<PAGE>
 
                                                                    EXHIBIT 10.1

                         ROYALTY TERMINATION AGREEMENT


     THIS AGREEMENT, dated as of the _____ day of November, 1996, is by and
among Silverado Foods, Inc., an Oklahoma corporation ("Silverado"), Nonni's
Inc., a California corporation ("Nonni's"), and Steve Sirianni, Tim Soldati and
Rich Martin (collectively, the "Shareholders").

                                R E C I T A L S

     A.  Silverado and Nonni's entered into an Asset Purchase Agreement dated
December 31, 1993 (the "Asset Purchase Agreement"), which provided, in Section
7.7 thereof, for the payment of a royalty with respect to the product lines
acquired from Nonni's pursuant to the Asset Purchase Agreement.

     B.  Said royalty obligation of Section 7.7 of the Asset Purchase Agreement
was amended pursuant to an agreement dated March 21, 1995 (said royalty
obligation, as amended pursuant to the March 21, 1995 agreement or as otherwise
modified or amended, is hereinafter referred to as the "Royalty").

     C.  The Shareholders are the owners of all of the issued and outstanding
stock of Nonni's.

     NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:

     1.  Termination of Royalty.  The Royalty is hereby terminated as of the
         ----------------------                                             
22nd day of July, 1996 (the "Termination Date").  Nonni's acknowledges that all
amounts due under the Royalty through the Termination Date have been paid in
full.  Nonni's and the Shareholders hereby remise, release and forever discharge
Silverado from any and all claims, demands, obligations or liabilities, whether
known or unknown, with respect to the Royalty.

     2.  Issuance of Stock.  Silverado shall issue to the Shareholders 700,000
         -----------------                                                    
shares of Silverado's common stock (the "Primary Shares") in the following
proportions (the "Agreed Proportions"):

              Steve Sirianni     233,334 shares
              Tim Soldati        233,333 shares
              Rich Martin        233,333 shares
                                 -------       
                    Total:       700,000 shares

Promptly following the execution of this Agreement, Silverado shall make
application to the American Stock Exchange for the listing of such shares and
deliver instructions to its transfer agent for the issuance of such shares.

     3.  Contingent Shares.  In the event Silverado's net sales (as defined
         -----------------                                                 
below) of the products which were subject to the Royalty (the "Royalty
Products") exceed $10,000,000 during
<PAGE>
 
any of the twelve month periods (i) commencing July 22, 1996, and ending July
21, 1997, (ii) commencing July 22, 1997, and ending July 21, 1998, or (iii)
commencing July 22, 1998, and ending July 21, 1999, Silverado shall issue to the
Shareholders (in the Agreed Proportions) an additional 200,000 shares of
Silverado common stock (the "Contingent Shares").  In the event the Contingent
Shares are earned based upon sales during any of said twelve month periods, the
Shareholders will not be entitled to any further shares with respect to sales
during any subsequent period.  If earned, the Contingent Shares shall be issued
within 90 days after the end of the month in which the sales level necessary to
earn the Contingent Shares is achieved.  Prior to such issuance, Silverado shall
make application to the American Stock Exchange for the listing of such shares
and deliver instructions to its transfer agent for the issuance of such shares.
No right to vote or receive dividends or any other rights as a shareholder of
Silverado shall exist with respect to any of the Contingent Shares,
notwithstanding the Shareholders' rights of issuance thereof, until the issuance
to the Shareholders of stock certificates representing such shares.  The
Shareholders acknowledge that there are no assurances that such target sales
level will be achieved and that all decisions regarding sales strategies,
marketing, advertising, product lines and other matters regarding the Royalty
Products shall be in the sole discretion of Silverado.  "Net sales" shall be
defined as gross sales, less returns, allowances and bad debts (i.e., debts
which are uncollected after 120 days).

     4.  Stock Price Guarantee.
         --------------------- 

         (a)  Silverado shall guarantee the stock price of the Primary Shares as
     follows:  In the event any of the Shareholders (a "Selling Shareholder")
     sells any of the Primary Shares during the period commencing on April 1,
     1997, and ending on December 31, 1997, in an Approved Transaction (as
     defined below), and the Net Sales Price (as defined below) per share is
     less than $5.71 per share, then Silverado shall pay to the Selling
     Shareholder within 60 days after the date of such sale an amount equal to
     the number of shares sold times the difference between $5.71 and the Net
     Sales Price per share received by the Selling Shareholder in such sale.  An
     "Approved Transaction" shall be defined as (i) a sale through a broker
     which is executed on any exchange, (ii) any sale directly to a market
     maker, as defined in Section 3(a)(38) of the Securities Exchange Act of
     1934, or (iii) any privately negotiated sale, provided that such sale is
     approved in writing in advance by Silverado.  "Net Sales Price" shall be
     defined as the total sales price and all other consideration received by
     the Selling Shareholder, less any applicable discounts and commissions,
     which discounts and commissions must be reasonable in amount.

         (b)  If the Contingent Shares are issued, Silverado shall guarantee the
     stock price of the Contingent Shares as follows:   Silverado shall
     guarantee the stock price of the Contingent Shares in the same manner as
     with respect to the Primary Shares, except that the period of time in which
     sales must occur to be eligible for such guarantee shall commence on the
     date of the effectiveness of the registration of the Contingent Shares on
     Form S-3 by Silverado and end on the date 120 days after such commencement
     date.

