EXHIBIT 10.1
AGREEMENT AMONG XXXXXX VENTURES, INC., PETROHUNTER
ENERGY CORPORATION AND PETROHUNTER ENERGY NT LTD.
DATED EFFECTIVE DECEMER 6, 2006
AGREEMENT
THIS AGREEMENT, hereinafter referred to as the "AGREEMENT", is entered into,
dated and made effective this 6th day of December, 2006,
BETWEEN: XXXXXX VENTURES, INC., a Nevada corporation having an office at #0-000
0xx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx X0X 0X0 Xxxxxx
(THE "PURCHASER")
AND: PETROHUNTER ENERGY CORPORATION, a Maryland corporation having an
office at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000
("PETROHUNTER")
AND: PETROHUNTER ENERGY NT LTD., a Nevada corporation which is a wholly
owned subsidiary of PetroHunter having an office at 0000 Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000
(THE "SUBSIDIARY")
WHEREAS the Purchaser is seeking to acquire an interest in certain assets (the
"ASSETS") of PetroHunter, as described more fully in Schedule "A" attached
hereto, which PetroHunter holds or will hold through its wholly owned
Subsidiary.
AND WHEREAS the Purchaser wishes to enter into an agreement to acquire the
Assets, by way of its purchase of the outstanding common shares and preferred
shares of the Subsidiary, on the terms and conditions set out herein.
NOW, THEREFORE, in consideration of $10.00 and other good and valuable
consideration, the parties agree as follows:
1. The parties hereto agree that they will use their best efforts to enter
into a definitive agreement (the "DEFINITIVE AGREEMENT"), on or before
December 31, 2006, containing substantially the same terms and
provisions as this Agreement, except that the Definitive Agreement
shall include any and all additional and customary representations and
warranties mutually agreed upon by the parties, which are not included
in this Agreement or are reasonably necessary as a result of
information obtained by either party during the course of due
diligence. If the parties enter into the Definitive Agreement, it shall
replace this Agreement in its entirety. If the parties do not enter
into a Definitive Agreement for any reason other than a material breach
by a party, then this Agreement nevertheless shall bind the parties.
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 1
2. The Purchaser shall purchase and PetroHunter shall assign and transfer
all of the issued and outstanding shares of common stock and preferred
stock of the Subsidiary (and all other equity which may be issued and
outstanding, if any, in the Subsidiary) in exchange for:
(a) the issuance of 200 million shares of common stock of Purchaser to
PetroHunter;
(b) the issuance of five (5) million preferred shares of Purchaser to
PetroHunter, said preferred shares having no dividend rights and
each preferred share having the equivalent of one hundred common
share voting rights at any meeting or vote of shareholders; and
(c) upon completion of any equity financing (the "FINANCING") of the
Purchaser within five (5) years of the date of this Agreement (or
the date of the Definitive Agreement, whichever is applicable),
the issuance by Purchaser to PetroHunter of a five (5) year
warrant (the "WARRANT") entitling PetroHunter and its affiliates
to purchase an equivalent number of securities as the Purchaser
has issued pursuant to the financing on the same terms as the
Financing save and except that, on each anniversary of the
Warrant, the price per security payable upon exercise of the
Warrant will increase by 10%. For greater clarity, if the
Purchaser engages in the sale of 100 common shares at a price of
$1.00 per share, the Warrant would entitle PetroHunter to purchase
100 common shares at a price of $1.00 per share in the first year
of the Warrant, $1.10 in the second year of the Warrant, $1.20 in
the third year of the Warrant, $1.30 in the fourth year of the
warrant, and $1.40 in the fifth year of the Warrant.
3. Subsidiary is currently conducting a private placement of 12%
convertible notes (the "NOTES") having an aggregate principal amount of
up to $50 million (the "PRIVATE PLACEMENT"). The Notes are convertible
at the option of the holder into one share of common stock of
Subsidiary for each $0.50 of debt. Subsidiary may convert the Notes at
its discretion immediately prior to the consummation of the proposed
acquisition of Subsidiary by Purchaser described herein. Subsidiary
agrees to so convert the outstanding Notes, to the extent not
previously converted, into shares of Subsidiary's common stock
immediately prior to the Closing (as defined below).
