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PAGE 1 OF 30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. THREE)*
INLAND RESOURCES INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
457469 10 4
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(CUSIP Number)
KYLE R. MILLER, 410 17TH STREET, SUITE 700, DENVER, COLORADO 80202
WITH A COPY TO: MIKE PARSONS, ESQ., GLAST, PHILLIPS & MURRAY, P.C.
13355 NOEL ROAD, 2200 ONE GALLERIA TOWER, DALLAS, TEXAS 74240
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
SEPTEMBER 8, 1998
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(Date of Event which Requires Filing of this Settlement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S) 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [_]
Note: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits. See (S) 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
- --------------------------------- ---------------------------------
CUSIP No. 457469 10 4 PAGE 2 OF 30 PAGES
----------- - --
- --------------------------------- ---------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kyle R. Miller
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
Number of 382,254
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person 5,439,149
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
382,254
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,439,149
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,821,403
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
66.6%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
- --------------------------------- ---------------------------------
CUSIP No. 457469 10 4 PAGE 3 OF 30 PAGES
----------- - --
- --------------------------------- ---------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KRM Acquisition Corp.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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7 SOLE VOTING POWER
Number of 5,439,149
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
5,439,149
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,439,149
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
64.9%
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14 TYPE OF REPORTING PERSON*
CO
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<PAGE>
SCHEDULE 13D
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CUSIP No. 457469 10 4 PAGE 4 OF 30 PAGES
----------- - --
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John E. Dyer
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
Number of 153,013
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
153,013
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
153,013
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 457469 10 4 PAGE 5 OF 30 PAGES
----------- - --
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bill I. Pennington
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
Number of 148,676
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
148,676
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
148,676
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 457469 10 4 PAGE 6 OF 30 PAGES
----------- - --
- --------------------------------- ---------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael J. Stevens
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
Number of 12,240
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
12,240
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,240
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 457469 10 4 PAGE 7 OF 30 PAGES
----------- - --
- --------------------------------- ---------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David P. Donegan
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
Number of 12,500
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
12,500
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,500
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 457469 10 4 PAGE 8 OF 30 PAGES
----------- - --
- --------------------------------- ---------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
C.W. Fink
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
Number of 1,000
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,000
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.01%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 457469 10 4 PAGE 9 OF 30 PAGES
----------- - --
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William T. War
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
Number of -0-
Shares
Beneficially -------------------------------------------------------------
Owned by
Each 8 SHARED VOTING POWER
Reporting
Person
With
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
-0-
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14 TYPE OF REPORTING PERSON*
CO
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<PAGE>
Page 10 of 30
ITEM 1. SECURITY AND ISSUER.
Common stock, par value $.001 per share (the "Common Stock"), of Inland
Resources Inc. (the "Issuer"), 410 17th Street, Suite 700, Denver, Colorado
80202.
ITEM 2. IDENTIFY AND BACKGROUND.
(a) The names of the persons filing this statement are:
(i) Kyle R. Miller ("Miller");
(ii) KRM Acquisition Corp., a Texas corporation ("KRM");
(iii) John E. Dyer ("Dyer");
(iv) Bill I. Pennington ("Pennington");
(v) Michael J. Stevens ("Stevens");
(vi) David P. Donegan ("Donegan");
(vii) C.W. Fink ("Fink"); and
(viii) William T. War ("War").
(b) The principal business address of KRM, and the residence address of the
natural persons, listed in (a), above, are as follows:
(i) Miller - 19 South Lane
Englewood, CO 80110
(ii) KRM - 410 17th Street, Suite 700
Denver, Colorado 80202
(iii) Dyer - 4060 S. Holly
Englewood, CO 80111
(iv) Pennington - 4 Club Lane
Columbine Valley, CO 80123
(v) Stevens - 9077 West Cross, Apt. 104
Littleton, CO 80123
(vi) Donegan - 10802 West 28th Place
Lakewood, CO 80215
(vii) Fink - 1965 Ridgehill Drive
Bountiful, UT 84010
(viii) War - 4113 Fairwood Drive
Midland, Texas 79707
(c) The principal business of KRM, and the principal occupation of the
natural persons, listed in (a), above, are as follows:
(i) Miller - the principal occupation of Miller is President and
Chief Executive Officer of the Issuer.
(ii) KRM - KRM is a newly formed corporation that has not previously
engaged in any business activity and does not presently conduct
any business activity.
<PAGE>
Page 11 of 30
(iii) Dyer - the principal occupation of Dyer is Vice President and
Chief Operating Officer of the Issuer.
(iv) Pennington - the principal occupation of Pennington is Vice
President and Chief Financial Officer of the Issuer.
(v) Stevens - the principal occupation of Stevens is Vice
President, Secretary and Treasurer of the Issuer.
(vi) Donegan - the principal occupation of Donegan is Manager of
Corporate Development of the Issuer.
(vii) Fink - the principal occupation of Fink is President of Inland
Refining, Inc, a wholly-owned subsidiary of the Issuer, whose
address is 2355 South 1100 West, Woods Cross, Utah 84087.
(viii) War - the principal occupation of War is Vice President of the
Issuer.
(d) None of the persons filing this report identified in subparagraph (a),
above, has, during the past five years, been convicted in any criminal
proceeding (excluding traffic violations and similar misdemeanors).
