OPTION CONTRACT TO PURCHASE CYRIL PETROCHEMICAL
CORPORATION PROMISSORY NOTE, MORTGAGE AND SECURITY AGREEMENT,
AND ALL ADDITIONAL COLLATERAL
COMES NOW, Oklahoma Energy Corporation, as "Purchaser", and the Oklahoma
Industrial Finance Authority and GEO American Resources, Inc. (by and through
the Oklahoma Industrial Finance Authority) collectively the "Seller," and they
recite the following:
WHEREAS, the, Oklahoma Industrial Finance Authority (the "OIFA") is a body
corporate and politic created by the Oklahoma Constitution, Article X, Section
33A, and the Oklahoma Statutes, Title 64, Sections 851-878. OIFA is a public
corporation and instrumentality of the State of Oklahoma which makes industrial
development loans through industrial development agencies. OIFA has its
principal place of business in the City of Oklahoma City, Oklahoma County, State
of Oklahoma.
WHEREAS, on the 10th day of November, 1993, OIFA made an industrial
development loan pursuant to the Oklahoma Industrial Finance Authority Act,
Title 74, Oklahoma Statutes, Section 857, to the Oklahoma Development Finance
Authority (the "ODFA"), a public trust, serving as an industrial development
agency, in the sum of Seven Hundred Fifty Thousand Dollars ($750,000) evidencing
said loan;
WHEREAS, pursuant to the loan agreement ODFA, in turn, reloaned the total
sum Seven Hundred Fifty Thousand Dollars ($750,000) in cash borrowed from OIFA
to Cyril Petrochemical Corporation and Cayman Resources Corporation which
jointly and severally, made, executed, and delivered to ODFA their promissory
note dated November 10, 1993, in the sum of Seven Hundred Fifty Thousand Dollars
($750,000) evidencing said loan (the "Promissory Note");
WHEREAS, as part of the above transaction and for value received, ODFA
assigned and delivered the Promissory Note to OIFA which presently holds the
Promissory Note;
WHEREAS, as part of the above transaction and to secure payment of the
principal and interest owing on the Promissory Note and the Loan Agreement,
Cyril Petrochemical Corporation and Cayman Resources Corporation executed and
delivered to OIFA that certain Mortgage and Security Agreement dated November
10, 1993, and filed in the Office of the County Clerk for Caddo County on
November 18, 1993, and recorded in Book 1840 at page 142 through 155, covering
that real estate situated in Caddo County, Oklahoma, as more particularly
described in Exhibit "A" attached hereto. To further secure repayment of said
obligations, Cyril Petrochemical Corporation executed and delivered to OIFA a
Uniform Commercial Code Financing Statement as to all its present and future
equipment, except the "Cracking Unit" which was centrally filed in the Office of
the County Clerk for Oklahoma County, State of Oklahoma, on November 10, 1993,
and numbered N03764;
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WHEREAS, to further secure repayment of said obligation, Cayman Resources
Corporation pledged to OIFA all outstanding common stock of Cyril Petrochemical
Corporation owned by Cayman Resources and delivered to OIFA its unregistered
stock share certificate bearing number 25 in the amount of 1,000 shares; and
OIFA took possession of said stock certificate and has maintained possession at
all times since November 1993.
WHEREAS, as of August 1, 1998, there was due and owing on the Promissory
Note and mortgage sum of One Million One Hundred Ninety Nine Seven Hundred
Twenty Four Dollars and Ninety Nine Cents ($1,119,724.90) plus Fourteen Percent
(14%) interest per annum, accruing from August 1st, 1998, together with all
costs and expenses to maintain the primises under the mortgage;
WHEREAS, said Promissory Note is in default and an action is pending in
cause numbered CJ 94-237, in the District Court for Caddo County, State of
Oklahoma, seeking personal judgment against Cyril Petrochemical Corporation and
Cayman Resources Corporation, and the foreclosure and sale of said mortgaged
property. Further, that in said proceeding there is a lien for labor and
material in the name of Lauren Constructors, Inc. which has been granted
judgment in the amount of Three Hundred Twenty One Thousand Six Hundred Ninety
Two Dollars and Forty Cents ($321,692.40), plus costs and interests, and that
said lien has a priority superior to the mortgage lien of OIFA; and that said
Lauren lien has been purchased and assigned to GEO American Resources, Inc., a
Oklahoma corporation, and;
WHEREAS, OIFA and GEO American Resources, Inc. have agreed to market and
sell all their respective interests in the OIFA Promissory Note, mortgage and
all additional collateral and the GEO American, Inc. lien for the combined total
sum of Nine Hundred Fifty Thousand Dollars ($950,000), and to share the proceeds
according to Exhibit "B" attached hereto;
NOW for the sum of Twenty Thousand Dollars ($20,000) payable concurrently
with the execution of this Agreement, Oklahoma Energy Corporation shall have the
exclusive Option to purchase the Promissory Note, mortgage, and all additional
collateral, including but not limited to all rights, title and interest in which
GEO American, Inc. may have in the subject premises, all for the purchase price
of Nine Hundred Fifty Thousand Dollars ($950,000). This Option shall be for a
period of one-hundred twenty (120) calendar days from June 30, 2000, and shall
be exercised by notice from Oklahoma Energy Corporation to OIFA ten (10)
business prior to the expiration of the Option term. The Option consideration
shall be applied to the purchase price;
FURTHER, Oklahoma Energy Corporation shall have the right to extend the
original Option term for four (4) additional Option terms of one (1) month each
after the expiration of the original Option term for an additional payment to
OIFA of Ten Thousand Dollars ($10,000) for each month extension by Notice from
Oklahoma Energy Corporation and payment to OIFA on or before five (5) business
days prior to the expiration of the original Option term. The additional payment
shall be applied to the purchase price.
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Upon the exercise by Oklahoma Energy Corporation of its Option, as extended
if applicable, and upon payment to OIFA of the remainder of the purchase price,
OIFA and GEO American Resources, Inc. agree to sell, convey, and assign their
respective interests using the following form:
The Oklahoma Industrial Finance Authority hereby sells, conveys, transfers,
assigns, and delivers without recourse to Oklahoma Energy Corporation, the above
described Promissory Note, which is attached hereto, and all collateral which
secures said obligation, including the Mortgage and Security Agreement, dated
November 10, 1993, the Uniform Commercial Code Financing Statement numbered
N03764; and the Cyril Petrochemical Corporation unregistered stock share
certificate number 25 in the amount of 1000 shares; and
GEO American Resources, Inc. hereby sells, conveys, transfers, assigns, and
delivers without recourse to Oklahoma Energy Corporation, all of its right,
title and interest in the above described lien for labor and material and
personal judgment on said lien.
This Option and Purchase Agreement shall be governed under the laws of the
State of Oklahoma.
Dated this 30th date of June, 2000.
SELLER:
THE OKLAHOMA INDUSTRIAL FINANCE AUTHORITY
By: /s/ Stephen J. Blake
------------------------------------------
Stephen J. Blake, Sr. Vice President
Dated this 28th date of June, 2000
PURCHASER:
OKLAHOMA ENERGY CORPORATION
By: /s/ Jan H. Schutze
------------------------------------------
Jan H. Schutze, Chief Executive Officer
And President
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