or any third parties, disclosed to Russo in the
course of the performance of Russo's services. Russo assigns and agrees to
assign to the Company or its nominee all rights in invention and other
proprietary information conceived by Russo during the term of this agreement
with respect to any work performed under said agreement.
18. INSIDE INFORMATION - SECURITIES VIOLATIONS
In the course of the performance of this agreement it is expected that
specific sensitive information concerning the operations of the Company's
business, and or affiliate companies shall come to the attention and knowledge
of Russo. In such event Russo will not divulge, discuss, or otherwise reveal
such information to any third parties.
19. DISCLOSURE
Russo is required to disclose any outside activities or interests,
including ownership or participation in the development of prior inventions,
that conflict, or may conflict with the best interest of the Company. It is
mutually understood that prompt disclosure is required under this paragraph if
the activity or interest is related, directly or indirectly, to any activity
that Russo may be involved with on behalf of the Company.
20. WARRANTY AGAINST CONTEMPLATION OF AGREEMENT RELATED CORRUPT PRACTICES
Russo represents and warrants that all payments and other valuable
considerations paid or to be paid under this agreement constitutes
compensation for services rendered; that this agreement and all payments and
other valuable considerations and the use of those payments and valuable
considerations are non-political in nature; and that said payments and
valuable considerations do not influence, sway or bribe any government or
municipal party, either domestic or foreign, in any way.
21. AMENDMENTS
This agreement may be modified or amended, provided such medications or
amendments are mutually agreed upon by and between the parties hereto and that
said modifications or amendments are made in writing and signed by both
parties.
22. SEVERABILITY
If any provision of this agreement shall be held to be contrary to law,
invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
this agreement is contrary to law, invalid or unenforceable, and that by
limiting such provision it would become valid and enforceable, then such
provision shall be deemed to be written, construed, and enforced as so
limited.
23. TERMINATION OF AGREEMENT
This Investment Banking and Consulting Agreement may not be terminated by
either party prior to the expiration of the term provided in paragraph 8 above
except as follows;
A) Upon the bankruptcy or liquidation of the other party; whether
voluntary or involuntary.
B) Upon the other party taking the benefit of any insolvency lay; and
or
C) Upon the other party having or applying for a receiver appointment
for either party,
D) As provide for in Paragraph 28 below.
24. ATTORNEY FEES
In the event either party is in default of the terms or conditions of
this Investment Banking and Consulting Agreement and legal action is initiated
or suit be entered as a result of such default, the prevailing party shall be
entitled to recover all costs incurred as a result of such default including
all costs, reasonable attorney fees. All maters in dispute shall be submitted
to binding arbitration before the American Arbitration Association, New York,
New York.
25. RETURN OF RECORDS
Upon termination of this agreement, Russo shall deliver all records,
notes, data, memorandum, models and equipment of any nature that are in the
control of Russo that are the property of or relate to the business of the
Company.
26. NON-WAIVER
The failure of either party, at any time to require any such performance
by any other party shall not be constructed as a waiver of such rights to
require such performance, and shall in no way effect such party's right to
require such performance and shall in no way affect such party's right
subsequently to require full performance hereunder.
27. DISCLAIMER BY RUSSO
Russo may advise on the preparation of certain promotional materials,
and; Russo makes no representation to the Company or others that; (a) its
efforts or services will result in any enhancement to the Company (b) the
price of the Company's publicly traded securities will increase (c) any person
will purchase the Company's saturates, or (d) any investor will lend money to
and or invest in or with the Company.
28. EARLY TERMINATION
In the event the Company fails or refuses to cooperate with Russo, or
fails or refuses to make timely payment of the compensation set forth above
and or in Addendum "A," Russo shall have the right to terminate any further
performance under this agreement. In such event, and upon notification
thereof, all compensation shall become immediately due and payable and or
deliverable, and Russo shall be entitled to receive and retain the same as
liquidated damages and not as a penalty, in lieu of all other remedies the
parties hereby acknowledge and agree that it would be too difficult currently
to determine the exact extend of Russo's damages, but that the receipt and
retention of such compensation is a reasonable present estimate of such
damage.
