ASSET PURCHASE AGREEMENT THIS AGREEMENT made as of the 22ND day of July, 2008
Exhibit
10.1
THIS AGREEMENT made as of the
22ND day of July, 2008
AMONG:
ARCTIC
OIL & GAS CORP., a corporation incorporated pursuant to the laws of
the State of Nevada having a registered office 0000 X Xxxxxx Xxx, Xxxxx 000 Xxx
Xxxxx, XX 00000, State of Nevada, USA.
(Hereinafter
called “ARCTIC”)
AND:
STRATEGIC
NINE CORPORATION,
a corporation incorporated pursuant to the laws of State of Nevada, having a
business office at 0000 X. Xxxxxx Xxxxx Xxx, Xxx Xxxxxxx XX 00000.
(Hereinafter
called “Strategic”)
AND:
STERLING
ENERGY TRUST (NZ), a Trust incorporated
pursuant to the laws of New Zealand, having a USA business office at 0/00
Xxxxxxxx Xxxxxx, Xxxxxxx Xxx, Xxxxxxxx, Xxx Xxxxxxx.
(Hereinafter
called “Sterling”)
AND:
LSKAVYAN
ENERGY TRUST, a
Trust incorporated pursuant to the laws of Armenia, having a business office at
000 Xxx Xxxx Xxxx, Xxxxxxx Xxxxx, XX 00000.
(Hereinafter
called “Lskavyan”)
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WHEREAS:
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A.
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On
April 10th,
2008, Strategic and Sterling filed a claim with the United Nations General
Assembly and the United States of America, claiming, as a responsible oil
and gas development agent of the “common heritage of mankind”, the sole
and exclusive exploitation, development, marketing and extraction rights
to the oil and gas resources of the seafloor and subsurface contained with
the entire Outer Xxxxx Xxxxx area beyond the exclusive economic zone of
the United States (the “Outer Xxxxx Xxxxx Claims”). A copy of
the filing is attached hereto as Schedule
“A”.
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B.
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On
April 10th
2008, Strategic and Partners lodged an unsolicited Lease Application on
the Inner Xxxxx xxxxx area with the MMS. A copy of the
filing is attached hereto as Schedule
“B”.
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C.
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Strategic
and Sterling hold 46 and 31 per cent interests, respectively, in the Outer
Xxxxx Xxxxx Claims and Xxxxx Xxxxx OCS Lease
Application.
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D.
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Lskavyan
Energy Trust holds a 9% interest in the Xxxxx Xxxxx OCS Lease
Application.
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E.
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ARCTIC
wishes to purchase a thirty (30) per cent interest in the Outer Xxxxx
Xxxxx Claims and Xxxxx Xxxxx OCS Lease Application, to be acquired from
Strategic (11 per cent), Sterling (10 per cent) and Lskavyan 9
percent.
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F.
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On
May 26th
2008, Strategic and Sterling filed a claim with the United Nations General
Assembly and the United States of America, claiming, as a responsible oil
and gas development agent of the “common heritage of mankind”, the sole
and exclusive exploitation, development, marketing and extraction rights
to the oil and gas resources of the seafloor and subsurface contained with
the entire Bering Sea Abyssal area beyond the exclusive economic zone of
the United States (the “Bering Sea Abyssal Claims”). A copy of
the filing is attached hereto as Schedule
“B”.
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G.
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ARCTIC
wishes to purchase a thirty (30) per cent interest in the Bering Sea
Abyssal Resources Claims to be acquired from Strategic (10 per cent),
Sterling (20 per cent).
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X.
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Xxxxxxxx,
the original Outer Xxxxx Xxxxx Claims and Xxxxx Xxxxx OCS Lease
Application and Bering Sea Abyssal Claim founder, shall retain a 10%
free-carried equity and a 3% gross production royalty, from any
hydrocarbons produced within the Outer Xxxxx Xxxxx Claims, Xxxxx Xxxxx OCS
lease application and the Bering Sea Abyssal Claim for 150 years from
start of commercial production.