                                      -2-
<PAGE>
 
         (c)  If Silverado fails to pay any amount under this Section 4 when
     due, the Shareholders shall give written notice to Silverado of such
     failure to pay.  If Silverado does not cure such failure to pay within 15
     days after its receipt of such notice, Silverado shall thereupon be deemed
     to be in default, and such amount in default shall bear interest from the
     end of the 15 day cure period until paid at the rate of 18% per annum.

         (d)  Notwithstanding anything contained herein to the contrary,
     Silverado shall have no obligation to guarantee the stock price of the
     Primary Shares or the Contingent Shares unless the Selling Shareholder
     notifies Silverado of his intent to sell at least 10 days prior to the date
     of the sale of the shares in question.  A notice given by the Selling
     Shareholder in accordance with Section 3(c) of the Registration Rights
     Agreement (as hereinafter defined) shall be deemed to satisfy the notice
     requirement of this Section 4(d).

         (e)  The period of the effectiveness of the stock price guarantees of
     the Primary Shares and the Contingent Shares shall be subject to extension
     pursuant to Section 4 of the Registration Rights Agreement.

         (f)  Notwithstanding anything contained herein to the contrary, at
     Silverado's discretion, in the event Silverado becomes obligated to a
     Selling Shareholder pursuant to the price guarantee provisions of this
     Section 4, Silverado may satisfy such obligation by issuing to such Selling
     Shareholder, within the time for payment set forth above, shares of
     Silverado's common stock having a Market Value (as hereinafter defined)
     equal to the amount owed by Silverado in connection with such price
     guarantee.  As used in this Section 4(f), "Market Value" shall mean the
     average of the closing sales price of Silverado's common stock on the
     American Stock Exchange (as recorded by The Wall Street Journal or, if not
                                             -----------------------           
     recorded thereby, by another authoritative source) over the five trading
     days comprised of the four trading days immediately preceding the date on
     which the Approved Transaction giving rise to the price guarantee occurs
     and the trading day on which such Approved Transaction occurs.

     5.  Registration Rights Agreement.  Silverado and the Shareholders shall
         -----------------------------                                       
enter into a Registration Rights Agreement (the "Registration Rights Agreement")
in substantially the form attached hereto as Exhibit A and made a part hereof.

     6.  Investment Representations.  The Shareholders and Nonni's represent
         --------------------------                                         
and warrant as follows:

         (a) Access to Information.  Respecting Silverado, its business, plans
             ---------------------                                            
     and financial condition, the terms of this transaction, and any other
     matters relating to this transaction:  the Shareholders have received all
     materials which have been requested by the Shareholders; have had a
     reasonable opportunity to ask questions of Silverado and its
     representatives; and Silverado has answered all inquiries that the
     Shareholders or the Shareholders' representatives have put to it.  The
     Shareholders have had access to all additional information necessary to
     verify the accuracy of the information set forth in this

                                      -3-
<PAGE>
 
     Agreement and any other materials furnished herewith and have taken all the
     steps necessary to evaluate the merits and risks of an investment as
     proposed hereunder.

         (b)  Experience.  The Shareholders or their representatives have such
              ----------                                                      
     knowledge and experience in finance, securities, investments and other
     business matters so as to be able to protect the interest of the
     Shareholders in connection with this transaction.

         (c)  Risks.  The Shareholders understand the various risks of an
              -----                                                      
     investment in Silverado as proposed herein and can afford to bear such
     risks, including, but not limited to, the risks of losing the entire
     investment.

         (d)  No Registration.  The Shareholders have been advised by Silverado
              ---------------                                                  
     that none of the shares of common stock of Silverado issuable hereunder
     (collectively, the "Securities") have been registered under the Act, that
     the Securities will be issued on the basis of the statutory exemption
     provided by Section 4(2) of the Securities Act of 1933, as amended (the
     "Act") or Regulation D promulgated thereunder, or both, relating to
     transactions by an issuer not involving any public offering and under
     similar exemptions under certain state securities laws, that this
     transaction has not been reviewed by, passed on or submitted to any Federal
     or state agency or self-regulatory organization where an exemption is being
     relied upon, and that Silverado's reliance thereon is based in part upon
     the representations made by the Shareholders in this Agreement.  The
     Shareholders acknowledge that the Shareholders have been informed by
     Silverado of, or are otherwise familiar with, the nature of the limitations
     imposed by the Act and the rules and regulations thereunder on the transfer
     of securities.  In particular, the Shareholders agree that no sale,
     assignment, or transfer of any of the Securities shall be valid or
     effective, and Silverado shall not be required to give any effect to any
     such sale, assignment or transfer, unless (i) the sale, assignment or
     transfer of such Securities is registered under the Act, it being
     understood that the Securities are not currently registered for sale and
     that Silverado has no obligation or intention to so register the Securities
     except as contemplated in the Registration Rights Agreement or (ii) such
     Securities are sold, assigned or transferred in accordance with all the
     requirements and limitations of Rule 144 under the Act, it being understood
     that Rule 144 is not available at the present time for the sale of the
     Securities, or (iii) such sale, assignment or transfer is otherwise exempt
     from registration under the Act.  The Shareholders further understand that
     an opinion of counsel and other documents may be required to transfer the
     Securities.  The Shareholders acknowledge that the Securities shall be
     subject to a stop transfer order and the certificate or certificates
     evidencing any Securities shall bear the following legend or a
     substantially similar legend and such other legends as may be required by
     state blue sky laws:

          "The securities represented by this certificate have not been
          registered under the Securities Act of 1933, as amended (the "Act"),
          or any state securities laws and neither such securities nor any
          interest therein may be offered, sold, pledged, assigned, or otherwise
          transferred unless (1) a

                                      -4-
<PAGE>
 
          registration statement with respect thereto is effective under the Act
          and any applicable state securities laws or (2) Silverado receives an
          opinion of counsel to the holder of such securities, which counsel and
          opinion are reasonably satisfactory to Silverado, that such securities
          may be offered, sold, pledged, assigned, or transferred in the manner
          contemplated without an effective registration statement under the Act
          or applicable state securities laws."

          (e)  Investment Intent.  The Shareholders will acquire the Securities
               -----------------                                               
     for the Shareholders' own account for investment and not with a view to the
     sale or distribution thereof or the granting of any participation therein,
     and has no present intention of distributing or selling to others any of
     such interest or granting any participation therein.

          (f)  Blue Sky Legends.  The Shareholders understand and agree that
               ----------------                                             
     certain legends required by the laws of the State of California will be
     placed on certificates representing the Securities.

          (g)  Shareholders.  The Shareholders are the owners of all of the
               ------------                                                
     issued and outstanding shares of capital stock of Nonni's.

          (h)  Survival.  The Shareholders acknowledge that the representations,
               --------                                                         
     warranties and agreements made by the Shareholders herein shall survive the
     execution and delivery of this Agreement and the issuance of the Securities
     hereunder.

     7.   Miscellaneous.
          ------------- 

          (a)  Notices. All notices and other communications required or
               -------                                                   
     permitted to be given hereunder shall be in writing and shall be deemed to
     have been duly given, delivered and received (a) if delivered personally,
     or (b) if sent by facsimile, registered or certified mail (return receipt
     requested) postage prepaid, or by courier guaranteeing next day delivery,
     in each case to the party to whom it is directed at the addresses set forth
     below (or at such other address for any party as shall be specified by
     notice given in accordance with the provisions hereof, provided that
     notices of a change of address shall be effective only upon receipt
     thereof).  Notices delivered personally shall be effective on the day so
     delivered; notices sent by registered or certified mail shall be effective
     on the third day after mailing; notices sent by facsimile shall be
     effective when receipt is acknowledged; and notices sent by courier
     guaranteeing next day delivery shall be effective on the earlier of the
     second business day after timely delivery to the courier or the day of
     actual delivery by the courier:

               (i)   if to Silverado:

                         Silverado Foods, Inc.
                         6846 South Canton, Suite 110
                         Tulsa, Oklahoma  74136

                                      -5-
<PAGE>
 
                         Fax:  (918) 491-6290
                         Attention:  President

               (ii)  if to Nonni's or the Shareholders:

                         Nonni's, Inc.
                         ________________________
                         ________________________
                         Fax:  (___) ______________
                         Attention:  _______________

          (b)  Agreement Binding on Successors.  This Agreement shall be binding
               -------------------------------                                  
     upon and inure to the benefit of the parties hereto and their respective
     heirs, successors and assigns.

          (c)  Headings.  The headings in this Agreement are solely for
               --------                                                
     convenience of reference and shall be given no effect in the construction
     or interpretation of this Agreement.

          (d)  Counterparts.  This Agreement may be executed in any number of
               ------------                                                  
     counterparts, each of which shall be deemed an original, but all of which
     together shall constitute one and the same instrument.

          (e)  Governing Law.  This Agreement shall be governed by and construed
               -------------                                                    
     in accordance with the laws of the State of California, without giving
     effect to conflict of laws.

          (f)  Entire Agreement.  This Agreement and the exhibits hereto set
               ----------------                                             
     forth the entire understanding of the parties with respect to the subject
     matter hereof, supersede all existing agreements among them concerning such
     subject matter may be modified only by a written instrument duly executed
     by the party to be charged.

          (g)  Attorneys' Fees.  In the event of any litigation arising out of
               ---------------                                                
     this Agreement, the party not prevailing in such proceedings shall pay the
     reasonable costs of the prevailing party in connection with such
     proceedings, including but not limited to attorneys' fees and expenses,
     witness fees and expenses and court costs.

          (h)  Authority.  Silverado's Board of Directors has taken all action
               ---------                                                      
     necessary to approve the execution, delivery and performance of this
     Agreement, and the person signing below on behalf of Silverado is duly
     authorized to execute this Agreement.

                                      -6-
<PAGE>
 
     IN WITNESS WHEREOF, this Agreement was executed by the parties as of the
date first above written.

                                    SILVERADO FOODS, INC.


                                    By:______________________________
                                    Name:____________________________
                                    Title:___________________________


                                    NONNI'S INC.