29. LIMITATION OF RUSSO LIABILITY
In the event Russo fails to perform its work or services hereunder, its
entire liability to the Company shall not exceed the lessor of; (a) the amount
of cash compensation Russo has received from the Company under paragraph 13
above (b) the amount of cash compensation Russo has received from the Company
under Addendum "A," or (c) the actual damage to the Company as result of such
non-performance. In no event shall Russo be liable to the Company for any
indirect, special or consequential damages, nor for any claim against the
Company by any person or entity arising form or in any way related to this
agreement.
30. OWNERSHIP OF MATERIALS
All right, title and interest in and to materials to be produced by Russo
in connection with this Investment Banking and Consulting Agreement and other
services to be rendered under said agreement shall be and remain the sole and
exclusive property of Russo, except in the event the Company performs fully
and timely its obligations hereunder.
31. AGREEMENT NOT TO HIRE
The Company understands and appreciated that Russo invested a tremendous
amount of time, energy and expertise in the training of its employees and
education of its sub contractors to be able to provide the very services the
Company desires. The Company further understands that in the event an
employee or sub contractor of Russo is enticed to leave, then Russo shall be
damaged in an amount the parties are incapable of calculating at the present
time. Therefore, the Company agrees not to offer employment or sub contractor
status to any employee or sub contractor of Russo, nor to allow any employee,
officer, director, shareholder or consultant of the Company to offer such
employment or sub contractor status with the Company or any other company,
concern, venture or entity with whom officers, directors or consultants of the
Company are employed, associated or hold a financial stake in it for a period
of three (3) years from the date of expiration or termination hereof.
Further, in the event an employee or sub contractor of Russo leaves the employ
of or dissolves or breaks association with Russo and subsequently establishes
employment or an association of any kind with another investor relations or
other type of competing firm of Russo, the Company agrees not to do business
with such other investor relations or competing firm of Russo for a period of
three (3) years from the date of expiration or termination hereof.
32. MISCELLANEOUS
A) Effective date of representations shall be no later than the date
of execution by the parties of the Investment Banking and Consulting
Agreement.
B) Currency: In all instances, references to dollars shall be deemed
to be United States Dollars.
C) Stock: In all instances, references to stock, options and
underlying shares shall be deemed to be unrestricted and free trading.
33. NOTICES
All notices hereunder shall be in writing and addressed to the party at
the address herein set forth, or at such other address which notice pursuant
to this section may be given, and shall be given by either personal delivery,
certified mail, express mail or other national overnight courier services.
Notices shall be deemed given upon the earlier of actual receipt or three (3)
business days after being made or delivered to such courier service. Any
notices to be given hereunder shall be effective if executed by and sent by
the attorneys for the parties giving such notice, and in connection therewith
the parties and their respective counsel agree that in giving such notice,
such counsel may communicate directly in writing with such parties to the
extent necessary to give such notice. Any notice required or permitted by
this agreement to be given shall be given to the respective parties at the
address first written above, on page one (1) of this Investment Banking and
Consulting Agreement.
34. FIRST RIGHT OF REFUSAL ON INVESTMENT BANKING AND CONSULTING SERVICES
The parties agree that during the term of this Investment Banking and
Consulting Agreement Russo shall have first right of refusal to provide the
Company with any fund raising activities and or Investment Banking and
Consulting services, provided that Russo has the ability to provide the same
or equivalent services needed or requested by the Company, and at a
compensation to Russo equal to, or in a lesser amount, than that which the
Company can obtain said services from another alternative provider. Russo
shall have ten (10) days upon written notice from the Company in which to
match or exceed such requested services at a compensation rate equal to or
less than that offered by another alternative provider of said services. Such
alternative provider will be the same type of firm as Russo and a member of
the New York Stock Exchange.
35. PARENT AND SUBSIDIARY COMPANIES OR ENTITIES
This Investment Banking and Consulting Agreement applies to all parent or
subsidiary companies or entities of the Company.
36. EXCLUSION WITH RESPECT TO PARTNERSHIP
The parties agree that, in no way, shall this Investment Banking and
Consulting Agreement be construed as being an act of partnership between the
parties hereto and that no party hereto shall have, as a result of the
execution of this Investment Banking and Consulting Agreement, any liability
for the commitments of any other party of any type, kind or sort.