(e) None of the persons filing this report identified in subparagraph (a),
above, has, during the past five years, been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
(f) KRM is a Texas corporation, and each of Miller, Dyer, Pennington,
Stevens, Donegan, Fink and War are citizens of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS, OR OTHER CONSIDERATION.
The issued and outstanding shares of Common Stock currently owned of record
and beneficially by each of Miller, Dyer, Pennington, Stevens, Donegan, Fink and
War were acquired by each of them with personal funds; and any shares to be
acquired in the future pursuant to outstanding options or warrants granted to
each of such persons are contemplated to be acquired with personal funds of each
such person.
On September 8, 1998, Pengo Securities Corp.("Pengo"), together with
Randall D. Smith, Jeffrey A. Smith and John W. Adams (collectively with Pengo,
the "Sellers"), entered into a letter agreement dated September 8, 1998 (the
"Letter Agreement") (filed as Exhibit 2 to this Amendment No. 3) with KRM
granting KRM the exclusive right until October 19, 1998 (extendable upon certain
payments being made by KRM to the Sellers until November 3, 1998) to act as
placement agent for the purpose of finding a person or persons, which may
include KRM, to purchase all of the shares of Common Stock held by the Sellers.
Subject to satisfaction of the conditions set forth in the Letter Agreement,
the Sellers are obligated to execute a definitive purchase agreement with a
purchaser
<PAGE>
Page 12 of 30
identified by KRM.
KRM has retained ING Baring Furman Selz LLC and McDonald & Company
Securities, Inc. (collectively the "Advisors") as financial advisors to KRM in
connection with an undertaking by KRM to raise funds for a private placement of
securities of KRM to enable KRM to be the purchaser of the shares of Common
Stock held by the Sellers, and to close the purchase of such shares within the
time frames set forth in the Letter Agreement. No transactions have been
entered into with any potential purchaser of securities of KRM as of the date
hereof, and KRM will not have funds sufficient to acquire the shares of Common
Stock owned by the Sellers unless it is able to successfully raise such funds
through the issuance of securities to one or more purchasers on terms and
conditions satisfactory to KRM.
ITEM 4. PURPOSE OF TRANSACTION.
If KRM successfully raises funds through the placement of its securities
and successfully consummates the acquisition of the shares of Common Stock owned
by the Sellers, KRM presently intends to pursue a proposal with the Issuer to
merge or consolidate with the Issuer or to otherwise make an offer to acquire
the remaining issued and outstanding shares of Common Stock of the Issuer at the
same price paid to the Sellers. Any such transaction will be subject to
negotiations with, and approval by, the Issuer, and upon the successful
placement of securities of KRM in amounts sufficient to fund any such
transaction. Upon the closing of any such transaction with the Issuer or the
holders of the remaining outstanding shares of Common Stock, KRM presently
expects that the Issuer would cease to be a reporting company under the
Securities Exchange Act of 1934 (the "Exchange Act").
It is also anticipated by KRM that if it successfully closes the purchase
of the shares of Common Stock owned by the Sellers, the three members of the
Board of Directors who are employees of Pengo or its affiliates would resign and
be replaced by persons appointed by KRM.
KRM has also retained the Advisors as initial purchasers or as financial
advisors and placement agents in connection with the offering of notes or other
debt instruments by KRM to fund various planned activities of the Issuer
relating to its oil refineries and a potential oil pipeline.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
KRM may be deemed to beneficially owns the 5,439,149 shares of Common Stock
owned by the Sellers, as a result of the Letter Agreement and KRM's right to
purchase such shares if it successfully raises the necessary funds and otherwise
satisfies the conditions of the Letter Agreement prior to the expiration of the
Letter Agreement. The 5,439,149 shares owned by the Sellers constitute
approximately 64.9% of the issued and outstanding shares of Common Stock of the
Issuer.
<PAGE>
Page 13 of 30
Miller, Dyer, Pennington, Stevens, Donegan, Fink and War presently own all
of the outstanding capital stock of KRM, and have entered into a voting
agreement pursuant to which they each have agreed to vote all of their shares in
KRM in the manner directed by Miller. Miller is also the sole director of KRM
and its President. Consequently, Miller presently has the sole voting and
dispositive power with respect to the shares of Common Stock owned by the
Sellers if they are successfully acquired by KRM, and may, therefore, also be
deemed to beneficially own the 5,439,149 shares of Common Stock owned by the
Sellers. Miller owns 23,343 shares of the issued and outstanding shares of
Common Stock of the Issuer, and has vested options and warrants to acquire an
additional 358,911 shares (212,561 shares are covered by vested options or
warrants with an exercise price that was out-of-the-money on September 15, 1998,
but these shares are included in Miller's beneficial ownership for purposes of
this Schedule 13D). Including the shares owned by the Sellers that may be
acquired by KRM, Miller beneficially owns 5,821,403 shares of Common Stock
(including vested options and warrants) representing approximately 66.6% of the
outstanding (including, for this purpose, the shares issuable upon exercise of
Miller's vested options and warrants) Common Stock of the Issuer.
If KRM successfully raises the necessary funds and otherwise satisfies the
conditions of the Letter Agreement prior to expiration of the Letter Agreement
and enters into a definitive agreement to purchase the shares of Common Stock
owned by the Sellers, it is possible that Miller, Dyer, Pennington, Stevens,
Donegan, Fink and War may contribute the shares of Common Stock of the Issuer
owned by them to KRM for additional shares of Common Stock of KRM. None of
these shares are included in the shares beneficially owned by KRM or Miller, and
each of KRM and Miller disclaims beneficial ownership of any of the shares of
the Issuer beneficially owned by Dyer, Pennington, Stevens, Donegan, Fink or
War. KRM disclaims beneficial ownership of any of the shares of the Issuer
beneficially owned by Miller. Each of Dyer, Pennington, Stevens, Donegan, Fink
and War disclaim beneficial ownership of the shares beneficially owned by KRM or
any of the other persons identified in this Item 4.
Dyer owns 57,513 shares of the issued and outstanding shares of Common
Stock of the Issuer, and has vested options and warrants to acquire an
additional 95,500 shares (85,000 shares are covered by vested options or
warrants with an exercise price that was out-of-the-money on September 15, 1998,
but these shares are included in Dyer's beneficial ownership for purposes of
this Schedule 13D). Consequently, Dyer beneficially owns 153,013 shares of
Common Stock (including vested options and warrants) representing approximately
1.8% of the outstanding (including, for this purpose, the shares issuable upon
exercise of Dyer's vested options and warrants) Common Stock of the Issuer.
Pennington owns 68,676 shares of the issued and outstanding shares of
Common Stock of the Issuer, and has vested options and warrants to acquire an
additional 80,000 shares (80,000 shares are covered by vested options or
warrants with an exercise price that was out-of-the-money on September 15, 1998,
but these shares are included in Pennington's beneficial ownership for purposes
of this Schedule 13D). Consequently, Pennington beneficially owns 148,676
shares of Common Stock (including vested options and warrants) representing
approximately 1.8% of the outstanding
<PAGE>
Page 14 of 30
(including, for this purpose, the shares issuable upon exercise of Pennington's
vested options and warrants) Common Stock of the Issuer.
Stevens does not own any shares of the issued and outstanding shares of
Common Stock of the Issuer, but has vested options and warrants to acquire
12,240 shares (12,240 shares are covered by vested options or warrants with an
exercise price that was out-of-the-money on September 15, 1998, but these shares
are included in Stevens' beneficial ownership for purposes of this Schedule
13D). Consequently, Stevens beneficially owns 12,240 shares of Common Stock
(including vested options and warrants) representing approximately 0.1% of the
outstanding (including, for this purpose, the shares issuable upon exercise of
Dyer's vested options and warrants) Common Stock of the Issuer.
Donegan does not own any shares of the issued and outstanding shares of
Common Stock of the Issuer, but has vested options and warrants to acquire
12,500 shares (12,500 shares are covered by vested options or warrants with an
exercise price that was out-of-the-money on September 15, 1998, but these shares
are included in Donegan's beneficial ownership for purposes of this Schedule
13D). Consequently, Donegan beneficially owns 12,500 shares of Common Stock
(including vested options and warrants) representing approximately 0.1% of the
outstanding (including, for this purpose, the shares issuable upon exercise of
Donegan's vested options and warrants) Common Stock of the Issuer.
Fink owns 1,000 shares of the issued and outstanding shares of Common Stock
of the Issuer, representing approximately 0.01% of the outstanding Common Stock
of the Issuer, and has no vested options to acquire shares of Common Stock of
the Issuer.
War does not own any shares of the issued and outstanding shares of Common
Stock of the Issuer, and has no vested options to acquire shares of Common Stock
of the Issuer.
(b) KRM may be regarded as having the sole power to vote or to direct the
vote of, or to dispose or to direct the disposition of, the shares of Common
Stock reported in Item 5(a), above, as beneficially owned by KRM.
Miller may be regarded as having the shared power to vote or to direct the
vote of, or to dispose or to direct the disposition of, the shares of Common
Stock beneficially owned by KRM reported in Item 5(a), above, and may be
regarded as having the sole power to vote or to direct the vote of, or to
dispose or to direct the disposition of, the other shares of Common Stock owned
by him reported in Item 5(a), above.
Dyer may be regarded as having the sole power to vote or to direct the vote
of, or to dispose or to direct the disposition of, the shares of Common Stock
owned by him reported in Item 5(a), above.
<PAGE>
Page 15 of 30
Pennington may be regarded as having the sole power to vote or to direct
the vote of, or to dispose or to direct the disposition of, the shares of Common
Stock owned by him reported in Item 5(a), above.
Stevens may be regarded as having the sole power to vote or to direct the
vote of, or to dispose or to direct the disposition of, the shares of Common
Stock owned by him reported in Item 5(a), above.
Donegan may be regarded as having the sole power to vote or to direct the
vote of, or to dispose or to direct the disposition of, the shares of Common
Stock owned by him reported in Item 5(a), above.
Fink may be regarded as having the sole power to vote or to direct the vote
of, or to dispose or to direct the disposition of, the shares of Common Stock
owned by him reported in Item 5(a), above.
War does not own any shares of Common Stock of the Issuer.
(c) There have been no transactions by the reporting persons in the Common
Stock during the past 60 days except as described above.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, any
securities of the Issuer beneficially owned by the reporting persons as
described herein.
