U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form For Registration of Securities of
Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
BISHOP CAPITAL CORPORATION
(Name of Small Business Issuer in its charter)
Wyoming 84-0901126
- ------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
716 College View Drive, Riverton, WY 82501
------------------------------------ -----
(Address of principal executive offices) (Zip Code)
(307) 856-3800
-------------------------
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
----------------------------
(Title of Class)
<PAGE>
Part I
Item 1. Description of Business
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The Company
Bishop Capital Corporation, formerly known as Bishop Cable Communications
Corporation, (the "Company") was originally incorporated under the laws of the
State of Colorado on February 22, 1983 and reincorporated under the laws of the
State of Wyoming on June 2, 1992. On November 22, 1995, the Company changed its
name. The Company is currently a wholly-owned subsidiary of American Rivers Oil
Company ("AROC"). AROC is spinning off the Company as a partial liquidating
dividend to its common shareholders of record at November 18, 1996. AROC's Class
B common shareholders will not participate in the distribution. It is intended
that the spin-off will occur upon the effectiveness of this Form 10-SB. The
Company is primarily engaged in the development and/or sale of real estate and
also has a royalty interest in a natural gas property. The Company had four
full-time employees as of September 30, 1996.
Real Estate
In October 1993, the Company entered into two limited partnership agreements to
purchase approximately 90 contiguous acres of land in Colorado Springs,
Colorado. A summary of the Company's participation in each partnership is as
follows:
(1) The Company contributed $250,000 cash to the first partnership which
purchased approximately 55 acres of land for commercial development. The
Company, as general partner, has an 81% interest with the remaining 19% interest
held by a limited partner who is the general partner in the second partnership
discussed below. The Company will be allocated 100% of the income and losses
until it has been paid $600,000 plus interest thereon at 8% per annum (not to
exceed $100,000) after which the income and losses will be allocated 81% to the
Company and 19% to the limited partner.
(2) The Company contributed $100,000 cash to the second partnership which
purchased approximately 35 acres of land for the construction of a recreational
facility encompassing a golf driving range, minature golf and baseball/softball
batting cages. This facility commenced operations in July 1994. The Company, as
the limited partner, has a 19% interest with the remaining 81% interest held by
a general partner as discussed above. The Company contributed an additional
$250,000 when certain financing requirements in the partnership were fulfilled
by the general partner. The Company is not a guarantor of any debt in this
partnership.
The Company competes with other commercial real estate development companies
having greater financial and operational resources and technical staffs that
plan, supervise, develop and market commercial real estate projects. The
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Company's business is affected not only by such competition, but also by market
demand, interest rates, credit availability and the strength of the economy in
general.
The undeveloped real estate is subject to local zoning laws and regulations. The
undeveloped real estate must be surveyed, designed and platted and then
submitted to the appropriate governmental authorities for approval, permits and
agreements before it can commence development. The ability of the Company to
obtain necessary approvals and permits for its planned development is often
beyond the Company's control. The length of time necessary to obtain permits and
approvals increases the carrying costs of unimproved land acquired for the
purpose of development. The western boundary of the undeveloped real estate
borders a drainage channel and appropriate governmental authorities will require
that certain improvements be made along the drainage channel as sections of the
undeveloped land are platted for development. The Company estimates that the
total drainage channel improvement costs will approximate $400,000.
The Company entered into Purchase Agreements to sell one tract of land (1.14
acre) to Diamond Shamrock Refining and Marketing Company for $388,850 for a
combination gasoline sales, convenience store and car wash facility and another
tract of land (1.04 acre) to a Taco Bell franchisee for not less than $350,000
(purchase price to be adjusted up if actual size of platted lot is greater than
size outlined in Purchase Agreement) for a fast-food facility. The Company is
also having preliminary discussions with a commercial retail bank regarding the
potential sale of another tract of land (1.01 acre) for a bank facility.
In October 1995 the Company acquired approximately 5 acres of undeveloped real
estate in Riverton, Wyoming for $80,000 and developed the parcel into a 15 lot
subdivision. The improvements (utilities, drainage, roadway, etc.) which were
completed in September 1996 cost approximately $154,000. In June 1996 the
Company entered into a one year listing agreement with a real estate brokerage
company to market at a 6% commission rate the improved lots.
The Company is not aware of any non-compliance with existing local, state and
Federal environmental rules and regulations relating to its real estate
activities.
Natural Gas Royalty Interest
The Company has royalty interests in the Madden Unit in Wyoming which produces
natural gas from producing horizons between 5,500 and 24,000 feet. A gas
processing plant in which the Company has no ownership interest treats the "sour
gas" produced from the Madison formation (24,000 feet). The plant processes 50
MMCFD (million cubic feet per day) from two completed Madison wells. The plant
products include methane, sulfur and carbon dioxide. The Company's royalty
interests are only subject to plant processing costs and severance and ad
valorem taxes. The Company and other royalty owners are currently negotiating
with the plant operator to eliminate the deduction of certain processing costs
which may not be in accordance with applicable state rules and regulations.
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Item 2. Management Discussion and Analysis of Financial Condition and Results of
Operations
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In December 1995, the Company's parent corporation, Metro Capital Corporation
("Metro"), upon approval of Metro's shareholders, consummated a reverse
acquisition with Karlton Terry Oil Company and its affiliates ("KTOC") whereby
KTOC acquired 80% control of Metro in exchange for certain oil and gas
properties. The shareholders of Metro also approved the change of Metro's name
to American Rivers Oil Company. Metro's assets, except for $700,000 cash and an
insignificant oil property, were transferred at their historical carrying value
to the Company where they were operated autonomously by the prior management of
Metro pursuant to the terms of a separate five-year Operating Agreement with its
parent company, AROC, which will expire on the effective date of the spin-off.
The following discussion and analysis should be read in conjunction with the
Company's Consolidated Financial Statements and Notes thereto.
Results of Operations for the Years Ended March 31, 1996 and 1995
The fiscal 1996 net loss was significantly lower than the net loss for fiscal
1995 primarily due to a gain on the sale of marketable securities of $688,400.
The fiscal 1996 net loss also included $150,000 of professional fees relating to
the reverse acquisition transaction with KTOC.
Revenue
Gas royalty revenue increased 3% from fiscal 1995 to fiscal 1996. Natural gas
production was 49,148 mcf in fiscal 1996, or a 25% increase compared to 1995
(39,383 mcf) and was primarily due to the "sour" gas treatment plant becoming
operational in March 1995. The production increase, however, was offset by a 21%
decrease in the average sales price of natural gas ($1.36/mcf in 1996 compared
to $1.72/mcf in 1995).
Costs and Expenses
The only production costs incurred in connection with the Company's natural gas
royalty interests are for gas plant processing charges and severance and ad
valorem taxes. These costs increased in fiscal 1996 due primarily to the gas
plant, which processes "sour gas", becoming operational in March 1995. The
Company and other royalty owners are presently negotiating with the plant
operator to decrease the plant processing cost per mcf being charged to the
royalty owners.
General and administrative expenses increased 17% in fiscal 1996 compared to
fiscal 1995 resulting primarily from compensation expense being recorded in
connection with the issuance of common stock to employees from the Company's
stock bonus plan and two outside directors receiving common stock as
compensation for services.
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Depreciation and amortization decreased 4% in fiscal 1996 compared to fiscal
1995 as a result of of a decrease in depreciable assets.
Other
Interest and dividend income decreased 21% in fiscal 1996 from fiscal 1995 due
to the sale of marketable equity and fixed income securities.
Rental income decreased 32% in fiscal 1996 from fiscal 1995 due to the
nonrenewal of an office lease in fiscal 1995.
The gain on sale of marketable securities in fiscal 1996 resulted primarily from
the sale of equity securities with a low cost basis. The Company does not
anticipate having a gain of this magnitude in the near future.
The professional fees expense of $150,000 in fiscal 1996 related to legal and
consulting fees incurred in connection with the December 1995 reverse
acquisition with Karlton Terry Oil Company.
The equity in limited partnership loss represents the Company's share of losses
as a 19% limited partner in a golf driving range, miniature golf and batting
cage recreational facility which commenced operations in July 1994.
The discontinued operations of an oil property relates to the oil property which
was not transferred to the Company in connection with the December 1995 reverse
acquisition with Karlton Terry Oil Company.
Results of Operations for the Six Months Ended September 30, 1996 and 1995
For the six months ended September 30, 1996, the net loss was $233,426 versus a
net loss of $267,699 for the same period in 1995. The decrease in the amount of
the loss in the first six months of fiscal 1996 compared to the same period in
fiscal 1995 was principally due to decreases in general and administrative
expenses offset by decreases in gain on sale of marketable securities and
discontinued operations of an oil property. The discontinued operations of an
oil property relate to the property which was not transferred to the Company in
connection with the December 1995 reverse acquisition.
Revenue
Gas royalty revenue for the six month periods in 1996 and 1995 remained
comparable even though the gas plant incurred a shutdown in August 1996 for
normal repairs and maintenance. As a result of the plant shutdown, natural gas
production for the six months ended September 30, 1996 decreased 2% (22,979 mcf
versus 23,498 mcf) compared to the same period in 1995. The average sales price
per mcf remained comparable ($1.25 versus $1.24) between the two periods.
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Costs and Expenses
Gas processing and production taxes increased 24% for the six months ended
September 30, 1996 compared to the same period in 1995. The increase is
primarily due to the plant operator recovering the difference between the actual
and estimated annual plant processing charges for the period April 1995 through
March 1996.
General and administrative expenses for the six months decreased 18% in 1996
compared to 1995. The decrease reflects a reduction in professional fees which
were higher in 1995 due to the reverse acquisition.
Depreciation and amortization for the six month periods in 1996 and 1995
remained comparable.
Other
Interest and dividend income decreased 29% for the six months ended September
30, 1996 compared to 1995 due to the sale of marketable securities.
Financial Condition
At September 30, 1996, the Company had working capital of $611,200.
The following summary table reflects comparative cash flows for the Company for
the six months ended September 30, 1996 and 1995 and for the two years ended
March 31, 1996:
<TABLE>
<CAPTION>
Six Months Ended Years Ended
September 30, March 31,
----------------------- -----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net cash used in operating activities $(193,000) $(211,700) $(321,200) $(307,900)
Net cash provided by investing activities 143,900 69,900 262,700 439,300
Net cash provided by (used in) financing
activities -- 39,500 -- (46,500)
</TABLE>
Net cash used in operating activities of $193,000 for the six months ended
September 30, 1996 compared to $211,700 for the comparative period in 1995
reflects reduced operating expenses and the discontinued operations of an oil
property. Net cash used in operating activities increased from $307,900 in
fiscal 1995 to $321,200 in fiscal 1996 primarily due to decreased oil revenue
accompanied by increased production costs.
Net cash provided by investing activities totaled $143,900 and $69,900 for the
six months ended September 30, 1996 and 1995, respectively. The Company utilized
net cash proceeds of $330,500 from the sale of marketable securities for the
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period ended September 30, 1996 for capital expenditures of $107,600, advancing
funds of $100,000 under a note receivable and funding of operating activities.
The capital expenditures primarily relate to improvements on undeveloped land in
Wyoming. During the six months ended September 30, 1995, the Company utilized
net cash proceeds of $75,600 from the sale of marketable securities for capital
expenditures of $9,000 and funding of operating activities. In fiscal 1996, net
cash proceeds of $1,095,500 from the sale of marketable securities were
primarily utilized for capital expenditures of $155,000, the transfer of
$700,000 cash in the reverse acquisition and funding of operating activities. In
fiscal 1995, net cash proceeds of $461,300 from the sale of marketable
securities were utilized primarily for the funding of operating activities.
Net cash provided by financing activities of $39,500 for the six months ended
September 30, 1995 resulted from proceeds from borrowings to fund operating
activities. Net cash used in financing activities of $46,500 in fiscal 1995
related to the acquisition of treasury stock.
The Company's material commitments for capital expenditures in the next twelve
months will be in conjunction with the development of Phase I of the real estate
located in Colorado Springs, Colorado. The Company has entered into contracts to
sell two tracts and is having preliminary discussions regarding the sale of a
third tract. The Company has engaged outside consultants to develop
specifications and bid packages for roadway, drainage channel and on-site
(grading, utilities, etc.) improvements related to Phase I consisting of
approximately 5 acres. The amount of such commitment is estimated to be in the
range of $400,000 to $500,000. The Company expects that such expenditures will
be funded through the proceeds realized from the sale of lots, working capital
and/or letters of credit collateralized by real estate.
Item 3. Description of Property
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The Company's principal properties consist of 55 acres of undeveloped real
estate in Colorado and a 15 lot subdivision and natural gas royalty interests in
Wyoming. None of the properties are held subject to any major encumbrance.
Real Estate Investment Policies
The Company's major investment in real estate is the 55 acres of undeveloped
real estate in Colorado Springs, Colorado which was acquired in October 1993 and
consists of separate 20 acre and 35 acre parcels. The Company is presently
planning a three phase development of commercial pad sites for the 20 acre
parcel. Phase I of the development, consisting of approximately 183,000 square
feet, includes 5 lots of which the Company has entered into Purchase Agreements
on two lots and is having preliminary discussions with another potential
purchaser for the sale of a third lot. The Company has engaged outside
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consultants to prepare the necessary Phase I documentation (surveys, designs and
plats) for submission to the appropriate governmental authorities for approval
and permits. The Company will be required to make improvements to the drainage
channel on the western boundary of the land in Phase I as discussed in Item 1.
The Company anticipates that the costs incurred in developing the land (grading,
utility extensions, etc.) in Phase I will be funded primarily by the escrow of
the sales proceeds realized from the sale of the lots. The Company anticipates
providing a Letter of Credit to the appropriate governmental authorities to
ensure that the necessary improvements to the drainage channel will be
completed. The Company anticipates that the development of the next two phases
will commence upon the completion of Phase I.
The Company's development plan for the remaining 35 acre parcel is presently
anticipated to be a combination of retail pad sites and an apartment complex.
The construction of an apartment complex will be based upon a variety of
factors, including (i) external demographic studies; (ii) financial review as to
the feasibility of the proposed project, including projected profit margins,
return on capital employed and the capital payback period; (iii) competition for
the proposed project, the ability to obtain financing on favorable terms and
management's judgment as to the real estate market and economic trends. The
Company would also consider various financial resources such as a partnership,
joint venture or other financing arrangements to minimize risk.
The Company does not anticipate any major investments in real estate mortgages
or securities of or interests in persons primarily engaged in real estate
activities.
Reserves
Reserves relating to the gas royalty interests owned are not included because
the information is unavailable. The Company's share of production from the
royalty interests for the six months ended September 30, 1996 was 22,979 mcf.
Item 4. Security Ownership of Certain Beneficial Owners and Management
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a. Security Ownership of Certain Beneficial Owners
Securities of the Company are owned by AROC. The following table shows, on a pro
forma basis giving effect to the spin-off of the Company to holders of AROC
common stock on a one share of Bishop for every four shares of AROC, those
persons known by the Company who will be the beneficial owners of more than 5%
of the Company's Common Stock:
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<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
-------------- ------------------- ---------------- --------
<S> <C> <C> <C>
Common Stock Haddon, Inc. 93,750 10.6%
c/o Coal Contractors
Gowen Mine
Fern Glen, PA 18241-2145
Common Stock Robert E. Thrailkill 78,720 8.9%
716 College View Drive
Riverton, WY 82501
Common Stock Consult & Assist 68,750 7.8%
P.O. Box 9856
Rancho Santa Fe, CA 92067
Common Stock Francarep, Inc. 68,750 7.8%
50 Av. des Champs-Elysees
75008 Paris, France
b. Security Ownership of Management
The following table shows, on a pro forma basis giving effect to the spin-off of
the Company to holders of AROC common stock, management's expected ownership of
the Company's Common Stock:
Amount and Nature
Name and Address of Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- ----------------- --------
Common Stock Robert E. Thrailkill 78,720 8.9%
716 College View Drive
Riverton, WY 82501
Common Stock John A. Alsko 19,563 2.2%
716 College View Drive
Riverton, WY 82501
Common Stock Robert J. Thrailkill 15,938 1.8%
716 College View Drive
Riverton, WY 82501
Common Stock All officers and directors
as a group (three persons) 114,221 12.9%
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</TABLE>
<PAGE>
c. Changes in Control
The Company is not aware of any arrangement which may, at a subsequent date,
result in a change of control of the Company.
Item 5. Directors and Executive Officers
a. Identification of Directors and Executive Officers
Name Age Office
---- --- ------
Robert E. Thrailkill 65 Chairman of the Board, President
and Chief Executive Officer
John A. Alsko 55 Secretary/Treasurer and Director
Robert J. Thrailkill 37 Vice President and Director
Robert E. Thrailkill. Mr. Thrailkill has been President, Chief Executive
Officer and Director of the Company since its inception in February 1983. Mr.
Thrailkill previously served as Chairman of the Board, President and Chief
Executive Officer of Metro Capital Corporation from February 1981 to December
1995 at which time there was a change in control. Mr. Thrailkill's business
background spans over 32 years of management responsibility in privately and
publicly-held companies. Mr. Thrailkill devotes full time to the business of the
Company.
John A. Alsko. Mr. Alsko was appointed as Secretary/Treasurer and a
Director of the Company in November 1995. Previously, Mr. Alsko served as Vice
President - Finance of Metro Capital Corporation from February 1987 to December
1995. Prior to joining Metro Capital Corporation, he was employed in various
financial positions with other privately and publicly-held companies and public
accounting firms. Mr. Alsko is a Certified Public Accountant.
Robert J. Thrailkill. Mr. Thrailkill was appointed as Vice President -
Operations and a Director of the Company in November 1995. Previously, Mr.
Thrailkill served as Director of Operations of Metro Capital Corporation from
January 1989 to December 1995. Prior to joining Metro Capital Corporation, he
was employed in various supervisory and managerial positions with other
companies.
The directors of the Company are elected to hold office until the next annual
meeting of shareholders or until a successor has been elected and qualified.
Officers of the Company are elected annually by the Board of Directors and hold
office until their successors are duly elected and qualified.
No arrangement or understanding exists between any of the above directors and
officers pursuant to which any one of those persons were selected to such office
or position. None of the directors hold directorships in other companies.
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b. Identification of Certain Significant Employees
Not applicable.
c. Family Relationships
Robert J. Thrailkill is the son of Robert E. Thrailkill.
d. Involvement in Certain Legal Proceedings
Not Applicable.
Item 6. Executive Compensation
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a. Summary Compensation Table
The following table sets forth the compensation received by the Chief
Executive Officer for the years ended March 31, 1996, 1995 and 1994. No other
executive officer had total annual salary and bonus exceeding $100,000 for the
year ended March 31, 1996.