37. TRAVEL COMPENSATION AND REIMBURSEMENT
In the course of Russo providing services as necessary hereunder, on the
behalf of or for the company during the term of this Investment Banking and
Consulting Agreement, the Company shall pay to, or reimburse, Russo for any
travel expenses incurred by Russo that are not specifically described
elsewhere herein, provided that the Company has been notified in advance by
Russo of the nature and of the cost of such required travel and the amount of
travel compensation and or reimbursement related thereto. Travel expenses
shall be deemed to include, but not to be limited to, transportation expenses,
hotel expenses, airline fairs, taxi fares, toll road fees, reasonable food
expenses and reasonable gratuities related thereto. The Company shall have
the right to book airline reservations, hotels, etc., itself on behalf of
Russo within five (5) days upon notice for the requirement thereof from Russo.
38. TIME IS OF THE ESSENCE
Time is hereby expressly made of the essence of this Investment Banking
and Consulting Agreement with respect to the performance by the parties of
their respective obligations hereunder.
39. ENUREMENT
This Investment Banking and Consulting Agreement shall enure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors, assigns and
any addenda's attached hereto.
40. ENTIRE AGREEMENT
This Investment Banking and Consulting Agreement contains the entire
agreement of the parties and may be modified or amended only by agreement in
writing, signed by the party against whom enforcement of any waiver, change,
amendment, modification, extension or discharge is sought. It is declared by
both parties that there are not oral or other agreements or understanding
between them affecting this Investment Banking and Consulting Agreement, or
relating to the business of Russo. This agreement supersedes all previous
agreements between Russo and the Company.
41. APPLICABLE LAW
This agreement is executed pursuant to and shall be interpreted and
governed for all purposes by the laws of the State of New York for which the
courts in Richmond County, New York shall have jurisdiction. If any provision
of this Investment Banking and Consulting Agreement is declared void, such
provision shall be deemed severed from this agreement, which shall otherwise
remain in full force and effect.
42. ACCEPTANCE BY RUSSO
This Investment Banking and Consulting Agreement is not valid or binding
upon Russo unless and until executed by its President or other duly authorized
executive officer of Russo at its home office in Staten Island, New York.
43. EXECUTION IN COUNTERPART; TELECOPY-FAX
This Investment Banking and Consulting Agreement may be executed in
counterparts, not withstanding the date or dates upon which this Investment
Banking and Consulting Agreement is executed and delivered by any of the
parties, and shall be deemed to be an original and all of which will
constitute one and the same agreement, effective as of the reference date
first written above. The fully executed telecopy (fax) version of this
Investment Banking and Consulting Agreement shall be construed by all parties
hereto as an original version of said Investment Banking and Consulting
Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands in execution
of this agreement.
FOR AND IN BEHALF OF THE COMPANY FOR AND IN BEHALF OF RUSSO
SECURITIES, INC.
By:/s/James F. Smith By:/s/Patrick P. Russo
------------------- -------------------
James F. Smith, President Patrick P. Russo,
President
14
12
SCHEDULE A
COMPENSATION
In consideration for the agreement of Russo to provide the services
described in the Investment Banking and Consulting Agreement (the
"Agreement")of which this Schedule A is a part, the Company will issue common
stock purchase warrants (the "Warrants") to purchase a total of 100,000 shares
of the Company's common stock (the "Common Stock") at $.01 per share (the
"Exercise Price"). The Warrants will be issued on the date of the execution
of the Agreement and will expire three (3) years after date of issue. The
specific terms of the Warrants are as follows:
(a) Warrant Exercise Price. The Exercise Price per share of the
----------------------
Warrants was established by the Board of Directors at $.01 per share.
(b) Term of Warrants. The Warrants may be exercised in whole or
----------------
in part at any time during the 36 months after the date of issue, unless the
expiration date of the Warrant and the term of the Agreement are extended by
the Company in writing to a later date.
(c) Manner of Exercise. All or any whole number of such
--------------------
Warrants may be exercised for cash during the term of the Warrants.
(d) Transferability. The Warrants are not transferable without
---------------
the Company's prior written approval.
(e) Redemption. There are no redemption rights afforded to the
----------
Company in connection with the Warrants.
