Document:

ex10_1.htm

Exhibit 10.1

                                                                                                                                                                                   

	   	 
	 	 
	$500,000.00  	 January ____, 2011
	 	San Diego, California

 

FOR VALUE RECEIVED, the undersigned Osage Exploration and Development, Inc., a Delaware corporation, 2445 Fifth Avenue, Suite 310, San Diego, CA  92101 ("Maker"), agrees to the terms of this Note and promises to pay to the order of Blackrock Management, Inc., ("Lender") at  ________________, San Diego, CA ________, or at such other place as may be designated in writing by the holder of this Note, the principal sum of Five Hundred Thousand Dollars ($500,000.00), together with a Loan Fee in lieu of interest of $100,000.00 payable in full as to both principal and fee on May ____, 2011.  Any principal or fee amount not paid when due shall bear interest until paid at a rate of twenty percent (20%) ("Default Interest") after Maturity.  Default Interest on this Note is calculated on the actual number of days elapsed on a basis of a 360 day year unless otherwise indicated above.  For purposes of computing interest on this Note, payments of all or any portion of the Principal Amount  and or Loan Fee will not be deemed to have been made until such payments are received by holder in collected funds.

ALL PARTIES PRINCIPAL.  All parties liable for payment hereunder shall each be regarded as a principal and each party agrees that any party hereto with approval of holder and without notice to other parties may from time to time renew this Note or consent to one or more extensions or deferrals of Maturity Date for any term or terms, and all parties shall be liable in same manner as on the original note.  All parties liable for payment hereunder waive presentment, notice of dishonor and protest and consent to partial payments, substitutions or release of collateral and to addition or release of any party or guarantor.

ADVANCES AND PAYMENT.  It is agreed that the sum of all advances under this Note may exceed the Principal Amount as shown above, but the unpaid balance shall never exceed the Principal Amount.  Advances and payments on this Note shall be recorded on records of Lender and such records shall be prima facie evidence of such advances, payments and unpaid principal balance.  Subsequent advances and the procedures described herein shall not be construed or interpreted as granting a continuing line of credit for the Principal Amount.  Lender reserves the right to apply any payment by Maker, or for account of Maker, toward this Note or any other obligation of Maker to Lender.  Maker may prepay this Note at any time without penalty.

COLLATERAL.  The Principal Amount is to be used by Maker to acquired oil and gas leasehold interests in Logan County, Oklahoma and surrounding counties for the development of a Mississippian oil and gas prospect. This Note and all other obligations of Maker to Lender, and all renewals or extensions thereof, are secured by  the oil and gas leases now owned by Maker in Logan County, Oklahoma and the oil and gas leases in Logan County, Oklahoma and surrounding counties to be acquired with the proceeds of this loan and all collateral securing this Note and by all other security interests heretofore or hereafter granted to Lender as more specifically described in Security Agreements and other securing documentation.

  

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        ACCELERATION.  At option of holder, the unpaid balance of this Note and all other obligations of Maker to holder, whether direct or indirect, absolute or contingent, now existing or hereafter arising, shall become immediately due and payable without notice or demand upon the occurrence or existence of any of following events or conditions:  (a) Any payment required by this Note or by any other note or obligation of Maker to holder or to others is not made when due or the occurrence or existence of any event which results in acceleration of the maturity of any obligation of Maker to holder or to others under any promissory note, agreement or undertaking; (b) Maker defaults in performance of any covenant, obligation, warranty or provision contained in any loan agreement or in any instrument or document securing or relating to this Note or any other note or obligation of Maker to holder or to others; (c) Any warranty, representation, financial information or statement made or furnished to Lender by or on behalf of Maker proves to have been false in any material respect when made or furnished; (d) The making of any levy against or seizure, garnishment or attachment of any collateral; (e) Any time Lender in good faith believes prospect of payment of this Note is impaired; (f) When in the judgment of Lender the collateral, if any, becomes unsatisfactory or insufficient either in character or value, and upon request, Maker fails to provide additional collateral as required by Lender; (g) Loss, theft, substantial damage or destruction of collateral, if any; (h) Death, dissolution, change in management or termination of existence of any Maker; or (i) Appointment of a receiver over any part of the property of any Maker, the assignment of property by any Maker for the benefit of creditors, or the commencement of any proceedings under any bankruptcy or insolvency laws by or against any party liable, directly or indirectly, hereunder.