<TABLE>
<CAPTION>
Long Term
Name Annual Compensation Compensation Awards
and ----------------------------------------- ----------------------------
Principal Other Annual Restricted Options
Position Year Salary Bonus Compensation Stock Award ($) SARS (#)
-------- ---- ------ ----- ------------- --------------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Thrailkill 1996 $145,000 $ -- $ -- $ 22,500 (2) 25,000 (3)
President, Chief 1995 145,000 -- -- 15,500 (4) 50,000 (5)
Executive Officer 1994 145,000 3,000 -- -- --
and Director (1)
</TABLE>
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(1) Robert E. Thrailkill was the Chief Executive Officer of Metro Capital
Corporation ("Metro") from February 1981 to December 1995 when a change in
control occurred. In December 1995, Mr. Thrailkill became Chief Executive
Officer of Bishop Capital Corporation, a wholly-owned subsidiary of Metro, into
which the majority of assets of Metro were transferred when the change in
control occurred. Metro subsequently changed its name to American Rivers Oil
Company ("AROC").
(2) Consists of 15,000 shares allocated and issued from AROC's 1987 Stock
Bonus Plan with a fair market value of $1.50 per share on the award date.
(3) Consists of AROC's securities underlying options exercisable on date of
grant (October 11, 1995) at a per share exercise price of $1.65 and expires five
years thereafter.
(4) Consists of 25,000 shares allocated and issued from AROC's 1987 Stock
Bonus Plan with a fair market value of $.62 per share on the award date.
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(5) Consists of AROC's securities underlying options exercisable on date of
grant (September 6, 1994) at a per share exercise price of $.68 and expires five
years thereafter.
The columns for "Long-Term Incentive Plan Payouts" and "All Other Compensation"
were omitted from the Summary Compensation Table since there was no information
reportable for the three years ended March 31, 1996.
b. Option/SAR Grants Table
The following table provides information with respect to the grant of stock
options pursuant to American Rivers Oil Company's ("AROC") 1992 Stock Option
Plan to the Chief Executive Officer in fiscal 1996 (See footnote (1) under Item
6(a)). There are no outstanding Stock Appreciation Rights ("SARs").
<TABLE>
<CAPTION>
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Exercise Annual Rates of Stock
Underlying Granted to or Base Price Appreciation for
Options Employees Price Expiration Option Term (1)
Name Granted (#) in Fiscal 1996 ($/Share) Date 5% 10%
- -------------------------- ----------- -------------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Thrailkill 25,000 50.0% $ 1.65 10/11/2000 $11,500 $25,250
</TABLE>
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(1) The dollar amounts under these columns represent the potential
realizable value of the grant of option assuming that the market price of AROC's
common stock appreciates in value from the date of grant at the 5% and 10%
annual rates prescribed by the SEC and therefore are not intended to forecast
possible future appreciation, if any, of the price of AROC's common stock.
c. Aggregated Option Exercise and Fiscal Year-End Option Value Table
There were no exercises of AROC stock options by the Chief Executive
Officer in fiscal 1996 (See footnote (1) under Item 6(a)). The following table
shows the number of shares covered by both exercisable and non-exercisable AROC
stock options as of March 31, 1996 and their values at such date. There are no
AROC SARs outstanding at March 31, 1996.
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Options at FY-End (#) Options at FY-End ($)(1)
--------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert E. Thrailkill 120,000 -- $43,700 --
</TABLE>
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- -------------
(1) On March 31, 1996, the last reported bid price of AROC's common stock
as quoted on NASDAQ was $1.50 per share. Value is calculated on the basis of the
difference between the option price and $1.50 multiplied by the number of shares
of Common Stock granted at that option price. The exercise prices for the
various options granted are $1.65 (25,000 options), $.68 (50,000 options) and
$1.44 (45,000 options). At March 31, 1996, the last reported bid price was lower
than the exercise price of $1.65 for the 25,000 options and, therefore, no value
is ascribed to those options in the above table. Subsequent to March 31, 1996,
the 45,000 options with an exercise price of $1.44 expired and Mr. Thrailkill
was granted 45,000 options at an exercise price of $1.38 from AROC's 1995 Stock
Option and Stock Compensation Plan.
d. Compensation of Directors
There are no current arrangements for the compensation of directors for
services rendered since the current directors are employees of the Company.
During fiscal 1996, two prior non-employee directors were each paid $3,300 for
services as directors and reimbursed for their travel expenses in connection
with meetings. There are no other arrangements whereby any of the Company's
directors received compensation for services as a director during fiscal 1996 in
addition to or in lieu of the amounts stated above.
e. Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
In November 1995, a Management Agreement (the "Agreement") was entered into
between the Company, Robert E. Thrailkill, the Company's President, and the
Company's previous parent company. The Agreement is for a five year term and is
renewable from year to year thereafter unless terminated previously by either
party. Under the Agreement, Mr. Thrailkill is paid an annual salary of $145,000,
which salary may be increased by the Board of Directors from time to time in
accordance with normal business practices of the Company; his expenses are
reimbursed in accordance with the Company's policies and procedures; he
participates in and receives established employee benefits and he is entitled to
participate in any future benefit made available by the Company to its
executives. The Agreement terminates upon death or disability and may be
terminated by the Company for cause (as defined in the Agreement). The Agreement
may also be terminated upon a breach of the Agreement, and in the event there is
a change in control of the Company (as defined in the Agreement). If the
Agreement is terminated because of a breach of the Agreement by the Company or a
change in control, the Company shall pay severance pay equal to the product of
(a) the annual salary rate in effect multiplied by (b) the greater of the number
of years (including partial years) remaining in the term of employment or the
number three. The Agreement provides that upon death, the Company shall pay an
amount equal to the annual salary; upon disability, the Company shall pay salary
for the balance of the term of the Agreement (less amounts paid by insurance) or
until the executive becomes gainfully employed, whichever is sooner; and, upon
termination for cause, the Company shall pay any salary due up to the
termination date.
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Item 7. Certain Relationships and Related Transactions
- ------- ----------------------------------------------
a. Certain Relationships
There were no transactions during the last two fiscal years, or proposed
transactions, in which the Company was or is to be a party with any director,
executive officer or any member of the immediate family of any director or
executive officer having a direct or indirect material interest of more than 10%
in any business or professional entity involved in such transactions.
b. Parent of Issuer
Not applicable
c. Transactions with Promoters
Not applicable
Item 8. Description of Securities
- ------- -------------------------
General
The Company is authorized to issue 15,000,000 shares of common stock, par value
$.01 per share, and 5,000,000 shares of preferred stock, no par value per share.
The Company will distribute 885,443 shares of the Company's common stock
pro-ratably (one share of Bishop for every four shares of American Rivers) to
American Rivers Oil Company's common shareholders of record at November 18,
1996. American Rivers Oil Company's Class B common shareholders will not
participate in the distribution.
Company Common Stock
Each share of the Company's common stock entitles the holder to one vote on each
matter to be voted upon by the holders of the Company's common stock. The
holders of the Company's common stock are not entitled to any preemptive rights.
The holders of the Company's common stock are entitled to receive such dividends
of cash or assets, if any, as are declared by the Company's Board of Directors
out of funds legally available for that purpose, subject to the preferential
rights, if any, of the holders of preferred stock. The Board of Directors of the
Company will determine its dividend policy with respect to the Company's common
stock based on the Company's results of operations, financial condition, capital
requirements and other circumstances. It is the Board of Directors' present
intention to retain cash for the operations of the Company and it is not
anticipated that cash dividends will be paid on the Company's common stock in
the foreseeable future.
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Part II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
- ------ -----------------------------------------------------------------------
a. Market Information
The common shares to be issued under this registration statement have no
established public trading market. None of the common shares will be listed on a
national securities exchange or NASDAQ. The common shares will likely be traded
in the over-the-counter market by certain dealers who from time to time may make
a market in such securities.
There are no outstanding options or warrants to purchase, or securities
convertible into, common stock of the Company. There are no common shares that
could be sold pursuant to Rule 144 under the Securities Act or that the Company
has agreed to register under the Securities Act for sale by security holders.
b. Holders
Upon distribution of the shares, there will be approximately 2,000 holders
of record of the Company's common stock (which amount does not include the
number of shareholders whose shares are held of record by brokerage firms).
c. Dividends
There have been no cash dividends declared on the common stock for the last
two fiscal years or for the six months ended September 30, 1996. Payment of cash
dividends, if any, in the future, will be determined by the Company's Board of
Directors in light of the Company's earnings, financial condition and other
relevant considerations. There are no restrictions on the Company's present or
future ability to pay dividends.
Item 2. Legal Proceedings
- ------- -----------------
There are no pending legal proceedings to which the Company is a party or
to which any of its property is subject.
Item 3. Changes in and Disagreements with Accountants
- ------- ---------------------------------------------
None.
-15-
<PAGE>
Item 4. Recent Sales of Unregistered Securities
- ------- ---------------------------------------
None.
Item 5. Indemnification of Directors and Officers
- ------- -----------------------------------------
The Company is not aware of any statute, charter provision, by-law,
contract or other arrangement that insures or indemnifies a controlling person,
director or officer which may affect his or her liability in that capacity.
-16-
<PAGE>
Part III
Item 1. Index to Exhibits Attachment
- ------- ----------------- ----------
3.1 Articles of Incorporation A
3.2 By-laws B
10.1 Management Agreement C
10.2 Purchase Option Agreement D
10.3 Contract to Sell Real Estate E
21 Subsidiaries of the Registrant F
27 Financial Data Schedule
(submitted only in electronic format).
Item 2. Description of Exhibits
- ------- -----------------------
3.1 Articles of Incorporation dated May 27, 1992 and Amendment
thereto dated November 20, 1995.
3.2 By-laws.
10.1 Management Agreement dated December 8, 1995 between American
Rivers Oil Company (formerly Metro Capital Corporation), Bishop
Capital Corporation (formerly Bishop Cable Communications
Corporation) and Robert E. Thrailkill.
10.2 Purchase Option Agreement dated August 28, 1996 between Bishop
Powers, Ltd., a Colorado Limited Partnership, Bishop Capital
Corporation as General Partner and Diamond Shamrock Refining and
Marketing Company.
10.3 Contract to Sell Real Estate dated November 14, 1996 between
Bishop Powers, Ltd., a olorado Limited Partnership, Bishop
Capital Corporation as General Partner and 123 Cascade
Associates LLC.
21 Subsidiaries of the Registrant.
-17-
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
BISHOP CAPITAL CORPORATION
(Registrant)
Date: December 10, 1996 By: /s/ Robert E. Thrailkill
--------------------------
Robert E. Thrailkill
President
-18-
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Independent Auditor's Report..............................................F-2
Consolidated Balance Sheets - September 30, 1996 (Unaudited)
and March 31, 1996....................................................F-3
Consolidated Statements of Operations - For the Six Months Ended
September 30, 1996 and 1995 (Unaudited), and the Years Ended
March 31, 1996 and 1995...............................................F-4
Consolidated Statement of Changes in Stockholder's Equity -
For the Years Ended March 31, 1995 and 1996, and the Six Months
Ended September 30, 1996 (Unaudited)..................................F-5
Consolidated Statements of Cash Flows - For the Six Months Ended
September 30, 1996 and 1995 (Unaudited), and the Years Ended
March 31, 1996 and 1995...............................................F-6
Notes to Consolidated Financial Statements................................F-7
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and
Board of Directors
Bishop Capital Corporation
We have audited the accompanying consolidated balance sheet of Bishop Capital
Corporation and subsidiaries as of March 31, 1996 and the related consolidated
statements of operations, changes in stockholder's equity and cash flows for the
years ended March 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Bishop Capital
Corporation and subsidiaries as of March 31, 1996, and the results of their
operations and their cash flows for the years ended March 31, 1996 and 1995, in
conformity with generally accepted accounting principles.
HEIN + ASSOCIATES LLP
Denver, Colorado
May 23, 1996, except for the last two
paragraphs of Note 1 as to which the
date is November 18, 1996
F-2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, MARCH 31,
1996 1996
------------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and equivalents $ 17,603 $ 66,770
Marketable securities 629,244 844,734
Receivables:
Gas royalties 6,504 9,399
Interest and other 7,877 13,258
Receivables from parent:
Note 100,000 17,522
Other 19,070 23,579
Notes receivable - officers 25,000 25,000
Prepaid expenses 10,611 17,960
----------- -----------
Total current assets 815,909 1,018,222
----------- -----------
PROPERTY AND EQUIPMENT:
Building 212,157 212,157
Furniture and fixtures 63,162 63,969
Vehicles and equipment 39,374 38,581
----------- -----------
314,693 314,707
Less accumulated depreciation (118,044) (111,045)
----------- -----------
Net property and equipment 196,649 203,662
----------- -----------
OTHER ASSETS:
Undeveloped land 517,290 411,709
Investment in limited partnership 242,747 254,112
Gas royalty interest, net of accumulated
amortization of $766,935 (unaudited)
and $700,245, respectively 300,116 366,806
Notes receivable 43,370 46,836
Other assets, net 3,576 3,860
----------- -----------
Total other assets 1,107,099 1,083,323
----------- -----------
TOTAL ASSETS $ 2,119,657 $ 2,305,207
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 61,993 $ 103,541
Payable to broker 142,683 --
----------- -----------
Total current liabilities 204,676 103,541
COMMITMENTS (Note 7)
STOCKHOLDER'S EQUITY:
Preferred stock, no par value; 5,000,000 shares
authorized, no shares issued -- --
Common stock, $.01 par value; 15,000,000 shares
authorized; 885,443 shares issued and
outstanding 8,854 8,854
Capital in excess of par value 2,166,025 2,166,025
Unrealized holding gain 13,625 66,884
Accumulated deficit (273,523) (40,097)
----------- -----------
Total stockholder's equity 1,914,981 2,201,666
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $2,119,657 $2,305,207
========== ==========
See accompanying notes to these consolidated financial statements
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS
ENDED FOR THE YEARS ENDED
SEPTEMBER 30, MARCH 31,
--------------------------- ----------------------------
1996 1995 1996 1995
--------- ---------- --------- ---------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUE -
Gas royalties $ 29,643 $ 30,267 $ 69,931 $ 68,176
COSTS AND EXPENSES:
Gas processing and production taxes 9,811 7,921 19,192 9,549
General and administrative 223,507 273,097 581,936 497,694
Depreciation and amortization 76,030 76,433 152,718 159,181
--------- --------- --------- ---------
309,348 357,451 753,846 666,424
--------- --------- --------- ---------
LOSS FROM OPERATIONS (279,705) (327,184) (683,915) (598,248)
OTHER INCOME (EXPENSE):
Interest income 20,309 26,425 51,094 61,010
Dividend income 5,672 10,249 20,061 29,229
Rental income 6,070 5,070 12,686 18,692
Gain (loss) on sale of marketable
securities 25,593 54,676 688,400 (3,222)
Professional fees relating to reverse
acquisition -- -- (150,000) --
Equity in limited partnership loss (11,365) (20,764) (54,606) (41,282)
Discontinued operations of oil property -- (16,171) (25,850) (24,720)
Other -- -- (1,745) 1,588
--------- --------- --------- ---------
NET LOSS $(233,426) $(267,699) $(143,875) $(556,953)
========= ========= ========= =========
NET LOSS PER COMMON SHARE $ (.26) $ (.31) $ (.17) $ (.65)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 885,000 856,000 867,000 856,000
========= ========= ========= =========
See accompanying notes to these consolidated financial statements.
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED MARCH 31, 1995 AND 1996 AND THE
SIX MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
Common Shares Treasury Stock
----------------------- -------------------- Capital in Unrealized
Number of Number of Excess of Holding
Shares Amount Shares Amount Par Value Gain
--------- ------ --------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES, April 1, 1994 523,530 $ 5,235 206,707 $(1,689,583) $ 3,027,683 $ 572,841
Net change in unrealized holding gain -- -- -- -- -- (43,905)
Stock bonus 7,871 79 -- -- 24,721 --
Purchase of treasury stock -- -- 9,977 (46,479) -- --
Net loss -- -- -- -- -- --
-------- -------- -------- ----------- ----------- ----------
BALANCES, March 31, 1995 531,401 5,314 216,684 (1,736,062) 3,052,404 528,936
Commitment to issue common stock for
services 29,515 295 -- -- 224,705 --
Net change in unrealized holding gain -- -- -- -- -- (462,052)
Consummation of reverse acquisition
and reflect capital structure of
Bishop 324,527 3,245 (216,684) 1,736,062 (1,111,084) --
Net loss -- -- -- -- -- --
-------- -------- -------- ---------- ---------- ----------
BALANCES, March 31, 1996 885,443 8,854 -- -- 2,166,025 66,884
Net change in unrealized holding gain -- -- -- -- -- (53,259)
(unaudited)
Net loss (unaudited) -- -- -- -- -- --
-------- ------- ------- ---------- ----------- ----------
BALANCES, September 30, 1996 (Unaudited) 885,443 $ 8,854 -- $ -- $ 2,166,025 $ 13,625
======== ======= ======= ========== =========== ===========
(Continued)
Retained
Earnings
(Deficit) Total
------------ ------------
BALANCES, April 1, 1994 $ 2,141,451 $ 4,057,627
Net change in unrealized holding gain -- (43,905)
Stock bonus -- 24,800
Purchase of treasury stock -- (46,479)
Net loss (556,953) (556,953)
----------- -----------
BALANCES, March 31, 1995 1,584,498 3,435,090
Commitment to issue common stock for
services -- 225,000
Net change in unrealized holding gain -- (462,052)
Consummation of reverse acquisition
and reflect capital structure of
Bishop (1,480,720) (852,497)
Net loss (143,875) (143,875)
---------- -----------
BALANCES, March 31, 1996 (40,097) 2,201,666
Net change in unrealized holding gain -- (53,259)
(unaudited)
Net loss (unaudited) (233,426) (233,426)
----------- ----------
BALANCES, September 30, 1996 (Unaudited) $ (273,523) $ 1,914,981
=========== ===========
See accompanying notes to these consolidated financial statements.