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2
NOW
THEREFORE, in consideration of
the premises and the mutual representations, warranties, covenants and
agreements provided in this Agreement, and for other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged), the
parties hereto agree each with the others as follows:
(a)
INTERPRETATION
(1) Definitions Whenever
used in this Agreement the following terms shall have the following meanings,
respectively:
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(a)
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“Agreement”
means this agreement and the schedules hereto as amended from time to
time;
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(b)
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“Affiliate”
means a Subsidiary of a parent company, two Subsidiaries of the same
parent company, or two companies controlled (de jure) by the same
person;
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(c)
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“Closing
Date” means October 9, 2007 or such other date as may be agreed to among
the parties;
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(d)
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“Closing”
means the closing that which will occur on the Closing
Date;
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(e)
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“ARCTIC Shares”
means fully voting common shares of par value $0.00001 per share in the
common stock of ARCTIC as constituted at the date of this
Agreement;
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(f)
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“NASDAQ”
means the National Association of Securities Dealers of the United States
automated securities quotation
system;
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(g)
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“Party”
and “Parties” means ARCTIC and Strategic and any one or more of
them, as the context may require;
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(h)
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“Subsidiary”
means a company controlled (de jure), directly or indirectly, by another
company.
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(2) Schedules The
following are the schedules appended to and forming part of this
Agreement:
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Schedule
“A”
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-
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Outer
Xxxxx Xxxxx Claims United Nations Filing, and Xxxxx Xxxxx OCS Lease
Application.
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| Schedule “B” | - | Bering Sea Abyssal Claim United Nations Filing. |
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(b)
PURCHASE
OF OUTER XXXXX XXXXX CLAIMS AND XXXXX XXXXX OCS LEASE APPLICATION.
(1) Outer
Xxxxx Xxxxx Claims and Xxxxx Xxxxx OCS Lease Application; In consideration of
ARCTIC delivering to Strategic 60,000,000 restricted common shares in the
capital of ARCTIC issued from its treasury to Strategic Sterling and
Lskavyan in its own right and as agents for Strategic, Sterling and Laskavyan,
on Closing, Strategic, Sterling and Lskavyan shall collectively sell and
ARCTIC shall purchase a thirty per cent interest in the Outer Xxxxx
Xxxxx Claims and Xxxxx Xxxxx OCS Lease Application.
(2) Bering
Sea Abyssal Claim; In consideration of
ARCTIC delivering to Strategic and Sterling 60,000,000 restricted common shares
in the capital of ARCTIC issued from its treasury to Strategic in its
own right and as agents for Strategic and Sterling, on Closing, Strategic, and
Sterling shall collectively sell and ARCTIC shall purchase a thirty
per cent interest in the Bering Sea Abyssal Claim.
(3) Deliveries
of Strategic on Closing On Closing Strategic and Sterling shall each
execute and deliver (i) a certified copy of a resolution or resolutions of the
directors of each company authorizing this Agreement; (ii) affirmative vote of
its shareholders, as required by applicable corporate or securities laws; and
(iii) such other items of documentation as counsel to the Parties and any of
them may advise and the Parties or any of them may reasonably
request.
(4) Deliveries
of ARCTIC on Closing On Closing
ARCTIC shall execute and deliver (i) the
ARCTIC Consideration; (ii) a certified copy of a resolution or
resolutions of the directors of ARCTIC authorizing this Agreement;
(iii) such other items or documentation as counsel to the Parties or
any of them may advise and the Parties of any of them may reasonably
request.
(5) Registration
of ARCTIC Shares ARCTIC shall register the
120,000,000 restricted shares and pay all costs involved in registering the
shares to make them free trading at the earliest possible date.
(6) ARCTIC to
Fund Expenditure ARCTIC shall spend the
next one million dollars on each of the the properties, then pay 35% share of
future project costs on each of the properties.
(7) Right to
Rescind Agreement if ARCTIC becomes Unable to
Operate Effectively: Strategic has at it’s
sole discretion, the right to return the shares to ARCTIC and rescind this
agreement with no penalty within 120 days if either: (i) ARCTIC becomes
embroiled in legal disputes with shareholders or other parties. Or (2) ARCTIC
fails to secure working capital to move the project forward.
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(c)
REPRESENTATIONS
AND WARRANTIES
(1) Representations
and Warranties of ARCTIC ARCTIC hereby represents and
warrants to Strategic as follows:
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(a)
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Organization
ARCTIC is a corporation duly incorporated and organized and
validly subsisting under the laws of the State of Nevada and has all
requisite corporate power, capacity and authority to own or lease its
property and assets.
