EXHIBIT 4.1
Asset Purchase Agreement
ASSET PURCHASE AGREEMENT
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This Asset Agreement ("Agreement") is made and dated for reference effective as
fully executed as at the 15th day of December, 2004.
BETWEEN:
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GENEVA ENERGY CORP., a body corporate subsisting and incorporated
under the laws of the State of Nevada, U.S.A., and having an address
for delivery and notice located at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxx, X.X.X., 00000 ("Vendor")
and
XXXXXX CREEK ENERGY CORP., a body corporate also subsisting and
incorporated under the laws of the State of Nevada, U.S.A., and having
an address for delivery and notice located at 0000 Xxxx 00xx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0 ("Purchaser")
WITNESS THAT:
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A. WHEREAS the Vendor desires to sell and convey the Assets to the Purchaser and
the Purchaser desires to purchase and receive the Assets from the Vendor;
B. NOW THEREFORE in consideration of the premises hereto and of the covenants,
warranties, representations, agreements and payments herein set forth and
provided for, the parties hereto covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 In this Agreement, including the preamble hereto, this clause and the
Schedule attached hereto unless the context otherwise requires:
(a) "Assets" means the Petroleum and Natural Gas Rights, the Tangibles and
the Miscellaneous Interests;
(b) Effective Time" means 9:00 a.m., Vancouver time, on December 15, 2004,
(c) "Environmental Damage" means any one or more of:
(i) ground water, surface water or aquifer contamination;
(ii) soil contamination;
(iii)corrosion or deterioration of structures, equipment, fences and
other property;
(iv) toxic of hazardous substance emissions; or
(v) injury or damage to plants or surface.
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INTERPRETATION - continued
(d) "Lands" means the Vendor's entire right, title, estate and interest in
and to those lands set forth and described in Schedule "A" hereto,
including without limitation those interests as also set forth in
Schedule "A" and the reversionary interests in the lands, and
including the Petroleum Substances within, upon or under such lands,
together with the right to explore for and recover same;
(e) "Leases" means collectively the leases and licences set forth and
described in Schedule "A" hereto and any and all other documents of
title by virtue of which the holder thereof is entitled to drill for,
win, take, own and/or remove the Petroleum Substances underlying all
or any part of the Lands;
(f) "Miscellaneous Interests" means the Vendor's entire right, title,
estate and interest in and to all property, assets and rights, other
than Petroleum and Natural Gas Rights or Tangibles, pertaining to the
Petroleum and Natural Gas Rights, the Lands, the Leases or the
Tangibles and to which the Vendor is entitled at the Effective Time
including, without limitation:
(i) all contracts, agreements, documents, books and records and all
seismic, geological, geophysical, production and engineering
information, reports and analysis relating to the Petroleum and
Natural Gas Rights, the Lands or the Tangibles and any and all
rights in relation thereto;
(ii) all subsisting rights to enter upon, use and occupy the surface
of any of the Lands;
(iii)all Petroleum Substances in the course of production from the
Lands not at the Effective Time beyond the point of delivery to
any purchaser of production of Petroleum Substances from the
Lands; and
(iv) the hole for and the casing located in the Xxxxx.
(g) "Petroleum and Natural Gas Rights" means the entire, right, title,
estate and interest of the Vendor in and to the Leases and the Lands;
(h) "Petroleum Substances" means petroleum, natural gas and related
hydrocarbons and all other substances, whether liquid or solid and
whether hydrocarbons or not, and rights to the extent granted by the
Leases;
(i) "Tangibles" means the Vendor's entire right, title, estate and
interest in and to all tangible depreciable property and assets
situate in, on or about the Lands, appurtenant thereto or used,
intended to be used or useful in connection therewith or with
production, processing, transmission or treatment operations thereon
or thereto; and
(j) "Xxxxx" means all xxxxx drilled on the Lands including, without
limitation, the xxxxx more particularly described in Schedule "A"
hereto.