 

        WAIVERS AND GOVERNING LAW.  No waiver by holder of any payment or other right under this Note or any related agreement or documentation shall operate as a waiver of any other payment or right.  This Note and the obligations evidenced hereby are to be construed and governed by the laws of the State of Oklahoma.

COLLECTION COSTS.  All parties liable for payment hereunder agree to pay reasonable costs of collection, including an attorney's fee of a minimum of 15% of all sums due upon default, whether or not a lawsuit is commenced as a part of the collection process.

RIGHT OF OFFSET.  Any indebtedness due from holder hereof to Maker or any party hereto including, but without limitation, any deposits or credit balances due from holder, is pledged to secure payment of this Note and any other obligations to holder of Maker or any party hereto, and may at any time while the whole or any part of such obligation remains unpaid, either before or after Maturity hereof, be appropriated, held or applied toward the payment of this Note or any other obligation to holder of Maker or any party hereto.

IN WITNESS WHEREOF, the Maker has executed this Note on the date first above written.

 

	 	Osage Exploration and Development, Inc.	 
	 	 	 	 
	 	By	 	 
	 	 	Kim Bradford, President	 

 

  

2Unassociated Document

Exhibit 10.2

 

ESCROW AGREEMENT

This Escrow Agreement is entered into this _____ day of January, 2011, by and between Osage Exploration and Development, Inc. (“Osage”), Blackrock Management, Inc. (“Blackrock”) and Robertson & Williams, attorneys (R&W).

WHEREAS, on the ____ day of January, 2011 Osage did execute and deliver to Blackrock its Note in the principal sum of $500,000.00 and Mortgage secured by certain oil and gas leases now owned and to be acquired by Osage in Logan County, Oklahoma and surrounding counties. As further security for repayment of the Note, Osage has agreed to have deposited into escrow with R&W, as escrow agent (the “Escrow Agent”) an executed Assignment of all its right, title and interest in the Oil and Gas Leases used as security under the said Mortgage to Blackrock; and it is also contemplated that additional Assignments of Oil and Gas Leases (collectively referred to herein in the singular form) will be deposited with the Escrow Agent as they are acquired; and,

WHEREAS, in order to further secure the repayment of the Note, Osage execute and deliver to R&W Unit Certificates representing 100% of the ownership in Cimarrona, LLC, an Oklahoma limited liability company; and,

WHEREAS, Blackrock has agreed to execute and have deposited into escrow with R&W, as escrow agent an executed Release of Mortgage of the Mortgage executed by Osage to Blackrock and mentioned hereinabove; and,

WHEREAS, R&W have agreed to hold the said Assignment of Oil and Gas Leases, Unit Certificates and Release of Mortgage and deliver the same to the respective parties upon the satisfaction of the following terms and conditions.

NOW THEREFORE, in consideration of the sum of $10.00 and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party, it is hereby agreed:

	
 1.

	
Each party shall execute and deliver to R&W this Escrow Agreement, which may be executed in counterparts:

	
      2. 

	
Osage shall execute, notarize and deliver to R&W its Assignment of Oil and Gas Leases, assigning to Blackrock all its interest in the oil and gas leases securing the aforesaid Mortgage;

	
 3. 

	
Osage shall execute and deliver to R&W Unit Certificates of Cimarrona, LLC, representing 100% of the ownership of that company;

	
  4.  

	
Blackrock shall execute, notarize an deliver to R&W its Release of Mortgage, fully releasing the aforesaid mortgage, security and collateral thereunder;

	
  5.  