(e) Not applicable.
ITEM 6. CONTRACTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Except as set forth in this Schedule 13D, none of the filing persons are
aware of any contracts, arrangements, understandings or relationships (legal or
otherwise) among themselves or between any of such persons and any other person
with respect to any securities of the Issuer, including but not limited to,
transfer or voting of any of the securities, finder's fees, joint ventures, loan
or option arrangements, put or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Joint Filing Agreement among the filing persons.
<PAGE>
Page 16 of 30
Exhibit 2 - Letter Agreement with the Sellers.
Exhibit 3 - Shareholders' Agreement and Voting Agreement.
<PAGE>
Page 17 of 30
SIGNATURES
----------
After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete and correct.
Dated: September 15, 1998 KRM ACQUISITION CORP.
By: /s/ Kyle R. Miller
-------------------------
Kyle R. Miller, President
Dated: September 15, 1998 /s/ Kyle R. Miller
----------------------------------------
KYLE R. MILLER, individually
Dated: September 15, 1998 /s/ John E. Dyer
----------------------------------------
JOHN E. DYER, Individually
Dated: September 15, 1998 /s/ Bill I. Pennington
----------------------------------------
BILL I. PENNINGTON, Individually
Dated: September 15, 1998 /s/ Michael J. Stevens
----------------------------------------
MICHAEL J. STEVENS, Individually
Dated: September 15, 1998 /s/ David P. Donegan
----------------------------------------
DAVID P. DONEGAN, Individually
Dated: September 15, 1998 /s/ C. W. Fink
---------------------------------------
C. W. FINK, Individually
Dated: September 15, 1998 /s/ William T. War
---------------------------------------
WILLIAM T. WAR, Individually
<PAGE>
Page 18 of 30
EXHIBIT 1
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(k), the undersigned hereby execute this Joint Filing
Agreement with respect to filing of a Schedule 13D with respect to Inland
Resources Inc., and declare that such statement is filed on behalf of each of
the undersigned.
Dated: September 15, 1998 KRM ACQUISITION CORP.
By: /s/ Kyle R. Miller
-------------------------
Kyle R. Miller, President
Dated: September 15, 1998 /s/ Kyle R. Miller
----------------------------------------
KYLE R. MILLER, individually
Dated: September 15, 1998 /s/ John E. Dyer
----------------------------------------
JOHN E. DYER, Individually
Dated: September 15, 1998 /s/ Bill I. Pennington
----------------------------------------
BILL I. PENNINGTON, Individually
Dated: September 15, 1998 /s/ Michael J. Stevens
----------------------------------------
MICHAEL J. STEVENS, Individually
Dated: September 15, 1998 /s/ David P. Donegan
----------------------------------------
DAVID P. DONEGAN, Individually
Dated: September 15, 1998 /s/ C. W. Fink
---------------------------------------
C. W. FINK, Individually
Dated: September 15, 1998 /s/ William T. War
---------------------------------------
WILLIAM T. WAR, Individually
<PAGE>
Page 19 of 30
EXHIBIT 2
Pengo Securities Corp.
885 Third Avenue, 34th Floor
New York, New York 10022
September 8, 1998
KRM Acquisition Corp.
c/o Kyle R. Miller
410 17th Street
Suite 700
Denver, CO 80202
Gentlemen:
1. Designation as Placement Agent. Pengo Securities Corp.
("Pengo"), together with Randall D. Smith, Jeffrey A. Smith, John W. Adams,
(collectively with Pengo, the "Sellers"), hereby grant "KRM Acquisition Corp.
("KRM") the exclusive right until the Expiration Date (defined below) to act as
placement agent for the purpose of finding a person or persons (which may
include KRM) (the "Purchaser") to purchase all of the Common Stock, par value
$.001 per share (the "Common Stock"), of Inland Resources Inc., a Washington
corporation ("Inland"), now owned by the Sellers. During such time, each of the
Sellers agrees not to transfer, sell or otherwise dispose of any shares of
Common Stock other than pursuant to a definitive purchase agreement entered into
by the Sellers and the Purchaser.
2. Term. This letter agreement will terminate on October 19, 1998
(subject to extension, the "Expiration Date"); provided, however, that the
Expiration Date may be extended by KRM until November 3, 1998 upon the payment
on or before November 3, 1998 to Pengo, on behalf of all the Sellers, of
$100,000 in cash.
3. Obligation of the Sellers to Sell. The Sellers shall only be
obligated to sell their shares of Common Stock to the Purchaser pursuant to a
definitive purchase agreement to be executed by each of the Sellers and the
Purchaser prior the Expiration Date ("Definitive Purchase Agreement"). Each of
the Sellers hereby covenants and agrees to enter into a Definitive Purchase
Agreement if the following conditions are met: (i) the terms and conditions
(other than those referred to in the following clauses (ii), (iii) and (iv) of
this paragraph 3) of the Definitive Purchase Agreement shall be satisfactory to
each of the Sellers, (ii) the Definitive Purchase Agreement shall
<PAGE>
Page 20 of 30
provide that the purchase price per share of Common Stock is not less than
$12.00, (iii) the Definitive Purchase Agreement shall provide that if the
Purchaser resells any shares of Common Stock purchased from the Sellers within
one year of the consummation of the sale of shares of Common Stock to the
Purchaser at a price per share (the "Resale Price") greater than that received
by the Sellers from the Purchaser (the "Sale Price") the Purchaser shall
promptly pay to Pengo, on behalf of all the Sellers, one-half of the difference
between the Resale Price and the Sale Price (the Definitive Purchase Agreement
to include appropriate provisions to cover a Resale Price that may not be
entirely in cash or in one installment), and (iv) the Definitive Purchase
Agreement shall have been approved by the board of directors of Inland (the
"Board") prior to its execution by the Sellers and the Purchaser. Each of the
Sellers further covenants and agrees to use its or his reasonable efforts to
cause the Board to approve the Definitive Purchase Agreement that meets the
conditions specified in the previous sentence.