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(b)
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Power
and Authority ARCTIC has all requisite corporate power,
authority and capacity to perform the obligations of
ARCTIC provided in this
Agreement.
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(d)
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Enforceability This
Agreement and all other agreements and documents required to be delivered
by ARCTIC pursuant to this Agreement constitute, or at the time
of delivery of the same will constitute, legal, valid and binding
enforceable obligations of ARCTIC .
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(e)
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Authorized
and Issued Capital The authorized capital of
ARCTIC consists of 500,000,000 shares of common stock, $0.00001
par value, of which not more than 245 million common shares have been duly
and validly issued prior to the issuance of the shares referred to in
paragraph 2.01 and are outstanding as fully paid and non-assessable shares
in the capital of ARCTIC, free and clear of all liens and
encumbrances.
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(f)
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NASDAQ
Quotation The ARCTIC Shares are quoted for
trading through the facilities of the PINK SHEET Network (“PINKS”) are
selling for an average price of $0.003 cents and no cease trading or
similar order of NASDAQ or any other securities regulatory authority has
been made or issued and is outstanding or is threatened to be made or
issued which prohibits or restricts or would prohibit or restrict the
quotation of ARCTIC Shares nor is ARCTIC aware of
any reason or basis for or upon which any such order or
ruling could be made or
issued.
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(g)
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Options No
person has any agreement or option, or any right or privilege (whether by
law, pre-emptive or contractual) capable of becoming an agreement or
option, including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription, allotment or
issuance of any shares or securities convertible into shares in the
capital of ARCTIC .
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(h)
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Related
Party Transactions No undisclosed indebtedness, liability
(including fixed or contingent liability) or contract exists, directly or
indirectly, between any shareholder, officer or director of ARCTIC or any
member of the families of such persons (“Related Parties”) on the one hand
and Strategic-Sterling on the other. Sterling has not voted on the
transaction for ARCTIC as he has an interest in
it.
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(i)
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Material
Contracts ARCTIC is not subject to or bound by any material
contract or commitment.
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(j)
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Litigation
There is no action, suit, proceeding, claim or demand by any person which
is threatened or outstanding against ARCTIC . To the best of
the knowledge of ARCTIC , there is no investigation by any governmental or
other instrumentality, authority or agency pending or threatened against
ARCTIC and ARCTIC knows of no valid basis for any
such investigation. ARCTIC is not subject to any judgment order
or decree entered in any lawsuit or
proceeding.
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(k)
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Assets Strategic
and Sterling are the legal and beneficial owner of all of the
Xxxxx Xxxxx Claims and other property and assets (whether real or
personal, tangible or intangible) now used or owned by it and Strategic
has marketable contingent tenure over such title to all such property and
assets free and clear of any and all claims, liens, mortgage, charges,
security interests or other
encumbrances.
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(l)
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Full
Disclosure This Agreement does not contain any untrue statement of
material fact or omit any statement of a material fact necessary in order
to make the statements contained herein not misleading. There
is no fact known to ARCTIC which materially adversely affects
the business, prospects or financial condition of ARCTIC or
which might reasonably be expected to deter a reasonable purchaser from
completing the transaction of purchase and sale herein contemplated which
has not been set forth in this Agreement (other than economic conditions
and factors applicable to business in
general).
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ARCTIC
hereby acknowledges and agrees that Strategic will be relying on the
representations and warranties made by ARCTIC in this Agreement in completing
the transactions provided herein. ARCTIC hereby agrees not
to do or cause anything to be done between the date of this Agreement and
Closing which might cause any of the foregoing representations and warranties to
be untrue at Closing.
(2) Representations
and Warranties of Strategic and Sterling Each Company hereby
represents and warrants to ARCTIC as follows:
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(a)
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Organization
Each Company is a corporation duly and validly incorporated and
organized and validly subsisting under the laws of the State of Nevada
(Sterling – New Zealand) and has all requisite corporate power, capacity
and authority to own or lease its property and assets, and is in good
standing in all jurisdictions in which the nature of the its business or
the property owned or leased by it makes such qualification, licensing or
registration necessary.