                                    By:______________________________
                                    Name:____________________________
                                    Title:___________________________



                                    _________________________________
                                    Steve Sirianni


                                    _________________________________
                                    Tim Soldati


                                    _________________________________
                                    Rich Martin

                                      -7-
<PAGE>
 
                                                                       EXHIBIT A
                                                                       ---------


                         REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of the ___ day
of November, 1996, is between SILVERADO FOODS, INC., an Oklahoma corporation
("Silverado"), and STEVE SIRIANNI, TIM SOLDATI AND RICH MARTIN (the
"Shareholders").

     WHEREAS, pursuant to and subject to the terms and conditions of a Royalty
Termination Agreement, dated as of  the date hereof (the "Royalty Termination
Agreement"), the Shareholders are receiving 700,000 shares (the "Primary
Shares") of common stock, par value $.01 per share, of Silverado ("Silverado
Common Stock") which are "restricted securities" as defined in Rule 144 under
the Securities Act of 1933, as amended (the "Act"); and

     WHEREAS, also pursuant to the Royalty Termination Agreement, the
Shareholders have the ability to earn, upon the occurrence of certain events,
200,000 additional shares (the "Contingent Shares") of Silverado Common Stock
which, if issued, would be "restricted securities" as defined in Rule 144 under
the Act; and

     WHEREAS, Silverado has agreed, subject to the terms and conditions stated
herein to execute, deliver and perform this Agreement.

     NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:

     1.   Registration.
          ------------ 

          (a)   In consideration of the Shareholders's willingness to accept the
     Primary Shares and the Contingent Shares pursuant to the Royalty
     Termination Agreement, and subject to the performance by the Shareholders
     of its covenants set forth herein, Silverado (i) shall prepare and file,
     within 60 days following the date of the Royalty Termination Agreement,
     with the Securities and Exchange Commission (the "Commission") a
     registration statement on Form S-3 with respect to the offering and sale of
     the Primary Shares by the Shareholders on a delayed or continuous basis
     pursuant to Rule 415 under the Act, (ii) shall prepare and file, within 60
     days following the issuance of the Contingent Shares to the Shareholders,
     with the Commission a registration statement on Form S-3 with respect to
     the offering and sale of Contingent Shares by the Shareholders on a delayed
     or continuous basis pursuant to Rule 415 under the Act, and (iii) shall use
     its best efforts to cause registration statements to become effective as
     soon as possible after the filing thereof so as to permit the secondary
     resale of the Shares by the Shareholders.  As used herein, the term
     "Registration Statement" means either or both of the registration
     statements required pursuant to clauses (i) and (ii) of the preceding

                                      A-1
<PAGE>
 
     sentence, as the context requires, including exhibits and financial
     statements and schedules and documents incorporated by reference therein,
     as amended, when they become effective under the Act and, in the case of
     the references to the Registration Statement as of a date subsequent to the
     effective date, as amended or supplemented as of such date.  As used
     herein, the term "Prospectus" means the prospectus included in the
     Registration Statement as of the date it becomes effective under the Act
     and, in the case of references to the Prospectus as of a date subsequent to
     the effective date of the Registration Statement, as amended or
     supplemented as of such date, including all documents incorporated by
     reference therein, as amended, and each prospectus supplement relating to
     the offering and sale of any of the Primary Shares or Contingent Shares.
     As used herein, the term "Shares" means the Primary Shares and/or the
     Contingent Shares, as the context requires.

          (b)   Once filed, Silverado will use its best efforts to cause the
     Registration Statement to remain effective, and to file with the Commission
     such amendments and supplements as may be necessary to keep the Prospectus
     current and in compliance in all material respects with the Act, until the
     earlier to occur of the following:  (i) the date on which restrictions on
     sales of the Shares by the Shareholders would otherwise terminate pursuant
     to Rule 144(k) under the Act (as such rule or any successor rule shall be
     amended from time to time); or (ii) the sale of all of the Shares covered
     by the Registration Statement, whether pursuant to the Registration
     Statement or otherwise.  Notwithstanding the foregoing, Silverado shall not
     be required to keep the Registration Statement effective, and the
     Shareholders shall not distribute any Shares pursuant thereto if, in the
     written opinion of counsel to Silverado addressed to the Shareholders, the
     Shares may be sold by the Shareholders without registration or restriction.

          (c)   Silverado shall furnish to the Shareholders a conformed copy of
     the Registration Statement as declared effective by the Commission and of
     each post-effective amendment thereto, and such number of copies of the
     final Prospectus and of each post-effective amendment or supplement thereto
     as may reasonably be required to facilitate the distribution of the Shares.
     Promptly after the Registration Statement has been declared effective by
     the Commission, Silverado shall so notify the Shareholders.  Thereafter, in
     the event that any stop order suspending the effectiveness of the
     Registration Statement is issued or any proceedings for that purpose are
     instituted or threatened by the Commission, Silverado will promptly so
     notify the Shareholders.

          (d)   The Registration Statement shall be prepared by Silverado in
     accordance with the Act and the rules and regulations promulgated
     thereunder.  The section of the Prospectus entitled "Selling Stockholder"
     shall be prepared in accordance with the requirements of Item 507 of
     Regulation S-K promulgated by the Commission and shall be based upon the
     information provided by the Shareholders to Silverado pursuant to Section
     3(a).