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INTERPRETATION - continued
1.2 The following Schedule is attached to and forms part of this Agreement:
(a) Schedule "A" - Description of Lands, Leases and Xxxxx.
1.3 Wherever any provision of the Schedule to this Agreement conflicts with any
provision in the body of this Agreement, the provisions of the body of this
Agreement shall prevail.
1.4 The headings of articles and clauses herein and in the Schedule are
inserted for convenience of reference only and shall not affect or be
considered in the construction or interpretation of the provisions hereof.
1.5 In this Agreement words importing persons include companies, and vice
versa, and words importing the masculine gender include the feminine and
neuter genders and vice versa.
ARTICLE 2
CONVEYANCE
2.1 In consideration for the following purchase price being paid by the
Purchaser to the Vendor (the "Purchase Price"), the receipt and sufficiency
of which the Vendor hereby acknowledges and confirms, the Vendor hereby
sells, assigns, transfers, conveys and sets over unto the Purchaser its
entire right, title, estate and interest in and to the Assets and the
Purchaser hereby purchases, receives and accepts directly from the Vendor
the Vendor's entire right, title, estate and interest in and to the Assets,
effective as of the Effective Time, all in accordance with and subject to
the terms and conditions of this Agreement, to have and to hold the same
together with all benefits and advantages to be derived therefrom,
absolutely.
2.2 The Purchase Price for the Assets is comprised of:
(a) the issuance to the order and direction of the Vendor by the Purchaser
of an aggregate of 6,000,000 common shares from the treasury of the
Purchaser, each with a par value of U.S. $0.001 per common share
(collectively, the "Shares"); and
(b) the payment to the order and direction of the Vendor by the Purchaser
of the sum of U.S. $300,000.
The Vendor hereby initially acknowledges and agrees that the Purchaser
makes no representations as to any resale or other restriction affecting
the Shares and that it is presently contemplated that the Shares will be
issued by the Purchaser to the order and direction of the Vendor in
reliance upon the registration and prospectus exemptions contained in
certain sections of the United States Securities Act of 1933 (the
"Securities Act") or "Regulation S" promulgated under the Securities Act
which will impose a trading restriction in the United States on the Shares
for a period of at least 12 months from the date of issuance. In addition,
the Vendor hereby also acknowledges and agrees that the within obligation
of the Purchaser to issue the Shares will be subject to the Purchaser being
satisfied that an exemption from applicable registration and prospectus
requirements is available under the Securities Act and all applicable
securities laws in respect of the Vendor and the Share, and the Purchaser
shall be relieved of any obligation whatsoever to purchase any Assets of
the Vendor and to issue Shares where the Purchaser reasonably determines
that a suitable exemption is not available to it. The Vendors hereby also
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CONVEYANCE - continued
acknowledges and understands that neither the sale of the Shares which the
Vendor is acquiring nor any of the Shares themselves have been registered
under the Securities Act or any state securities laws, and, furthermore,
that the Shares must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is
available. The Vendor also acknowledges and understands that the
certificates representing the Shares will be stamped with the following
legend (or substantially equivalent language) restricting transfer in the
following manner:
"The transfer of the securities represented by this certificate is
prohibited except in accordance with the provisions of Regulation S
promulgated under the United States Securities Act of 1933, as amended
(the "Securities Act"), pursuant to registration under the Act or
pursuant to an available exemption from registration. In addition,
hedging transactions involving such securities may not be conducted
unless in compliance with the Securities Act.".
or
"The securities represented by this certificate have not been
registered under the United States Securities Act of 1933, as amended,
or the laws of any state, and have been issued pursuant to an
exemption from registration pertaining to such securities and pursuant
to a representation by the security holder named hereon that said
securities have been acquired for purposes of investment and not for
purposes of distribution. These securities may not be offered, sold,
transferred, pledged or hypothecated in the absence of registration,
or the availability of an exemption from such registration.
Furthermore, no offer, sale, transfer, pledge or hypothecation is to
take place without the prior written approval of counsel to the
company being affixed to this certificate. The stock transfer agent
has been ordered to effectuate transfers only in accordance with the
above instructions.";
and the Vendor hereby consents to the Company making a notation on its
records or giving instructions to any transfer agent of the Shares in order
to implement the restrictions on transfer set forth and described
hereinabove.
ARTICLE 3
EFFECTIVE TIME AND ADJUSTMENTS
3.1 The transfer and assignment of the Assets from the Vendor to the Purchaser
shall be effective as of the Effective Time. The Vendor will be responsible
for costs and expenses incurred prior to the Effective Time in connection
with the Assets and the Purchaser will be responsible for costs and
expenses incurred after the Effective Time in connection with the Assets.
3.2 All benefits and obligations of every kind and nature accruing to or
payable, or paid and received or receivable in respect of the Assets, or
that are attributable to or otherwise affect the Assets, including
operating, maintenance, development and capital costs and the revenue from
the sale of production shall be apportioned between the Vendor and the
Purchaser as of the Effective Time.
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EFFECTIVE TIME AND ADJUSTMENTS - continued
3.3 All adjustments not made or not capable of being estimated shall be made
within two years from the date hereof; no further or subsequent adjustments
shall be made thereafter.
ARTICLE 4
VENDOR'S REPRESENTATIONS
4.1 The Vendor covenants with and represents and warrants to the Purchaser that
as of the date hereof and the Effective Time:
(a) the Vendor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada;
(b) the Vendor has good right, full power and absolute authority to carry
on its business, to enter into this Agreement, to bargain, sell,
transfer, assign and convey to the Purchaser the full legal and
beneficial title to the Vendor's entire interest in and to the Assets
for the purposes and in the manner herein provided and according to
the true intent and meaning of this Agreement;
(c) the Agreement and all further and other documents required hereunder
have been duly authorized, executed and delivered by the Vendor and
this Agreement and such documents constitute legal, valid and binding
obligations of the Vendor enforceable in accordance with their
respective terms;
(d) the execution and delivery of this Agreement and each and every
agreement or document to be executed and delivered hereunder, and the
consummation of the transactions contemplated herein, will not
violate, nor be in conflict with, any provision of any agreement or
instrument to which the Vendor is a party or is bound, or any
judgment, decree, order, statute, rule or regulation applicable to the
Vendor or of the Vendor's constating documents or by-laws;
(e) the Vendor has not entered into any agreement and has done no act or
thing whereby any of its interest in and to the Assets may be
cancelled, determined or reduced, nor has the Vendor encumbered or
alienated the same or any interest therein, and the Assets are now and
were at the Effective Time free and clear of all liens, mortgages,
pledges, charges, burdens, encumbrances, adverse claims, demands and
royalties or other interests created by, through or under the Vendor,
save as set forth in Schedule "A" hereto; provided that, subject to
the foregoing, the Vendor does not warrant title to the Assets;
(f) subject to the rents, covenants, conditions and stipulations in the
Leases reserved and contained and on the lessees or holders part
thereunder to be paid, performed and observed, the Purchaser may enter
into and upon, hold and enjoy the Leases for the residue of their
respective terms and all renewals or extensions thereof as to the
interests hereunder assigned for its own use and benefit without any
lawful interruption of or by the Vendor or any other person whomsoever
claiming by, through or under the Vendor;
(g) to the best of the knowledge, information and belief of the Vendor,
any and all royalties, rentals and other payments due under each of
the Leases have been properly and timely paid, and all conditions
necessary to keep each of the Leases in force have been fully
performed;
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VENDOR'S REPRESENTATIONS - continued
(h) there are no authorizations for expenditure pursuant to which
expenditures are or may be made or any other financial commitments
which are outstanding or due, or hereafter may become due in respect
of the Assets or operations in respect thereof;
(i) the Vendor has incurred no obligation or liability, contingent or
otherwise, for brokers' or finders' fees in respect of this