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(b)
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Power
and Authority
Each Company has all requisite corporate power, capacity and
authority to enter into this Agreement and to perform the obligations of
each Company provided in this
Agreement.
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(c)
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Enforceability
This Agreement and all other agreements and documents required to be
delivered by each Company pursuant to this Agreement constitute, or at the
time of delivery of the same will constitute, legal, valid and binding
enforceable obligations of each
Company.
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(d)
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Compliance
with Laws Each Company is conducting its business in
compliance in all material respects with all applicable laws, regulations,
policies, ordinances, codes, orders, deficiency notices, notices of
violation or other notices concerning its business which have been issued
by any regulatory or other governmental department, authority or agency
and there are no matters under discussion with any such department,
authority or agency relating to work orders, non-compliance orders,
deficiency notices, notices of violation or other
notices.
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(e)
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Outer
Xxxxx Xxxxx Claims and OCS Xxxxx Xxxxx Lease Application Each
Company is the legal and beneficial owner of the Outer Xxxxx Xxxxx Claims
and Xxxxx Xxxxx OCS Lease Application in the percentage interests set out
herein, free and clear of any and all claims, liens, mortgages, charges,
security interests or other
encumbrances.
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(f)
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Full
Disclosure This Agreement does not contain any untrue statement of
a material fact or omit any statement of a material fact necessary in
order to make the statements contained herein not
misleading. There is no fact known to each Company which
materially adversely affects the quality of title to the Outer Xxxxx Xxxxx
Claims or which might reasonably be expected to deter a reasonable
purchaser from completing the transaction of purchase and sale herein
contemplated which has not been set forth in this Agreement (other than
economic conditions and factors applicable to business in
general);
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(d)
COVENANTS
(1) Covenants
of Strategic and Sterling Each Company covenants and
agrees to provide to ARCTIC all necessary information relating to the Outer
Xxxxx Xxxxx Claims and Xxxxx Xxxxx OCS Lease Application, as is required from
time to time for ARCTIC to meet its reporting requirements as a
reporting company under the Securities and Exchange Act of 1934
(U.S.).
(e)
CONDITIONS
PRECEDENT
(1) Conditions
Precedent in Favor of ARCTIC Closing is subject to
the following conditions in favor of ARCTIC :
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(a)
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All
of the representations and warranties of Strategic, and Sterling provided
in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and at the time of Closing as if such
representations and warranties had been made at and with reference to the
time of Closing;
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(b)
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Strategic,
and Sterling shall each have observed and performed all of the covenants
and agreements provided in this Agreement which are to be observed and
performed at or prior to Closing;
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(c)
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No
action or proceeding shall he pending or threatened by any person, firm,
corporation, governmental authority, regulatory body or agency to enjoin,
restrict or prohibit the transactions contemplated in this Agreement;
and
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(d)
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There
shall have been no material adverse change in the assets, business,
affairs or condition of any of Strategic or Sterling as provided or
contemplated in this Agreement.
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The
conditions contained in this Section are included for the exclusive benefit of
ARCTIC and ARCTIC shall be entitled to waive, in whole or
in part, compliance with any condition or conditions contained in this Section
if ARCTIC sees fit to do so.
(2) Conditions
Precedent in Favor of Strategic and Sterling Closing is subject to
the following conditions precedent in favor of Strategic:
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(a)
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All
of the representations and warranties of ARCTIC provided in
this Agreement shall be true and correct in all material respects as of
the date of this Agreement and at Closing as if such representations and
warranties had been made at and with reference to
Closing;
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(b)
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ARCTIC shall
have observed and performed all of the covenants and agreements provided
in this Agreement which are to be observed and performed at or prior to
Closing;
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(c)
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No
action or proceeding shall be pending or threatened by any person, firm,
corporation governmental authority, regulatory body or agency to enjoin,
restrict or prohibit the transactions contemplated in this
Agreement;
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(d)
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There
shall have been no material adverse change in the assets, business,
affairs or condition of ARCTIC as provided or contemplated in
this Agreement; and
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(e)
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The
conditions contained in this Section 5.02 are included for the exclusive
benefit of Strategic and Sterling and these companies shall be entitled to
waive, in whole or in part, compliance with any condition or conditions
contained in this Section if they see fit to do
so.