                                      A-2
<PAGE>
 
          (e)   Promptly after having been notified by the Shareholders of their
     intention to distribute Shares in a manner described by the Registration
     Statement in the section entitled "Plan of Distribution" and after having
     received the information required to be delivered to Silverado as provided
     in Section 3(c), Silverado will, if necessary, (i) prepare a supplement to
     the Prospectus based upon the information so provided and file the same
     with the Commission pursuant to Rule 424(b) under the Act and (ii) register
     or qualify the Shares to be sold under the securities or blue sky laws of
     such jurisdictions in the United States as the Shareholders shall
     reasonably request; provided, however, that Silverado shall in no event be
                         --------  -------                                     
     required to qualify to do business as a foreign corporation or as a dealer
     in any jurisdiction where it is not so qualified, to conform its
     capitalization or the composition of its assets at the time to the
     securities or blue sky laws of any such jurisdiction, to execute or file
     any general consent to service of process under the laws of any
     jurisdiction, to take any action that would subject it to service of
     process in suits other than those arising out of the offer and sale of
     Shares, or to subject itself to taxation in any jurisdiction where it has
     not therefore done so.

     2.   Expenses of Registration.  All expenses in connection with the
          ------------------------                                      
Registration Statement, any qualification or compliance with federal or state
laws required in connection therewith, and the distribution of the Shares shall,
as between the Shareholders and Silverado, be borne as follows:

          (a)   Silverado shall pay and be responsible for the registration fee
     payable under the Act, blue sky fees and expenses, if applicable (subject
     to the limitations set forth in Section 1(e)), all fees and disbursements
     of Silverado's counsel and accountants, and the cost of printing or
     photocopying the Registration Statement and the Prospectus.  Silverado will
     not be required to engage the services of a printer with respect to the
     Registration Statement or the Prospectus, but may elect to do so.

          (b)   The Shareholders shall pay all fees and disbursements of its own
     counsel and advisers, all stock transfer fees (including the cost of all
     transfer tax stamps) or expenses, if any, and all other expenses (including
     brokerage discounts, commissions and fees) related to the distribution of
     the Shares that have not expressly been assumed by Silverado.

     3.   The Shareholders' Covenants Regarding the Shares.  The Shareholders
          ------------------------------------------------                   
covenant and agree with Silverado that:

          (a)   The Shareholders will cooperate with Silverado in connection
     with the preparation of the Registration Statement, and for so long as
     Silverado is obligated to keep the Registration Statement effective, the
     Shareholders will provide to Silverado, in writing, for use in the
     Registration Statement, all information regarding the Shareholders as may
     be necessary to enable Silverado to prepare the Registration Statement and
     Prospectus covering the Shares and to maintain the effectiveness thereof.

                                      A-3
<PAGE>
 
          (b)   During such time as the Shareholders may be engaged in a
     distribution of the Shares, the Shareholders will comply with Rules 10b-2,
     10b-6 and 10b-7 promulgated under the Securities Exchange Act of 1934, as
     amended (the "Exchange Act") and pursuant thereto will, among other things:
     (i) not engage in any stabilization activity in connection with the
     securities of Silverado in contravention of such Rules; (ii) distribute the
     Shares solely in the manner described in the Prospectus; (iii) cause to be
     furnished to each agent or broker-dealer to or through whom the Shares may
     be offered, or to the offeree if an offer is made directly by the
     Shareholders, such copies of the Prospectus (as amended and supplemented to
     such date) and documents incorporated by reference therein as may be
     required by such agent, broker-dealer or offeree or applicable law; and
     (iv) not bid for or purchase any securities of Silverado or attempt to
     induce any person to purchase any securities of Silverado other than as
     permitted under the Exchange Act.

          (c)   At least 10 days prior to any distribution of the Shares, the
     Shareholders will advise Silverado in writing of the dates on which the
     distribution will commence and terminate, the number of the Shares to be
     sold, the name of any agent or broker-dealer to or through whom such
     distribution is being made, the selling commission or other compensation to
     such agent or broker-dealer and the number of Shares of Silverado Common
     Stock that will be owned beneficially by the Shareholders after giving
     effect to such sale.

          (d)   Upon notice from Silverado that it requires the suspension of
     the distribution of any of the Shares pursuant to the provisions of Section
     4, then the Shareholders shall cease distributing the Shares until such
     time as Silverado notifies the Shareholders that distribution of the Shares
     may recommence.

          (e)   The Shareholders will not sell, transfer or dispose of any of
     the Shares, or enter into any agreements or understandings with third
     parties respecting the sale, transfer or disposition of any of the Shares,
     except as described in the section of the Prospectus entitled "Plan of
     Distribution" so long as Silverado maintains the effectiveness of the
     Registration Statement.

          (f)   The Shareholders will not sell, transfer or dispose of any of
     the Shares until on or after January 1, 1997.

