PORTFOLIO LEASEHOLD ACQUISITION AGREEMENT
This PORTFOLIO LEASEHOLD ACQUISITION AGREEMENT (the "Agreement") is
entered into this 10th day of July 2008 (this "Agreement"), by and among
Implantable Vision, Inc., a Utah corporation (the "Company"), Lariat Energy
Corporation, a Nevada corporation "Lariat", Pilgrim Petroleum Corporation, a
Delaware corporation ("Pilgrim"), and American Petroleum Corporation, a Texas
corporation ("American" and, together with Pilgrim and Lariat, the "Seller").
RECITALS
WHEREAS, the Company desires to purchase certain resource property
assets of the Seller and the Seller desires to sell such assets to the Company
on the terms and conditions set forth in this Agreement;
WHEREAS, Seller owns an undivided one hundred percent (100%) interest
(the "Subject Interest") in the oil and gas leases described on Exhibit A hereto
(the "Leases") and in the lands described therein (the "Lands") and desires to
sell its Subject Interest in the Leases;
WHEREAS, Seller believes the current value of these assets is sixty
million dollars ($60,000,000), based upon the Resource Evaluation Report
prepared according to National Instrument 51-101 by Xxxxxxxxx Associates,
Independent Qualified Reserves Evaluators, dated September 15, 2006. This report
reflected a Net Present Value of Future Net Revenues (10% discount rate) of
$52,050,000 at the time of the report. Based upon the increase in the market
value of the underlying price of a barrel of oil and billion cubic feet of gas
since this report, Seller believes that the value of the assets has increased to
$60,000,000. However, Seller can offer no assurances as to the increase in the
value of the assets;
WHEREAS, American has the right to operate all oil and gas drilling and
other activities on the Leases (the "Operating Rights") under Railroad
Commission of Texas; and
WHEREAS, Seller has agreed hereby to sell, assign and convey to the
Company and the Company has agreed hereby to purchase and accept the Subject
Interest in the Leases subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
1. Purchase and Sale.
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1.1 Assets to Be Transferred. On the terms and subject to the
conditions set forth in this Agreement, the Seller hereby sells, assigns,
transfers, conveys and delivers to the Company, and the Company hereby purchases
and assumes from the Seller, free and clear of all liens, claims and
encumbrances, all of the Seller's right, title and interest in and to all of the
Property described on Exhibit A to this Agreement (the "Purchased Assets").
1.2 Purchase Price. The Purchase Price for the Purchased
Assets shall be paid by the Company to the Seller simultaneously with the
execution hereof. The "Purchase Price" shall be:
1.2.1 the issuance of 29,227,273 shares of the Company's
common stock to Lariat and a Convertible Promissory Note payable to
Lariat in the principal amount of seven million dollars ($7,000,000) in
the form of Exhibit B, attached hereto and incorporated herein..
1.2.2 the issuance of 12,525,974 shares of the Company's
common stock to American and a Convertible Promissory Note payable to
American in the principal amount of three million dollars ($3,000,000)
in the form of Exhibit C, attached hereto and incorporated herein.
1.3 Closing Date. The Closing Date shall be the Effective Date of
this Agreement.
2. Representations and Warranties of the Company.
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The Company represents and warrants to the Seller as of the date
hereof, that:
2.1 Organization and Qualification. Except as set forth in Section 2.1 of
the disclosure schedule, the Company is a corporation duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
state of Utah, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is not in violation of any of the provisions of its articles of
incorporation or bylaws. Other than BT Acquisitions, Inc., its wholly-owned
subsidiary, the Company has no subsidiaries and no equity, profit sharing,
participation or other ownership interest (including any general partnership
interest, limited partnership interest or membership interest) in any
corporation, partnership, limited partnership, limited liability company or
other entity.
The Company is duly qualified or licensed to do business and is in good
standing as a foreign corporation in the jurisdictions in which the nature of
the business conducted or property owned by it requires the Company to be
qualified or licensed to do business as a foreign corporation.
2.2 Authorization; Enforcement. The Company has the requisite corporate
power and authority to conduct its business as it is currently being conducted,
to execute and deliver this Agreement, to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the performance by the Company of the
transactions contemplated hereby has been duly authorized by all necessary
corporate action.
2.3 Capitalization.
(a) The authorized capital stock of the Company consists of 150,000,000
shares of common stock, par value $.001 per share (the "Company Common Stock"),
of which 33,178,442 shares are issued and outstanding as of the date of this
Agreement, and 100,000,000 shares of Series A Convertible Preferred Stock, par
value $.001 per share, of which 1,000,000 shares are issued and outstanding as
of the date of this Agreement.
(b) All of the issued and outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. The Company Common Stock to be issued to the
Seller pursuant to this Agreement will, when issued as specified herein, be
validly issued and outstanding, fully paid and non-assessable, and not issued in
violation of the preemptive rights of any other person.
(c) To the Company's knowledge, there are no voting trusts, stockholder
agreements or other voting arrangements that have been entered into among the
stockholders of the Company, or charges, liens or encumbrances on issued shares
of the Company Common Stock.
2.4 Financial Statements. As a company whose common stock trades on a
the Over-The-Counter Bulletin Board, the Company is required to file certain
financial reports with the Securities and Exchange Commission (the "SEC"). The
Seller and its directors have had a chance to review said reports as they are
public documents (said publicly-available reports and schedules thereto are
referred to herein as the "Company Financial Statements"). Except as otherwise
set forth in Section 2.4 of the Disclosure Schedule, each of the Company
Financial Statements filed since January 1, 2006 is complete and correct in all
material respects, has been prepared in accordance with GAAP consistently
applied throughout the periods presented, and presents fairly the financial
position, results of operations, cash flows and stockholders' equity of the
Company as at the dates and for the periods indicated (subject, in the case of
unaudited statements, to normal, recurring audit adjustments which will not be
material in amount or significance) and does not include or omit to state any
fact which renders the Company Financial Statements misleading. There has been
no change in Company accounting policies since January 1, 2006, except as
described in the notes to the Company Financial Statements.
2.5 Absence of Certain Changes. Except as otherwise set forth in
Section 2.5 of the Disclosure Schedule or in its periodic reports filed with the
SEC pursuant to the Securities Exchange Act of 1934, as amended, since July 31,
2007, the Company has not:
(a) suffered any material adverse change in its business, operations,
assets, or financial condition, except as reflected on the Company
Financial Statements;
(b) suffered any material damage or destruction to or loss of the
assets of the Company, whether or not covered by insurance, which property
or assets are material to the operations or business of the Company taken
as a whole;
(c) settled, forgiven, compromised, canceled, released, waived or
permitted to lapse any material rights or claims other than in the ordinary
course of business;
(d) entered into or terminated any material agreement, commitment or
transaction, or agreed to or made any changes in material leases or
agreements, other than renewals or extensions thereof and leases,
agreements, transactions and commitments entered into or terminated in the
ordinary course of business;
(e) written up, written down or written off the book value of any
material amount of assets, other than in the ordinary course of business;
or
(f) declared, paid or set aside for payment any dividend or
distribution with respect to the capital stock of the Company.