4. By signing a Subscription Agreement, each investor in the Private
Placement consents to and approves the consummation of the proposed
acquisition of Subsidiary by Purchaser described herein and will be
issued one share of Purchaser's common stock for each share of
Subsidiary common stock owned by the investor.
5. Purchaser will change its name to "Outback Energy Corporation" and
effect a recapitalization such that the number of common shares held by
its existing shareholders will not exceed 60 million.
6. The Parties further agree as follows:
(a) that the closing of the acquisition of the Subsidiary (the
"CLOSING") shall occur on a date mutually agreed by the parties
hereto;
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 2
(b) After the initial financing contemplated in Section 3 has been
completed and for a period of five (5) years from the date of this
Agreement (or the date of the Definitive Agreement, whichever is
applicable), PetroHunter and its affiliates will have the right of
first refusal to finance the Purchaser on terms substantially
identical to the terms of any financing a third party agrees to
complete for Purchaser;
(c) Purchaser will adopt the Subsidiary's stock option plan and assume
the obligations of any stock options granted by the Subsidiary, it
being understood that the option pool of the stock option plan
will not exceed 10% of the number of outstanding shares of the
issuing company; and
(d) Purchaser will have sold, transferred, or otherwise disposed of
its assets other than cash prior to Closing, so that it will have
no more than $10,000 of assets and no more than $50,000 of
liabilities of any kind at Closing.
7. Concurrently with the execution of this Agreement, the Purchaser shall
effect the appointment to its Board of Directors Xxxxxxx X. Xxxxxxxxx
and Xxxxxxx Xxxxxxx (collectively, the "New Directors"). In the event
that Closing does not occur on or before January 15, 2007, then the New
Directors, and any directors and officers that they have appointed
during their term as directors, shall resign, leaving Xxxxxx Xxxx as
the sole director of Purchaser.
8. The Closing shall be conditional upon the following:
(a) Any agreements underlying PetroHunter or the Subsidiary's
acquisition of the Assets shall be in good standing at the date of
Closing;
(b) PetroHunter and the Subsidiary will, from the date hereof until
Closing, operate their business only in the ordinary course and
will not sell, distribute, license or encumber any of the Assets;
(c) Purchaser shall be in receipt of any certificates, opinions and/or
documents related to the Assets, as Purchaser may reasonably
request, including documents relating to any previous geological
work on the Assets and any legal opinions relating to the Assets,
from whatever jurisdiction;
(d) the receipt of all consents, approvals, authorizations and orders
required of or for the completion of any document, transaction, or
opinion required hereunder;
(e) satisfactory completion of due diligence, at the absolute and sole
discretion of Purchaser, concerning the business, affairs,
financial affairs and Assets of the Subsidiary and PetroHunter;
(f) satisfactory completion of due diligence, at the absolute and sole
discretion of PetroHunter, concerning the business, affairs and
financial affairs of Purchaser;
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 3
(g) completion of a minimum of $15 million of the financing
contemplated in section 3 hereof together with any additional
conditions as the parties agree to be included in the Definitive
Agreement;
(h) recapitalization of the Purchaser such that the number of common
shares held by its existing shareholders (i.e., those not
purchasing in the initial financing contemplated in section 3)
shall not exceed 60 million;
(i) amendment of the Purchaser's Articles of Incorporation to provide
for authorized capital stock consisting of 1,000,000,000 common
shares and 100,000,000 preferred shares;
(j) adoption of the stock option plan as set forth in section 6(c)
above; and
(k) disposition of all of Purchaser's assets other than cash.
9. Purchaser hereby represents and warrants to PetroHunter and the
Subsidiary that:
(a) it is a public corporation incorporated in the State of Nevada and
is in good standing with all agencies. Its shares are eligible to
trade on the OTC Bulletin Board, under the symbol "CVTR";
(b) there are no legal actions against Purchaser and the company knows
of no intended legal actions against the company and is not
engaged in any legal actions against other parties;
(c) its business and financial condition are as set forth in its
filings with the SEC, on the XXXXX database, and these filings are
current as of the date thereof;
(d) all offers and sales of Purchaser's securities by Purchaser have
been made in compliance with all applicable securities laws;
(e) there are no outstanding mergers, acquisitions, financial
commitments, obligations, liabilities, etc. other than those
contemplated in this transaction; and
(f) there are no legal actions against the company or directors,
officers and/or shareholders of the company nor does Purchaser
know of any intended legal actions against it or any of its
directors and Purchaser is not engaged in any legal actions
against other parties, and is current in all filings with tax,
securities and other regulatory authorities.