Without limitation of the foregoing, a merger, recapitalization or
other transaction involving Inland, which is entered into simultaneously with or
following the purchase of Common Stock pursuant to a Definitive Purchase
Agreement, in which the holders of Common Stock and Class C Preferred Stock of
Inland other than the Sellers receive consideration in excess of the Sale Price,
shall be covered by clause (iii) of this Paragraph 3.
4. Obligations of the Placement Agent.
(a) KRM will use reasonable efforts to find a Purchaser, to
engage McDonald & Company and ING Barings, as investment bankers to aid in such
efforts, and to negotiate the terms of a Definitive Purchase Agreement meeting
the conditions set forth in Paragraph 3.
(b) The sale of the Common Stock pursuant to a Definitive
Purchase Agreement is to be effected pursuant to the exemption from the
registration requirements of the securities Act of 1933, as amended (the "Act"),
provided by Section 4(2) thereof. Accordingly, KRM agrees that:
(i) Any offers of the Common Stock will be made only to
corporate and institutional investors, each of which has such knowledge and
experience In financial and business matters so as to render it capable of
evaluating the merits and risks of its prospective investment in the Common
Stock and who has assets or other indicia of financial stability sufficient to
enable it to bear the economic risk of investing in and holding the Common
Stock; provided, however, such offer may be to an entity, such as KRM, formed
for the purpose of acquiring the Common Stock, if all of the shareholders,
members or partners of such entity are corporate or institutional investors of
the type described above ("Purchasing Entity"). No Common Stock will
<PAGE>
Page 21 of 30
be offered to natural persons, except for members of senior management of
Inland, who also may be included as shareholders, members or partners of a
Purchasing Entity.
(ii) The Common Stock will be offered only by approaching
prospective Purchasers on an individual basis. The Common Stock will not be
offered or sold by any means of general solicitation or general advertising.
(iii) Any private placement memorandum or other materials
supplied to a prospective Purchaser will contain a statement expressly offering
an opportunity for each prospective Purchaser to ask questions of, and receive
answers from, Inland concerning the offering of the Common Stock and to obtain
additional relevant information that is not confidential or non-public
information (or, if confidential, that is subject to an appropriate
confidentiality letter) that inland or KRM possesses or can acquire without
unreasonable effort or expense.
5. Miscellaneous. This letter agreement (a) may be modified or
amended only by a written agreement executed and delivered by each of the
Sellers and KRM (b) may be executed in one or more counterparts, each such
counterpart being deemed an original instrument and all such counterparts
together constituting the same agreement and (c) shall be governed by and
construed in accordance with at laws of the State of New York applicable to
agreements to be performed entirely within such State.
If the foregoing correctly sets forth our agreement, please so
indicate in the space provided below and return one copy to each of the
undersigned. This letter will not be effective unless and until it is
countersigned by KRM.
PENGO SECURITIES CORP,
By: /s/ David A. Persing
-----------------------------
Name: David A. Persing
Title: Senior Vice President
/s/ Randall D. Smith
-------------------------------
Randall D. Smith
<PAGE>
Page 22 of 30
/s/ Jeffrey A. Smith
---------------------------------
Jeffrey A. Smith
/s/ John W. Adams
-------------------------------
John W. Adams
Accepted and agree to:
KRM ACQUISITION CORP.
By: /s/ Kyle R. Miller
------------------------
<PAGE>
EXHIBIT 3 Page 23 of 30
SHAREHOLDERS' AGREEMENT AND VOTING AGREEMENT
THIS SHAREHOLDERS' AGREEMENT AND VOTING AGREEMENT (the "Agreement") is made
and entered into effective the 8th day of September, 1998, by and between KRM
ACQUISITION CORP., a corporation existing under the laws of the State of Texas
(the "Corporation"), and KYLE R. MILLER, JOHN E. DYER, BILL I. PENNINGTON,
MICHAEL J. STEVENS, C.W. FINK, DAVID P. DONEGAN AND WILLIAM T. WAR (hereinafter
referred to individually as the "Shareholder" and jointly as the
"Shareholders").
WHEREAS, the Shareholders own all of the outstanding common stock of the
Corporation (the "Shares"); and
WHEREAS, the Shareholders believe it to be in their best interests and in
the best interest of the Corporation that their ability to transfer the Shares
be restricted and that a program be established for the purpose of the
disposition of the Shares owned by a Shareholder at the time he is no longer
associated with the Corporation; and
WHEREAS, the Shareholders have also entered into this Agreement for the
purpose of voting as a unit the Shares, and the Shareholders confirm that they
believe it to be in the best interest of the Corporation and themselves to vote
their Shares as a unit as set forth herein, for the term provided for herein,
and to provide for a means of insuring continuity and stability in the
management of the Company.