2.6 Tax Returns; Taxes. Since January 1, 2006, the Company: (a) has
duly filed all U.S. federal and material state, county, local and foreign tax
returns and reports required to be filed by it, including those with respect to
income, payroll, property, withholding, social security, unemployment,
franchise, excise and sales taxes and all such returns and reports are correct
in all material respects; (b) has either paid in full all taxes that have become
due as reflected on any return or report and any interest and penalties with
respect thereto or has fully accrued on its books or has established adequate
reserves for all taxes payable but not yet due; and (c) has made required cash
deposits with appropriate governmental authorities representing estimated
payments of taxes, including income taxes and employee withholding tax
obligations. No extension or waiver of any statute of limitations or time within
which to file any return has been granted to or requested by the Company with
respect to any tax.
2.7 Litigation and Government Claims. There is no pending suit, claim,
action or litigation, or administrative, arbitration or other proceeding or
governmental investigation or inquiry against the Company to which its
businesses or assets are subject, and to the knowledge of the Company, there are
no such proceedings threatened or contemplated. The Company is not subject to
any judgment, decree, injunction, rule or order of any court, or, to the
knowledge of the Company, any governmental restriction applicable to the Company
2.8 No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby does not and will not: (i) conflict with or violate any
provision of the Company's articles of incorporation or bylaws, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of any agreement, credit facility, debt or other instrument (evidencing
a Company debt or otherwise) or other understanding to which the Company is a
party or by which any property or asset of the Company is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
as currently in effect to which the Company is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company is bound or affected.
2.9 Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person in connection with the
execution, delivery and performance by the Company of this Agreement other than
such filings as may be required by the Securities and Exchange Commission.
2.10 Independent Investigation.
(a) The Company is an informed and sophisticated participant in the
transactions contemplated hereby. The Company has undertaken an
investigation, been provided with, evaluated and relied upon certain
documents and information to assist it in making an informed and
intelligent decision with respect to the execution of this Agreement. The
Company acknowledges that the Seller makes no representation or warranty as
to the value of or revenues obtainable from ownership of the Purchased
Assets.
(b) The Company acknowledges that it and its representatives and
agents have been permitted full and complete access to the Purchased Assets
and any and all information the Company and its representatives and agents
have desired or requested to see and/or review, and that the Company and
its representatives and agents have had a full opportunity to meet with or
discuss via telephone with the Seller to discuss the Purchased Assets. The
Company acknowledges that it has conducted to its satisfaction an
independent investigation and verification of the financial condition,
results of operations, assets, liabilities, properties and projected
operations that will occur by the Company upon the consummation of the
Purchased Assets and, in making its determination to proceed with the
transactions contemplated by this Agreement, the Company has relied on the
results of its own independent investigation and verification and the
representations and warranties of the Company expressly and specifically
set forth in this Agreement.
2.11 Brokers. The Company has not incurred, nor will the Company incur
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3. Representations and Warranties of the Seller.
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The Seller represents and warrants to the Company as of the date
hereof, that:
3.1 Organization and Good Standing. Each Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
its incorporation. Each Seller has no subsidiaries and does not own any equity,
profit sharing, participation or other ownership interest (including any general
partnership interest, limited partnership interest or membership interest) in
any corporation, partnership, limited partnership, limited liability company or
other entity. Each Seller is duly qualified or licensed to do business and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted or property owned by it requires it to be qualified or
licensed to do business as a foreign corporation.
3.2 Power and Authority. Seller has the corporate power and authority to
own, lease and operate its properties and assets, including the Purchased
Assets, and to carry on its business as currently being conducted. Seller has
the corporate power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement. The execution, delivery and
performance by Seller of this Agreement have been duly authorized by all
necessary corporate action.
3.3 Authorization. This Agreement has been duly executed by
Seller, and when delivered by Seller in accordance with the terms hereof, will
constitute the valid and legally binding obligation of Seller, enforceable
against it in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
3.4 Authorization; Enforcement. The execution and delivery of this
Agreement and the consummation by it of the transactions contemplated hereby
require no further consent or action by the Seller.
3.5 No Conflicts. The execution, delivery and performance of this
Agreement by the Seller and the consummation by the Seller of the transactions
contemplated hereby does not and will not: (i) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of
any agreement, credit facility, debt or other instrument (evidencing a Seller
debt or otherwise) or other understanding to which the Seller is a party or by
which any property or asset of the Seller is bound or affected, or (ii) will not
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority as currently
in effect to which the Seller is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Seller is bound
or affected.
3.6 Filings, Consents and Approvals. The Seller is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person in connection with the
execution, delivery and performance by the Seller of this Agreement.
3.7 Brokers. The Seller has not incurred, nor will the Seller incur
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.8 Purchased Assets.
(a) Exhibit A is an accurate and complete list of the Purchased
Assets. Seller owns and possesses all right, title and interest in and to
the Purchased Assets (free and clear of any lien, claim, encumbrance,
security interest, license, or other restriction). No written claim by any
third party contesting the validity, enforceability, use or ownership of
any of the Purchased Assets has been made against Seller or, to the
knowledge of Seller, is threatened. To the knowledge of Seller, Seller has
not infringed upon, misappropriated, or otherwise come into conflict with
any property rights of third parties. Seller has not received any charge,
complaint, claim, demand or notice alleging any such interference,
infringement, misappropriation or violation relating to the Purchased
Assets. To the knowledge of the Seller, no third party has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
property rights of the Purchased Assets.
(b) With respect to each item of Intellectual Property included in the
Purchased Assets:
(i) each item is free from any outstanding injunction, judgment,
order, decree, ruling or charge;
(ii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the knowledge of the
Seller is threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and
(iii) there is no currently enforceable agreement by Seller to
indemnify any customer for or against any interference, infringement
or misappropriation of any third party's intellectual property.
3.9 Investor Representations.
(a) Each Seller is acquiring the securities of Company Common
Stock and Notes (collectively the "Securities" to be issued as payment
of the Purchase Price) as principal for its own account and not with a
view to or for distributing or reselling such Securities or any part
thereof in violation of the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities law, has no
present intention of distributing any of such Securities in violation
of the Securities Act or any applicable state securities law and has
no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Seller's right to
sell the Securities immediately in compliance with applicable federal
and state securities laws) in violation of the Securities Act or any
applicable state securities law.
(b) Each Seller is an "accredited investor" as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Regulation D
promulgated under the Securities Act.
3.10 SEC Filings. At the Closing, the Company will be current in
all SEC filings required by it to be filed
4. Covenants and Agreements.
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4.1 Expenses. Except as otherwise specifically provided herein, the
Company on the one hand and Seller on the other hand shall bear their respective
fees, costs and expenses incurred in connection with the preparation, execution
and performance of this Agreement and all related documents contemplated hereby
and the transactions contemplated hereby and thereby, including all fees and
expenses of their representatives and Agents.
4.2 Public Announcements. No party to this Agreement shall make, or
cause to be made, any press release or public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate by
means of any news media in respect of this Agreement without prior written
approval of the other party, which approval shall not be unreasonably withheld
or delayed.
4.3 Further Action. Each party, at the request of the other party,
shall execute such documents and take such further actions as may be reasonably
required to carry out the provisions hereof and give effect to the transactions
contemplated hereby. From time to time after the Closing Date, the Company shall
prepare all documents and the Company and Seller shall take all actions
reasonably necessary to further the sale and assignment of the Purchased Assets
to the Company hereunder.
4.4 [Intentionally Omitted.]