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(3) Non-Fulfillment
of Conditions by ARCTIC In the event that ARCTIC is unable or
unwilling to perform, satisfy or fulfill any condition on the part of
ARCTIC to be performed, satisfied, or fulfilled by
ARCTIC pursuant to this Agreement, whether pursuant to Section 5.02
hereof or otherwise, Strategic shall by notice in writing to
ARCTIC be entitled to terminate this Agreement without liability to
Strategic whether for damages, costs, fees, expenses or other
amounts.
(4) Non-Fulfillment
of Conditions by Strategic and Sterling In the event that any of
the companies are unable or unwilling to perform, satisfy or fulfill any
condition to be performed, satisfied or fulfilled pursuant to this Agreement,
ARCTIC shall by notice in writing to each of the companies be
entitled to terminate this Agreement without liability to
ARCTIC whether for damages, costs, fees expenses or
other amounts.
(f)
GENERAL
(1) Survival
of Representations and Warranties All representation, warranties,
covenants and agreements of the Parties hereto provided in this Agreement shall
survive Closing and not merge thereon provided that the representations and
warranties provided in this Agreement shall only survive for three years
following Closing.
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(2) Further Assurances Each of the Parties
shall, whenever required by another Party, and at the expense of the requesting
Party, execute and deliver such further assurances as may be reasonably
requested from time to time in order to confirm or give effect to the
transactions provided or contemplated in this Agreement.
(3) Enurement
This Agreement shall enure to the benefit of and be binding upon the Parties to
this Agreement and their respective successors and assigns. No Party
may assign this Agreement or any or its rights under or interest in this
Agreement without the consent of the others.
(4) Notices
All notices required or permitted to be given under this Agreement shall be
given in writing by personal delivery (including courier delivery) or by prepaid
registered mail or by facsimile. The address for notice to each of the Parties
shall be as follows:
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(b)
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if
to ARCTIC: Xxxxxx Xxxxxxxx, at 0000 X Xxxxxx Xxx, Xxxxx 000 Xxx Xxxxx, XX
00000, Tel: 000-000-0000, Fax: 000-000-0000; E-mail: xxxxxxxx@xxxxx.xxx
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(b)
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If
to Strategic: Xxxxx Xxxxxxxx, at 0000 x. Xxxxxx Xxxxx Xxx, Xxx Xxxxxxx XX
00000.
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(b)
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If
to Sterling: Xxxxx Xxxxxxxx, at 0000 x. Xxxxxx Xxxxx Xxx, Xxx Xxxxxxx XX
00000.
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Provided
that any Party may change its address for notice by giving written notice to the
others. Any notice shall he deemed to have been received on the date it is
received at the address for notice of the Party to whom it is addressed (or in
the case of a facsimile notice when received at the facsimile of the Party for
whom it is intended).
(5) Entire
Agreement This Agreement contains
all of the terms and conditions agreed upon between the Parties with respect to
the subject matter of this Agreement and is not subject to any oral agreement or
undertaking of any kind.
(6) Time of
the Essence Time shall be of the essence of this Agreement.
(7) Governing
Law and Attornment This Agreement and the rights and obligations of the
Parties provided herein shall be governed by and construed in accordance with
the laws of the State of Nevada, United States of America as a contract made,
executed, delivered and entered into in the State of Nevada, United States of
America. Exclusive jurisdiction for any proceedings in relation to
this Agreement is the State of Nevada, United States of America
(8) Arbitration Any
controversy or claim, arising under, out of, or in any way relating to this
Agreement including, without limitation, the execution, delivery, validity,
enforceability, performance, breach, discharge, interpretation or construction
of this Agreement, shall be settled by binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association in the
City of Las Vegas, Nevada, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Both
parties consent to jurisdiction in the City of Las Vegas, Nevada.
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EXECUTION
IN
WITNESS WHEREOF the Parties
have caused this Agreement to be executed by their duly authorized officers in
such regard.
ARCTIC OIL & GAS
CORP.
By:
XXXXXX
XXXXXXXX, DIRECTOR
STRATEGIC
NINE CORPORATION.
By:
STERLING
OIL AND GAS TRUST (NZ)
By:
LSKAVYAN
ENERGY TRUST
By:
