EXHIBIT 10.44
OPTION AGREEMENT AMENDMENT
This Option Agreement Amendment entered into at Riverton, WY this
1st day of November, 1995, by and between U.S. Energy Corp. and
Crested Corp. d/b/a USE/CC Joint Venture, a Wyoming co-
partnership ("USECC") and Arrowstar Investments, Inc., a Wyoming
corporation ("Arrowstar").
WITNESSETH:
WHEREAS, Arrowstar owns a 7,200 square foot hangar located
on a leasehold at the Riverton Regional Airport, more fully
described in that certain Lease Agreement between the City of
Riverton and Richard Gilpatrick d/b/a RENTCO dated August 29,
1991, which was assigned to Arrowstar on December 28, 1992 and is
attached hereto as Exhibit "A", (said hangar and leasehold is
hereinafter referred to collectively as the "Premises")
WHEREAS, USECC and Arrowstar entered into that certain
Option Agreement dated June 14, 1995 (the "Option Agreement") by
which Arrowstar granted USECC a six year option to purchase the
Premises for a minimum price of $110,000 or a greater value
depending on market conditions to be mutually agreed upon by both
parties;
WHEREAS, an independent appraisal of the Premises conducted
by Charles Walton, Certified General Real Estate Appraiser,
determined that the market value of the Premises as of September
8, 1995 was $75,000.00;
WHEREAS, USECC and Arrowstar have agreed to amend the Option
Agreement to reduce the minimum price to purchase the Premises
from $110,000 to $75,000; and
WHEREAS, USECC has notified Arrowstar that it desires to
exercise the option and purchase the Premises for the minimum
price and otherwise on the terms set forth in this Option
Agreement Amendment.
NOW THEREFORE, for consideration of $10.00 and other
consideration, including the mutual understandings set forth
above, the parties agree as follows:
1. The Option Agreement is hereby amended to grant USECC an
option to purchase the Premises for a minimum price of $75,000.
Option Agreement Amendment
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Page 2
2. Upon exercise of the Option, USECC shall pay Arrowstar the
sum of $30,000 and deliver to Arrowstar a promissory note for
$45,000 substantially in the form of Exhibit B hereto.
Contemporaneously therewith Arrowstar shall deliver to USECC an
assignment of the Lease Agreement covering the Premises and a
quit claim deed conveying the hangar located thereon. Arrowstar
has previously obtained the consent of the City of Riverton to
the assignment of the Lease to USECC, doing business as Western
Executive Air, Inc.
ARROWSTAR INVESTMENTS, INC. USECC
BY U.S. ENERGY CORP.
s/ Mark Larsen s/ Hal Herron
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Mark Larsen, President Hal Herron, Vice President
USECC BY CRESTED CORP.
s /Max t. Evans
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Max T. Evans, President
PROMISSORY NOTE
$45,000.00 Debtor:USE/CC Joint Vent
ure
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November 1, 1995
Riverton, Wyoming
FOR VALUE RECEIVED, USE/CC JOINT VENTURE (Debtor), a Wyoming co-
partnership between U.S. ENERGY CORP., a Wyoming corporation and
CRESTED CORP., a Colorado corporation, hereby promises to pay to
the order of ARROWSTAR INVESTMENTS INC., a Wyoming corporation
("Creditor") in lawful money of the United States of America, at
the office of Creditor located at 877 North 8th West, Riverton,
Wyoming, 82501, or at such other place as Creditor or a future
holder hereof (Creditor or such other holder being referenced
herein as "Holder") may from time to time designate in writing,
the principal sum of Forty Five Thousand dollars and No cents
($45,000.00), together with interest on the unpaid principal
balance hereof, all as specified below.
All interest accruing at the annual percentage rates specified
herein shall be calculated on the basis of a 360-day year and
actual days elapsed, and any such accrued interest which is not
paid when due shall be added to unpaid principal and shall
thereafter bear interest in the same manner as the unpaid
principal balance hereof. Additionally, notwithstanding any
provision of this Note, it is the intent and agreement of Debtor,
in the event any obligation to pay interest specified herein is
found to violate any applicable law or regulation, that this Note
shall be construed or deemed amended so that the interest is
reduced to the extent necessary to comply with such applicable
law or regulation.
1. PAYMENTS OF PRINCIPAL AND INTEREST
1.1 Interest Rate and Monthly Payments. During the term hereof,
the principal amount hereof, from time to time outstanding, shall
bear interest at the rate of ten percent (10.0%) per annum (the
"Standard Rate"). The principal amount, with accrued interest,
shall be due in 60 monthly installments of $500.00 each, due on
or before the first day of each month, beginning October
1, 1995, with the entire outstanding balance payable in full on
November 1, 2000 (the "Maturity Date"). The installment payments
that are timely made shall be credited to interest and principal
in accordance with the attached loan amortization schedule,
Exhibit A.