     4.   Suspension of the Distribution of the Shares.
          -------------------------------------------- 

          (a)   If Silverado determines in good faith that the distribution of
     any of the Shares would interfere with any pending financing, acquisition,
     corporate reorganization or any other corporate development involving
     Silverado or any of its subsidiaries or would require premature disclosure
     thereof, and promptly give the Shareholders written notice of such
     determination, Silverado shall be entitled to require the Shareholders to
     suspend its distribution of the Shares for a reasonable period of time
     which, for purposes of this Section 4(a), shall not exceed 90 days;
     provided, in the event of such a suspension

                                      A-4
<PAGE>
 
     during the effectiveness of any of the stock price guarantees set forth in
     Section 4 of the Royalty Termination Agreement, then the period of the
     effectiveness of any stock price guarantee which is so affected shall be
     extended by the amount of time of such suspension.  Such written notice
     shall contain a general statement of the reasons for such suspension and an
     estimate of the anticipated period of suspension, and Silverado shall
     promptly notify the Shareholders of the expiration or earlier termination
     of such suspension.

          (b)   If Silverado shall file a registration statement (other than in
     connection with the registration of securities issuable pursuant to a
     continuous "at the market offering" pursuant to Rule 415(a)(4) under the
     Act, an employee stock option, stock purchase, dividend reinvestment or
     similar plan or pursuant to a merger, exchange offer or transaction of the
     type specified in Rule 145(a) under the Act) with respect to Silverado
     Common Stock or securities convertible into or exchangeable or exercisable
     for Silverado Common Stock, and Silverado reasonably determines (in the
     case of a non-underwritten offering) or the managing underwriter or
     underwriters advise Silverado (in the case of an underwritten offering)
     that a sale or distribution of the Shares would adversely affect such
     offering, then upon written notice by Silverado, the Shareholders shall, to
     the extent not inconsistent with applicable law, suspend the distribution
     of any of the Shares or any sale of the Shares pursuant to Rule 144 under
     the Act during the 10-day period prior to and the 90-day period following
     the effective date of such registration statement, with such 90-day period
     being subject to early termination by Silverado with the approval of the
     managing underwriter or underwriters.  Without limiting the rights of
     Silverado under Section 4(a), during any suspension period initiated
     pursuant to this Section 4(b), Silverado shall not file or cause to become
     effective an additional registration statement of the type for which it
     would be entitled to suspend the distribution of the Shares pursuant to
     this Section 4(b).  In the event any such suspension pursuant to this
     Section 4(b) occurs during the effectiveness of any of the stock price
     guarantees set forth in Section 4 of the Royalty Termination Agreement,
     then the period of the effectiveness of any stock price guarantee which is
     so affected shall be extended by the amount of time of such suspension.

     5.   Indemnification.
          --------------- 

          (a)   Silverado will indemnify and hold harmless the Shareholders,
     their estate, heirs and personal representatives, and each person (if any)
     who controls the Shareholders within the meaning of either Section 15 of
     the Act or Section 20 of the Exchange Act (collectively, the "Shareholder
     Indemnified Parties") from and against any losses, claims, damages or
     liabilities, joint or several, to which the Shareholder Indemnified Parties
     may become subject, insofar as such losses, claims, damages or liabilities
     (or actions in respect thereof) are based upon any untrue statement or
     alleged untrue statement of a material fact contained in the Registration
     Statement or the Prospectus, or any omission or alleged omission to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein, in light of the circumstances under which they

                                      A-5
<PAGE>
 
     were made, not misleading, or upon any violation by Silverado of the Act or
     blue sky laws of any state or any rules under those laws, or any other laws
     applicable to Silverado in connection with the registration or listing of
     the Shares; and, subject to Section 5(c), Silverado will reimburse the
     Shareholder Indemnified Parties for any legal or other expense reasonably
     incurred by them in connection with investigating or defending any such
     loss, claim, damage or liability; provided, however, that Silverado will
                                       --------  -------                     
     not indemnify or hold harmless any of the Shareholder Indemnified Party
     from or against any such loss, claim, damage, liability or person (i) that
     arises out of or is based upon any violation of the Shareholders' covenants
     in Section 3 or of any federal or state securities laws, rules or
     regulations committed by any of the Shareholder Indemnified Parties (or any
     agent, broker-dealer or underwriter engaged by them) or (ii) if the untrue
     statement, omission or allegation thereof upon which such losses, claims,
     damages, liabilities or expenses are based (x) was made in reliance upon
     and in conformity with the information provided by the Shareholders
     specifically for use or inclusion in the Registration Statement, or (y) was
     made in any Prospectus used after such time as Silverado advised the
     Shareholders that the filing of a post-effective amendment or supplement
     thereto was required, except the Prospectus as so amended or supplemented,
     or (z) was made in any Prospectus used after such time as the obligation of
     Silverado hereunder to keep the Registration Statement effective and
     current has expired.