(f) Adjustments. The Exercise Price and the number of shares (and, in
-----------
certain events, the class or classes of capital stock of the Company)
purchased upon the exercise of each Warrant are each, respectively, subject to
adjustment from time to time as hereinafter provided prior to the expiration
of any Warrant by its exercise or by its terms, in case any one or more of the
events and referred to described below shall occur at any time or from time to
time; that is to say, if the Company shall:
(i) issue any shares of its Common Stock as a dividend or
subdivide its outstanding shares of Common Stock into a greater number of
shares
then, in either of such cases, the then applicable purchase price per share of
the shares of Common Stock purchasable pursuant to each Warrant in effect at
the time of such action shall be proportionately reduced and the number of
shares at that time purchasable pursuant to each Warrant shall be
proportionately increased; or,
(ii) combine its outstanding shares of Common Stock into a
smaller number of such shares,
then, in such case, the then applicable purchase price per share of the shares
of Common Stock purchasable pursuant to each Warrant in effect at the time of
such action shall be proportionately increased and the number of shares of
Common Stock at that time purchasable pursuant to each Warrant shall be
proportionately decreased; or
(iii) issue by reclassification of its shares of Common Stock
any shares of its capital stock,
then, as a condition of such recapitalization, lawful and adequate provision
shall be made whereby the holder of each Warrant shall have, immediately after
the effective date of any such reclassification, the right to purchase, upon
the basis and on the terms and conditions specified herein, in lieu of the
shares of Common Stock of the Company theretofore purchasable upon the
exercise of each Warrant, such shares of stock or other securities as may be
issued or payable with respect to, or in exchange for the number of shares of
Common Stock of the Corporation theretofore purchasable upon the exercise of
each Warrant, had such recapitalization not taken place; and in any such
event, the rights of the Warrant holder to any adjustment in the number of
shares of Common Stock purchasable upon the exercise of each Warrant, as
hereinbefore provided, shall continue and be preserved in respect of any stock
or other securities which the Warrant holder becomes entitled to purchase.
If after an adjustment the holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the
Board of Directors shall in good faith determine the allocation of the
adjusted Exercise Price between or among the classes of capital stock. After
such allocation, that portion of the Exercise Price applicable to each share
of each such class of capital stock shall thereafter be subject to adjustment
on terms comparable to those applicable to Common Stock in this Agreement.
Notwithstanding the allocation of the Exercise Price between or among shares
of capital stock as provided by this Section 8, a Warrant may only be
exercised in full by payment of the entire Exercise Price currently in effect;
or
(iv) merge or consolidate with or into another corporation or
sell or convey to another corporation, all or substantially all of the
Company's assets
then, as a condition of such consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be,
shall make lawful and adequate provision whereby the Registered Holder of each
Warrant then outstanding shall receive, on exercise of such Warrant, the kind
and amount of securities and property receivable upon such change,
consolidation, merger, sale or conveyance by a holder of the number of
securities issuable upon exercise of such Warrant immediately prior to such
consolidation, merger, sale or conveyance, and shall forthwith file at the
Corporation Office of the Warrant Agent a statement signed by its Chairman of
the Board or President and by its Secretary or an Assistant Secretary
evidencing such provisions. Such provisions shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 8.
(v) take a record of the holders of its Common Stock for the
purpose of entitling them to purchase shares of its Common Stock at a price
per share more than 10% below the current market price per share of its Common
Stock (as defined below) at the date of taking such record,
then, the number of shares of Common Stock purchasable pursuant to this
Warrant shall be adjusted by multiplying (a) the number of shares of Common
Stock which the holder hereof was entitled to receive immediately prior to
such adjustment (taking into account fractional interests to the nearest
1000th of a share) by (b) a fraction, the numerator of which is the number of
shares of the Common Stock of the Corporation outstanding (excluding the
shares owned by the Corporation) immediately prior to the taking of such
record plus the number of additional shares offered for purchase, and the
denominator of which is the number of shares of Common Stock of the
Corporation outstanding (excluding shares owned by the Corporation)
immediately prior to the taking of such record plus the number of shares which
the aggregate offering price of the total number of additional shares so
offered could purchase at such current market price and the price per share
shall be that number determined by multiplying (a) the price per share in
effect immediately prior to the taking of such record by (b) a fraction, the
numerator of which is the number of shares purchasable hereunder immediately
prior to taking of such record and the denominator of which is the number of
shares purchasable hereunder immediately after the taking of such record.