NOW THEREFORE, for and in consideration of the foregoing recitals and the
mutual promises and representations herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed by and among the parties hereto as follows:
<PAGE>
Page 24 of 30
ARTICLE I
RESTRICTIONS ON TRANSFER
1.01 RESTRICTIONS ON TRANSFER. No sale, assignment, transfer, pledge,
hypothecation, or other disposition of the Shares, now or hereafter owned or
held by any Shareholder, or by any person hereafter acquiring any such Shares or
part thereof or becoming a party to this Agreement as a Shareholder, or of any
portion therein (hereinafter referred to as a "Transfer of Shares"), shall be
valid, enforceable or effective unless made in accordance with all of the terms
and provisions of this Agreement.
1.02 TRANSFER TO THIRD PARTY; RIGHT OF FIRST REFUSAL. Neither
Shareholder shall make any Transfer of Shares unless he shall have first offered
all of his Shares to the other Shareholders in the manner and to the extent
hereinafter set forth.
(a) Third-Party Offer. The Shareholder desiring to effect a
Transfer of Shares (hereinafter referred to as the "Offeror") shall
transmit to the other Shareholders by certified mail, return receipt
requested, a true copy of a bona fide written offer for the purchase of
all of the Offeror's Shares, together with sufficient information from
which a judgment may be made as to the ability to perform such offer and
as to the desirability of permitting the prospective purchaser to be a
Shareholder of the Corporation.
(b) Option. The other Shareholders of the Corporation shall have
the option, exercisable within forty-five (45) days of the receipt of the
notice of the third-party offer of the Transfer of Shares, to purchase
such Shares at the same price per share, and upon substantially the same
terms and conditions contained in such offer, in the proportions in which
the Shares then owned by each of them compares to all of the Shares owned
by the Shareholders, excluding the Shares owned by the Offeror.
(c) Shareholder Purchase. If one or more of such Shareholders
shall signify his intention to exercise such option, and if one or more of
the other Shareholders shall refuse or fail to exercise such option, then
the accepting Shareholder(s) shall have the right to purchase from the
Offeror all of the Offeror's Shares within fifteen (15) days of the
expiration of the forty-five (45) day period, in such proportion as they
may agree among themselves, and in the absence of an agreement, in the
same proportion or proportions in which they then own Shares, excluding
the Shares owned by the Offeror and the Shares owned by the Shareholders
not electing to purchase any of the Offeror's Shares.
(d) Sale to Third Party. ln the event that Shares have been
offered for sale under and pursuant to this Section 1.02, and such offer
has not been finally accepted
<PAGE>
Page 25 of 30
by the other Shareholders in accordance with the provisions hereof, any
Shares which have not been finally accepted may be sold or disposed of upon
the terms and conditions contained in the offer within ten (10) days after
the expiration of the last date of any right to purchase, except that the
purchaser or purchasers who acquire the same shall hold the Shares subject
to the terms of this Agreement and, shall, as a condition precedent to
acquiring such Shares, be required to execute an addendum or amendment to
this Agreement expressly agreeing to be bound by all of the terms and
conditions hereof, including, without limitation, the voting provisions set
forth in Article V. Any such Shares which are not sold or disposed of
within such ten (10) day period shall again become fully subject to the
terms of this Agreement.
1.03 TRANSFER CONTRARY TO AGREEMENT. Any purported Transfer of Shares
in violation of any provisions of this Agreement shall be void and ineffectual,
shall not operate to transfer any interest or title to the purported transferee,
and shall give the Corporation and the other Shareholders an option to purchase
such Shares in the manner and on the terms and conditions provided for herein.
ARTICLE II
ESTATE AND HEIRS BOUND UPON DEATH
Upon the death of a Shareholder (the "Decedent"), the estate of the
Decedent and the heirs and beneficiaries of the Decedent who are assigned Shares
shall hold the Shares subject to the terms of this Agreement and shall, as a
condition precedent to receiving such Shares, be required to execute an addendum
or amendment to this Agreement expressly agreeing to be bound by all of the
terms and conditions hereof, including, without limitation, the voting
provisions set forth in Article V.
ARTICLE III
ASSIGNEES BOUND UNDER ALL OTHER CIRCUMSTANCES
If, upon the occurrence of the disability, divorce or any other event
relating to a Shareholder, a legal representative, former spouse or other person
is assigned all or a portion of such Shareholder's Shares or the right to vote
or dispose of such Shares, such representative, former spouse or other person
shall take and hold such Shares, or the right to vote or dispose of such Shares,
subject to the terms of this Agreement, and shall, as a condition precedent to
any such assignment, execute an addendum or amendment to this Agreement
expressly agreeing to be bound by all of the terms and conditions hereof,
including, without limitation, the voting provisions set forth in Article V.
This Article III is not intended to allow any transfer that would otherwise be
covered by Section 1.02 and any such proposed assignment shall be fully subject
to said Section 1.02.