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED
SEPTEMBER 30, MARCH 31,
-------------------------- --------------------------
1996 1995 1996 1995
------------ ---------- ---------- ----------
(Unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (233,426) $ (267,699) $ (143,875) $ (556,953)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 76,030 78,550 155,185 164,041
Issuance of common stock for services -- -- 225,000 --
Stock bonus compensation -- -- -- 24,800
Equity in partnership losses 11,365 20,764 54,606 41,282
Write-down of investment -- -- 25,000 --
Abandoned leases -- -- -- 13,576
Loss (gain) on sale of marketable securities (25,593) (54,676) (688,400) 3,222
Gain on sale of property and equipment -- -- -- (917)
Changes in operating assets and liabilities:
(Increase) decrease in:
Trade receivables 2,895 10,033 3,655 (5,732)
Interest and other receivables 5,381 (63,675) 8,003 15,239
Receivable from parent 4,509 -- (23,579) --
Prepaid expenses 7,349 6,791 (1,680) 2,432
Other assets -- -- 14,126 --
Increase (decrease) in accounts payable
and accrued expenses (41,550) 58,169 50,770 (8,917)
---------- ---------- --------- ---------
Net cash used in operating activities (193,040) (211,743) (321,189) (307,927)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (225,259) (122,108) (169,979) (335,830)
Proceeds from sale of marketable securities 555,766 197,736 1,265,512 797,108
Funds advanced under notes receivable (100,000) -- (42,522) (7,000)
Proceeds from notes receivable 20,988 3,278 64,461 8,104
Additions to undeveloped land (105,581) (9,003) (133,473) --
Proceeds from sale of property and equipment -- -- -- 2,000
Purchase of property and equipment (2,041) -- (21,274) (25,129)
Transfer of cash in reverse acquisition -- -- (700,000) --
----------- ----------- ----------- -----------
Net cash provided by investing activities 143,873 69,903 262,725 439,253
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings -- 40,000 60,000 10,000
Principal payments on borrowings -- (528) (60,000) (10,000)
Treasury stock acquired -- -- -- (46,479)
----------- ----------- ----------- -----------
Net cash provided by (used in) financing
activities -- 39,472 -- (46,479)
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS (49,167) (102,368) (58,464) 84,847
CASH AND EQUIVALENTS, beginning of period 66,770 125,234 125,234 40,387
----------- ----------- ----------- -----------
CASH AND EQUIVALENTS, end of period $ 17,603 $ 22,866 $ 66,770 $ 125,234
=========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 5,477 $ -- $ 830 $ --
=========== =========== =========== ===========
Non-cash equipment purchases $ -- $ -- $ -- $ 13,500
=========== =========== =========== ===========
Payable for purchase of marketable securities $ 142,683 $ -- $ -- $ --
=========== =========== =========== ===========
See accompanying notes to these consolidated financial statements
F-6
</TABLE>
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information Subsequent to March 31, 1996 is Unaudited)
1. BASIS OF PRESENTATION:
Reverse Acquisition - In October 1995, Metro Capital Corporation (Metro)
and Karlton Terry Oil Company (KTOC) entered into an Asset Purchase
Agreement whereby KTOC agreed to exchange certain oil and gas properties
(the "Contributed Properties") for a total of 7,717,820 shares of Class B
common stock of Metro, which represented 80% of the issued and outstanding
voting securities of Metro. On November 29, 1995, the shareholders of Metro
approved this transaction and the closing occurred on December 8, 1995. The
shareholders also approved changing the name of the Company from Metro to
American Rivers Oil Company (AROC).
Metro's assets, except for $700,000 cash and an insignificant oil property,
were transferred at their historical carrying value to a wholly-owned
subsidiary, Bishop Capital Corporation, formerly Bishop Cable
Communications Corporation ("Bishop" or the "Company"), where they are
being operated autonomously by the prior management of Metro pursuant to
the terms of separate five-year Operating and Voting Agreements. The
Operating Agreement provides that Bishop's management will have sole
authority and discretion with respect to the business, operations, and
assets of Bishop. The Voting Agreement appoints Bishop's president as
attorney and proxy to vote in his sole and absolute discretion, all of the
shares of all classes of the common stock of AROC and/or Bishop owned by
them with respect to any matter brought before the shareholders of AROC
and/or Bishop relating to or involving exclusively Bishop.
Accordingly, the accompanying financial statements include the consolidated
operating results and cash flows of Metro until December 8, 1995 when the
change of control occurred. Beginning in December 1995, the accompanying
financial statements reflect only the operations of Bishop.
Bishop's subsidiaries consist of Bishop Powers, Ltd. and Bridger Creek
Partnership in which the Company holds general partner interests of 81% and
80%, respectively.
Unaudited Information - The balance sheet as of September 30, 1996 and the
statements of operations and cash flows for the six-month periods ended
September 30, 1996 and 1995 were taken from the Company's books and records
without audit. However, in the opinion of management, such information
includes all adjustments (consisting only of normal accruals), which are
necessary to properly reflect the financial position of the Company as of
September 30, 1996 and the results of operations and cash flows for the six
months ended September 30, 1996 and 1995. The results of operations for the
interim periods presented are not necessarily indicative of those to be
expected for the year.
Change in Capital Structure and Spinoff - In November 1996, the Board of
Directors of AROC (the Company's sole stockholder) agreed to make a pro
rata distribution of 885,443 shares of the Company's common stock to AROC's
common stockholders of record on November 18, 1996. The remaining 3,614,557
shares of the Company's common stock owned by AROC were canceled on the
record date. AROC's Class B common stockholders did not participate in the
distribution. Accordingly, this change
F-7
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information Subsequent to March 31, 1996 is Unaudited)
in capital structure has been given retroactive effect in the accompanying
financial statements as if it occurred at the beginning of the earliest
period presented.
Net Loss Per Share - Net loss per share has been computed based on the
weighted average number of common shares outstanding for each period
presented. The weighted average shares have been retroactively restated for
the effects of the reverse acquisition and the spinoff discussed above.
2. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations - The Company is primarily engaged in the development
and/or sale of real estate and also has a royalty interest in a natural gas
property.
Principles of Consolidation - The accompanying financial statements include
the accounts of the Company and both majority-owned partnerships discussed
in Note 1. All material intercompany transactions and accounts have been
eliminated in consolidation.
Property, Equipment and Depreciation - Property and equipment are stated at
cost. Depreciation is being provided by the straight-line method over
estimated useful lives of three to thirty-one years.
Maintenance and repairs are charged to expense as incurred, and
expenditures for major improvements are capitalized. When assets are
retired or otherwise disposed of, the property accounts are relieved of
costs and accumulated depreciation.
Undeveloped Land - Undeveloped land is stated at cost and consists solely
of acquisition costs at March 31, 1996.
Impairment of Long-lived Assets - In the event that facts and circumstances
indicate that the cost of property and equipment or other long-lived assets
may be impaired, an evaluation of recoverability of net carrying costs will
be performed. If an evaluation is required, the estimated future
undiscounted cash flows associated with the asset will be compared to the
asset's carrying amount to determine if a write-down to estimated fair
value is required.
Gas Royalty Interests - The Company amortizes gas royalty interests on a
straight-line basis over eight years.
Cash Equivalents - The Company considers highly liquid temporary
investments with an original maturity of three months or less to be cash
equivalents.
Marketable Securities - Marketable securities are accounted for in
accordance with Statement of Financial Accounting Standard (SFAS) No. 115
"Accounting for Certain Investments in Debt and Equity Securities."
Pursuant to SFAS No. 115, the Company's securities are classified as
available-for-sale based on management's intent. Investment securities
classified as available-for-sale are stated at market
F-8
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information Subsequent to March 31, 1996 is Unaudited)
value, with unrealized gains and losses, net of applicable income taxes,
reported as a separate component of stockholder's equity. If the decline in
market value of a security is determined to be other than temporary, the
loss in value is charged to earnings. Realized gains or losses are
determined on a specific identification method.
Investments - The Company's 19% ownership in a limited partnership (Z-H,
LTD.) is stated at cost, adjusted for its equity in undistributed earnings
since acquisition.
Income Taxes - Income taxes are provided for in accordance with SFAS No.
109, "Accounting for Income Taxes." SFAS No. 109 requires an asset and
liability approach in the recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of the Company's assets and
liabilities. AROC includes the Company's operations in its consolidated
income tax return. Income taxes are allocated between AROC and the Company
as if the Company was a separate taxpayer.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and the accompanying notes. The actual
results could differ from those estimates.
The Company's financial statements are based on a number of significant
estimates including the amortization period for the gas royalty interest,
realizability of the carrying value of undeveloped land and the limited
partnership investment discussed in Note 5, and the determination of other
than temporary impairment of marketable securities. The Company's estimates
are expected to change as additional information becomes available and it
is reasonably possible that such estimates will materially change in the
forthcoming year.
3. MARKETABLE SECURITIES:
The cost and estimated fair market value of available-for-sale securities
at March 31, 1996 were as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED FAIR
HOLDING HOLDING MARKET
COST GAINS LOSSES VALUE
--------- ----- ----- ---------- ---------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 466,357 $ 6,078 $ (11,427) $ 461,008
Redeemable preferred
securities 136,955 8,297 -- 145,252
Equity securities 174,538 89,057 (25,121) 238,474
--------- --------- --------- ---------
$ 777,850 $ 103,432 $ (36,548) $ 844,734
========= ========= ========= =========
F-9
</TABLE>
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information Subsequent to March 31, 1996 is Unaudited)
The cost and estimated fair market value of available-for-sale securities
with contractual maturities (U.S. Treasury and redeemable preferred) at
March 31, 1996, by contractual maturity periods, were as follows:
FAIR
MARKET
COST VALUE
---------- ----------
Due in one year or less $ 232,105 $ 232,029
Due after one year through five years 210,902 211,679
Due after five years through ten years 90,953 97,031
Due after ten years 69,352 65,521
--------- ---------
$ 603,312 $ 606,260
========== ==========
Cash proceeds from the sale of available-for-sale securities during the
years ended March 31, 1996 and 1995 were $1,265,512 and $797,108,
respectively. Net gains from available-for-sale securities sold in the year
ended March 31, 1996 amounted to $688,400 (gross gains of $701,152 and
gross losses of $12,752). Net losses from securities sold in the year ended
March 31, 1995 were $3,222 (gross gains of $23,638 and gross losses of
$26,860).
At September 30, 1996, the Company has a margin account payable to a broker
for $142,683. This account provides for interest at approximately 8% at
September 30, 1996.
4. GAS ROYALTY INTERESTS:
In December 1990, the Company purchased a royalty interest in certain gas
properties located in Wyoming for approximately $1,067,000. At March 31,
1996, the net carrying value of this interest amounts to $367,000. Revenues
related to this royalty interest are affected by local gas transportation,
processing, and marketing arrangements. Reserve disclosures relating to the
gas royalty interest are not included because the information is
unavailable from the operator of the properties.
In connection with the purchase, the Company formed a tax partnership,
which allocates to the Company the first $40,000 of annual net income from
the partnership and 80% of annual net income in excess of $40,000. After
the Company has received cumulative net income of $1,050,000, plus interest
at prime adjusted semi-annually, the Company will receive 60% of the annual
net income in the partnership.
5. PARTNERSHIPS:
In October 1993, the Company became the general partner of a limited
partnership to develop or sell 55 acres of undeveloped real estate. The
Company contributed $250,000 cash for its 81% general partnership interest.
The remaining 19% interest is held by the limited partner who is the
general
F-10
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information Subsequent to March 31, 1996 is Unaudited)
partner in the partnership described below. The Company will be allocated
100% of the income and losses until it has been paid $600,000 plus interest
at 8% per annum (not to exceed $100,000) after which the allocation will be
apportioned according to ownership.
The Company also became a limited partner in a limited partnership, which
purchased approximately 35 acres of undeveloped land adjacent to the land
mentioned above. The partnership constructed a golf driving range,
miniature golf, and batting facility which was completed in July 1994. The
Company contributed $350,000 cash for its 19% partnership interest, which
is reported on the equity method of accounting.
Following is a summary of condensed financial information pertaining to
this limited partnership:
Balance sheet data at March 31, 1996:
Current assets $ 8,327
Noncurrent assets 1,129,394
Current liabilities 31,622
Noncurrent liabilities 1,160,774
Company's equity in net assets 254,112
YEARS ENDED MARCH 31,
-----------------------
1996 1995
------- -------
Operations data:
Revenue $ 261,526 $ 121,961
Costs and expenses 548,928 339,236
--------- ---------
Net loss $(287,402) $(217,275)
========= =========
Company's equity in limited partnership loss $ (54,606) $(41,282)
========= =========
The land owned by the partnerships discussed above is located in Colorado
Springs, Colorado and, accordingly, the value of these properties is
directly affected by local economic and operating conditions.
F-11
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information Subsequent to March 31, 1996 is Unaudited)
6. INCOME TAXES:
The items that give rise to the components of the net deferred tax asset as
of March 31, 1996, are as follows:
Gas royalty interest $227,000
Net operating loss carryforward 231,000
--------
Deferred tax asset 458,000
Less valuation allowance (458,000)
--------
Net deferred tax asset $ --
========
As of March 31, 1996, AROC has net operating loss carryforwards for Federal
income tax purposes, of which approximately $500,000 is attributable to the
Company pursuant to the Asset Purchase Agreement and, if not previously
utilized, will expire in the years 2009 and 2010.
7. COMMITMENTS:
Effective December 1995, a five-year management agreement (the "Agreement")
was entered into between the Company, the Company's president (the
"Executive") and the parent company. The Agreement, which supersedes a
previous employment agreement, provides for minimum annual compensation of
$145,000 plus employee benefits. On the last day of September of each year
thereafter, the term of the Agreement shall be automatically extended an
additional year unless, prior to such last day of September, the Company or
the Executive shall have delivered written notice that the term of
employment will not be extended. The Agreement may be terminated by the
Company only upon the death or disability of the Executive or for cause. If
the Executive is terminated without cause, the Company would be required to
pay as severance pay an amount equal to the Executive's salary in effect as
of the date of termination multiplied by the greater number of years
remaining in the term of employment or the number three.
The Company also entered into a three-year employment agreement in December
1995 with two other officers which provide for aggregate annual
compensation of $85,000 plus employee benefits. The agreements shall be
automatically extended an additional year on September 30 of each year
thereafter unless written notice is given by either party that the term of
employment will not be extended. The agreements may be terminated upon the
death or disability of the individual officer or for cause.
8. FINANCIAL INSTRUMENTS:
Statement of Financial Accounting Standards No. 107 requires all entities
to disclose the fair value of certain financial instruments in their
financial statements. Accordingly, at March 31, 1996, management's best
estimate is that the carrying amount of cash and equivalents, notes and
F-12
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of American Rivers Oil Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information Subsequent to March 31, 1996 is Unaudited)
other receivables, accounts payable and accrued expenses approximates fair
value due to the short maturity of these instruments. Due to the short
operating history of the business owned by the limited partnership
discussed in Note 5, management is unable to estimate the fair value of the
Company's 19% limited partner interest. However, management believes that
fair value exceeds the carrying value at March 31, 1996.
9. SUBSEQUENT EVENTS:
In May 1996, the Company loaned an additional $100,000 to the parent
company. The note bears interest at 10% and is collateralized by oil and
gas producing properties in Louisiana. In November 1996, this loan was
repaid and the collateral was released.
In November 1996, certain officers and employees of the Company were
allocated 38,300 shares of AROC's common stock from AROC's 1987 Stock Bonus
Plan as additional compensation. The estimated fair value of these shares
was approximately $50,000.
F-13
ATTACHMENT A
ARTICLES OF INCORPORATION
OF
BISHOP CABLE COMMUNICATIONS CORPORATION
The undersigned incorporator, being a natural person of the age of 18 years
or more, and desiring to form a corporation under the laws of the State of
Wyoming, does hereby sign, verify and deliver in duplicate to the Secretary of
State of the State of Wyoming these Articles of Incorporation.
ARTICLE I
NAME
The name of the corporation shall be:
Bishop Cable Communications Corporation
ARTICLE II
CAPITAL
The total number of shares of all classes of capital stock which the
corporation shall have authority to issue is 20,000,000 shares, of which
5,000,000 shares shall be shares of Preferred Stock, no par value per share and
15,000,000 shares shall be shares of Common Stock, $.01 par value per share.
(a) Preferred Stock. The designations and the powers, preferences and
rights, and the qualifications, limitations or restrictions of the Preferred
Stock, the establishment of different series of Preferred Stock, and variations
in the relative rights and preferences as between different series shall be
established in accordance with the Wyoming Business Corporation Act by the Board
of Directors.
(b) Common Stock. The holders of Common Stock shall have and possess all
rights as shareholders of the corporation, including such rights as may be
granted elsewhere by these Articles of Incorporation, except as such rights may
be limited by the preferences, privileges and voting powers, and the
restrictions and limitations of the Preferred Stock.
Subject to preferential dividend rights, if any, of the holders of
Preferred Stock, dividends upon the Common Stock may be declared by the Board of
Directors and paid out of any funds legally available therefor at such times and
in such amounts as the Board of Directors shall determine.
10021EOF
<PAGE>
The capital stock, after the amount of the subscription price has been paid
in, shall not be subject to assessment to pay the debts of the corporation.
Any stock of the corporation may be issued for money, property, services
rendered, labor done, cash advances for the corporation, or for any other assets
of value in accordance with the action of the Board of Directors, whose judgment
as to value received in return therefor shall be conclusive and said stock, when
issued, shall be fully paid and nonassessable.
ARTICLE III
NO PREEMPTIVE RIGHTS
A shareholder of the corporation shall not be entitled to a preemptive
right to purchase, subscribe for, or otherwise acquire any unissued or treasury
shares of stock of the corporation, or any options or warrants to purchase,
subscribe for or otherwise acquire any such unissued or treasury shares, or any
shares, bonds, notes, debentures, or other securities convertible into or
carrying options or warrants to purchase, subscribe for or otherwise acquire any
such unissued or treasury shares.
ARTICLE IV
CUMULATIVE VOTING
A shareholder of the corporation shall not be entitled to cumulative
voting.
ARTICLE V
REGISTERED OFFICE AND AGENT
The initial registered office of the corporation shall be at 716 College
View Drive, Riverton, Wyoming 82501, and the name of the initial registered
agent at such address is Robert E. Thrailkill. Either the registered office or
the registered agent may be changed in the manner provided by law.
Part or all of the business of said corporation may be carried on in the
State of Wyoming or beyond the limits of the State of Wyoming, in other states
or territories of the United States and in foreign countries.
10021EOF
--2--
<PAGE>
ARTICLE VI
BOARD OF DIRECTORS
The business and affairs of this Corporation shall be managed by a Board of
Directors which shall have all authority granted to it by the Wyoming Business
Corporation Act. The number of directors may from time to time be increased or
decreased in such manner as shall be provided by the Bylaws of this corporation.
So long as the number of directors shall be less than three, no shares of this
corporation may be issued and held of record by more shareholders than there are
directors. Any shares issued in violation of this paragraph shall be null and
void. In the event there are less than three directors, this provision shall
also constitute a restriction on the transfer of shares.
The initial board of directors of the corporation shall consist of three
directors, and the names and addresses of the persons who shall serve as
directors until the first annual meeting of shareholders or until their
successors are elected and shall qualify are:
Robert E. Thrailkill 716 College View Drive
Riverton, Wyoming 82501
Gene E. York 716 College View Drive
Riverton, Wyoming 82501
John R. Benesch 716 College View Drive
Riverton, Wyoming 82501
In the event that the Board of Directors consists of six or more members,
the Board shall be divided into three classes, as equal in number as the then
total number of members of the Board. Prior to the first annual meeting of
shareholders wherein the Board shall consist of six or more members, the Board
shall divide itself into three classes which shall be denominated as Class One,
Class Two and Class Three. At the first annual meeting of shareholders held
subsequent to the increase in the number of directors to six or more members,
the persons nominated as Class One directors shall be elected to hold office for
a term expiring at the next succeeding annual meeting and until their successors
have been duly elected or until death, resignation or removal. Persons nominated
for election as Class Two directors shall be elected to hold office for a term
expiring at the second succeeding annual meeting and until their successors have
been duly elected or until death, resignation or removal. Persons nominated for
election as Class Three directors shall be elected to hold office for a term
expiring at the third succeeding annual meeting and until their successors have
been duly elected or until death, resignation or removal. At all meetings
thereafter, directors to be elected to the class then being elected shall be
10021EOF
--3--
<PAGE>
elected to hold office for a term expiring at the third succeeding annual
meeting and until their successors have been duly elected or until death,
resignation or removal, except for directors being elected solely by a series of
preferred stock, if the resolution defining the rights of such series
specifically states that the directors being elected by the holders of that
series of preferred stock shall be elected to serve only until the next annual
meeting of shareholders and until their successors have been duly elected or
until death, resignation, or removal. Any vacancies in the Board for any reason
and any newly created directorships resulting from any increase in the number of
directors may be filled by the Board acting by a majority of the directors then
in office, although less than a quorum, and any directors so chosen shall hold
office until the next election of the class for which such directors shall have
been chosen and until their successors shall be elected or until death,
resignation or removal. No decrease in the number of directors shall shorten the
term of any incumbent director.