	
Upon receipt from Blackrock of the original Note duly cancelled by Blackrock and marked in prominent letters thereon the legend “Paid in Full” and receipt of written notification by Osage and Blackrock to R&W, signed by a corporate officer of each company and sent by fax or US Mail, notifying in unequivocal terms that the aforesaid Note has been paid in full, R&W will:

 

  

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(a)

	
Deliver to Osage, by US Mail, courier or hand delivery at its offices in Oklahoma City, Oklahoma, the originals of the aforementioned Assignment of Oil and Gas Leases, Unit Certificates, Release of Mortgage and cancelled Note.

	
        6.  

	
If R&W has not received written notice and the original cancelled Note within 24 hours after the Maturity Date of the Note as shown thereon R&W will:

	
  

	
(a)

	
Deliver to Blackrock by US Mail or courier at its offices in San Diego, California, the originals of the aforementioned Assignment of Oil and Gas Leases, Unit Certificates and Release of Mortgage.

Upon satisfying the enumerated conditions of 5(a) or 6(a), as the case may be R&W will have satisfied its obligations under this agreement and is released from any further liability hereunder.

The Parties agree that the following provisions shall control with respect to the rights, duties, liabilities, privileges and immunities of the Escrow Agent:

(a)           The Escrow Agent is not a party to, and is not bound by, or charged with notice of, any agreement out of which this escrow may arise.

(b)           The Escrow Agent acts hereunder as a depository only, and is not responsible or liable in any manner whatever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part thereof, or for the identity or authority of any person executing or depositing it.

(c)           In the event the Escrow Agent becomes involved in litigation in connection with the escrow, the parties agree to indemnify and save the Escrow Agent harmless from all loss, cost, damage, expenses and attorney’s fees suffered or incurred by the Escrow Agent as a result thereof. The obligations of the parties under this paragraph shall be performed at the office of the Escrow Agent, 9658 N. May Ave., Suite 200, Oklahoma City, Oklahoma 73120.

(d)           Any cost incurred by the Escrow Agent in the performance of its obligations hereunder shall be paid by Osage, including, but not limited to cost associated with the deliver of the document under paragraphs 5(a) or 6(a), if any.

(e)           The Escrow Agent shall be protected in acting upon any written notice, request, waiver, consent, certificate, receipt, authorization, power of attorney or other paper or document which the Escrow Agent in good faith believes to be genuine and what it purports to be.

(f)           The Escrow Agent shall not be liable for anything which it may do or refrain from doing in connection herewith, except its own gross negligence or willful misconduct.

 

  

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(g)           In the event any disagreement between any of the parties to this agreement, or between them or either of any of them and any other person, resulting in adverse claims or demands being made in connection with the subject matter of the escrow, or in the event that the Escrow Agent, in good faith, be in doubt as to what action it should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way to any person for its failure or refusal to act, and the Escrow Agent shall be entitled to continue so to refrain from acting until (i) the rights of all parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have been adjusted and all doubt resolved by agreement among all of the interested persons, and the Escrow Agent shall have been notified thereof in writing signed by all such persons. The rights of the Escrow Agent under this paragraph are cumulative of all other rights which it may have by law or otherwise.

(h)           During the entire term of this Agreement, any funds held by the Escrow Agent as cash awaiting distribution shall be held in the Escrow Agent’s IOLTA account and shall not accrue interest to any party’s benefit.

(h)           This Agreement may be executed in one or more counterparts, any one of which may be considered an original and executed facsimile copies received by the Escrow Agent will also be considered an original.

Executed this _____ day of January, 2011.                                                                

 

	 “PARTIES”	Osage Exploration and Development, Inc.	 
	 	 	 	 
	
 

	
By

	 	 
	 	 	Kim Bradford, President	 
	 	 	 	 
	 	
By

	 	 
	 	 	Blackrock Management, Inc.	 
	 	 	 	 
	 	
By

	 	 
	 	 	 	 
	 	 	Ran Furman, President	 
	 	 	 	 
	
“ESCROW AGENT”

	 	
Robertson & Williams, Inc.

	 
	 	By	 	 
	 	 	Thomas C. Williams, President	 

 

  

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