4.5 Investigation. The representations, warranties, covenants and
agreements set forth in this Agreement shall not be affected or diminished in
any way by any investigation (or failure to investigate) at any time by or on
behalf of the party for whose benefit such representations, warranties,
covenants and agreements were made. All statements contained herein or in any
schedule, certificate, exhibit, list or other document required to be delivered
pursuant hereto, shall be deemed to be representations and warranties for
purposes of this Agreement; provided, that any knowledge or materiality
qualifications contained herein shall be applicable to such other documents.
4.6 Full Access and Information; Confidentiality. Seller has given to
the Company and its representatives full access to Seller's properties, books,
records, contracts and commitments (collectively the "Records") relating to the
Purchased Assets, as the Company has reasonably requested, and the Company has
furnished to Seller and its representatives all such information and documents
relating to the Company as Seller reasonably requested. Each of the Parties will
treat, and will cause its representatives to treat, all information that they
received in connection with the transaction contemplated herein, if not in the
public domain, as confidential.
4.7 Indemnification by the Seller. From and after the Closing Date, the
Seller shall indemnify, defend and hold harmless the Company from and against
any Losses incurred or suffered as a result of or arising from:
(a) any breach of the representations or warranties of the Seller
set forth in Article 3; or
(b) the breach of any covenant, agreement or other obligation of
the Seller set forth in this Agreement.
(c) the Company will provide indemnification to the new
Directors and Officers for any actions that arise from actions that
happened prior to the new Directors and Officers taking their
positions.
4.8 Indemnification by the Company. From and after the Closing Date,
the Company shall indemnify, defend and hold harmless the Seller from and
against any Losses incurred or suffered as a result of or arising from:
(a) any breach in any representation or warranty of the Company
set forth in Article 2; or
(b) the breach of any covenant, agreement or other obligation of
the Company set forth in this Agreement.
4.9 Indemnity Procedure. A party or parties hereto agreeing to be
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "Indemnifying Party" and the other party or parties
claiming indemnity is referred to as the "Indemnified Party".
(i) An Indemnified Party under this Agreement shall, with
respect to claims asserted against such party by any third party, give
written notice to the Indemnifying Party of any liability which might
give rise to a claim for indemnity under this Agreement within thirty
(30) calendar days of the receipt of any written claim from any such
third party, but not later than twenty (20) days prior to the date any
answer or responsive pleading is due, and with respect to other matters
for which the Indemnified Party may seek indemnification, give prompt
written notice to the Indemnifying Party of any liability which might
give rise to a claim for indemnity; provided, however, that any failure
to give such notice will not waive any rights of the Indemnified Party
except to the extent the rights of the Indemnifying Party are
materially prejudiced.
(ii) The Indemnifying Party shall have the right, at its
election, to take over the defense or settlement of such claim by
giving written notice to the Indemnified Party at least fifteen (15)
days prior to the time when an answer or other responsive pleading or
notice with respect thereto is required. If the Indemnifying Party
makes such election, it may conduct the defense of such claim through
counsel of its choosing (subject to the Indemnified Party's approval of
such counsel, which approval shall not be unreasonably withheld), shall
be solely responsible for the expenses of such defense and shall be
bound by the results of its defense or settlement of the claim. The
Indemnifying Party shall not settle any such claim without prior notice
to and consultation with the Indemnified Party, and no such settlement
involving any equitable relief or which might have an adverse effect on
the Indemnified Party may be agreed to without the written consent of
the Indemnified Party (which consent shall not be unreasonably
withheld). So long as the Indemnifying Party is diligently contesting
any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense and the Indemnifying Party will not
be responsible for the fees of separate legal counsel to the
Indemnified Party, unless the named parties to any
proceeding include both parties and representation of both parties by
the same counsel would be inappropriate. If the Indemnifying Party does
not make such election, or having made such election does not, in the
reasonable opinion of the Indemnified Party proceed diligently to
defend such claim, then the Indemnified Party may (after written notice
to the Indemnifying Party), at the expense of the Indemnifying Party,
elect to take over the defense of and proceed to handle such claim in
its discretion and the Indemnifying Party shall be bound by any defense
or settlement that the Indemnified Party may make in good faith with
respect to such claim. In connection therewith, the Indemnifying Party
will fully cooperate with the Indemnified Party should the Indemnified
Party elect to take over the defense of any such claim.
(iii) The parties agree to cooperate in defending such third
party claims and the Indemnified Party shall provide such cooperation
and such access to its books, records and properties as the
Indemnifying Party shall reasonably request with respect to any matter
for which indemnification is sought hereunder; and the parties hereto
agree to cooperate with each other in order to ensure the proper and
adequate defense thereof.
(iv) With regard to claims of third parties for which
indemnification is payable hereunder, such indemnification shall be
paid by the Indemnifying Party upon the earlier to occur of: (i) the
entry of a judgment against the Indemnified Party and the expiration of
any applicable appeal period, or if earlier, five (5) days prior to the
date that the judgment creditor has the right to execute the judgment;
(ii) the entry of an unappeasable judgment or final appellate decision
against the Indemnified Party; or (iii) a settlement of the claim.
Notwithstanding the foregoing, provided that there is no dispute as to
the applicability of indemnification, the reasonable expenses of
counsel to the Indemnified Party shall be reimbursed on a current basis
by the Indemnifying Party if such expenses are a liability of the
Indemnifying Party. With regard to other claims for which
indemnification is payable hereunder, such indemnification shall be
paid promptly by the Indemnifying Party upon demand by the Indemnified
Party.
5. Miscellaneous.
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5.1 Entire Agreement. This Agreement, together with the exhibits
attached hereto, contain every obligation and understanding between the parties
relating to the subject matter hereof and merges all prior discussions,
negotiations, agreements and understandings, both written and oral, if any,
between them, and none of the parties shall be bound by any conditions,
definitions, understandings, warranties or representations other than as
expressly provided or referred to herein.
5.2 Notices. Any notice or other communication or deliveries under this
Agreement shall be in writing and delivered personally or sent by certified
mail, return receipt requested, postage prepaid, or sent by prepaid overnight
courier to the parties. Any notices sent to the parties shall be at the
addresses below:
If to the Seller at:
Pilgrim Petroleum Corporation/American Petroleum Corporation
0000 Xxxxxxxxx Xx, Xxxxxxx Xxxxx 00000
P214-687-0015
F214-687-0019
Lariat Energy Corporation
0000 Xxxxxxxxx Xx.
Xxxxx 000
Xxxxxxx, XX 00000
P: (000) 000-0000
F: (000) 000-0000
If to the Company at:
Implantable Vision, Inc.
00000 Xxxxxx Xx.
Xxxxx Xxxxxxx, XX 00000
P: (000) 000-0000
F: (000) 000-0000
5.3 Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the Company and the Seller or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
5.4 Governing Law/Venue. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Utah (except the choice of law rules thereof). Each party hereto agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts in Dallas, Texas. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts in Dallas, Texas, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. The parties hereby waive all
rights to a trial by jury.
5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, heirs,
personal representatives, legal representatives, and permitted assigns.
5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person or entity.
5.8 Enforcement. Each party hereto hereby acknowledges that the breach
of this Agreement by any party hereto will cause irreparable damage, and
therefore, the Company and Seller may enforce their rights under this Agreement
by equitable relief, including injunction and specific performance, in addition
to other remedies that they may have at law or in equity.