transaction for which Purchaser shall have any obligation or
liability;
(j) the interests of the Vendor in the Lands are not subject to a penalty
or to reduction, whether by virtue of the conversion or other
alteration of the interest of any third party under existing
agreements pertaining to the Assets or otherwise;
(k) to the best of the knowledge, information and belief of the Vendor,
all Xxxxx have been drilled, and, if completed, completed and operated
in accordance with good oil and gas field practices and in compliance
with all rules and regulations of all governmental agencies having
jurisdiction with respect thereto;
(l) to the best of the knowledge, information and belief of the Vendor,
all producing Xxxxx and facilities located on or appurtenant to the
Lands are in good operating condition;
(m) the Vendor has performed and observed all of its material duties,
liabilities, obligations and covenants of any nature or kind required
to be satisfied, performed and observed by it under the terms of any
of the Leases and any agreement pertaining to the Assets, and the
Vendor is not in default under or in breach of any of the terms,
covenants and conditions thereof;
(n) there are no charges, claims, proceedings, actions or lawsuits in
existence, contemplated or threatened, against or with respect to the
Assets or the interests of the Vendor therein;
(o) the Vendor has not granted to any person or corporation any right or
contract to purchase the Vendor's share of Petroleum Substances
produced from the Lands;
(p) to the best of the knowledge, information and belief of the Vendor,
all laws, regulations and orders of all governmental agencies having
jurisdictions over the Assets have been, and until the Closing Time
shall continue to be complied with;
(q) the Vendor is not obligated by virtue of a prepayment arrangement
under any contract for the sale of Petroleum Substances and containing
a "take or pay" or similar provision, or a production payment or of
any other arrangement, to deliver Petroleum Substances produced from
the Lands at some future time without then or thereafter receiving
full payment therefore;
(r) all ad valorem, property, production, severance and similar
taxes and assessments based upon or measured by the ownership
of production of Petroleum Substances from the Lands or the
receipt of proceeds therefrom payable by the Vendor have been
properly paid;
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VENDOR'S REPRESENTATIONS - continued
(s) to the best of the knowledge, information and belief of Vendor, there
has been no Environmental Damage or any other pollution or
contamination whatsoever, whether arising from or relating to the
drilling of xxxxx on the Lands, the production of Petroleum Substances
from the Lands, the conduct of operations on the Lands, or otherwise;
(t) the Vendor has not received notice of any violation of or
investigation relating to any federal, provincial or local
environmental or pollution law, regulation or ordinance with respect
to the Assets, nor has the Vendor been provided with any notification,
order or request by or on behalf of any federal, provincial or local
authority having jurisdiction over environmental matters requiring the
Vendor to undertake, now or in the future, any action or procedure to
comply with any federal, provincial or local laws related to
protection of the environment for which the required remedial action
has not been completed;
(u) the Vendor is not a non-resident of Canada within the meaning of the
Income Tax Act (Canada).
(v) all documents and agreements affecting Vendor's title to the Assets or
production or revenue from the Assets, of which the Vendor is either a
party or is aware, has been made available to and shall be delivered
to the Purchaser;
(w) the Assets are not subject to any preferential rights of purchase,
rights of first refusal, or any similar restrictions; and
(x) none of the xxxxx included in the Assets are under penalty or subject
to any reduction in working interest.
4.2 Notwithstanding anything to the contrary herein expressed or implied, it is
expressly agreed and understood that the covenants, representations and
warranties contained in clause 4.1 were true as at the Effective Time and
are true on the date hereof, and shall survive and remain in full force and
effect for the benefit of the Purchaser for a period of two years after the
date hereof.
4.3 The Vendor shall be liable to the Purchaser for and shall, in addition,
indemnify the Purchaser from and against, all losses, costs, claims,
damages, expenses, and liabilities suffered, sustained, paid or incurred by
the Purchaser or any third party which would not have been suffered,
sustained, paid or incurred by the Purchaser or any third party had all of
the representations and warranties contained in clause 4.1 been accurate
and truthful.