10. PetroHunter and the Subsidiary hereby represent and warrant to
Purchaser that:
(a) PetroHunter is a corporation incorporated in the State of Maryland
and is in good standing with all regulatory agencies;
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 4
(b) the Subsidiary is a private corporation incorporated in the State
of Nevada and is in good standing with all regulatory agencies;
(c) there are no legal actions against PetroHunter or the Subsidiary
or their directors, officers or employees nor do PetroHunter or
the Subsidiary know of any intended legal actions against them or
any of their directors, officers and employees that would
materially affect the transactions contemplated by this Agreement,
PetroHunter and the Subsidiary are not engaged in any legal
actions against other parties, and are current in all filings with
tax and regulatory authorities;
(d) their business and financial condition will remain materially
unchanged from any due diligence or financial statement
documentation provided to Purchaser prior to Closing; and
(e) the Subsidiary owns 50% beneficial right, title and interest in
and to the Assets which will be disclosed in a schedule to the
Definitive Agreement, subject to any liens, charges,
securitizations, obligations, security filings, obligations to
vendors or debts disclosed in the financial statements and other
due diligence documents of PetroHunter and the Subsidiary provided
to Purchaser prior to Closing.
11. Each and every obligation of Purchaser to be performed on the Closing
shall be subject to the satisfaction prior thereto of the following
conditions:
(a) the representations and warranties made by PetroHunter and the
Subsidiary in this Agreement and the Definitive Agreement or given
on their behalf hereunder shall be substantially accurate in all
material respects on and as of the Closing with the same effect as
though such representations and warranties had been made or given
on and as of the Closing;
(b) PetroHunter and the Subsidiary shall have performed and complied
with all obligations and covenants required by this Agreement and
the Definitive Agreement to be performed or complied with by them
prior to or at Closing;
(c) Purchaser shall have been furnished that information on the
business and affairs of PetroHunter and the Subsidiary which it
deems, in its sole and absolute discretion, to be necessary for it
to meet its continuous disclosure obligations under the Securities
Exchange Act of 1934 upon Closing including, without limiting the
generality of the foregoing, the obligation to file a Report on
Form 8-K which contains substantially the same information as
would be required to register a class of securities under the
Securities Exchange Act of 1934;
(d) as of Closing there shall not have occurred any material adverse
change, financially or otherwise, which materially impairs the
ability of PetroHunter and the Subsidiary to conduct their
business and affairs; and
(e) the opinion of counsel to Purchaser that the Closing will not
result in Purchaser breaching any applicable securities law, rules
and regulations.
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 5
12. Each and every obligation of PetroHunter and the Subsidiary to be
performed on Closing shall be subject to the satisfaction prior thereto
of the following conditions:
(a) the representations and warranties made by Purchaser in this
Agreement and the Definitive Agreement or given on their behalf
hereunder shall be substantially accurate in all material respects
on and as of the Closing with the same effect as though such
representations and warranties had been made or given on and as of
the Closing;
(b) Purchaser shall have performed and complied with all obligations
and covenants required by this Agreement and the Definitive
Agreement to be performed or complied with by them prior to or at
Closing;
(c) Subsidiary shall have secured the convertible debt financing
described in Section 3 hereof, of which at least $15 million will
have closed on or before January 10, 2007;
(d) PetroHunter and the Subsidiary shall have completed, to their
satisfaction, due diligence on the business and affairs of
Purchaser; and
(e) as of Closing there shall not have occurred any material adverse
change, financially or otherwise, which materially impairs the
ability of PetroHunter and the Subsidiary to conduct their
business and affairs.
13. The parties are obligated, as part of their continuous disclosure
obligations under the Securities Exchange Act of 1934, to disclose this
Agreement, the Definitive Agreement and any other material news
relating to these agreements, the Assets and the status of the
transactions contemplated herein.
14. At Closing, Xxxxxx Xxxx will resign all positions with Purchaser and
Purchaser shall adopt Subsidiary's Bylaws.