5.9 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefore, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
6. Conditions Precedent to Obligations of Seller.
---------------------------------------------
6.1 Seller Conditions Precedent. Except as may be waived by
Seller, the obligations of Seller to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction on or
before the Closing Date of each of the following conditions:
(i) Compliance. The Company shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all
terms, covenants and conditions of this Agreement to be complied with
or performed by the Company on or before the Closing Date;
(ii) Representations and Warranties. All of the representations and
warranties made by the Company in this Agreement shall be true and
correct in all material respects at and as of the Closing Date with the
same force and effect as if such representations and warranties had
been made at and as of the Closing Date, except for changes permitted
or contemplated by this Agreement;
(iii) Officer's Certificate. The Company shall have delivered
to Seller a Certificate of the President of the Company, dated the
Closing Date, certifying that the conditions set forth in Section
6.1(i) and (ii) have been satisfied; and
(iv) Secretary's Certificate. The Company shall have delivered to
Seller a certificate of the Secretary of the Company certifying as to
its Certificate of Incorporation, By-Laws, incumbency of officers, and
the resolutions attached thereto and any other corporate proceedings
relating to the authorization, execution and delivery of this Agreement
and the transactions contemplated thereby.
(v) Other Closing Deliveries. At the Closing, the Company shall
have delivered or caused to be delivered to Sellers the following:
(a) written resignations of all officers and
directors of the Company in office immediately prior to the
Closing. Resignations of all officers shall be effective upon
the Closing and resignations of all directors shall be
effective upon the expiration of the 10-day period following
the filing and delivery of an Information Statement (the "14-f
Information Statement") required by Rule 14f-1 promulgated
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
(b) resolutions duly adopted by the Board of
Directors of the Company approving the following events or
actions, as applicable:
(1) the execution, delivery and performance of the terms of this
Agreement;
(2) the transaction described herein and the terms thereof;
(3) the appointment of the following individuals as directors to serve on
the Company board of directors (the "Initial Seller Directors")
effective as of Closing:
Xxxxxx Xxxxxx
Xxxxx Xxxxxxx
Xx. Xxxxxx shall be also named Chairman of the Board effective as
of Closing;
(4) the appointment of the following individuals as directors to serve on
the Company Board of Directors (the "Seller Directors") effective upon
the expiration of the 10-day period following the filing and delivery
of the 14f-1 Information Statement:
Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxxx
Gama Munoz
(5) the appointment of the following persons as officers of the Company,
with the titles set forth opposite his name (the "Seller Officers")
effective as of Closing:
Name Position
---- --------
Xxxxxx Xxxxxx Chairman of the Board and Secretary
Xxxxx Xxxxxxx President and Chief Financial Officer
Xxxxx Xxxxxxx Vice President - Land and Exploration
Xxxxxxxxx Xxxx Vice President - Marketing
(c) an instruction letter signed by the President of
the Company addressed to the Company's transfer agent of
record, in a form reasonably acceptable to Seller and
consistent with the terms of this Agreement, instructing the
transfer agent to issue share certificates representing the
Purchase Price shares to be delivered pursuant to this
Agreement registered in the names of the Sellers described in
Section 1.2; and
(d) such other documents as Sellers may reasonably
request in connection with the transactions contemplated
hereby.
7. Conditions Precedent to Obligations of the Company.
--------------------------------------------------
7.1 Company Conditions Precedent. Except as may be waived by the Company,
the obligations of the Company to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions:
(i) Compliance. Seller shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all
terms, covenants, and conditions of this Agreement to be complied with
or performed by it on or before the Closing Date;
(ii) Representations and Warranties. All of the representations and
warranties made by Seller shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect
as if such representations and warranties had been made at and as of
the Closing Date;
(iii) Officer's Certificate. Seller shall have delivered to the
Company a Certificate of the President of each Seller, dated the
Closing Date, certifying that the conditions set forth in Section
7.1(i) and (ii) been satisfied;
(iv) Secretary's Certificate. Seller shall have delivered to the
Company a certificate of the Secretary of each Seller certifying as to
its Certificate of Incorporation, By-Laws, incumbency, and certain
resolutions attached thereto and any other corporate proceedings
relating to the authorization, execution and delivery of this
Agreement and the transactions contemplated thereby;
(v) Exchange by Seller. Seller shall have obtained all consents
necessary to transfer the Purchased Assets to the Company, and shall
have taken all steps necessary to effect such transfer; and
(vi) Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and
all documents and instruments incident to such transactions shall be
satisfactory to the Company and its counsel, and the Company and its
counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably
request.
8. Miscellaneous.
-------------
8.1 Termination. This Agreement and the transactions contemplated
hereby and the provisions herein may be terminated at any time on or before the
Closing Date: (a) by mutual consent of Seller and the Company; (b) by the
Company or Seller if the Exchange has not been or is incapable of being
consummated by July __, 2008, as extended (the "Termination Date"), unless such
failure is due to the failure of the terminating party to perform or observe the
covenants, agreements, and conditions hereof to be performed or observed by him,
her or it at or before the Closing Date; provided, that the non-breaching
party's cause of action resulting from such failure to perform or to observe the
covenants, agreements and conditions hereof shall not be terminated; or (iii) by
Seller or the Company if the transactions contemplated hereby violate any
non-appealable final order, decree, or judgment of any court or governmental
body or agency having competent jurisdiction.
8.2 Entire Agreement. This Agreement, including the schedules and
exhibits hereto, contains the complete agreement among the parties with respect
to the transactions contemplated hereby and supersedes all prior agreements and
understandings among the parties with respect to such transactions. Section and
other headings are for reference purposes only and shall not affect the
interpretation or construction of this Agreement. The parties hereto have not
made any representation or warranty except as expressly set forth in this
Agreement or in any certificate or schedule delivered pursuant hereto. The
disclosure schedules hereto shall be read as a whole and information on any
particular section thereto shall be deemed to be responsive to other appropriate
sections of the same disclosure schedule. The obligations of any party under any
agreement executed pursuant to this Agreement shall not be affected by this
section.
8.3 Survival and Limitation on Liability. The representations and
warranties of each party contained herein or in any exhibit, certificate,
document or instrument delivered pursuant to this Agreement shall survive the
Closing for a period of one year following the Closing Date. No party to this
Agreement shall have any liability to any other party hereto for any claim(s)
based upon the representations, warranties, covenants, agreements and
obligations under this Agreement unless such claim(s) is asserted within such
one year survival period (except for claims for fraud or intentional
misrepresentation, which may be asserted after the expiration of the applicable
survival period) and only if damages resulting from such claim(s) exceed in the
aggregate $25,000, in which event liability shall be for the entire amount of
damages.
8.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.
8.5 SEC Filings. Subsequent to Closing, the Company shall prepare any
filings as may be necessary in connection with the transactions contemplated in
this Agreement, including, without limitation, the 14f-1 Information Statement.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the Company and Seller have duly executed this
Agreement, all as of the date first written above.
SELLER:
PILGRIM PETROLEUM CORPORATION
/s/Xxxxxx Xxxxxx
----------------
President
AMERICAN PETROLEUM CORPORATION
/s/ Xxxxxx Xxxxxx
-----------------
President
LARIAT ENERGY CORPORATION
/s/ Xxxxxxx Xxxxxxx
-------------------
President
THE COMPANY:
IMPLANTABLE VISION, INC.