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ARTICLE 5
PURCHASER'S REPRESENTATIONS AND WARRANTIES
5.1 The Purchaser covenants with and represents and warrants to the Vendor that
as of the date hereof and the Effective Time:
(a) the Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and
is registered and in good standing in the State of Nevada;
(b) the Purchaser has all requisite power and authority to carry on its
business as presently conducted, to enter into this Agreement, to
purchase the Assets on the terms described herein and to perform its
other obligations under this Agreement;
(c) the execution and delivery of this Agreement and each and every
agreement or document to be executed and delivered hereunder and the
consummation of the transactions contemplated herein will not violate,
nor be in conflict with, any provision of any agreement or instrument
to which the Purchaser is a party or is bound, or any judgment,
decree, order, statute, rule or regulation applicable to the Purchaser
or of the Purchaser's constating documents or by-laws;
(d) the execution, delivery and performance of this Agreement and the
transactions contemplated hereby have been duly and validly authorized
by all requisite corporate action on the part of the Purchaser;
(e) this Agreement and all conveyancing and other documents and
instruments required hereunder to be executed and delivered by it
shall have been duly executed and delivered. This Agreement does, and
such documents and instruments will, constitute legal, valid and
binding obligations of it in accordance with their terms;
(f) the Purchaser has incurred no liability, contingent or otherwise, for
brokers or finders' fees in respect of this transaction for which the
Vendor shall have any responsibility whatsoever; and
(g) the Purchaser is not a "non-Canadian" within the meaning of the
Investment Canada Act (Canada).
5.2 Notwithstanding anything to the contrary herein expressed or implied, it is
expressly agreed and understood that the foregoing covenants,
representations and warranties were true as of the Effective Date and are
true on the date hereof and shall survive and remain in full force and
effect for the benefit of the Vendor for a period of two years after the
date hereof.
5.3 The Purchaser shall be liable to the Vendor for and shall, in addition,
indemnify the Vendor from and against, all losses, costs, claims, damages,
expenses, and liabilities suffered, sustained, paid or incurred by Vendor
or any third party which would not have been suffered, sustained, paid or
incurred by the Vendor or any third party had all of the representations
and warranties contained in clause 5.1 been accurate and truthful.
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ARTICLE 6
NO MERGER
6.1 The covenants, representations and warranties set forth in Articles IV and
V shall be deemed to apply to all assignments, conveyances, transfers and
documents conveying any of the Assets from the Vendor to the Purchaser and
there shall not be any merger of any covenants, representations or
warranties in such assignments, transfers or documents notwithstanding any
rule of law, equity or statute to the contrary and all such rules are
hereby waived.
ARTICLE 7
INDEMNIFICATION
7.1 Except as otherwise expressly provided herein, and subject to clause 7.3,
the Vendor shall be liable to the Purchaser for, and shall, in addition,
indemnify the Purchaser from and against, all losses, costs, claims,
damages (direct or indirect), expenses or liabilities suffered, sustained,
paid or incurred by the Purchaser or any third party which arise out of or
in connection with, or pertain to the Assets and relate to a matter
occurring prior to the Effective Time.
7.2 The Purchaser shall be liable to the Vendor for, and shall, in addition,
indemnify the Vendor from and against all losses, costs, claims, damages
(direct or indirect), expenses or liabilities suffered, sustained, paid or
incurred by the Vendor or any third party, which arise out of or in
connection with, or pertain to the Assets and relate to a matter occurring
after the Effective Time.
7.3 The parties agree that all costs, expenses, risks, liabilities and
obligations respecting the abandonment of any Xxxxx which are part of the
Assets, and the closure, decommissioning and dismantling the facilities and
reclamation and restoration of all well sites and facilities shall not be
borne or paid for by the Vendor and the Purchaser shall, in respect
thereof, indemnify, defend and save harmless the Vendor from and against
any claims or demands by any person for or resulting in expense, liability,
loss, costs, claims or damages, direct or indirect (including the effect
of, and the costs of complying with any order, direction, or claim of any
government, or agency, department, official or tribunal thereof having
jurisdiction) pertaining to the foregoing.