          (b)   The Shareholders will indemnify and hold harmless Silverado, its
     directors and officers and each person, if any, who controls Silverado
     within the meaning of either Section 15 of the Act or Section 20 of the
     Exchange Act (the "Silverado Indemnified Parties"), from and against any
     losses, claims, damages or liabilities, joint or several, to which the
     Silverado Indemnified Parties may become subject, insofar as such losses,
     claims, damages or liabilities (or actions in respect thereof) arise out of
     or are based upon (i) any untrue statement or alleged untrue statement of a
     material fact contained in the Registration Statement or the Prospectus, or
     any omission or alleged omission to state therein a material fact required
     to be stated therein or necessary to make the statements therein, in light
     of the circumstances under which they were made, not misleading, if the
     statement or omission was made in reliance upon and in conformity with the
     information provided by the Shareholders specifically for use or inclusion
     in the Registration Statement, or (ii) the use of any Prospectus after such
     time as Silverado has advised the Shareholders that the filing of a post-
     effective amendment or supplement thereto is required, except the
     Prospectus as so amended or supplemented, or (iii) the use of any
     Prospectus after such time as the obligation of Silverado hereunder to keep
     the Registration Statement effective and current has expired, or (iv) any
     violation by the Shareholders or any person who controls the Shareholders
     within the meaning of either Section 15 of the Act or Section 20 of the
     Exchange Act (or any agent, broker-dealer or underwriter engaged by the
     Shareholders or any such controlling person) of the Shareholders's
     covenants in Section 3 or of any federal or state securities law or rule or
     regulation thereunder; and, subject to Section 5(c), the Shareholders will
     reimburse the Silverado Indemnified Parties for any legal or other expenses
     reasonably incurred by them in connection with investigating or defending
     any such loss, claim, damage or

                                      A-6
<PAGE>
 
     liability.  In no event shall the liability of a Shareholder for
     indemnification under this Section 5(b) exceed the proceeds received by
     such Shareholder from his sale of Shares under the Registration Statement.

          (c)   Each party entitled to indemnification under this Section 5 (the
     "Indemnified Party") shall give notice to the party required to provide
     indemnification (the "Indemnifying Party") promptly after such Indemnified
     Party has actual knowledge of any claim as to which indemnity may be
     sought, and the Indemnifying Party may participate at its own expense in
     the defense, or if it so elects, to assume the defense of any such claim
     and any action or proceeding resulting therefrom, including the employment
     of counsel and the payment of all expenses.  The failure of any Indemnified
     Party to give notice as provided herein shall not relieve the Indemnifying
     Party from its obligations to indemnify such Indemnified Party, except to
     the extent that the Indemnified Party's failure to so notify actually
     prejudices the Indemnifying Party's ability to defend against such claim,
     action or proceeding; it being understood and agreed that the failure to so
     notify the Indemnifying Party prior to the execution of a binding
     settlement agreement or the entry of a judgment or issuance of an award
     with respect to a claim, action or proceeding shall constitute actual
     prejudice to the Indemnifying Party's ability to defend against such claim,
     action or proceeding.  In the event that the Indemnifying Party elects to
     assume the defense in any action or proceeding, the Indemnified Party shall
     have the right to employ separate counsel in any such action or proceeding
     and to participate in the defense thereof, but the fees and expenses of
     such separate counsel shall be such Indemnified Party's expense unless (i)
     the Indemnifying Party has agreed to pay such fees and expenses or (ii) the
     named parties to any such action or proceeding (including any impleaded
     parties) include an Indemnified Party and the Indemnifying Party, and such
     Indemnified Party shall have been advised by counsel that there may be a
     conflict of interest between such indemnified Party and the Indemnifying
     Party in the conduct of the defense of such action (in which case, if such
     Indemnified Party notifies the Indemnifying Party that it elects to employ
     separate counsel at the expense of the Indemnifying Party, the Indemnifying
     Party shall not assume the defense of such action or proceeding on such
     Indemnified Party's behalf, it being understood, however, that the
     Indemnifying Party shall not, in connection with any one such action or
     proceeding or separate but substantially similar or related actions or
     proceedings arising out of the same general allegations or circumstance,s
     be liable for the reasonable fees and expenses of more than one separate
     firm of attorneys at any time for all Indemnified Parties, which firm shall
     be designated in writing by the Shareholders or Silverado as the case may
     be).  No Indemnifying Party, in the defense of any such claim or
     litigation, shall, except with the consent of the Indemnified Party,
     consent to entry of any judgment or enter into any settlement which does
     not include as an unconditional term thereof the giving by the claimant or
     plaintiff to such Indemnified Party of a release from all liability in
     respect to such claim or litigation.  The Indemnifying Party shall not be
     liable for any settlement of any such action or proceeding effected without
     its written consent, but if settled with its written consent or, if there
     be a final judgment for the plaintiff in any such action or

                                      A-7
<PAGE>
 
     proceeding, the Indemnifying Party shall indemnify and hold harmless the
     Indemnified Party from and against any loss or liability by reason of such
     settlement or judgment.