<PAGE>
Page 26 of 30
ARTICLE IV
DISPOSITION OF SHARES UPON TERMINATION
OF EMPLOYMENT FOR ANY REASON
4.01 TERMINATION OF EMPLOYMENT. In the event the full-time employment
by the Corporation, Inland Resources Inc. ("Inland") or any successor entity of
either the Corporation or Inland (collectively referred to herein as the
"Employer") is voluntarily terminated by such Shareholder or terminated by the
Employer for any reason, so that such Shareholder is no longer employed by any
Employer (the "Terminated Shareholder"), the other Shareholders shall have the
option to purchase all, but not less than all, of the Shares of the Terminated
Shareholder (the "Terminated Shares"), as provided in this Article IV.
4.02 OPTION. The other Shareholders of the Corporation shall have the
option, exercisable within one hundred twenty (120) days of the termination, to
purchase such Terminated Shares, in the proportions in which the Shares then
owned by each of them compares to all of the Shares owned by the Shareholders,
excluding the Terminated Shares, at the purchase price set forth below.
4.03 PURCHASE PRICE. The purchase price payable to the Terminated
Shareholder for the Terminated Shares shall be an amount calculated as follows:
(i) if the termination occurs prior to the consummation of any acquisition by
the Corporation of a controlling interest in Inland, the purchase price shall be
the par value per share of each Share, or (ii) if the termination occurs after
the consummation of any acquisition by the Corporation of a controlling interest
in Inland, the purchase price shall be determined as follows: the consolidated
earnings of the Corporation for the most recently completed four fiscal quarters
before reduction for interest expense, income taxes and depletion, depreciation
and amortization ("EBITDA") shall be multiplied by six and the resulting product
will be adjusted by adding to such product the amount of consolidated net
working capital of the Corporation and then subtracting (i) the amount of all
consolidated long-term debt of the Corporation and (ii) the amount of all
preferred stock of the Corporation, and the resulting number shall be referred
to as the "Adjusted Value"; and the Adjusted Value will be divided by the
aggregate number of issued and outstanding shares of common stock of the
Corporation at the date of calculation, and the resulting quotient shall be the
price per share to be paid. Such purchase price shall be payable in cash within
one hundred fifty (150) days of the termination. In the event Kyle R. Miller is
the Terminated Shareholder, this Agreement shall be deemed automatically amended
to delete Article V without further action of any of the parties hereto.
ARTICLE V
VOTING AGREEMENT
Until such time as the Corporation shall have acquired a controlling
interest in Inland, each of the Shareholders hereby agrees that all of the
Shares held by each Shareholder shall be voted by such Shareholder at any and
all meetings of the shareholders of the Corporation (regular or special
meetings) and with respect to any actions taken by written consent of the
shareholders of the Corporation in the manner directed by Kyle R. Miller. From
and after the date the Corporation acquires a controlling interest in Inland,
each of the Shareholders hereby agrees that all of the Shares held by each
Shareholder shall be voted by such Shareholder at any and all meetings of the
shareholders of the Corporation (regular or special meetings) and with respect
to any actions taken
<PAGE>
Page 27 of 30
by written consent of the shareholders of the Corporation in the manner that a
majority of the Shares agree to vote. For this purpose, the Shareholders will
meet prior to any such meeting or taking of written consent by the shareholders
of the Corporation to determine the manner in which a majority of the Shares
desire to vote, and this decision shall be binding on all of the Shareholders as
herein set forth. Each of the undersigned Shareholders acknowledges and agrees
that this Agreement is a voting agreement created under Section B, Article 2.30
of the Texas Business Corporation Act.
ARTICLE VI
MISCELLANEOUS
6.01 SHARES ACQUIRED UNDER AGREEMENT. So long as this Agreement is in
effect, any Shares acquired by a Shareholder shall remain subject to the terms
hereof and any party not presently a Shareholder receiving or purchasing Shares
will be bound by the restrictions imposed hereunder as if an original party
hereto.
6.02 SHARE CERTIFICATES. There shall be conspicuously included on
the share certificates issued to each Shareholder, in addition to any other
legend required by the Corporation or by state or federal law, an endorsement in
substantially the following from:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
CONDITIONS AND RESTRICTIONS AS TO TRANSFER UNDER THE TERMS OF A
SHAREHOLDERS' AGREEMENT AND VOTING AGREEMENT ENTERED INTO BY THIS
CORPORATION AND CERTAIN OF ITS SHAREHOLDERS, A TRUE AND CORRECT COPY OF
WHICH IS ON FILE AT THE OFFICES OF THE CORPORATION 410 17TH STREET, SUITE
700, DENVER, COLORADO 80202, AND SAID SHARES MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED, OR VOTED, OF EXCEPT IN STRICT
ACCORDANCE WITH THE TERMS OF THAT AGREEMENT. A COPY OF SAID AGREEMENT WILL
BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON RECEIPT
BY THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE
OF A WRITTEN REQUEST OF THE HOLDER REQUESTING SUCH A COPY.
Thereafter the share certificates shall be delivered to the Shareholders, who
shall, subject to the terms of this Agreement, be entitled to exercise all
rights of ownership in such Shares. All Shares hereinafter issued to the
Shareholders shall bear the same endorsement.
6.03 FAILURE TO DELIVER SHARE CERTIFICATE. If a Shareholder (or his
personal representative) who is obligated to sell his Shares hereunder fails to
deliver the certificates representing such Shares in accordance with the terms
of this Agreement, the purchaser of such Shares may, at his option, in addition
to all other remedies he may have, send to such Shareholder
<PAGE>
Page 28 of 30
(or his personal representative) by registered mail, return receipt requested,
the applicable purchase price for such Shares. Upon receipt of proof of payment
of the purchase price (which proof shall consist of a photocopy of the check,
money order or other instrument in payment of the purchase price and a photocopy
of the receipt issued by the U.S. Postal Service upon mailing of registered mail
or such other proof as may be acceptable to the Corporation), the Corporation,
upon written notice to such Shareholder (or his personal representative), shall
(a) cancel on its books the certificates representing the Shares to be sold, (b)
issue in the name of the purchaser, in lieu thereof, a new certificate
representing such Shares, and (c) deliver such new certificate to the purchaser,
and thereupon all of the rights of such Shareholder (or his personal
representative) in and to said Shares shall terminate.
6.04 TERMINATION. This Agreement shall terminate upon the occurrence
of any of the following events:
(a) upon the receivership, bankruptcy or dissolution of the
Corporation;
(b) upon a sale or transfer of all or substantially all of the
assets of the Corporation, other than a merger with Inland, in which case
this Agreement shall remain in place with respect to all shares received
from Inland by the Shareholder in connection therewith and with respect to
Inland shares otherwise owned by the Shareholder at such time and such
shares in Inland shall thereafter be deemed to be "Shares" hereunder;
(c) whenever there is only one (1) surviving Shareholder bound by
the terms hereof; or
(d) upon the mutual written agreement of all parties who are then
bound by the terms hereof.
In the event of the termination of this Agreement, the outstanding Shares shall
be free of any restrictions imposed by this Agreement. Each Shareholder shall
surrender to the Corporation the certificates for his Shares and the Corporation
shall issue to him in lieu thereof new certificates for an equal number of
Shares without the endorsement set forth above.
6.05 BENEFIT. This Agreement shall be binding upon and inure to the
benefit of the successors, assigns, personal representatives, heirs and legatees
(sometimes referred to collectively in this Agreement as "personal
representatives") of the respective parties hereto. Each Shareholder agrees
that he will not hypothecate or otherwise create or suffer to exist any lien,
claim or encumbrance in any of his Shares at any time subject hereto, other than
the encumbrance created by this Agreement.
<PAGE>
Page 29 of 30
6.06 SPECIFIC PERFORMANCE. The parties hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
by reason of a failure to perform any of the obligations under this Agreement.
Therefore, if any party hereto shall institute any action or proceeding to
enforce the provisions hereof, any person (including the Corporation) against
whom such action or proceeding is brought hereby waives the claim or defense
therein that such party has an adequate remedy at law, and such person shall not
urge in any such action or proceeding the claim or defense that such remedy at
law exists.
6.07 ENTIRE AGREEMENT. This Agreement contains the entire agreement
of the parties hereto and no modification, amendment, change or discharge of any
term or provision of this Agreement shall be valid or binding unless the same is
in writing and signed by all the parties hereto. No waiver of any of the terms
of this Agreement shall be valid unless signed by the party against whom such
waiver is asserted.
6.08 CONSTRUCTION. The parties acknowledge that each party has had
the opportunity to review and revise this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
6.09 NOTICES. Any notice, demand, offer or other written instrument
required or permitted to be given, made or sent hereunder shall be in writing,
signed by the party giving or making the same, and shall be sent by registered
mail to all parties hereto and to the Corporation simultaneously at their
respective addresses as set forth herein. Any notice, demand, offer or other
written instrument required to be given to or sent to the estate of any decedent
hereunder shall be signed and sent, in like manner, addressed to the personal
representative of such decedent at his address, or, if there be no such personal
representative, to the estate of the decedent, at his address herein set forth.
Any party hereto shall have the right to change the place to which any such
notice, offer, demand or writing shall be sent to him or her by a similar notice
sent in like manner to all parties hereto. The date of mailing of any offer,
demand, notice or instrument shall be deemed to be the date of such offer,
demand, notice or instrument and shall be effective from such date.
6.10 GOVERNING LAWS. This Agreement has been executed in the State of
Texas and shall be governed and construed in accordance with the laws of that
state.
<PAGE>
Page 30 of 30
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals on
the day and year first above written.
CORPORATION:
-----------
KRM ACQUISITION CORP.
By: /s/ Kyle R. Miller
----------------------------------
Kyle R. Miller, President
410 17th Street, Suite 700
Denver, Colorado 80202
SHAREHOLDERS:
-------------
/s/ Kyle R. Miller
--------------------------------------
KYLE R. MILLER
/s/ John E. Dyer
--------------------------------------
JOHN E. DYER
/s/ Bill I. Pennington
--------------------------------------
BILL I. PENNINGTON
/s/ Michael J. Stevens
--------------------------------------
MICHAEL J. STEVENS
/s/ C.W. Fink
--------------------------------------
C.W. FINK
/s/ David P. Donegan
--------------------------------------
DAVID P. DONEGAN
/s/ William T. War
--------------------------------------
WILLIAM T. WAR