Notwithstanding any other provisions of these Articles of Incorporation or
the Bylaws of the corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, these Articles of Incorporation or the
Bylaws of the corporation), the affirmative vote of the holders of 75% or more
of the total votes of the shares entitled to vote generally in the election of
directors (considered for this purpose as one class) shall be required to amend,
alter, change or repeal this Article VI of the Articles of Incorporation.
ARTICLE VII
INDEMNIFICATION
The corporation shall indemnify any person who is or was a director to the
maximum extent provided by statute.
The corporation shall indemnify any person who is or was an officer,
employee or agent of the corporation who is not a director to the maximum extent
provided by law, or to a greater extent if consistent with law and if provided
by resolution of the corporation's shareholders or directors, or in a contract.
The corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee, fiduciary or agent of the
corporation and who while a director, officer, employee, fiduciary or agent of
the corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, fiduciary or agent of any other
foreign or domestic corporation, partnership, joint venture, trust, other
enterprise or employee benefit plan against any liability asserted against or
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 provisions of the statute.
lOO2lEOF
--4--
<PAGE>
ARTICLE VIII
LIMITATION OF DIRECTOR LIABILITY
A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or to its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for acts specified under Section 17-16-833 of the
Wyoming Business Corporation Act or any amended or successor provision thereof,
or (iv) for any transaction from which the director derived an improper personal
benefit. If the Wyoming Business Corporation Act is amended after this Article
is adopted to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
corporation shall be eliminated or limited to the fullest extent permitted by
the Wyoming Business Corporation Act as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders
of the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or modification.
ARTICLE IX
CORPORATE OPPORTUNITIES
The officers, directors and other members of management of this corporation
shall be subject to the doctrine of corporate opportunities only insofar as it
applies to business opportunities in which this corporation has expressed an
interest as determined from time to time by the corporation's Board of Directors
as evidenced by resolutions appearing in the corporation's minutes. When such
areas of interest are delineated, all such business opportunities within such
areas of interest which come to the attention of the officers, directors and
other members of management of this corporation shall be disclosed promptly to
this corporation and made available to it. The Board of Directors may reject any
business opportunity presented to it and thereafter any officer, director or
other member of management may avail himself of such opportunity. Until such
time as this corporation, through its Board of Directors, has designated an area
of interest, the officers, directors and other members of management of this
corporation shall be free to engage in such areas of interest on their own and
the provisions hereof shall not limit the rights of any officer, director or
other member of management of this corporation to continue a business existing
10021EOF
--5--
<PAGE>
prior to the time that such area of interest is designated by this corporation.
This provision shall not be construed to release any employee of the corporation
(other than an officer, director or member of management) from any duties which
he may have to the corporation.
ARTICLE X
COMPROMISES WITH CREDITORS
Whenever a compromise or arrangement is proposed by the corporation between
it and its creditors or any class of them, and/or between said corporation and
its shareholders or any class of them, any court of equitable jurisdiction may,
on the application in a summary way by said corporation, or by a majority of its
stock, or on the application of any receiver or receivers appointed for said
corporation, or on the application of trustees in dissolution, order a meeting
of the creditors or class of creditors and/or of the shareholders or class of
shareholders of said corporation, as the case may be, to be notified in such
manner as the said court decides. If a majority in number, representing at least
three-fourths in amount of the creditors or class of creditors, and/or the
holders of the majority of the stock or class of stock of said corporation, as
the case may be, agree to any compromise or arrangement and/or to any
reorganization of said corporation, as a consequence of such compromise or
arrangement, the said compromise or arrangement and/or the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding upon all the creditors or class of creditors, and/or on all the
shareholders or class of shareholders of said corporation, as the case may be,
and also on said corporation.
ARTICLE XI
MEETINGS OF SHAREHOLDERS
Meetings of shareholders shall be held at such time and place as provided
in the Bylaws of the corporation. At all meetings of the shareholders, one-third
of all shares entitled to vote at the meeting shall constitute a quorum.
ARTICLE XII
VOTING OF SHAREHOLDERS
With respect to any action to be taken by shareholders of this corporation
which pursuant to statute requires the vote of two-thirds of the outstanding
shares entitled to vote thereon, a vote or concurrence of the holders of a
majority of the outstanding shares of the shares entitled to vote thereon, or of
any class or series, shall be required.
10021EOF
--6--
<PAGE>
ARTICLE XIII
INCORPORATOR
The name and address of the incorporator are as follows:
John A. Alsko
716 College View Drive
Riverton, Wyoming 82501
IN WITNESS WHEREOF, the undersigned certifies under penalty of perjury that
the execution of this instrument is the undersigned's act and deed, that the
undersigned has read these Articles of Incorporation and all attachments thereto
and knows the contents thereof and the facts stated therein are true.
Date: 5/27/92 /s/ JOHN A. ALSKO
--------------------- ---------------------------------------
10021EOF
--7--
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
BISHOP CABLE COMMUNICATIONS CORPORATION
Article I shall be revised as follows:
ARTICLE I
NAME
The name of the corporation shall be:
Bishop Capital Corporation
This amendment was approved by written consent of all of the directors and
the sole shareholder of Bishop Cable Communications Corporation (the "Company")
on November 20, 1995. As of November 20, 1995, the Company's only authorized
class of voting securities was its Common Stock, $.01 par value, of which
15,000,000 shares were authorized and 4,500,000 shares were outstanding, all of
which are owned by the Company's sole shareholder, Metro Capital Corporation and
all of which shares were voted in favor of the Amendment.
IN WITNESS WHEREOF, the undersigned certifies under penalty of perjury that
the execution of this instrument is the undersigned's act and deed, that the
undersigned has read these Articles of Incorporation and all attachments thereto
and knows the contents thereof and the facts stated therein are true
Date: November 20, 1995
/s/ John R Benesch
-------------------------------
John R Benesch, Secretary
ATTACHMENT B
BISHOP CABLE COMMUNICATIONS CORPORATION
BYLAWS
ARTICLE I
OFFICES
The principal office of Bishop Cable Communications Corporation (the
"Corporation") shall be located in the State of Wyoming. The Corporation may
have such other offices or relocate its principal office either within or
without the State of Wyoming as the Board of Directors of the Corporation (the
"Board") may designate or as the business of the Corporation may require.
The registered office of the Corporation in the Articles of Incorporation
(the "Articles") need not be identical with the principal office in the State of
Wyoming.
ARTICLE II
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders shall be
held each year on a date and at a time and place to be determined by resolution
of the Board, for the purpose of electing directors and for the transaction of
such other business as may come before the meeting. If the election of directors
shall not be held on the day designated for the annual meeting of the
shareholders, or at any adjournment thereof, the Board shall cause the election
to be held at a special meeting of the shareholders.
Section 2. Special Meetings. Special meetings of the shareholders for any
purpose, unless otherwise provided for by statute, may be called by the
President, the Board or by the President at the request of the holders of not
less than one-tenth of all the shares of the Corporation entitled to vote at the
meeting.
Section 3. Place of Meeting. The Board may designate any place, either
within or without the State of Wyoming, as the place of meeting for any annual
or special meeting. If no designation is made, the place of meeting shall be the
registered office of the Corporation in the State of Wyoming.
Section 4. Notice of Meeting. Written notice, stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered as the laws of the State of
Wyoming shall provide.
10021E12
<PAGE>
Section 5. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board may fix in advance a date (the "Record Date") for any
such determination of shareholders, which date shall be not more than 50 days
prior to the date on which the particular action requiring such determination of
shareholders is to be taken. If no Record Date is fixed by the Board, the Record
Date for any such purpose shall be ten days before the date of such meeting or
action. The Record Date determined for the purpose of ascertaining the number of
shareholders entitled to notice of or to vote at a meeting may not be less than
ten days prior to the meeting. When a Record Date has been determined for the
purpose of a meeting, the determination shall apply to any adjournment thereof.
Section 6. Quorum. If less than a quorum of the outstanding shares as
provided for in the Articles are represented at a meeting, such meeting may be
adjourned without further notice for a period which shall not exceed 60 days. At
such adjourned meeting, at which a quorum shall be present, any business may be
transacted which might have been transacted at the original meeting. Once a
quorum is present at a duly organized meeting, the shareholders present may
continue to transact business until adjournment, notwithstanding any departures
of shareholders during the meeting which leave less than a quorum.
Section 7. Voting of Shares. Each outstanding share entitled to vote shall
be entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.
Section 8. Proxies. At all meetings of shareholders, a shareholder may vote
by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
11 months from the date of its execution, unless otherwise provided in the
proxy. Proxies shall be in such form as shall be required by the Board and as
set forth in the notice of meeting and/or proxy or information statement
concerning such meeting.
Section 9. Voting of Shares by Certain Holders. Shares standing in the name
of another corporation may be voted by agent or proxy as the bylaws of such
corporation may prescribe or, in the absence of such provision, as the Board of
Directors of such corporation may determine as evidenced by a duly certified
copy of either the bylaws or corporate resolution.
Neither treasury shares nor shares held by another corporation, if the
majority of the shares entitled to vote for the election of directors of such
other corporation is held by the Corporation, shall be voted at any meeting or
counted in determining the total number of outstanding shares at any given time.
10021E12
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<PAGE>
Shares held by an administrator, executor, guardian or conservator may be
voted by such fiduciary, either in person or by proxy, without a transfer of
such shares into the name of such fiduciary. Shares standing in the name of a
trustee may be voted by such trustee, either in person or by proxy, but no
trustee shall be entitled to vote shares held by a trustee without a transfer of
the shares into such trust.
Shares standing in the name of a receiver may be voted by such receiver and
shares held by or under the control of a receiver may be voted by such receiver,
without the transfer thereof into the name of such receiver if authority so to
do is contained in an appropriate order of the court by which the receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred on the books of the Corporation
into the name of the pledgee, and there after the pledgee shall be entitled to
vote the shares so transferred.
Section 10. Action by Consent of all Shareholders. Any action required to
be taken, or which may be taken at a meeting of the shareholders may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
shall be signed by all of the shareholders entitled to vote with respect to the
subject matter thereof. Such written consent or consents shall be filed with the
minutes of the Corporation. Such action by written consent of all entitled to
vote shall have the same force and effect as a unanimous vote of such
shareholders.
Section 11. Inspectors. The Board may, in advance of any meeting of
shareholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If the inspectors shall not be so appointed or if any of
them shall fail to appear or act, the chairman of the meeting may appoint
inspectors. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares outstanding and the voting
power of each, the number of shares represented at the meeting, the existence of
a quorum, the validity and effect of proxies and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the chairman of the
meeting or any shareholder entitled to vote thereat, the inspectors shall make a
10021E12
3
<PAGE>
report in writing of any challenge, request or matter determined by them and
shall execute a certificate of any fact found by them.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The Board shall have the power to manage the
business and affairs of the Corporation in such manner as it sees fit. In
addition to the powers and authorities expressly conferred upon it, the Board
may do all lawful acts which are not directed to be done by the shareholders by
statute, by the Articles or by these Bylaws.
Section 2. Number, Tenure and Qualifications. The number of directors of
the Corporation shall be three. Each director shall hold office until the next
annual meeting of shareholders and until a successor director has been elected
and qualified, or until the death, resignation or removal of such director.
Directors need not be residents of the State of Wyoming or shareholders of the
Corporation.
Section 3. Regular Meetings. A regular meeting of the Board shall be held,
without other notice than this Bylaw, immediately after and at the same place as
the annual meeting of shareholders. The Board may provide, by resolution, the
time and place, either within or without the State of Wyoming, for the holding
of additional regular meetings, without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board may be called by
or at the request of the President or any two directors. The person or persons
authorized to call special meetings of the Board may fix any place, either
within or without the State of Wyoming, as the place for holding any special
meeting of the Board called by them.
Section 5. Telephonic Meetings. Members of the Board and committees thereof
may participate and be deemed present at a meeting by means of conference
telephone or similar communications equipment by which all persons participating
in the meeting can hear each other at the same time.
Section 6. Notice. Notice of any special meeting of the Board shall be
given by telephone, telegraph or written notice sent by mail. Notice shall be
delivered at least one day prior to the meeting (five days before the meeting if
the meeting is held outside the State of Wyoming) if given by telephone,
telegram or if,delivered personally. If notice is given by telegram, such notice
shall be deemed to be delivered when the telegram is delivered to the telegraph
company. Written notice may be delivered by mail to each director at such
director's business or home address and if mailed shall be delivered at least
five days prior to the meeting.
10021E12
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<PAGE>
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail so addressed with postage thereon prepaid. Any director may
waive notice of any meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
Board need be specified in the notice or waiver of notice of such meeting.
Section 7. Quorum. A majority of the total membership of the Board shall
constitute a quorum for the transaction of business at any meeting of the Board,
but if a quorum shall not be present at any meeting or adjournment thereof, a
majority of the directors present may adjourn the meeting without further
notice.
Section 8. Action by Consent of All Directors. Any action required to be
taken, or which may be taken at a meeting of the Board may be taken without a
meeting, if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors entitled to vote with respect to the subject
matter thereof. Such written consent or consents shall be filed with the minutes
of the Corporation. Such action by written consent of all entitled to vote shall
have the same force and effect as a unanimous vote of such directors at a
meeting of directors at which a quorum is present.
Section 9. Manner of Acting. The act of a majority of the directors present
at a meeting at which a quorum is present shall be an act of the Board.
The order of business at any regular or special meeting of the Board shall
be:
1. Record of those present.
2. Secretary's proof of notice of meeting, if notice is not waived.
3. Reading and disposal of unapproved minutes, if any.
4. Reports of officers, if any.
5. Unfinished business, if any.
6. New business.
7. Adjournment.
Section 10. Vacancies. Any vacancy occurring in the Board by reason of an
increase in the number specified in these Bylaws, or for any other reason, may
be filled by the affirmative vote of a majority of the remaining directors,
though less than a quorum of the Board may remain at the time such meeting
considering filling such vacancies is held.
10021E12
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<PAGE>
Section 11. Compensation. By resolution of the Board, the directors may be
paid their expenses, if any, for attendance at each meeting of the Board and may
be paid a fixed sum for attendance at each meeting of the Board and a stated
salary as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor or from
receiving compensation for any extraordinary or unusual services as a director.
Section 12. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless the dissent
of such director shall be entered in the minutes of the meeting, filed in
writing with the person acting as the Secretary of the meeting before the
adjournment thereof or forwarded by registered mail to the Secretary of the
Corporation immediately after the meeting. Such right to dissent shall not apply
to a director who voted in favor of such action.
Section 13. Executive or Other Committees. The Board, by resolution adopted
by a majority of the entire Board, may designate among its members an executive
committee and one or more other committees, each of which, to the extent
provided in the resolution, shall have all of the authority of the Board, but no
such committee shall have the authority of the Board in reference to amending
the Articles, adopting a plan of merger or consolidation, recommending to the
shareholders the sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Corporation otherwise than
in the usual and regular course of its business, recommending to the
shareholders a voluntary dissolution of the Corporation or a revocation thereof,
or amending the Bylaws. The designation of such committees and the delegation
thereto of authority shall not operate to relieve the Board, or any member
thereof, of any responsibility imposed by law.
Any action required to be taken, or which may be taken at a meeting of a
committee designated in accordance with this Section of the Bylaws, may be taken
without a meeting, if a consent in writing setting forth the action so taken
shall be signed by all those entitled to vote with respect to the subject matter
thereof. Such written consent or consents shall be filed with the minutes of the
Corporation. Such action by written consent of all entitled to vote shall have
the same force and effect as a unanimous vote of such persons.
Section 14. Resignation of Officers and Directors. Any director or officer
may resign at any time by submitting a resignation in writing. Such resignation
takes effect from the time of its receipt by the Corporation unless a date or
time is fixed in the resignation, in which case it will take effect from that
time. Acceptance of the resignation shall not be required to make it effective.
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ARTICLE IV
OFFICERS
Section 1. Number. The officers of the Corporation shall be a President, a
Secretary and a Treasurer, all of whom shall be executive officers and each of
whom shall be elected by the Board, and such other officers as the Board may
designate from time to time. A Chairman of the Board, Chairman of the
Board/Chief Executive Officer and one or more Vice Presidents shall be executive
officers if the Board so determines by resolution. Such other officers and
assistant officers, as may be deemed necessary, shall be designated
administrative assistant officers and may be appointed and removed as the Chief
Executive Officer decides. Any two or more offices may be held by the same
person.
Section 2. Election and Term of Office. The executive officers of the
Corporation, to be elected by the Board, shall be elected annually by the Board
at its first meeting held after each annual meeting of the shareholders or at a
convenient time soon thereafter. Each executive officer shall hold office until
the resignation of such officer or a successor shall be duly elected and
qualified, until the death of such executive officer, or until removal of such
officer in the manner herein provided.
Section 3. Removal. Any officer or agent elected or appointed by the Board
may be removed by the Board whenever, in its judgment, the best interests of the
Corporation would be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any executive office because of death,
resignation, removal, disqualification or otherwise may be filled by the Board
for the unexpired portion of the term.
Section 5. The Chairman of the Board. If a Chairman of the Board (the
"Chairman") shall be elected by the Board, the Chairman shall preside at all
meetings of the shareholders and of the Board. The Chairman may sign, with the
officers authorized by the Chief Executive Officer or the Board, certificates
for the shares of the Corporation and shall perform such other duties as from
time to time are assigned by the Chief Executive Officer or the Board. The
Chairman of the Board may be elected as the Chief Executive Officer, in which
case the Chairman shall perform the duties hereinafter set forth in Article IV,
Section 7, of these Bylaws.
Section 6. The President. The President may sign, with the officers
authorized by the Chief Executive Officer or the Board, certirficates for shares
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of the Corporation and shall perform such other duties as from time to time are
assigned by the Chief Executive Officer or the Board. The President may be
elected as the Chief Executive Officer of the Corporation, in which case, the
President shall perform the duties hereinafter set forth in Article IV, Section
7, of these Bylaws.
Section 7. The Chief Executive Officer. If no Chairman shall be elected by
the Board, the President shall be the Chief Executive Officer of the
Corporation. If a Chairman is elected by the Board, the Board shall designate,
as between the Chairman and the President, who shall be the Chief Executive
Officer. The Chief Executive Officer shall be, subject to the control of the
Board, in general charge of the affairs of the Corporation. The Chief Executive
Officer may sign, with the other officers of the Corporation authorized by the
Board, deeds, mortgages, bonds, contracts or other instruments whose execution
the Board has authorized, except in cases where the signing and execution
thereof shall be expressly delegated by the Board or these Bylaws to some
officer or agent of the Corporation, or shall be required by law to be otherwise
signed or executed.
