PURCHASE AGREEMENT
THIS
AGREEMENT,
dated
for reference the 24th day of May, 2007, is made
BETWEEN: |
COVENTRY
CAPITAL LLC,
having an address of Suite 600, 1201 Orange Street, Wilmington, Delaware,
USA, 19899-0511
|
(hereinafter
referred to as the “Buyer”)
AND: |
RADIAL
ENERGY INC.,
a
company incorporated under the laws of the State of Nevada, having
an
office at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Two Xxxxx Xxxxxx Xxxxxxxx,
Xxxxxxx, Xxxxx, XXX, 00000
|
(hereinafter
referred to as the “Seller”)
WHEREAS
the
Seller desires to sell to the Buyer and the Buyer desires to purchase from
the
Seller Fifty Percent (50%) of the Seller’s right, title and interest in and to
its share of the Net Production Revenue generated from the Peruvian Huaya
Anticline Project, Block 100, oil prospect located in Loreto Department, Peru,
Ucayali Basin (hereinafter referred to as the “Assets”), subject to the terms
and conditions set forth in this Purchase and Sale Agreement (the “Agreement”).
NOW
THEREFORE,
in
consideration of the mutual promises contained herein, the benefits to be
derived by each party hereunder, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Buyer and Seller agree as follows:
1. |
Purchase
of Assets
|
The
Seller offers and agrees to sell, and the Buyer offers and agrees to purchase
all of Seller’s right, title and interest in and to Fifty Percent (50%) of the
Seller’s right, title and interest in and to its share of the Net Production
Revenue generated from the Peruvian Huaya Anticline Project, Block 100, oil
prospect located in Loreto Department, Peru, Ucayali Basin, being Ten point
Thirty-Five Percent (10.35%) of Total Production Revenue.
The
Purchaser shall have access to original, or, if no originals are available,
clean and legible copies of information and data respecting the Assets in the
Seller's possession, including, without limitation, Agreements, production
records, geological and geophysical data and reports and all other information
relating directly to the ownership of or production revenue of the Assets but
exclusive of any such records, data or information where provision of same
is
prohibited by third party agreements or applicable law.
2. |
Purchase
Price
|
As
consideration for the sale of the Assets, the Buyer shall pay or deliver to
the
Seller upon execution of this Agreement the sum of One Hundred Thousand Dollars
($100,000) in US funds (the “Purchase Price”).
3. |
Mandatory
Repurchase of
Assets
|
The
Purchaser shall grant to the Seller the option to repurchase the Assets at
any
time until May 2, 2008 on the following terms:
(a) |
The
Seller can repurchase the Assets on or before November 1, 2007
for the
purchase price of Four Hundred Thousand Dollars ($400,000) in US
funds;
or
|
(b) |
The
Seller can repurchase the Assets from November 2, 2007 to March
1, 2008
for the purchase price of Six Hundred Thousand Dollars ($600,000)
in US
funds; or
|
(c) |
The
Seller can repurchase the Assets from March 2, 2008 to May 1, 2008
for the
purchase price of Eight Hundred Thousand Dollars ($800,000) in
US
funds.
|
In
the
event the Seller is unable to repurchase the Assets by May 1, 2008, the Seller
will be required to convert the final purchase price of Eight Hundred Thousand
Dollars ($800,000) into a loan due and payable to the Buyer.
In
any
event, the Seller will be required to meet it’s financial obligations to Coach
Capital LLC prior to the repurchase of the Assets.
4. |
Monthly
Payments
|
The
Seller agrees to pay to the Buyer a monthly fee of Fifty Thousand Dollars
($50,000) commencing September 1, 2007 and payable on the first day of each
and
every month prior to the repurchase of Assets. The funds are to be generated
from the Seller’s share of production revenue derived from the Assets and, in
the event the Seller is unable to pay this monthly fee, the fee, or any amount
thereof remaining outstanding from time to time, will accrue in the form of
a
loan payable to the Buyer.
Upon
the
repurchase of Assets by the Seller the payment of the monthly fees shall cease.