15. At Closing, Subsidiary shall assume the responsibility for payment of
Purchaser's legal fees for the transactions contemplated by this
Agreement, which amount shall be included in Purchaser's liabilities
discussed in Section 6(d) above.
16. No party will solicit any third party for the licensing, development,
exploration, lease, assignment, transfer or sale of any or all their
respective Assets, or solicit opportunities for either party to enter
into any discussions with any third party for the licensing, lease,
transfer or sale of any or all of its respective Assets, for the term
of this Agreement or the Definitive Agreement, whichever is applicable.
This section shall not be read to prohibit the parties from conducting
such discussions which are in the ordinary course of business but is
intended to be read as protecting each of the parties from the other
entering into negotiations which would conflict with the transactions
contemplated by this Agreement and by the Definitive Agreement.
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 6
17. This Agreement shall be construed in accordance with, and governed by,
the laws of the State of Nevada, and each party separately and
unconditionally subjects to the jurisdiction of any court of competent
authority in Nevada, and the rules and regulations thereof, for all
purposes related to this agreement and/or their respective performance
hereunder.
18. This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof and may be modified only by a
written document signed by all parties.
19. Upon Closing, the parties shall prepare, execute and file any and all
documents necessary to comply with all applicable federal and state
securities laws, rules and regulations in any jurisdiction where they
are required to do so.
20. This Agreement is subject to the approval of the board of directors of
each party and any regulatory agency having jurisdiction over the
transactions contemplated herein, and is further subject to PetroHunter
and the Subsidiary obtaining an opinion of tax counsel, to their sole
satisfaction, that the disposition of the shares of the Subsidiary, the
acquisition of securities issued by Purchaser as payment therefor, or
any final transfer or assignment of the Assets, by PetroHunter to the
Subsidiary, will not result in a significant taxable event or
disposition for PetroHunter.
20. Purchaser, PetroHunter and the Subsidiary each represent and warrant to
the other that it is not involved in any materially adverse judicial,
regulatory or civil proceedings nor is it aware of any potential
materially adverse judicial, regulatory or civil proceedings which may
be brought against it.
21. If this Agreement accurately sets forth the terms and conditions under
which you are willing to enter into the transactions contemplated
hereby, please so indicate by signing and returning a copy of this
Agreement to Purchaser, by fax, not later than 5:00 p.m. Pacific
Standard Time, on December 6, 2006, failing which, any offer contained
herein will be considered invalid.
22. If any term or provision hereof shall be held illegal or invalid, this
Agreement shall be construed and enforced as if such illegal or invalid
term or provision had not been contained herein.
23. All references to currency in this Agreement are references to the
lawful currency of the United States of America.
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Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 7
DATED THIS 6TH DAY OF DECEMBER, 2006
"PURCHASER"
XXXXXX VENTURES, INC.
By: /s/ Xxxxxx Xxxx
-------------------------------------
Name: Xxxxxx Xxxx
-----------------------------------
Title: President
----------------------------------
"PETROHUNTER"
PETROHUNTER ENERGY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: Chief Financial Officer
----------------------------------
"SUBSIDIARY"
PETROHUNTER ENERGY NT LTD.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------------
Title: President
-----------------------------------
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 8
SCHEDULE "A"
THE ASSETS
All of the rights and obligations of GSL Energy Corporation (now known as
PetroHunter Operating Company) as set forth under the following agreements:
o Purchase and Sale of Contractual Interest (Northern Territory Permit
No. 98) between PetroHunter Energy Corporation, PetroHunter Energy NT
Ltd. and Sweetpea Corporation Pty Ltd, dated effective December 1, 2006
o Purchase and Sale of Contractual Interest (Northern Territory Permit
Nos. 76, 99 and 117) between PetroHunter Energy Corporation,
PetroHunter Energy NT Ltd. and Sweetpea Corporation Pty Ltd, dated
effective December 1, 2006
o Assignment of Contractual Interest and Option Agreement between MAB
Resources LLC, Sweetpea Corporation Pty Ltd and GSL Energy Corporation
dated effective April 1, 2006
o Exploration and Development Agreement between MAB Resources LLC and GSL
Energy Corporation effective March 17, 2006
Xxxxxx Ventures/PetroHunter Energy NT Agreement - page 9