Section 8. The Vice President. In the absence of the President or in the
event of the death or inability to act of the President, the Vice President
shall perform the duties of the President, and when so acting shall have all the
powers of and be subject to all the restrictions upon the President. In the
event there is more than one Vice President, the Vice Presidents in the order
designated at the time of their election, or in the absence of any designation,
then in the order of their election, shall perform the duties of the President
and, when so acting, shall have all the powers of and shall be subject to all
the restrictions upon the President. Any Vice President may sign, with the other
officers authorized by the Chief Executive Officer or the Board certificates for
shares of the Corporation and shall perform such other duties as from time to
time may be assigned by the Chief Executive Officer or the Board.
Section 9. The Secretary. Unless the Board otherwise directs, the Secretary
shall keep the minutes of the shareholders' and directors' meetings in one or
more books provided for that purpose. The Secretary shall also see that all
notices are duly given in accordance with the law and the provisions of the
Bylaws; be custodian of the corporate records and the seal of the Corporation;
affix the seal or direct its affixing to all documents, the execution of which
on behalf of the Corporation is duly authorized; keep a list of the address of
each shareholder; sign, with the other officers authorized by the Chief
Executive Officer or the Board, certificates for shares of the Corporation; have
charge of the stock transfer books of the Corporation and perform all duties
incident to the office of Secretary and such other duties as from time to time
may be assigned by the Chief Executive Officer or by the Board.
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Section 10. The Treasurer. If required by the Board, the Treasurer shall
give a bond for the faithful discharge of his duties in such sum and with such
surety or sureties as the Board shall determine. The Treasurer shall have charge
and custody of and be responsible for all funds and securities of the
Corporation, receive and give receipts for monies due and payable to the
Corporation from any source whatsoever and deposit all such monies in the name
of the Corporation in such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of the Bylaws. The Treasurer may
sign, with the other officers authorized by the Chief Executive Officer or the
Board, certificates for shares of the Corporation and shall perform all duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned by the Chief Executive Officer or the Board.
Section 11. Assistant Officers. The Chief Executive Officer may appoint
such other officers and agents as may be necessary or desirable for the business
of the Corporation. Such other officers shall include one or more Assistant
Secretaries and Treasurers who shall have the power and authority to act in
place of the officer for whom they are elected or appointed as an assistant in
the event of the officer's inability or unavailability to act in his official
capacity. The Assistant Secretary or Secretaries or Assistant Treasurer or
Treasurers may sign, with the other officers authorized by the Chief Executive
Officer or the Board, certificates for shares of the Corporation. The Assistant
Treasurer or Treasurers shall, if required by the Board, give bonds for the
faithful discharge of their duties in such sums and with such sureties as the
Board shall determine. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties as shall be assigned to them by the Secretary
or the Treasurer, respectively, or by the Chief Executive Officer or the Board.
Section 12. Salaries. The salaries of the executive officers shall be fixed
by the Board and no officer shall be prevented from receiving such salary by
reason of the fact that such officer is also a director of the Corporation. The
salaries of the administrative assistant officers shall be fixed by the
President.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board may authorize any officer or officers,
agent or agents, to enter into any contract on behalf of the Corporation and
such authority may be general or confined to specific instances.
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Section 2. Checks, Drafts, Etc. All checks, drafts or other orders for the
payment of money, notes or other evidence of indebtedness, issued in the name of
the Corporation, shall be signed by such officer or officers, agent or agents,
of the Corporation and in such manner as shall from time to time be determined
by resolution of the Board.
Section 3. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board may select.
ARTICLE VI
CERTIFICATES FOR SECURITIES
AND THEIR TRANSFER
Section 1. Certificates for Securities. Certificates representing
securities of the Corporation (the "Securities") shall be in such form as shall
be determined by the Board. To be effective, such certificates for Securities
(the "Certificates") shall be signed by the President or a Vice President and
the Secretary or an Assistant Secretary of the Corporation. Any or all of the
signatures may be facsimiles if the Certificate is either countersigned by the
transfer agent, or countersigned by the facsimile signature of the transfer
agent and registered by the written signature of an officer of any company
designated by the Board as registrar of transfers so long as that officer is not
an employee of the Corporation.
A Certificate signed or impressed with the facsimile signature of an
officer, who ceases by death, resignation or otherwise to be an officer of the
Corporation before the Certificate is delivered by the Corporation, is valid as
though signed by a duly elected, qualified and authorized officer, provided that
such Certificate is countersigned by the signature of the transfer agent or
facsimile signature of the transfer agent of the Corporation and registered as
aforesaid.
All Certificates shall be consecutively numbered or otherwise identified.
Certificates shall state the jurisdiction in which the Corporation is organized,
the name of the person to whom the Securities are issued, the designation of the
series, if any, and the par value of each share represented by the Certificate,
or a statement that the shares are without par value. The name and address of
the person to whom the Securities represented thereby are issued, the number of
Securities, and date of issue, shall be entered on the security transfer books
of the Corporation. All Certificates surrendered to the Corporation for transfer
shall be canceled and no new Certificate shall be issued until the former
Certificate for a like number of shares shall have been surrendered and
canceled, except that, in case of a lost, destroyed or mutilated Certificate, a
new one may be issued therefor upon such terms and indemnity to the Corporation
as the Board may prescribe.
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Section 2. Transfer of Securities. Transfer of Securities shall be made
only on the security transfer books of the Corporation by the holder of record
thereof, by the legal representative of the holder who shall furnish proper
evidence of authority to transfer, or by an attorney authorized by a power of
attorney which was duly executed and filed with the Secretary of the Corporation
and a surrender for cancellation of the Certificate for such shares. The person
in whose name Securities stand on the books of the Corporation shall be deemed
by the Corporation to be the owner thereof for all purposes.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall be determined by resolution of the
Board.
ARTICLE VIII
DIVIDENDS
The Board may declare, and the Corporation may pay in cash, stock or other
property, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Articles.
ARTICLE IX
SEAL
The Board shall provide a corporate seal, circular in form, having
inscribed thereon the corporate name, the state of incorporation and the word
"Seal." The seal on Securities, any corporate obligation to pay money or any
other document may be by facsimile, or engraved, embossed or printed.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or director
of the Corporation under the provisions of these Bylaws or under the provisions
of the Articles or under the provisions of the applicable laws of the State of
Wyoming, a waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before, at or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
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ARTICLE XI
INDEMNIFICATION
The Corporation shall have the power to indemnify any director, officer,
employee or agent of the Corporation or any person serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise to the fullest extent
permitted by the Wyoming Business Corporation Act.
ARTICLE XII
AMENDMENTS
These Bylaws may be altered, amended, repealed or replaced by new bylaws by
the Board at any regular or special meeting of the Board.
ARTICLE XIII
UNIFORMITY OF INTERPRETATION
AND SEVERABILITY
These Bylaws shall be so interpreted and construed as to conform to the
Articles and the statutes of the State of Wyoming or of any other state in which
conformity may become necessary by reason of the qualification of the
Corporation to do business in such foreign state, and where conflict between
these Bylaws and the Articles or a statute has arisen or shall arise, the Bylaws
shall be considered to be modified to the extent, but only to the extent,
conformity shall require. If any Bylaw provision or its application shall be
deemed invalid by reason of the said nonconformity, the remainder of the Bylaws
shall remain operable in that the provisions set forth in the Bylaws are
severable.
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ATTACHMENT C
MANAGEMENT AGREEMENT
THIS AGREEMENT is made as of this 8th day of December 1995, by and among
METRO CAPITAL CORPORATION, a Wyoming corporation (the "Company"), BISHOP CABLE
COMMUNICATIONS CORPORATION, a Wyoming corporation and wholly-owned subsidiary of
the Company (the "Subsidiary") and ROBERT E. THRAILKILL ("R. E. Thrailkill")
(the " Executive").
R. E. Thrailkill is presently employed by the Company as President and
Chief Executive Officer and has previously entered into an Executive Employment
Agreement, dated April 1, 1993, whereby he is to be employed as the President of
the Company until March 31, 1998. This Agreement supersedes and constitutes a
novation of the Executive Employment Agreement between the Company and R. E.
Thrailkill.
Pursuant to an Asset Purchase Agreement, dated October 19, 1995, between
the Company and Karlton Terry Oil Company, Karlton Terry and Jubal Terry
(collectively "KTOC"), KTOC will be obtaining control of the Company. KTOC is
transferring certain assets to the Company and the Company is transferring to
the Subsidiary all of its assets except for (i) the amount of cash and
marketable securities in excess of $1.2 million, which amount in any event shall
be at least $700,000; and, (ii) the Company's working interest in, and its
operating, agreement with respect to, the property known as Twenty Mile Hill,
which is held by Metro Minerals Corporation, a wholly owned subsidiary of the
Company. The Subsidiary is to be operated autonomously by the current management
of the Company until the Company effects a distribution of the Common Stock of
the Subsidiary to the holders of the Company's Common Stock, but in no event for
more than five (5) years.
The Company and the Subsidiary recognize (i) that the Executive's
contribution to the growth and success of the Company since its inception has
been substantial, (ii) the Executive has extensive experience in the management
of the Company's business, and (iii) KTOC has extensive experience in the
management of KTOC's oil and gas business. The Company and the Subsidiary desire
to provide for the continued employment of the Executive by the Subsidiary and
to make certain changes in the Executive's employment arrangements with the
Company which the Company and the Subsidiary have determined will reinforce and
encourage the Executive's continued attention and dedication to the Subsidiary
as members of the Subsidiary's management. The Executive is willing to commit
himself to serve the Subsidiary, on the terms and conditions herein provided.
In order to effect the foregoing, the Company, the Subsidiary and the
Executive wish to enter into a management employment agreement on the terms and
conditions set forth below. Accordingly, in consideration of the promises and
the respective covenants and agreements of the parties herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Subsidiary hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Subsidiary, on the terms and conditions
set forth herein.
<PAGE>
2. Term. The employment of the Executive by the Subsidiary as provided in
Section I will commence on the date hereof and continue for five (5) years from
the date hereof, unless sooner terminated as hereinafter provided. On September
30, 1996, and on tile last day of September of each year thereafter, the term of
each Executive's employment shall be automatically extended an additional year
unless, prior to such last day of September, the Subsidiary shall have delivered
to the Executive or the Executive shall have delivered to the Subsidiary written
notice that the term of the Executive's employment hereunder will not be
extended.
3. Positions and Duties. R. E. Thrailkill shall serve as President of the
Subsidiary, his powers and duties in that capacity to be such as may be
determined from time to time by the Board of Directors of the Subsidiary. During
the period of this Agreement, R. E. Thrailkill shall serve also, without
additional compensation, as Chairman of the Board, Chief Executive Officer and a
director of the Subsidiary. and to any other such office as he may be elected or
appointed by the Board of Directors of the Subsidiary, provided such other
duties will not interfere with R. E. Trailkill's duties as President of the
Subsidiary. His curies in those capacities shall be as set forth in the Bylaws
of the Subsidiary.
The Subsidiary agrees to headquarter the Executive in the Riverton, Wyoming
area except for required travel on the Subsidiary's business.
4. Extent of Services. The Executive shall devote his entire time,
attention and energies to the business of the Subsidiary and shall not, during
the term of this Agreement, be engaged in any other business activity, whether
or not such business activity is pursued for gain, profit or other pecuniary
advantage, unless prior approval therefor has been obtained from the Board of
Directors of the Subsidiary. This provision shall not be construed as preventing
the Executive from investing his assets in such form or manner as will not
require any services on the part of the Executive in the operation of the
affairs of the companies in which such investments are made.
5. Compensation and Related Matters. The Executive's compensation, as set
forth below, is to be self-funded by the Subsidiary with no liability to pay
such compensation by the Company.
(a) Salary. During the period of R. E. Thrailkill's employment
hereunder, the Subsidiary shall pay to R. E. Thrailkill a salary at a rate of
not less than $145,000 per annum.
The Executive's salary shall be paid in equal installments as nearly as
practicable on the 15th and the last days of each month in arrears. The
Executive's salary may be increased from time to time (i) in accordance with
normal business practices of the Subsidiary, (ii) based upon the Executive's
performance and/or (iii) to reflect increases in the cost of living. The
Executive's salary, if so increased, shall not thereafter during the term of
this Agreement be decreased. Compensation of the Executive by salary payments
shall not be deemed exclusive and shall not prevent the Executive from
participating in any other compensation or benefit plan of the Subsidiary or the
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Company. The salary payments (including any increased salary payments) hereunder
shall not in any way limit or reduce any other obligation of the Company or the
Subsidiary hereunder, and no other compensation, benefit or payment hereunder
shall in any way limit or reduce the obligation of tile Subsidiary to pay the
Executive's salary hereunder.
(b) Expenses. During the term of the Executive's employment hereunder,
the Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing services hereunder,
including all expenses of travel and living expenses while away from home on
business or at the request of and in the service of the Subsidiary, provided
that such expenses are incurred and accounted for in accordance with the
policies and procedures presently established by the Company.
(c) Other Benefits. The Company and the Subsidiary shall maintain in
full force and effect, and the Executive shall be entitled to continue to
participate in, all of its employee benefit plans and arrangements in effect on
the date hereof in which the Executive participates or plans or arrangements
providing the Executive with at least equivalent benefits thereunder (including
without limitation each stock option plan, stock bonus plan, life insurance and
health and-accident plan and arrangement, medical insurance plan, disability
plan and vacation plan). The Company and the Subsidiary shall not make any
changes in such plans or arrangements which would adversely affect the
Executive's rights or benefits thereunder, unless such change occurs pursuant to
a program applicable to all executives of the Company and the Subsidiary and
does not result in a proportionately greater reduction in the rights of or
benefits to the Executive as compared with any other of the executives of the
Company. The Executive shall be entitled to participate in or receive benefits
under any employee benefit plan or arrangement made available by the Company or
the Subsidiary in the future to executives and key management employees, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Nothing paid to the Executive
under any plan or arrangements presently in effect or made available in the
future shall be deemed to be in lieu of the salaries payable to the Executive
pursuant to paragraph (a) of this Section. Any payments or benefits payable to
the Executive hereunder in respect of any calendar year during which the
Executive is employed by the Subsidiary for less than the entire such year
shall, unless otherwise provided in the applicable plan or arrangement, be
prorated in accordance with the number of days in such calendar year during
which the Executive is so employed.
(d) Vacations. The Executive shall be entitled to the number of
vacation days in each calendar year, and to compensation in respect of earned
but unused vacation days, determined in accordance with the Subsidiary's
vacation plan. The Executive shall also be entitled to all paid holidays given
by the Subsidiary to its executives.
(e) Services Furnished. The Subsidiary shall furnish the Executive
with office space and such other facilities and services as shall be suitable to
the individual Executive's positions and adequate for the performance of their
respective duties as set forth in Section 3 hereof.
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6. Disclosure of Information. The Executive recognizes and acknowledges
that the operation of the Company and the Subsidiary's businesses and know how
as it may exist from time to time, and the Company and the Subsidiary's trade
secrets are valuable, special and unique assets of the Company and the
Subsidiary's businesses. The Executive will not, during or after the term of his
employment. disclose such information and know how or any part thereof, or any
trade secrets, to any person, firm, corporation, association or other entity for
any reason or purpose whatsoever. In the event of a breach or threatened breach
by an Executive of the provisions of this paragraph, the Company and/or the
Subsidiary shall be entitled to an injunction restraining the Executive from
disclosing in whole or in part such information or any trade secrets or from
rendering any services to any person, firm, corporation, association or other
entity to whom such information in whole or in part has been disclosed or is
threatened to be disclosed. Nothing herein shall be construed as prohibiting the
Company or the Subsidiary from pursuing any other remedies available to the
Company or the Subsidiary for such breach or threatened breach, including the
recovery of damages from the Executive.
7. Termination. The Company may not terminate the Executive's employment
for any reason. The individual Executive's employment hereunder may be
terminated only by the Subsidiary without any breach of this Agreement only
under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon
his death.
(b) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his duties
hereunder on a full-time basis for the entire period of six consecutive months,
and within thirty (30) days after written notice of termination is given (which
may occur before or after the end of such six-month periods) shall not have
returned to the performance of his duties hereunder on a full-time basis, the
Subsidiary may terminate the Executive's employment hereunder.
(c) Cause. The Subsidiary may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Subsidiary shall have
"Cause" to terminate the Executive's employment hereunder upon (A) the willful
and continued failure by the Executive to substantially perform his duties
hereunder (other than any such failure resulting from the executive's incapacity
due to physical or mental illness), after demand for substantial performance is
delivered by the Subsidiary that specifically identifies the manner in which the
Subsidiary believes the Executive has not substantially performed his duties, or
(B) the willful engaging by the Executive in misconduct which is materially
injurious to the Subsidiary, monetarily or otherwise. For purposes of this
paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Subsidiary. Notwithstanding the foregoing, the Executive shall
not be deemed to have been terminated for Cause without (i) reasonable notice to
the Executive setting forth the reasons for the Subsidiary's intention to
terminate for Cause; (ii) an opportunity for the Executive, together with his
counsel, to be heard before the Board of Directors of the Subsidiary, and (iii)
delivery to the Executive of a Notice of termination as defined in subsection
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(e) hereof from the Board of Directors of the Subsidiary finding that in the
good faith opinion of such Board the Executive was guilty of conduct set forth
above in clause (A) or (B) of the preceding sentence, and specifying the
particulars thereof in detail.
(d) Termination by the Executive. The Executive may terminate his
employment hereunder (i) for Good Reason or (ii) if his health should become
impaired to an extent that makes his continued performance of his duties
hereunder hazardous to his physical or
mental health or his life, provided that the Executive shall have furnished the
Subsidiary with a written statement from a qualified doctor to such effect.
For purposes of this Agreement, "Good Reason" shall mean (A) a change in
control of the Subsidiary (as defined below) which is not approved by the
Executive, (B) a failure by the Company or the Subsidiary to comply with any
material provision of this Agreement which has not been cured within ten days
after notice of such noncompliance has been given by the Executive to the
Company and Subsidiary as the case may be, or (C) any purported termination of
the Executive's employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph (e) hereof (and for
purposes of this Agreement no such purported termination shall be effective).
For purposes of this Agreement, a "change in control of the Subsidiary"
shall mean a change in control of a nature that would be required to be reported
in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act"); provided that, without
limitation, such a change in control shall be deemed to have occurred if (i) any
"person" (as that term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Subsidiary or any "person" who on the date hereof is a director
or officer of the Subsidiary, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company or the Subsidiary representing 20% or more of the combined voting
power of the Subsidiary's then outstanding securities, or (ii) during any period
of two consecutive years during the term of this Agreement, individuals who at
the beginning of such period constitute the Board of the Subsidiary cease for
any reason to constitute at least a majority thereof, unless the election of
each director who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of the period.