(vi) reduce the Exercise Price of any or all classes of
warrants, then, as a condition of such reduction it shall be made uniformly as
to all warrants of that class then outstanding.
For the purpose hereof, the current market price per share of Common
Stock of the Corporation at any date shall be deemed to be the average of the
daily closing prices for the thirty (30) consecutive business days commencing
forty-five (45) business days before the day in question. The closing price
for each day shall be the last sale price, or, in case of no sales on such
day, the average of the closing bid and asked prices, in either case as
officially quoted by any National Securities Exchange, or, if the Common Stock
of the Corporation is not listed or admitted to trading on any such Exchange,
the average of the highest bid and asked prices as reported in the sheets of
the National Association of Securities Dealers, Inc. for the over the counter
market in New York City, or if not so reported, the average of the highest bid
and asked prices as furnished by any New York Stock Exchange firm selected
from time to time by the Company for the purpose.
(g) No Right As Stockholder. No Warrant holder is by virtue of
-----------------------
ownership of the Warrants, entitled to any rights whatsoever of a stockholder
of the Company.
(h) The Warrants are not transferable. However, the shares of common
stock issued upon exercise of the Warrants pursuant to an effective
Registration Statement of the Company on Form S-8 are freely transferable.
Russo agrees that it will sell such shares of Common Stock only at current
market prices, but in no event less than $5.00 per share during the first two
(2) years after the issue date of the Warrants, and that no commissions or
compensation will be paid in connection with any such sale in excess of
customary brokers commissions.
EXHIBIT 4(B)
------------
GENERAL AMERICAN ROYALTY, INC.
------------------------------
One Energy Square, Suite 717 4925 Greenville Avenue Dallas, Texas 75206
Tel: (214) 361-8535 Fax: (214) 361-7715
VIA FACSIMILE (214) 520-1314
September 12, 1997
Ms. Sharron Ann Sibley
Superior Financial Group, Inc.
4131 North Central Expressway, Suite 340
Lock Box 29
Dallas, Texas 75204
Dear Ms. Sibley:
This letter will serve to memorialize the understanding made on September
11, 1997 between General American Royalty, Inc. (the "Company") and Superior
Financial Group, Inc. pursuant to which Superior Financial Group, Inc. agrees
to consult and advise the Company with respect to certain financial matters
including communications with analysts, broker/dealers and other members of
the financial community. The term of the agreement will commence on the date
hereof and will continue for a period of three (3) years unless sooner
terminated by mutual consent of the parties.
In consideration of the agreement to render such services you are
entitled to receive Five Thousand (5,000) options to purchase an equivalent
number of shares of common stock of the Company at an exercise price of $.01
per share for a period expiring 3 years from and after the date hereof.
If the above and foregoing accurately sets forth our agreement, please so
indicate by executing one copy of this letter in the space provided below and
returning to the undersigned.
Yours very truly,
GENERAL AMERICAN ROYALTY, INC.
By:/s/James F. Smith
-------------------
James F. Smith, President
ACCEPTED AND AGREED this 12th day of September, 1997.
SUPERIOR FINANCIAL GROUP, INC.
By:/s/Sharron Ann Sibley
-----------------------
Sharron Ann Sibley, President
EXHIBIT 4(C)
------------
GENERAL AMERICAN ROYALTY, INC.
------------------------------
One Energy Square, Suite 717 4925 Greenville Avenue Dallas, Texas 75206
Tel: (214) 361-8535 Fax: (214) 361-7715
VIA FACSIMILE (212) 867-6908
September 12, 1997
Howard Bronson & Co.
708 3rd Ave., 22nd Floor
New York, NY 10017
Ladies/Gentlemen:
This letter will serve to memorialize the understanding made on September
11, 1997 between General American Royalty, Inc. (the "Company") and Howard
Bronson & Co. pursuant to which Howard Bronson & Co. agrees to consult and
advise the Company with respect to certain (i) dissemination of press releases
and quarterly and annually reports; (ii) communications with analysts,
broker/dealers and other members of the financial community. The term of the
agreement will commence on the date hereof and will continue for a period of
three (3) years unless sooner terminated by mutual consent of the parties.