ARTICLE 8
FURTHER ASSURANCES
8.1 As may be necessary or desirable, and without further consideration, the
parties hereto shall execute, acknowledge and deliver such other
instruments and shall take such other action as may be necessary to carry
out their respective obligations under, or to give effect to the provisions
and interest of, this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 This Agreement shall, in all respects, be subject to and be interpreted,
construed and enforced in accordance with the laws in effect in the State
of Nevada. Each party hereto irrevocably accepts and submits to the
exclusive jurisdiction of the courts of the State of Nevada and all courts
of appeal therefrom.
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MISCELLANEOUS - continued
9.2 Time shall be of the essence of this Agreement.
9.3 The address for notices of each of the parties hereto shall be as set forth
on the front page of this Agreement. Any of the parties hereto may from
time to time change its address for service herein by giving written notice
to the other parties hereto. Any notice may be served by personal service
upon a party hereto or, provided there is no disruption or threatened
disruption of postal service, by mailing the same by prepaid post in a
properly addressed envelope addressed to the party hereto at its address
for service hereunder. Any notice given by service upon a party hereto
shall be deemed to be given on the date of such service and any notice
given by mail shall be deemed to be given to and received by the addressee
on the third day (except Saturdays, Sundays, statutory holidays and days
upon which postal service in Canada is interrupted) after the mailing
thereof. Any notice may be served by instantaneous electronic means to the
number for notice hereunder. Any notice given by service upon a party and
any notice given by instantaneous electronic means shall be deemed to be
given to and received by the addressee on the day (except Saturdays,
Sundays, statutory holidays and days which the offices of the addressee are
closed for business) of service or after the sending thereof with
appropriate answerback acknowledgment, provided it was sent before 2:00
p.m.; otherwise it shall be deemed to be received the next following
business day.
9.4 This Agreement may be amended only by written instrument signed by all
parties hereto.
9.5 Until such time as the Purchaser is novated into the agreements governing
any of the Assets, the following provisions shall apply with respect to
those Assets until the novation has occurred:
(a) the Vendor shall not initiate any operation in respect of the Assets
except upon the written instruction of the Purchaser; and
(b) the Vendor shall forthwith provide to the Purchaser all authorizations
for expenditure, notices, specific information and other documents in
respect of the Assets which it receives and shall respond to such
authorizations for expenditure, notices, information and other
documents pursuant to the written instructions of the Purchaser, if
received on a timely basis, provided that the Vendor may (but shall
not be obliged to) refuse to follow instructions which it reasonably
believes to be unlawful or in conflict with an applicable contract.
9.6 This Agreement shall be binding upon and shall enure to the benefit of the
parties hereto and their respective successors, receivers,
receiver-managers, trustees and permitted assigns.
9.7 This Agreement may be executed in counterparts and if executed in
counter-parts all executed counterparts together shall constitute one
agreement and all parties shall be deemed to have executed the same
document.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
The COMMON SEAL of )
GENEVA ENERGY CORP., )
the Vendor herein, was hereunto affixed )
in the presence of: ) (C/S)
)
____________________________________________)
Authorized Signatory )
The COMMON SEAL of )
XXXXXX CREEK ENERGY CORP., )
the Purchaser herein, was hereunto affixed )
in the presence of: ) (C/S)
)
____________________________________________)
Authorized Signatory )
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Schedule A
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This is Schedule "A" to that certain Asset Purchase Agreement, dated for
reference December 15, 2004, as between Geneva Energy Corp. and Xxxxxx Creek
Energy Corp.
Description of Lands, Leases and Xxxxx
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Xxxxxx Leases
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Working Interest: 75%;
Net Revenue Interest: 56.25%;
East half (E/2) of Sec. 36-10N-8E
Xxxxxxx Leases
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Working Interest: 75%;
Net Revenue Interest: 56.25%;
South half of the Southeast quarter and the Southwest quarter
(S/2/se/4 & SW/4 of Section 25-10N-8eEast half (E/2) of Sec.
36-10N-8E
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