The Company shall consult with the Executive regarding any proposed change
in control of the Company. For purposes hereof, "change in control" shall have
the same meaning as set forth in the preceding paragraph.
(e) Any termination of the Executive's employment by the Subsidiary or
by the Executive (other than termination pursuant to subsection (a) above) shall
be communicated by written Notice of Termination to the other parties hereto.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
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(f) "Date of Termination" shall mean (i) if the Executive's employment
is terminated by his death, the date of his death, (ii) if the Executive's
employment is terminated pursuant to subsection (b) above, 30 days after Notice
of Termination is given (provided that the Executive shall not have returned to
the performance of his duties on a full-time basis during such 30 days period),
(iii) if the Executive's employment is terminated pursuant to subsection (e)
above, the date specified in the Notice of Termination, and (iv) if the
Executive's employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that if within 30 days after any Notice
of Termination is given the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding and final arbitration
award or by a final judgment order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal having
been perfected).
8. Compensation Upon Termination or During Disability.
(a) If the Executive is unable to perform his services by reason of
illness or incapacity for a period of more than six months, the compensation
otherwise payable to him during the continued period of such illness or
incapacity shall be reduced by the amount of any insurance benefits provided by
the Company or the Subsidiary. The Subsidiary may terminate this Agreement at
any time after Executive shall be absent from his employment for whatever cause,
for a continuous period of more than six months and all obligations of the
Subsidiary and shareholders hereunder shall cease upon such termination,
provided, however, that in the event that such absence is due to illness or
incapacity, the Subsidiary shall be obligated to pay the full amount of
Executive's salary for the balance of the term of this Agreement or until
Executive becomes gainfully employed, whichever is sooner.
(b) If the Executive's employment is terminated by his death, the
Subsidiary shall pay to the Executive's spouse, or if he leaves no spouse, to
his estate, commencing on the next succeeding day which is the 15th day or last
day of the month, as the case may be, and semimonthly thereafter on the 15th and
last days of each month, until a total of 24 payments has been made, an amount
on each payment date equal to the semi-monthly salary payment payable to the
Executive pursuant to Section 5(a) hereof at the time of his death.
(c) If the Executive's employment shall be terminated for Cause, the
Subsidiary shall pay the Executive his full salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given and
the Subsidiary shall have no further obligations to the Executive under this
Agreement.
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(d) If (A) in breach of this Agreement, the Company or the Subsidiary
shall terminate an Executive's employment other than pursuant to Section 7(b) or
7(c) hereof (it being understood that a purported termination pursuant to
Section 7(b) or 7(c) hereof which is disputed and finally determined not to have
been proper shall be a termination by the Company and/or the Subsidiary in
breach of this Agreement) or (B) the Executive shall terminate his employment
for Good Reason, then
(i) the Company and the Subsidiary shall pay the Executive his
full salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given;
(ii) in lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination, the Subsidiary shall pay as
severance pay to the Executive an amount equal to the product of (A) the
Executive's annual salary rate in effect as of the Date of termination,
multiplied by (B) the greater of the number of years (including partial years)
remaining in the term of employment hereunder or the number three, such payments
to be made in a lump sum on or before the 5th day following the Date of
Termination;
(iii) if termination of the Executive's employment arises out of
a breach by the Subsidiary of this Agreement, the Subsidiary shall pay all other
damages to which the Executive may be entitled as a result of such breach,
including damages for any and al' loss of benefits to the Executive under the
Company and the Subsidiary's employee benefit plans (other than the Subsidiary's
Incentive Compensation Plan) which the Executive would have received if the
Subsidiary had not breached this Agreement and had the Executive's employment
continued for the full term provided in Section 2 hereof, and including all
legal fees and expenses incurred by him as a result of such termination; and
(iv) if termination of the Executive's employment arises out of a
breach by the Company of this Agreement, the Company shall pay all other damages
to which the Executive may be entitled as a result of such breach, including
damages for any and all loss of benefits to the Executive under the Company and
the Subsidiary's employee benefit plan~ (other than the Company's Incentive
Compensation Plan) which the Executive would have received if the Company had
not breached this Agreement and had the Executive's employment continued for the
full term provided in Section 2 hereof, and including all legal fees and
expenses incurred by him as a result of such termination.
(e) If the Executive shall terminate his employment under clause (ii)
of Section 7(d) hereof, the Subsidiary shall pay the Executive his full salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given together with such reasonable severance payment, if any, or
the Subsidiary's Board of Directors may determine.
(f) Unless the Executive is terminated for Cause, the Company and the
Subsidiary shall maintain in full force and effect, for the continued benefit of
the Executive for the greater of the number of years (including partial years)
remaining in the term of employment hereunder
-7 -
<PAGE>
or the number three, all employee benefit plans and programs in which the
Executive was entitled to participate immediately prior to the Date of
Termination provided that the Executive's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that the Executive's participation in any such plan or program is barred, the
Company and the Subsidiary shall arrange to provide the Executive with benefits
substantially similar to those which the Executive would otherwise have been
entitle to receive under such plans and programs from which his continued
participation is barred.
(g) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 8 by seeking other employment or otherwise.
9. Successors: Binding Agreement.
(a) The Company and the Subsidiary will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or the
Subsidiary, by agreement in form and substance satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company and the Subsidiary would be required to perform
it if no such succession had taken place. Failure by the Company or the
Subsidiary to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of the Agreement and shall entitle the Executive to
compensate on from the Company and the Subsidiary in the same amount and on the
same terms as they would be entitled to hereunder if they terminated their
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Subsidiary" shall
mean the Subsidiary as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in this Section 9 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 9 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If an Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee or other designee or, if
there be no such designee, to the Executive's estate.
10. Indemnification. The Subsidiary shall indemnify and hold the Company
harmless for all actions of the Executive.
-8-
<PAGE>
11. Notice. For purposes of this Agreement, notices, demands and all other
communications provided for in the agreement shall be in writing and shall be
deemed to have bee~ duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the Company, the Subsidiary and the Executive at the
following addresses:
(i) If to the Company:
Karlton Terry, President
Metro Capital Corporation
700 E. 9th Ave., Suite 106
Denver, Colorado 80203
(ii) If to the Subsidiary:
Robert E. Thrailkill, President
Bishop Cable Communications Corporation
716 College View Drive
Riverton, Wyoming 80501
(iii) If to the Executive:
Robert E. Thrailkill
716 College View Drive
Riverton, Wyoming 82501
Any party to this Agreement may change the address for giving notices by written
notice to the other parties in conformity with the foregoing, except that
notices of change of address shall be effective only upon receipt.
12. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executives and such officers as may be specifically
designated by the Company and the Subsidiary. No waiver by any party hereto at
any time of any breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by any party which are not set forth expressly in this Agreement.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Wyoming.
13. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not effect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
-9-
<PAGE>
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
15. Governing Law. This interpretation and construction of this Agreement,
and all matters relating hereto, shall be governed by the internal laws of the
State of Wyoming.
16. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators, in Riverton, Wyoming, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction. The
expense of such arbitration shall be borne by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
METRO CAPITAL Corporation
By /S/ KARLTON TERRY
----------------------------------------
Karlton Terry, President
BISHOP CABLE COMMUNICATIONS CORPORATION
By /S/ ROBERT E. THRAILKILL
----------------------------------------
Robert E. Thrailkill, President
/S/ ROBERT E. THRAILKILL
----------------------------------------
Robert E. Thrailkill
A:\MNGNTAGR.THR
-10-
ATTACHMENT D
PURCHASE OPTION AGREEMENT
Bishop Powers, Ltd., A Colorado Limited Partnership, Managing Partner;
Bishop Capital Corp., A Wyoming Corp., c/o Robert E. Thrailkill (Owner)
whose address is
716 College View Dr., Riverton, WY 82561
c/o Highlands Commercial Group LLC, 800 Holly Sugar Bldg.,
Colorado Springs, CO 80903 J. Spittler,
in consideration of Diamond Shamrock Refining and Marketing Company, whose
address is P.O. Box 696000, San Antonio, Texas 78269-6000 (Buyer), paying to
Owner within ten (10) days from receipt of this agreement signed by both parties
One Thousand and No/100-----Dollars ($1,000.00), called option money.
Owner hereby grants to Buyer for a period of sixty (60) days from the date of
this agreement, the exclusive option of purchasing from Owner for the total
purchase price of Three Hundred Fifty Thousand and No/100----Dollars
($350,000.00) and upon the provisions hereinafter set out, the following
described tract of land located in Colorado Springs, El Paso County, Colorado:
A tract of land having a minimum of 43,000 square feet exclusive of
any present or proposed rights-of-way or dedications to a public
authority and said tract of land located 530 feet west of the
northwest corner of the intersection of Powers Blvd. and Palmer Park
Blvd. shall have a minimum frontage of 200 feet along, adjoining and
adjacent to Palmer Park Blvd. with a depth of 220 feet therefrom and a
minimum frontage of 220 feet along, adjoining and adjacent to the
proposed right-in, right-out Palmer Park Access with a depth of 200
feet therefrom.
Owner hereby grants to Buyer and its employees and representatives, at
anytime, and from time to time, the right to enter upon the land and make, at
Buyer's expense, a survey of said land containing the type of information shown
on attached Exhibit "A" and such engineering, soil, or other tests it may
desire. At the closing, the cost of the survey made by Buyer will be credited
against the payment of the purchase price. Upon Buyer giving Owner written
notice of its election to purchase the land, the following provisions shall
apply:
1. Buyer shall tender to Commonwealth Land Title Insurance Co. Attn:
whose address is 121 E. Vermijo Ave. Colorado Springs, Colorado 80903
(Escrow Agent), its check in the amount of Three Thousand Five Hundred and
no/100 Dollars ($3,500.00), as earnest money, and a signed copy of this
agreement for acceptance by Escrow Agent.
<PAGE>
2. For purposes of this agreement, the term "Buyer's Purpose" shall mean
the construction and operations of a self-service retail gasoline service
station, car wash and convenience store (including the sale of beer and wine) of
the type and size desired by Buyer with approaches, curb cuts and free standing
signs in accordance with Buyer's design.
3. Within thirty (30) days from the date Buyer's notice of election to
purchase is given, Owner shall, at its expense, furnish to Buyer the following:
a) evidence satisfactory to Buyer that water, sewer, telephone, gas and
electricity are available to the land from public utility companies
and located in public easements adjacent to the land.
b) an interim title insurance binder and sample form of title policy
covering the land, prepared and issued by a title insurance company
acceptable to Buyer with copies of all documents shown on said title
insurance binder as an exception to title; and
c) certificates from all appropriate governmental authorities reflecting
that a search has been made for, and there are no chattel mortgages,
conditional sales contracts, financing statements and other similar
instruments creating liens of any kind affecting the land or personal
property located thereon.
4. If any engineering, soil or other tests are made by Buyer and do not
show to Buyer's satisfaction the land is suitable for use for Buyer's Purpose,
notwithstanding anything contained herein to the contrary, Buyer may terminate
this agreement at any time thereafter by giving Owner written notice of
termination.
5. If required in order for Buyer to obtain a building permit or other
governmental authorizations to use or improve the land for Buyer's Purpose,
Owner shall prior to closing and at Owner's expense, subdivide and plat the land
in accordance with all applicable governmental ordinances, regulations, rules
and laws. Before Owner delivers said plat to the governmental authorities for
approval and recording, Owner shall deliver said plat to Buyer for Buyer's
approval. Buyer reserves the right to raise objections to any matters contained
in said plan.
6. Buyer shall have thirty (30) days after receipt of the survey and all
data to be provided hereunder to approve same. If, in the opinion of Buyer: (i)
the form of title insurance policy and issuing company are acceptable; (ii) the
policy does not contain any exception on account of, and the land is free and
clear of, any and all restrictions, reservations, covenants, laws, zoning or
other ordinances or regulations, easements, rights-of-way or other circumstances
of any kind which would prevent, hinder or impede ingress to or egress from the
<PAGE>
land, the improvement or use of the land for Buyer's Purpose, or the issuance to
Buyer of a building permit and any other permits required or deemed necessary by
the applicable governmental authority in order for Buyer to improve and use the
land for Buyer's Purpose; (iii) water, sewer, telephone, gas and electricity are
available to the land from public utility companies and located in public
easements adjacent to the land; (iv) there are no exceptions which constitute an
objection to marketable title; (v) Owner will be able to deliver to Buyer at the
closing good, marketable and unencumbered title to, and immediate and exclusive
possession of the land; and (vi) all other requirements set forth in this
agreement have been satisfied to Buyer's satisfaction, then this sale shall be
closed promptly. If, in the opinion of Buyer, any requirement set forth in this
agreement has not been satisfied to Buyer's satisfaction, Buyer shall give Owner
written notice pointing out any objections or defects. Owner shall within thirty
(30) days after receipt of such notice cure such objections and defects to the
satisfaction of Buyer. If such objections and defects are so cured and no
additional objections or defects have arisen, then this sale shall be closed
promptly. If such objections and defects are not so timely cured, Buyer may, at
its option, waive same by giving written notice to Owner of such waiver within
fifteen (15) days after the expiration of said thirty (30) day period, and then
this sale shall be closed promptly. If Buyer does not notify Owner of such
waiver within said time period, this agreement shall terminate.
OPTION #245
<PAGE>
7. At the closing of this sale, Buyer will deliver to Escrow Agent a check
in an amount equal to the difference between (i) the option money plus the
earnest money, plus the cost of a survey of the land obtained by Buyer and (ii)
the total purchase price set forth herein. Owner shall deliver to Buyer a duly
executed and acknowledged general warranty deed covering the land, in a form
acceptable to Buyer. Owner shall deliver to Buyer an Owner's title insurance
policy issued in favor of Buyer for an amount equal to the total purchase price.
If Buyer so directs, Owner agrees that the general warranty deed and Owner's
title insurance policy required under this Agreement will be delivered in the
name of and in favor of Buyer's nominee or designee. All ad valorem and personal
property taxes assessed, or to be assessed against the land for the then current
year shall be prorated between Owner and Buyer as of the closing date. All
sales, use, transfer and similar taxes relating to said transaction shall be
borne by and shall be the responsibility of Owner, and if Buyer is obligated or
required to pay any such taxes, the amount Buyer so pays or is required to pay
shall be credited toward the payment of the total purchase price hereunder The
Escrow Agent's fees, and fees or commissions due any real estate agent, or
agents, shall be paid by Owner. Each party shall be responsible for its own
closing costs over and above those enumerated above.
8. At the closing of this transaction Owner will deliver to Buyer. in a
form acceptable to Buyer, dated as of the date of the closing, a statement
declaring, under penalty of perjury, Owner is not a "Foreign Person" as defined
in Section 1445(f)(3) of the Internal Revenue Code, and that Section 1445(a) of
the Internal Revenue Code is not applicable to this transaction. If such
statement is not delivered at closing, Buyer shall have the right to withhold
from the total price payable to Owner under this agreement, such amount as Buyer
deems necessary to satisfy the obligation imposed upon Buyer by Section 1445(a)
of the Internal Revenue Code, not to exceed ten percent (10%) of the total
purchase price.
9. Owner represents and warrants to Buyer as of the date of this sale the
following: 1) to the best of Owner's knowledge, the land is free and clear of
all restrictions, covenants, reservations, ordinances or other circumstances
which would prevent, hinder or impede (a) the improvement or use of the land,
(b) ingress to or egress from the land, or (c) the issuance of permits for
construction of the improvements Buyer deems necessary for Buyer's Purpose; 2)
the land has the frontage along, adjacent to and adjoining the public highways
or streets represented above; and 3) water, sewer, gas and electricity are
available to the land from public companies and located in public easements
adjacent to the land. Owner's representations and warranties shall survive the
closing of this sale and the execution and delivery of the deed contemplated
herein.
10. Upon the termination of this agreement, Escrow Agent will return any
earnest money to Buyer and, any deed delivered by Owner to Escrow Agent; to
Owner, and neither Owner nor Buyer shall be obligated to perform further
hereunder. If, after approval of said title, deed, title policy, title company,
and other data to be provided hereunder, and the satisfaction of all other
requirements of this agreement. Buyer defaults in its obligation to purchase
said land, Escrow Agent shall deliver to Owner the earnest money and any deed
delivered by Owner to Escrow Agent, and Owner shall retain the earnest money and
option money as liquidated damages and its sole remedy. If Buyer terminates this
agreement because Owner fails to fulfill Owner's obligations hereunder, Escrow
Agent will return to Buyer all earnest money, and Owner shall return to Buyer,
all option money paid by Buyer to Owner.
11. Notices or data required to be delivered to Owner by Buyer shall be
deemed delivered when delivered to Owner in person, or deposited in the U.S.
Mail, duly stamped and addressed to Owner at its address set forth above. All
documents and data to be delivered to Buyer shall be deemed given when delivered
to Buyer at its address set forth above.
12. If Escrow Agent shall decline to accept this escrow, this agreement
nevertheless shall remain binding, and Buyer shall not be required to make any
earnest money deposit. Waiver of any representation or warranty contained herein
to be binding on Buyer must be in writing, and signed by an authorized
<PAGE>
representative of Buyer. This agreement constitutes the entire agreement between
the parties and shall be binding upon and inure to the benefit of their heirs,
devisees, legal representatives, successors and assigns and may be amended or
altered only by written instrument duly signed by the parties. Buyer may assign
this agreement to a third party without the consent of Owner.
13. Special Provisions:
See attached addendum.
If not signed by Owner and returned to Buyer within fifteen (15) days from
the date hereof, Buyer may consider this agreement null and void.
DATED this day of 19 TAX ID or SSN: 83-0306089
-------- ------- --- ------------------
DIAMOND SHAMROCK REFINING Bishop Powers, Ltd. A CO ltd. partnership
AND MARKETING COMPANY Bishop Capital Corp., a WY corp.
------------------------------------------
(Company Name)
By: /S/ N.T. AUSTIN By: SEE ATTACHED COUNTERPROPOSAL
- -------------------------------- -----------------------------------------
Manager, Real Estate N.T. Austin Title Managing Partner (Owner)
(Buyer)
By: /S/ ROBERT THRAILKILL
-------------------------------------
Robert Thrailkill (Owner)
The foregoing escrow is accepted by, and Escrow Agent acknowledges receipt of
the earnest money deposit described above and agrees to disperse said earnest
money and any other funds and documents received by it hereunder in accordance
with the provisions of this agreement.
---------------------------------------
(Title Company Name)
By: By:
------------------------------ -----------------------------------
Title: Title:
(Escrow Agent)
<PAGE>
ADDENDUM TO PURCHASE OPTION AGREEMENT #245
SPECIAL PROVISIONS
1) Actual size and dimensions of tract shall be determined by survey; however,
the tract shall not be less than 43,000 SF.
2) No less than the proposed right-in, right-out access along tracts easterly
boundary and the full motion access along tract's westerly boundary shall
be acceptable to Buyer.
3) Buyer shall install the proposed right-in, right-out access road at its
expense with the second user reimbursing Buyer 1/2 the cost.