In consideration of the agreement to render such services you are
entitled to receive Five Thousand (5,000) options to purchase an equivalent
number of shares of common stock of the Company at an exercise price of $.01
per share for a period expiring 3 years from and after the date hereof.
Howard Bronson & Co. agrees that it will sell such shares of Common Stock
only at current market prices, but in no event less than $5.00 per share
during the first two (2) years after the issue date of the Warrants, and that
no commissions or compensation will be paid in connection with any such sale
in excess of customary brokers commissions.
If the above and foregoing accurately sets forth our agreement, please so
indicate by executing one copy of this letter in the space provided below and
returning to the undersigned.
Yours very truly,
GENERAL AMERICAN ROYALTY, INC.
By:/s/James F. Smith
-------------------
James F. Smith, President
ACCEPTED AND AGREED this 15th day of September, 1997.
HOWARD BRONSON & CO.
By:/s/Howard C. Bronson
----------------------
Howard C. Bronson, President
EXHIBIT 5
S O N F I E L D & S O N F I E L D
A PROFESSIONAL CORPORATION
LEON SONFIELD (1865-1934) ATTORNEYS AT LAW NEW YORK
GEORGE M. SONFIELD (1899-1967) LOS ANGELES
ROBERT L. SONFIELD (1893-1972) 770 SOUTH POST OAK LANE WASHINGTON,
D.C.
________________ HOUSTON, TEXAS 77056
FRANKLIN D. ROOSEVELT, JR. (1914-1988) EMAIL:[email protected]
TELECOPIER (713) 877-1547
ROBERT L. SONFIELD, JR. _____
MANAGING DIRECTOR TELEPHONE (713) 877-8333
September 12, 1997
Board of Directors
General American Royalty, Inc.
4925 Greenville Avenue, Suite 717
Dallas, Texas 75206
Dear Gentlemen:
In our capacity as counsel for General American Royalty, Inc. (the
"Company"), we have participated in the corporate proceedings relative to the
authorization and issuance by the Company of a maximum of 110,000 shares of
common stock upon exercise of the Warrants issued pursuant to the Consulting
Agreements all as set out and described in the Company's Registration
Statement on Form S-8 (File No. _______) under the Securities Act of 1933 (the
"Registration Statement"). We have also participated in the preparation and
filing of the Registration Statement including the federal income tax
information set out therein under the caption "Consulting Agreements - Federal
Income Tax Effects" and elsewhere in the Prospectus constituting a part of the
Registration Statement.
Based upon the foregoing and upon our examination of originals (or copies
certified to our satisfaction) of such corporate records of the Company and
other documents as we have deemed necessary as a basis for the opinions
hereinafter expressed, and assuming the accuracy and completeness of all
information supplied us by the Company, having regard for the legal
considerations which we deem relevant, we are of the opinion that:
(1) The Company is a corporation duly organized and validly existing
under the laws of the State of Delaware;
(2) The Company has taken all requisite corporate action and all
action required by the laws of the State of Delaware with respect to the
authorization, issuance and sale of common stock to be issued pursuant to the
Registration Statement;
(3) The maximum of 110,000 shares of common stock, when issued and
distributed pursuant to the Registration Statement, will be validly issued,
fully paid and nonassessable;
(4) Based upon the current provisions of Federal income tax laws and
regulations, and on current authoritative interpretations thereof, we believe
the discussion in the Registration Statement under the caption "Consulting
Agreements - Federal Income Tax Effects" of the Federal income tax laws
relevant to the Warrant holders, although necessarily general, considers each
material Federal income tax issue of significance to Warrant holders and the
result which, more likely than not, would obtain under the laws and
regulations in effect as of the date hereof.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the references to our firm in the Registration
Statement.
Yours very truly,
/s/SONFIELD & SONFIELD
- ------------------------
SONFIELD & SONFIELD
EXHIBIT 24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation, by reference, in this Registration
Statement on Form S-8 of our report, which includes an explanatory paragraph
addressing the restatement of the previously issued financial statements,
dated November 10, 1996, except as to the information presented in Note 6, for
which the date is January 21, 1997, on our audit of the financial statements
of General American Royalty, Inc.
/s/Coopers & Lybrand L.L.P._____________________________
- ------------------------------
COOPERS & LYBRAND L.L.P.
Dallas, Texas
September 15, 1997