1.2 Prepayment. The indebtedness hereunder may be prepaid in
whole or in part any time, without penalty or premium, at the
election of Debtor. Any partial prepayment shall be applied
first to interest accrued to the date of such prepayment and then
to installments of principal in inverse order of maturity.
USECC Joint Venture
Promissory Note
Page 2
2. EVENTS OF DEFAULT
The failure to make any payment of principal or interest due
pursuant to the terms hereof shall be deemed to be an event of
default ("Event of Default") hereunder.
3. DEFAULT INTEREST
Upon the occurrence of an Event of Default, Holder shall promptly
notify Debtor and any amount which is not paid as of the
expiration of five (5) days after receipt of such notice shall,
together with the remaining unpaid principal balance hereof,
thereafter bear interest at the alternative rate (rather than the
Standard Rate otherwise applicable hereunder) equal to thirteen
(13%) per annum (the "Default Rate"), until the Event of Default
is fully cured.
4. MISCELLANEOUS PROVISIONS
4.1 Attorneys' Fees. Should suit be brought to enforce,
interpret or collect any part of this Note, the prevailing party
shall be entitled to recover, as an element of the costs of suit
and not as damages, reasonable attorneys' fees and other costs of
enforcement and collection.
4.2 Choice of Law and Forum. This Note shall be construed and
enforced in accordance with the laws of the State of Wyoming,
U.S.A., including, without limitation, any Wyoming laws governing
usury or permissible rates of interest. Except as set forth
below, Debtor hereby agrees that any suit to enforce any
provision of, or to collect this Note shall be brought in the
United States District Court for the District of Wyoming or the
District Court for the County of Fremont-Ninth Judicial
District, Wyoming, U.S.A. Each party hereby agrees that such
courts shall have exclusive in personam jurisdiction and venue
with respect to such party, and each party hereby submits to the
exclusive in personam jurisdiction and venue of such courts.
4.3 Notices. Any notice to be given by Holder to Debtor shall
be in writing and delivered or mailed by registered or certified
mail to the offices of Debtor at 877 North 8th West, Riverton, WY
82501 or to such other address as Debtor shall advise by notice
given to Holder in accordance with the terms hereof. Any notice
to be given by Debtor to Holder shall be in writing and delivered
or mailed by registered or certified mail to the address where
payments are to be made in accordance with the terms of this
Note.
USECC Joint Venture
Promissory Note
Page 3
4.4 Debtor's Waivers. Except as expressly provided to the
contrary herein, Debtor (and all guarantors, endorsers and other
parties hereafter becoming liable for the payment of this Note)
hereby waive diligence, presentment, protest, demand of payment,
notice of protest, dishonor and nonpayment, and waive the legal
effect of Holder's failure to give all notices not expressly
provided for herein. Debtor expressly agrees that, without in
any way affecting the liability of Debtor hereunder, the Holder
may extend the Maturity Date or the time for payment of any
amount due hereunder, accept security, release any party liable
hereunder, and release any security now or hereafter securing
this Note.
4.5 Loss or Destruction. Upon receipt of evidence reasonably
satisfactory to Debtor of the loss or mutilation of this Note,
Debtor will execute and deliver, in substitution hereof, a
replacement note.
4.6 Severance. Every provision of this Note is intended to be
severable. In the event any term or provision hereof is declared
to be illegal or invalid for any reason by a court of competent
jurisdiction , such illegality or invalidity shall not affect the
balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable. Creditor and
Debtor further agree to replace any such void or unenforceable
provision of this Note with valid and enforceable provisions
which will achieve, to the fullest extent possible, the economic,
business and other purposes of the void or unenforceable
provision.
4.7 Waivers. Any waiver, express or implied, of any Event of
Default hereunder shall not be considered a waiver of any
subsequent or different Event of Default. No delay or omission
on the part of Holder in exercising any right under this Note
shall operate as a waiver of such right or of any other right of
the Holder hereunder.
4.8 Modification. No provision of this Note may be waived,
modified, or discharged other than by an express writing signed
by the party against whom enforcement of such waiver,
modification or discharge is sought.
DEBTORS:
USE/CC Joint Venture. USECC/Joint Venture
By U.S. Energy Corp. By Crested Corp.
s/ Hal Herron s/ Max T. Evans
Hal Herron, Vice President Max T. Evans, President
USECC Joint Venture
Promissory Note
Page 4
ACKNOWLEDGEMENT
STATE OF WYOMING )
)ss.
COUNTY OF FREMONT )
Before me on November 1, 1995, personally appeared Hal
Herron known to me to be a Vice President of U.S. Energy Corp.
and Max T. Evans, known to me to be the President of Crested
Corp., both of whom acknowledged that they executed this
Promissory Note for and on behalf of USE/CC Joint Venture.
(NOTARY SEAL)
s/ Thomas M. Evans
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Notary Public
My Commission Expires: 11/16/99