4) Owner shall install the proposed full motion access and subsequent service
road and remove trees along Sand Creek at its sole expense prior to
closing.
5) All other required offsite public improvements shall be installed by Owner
at its sole expense prior to closing.
6) Owner shall be obligated to receive all necessary approvals for the
development of the PBC-2 tract.
7) Owner shall furnish Buyer a "finished pad" ready to develop with all
utilities, including 3-phase electrical, to property line and pad
elevations to Buyers satisfaction prior to closing.
8) Buyer shall have the perpetual use of the top 33.3% (50 SF) of one of the
two authorized PBC-2 District signs to be installed along Powers Blvd.
R.O.W. to Buyers satisfaction. Said sign shall be 30 feet high, 150 SF
total signage each side per city code. Buyer shall participate in the cost
of said sign after entering into a sign agreement and agreeing to design of
sign with owner prior to closing.
9) The balance of the 22+ acre PBC-2 tract shall be restricted against
gasoline sales, c-stores sales and car wash.
10) Closing shall not occur until Buyer has obtained all required permits
necessary to construct the facility for Buyer's Purpose on the property.
a:\Add245.doc32 07/05/96
<PAGE>
REALTOR
=================
HIGHLAND
COMMERCIAL GROUP
=================
The printed portions of this
form, except (italicized)
(differentiated) additions,
have been approved by the
Colorado Real Estate
Commission (CBS 3-9-95)
THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL
AND TAX OR OTHER COUNSEL BEFORE SIGNING.
COUNTERPROPOSAL
August 6, 1996
----------------
RE: Proposed contract to buy and sell the following described real estate
in the County of El Paso, Colorado, to wit:
Approximately 49,200 square feet, to be platted, approximately 535, west of the
northwest intersection of Palmer Park Blvd. and Powers Blvd as shown on attached
drawing.
known as No. na
- --------------------------------------------------------------------------------
Street Address City
dated undated 19
------------------------- --------------
between Bishop Powers Ltd. Colorado Limited Partnership, Seller
- --------------------------------------------------------------------------------
and Diamond Shamrock Refining and Marketing Company, Buyer.
- --------------------------------------------------------------------------------
The undersigned accepts the proposed contract, subject to the following
amendments:
See Attached Addendum A, attached hereto, and by this reference
incorporated herein.
1. Buyer and Seller hereby acknowledge that the attached Addendum A was
prepared by James E. Spittler, Jr., of Highland Commercial Group, LLC, and
has not been approved by the Colorado Real Estate Commission. Both Buyer
and Seller should consult their respective legal counsels with respect to
this Agreement.
2. Seller will deliver a special warranty deed.
3. If Buyer has not closed within 180 days after the later of final plat
approval and final development plan approval and recordation, this contract
shall terminate.
<PAGE>
All other terms and conditions shall remain the same. This counterproposal shall
expire unless accepted in writing, by Buyer and Seller, as evidenced by their
signatures below, and the offering party to this document receives notice of
such acceptance on or before August 21, 1996. If accepted, the proposed
contract, as amended hereby, shall become a contract between Seller and Buyer.
/S/ ROBERT E. THRAILKILL /S/ ROBERT E. THRAILKILL
- ----------------------------------- ---------------------------------------
Seller Bishop Powers, Ltd. Seller
Date of Seller's Signature 8-6-1996 Date of Seller's Signature 8-28-1996
--------- ----------
Seller's Address: 716 College View Dr., Riverton, WY 82561
- --------------------------------------------------------------------------------
/S/ N. T. AUSTIN
- ------------------------------------ ---------------------------------------
Buyer Diamond Shamrock Refining Buyer
and Marketing Company
Date of Buyer's Signature Aug 21, 1996 Date of Buyer's Signature 19
-------------- ----------
Buyer's Address: PO Box 696000, San Antonio, TX 78269-6000
- --------------------------------------------------------------------------------
N.B. When this counterproposal form is used, the proposed contract is not to be
signed by the party initiating this counterproposal. This counterproposal must
be securely attached to the proposed contract.
Counterproposal
ISG-McAllister Publishing (800) 336-1027 Prepared at Highland Commercial Group,
Colorado Springs, CO (719) 577-0044
<PAGE>
ADDENDUM A
Addendum to the Counterproposal to the Purchase Option Agreement, "AGREEMENT",
between Diamond Shamrock Refining and Marketing Company, as "Buyer" and Bishop
Powers Ltd, a Colorado Limited Partnership as "Seller".
ADDITIONAL PROVISIONS
a. The tract of land shall be 205', west to east, from the centerline of the
full access driveway to the centerline of the right-in/right-out driveway, by
240 feet, south to north, from the north right of way line of Palmer Park Blvd
to the centerline of the west to east access easement. The total square footage
conveyed to Diamond Shamrock shall be 49,200 sf.
b. The Seller shall be responsible for installation of the access roads and
utilities to the site.
c. The Purchase price shall be $388,850.00
d. Buyer shall supply Seller with its develofpment plan for the site so that
Seller can prepare a site development plan and plat for the City of Colorado
Springs. This Agreement is specifically contingent upon Seller getting the
necessary approvals from the City of Colorado Springs for the development plan
and plat, on terms and conditions that are acceptable to Seller at its sole
discretion.
e. Buyer and Seller to agree upon the site rough grading plan.
f. Signage agreement in the Agreement is agreed upon, subject to signage
ordinances continuing to allow two 150 sf project pole signs.
g. Previous contract conditions notwithstanding, Buyer shall have sixty (60)
days from the date of mutual execution of the "Agreement" to determine at its
sole discretion that the property is suitable for his intended use as provided
hereinbelow. Seller represents and warrants the Property is vacant, is not now,
and to Seller's knowledge has never been used in violation of any of the laws
set out in this paragraph.Purchaser acknowledges and agrees that Seller has not
made, does not make and specifically negates and disclaims any representations,
warranties, promises, covenants, agreements or guaranties of any kind or
character whatsoever, whether express or implied, oral or written, past, present
or future, of, as to, concerning or with respect to (i) the value, nature,
quality or condition of the Property, including, without limitation, the water,
soil and geology; (ii) the income to be derived from the Property; (iii) the
suitability of the Property for any and all activities and uses which Purchaser
may conduct thereon; (iv) the compliance of or by the Property or its operation
with any laws, rules, ordinances or regulations of any applicable governmental
<PAGE>
authority or body; (v) the habitability, merchantability, marketability,
profitability or fitness for a particular purpose of the Property, or (vi) any
other matter with respect to the Property; and Seller specifically disclaims any
representations regarding compliance with any environmental protection,
pollution or land use laws, rules, regulations, orders or requirements,
including solid waste, as defined by the U.S. Environmental Protection Agency
regulations at 40 C.F.R., Part 261, or the disposal or existence, in or on the
Property, of asbestos or any hazardous substance, as defined by the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, and regulations promulgated thereunder. Except as set out herein,
Purchaser further acknowledges and agrees that having been given the opportunity
to inspect the Property, Purchaser is relying solely on its own investigation of
the Property and not on any information provided or to be provided by Seller or
Broker other than as is stated in this Contract. Purchaser further acknowledges
and agrees that any information provided or to be provided by or on behalf of
Seller with respect to the Property was obtained from a variety of sources and
that Seller has not made any independent investigation or verification of such
information and makes no representations as to the accuracy of such information
and makes no representations as to the accuracy or completeness of such
information. Seller is not liable or bound in any manner by any oral or written
statements, representations or information pertaining to the Property, or the
operation thereof, furnished by any real estate broker, agent, employee, servant
or other person. Purchaser further acknowledges and agrees that to the maximum
extent permitted by law, the sale of the Property as provided for herein is made
on an "AS IS" condition and basis with all faults. Purchaser and anyone claiming
by, through or under Purchaser hereby fully and irrevocably releases Seller, his
employees, representatives and agents, from any and all claims that may now or
hereafter acquire against Seller, his employees, representatives and agents for
any cost, loss, liability, damage, expense, demand, action or cause of action
arising from or related to any defects, errors, omissions or other conditions,
including environmental matters, affecting the Property, or any portion thereof
on and after the closing. It is understood and agreed that the purchase price
has been adjusted by prior negotiation to reflect that all of the Property is
sold by Seller and purchased by Purchaser subject to the foregoing. In the event
that Purchaser does not notify Seller in writing, during the above 60 day period
that the property is not acceptable, "Notification," then this contract shall be
deemed to be in full force and effect, subject to the other provisions of the
Agreement.
i. Purchaser acknowledges timely disclosure by James E. Spittler Jr., and
Highland Commercial Group that they are acting as Listing Broker in this
transaction, and as such have a fiduciary responsibility to the Seller.
thrds2
<PAGE>
FIRST AMENDMENT OF PURCHASE OPTION:AGREEMENT #245
BY AND BETWEEN BISHOP POWERS, LTD. AND
DIAMOND SHAMROCK REFINING AND MARKETING COMPANY
Bishop Powers, Ltd. ("Owner") and Diamond Shamrock Refining and Marketing
Company ("Buyer") having executed that certain Purchase Option Agreement Number
245 dated August 28, 1996 for property located west of the northwest corner of
Powers and Palmer Park Blvd., do hereby amend said Agreement as follows:
Buyer's option period shall be extended through November 13, 1996
Except as specifically amended herein, all other provisions of said Purchase
Option Agreement shall remain in full force and effect.
DATED this the 3rd day of October, 1996
DIAMOND SHAMROCK REFINING BISHOP POWERS, LTD.
AND MARKETING COMPANY
BISHOP CAPITAL CORP.
MANAGING PARTNER
By: /S/ N. T. Austin By: /S/ ROBERT THRAILKILL
- ----------------------------------- ----------------------------------
Real Estate Manager Robert Thrailkill
A:\3rd245.doc35
da 10/03/96
<PAGE>
M. L. Cloin
General Manager
Real Estate/Acquisitions
Diamond Shamrock
November 13, 1996
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Bishop Powers, Ltd.
Attn: Robert Thrailkill
716 College View Dr.
Riverton, Wyoming 82561
RE: Purchase Option Agreement No. 245 dated August 28, 1996, by Bishop Powers,
Ltd. et.al. and between Diamond Shamrock Refining and Marketing Company
covering property located west of the northwest corner of Powers and Palmer
Park Blvd., Colorado Springs, El Paso County, Colorado
Dear Sirs:
In accordance with the above referenced agreement covering the subject property,
this letter constitutes notice from Diamond Shamrock of election to purchase the
subject property.
We are immediately tendering our earnest money funds in the amount of $3,500 as
well as a copy of the Purchase Agreement to Commonwealth Land Title Insurance
Company for acceptance into
escrow.
If you have any questions, do not hesitate to contact us.
Sincerely,
/S/ M. L. CLOIN
- ------------------------------
M. L. Cloin
MLC/da
cc: K. Eaton V. M. Calderon
D. Miller T. Austin
J. McAlister K. King
B. Beadle D. Thurmond
H. Green
a:ern245.doc
Diamond Shamrock PO.Box 696000.San Antonio, Texas 78269-6000.
Phone: 210 641-6800
ATTACHMENT E
REALTOR
=================
HIGHLAND
COMMERCIAL GROUP
=================
The printed portions of this
form, except (italicized)
(differentiated) additions,
have been approved by the
Colorado Real Estate
Commission. (CBS 3-9-95)
THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL
AND TAX OR OTHER COUNSEL BEFORE SIGNING.
VACANT LAND/FARM AND RANCH
CONTRACT TO BUY AND SELL REAL ESTATE
November 14, 1996
-----------------
1. PARTIES AND PROPERTY. 123 Cascade Associates, LLC
-----------------------------------------------------
buyer(s) [Buyer], (as joint tenants/tenants in common) agrees to buy, and the
undersigned seller(s) [Seller], agrees to sell, on the terms and conditions set
forth in this contract, the following described real estate in the County of El
Paso , Colorado, to wit:
A to be platted lot at the northwest corner of Powers Blvd
and Palmer Park Blvd consisting of approximately 40,000 sq
ft. The size and configuration of the parcel to be confirmed
and approved during the inspection period.
known as No. To be determined
------------------------------------------------------------------
Street Address City State Zip
together with all interest of Seller in vacated streets and alleys adjacent
thereto, all easements and other appurtenances thereto, all improvements thereon
and all attached fixtures thereon, except as herein excluded (collectively the
Property).
2. INCLUSIONS / EXCLUSIONS. The purchase price includes the following items (a)
if attached to the Property on the date of this contract: lighting, heating,
plumbing, ventilating, and air conditioning fixtures, TV antennas, water
softeners, smoke/fire/burglar alarms, security devices, inside telephone wiring
and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems,
built-in kitchen appliances, sprinkler systems and controls, built-in vacuum
systems (including accessories), and garage door openers including na remote
controls, (b) if on the Property whether attached or not on the date of this
contract: storm windows, storm doors, window and porch shades, awnings, blinds,
screens, curtain rods, drapery rods, fireplace inserts, fireplace screens,
fireplace grates, heating stoves, storage sheds, all keys and
(c) none other. Vacant land only.
- ---------------------------------
(d) Water Rights. Purchase price to include the following water rights: none
-----
<PAGE>
(e) Growing Crops. With respect to the growing crops Seller and buyer agree as
follows: na
---
The above-described included items (Inclusions) are to be conveyed to Buyer by
Seller by bill of sale, na deed or other applicable legal instrument(s) at the
closing, free end clear of all taxes, liens and encumbrances, except as provided
in Section 12. The following attached fixtures are excluded from this sale: na
3. PURCHASE PRICE AND TERMS. The purchase price shall be $ See Para 2le, payable
in U.S. dollars by Buyer as follows: (Complete the applicable terms below.)
(a) EARNEST MONEY.
$10,000.00 in the form of a promissory note, as earnest money deposit and part
payment of the purchase price, payable to and held by Lawyers Title Insurance
Co. in its trust account on behalf of both Seller and Buyer. Broker is
authorized to deliver the earnest money deposit to the closing agent, if any, at
or before closing.
The balance of $ See Para 2le (purchase price less earnest money) shall be paid
as follows:
(b) CASH AT CLOSING.
$ See Para 2le, plus closing costs, to be paid by Buyer at closing in funds
which comply with all applicable Colorado laws,which include cash, electronic
transfer funds, certified check, savings and loan teller's check, and cashier's
check, (Good Funds). Subject to the provisions of Section 4, if the existing
loan balance at the time of closing shall be different from the loan balance in
Section 3, the adjustment shall be made in Good Funds at closing or paid as
follows: na
---
<PAGE>
[The printed portions of this form, except (italicized) (differentiated)
additions, have been approved by the Colorado Real Estate Commission
(CBS3-9-95)]
7. ASSIGNABLE. This contract shall be assignable by Buyer without Seller's prior
written consent. Except as so restricted, this contract shall inure to the
benefit of and be binding upon the heirs, personal representatives, successors
and assigns of the parties. *
* Controlled by Buyer
8. EVIDENCE OF TITLE. Seller shall furnish to Buyer, at Seller's expense, a
current commitment for owner's title insurance policy in an amount equal to the
purchase price certified to a current date,on or before 20 days from mutual
execution 19----- (Title Deadline). If a title insurance commitment is
furnished, Buyer requires Seller that copies of instruments (or abstracts of
instruments) listed in the schedule of exceptions (Exceptions) in the title
insurance commitment also be furnished to Buyer at Seller's expense. This
requirement shall pertain only to instruments shown of record in the office of
the clerk and recorder of the designated county or counties. The title insurance
commitment, together with any copies or abstracts of instruments furnished
pursuant to this Section 8, constitute the title documents (Title Documents).
Buyer, or Buyer's designee, must request Seller, in writing, to furnish copies
or abstracts of instruments listed in the schedule of exceptions no later than
na calendar days after Title Deadline. If Seller furnishes a title insurance
commitment, Seller will pay the premium at closing and have the title insurance
policy delivered to Buyer as soon as practical after closing.
9. TITLE.
(a) TITLE REVIEW. Buyer shall have the right to inspect the Title
Documents. Written notice by Buyer of unmerchantability of title or of any other
unsatisfactory title condition shown by the Title Documents shall be signed by
or on behalf of Buyer and given to Seller on or before 30 calendar days after
Title Deadline, or within five (5) calendar days after receipt by Buyer of any
Title Document(s) or endorsement(s) adding new Exception(s) to the title
commitment together with a copy of the Title Document adding new Exception(s) to
title. If Seller does not receive Buyer's notice by the date(s) specified above,
Buyer accepts the condition of title as disclosed by the Title Documents as
satisfactory.
(b) MATTERS NOT SHOWN BY THE PUBLIC RECORDS. Seller shall deliver to Buyer,
on or before the Title Deadline set forth in Section 8, true copies of all
lease(s) and survey(s) in Seller's possession pertaining to the Property and
shall disclose to Buyer all easements, liens or other title matters not shown by
the public records of which Seller has actual knowledge. Buyer shall have the
right to inspect the Property to determine if any third party(s) has any right
in the Property not shown by the public records (such as an unrecorded easement,
unrecorded lease, or boundary line discrepancy). Written notice of any
unsatisfactory condition(s) disclosed by Seller or revealed by such inspection
shall be signed by or on behalf of Buyer and given to Seller on or before
December 15, 1996. If Seller does not receive Buyer's notice by said date, Buyer
accepts title subject to such rights, if any, of third parties of which Buyer
has actual knowledge.
(c) SPECIAL TAXING DISTRICTS. SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO
GENERAL OBLIGATION INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL
TAX LEVIES ON THE TAXABLE PROPERTY WITHIN SUCH DISTRICTS. PROPERTY OWNERS IN
SUCH DISTRICTS MAY BE PLACED AT RISK FOR INCREASED MILL LEVIES AND EXCESSIVE TAX
BURDENS TO SUPPORT THE SERVICING OF SUCH DEBT WHERE CIRCUMSTANCES ARISE
RESULTING IN THE INABILITY OF SUCH A DISTRICT TO DISCHARGE SUCH INDEBTEDNESS
WITHOUT SUCH AN INCREASE IN MILL LEVIES. BUYER SHOULD INVESTIGATE THE DEBT
<PAGE>
[The printed portions of this form, except (italicized) (differentiated)
additions, have been approved by the Colorado Real Estate Commission
(CBS3-9-95)]
LPI-8
FINANCING REQUIREMENTS OF THE AUTHORIZED GENERAL OBLIGATION INDEBTEDNESS OF SUCH
DISTRICTS, EXISTING MILL LEVIES OF SUCH DISTRICT SERVICING SUCH INDEBTEDNESS,
AND THE POTENTIAL FOR AN INCREASE IN SUCH MILL LEVIES.
In the event the Property is located within a special taxing district and
Buyer desires to terminate this contract as a result, if written notice is given
to Seller on or before the date set forth in subsection 9 (b), this contract
shall then terminate. If Seller does not receive Buyer's notice by the date
specified above, Buyer accepts the effect of the Property's inclusion in such
special taxing district(s) and waives the right to so terminate.