Should the Seller be unable to complete the repurchase of Assets by May 1,
2008
and the purchase price converts into a loan, the monthly fee of Fifty Thousand
Dollars ($50,000) shall continue to be payable and accrue until such time as
the
full amount of the repurchase loan and any amount of accrued monthly payments
have been paid in full.
4. |
Seller's
Representations and Warranties
|
The
Seller represents and warrants as follows.
(a) |
Legal
Status and Authority:
|
(i) The
Seller
is a corporation, validly organized and existing, and in good standing, under
the laws of the State of Nevada. The Seller has the power and authority to
own
its property and to carry on its business as now conducted and to enter into
and
to carry out the terms of this Agreement.
(ii) The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action and Seller is not subject to any articles or by-laws, lien
or
encumbrance of any kind, agreement, instrument, order or decree of any court
or
governmental body (other than any governmental approval required) which would
prevent consummation of the transactions contemplated by this
Agreement.
(iii) The
consummation of this transaction will not violate or cause a default under
(i)
any provision of the Seller's governing documents; (ii) any provision of any
material contract or agreement or of any bank loan, indenture or credit
agreement to which the Seller is a party; (iii) any law, ordinance, rule or
regulation of any governmental authority; or (iv) any applicable order, writ,
judgment or decree of any court or other competent authority and will not result
in the creation of any lien, charge or encumbrance on any of the
Assets.
(b) |
Litigation
|
There
is
no claim, demand, legal action, administrative proceeding, lawsuit, governmental
inquiry or investigation relating to the Assets pending or, to the Seller's
knowledge, threatened. Nor are there any bankruptcy, reorganization or
arrangement proceedings pending, being contemplated by or, to the knowledge
of
the Seller, threatened against the Seller.
5. |
Buyer's
Representations and Warranties
|
The
Buyer
represents and warrants:
(a) |
Legal
Status and Authority:
|
(i) The
Buyer
is a corporation validly organized and existing and in good standing, under
the
laws of the state of Delaware and has the power and authority to own its
property and to carry on its business, as now conducted, and to enter into
and
to carry out the terms of this Agreement.
(ii) The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on behalf of the Buyer, and the Buyer is not subject to any charter,
bylaw, lien or encumbrance of any kind, agreement, instrument, order or decree
of any court or governmental body which would prevent consummation of the
actions contemplated by this Agreement.
6. |
Time
|
Time
is
of the essence of this Agreement.
7. |
Further
Assurances
|
The
Seller and the Buyer will do, execute and deliver or will cause to be done,
executed and delivered all such further acts, documents and things as may be
reasonably required for the purpose of giving effect to this
Agreement.
8. |
Assignment
|
This
Agreement cannot be assigned to another party except with the prior written
consent of both the Buyer and the Seller.
9. |
Notices
|
9.1 |
Any
notice under this Agreement will be given in writing and may be sent
by
fax, telex, telegram or may be delivered or mailed by prepaid post
addressed to the party to which notice is to be given at the address
indicated above, or at another address designated by that party in
writing.
|
9.2 |
If
notice is sent by fax, telex, telegram or is delivered, it will be
deemed
to have been given at the time of transmission or
delivery.
|
9.3 |
If
notice is mailed, it will be deemed to have been received 48 hours
following the date of mailing of the
notice.
|
9.4 |
If
there is an interruption in normal mail service due to strike, labour
unrest or other cause at or before the time a notice is mailed the
notice
will be sent by fax, telex, telegram or will be
delivered.
|
10. |
Amendments
|
This
Agreement may be amended, waived, discharged, or terminated only by instrument
in writing signed by the party against whom enforcement of the amendment,
waiver, discharge or termination is sought.
11. |
Execution
in Counterpart
|
This
Agreement may be signed in counterpart and each such counterpart, whether in
original or facsimile form, together shall constitute a true original and
provide satisfactory evidence that this Agreement has been duly executed by
the
parties hereto.
IN
WITNESS WHEREOF
the
Buyer and the Seller have executed and delivered this Agreement as of the day
and year first written above.
COVENTRY
CAPITAL LLC
Per: Authorized
Signatory
RADIAL
ENERGY INC.
/s/
G.
Xxxxx Xxxxx
Per:
G.
Xxxxx
Xxxxx, President