/s/ Xxxxxx Xxxxxxx, MD
----------------------
Xxxxxx Xxxxxxx, President
EXHIBIT A
PURCHASED ASSETS
Lease Name CO RRC Acres Interest
more or less Conveyed
--------------------------------------------------------------------------------
1 Xxxxxx, X.X. W 13076 120 all of Net Working Interest
2 Xxxxxx, X.X. Xxxxx 0 X 00000
3 Xxxxx Xxxxxxxx A 20057 all of Net Working Interest
4 " " "C" A 18323 280 all of Net Working Interest
5 Xxxxx Xxxxx W 05716 430 all of Net Working Interest
6 Xxxxxxxxx W 05239 140 all of Net Working Interest
7 Xxxxxxx Mineral Trust W 13962 960 all of Working Interest
8 White A 00697 430 all of Net Working Interest
9 White, (Shallow) A 21272
10 City National Bank A 18191 4300 all of Net Working Interest
11 Climax A 00525 5000
00 Xxxxxx X 00000 all interest/not specified
13 X.X. Xxxxxxxx "B" W 05066 all interest/not specified
14 Xxxxxxxx AN W 18415 all interest/not specified
Totals 11660
A = Xxxxxx County
W = Wichita County
EXHIBIT B
Lariat Note
THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER
ANY STATE SECURITIES LAWS. THIS CONVERTIBLE PROMISSORY NOTE MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR REGISTRATION OR QUALIFICATION UNDER SUCH STATE SECURITIES
LAWS, UNLESS THE PROPOSED TRANSACTION DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION.
CONVERTIBLE PROMISSORY NOTE
$7,000,000.00 Dallas, Texas July ___, 2008
FOR VALUE RECEIVED, the undersigned, Implantable Vision, Inc., a Utah
corporation, and its successors and assigns ("Borrower"), promises to pay to the
order of Lariat Energy Corporation, a Nevada corporation, and its successors and
permitted assigns ("Holder"), the principal sum of Seven Million Dollars
($7,000,000.00), together with simple interest from the date of advancement on
the principal balance hereof from time to time remaining unpaid at an interest
rate equal to the U.S. prime rate as published in the Wall Street Journal Online
plus one percent (1%) per annum, determined on the date of this Convertible
Promissory Note (the "Note"), and adjusted on each anniversary until maturity
(subject to Section 2 of this Note), both principal and interest being payable
at the address designated in Section 12, or at such other place as Holder may
from time to time designate in writing.
The principal of this Note shall mature and be due and payable on July
__, 2010. All accrued and unpaid interest shall be due and payable immediately
on maturity.
All past due principal and accrued interest on this Note shall bear
interest from maturity (whether on demand, upon acceleration of maturity
following an Event of Default (as defined below) or otherwise) until paid at the
lesser of (i) the rate of twelve percent (12%) per annum or (ii) the highest
rate for which Borrower may legally contract under applicable law. All payments
hereunder shall be payable in lawful money of the United States of America which
shall be legal tender for public and private debts at the time of payments.
1. Conversion.
----------
(a) Conversion Option. This Note shall be convertible at the
option of Holder hereof (the "Optional Conversion"), in whole or in part, in
lieu of and in satisfaction of the unpaid principal hereunder, into that number
of fully paid and nonassessable shares of Common Stock (as defined in Section 2)
as is equal to the quotient of the unpaid principal divided by the applicable
Conversion Price (as defined in Section 2). Upon any Optional Conversion, the
outstanding principal due under this Note shall be reduced in full by an amount
equal to the number of shares of Common Stock issued upon such conversion
multiplied by the applicable Conversion Price.
(b) Conversion Procedures. If Holder is entitled to and
desires to convert this Note into Common Stock, it shall surrender this Note to
Borrower at its principal executive offices, accompanied by proper instruments
of transfer to Borrower or in blank, accompanied by irrevocable written notice
to Borrower that Holder elects so to convert this Note and the name or names
(with address) in which a certificate or certificates for Common Stock are to be
issued. Borrower shall, as soon as practicable after such written notice and
compliance with any other conditions herein contained, deliver at such office to
Holder, certificates for the number of full shares of Common Stock to which it
shall be entitled. Such conversion shall be deemed to have been made as of the
date of such surrender of this Note, and the person or persons entitled to
receive Common Stock or other securities deliverable upon conversion shall be
treated for all purposes as the record holder or holders thereof on such date.
(c) Certain Adjustments. The applicable Conversion
Price and the number of securities issuable upon conversion of this Note shall
be subject to adjustment from time to time as follows:
(i) In case Borrower shall at any time after the date
hereof (1) pay a dividend or make a distribution on its capital stock
that is paid or made in shares of stock of Borrower, (2) subdivide its
outstanding shares of Common Stock into a greater number of shares or
(3) combine its outstanding shares of Common Stock into a smaller
number of shares, then in each such case the applicable Conversion
Price in effect immediately prior thereto and the securities issuable
shall be adjusted retroactively as provided below so that Holder
thereafter shall be entitled to receive the number of shares of Common
Stock of Borrower and other shares and rights to purchase stock or
other securities which Holder would have owned or have been entitled to
receive after the happening of any of the events described above had
this Note been converted immediately prior to the happening of such
event or any record date with respect thereto. In the event of the
redemption of any shares referred to in clause (1), Holder shall have
the right to receive, in lieu of any such shares or rights, any cash,
property or securities paid in respect of such redemption. An
adjustment made pursuant to this subsection (i) shall become effective
immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective
date in the case of a subdivision or combination.
(ii) Whenever the Conversion Price is adjusted as
provided above, Borrower shall compute the adjusted Conversion Price in
accordance herewith and mail to Holder a notice stating that the
Conversion Price has been adjusted and setting forth the adjusted
Conversion Price.
(iii) In the event that at any time, as a result of
any adjustment made pursuant to this Section, Holder shall become
entitled to receive any shares of Borrower other than shares of Common
Stock or to receive any other securities, the number of such other
shares or securities so receivable upon conversion of this Note shall
be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions contained in these
provisions with respect to Common Stock.
(d) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of this Note. All calculations of the number of shares of Common Stock to be
issued upon conversion of this Note shall be rounded to the nearest whole share.
(e) Reclassification, Consolidation, Merger or Sale of Assets.
In case of any reclassification of Common Stock, any consolidation of Borrower
with, or merger of Borrower into, any other person, any merger of another person
into Borrower (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of Borrower), any sale or transfer of all or substantially all of
the assets of Borrower or any compulsory share exchange pursuant to which share
exchange the Common Stock is converted into other securities, cash or other
property, then lawful provision shall be made as part of the terms of such
transaction whereby Holder shall have the right thereafter, during the period
this Note shall be convertible hereunder, to convert this Note only into the
kind and amount of securities, cash and other property receivable upon such
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock of Borrower into which this Note
might have been converted immediately prior to such reclassification,
consolidation, merger, sale, transfer or share exchange assuming such holder of
Common Stock of Borrower (i) is not a person with which Borrower consolidated or
into which Borrower merged or which merged into Borrower, to which such sale or
transfer was made or a party to such share exchange, as the case may be
("constituent person"), or an affiliate of a constituent person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange (provided that if the
kind or amount of securities, cash and other property receivable upon such
reclassification, consolidation, merger, sale, transfer or share exchange is not
the same for each share of Common Stock of Borrower held immediately prior to
such consolidation, merger, sale or transfer by other than a constituent person
or an affiliate thereof and in respect of which such rights of election shall
not have been exercised ("non-electing share"), then the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange by each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Borrower, the person formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires Borrower's shares, as the case may be, shall make provisions in
its certificate or articles of incorporation or other constituent document to
establish such right. Such certificate or articles of incorporation or other
constituent document shall provide for adjustments which, for events subsequent
to the effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to the
adjustments provided for herein. The above provisions shall similarly apply to
successive reclassifications, consolidations, mergers, sales, transfers or share
exchanges.
(f) Reservation of Shares; Transfer Taxes; Etc. Borrower shall
at all times reserve and keep available, out of its authorized and unissued
stock, solely for the purpose of effecting the conversion of this Note, such
number of shares of its Common Stock and other securities free of preemptive
rights as shall from time to time be sufficient to effect the conversion of this
Note. Borrower shall from time to time, in accordance with the laws of the State
of Utah, increase the authorized number of shares of Common Stock if at any time
the number of shares of Common Stock not outstanding shall not be sufficient to
permit the conversion of this Note. Borrower shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery of shares of
Common Stock or other securities upon conversion of this Note by Holder.
2. Defined Terms. As used in this Note, the following terms
have the respective meanings set forth below:
(a) "Common Stock" shall mean the common stock of Borrower and
any capital stock into which such common stock shall have been changed and any
other stock resulting from any reclassification of such stock which is not
preferred as to dividends or assets over any other class of stock which shall be
in effect from time to time.
(b) "Conversion Price" shall mean, subject to adjustment
as provided in Section 1(c) hereof, $3.08.
3. Prepayments. Borrower shall have the right to prepay the
principal and any interest outstanding under this Note in full or in part at
any time and from time to time. Any prepayment shall be applied first
against any accrued interest and then against principal.
4. Default Remedies.
(a) Borrower shall be in default under this Note upon the
happening of any condition or event set forth below (each, an "Event of
Default"):
(i) Borrower shall fail to pay the principal and interest
due on this Note on the date which the same becomes due
and payable in accordance with the terms hereof and
Borrower fails to make such payment within twenty (20)
days of the date which Borrower receives written notice
from the Holder that any such payment has not been
received by Holder;
(ii) default by Borrower in the punctual performance of any
other obligation, covenant, term or provision contained
in this Note, and such default shall continue
unremedied for a period of ten (10) days or more
following written notice of default by Holder to
Borrower;
(iii)The commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower
which results in the entry of an order for relief which
remains undismissed, undischarged or unbonded for a
period of 60 days or more.
(b) The entire unpaid principal balance of this Note and all
accrued interest thereon shall immediately be due and payable at the
option of the holder hereof upon the occurrence of any one or more of
the Events of Default and at any time thereafter.
5. Cumulative Rights. No delay on the part of the holder of this Note
in the exercise of any power or right under this Note or under any other
instrument executed pursuant hereto shall operate as a waiver thereof, nor shall
a single or partial exercise of any power or right preclude other or further
exercise thereof or the exercise of any other power or right.
6. Waiver. Borrower waives demand, presentment, protest, notice of
dishonor, notice of nonpayment, notice of intention to accelerate or notice of
acceleration (other than notices of default required pursuant to Sections
4(a)(i) and (ii)), notice of protest and any and all lack of diligence or delay
in collection or the filing of suit hereon which may occur, and agree to all
extensions and partial payments, before or after maturity, without prejudice to
the holder hereof.
7. Attorneys' Fees and Costs. In the event that this Note is collected
in whole or in part through suit, arbitration, mediation, or other legal
proceeding of any nature, then and in any such case there shall be added to the
unpaid principal amount hereof all reasonable costs and expenses of collection,
including, without limitation, reasonable attorney's fees.
8. Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of Texas, without giving effect
to conflicts of law provision or rule (whether of the State of Texas or any
other jurisdiction) that would result in the application of the laws of any
jurisdiction other than the State of Texas.
9. Headings. The headings of the sections of this Note are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
10. Usury. All agreements between Borrower and the holder of this Note,
whether now existing or hereafter arising and whether written or oral, are
expressly limited so that in no contingency or event whatsoever, whether by
acceleration of the maturity of this Note or otherwise, shall the amount paid,
or agreed to be paid, to the holder hereof for the use, forbearance or detention
of the money to be loaned hereunder or otherwise, exceed the maximum amount
permissible under applicable law. If from any circumstances whatsoever
fulfillment of any provision of this Note or of any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity, and if from any such
circumstances the holder of this Note shall ever receive anything of value as
interest or deemed interest by applicable law under this Note or any other
document evidencing, securing or pertaining to the indebtedness evidenced hereby
or otherwise an amount that would exceed the highest lawful rate, such amount
that would be excessive interest shall be applied to the reduction of the
principal amount owing under this Note or on account of any other indebtedness
of Borrower to the holder hereof relating to this Note, and not to the payment
of interest, or if such excessive interest exceeds the unpaid balance of
principal of this Note and such other indebtedness, such excess shall be
refunded to Borrower. In determining whether or not the interest paid or payable
with respect to any indebtedness of Borrower to the holder hereof, under any
specific contingency, exceeds the highest lawful rate, Borrower and the holder
hereof shall, to the maximum extent permitted by applicable law, (a)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (b) amortize, prorate, allocate and spread the total amount of
interest throughout the full term of such indebtedness so that the actual rate
of interest on account of such indebtedness is uniform throughout the term
thereof, and/or (c) allocate interest between portions of such indebtedness, to
the end that no such portion shall bear interest at a rate greater than that
permitted by law. The terms and provisions of this paragraph shall control and
supersede every other conflicting provision of all agreements between Borrower
and the holder hereof.
11. Successors and Assigns. This Note may not be sold, transferred
or otherwise assigned by Holder without the prior written consent of Borrower.
Borrower's obligations under this Note may not be transferred or otherwise
assigned by Borrower without the prior written consent of Holder.
12. Severability. In the event any one or more of the provisions
contained in this Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Note shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.
13. Notices. All notices of communication required or permitted
hereunder shall be in writing and may be given by (a) depositing the same in
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt request, (b) delivering the same in
person or by overnight express to an officer or agent of such party or, (c)
telecopying the same with electronic confirmation of receipt:
(i) If to Borrower, addressed thereto at:
Implantable Vision, Inc.
Attn.: President
-----------------------
-----------------------
-----------------------
Telecopier: ______________; and
(ii) If to Holder, addressed thereto at:
Lariat Energy Corporation
Attn.: President
-----------------------
-----------------------
-----------------------
Attention: _______________
Telecopier: ______________; and
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 13 from time to time. Any notice that is delivered personally,
or sent by telecopy or overnight express in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party. Any notice which is addressed and mailed in the manner
herein provided shall be conclusively presumed to have been given to the party
to whom it is addressed at the close of business, local time of the recipient,
on the third day after the day it is so placed in the mail.
IN WITNESS WHEREOF, the undersigned have executed this Note on and as
of the date first above written.
BORROWER:
Implantable Vision, Inc.,
a Utah corporation
By: _________________
Name:________________
Title:_______________
HOLDER:
Lariat Energy Corporation,
a Nevada corporation
By:__________________
Name:________________
Title:_______________
EXHIBIT C
American Note
THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER
ANY STATE SECURITIES LAWS. THIS CONVERTIBLE PROMISSORY NOTE MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR REGISTRATION OR QUALIFICATION UNDER SUCH STATE SECURITIES
LAWS, UNLESS THE PROPOSED TRANSACTION DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION.
CONVERTIBLE PROMISSORY NOTE
$3,000,000.00 Dallas, Texas July ___, 2008
FOR VALUE RECEIVED, the undersigned, Implantable Vision, Inc., a Utah
corporation, and its successors and assigns ("Borrower"), promises to pay to the
order of American Petroleum Corporation, a Texas corporation,, and its
successors and permitted assigns ("Holder"), the principal sum of Three Million
Dollars ($3,000,000.00), together with simple interest from the date of
advancement on the principal balance hereof from time to time remaining unpaid
at an interest rate equal to the U.S. prime rate as published in the Wall Street
Journal Online plus one percent (1%) per annum, determined on the date of this
Convertible Promissory Note (the "Note"), and adjusted on each anniversary until
maturity (subject to Section 2 of this Note), both principal and interest being
payable at the address designated in Section 12, or at such other place as
Holder may from time to time designate in writing.
The principal of this Note shall mature and be due and payable on July
__, 2010. All accrued and unpaid interest shall be due and payable immediately
on maturity.
All past due principal and accrued interest on this Note shall bear
interest from maturity (whether on demand, upon acceleration of maturity
following an Event of Default (as defined below) or otherwise) until paid at the
lesser of (i) the rate of twelve percent (12%) per annum or (ii) the highest
rate for which Borrower may legally contract under applicable law. All payments
hereunder shall be payable in lawful money of the United States of America which
shall be legal tender for public and private debts at the time of payments.
2. Conversion.
(a) Conversion Option. This Note shall be convertible at the
option of Holder hereof (the "Optional Conversion"), in whole or in part, in
lieu of and in satisfaction of the unpaid principal hereunder, into that number
of fully paid and nonassessable shares of Common Stock (as defined in Section 2)
as is equal to the quotient of the unpaid principal divided by the applicable
Conversion Price (as defined in Section 2). Upon any Optional Conversion, the
outstanding principal due under this Note shall be reduced in full by an amount
equal to the number of shares of Common Stock issued upon such conversion
multiplied by the applicable Conversion Price.
(b) Conversion Procedures. If Holder is entitled to and
desires to convert this Note into Common Stock, it shall surrender this Note to
Borrower at its principal executive offices, accompanied by proper instruments
of transfer to Borrower or in blank, accompanied by irrevocable written notice
to Borrower that Holder elects so to convert this Note and the name or names
(with address) in which a certificate or certificates for Common Stock are to be
issued. Borrower shall, as soon as practicable after such written notice and
compliance with any other conditions herein contained, deliver at such office to
Holder, certificates for the number of full shares of Common Stock to which it
shall be entitled. Such conversion shall be deemed to have been made as of the
date of such surrender of this Note, and the person or persons entitled to
receive Common Stock or other securities deliverable upon conversion shall be
treated for all purposes as the record holder or holders thereof on such date.
(c) Certain Adjustments. The applicable Conversion Price and the number of
securities issuable upon conversion of this Note shall be subject to adjustment
from time to time as follows:
(i) In case Borrower shall at any time after the date
hereof (1) pay a dividend or make a distribution on its capital stock
that is paid or made in shares of stock of Borrower, (2) subdivide its
outstanding shares of Common Stock into a greater number of shares or
(3) combine its outstanding shares of Common Stock into a smaller
number of shares, then in each such case the applicable Conversion
Price in effect immediately prior thereto and the securities issuable
shall be adjusted retroactively as provided below so that Holder
thereafter shall be entitled to receive the number of shares of Common
Stock of Borrower and other shares and rights to purchase stock or
other securities which Holder would have owned or have been entitled to
receive after the happening of any of the events described above had
this Note been converted immediately prior to the happening of such
event or any record date with respect thereto. In the event of the
redemption of any shares referred to in clause (1), Holder shall have
the right to receive, in lieu of any such shares or rights, any cash,
property or securities paid in respect of such redemption. An
adjustment made pursuant to this subsection (i) shall become effective
immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective
date in the case of a subdivision or combination.
(ii) Whenever the Conversion Price is adjusted as
provided above, Borrower shall compute the adjusted Conversion Price in
accordance herewith and mail to Holder a notice stating that the
Conversion Price has been adjusted and setting forth the adjusted
Conversion Price.
(iii) In the event that at any time, as a result of
any adjustment made pursuant to this Section, Holder shall become
entitled to receive any shares of Borrower other than shares of Common
Stock or to receive any other securities, the number of such other
shares or securities so receivable upon conversion of this Note shall
be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions contained in these
provisions with respect to Common Stock.
(d) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of this Note. All calculations of the number of shares of Common Stock to be
issued upon conversion of this Note shall be rounded to the nearest whole share.
(e) Reclassification, Consolidation, Merger or Sale of Assets.
In case of any reclassification of Common Stock, any consolidation of Borrower
with, or merger of Borrower into, any other person, any merger of another person
into Borrower (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of Borrower), any sale or transfer of all or substantially all of
the assets of Borrower or any compulsory share exchange pursuant to which share
exchange the Common Stock is converted into other securities, cash or other
property, then lawful provision shall be made as part of the terms of such
transaction whereby Holder shall have the right thereafter, during the period
this Note shall be convertible hereunder, to convert this Note only into the
kind and amount of securities, cash and other property receivable upon such
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock of Borrower into which this Note
might have been converted immediately prior to such reclassification,
consolidation, merger, sale, transfer or share exchange assuming such holder of
Common Stock of Borrower (i) is not a person with which Borrower consolidated or
into which Borrower merged or which merged into Borrower, to which such sale or
transfer was made or a party to such share exchange, as the case may be
("constituent person"), or an affiliate of a constituent person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange (provided that if the
kind or amount of securities, cash and other property receivable upon such
reclassification, consolidation, merger, sale, transfer or share exchange is not
the same for each share of Common Stock of Borrower held immediately prior to
such consolidation, merger, sale or transfer by other than a constituent person
or an affiliate thereof and in respect of which such rights of election shall
not have been exercised ("non-electing share"), then the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange by each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Borrower, the person formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires Borrower's shares, as the case may be, shall make provisions in
its certificate or articles of incorporation or other constituent document to
establish such right. Such certificate or articles of incorporation or other
constituent document shall provide for adjustments which, for events subsequent
to the effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to the
adjustments provided for herein. The above provisions shall similarly apply to
successive reclassifications, consolidations, mergers, sales, transfers or share
exchanges.
(f) Reservation of Shares; Transfer Taxes; Etc. Borrower shall
at all times reserve and keep available, out of its authorized and unissued
stock, solely for the purpose of effecting the conversion of this Note, such
number of shares of its Common Stock and other securities free of preemptive
rights as shall from time to time be sufficient to effect the conversion of this
Note. Borrower shall from time to time, in accordance with the laws of the State
of Utah, increase the authorized number of shares of Common Stock if at any time
the number of shares of Common Stock not outstanding shall not be sufficient to
permit the conversion of this Note. Borrower shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery of shares of
Common Stock or other securities upon conversion of this Note by Holder.
2. Defined Terms. As used in this Note, the following terms have the
respective meanings set forth below:
(a) "Common Stock" shall mean the common stock of Borrower and
any capital stock into which such common stock shall have been changed and any
other stock resulting from any reclassification of such stock which is not
preferred as to dividends or assets over any other class of stock which shall be
in effect from time to time.
(b) "Conversion Price" shall mean, subject to adjustment as provided
in Section 1(c) hereof, $3.08.
3. Prepayments. Borrower shall have the right to prepay the
principal and any interest outstanding under this Note in full or in part at
any time and from time to time. Any prepayment shall be applied first
against any accrued interest and then against principal.
4. Default Remedies.
(a) Borrower shall be in default under this Note upon the
happening of any condition or event set forth below (each, an "Event of
Default"):
(iv) Borrower shall fail to pay the principal and interest
due on this Note on the date which the same becomes due
and payable in accordance with the terms hereof and
Borrower fails to make such payment within twenty (20)
days of the date which Borrower receives written notice
from the Holder that any such payment has not been
received by Holder;
(v) default by Borrower in the punctual performance of any
other obligation, covenant, term or provision contained
in this Note, and such default shall continue
unremedied for a period of ten (10) days or more
following written notice of default by Holder to
Borrower;
(vi) The commencement of any proceeding under any bankruptcy
or insolvency laws by or against Borrower which results
in the entry of an order for relief which remains
undismissed, undischarged or unbonded for a period of
60 days or more.
(b) The entire unpaid principal balance of this Note and all
accrued interest thereon shall immediately be due and payable at the
option of the holder hereof upon the occurrence of any one or more of
the Events of Default and at any time thereafter.
5. Cumulative Rights. No delay on the part of the holder of this Note
in the exercise of any power or right under this Note or under any other
instrument executed pursuant hereto shall operate as a waiver thereof, nor shall
a single or partial exercise of any power or right preclude other or further
exercise thereof or the exercise of any other power or right.
6. Waiver. Borrower waives demand, presentment, protest, notice of
dishonor, notice of nonpayment, notice of intention to accelerate or notice of
acceleration (other than notices of default required pursuant to Sections
4(a)(i) and (ii)), notice of protest and any and all lack of diligence or delay
in collection or the filing of suit hereon which may occur, and agree to all
extensions and partial payments, before or after maturity, without prejudice to
the holder hereof.
7. Attorneys' Fees and Costs. In the event that this Note is collected
in whole or in part through suit, arbitration, mediation, or other legal
proceeding of any nature, then and in any such case there shall be added to the
unpaid principal amount hereof all reasonable costs and expenses of collection,
including, without limitation, reasonable attorney's fees.
8. Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of Texas, without giving effect
to conflicts of law provision or rule (whether of the State of Texas or any
other jurisdiction) that would result in the application of the laws of any
jurisdiction other than the State of Texas.
9. Headings. The headings of the sections of this Note are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
10. Usury. All agreements between Borrower and the holder of this Note,
whether now existing or hereafter arising and whether written or oral, are
expressly limited so that in no contingency or event whatsoever, whether by
acceleration of the maturity of this Note or otherwise, shall the amount paid,
or agreed to be paid, to the holder hereof for the use, forbearance or detention
of the money to be loaned hereunder or otherwise, exceed the maximum amount
permissible under applicable law. If from any circumstances whatsoever
fulfillment of any provision of this Note or of any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity, and if from any such
circumstances the holder of this Note shall ever receive anything of value as
interest or deemed interest by applicable law under this Note or any other
document evidencing, securing or pertaining to the indebtedness evidenced hereby
or otherwise an amount that would exceed the highest lawful rate, such amount
that would be excessive interest shall be applied to the reduction of the
principal amount owing under this Note or on account of any other indebtedness
of Borrower to the holder hereof relating to this Note, and not to the payment
of interest, or if such excessive interest exceeds the unpaid balance of
principal of this Note and such other indebtedness, such excess shall be
refunded to Borrower. In determining whether or not the interest paid or payable
with respect to any indebtedness of Borrower to the holder hereof, under any
specific contingency, exceeds the highest lawful rate, Borrower and the holder
hereof shall, to the maximum extent permitted by applicable law, (a)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (b) amortize, prorate, allocate and spread the total amount of
interest throughout the full term of such indebtedness so that the actual rate
of interest on account of such indebtedness is uniform throughout the term
thereof, and/or (c) allocate interest between portions of such indebtedness, to
the end that no such portion shall bear interest at a rate greater than that
permitted by law. The terms and provisions of this paragraph shall control and
supersede every other conflicting provision of all agreements between Borrower
and the holder hereof.
11. Successors and Assigns. This Note may not be sold,
transferred or otherwise assigned by Holder without the prior written consent
of Borrower. Borrower's obligations under this Note may not be transferred or
otherwise assigned by Borrower without the prior written consent of Holder.
12. Severability. In the event any one or more of the provisions
contained in this Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Note shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.
13. Notices. All notices of communication required or permitted
hereunder shall be in writing and may be given by (a) depositing the same in
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt request, (b) delivering the same in
person or by overnight express to an officer or agent of such party or, (c)
telecopying the same with electronic confirmation of receipt:
(i) If to Borrower, addressed thereto at:
Implantable Vision, Inc.
Attn.: President
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-----------------------
-----------------------
Telecopier: ______________; and
(ii) If to Holder, addressed thereto at:
American Petroleum Corporation
Attn.: President
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-----------------------
-----------------------
Attention: _______________
Telecopier: ______________; and
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 13 from time to time. Any notice that is delivered personally,
or sent by telecopy or overnight express in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party. Any notice which is addressed and mailed in the manner
herein provided shall be conclusively presumed to have been given to the party
to whom it is addressed at the close of business, local time of the recipient,
on the third day after the day it is so placed in the mail.
IN WITNESS WHEREOF, the undersigned have executed this Note on and as
of the date first above written.
BORROWER:
Implantable Vision, Inc.,
a Utah corporation
By:___________________
Name:_________________
Title:________________
HOLDER:
American Petroleum Corporation,
a Texas corporation,
By:__________________
Name:________________
Title:_______________
IMPLANTABLE VISION, INC.
Portfolio Leasehold Acquisition Agreement
July 10, 2008
Disclosure Schedule
All information disclosed in this Disclosure Schedule as exceptions to
any representation or warranty or in connection with any particular section of
the Portfolio Leasehold Acquisition Agreement, dated July 10, 2008, by and among
Implantable Vision, Inc. (the "Company"), Lariat Energy Corporation, Pilgrim
Petroleum Corporation and American Petroleum Corporation to which this
Disclosure Schedule is attached shall be deemed to be disclosed in every section
hereof, or in connection with any section hereof, if relevant thereto.
Section 2.1
Organization and Qualification
The Company has been advised that its registration with the State of
Utah has expired, and that it is no longer in good standing in such State.
Section 2.4
Financial Statements
The Company plans to file an Amendment No. 1 to its Annual Report on
Form 10-KSB for the fiscal year ended July 31, 2007 to amend the financial
statements included therein to reflect the removal of amounts (approximately
$90,909) that were erroneously recorded as accumulated depreciation relating to
the amortization of the phakic refractive lens that the Company acquired from
CIBA Vision AG in June 2006. The amortization of this asset is also erroneously
reflected in the Company's Quarterly Reports for the periods ended January 31,
2008 ($120,321), October 31, 2007 ($105,615) and April 30, 2007 ($14,706).