          (d)   If the indemnification provided for under this Section 5 is
     unavailable to or insufficient to hold the Indemnified Party harmless under
     subparagraphs (a) or (b) above in respect of any losses, claims, damages or
     liabilities referred to therein for any reason other than as specified
     therein, then the Indemnifying Party shall contribute to the amount paid or
     payable by such Indemnified Party as a result of such losses, claims,
     damages or liabilities in such proportion as is appropriate to reflect the
     relative fault of the Indemnifying Party on the one hand and such
     Indemnified Party on the other in connection with the statements or
     omissions which resulted in such losses, claims, damages or liabilities, as
     well as any other relevant equitable considerations.  The relative fault
     shall be determined by reference to, among other things, whether the untrue
     or alleged untrue statement of a material fact or the omission or alleged
     omission to state a material fact relates to information supplied by (or
     omitted to be supplied by) Silverado or the Shareholders, the parties'
     relative intent, knowledge, access to information and opportunity to
     correct or prevent such statement or omission, the relative benefits
     received by each party from the sale of the Shares and any other equitable
     considerations appropriate under the circumstances.  The amount paid or
     payable by an Indemnified Party as a result of the losses, claims, damages
     or liabilities referred to above in this subsection (d) shall be deemed to
     include any legal or other expense reasonably incurred by such Indemnified
     Party in connection with investigating or defending any such action or
     claim.  No person guilty of fraudulent misrepresentation (within the
     meaning of Section 11(f) of the Act) shall be entitled to contribution from
     any person who was not guilty of such fraudulent misrepresentation.

     6.   No Third-Party Beneficiaries.  NOTHING CONTAINED IN THIS AGREEMENT,
          ----------------------------                                       
EXPRESS OR IMPLIED IS INTENDED TO CONFER UPON ANY PERSON, OTHER THAN THE PARTIES
AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND PERMITTED ASSIGNS, ANY RIGHTS,
REMEDIES OR OBLIGATIONS UNDER, OR BY REASON OF, THIS AGREEMENT.

     7.   Entire Agreement.  This Agreement constitutes the entire agreement
          ----------------                                                  
between the parties and supersedes all prior understandings and agreements with
respect to the subject matter hereof or thereof.

     8.   Notices.  All notices and other communications under this Agreement
          -------                                                            
shall be in writing and sent by (i) personal delivery (including courier
service), (ii) telecopier during normal business hours to the number indicated
below, or (iii) first class or registered or certified mail, postage prepaid and
addressed as follows (or to such other addresses and telecopier numbers as
either party may designate by notice to the other party) (any communication
being deemed given upon receipt);

                                      A-8
<PAGE>
 
          If to the Shareholders at:

               Steve Sirianni, Tim Soldati and Rich Martin

               -----------------------------
               -----------------------------
               Attention: 
                           -----------------
               Telecopier No.:

          If to Silverado at:

               Silverado Foods, Inc.
               6846 South Canton, Suite 110
               Tulsa, OK  74136
               Attention:  Chief Financial Officer
               Telecopier No.: (918) 491-6200

     9.   Amendments and Waivers.  No amendment of any provision of this
          ----------------------                                        
Agreement shall be valid unless the same shall be set forth in an instruction in
writing signed by each party.  Each of the parties may waive compliance by such
other party with any agreements of such party or the fulfillment of any of the
conditions to its own obligations set forth herein.  Any agreement on the part
of any party to any such waiver shall be valid only if set forth in an
instrument in writing signed by such party.  No waiver by either party or any
default, misrepresentation, or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default, misrepresentation,
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.  Neither the failure nor
any delay by any party in exercising any right, power or privilege under this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power or privilege will preclude
any other or further exercise of any other right, power or privilege.

     10.  Assignment; Successors and Assigns.  This Agreement shall be binding
          ----------------------------------                                  
upon, and inure to the benefit of, the parties and their respective successors
and permitted assigns, but neither this Agreement nor any of the right,s
interests or obligations hereunder shall be assigned, by operation of law or
otherwise, by any party without the prior written consent of the other party.
This Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and
assigns.

     11.  Severability.  Any provision of this Agreement which is prohibited or
          ------------                                                         
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.

     12.  Headings.  The descriptive headings of the several Sections of this
          --------                                                           
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

                                      A-9
<PAGE>
 
     13.  Governing Law.  This Agreement shall be governed by, and construed in
          -------------                                                        
accordance with, the laws of the State of California, without regard to
principles of conflicts of law.

     14.  Counterparts.  This Agreement may be executed in one or more
          ------------                                                
counterparts, each of which when so executed shall be deemed an original, but
all of which together shall constitute one and the same instrument.

     15.  Construction.  The parties have participated jointly in the
          ------------                                               
negotiation and drafting of this Agreement.  In the event any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring either party by virtue of the authorship of
any of the provisions of this Agreement.  Any reference in this Agreement to any
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.  The word "including" shall
mean "including without limitation".

     16.  Attorneys' Fees.  In the event of any litigation arising out of this
          ---------------                                                     
Agreement, the party not prevailing in such proceedings shall pay the reasonable
costs of the prevailing party in connection with such proceedings, including but
not limited to attorneys' fees and expenses, witness fees and expenses and court
costs.

     17.  Authority.  Silverado's Board of Directors has taken all action
          ---------                                                      
necessary to approve the execution, delivery and performance of this Agreement,
and the person signing below on behalf of Silverado is duly authorized to
execute this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.



                                       ---------------------------------------
                                       Steve Sirianni


                                       ---------------------------------------
                                       Tim Soldati


                                       ---------------------------------------
                                       Rich Martin


                                     A-10
<PAGE>
 
                                       SILVERADO FOODS, INC.


                                       By:_____________________________________
                                       Name:___________________________________
                                       Title:__________________________________

                                     A-11