(d) RIGHT TO CURE. If Seller receives notice of unmerchantability of title
or any other unsatisfactory title condition(s) as provided in subsection (a) or
(b) above, Seller shall use reasonable effort to correct said unsatisfactory
title condition(s) prior to the date of closing. If Seller fails to correct said
unsatisfactory title condition(s) on or before the date of closing, this
contract shall then terminate; provided, however, Buyer may, by written notice
received by Seller, on or before closing, waive objection to said unsatisfactory
title condition(s).
10. INSPECTION. Seller agrees to provide Buyer on or before See paragraph
21a,19--- with a Seller's Property Disclosure form completed by Seller to the
best of Seller's current actual knowledge. Buyer or any designee shall have the
right to have inspection(s) of the physical condition of the Property and
Inclusions at Buyer's expense. If written notice of any unsatisfactory
condition, signed by or on behalf of Buyer, is not received by Seller on or
before See paragraph 21a, 19--- (Objection Deadline), the physical condition of
the Property and Inclusions shall be deemed to be satisfactory to Buyer. If such
notice is received by Seller as set forth above, and if Buyer and Seller have
not agreed, in writing, to a settlement thereof on or before see paragraph 21a ,
19 (Resolution Deadline), this contract shall terminate three calendar days
following the Resolution Deadline unless, within the three calendar days, Seller
receives written notice from Buyer waiving objection to any unsatisfactory
condition. Buyer is responsible for and shall pay for any damage which occurs to
the Property and Inclusion as a result of such inspection.
11. DATE OF CLOSING. The date of closing shall be see paragraph 2lb , 19--- , or
by mutual agreement at an earlier date. The hour and place of closing shall be
as designated by mutual consent in Colorado Springs.
<PAGE>
12. TRANSFER OF TITLE. Subject to tender or payment at closing as required
herein and compliance by Buyer with the other terms and provisions hereof,
Seller shall execute and deliver a good and sufficient special warranty deed to
Buyer, on closing, conveying the Property free and clear of all taxes except the
general taxes for the year of closing, and except none other. Title shall be
conveyed free and clear of all liens for special improvements installed as of
the date of Buyer's signature hereon, whether assessed or not; except (i)
distribution utility easements (including cable TV), (ii) those matters
reflected by the Title Documents accepted by Buyer in accordance with subsection
9(a), (iii) those rights, if any, of third parties in the Property not shown by
the public records in accordance with subsection 9(b), (iv) inclusion of the
Property within any special taxing district, and (v)subject to building and
zoning regulations.
13. PAYMENT OP ENCUMBRANCES. Any encumbrance required to be paid shall be paid
at or before closing from the proceeds of this transaction or from any other
source.
14. CLOSING COSTS, DOCUMENTS AND SERVICES. Buyer and Seller shall pay, in Good
Funds, their respective closing costs and all other items required to be paid at
closing, except as otherwise provided herein. Buyer and Seller shall sign and
complete all customary or required documents at or before closing. Fees for real
estate closing services shall not exceed S 200.00 and shall be paid at closing
by 1/2 by Buyer and 1/2 by Seller. The local transfer tax of na% of the purchase
price shall be paid at closing by na. Any sales and use tax that may accrue
because of this transaction shall be paid when due by Buyer.
15. PRORATIONS. General taxes for the year of closing, based on the taxes for
the calendar year immediately preceding closing, rents, water and sewer charges,
homeowner's association dues, and interest on continuing loan(s), if any, and
none other shall be prorated to date of closing.
16. POSSESSION. Possession of the Property shall be delivered to Buyer as
follows: upon delivery of deed
- --------------------------------------------------------------------------------
subject to the following lease(s) or tenancy(s):
none . If Seller, after closing, fails to deliver possession on the date herein
specified, Seller shall be subject to eviction and shall be additionally liable
to Buyer for payment of $200.00 per day from the date of agreed possession until
possession is delivered.
17. CONDITION OF AND DAMAGE TO PROPERTY. Except as otherwise provided in this
contract, the Property and Inclusions shall be delivered in the condition
existing as of the date of this contract, ordinary wear and tear excepted. In
the event the Property shall be damaged by fire or other casualty prior to time
of closing, in an amount of not more than ten percent of the total purchase
price, Seller shall be obligated to repair the same before the date of closing.
In the event such damage is not repaired within said tim eor if the damages
<PAGE>
exceed such sum, this contract may be terminated at the option of Buyer. Should
Buyer elect to carry out this contract despite such damage, Buyer shaH be
entitled to credit for all the insurance proceeds resulting from such damage to
the Property and Inclusions, not exceeding, however, the total purchase price.
Should any Inclusion(s) or service(s) fail or be damaged between the date of
this contract and the date of closing or the date of possession, whichever shall
be earlier, then Seller shall be liable for the repair or replacement of such
Inclusion(s) or service(s) with a unit of similar size, age and quality, or an
equivalent credit, less any insurance proceeds received by Buyer covering such
repair or replacement. The risk of loss for any damage to growing crops, by fire
or other casualty, shall be borne by the party entitled to the growing crops, if
any, as provided in Section 2 and such party shall be entitled to such insurance
proceeds or benefits for the growing crops, if any.
18. TIME OF ESSENCE/REMEDIES. Time is of the essence hereof. If any note or
check received as earnest money hereunder or any other payment due hereunder is
not paid, honored or tendered when due, or if any other obligation hereunder is
not performed or waived as herein provided, there shall be the following
remedies:
(a) IF BUYER IS IN DEFAULT:
[Check one box only.]
[ ] (1) SPECIFIC PERFORMANCE. Seller may elect to treat this contract as
canceled, in which case all payments and things of value received hereunder
shall be forfeited and retained on behalf of Seller, and Seller may recover such
damages as may be proper, or Seller may elect to treat this contract as being in
full force and effect and Seller shall have the right to specific performance or
damages, or both.
[ X ] (2) LIQUIDATED DAMAGES. All payments and things of value received
hereunder shall be forfeited by Buyer and retained on behalf of Seller and both
parties shall thereafter be released from all obligations hereunder. It is
agreed that such payments and things of value are LIQUIDATED DAMAGES and (except
as provided in subsection (c) are SELLER'S SOLE AND ONLY REMEDY for Buyer's
failure to perform the obligations of this contract. Seller expressly waives the
remedies of specific performance and additional damages.
(b) IF SELLER IS IN DEFAULT:
Buyer may elect to treat this contract as canceled, in which case all
payments and things of value received hereunder shall be returned and Buyer may
recover such damages as may be proper, or Buyer may elect to treat this contract
as being in full force and effect and Buyer shall have the right to specific
performance or damages, or both.
<PAGE>
(c) COSTS AND EXPENSES. Anything to the contrary herein notwithstanding, in
t he event of any arbitration or litigation arising out of this contract, the
arbitrator or court shall award to the prevailing party all reasonable costs and
expenses, including attorney fees.
19. EARNEST MONEY DISPUTES. Notwithstanding any termination of this contract,
Buyer and Seller agree that, in the event of any controversy regarding the
earnest money and things of value held by broker or closing agent, unless mutual
written instructions are received by the holder of the earnest money and things
of value, broker or closing agent shall not be required to take any action but
may await any proceeding, or at broker's or closing agent's option and sole
discretion, may interplead all parties and deposit any moneys or things of value
into a court of competent jurisdiction and shall recover court costs and
reasonable attorney fees.
<PAGE>
[The printed portions of this form except (italicized) (differentiated)
additions, have been approved by the Colorado Real Estate Commission (CBS3
9-95)].
21. ADDITIONAL PROVISIONS: (The language of these additional provisions has not
been approved by the Colorado Real Estate Commission).
See Addendum A attached hereto and by this reference incorporated herein.
22. RECOMMENDATION OF LEGAL COUNSEL. By signing this document, Buyer and Seller
acknowledge that the Selling Company or the Listing Company has advised that
this document has important legal consequences and has recommended the
examination of title and consultation with legal and tax or other counsel before
signing this contract.
23. TERMINATION. In the event this contract is terminated, all payments and
things of value received hereunder shall be returned and the parties shall be
relieved of all obligations hereunder, subject to Section 19.
24. SELLING COMPANY BROKER RELATIONSHIP. The selling broker, Highland Commercial
Group, LLC, and its sales persons have been engaged as transaction brokers.
Selling Company has previously disclosed in writing to the Buyer that different
relationships are available which include buyer agency, seller agency,
subagency, or transaction-broker.
25. NOTICE TO BUYER Any notice to Buyer shall be effective when received by
Buyer, or, if this box is checked [ ] when received by Selling Company.
26. NOTICE TO SELLER Any notice to Seller shall be effective when received by
Seller or Listing Company.
27. MODIFICATION OP THIS CONTRACT. No subsequent modification of any of the
terms of this contract shall be valid, binding upon the parties or enforceable
unless made in writing and signed by the parties.
28. ENTIRE AGREEMENT. This contract constitutes the entire contract between the
parties relating to the subject hereof, and any prior agreements pertaining
thereto, whether oral or written, have been merged and integrated into this
contract.
29. NOTICE OF ACCEPTANCE: COUNTERPARTS. This proposal shall expire unless
accepted in writing, by Buyer and Seller, as evidenced by their signatures
below, and the offering party receives notice of such acceptance on or before
November 19, 1996 (Acceptance Deadline). If accepted, this document shall become
a contract between Seller and Buyer. A copy of this document may be executed by
each party, separately, and when each party has
<PAGE>
executed a copy thereof, such copies taken together shall be deemed to be a full
and complete contract between the parties.
/S/ MARVIN E. KORF
- --------------------------------- --------------------------------
Buyer 123 Cascade Associates LLC Buyer
E.V. President
Date of Buyer's signature 11/15, 1996 Date of Buyer's signature , 19
----------- -------------
Buyer's Address 717 North Tejon Street, Colorado Springs, CO 80903
----------------------------------------------------------------
/S/ ROBERT E. THRAILKILL /S/ ROBERT E.THRAILKILL
- ---------------------------------- --------------------------------
Seller Bishop Powers, Ltd Seller By: Bishop Capital
Corp, Managing Ptr
Date of Seller's signature 11/19, 1996 Date of Seller's signature , 19
------------ ----------
Sellers Address 716 College View, Riverton, WY 82501
----------------------------------------------------------------
The undersigned Broker(s) acknowledges receipt of the earnest money deposit
specified in Section 3, and Selling Company confirms its Broker Relationship as
set forth in Section 24.
Selling Company
Highland Commercial Group, LLC, 2 N Cascade Ave, #800, Colo Spgs, CO 80903
--------------------------------------------------------------------------
Name and Address
By:
----------------------------------- -------------------------------19----
James E. Spittler, Jr. Date
Listing Company
Highland Commercial Group, LLC, 2 N Cascade Ave, #800, Colo Spgs,CO 80903
-------------------------------------------------------------------------
Name and Address
By:
----------------------------------- -------------------------------19---
James E. Spittler, Jr. Date
Note: Closing Instructions should be signed at the time this
contract is signed.
<PAGE>
ADDENDUM A
Addendum to the Vacant Land Contract
to Buy and Sell Real Estate, Dated
November 14, 1996 between 123 Cascade
Associates, LLC., as "Buyer" and Bishop
Powers Ltd, a Colorado Limited
Partnership as "Seller".
ADDITIONAL PROVISIONS
a. To the best of Seller's knowledge, there is not a Vacant Land Property
Disclosure form, and therefore Seller is not providing one to Buyer. Buyer shall
have sixty (60) days from the date of mutual acceptance hereof to determine at
its sole discretion that the property is suitable for its intended use with
respect to, but not limited to, soils, ingress and egress, environmental and
hazardous material issues, traffic, zoning, and any other matter it determines,
in its sole discretion to be pertinent. If Buyer gives Seller written notice of
unsatisfactory conditions prior to the expiration of the inspection period, and
said objections have not been mutually settled within 14 days of the Objection
(Resolution Deadline), then this contract shall terminate, earnest money
returned to Buyer and parties hereto released from all obligations hereunder. If
Buyer does not give Seller written objections prior to the end of the inspection
period, (objection Deadline), then this contract shall be deemed to be in full
force and effect and Buyer shall redeem the earnest money promissory note.
b. The closing shall take place within 20 days of final approval of the plat by
the City of Colorado Springs.
c. The tract of land shall be the southeast corner of the northwest corner of
Palmer Park Blvd, and Powers Blvd, and shall be approximately 45,632 sf, with
the final size to be determined via the preliminary plat, and mutually agreed
upon during the inspection period.
d. The Seller shall be responsible for delivering to Buyer a platted lot,
including required offsite public improvements and for the installation of the
interior access roads and utilities, including water, gas, sewer and electric,
to the site.
e. The Purchase price shall be not less than $350,000 or $7.67 psf times the
actual size of the platted lot, with the purchase price to be adjusted up based
upon any difference in size of the final configuration versus the 45,632 sf
outlined above.
f. Buyer shall supply Seller with its development plan for the site so that
Seller can prepare a project development plan and plats for the City of Colorado
Springs. This Agreement is specifically contingent upon Seller getting the
necessary approvals from the City of Colorado Springs for the project
development plan and plats, on terms and conditions that are acceptable to
Seller at its sole discretion. Any changes to the Buyer's site development
<PAGE>
plan requested by Seller or the City must be approved by the buyer. Buyer and
Seller must agree upon a mutually agreeable project landscape plan into which
Buyer will integrate its landscape plan.
g. Buyer and Seller to agree upon the site rough grading plan during the
inspection period.
h. Purchaser acknowledges and agrees that Seller has not made, does not make and
specifically negates and disclaims any representations, warranties, promises,
covenants, agreements or guaranties of any kind or character whatsoever, whether
express or implied, oral or written, past, present or future, of, as to,
concerning or with respect to (i) the value, nature, quality or condition of the
Property, including, without limitation, the water, soil and geology; (ii) the
income to be derived from the Property; (iii) the suitability of the Property
for any and all activities and uses which Purchaser may conduct thereon; (iv)
the compliance of or by the Property or its operation with any laws, rules,
ordinances or regulations of any applicable governmental authority or body; (v)
the habitability, merchantability, marketability, profitability or fitness for a
particular purpose of the Property, or (vi) any other matter with respect to the
Property; and Seller specifically disclaims any representations regarding
compliance with any environmental protection, pollution or land use laws, rules,
regulations, orders or requirements, including solid waste, as defined by the
U.S. Environmental Protection Agency regulations at 40 C.F.R., Part 261, or the
disposal or existence, in or on the Property, of asbestos or any hazardous
substance, as defined by the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended, and regulations promulgated thereunder.
Purchaser further acknowledges and agrees that having been given the opportunity
to inspect the Property, Purchaser is relying solely on its own investigation of
the Property and not on any information provided or to be provided by Seller or
Broker other than as is stated in this Contract. Purchaser further acknowledges
and agrees that any information provided or to be provided by or on behalf of
Seller with respect to the Property was obtained from a variety of sources and
that Seller has not made any independent investigation or verification of such
information and makes no representations as to the accuracy or completeness of
such information. Seller is not liable or bound in any manner by any oral or
written statements, representations or information pertaining to the Property,
or the operation thereof, furnished by any real estate broker, agent, employee,
servant or other person. Purchaser further acknowledges and agrees that to the
maximum extent permitted by law, the sale of the Property as provided for herein
is made on an "AS IS" condition and basis with all faults. Purchaser and anyone
<PAGE>
claiming by, through or under Purchaser hereby fully and irrevocably releases
Seller, his employees, representatives and agents, from any and all claims that
it may now or hereafter acquire against Seller, his employees, representatives
and agents for any cost, loss, liability, damage, expense, demand, action or
cause of action arising from or related to any defects, errors, omissions or
other conditions, including environmental matters, affecting the Property, or
any portion thereof. It is understood and agreed that the purchase price has
been adjusted by prior negotiation to reflect that all of the Property is sold
by Seller and purchased by Purchaser subject to the foregoing. In the event that
Purchaser does not notify Seller in writing, during the above 60 day period that
the property is not acceptable, "Notification," then this contract shall be
deemed to be in full force and effect, subject to the other provisions of the
Agreement.
i. Purchaser acknowledges timely disclosure by James E. Spittler, Jr., and
Highland Commercial Group that they are acting as Transaction Broker in this
transaction.
j. Marvin Korf, a member of the purchasing entity hereby discloses that he is a
licensed real estate broker in the State of Colorado.
k. Seller will supply an ALTA survey of the property to Buyer.
l. Seller shall provide to Buyer a Reciprocal Easement Agreement to be used
throughout the project, a Common Area Maintenance Agreement to be used within
the project, and a reciprocal easement agreement between the subject property
and the adjacent property to the north, said Agreements to mutually agreed upon
prior to expiration of the inspection period.
m. Seller agrees to provide an irrevocable letter of credit, on a bank and in a
form that is approved by Buyer, said approval not to be unreasonably withheld,
to provide surety to Buyer that the on and off-site improvements will be made in
a timely manner. Said surety to be based upon signed engineering and
construction contracts that are approved by buyer and Seller. With this letter
of credit in place, Buyer will close per paragraph b above.
n. This contract is specifically contingent upon the necessary approvals from
the city for the plat and for the use of the site as a fast food restaurant. In
the event said approvals are not received on or before March 31, 1997, then
either party may extend this contract until April 30, 1997. If neither party
extends the contract then it shall be deemed terminated, earnest money shall be
returned to Buyer, and parties hereto released from obligations hereunder. Buyer
shall have the right to extend the contract, unilaterally, if the plat has not
<PAGE>
been approved by April 30, 1997 until May 31st, 1997. In the event the plat is
not approved by May 31, 1997 then this contract shall terminate, earnest money
shall be returned to Buyer and parties hereto released from obligations
hereunder.
o. Buyer shall be entitled to a pro rata share of signage on one of the two
proposed project signs. The parties shall agree to the signage during the
inspection period.
ATTACHMENT F
Subsidiaries of the Registrant
State or other Jurisdiciton
of Incorporation or
Name Organization
---- ---------------------------
Bridger Creek Partnership Wyoming
Bishop Powers, Ltd. Colorado
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> MAR-31-1997 MAR-31-1996
<PERIOD-END> SEP-30-1996 MAR-31-1996
<CASH> 17,603 66,770
<SECURITIES> 629,244 844,734
<RECEIVABLES> 158,451 88,758
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 815,909 1,018,222
<PP&E> 314,693 314,707
<DEPRECIATION> 118,044 111,045
<TOTAL-ASSETS> 2,119,657 2,305,207
<CURRENT-LIABILITIES> 204,676 103,541
<BONDS> 0 0
0 0
0 0
<COMMON> 8,854 8,854
<OTHER-SE> 1,906,126 2,192,812
<TOTAL-LIABILITY-AND-EQUITY> 2,119,657 2,305,207
<SALES> 29,643 69,931
<TOTAL-REVENUES> 29,643 69,931
<CGS> 9,811 19,192
<TOTAL-COSTS> 303,871 753,016
<OTHER-EXPENSES> 11,365 206,531
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 5,477 830
<INCOME-PRETAX> (233,426) (118,025)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (233,426) (118,025)
<DISCONTINUED> 0 (25,850)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (233,426) (143,875)
<EPS-PRIMARY> (.26) (.17)
<EPS-DILUTED> (.26) (.17)
</TABLE>
