SHARE PURCHASE AGREEMENT THIS SHARE PURCHASE AGREEMENT dated January 14, 2004, (“Effective Date”) is between: EPITIHIA TRUST (“Epitihia”) AND WESCORP ENERGY INC. (“Wescorp”)
THIS SHARE PURCHASE AGREEMENT dated January 14, 2004, (“Effective Date”) is between:
EPITIHIA TRUST
(“Epitihia”)
AND
WESCORP ENERGY INC.
(“Wescorp”)
BACKGROUND
| A. |
Epitihia is the registered and beneficial
owner of 50% of the common shares in the capital stock of Vajar Trading
Ltd. (the “Corporation”); |
| B. |
Epitihia wishes to sell to Wescorp 50%
of the common shares in the Corporation (the “Vajar Shares”)
and Wescorp wishes to buy the Vajar Shares from Epitihia. |
| C. |
In consideration for the purchase of
the shares of the Corporation, Epitihia wishes to acquire shares in Wescorp
and Wescorp wishes to transfer to Epitihia shares in Wescorp. |
| D. | The parties wish to set forth the terms
and conditions of the sale of the Vajar Shares and the transfer of Wescorp
Shares. |
AGREEMENTS
For valuable consideration, the receipt of which each Party acknowledges, the Parties agree as follows:
| 1 | DEFINED TERMS. In this Agreement: |
| a) | “Affiliate” means a corporation
which controls, is controlled by, or is under common control of a Party
or a Party’s Affiliate; |
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| b) | “Agreement”, “this Agreement”,
and “the Agreement” means this agreement as it may be amended
or supplemented periodically; |
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| c) | “Control” includes, without limitation,
directly or indirectly owning shares having more than 50% of the
votes entitled to be cast to elect the directors of a corporation and
“Controlled” includes, without limitation, a corporation which
is under Control |
|
| d) | “Parties” means Epitihia Trust and
Wescorp Energy Inc. collectively, and “Party” means each
individually; |
|
| e) | “Sales” means any sales of the Corporation,
flowstar Technologies Inc., or their respective Affiliates. |
|
| f) | “Wescorp Shares” means shares of
common stock of Wescorp Energy Inc. which are registered and free trading
without any restrictions whatsoever. |
| 1. | PURCHASED SHARES AND PURCHASE PRICE |
| 1.1 | Vajar Share Purchase. Subject to the terms
and conditions hereof, Epitihia agrees to sell to Wescorp and Wescorp
agrees to purchase from Epitihia shares representing an undivided 50%
of the Vajar Shares. |
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| 1.2 | First Tranche. In consideration for the
purchase of an undivided 50% of the Vajar Shares, Wescorp will transfer
1.2 million Wescorp Shares (“First Tranche”), to Epitihia as outlined
in paragraph 3.1 below, and |
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| 1.3 | Second Tranche. In further consideration
for the purchase of the same undivided 50% of the Vajar Shares, Wescorp
will transfer up to an additional 1.3 million Wescorp Shares (“Second
Tranche”), to Epitihia as outlined in paragraph 3.2 below |
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| 2. | REPRESENTATIONS AND WARRANTIES OF EPITIHIA |
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| 2.1 | Epitihia covenants, represents and warrants as
follows and acknowledges that Wescorp is relying upon such covenants, representations
and warranties in connection with the purchase by Wescorp of the Vajar Shares:
|
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| a) | No person, firm or corporation has any agreement
or option, or any right or privilege capable of becoming an agreement or
option for the purchase from the Corporation of any of the Shares. |
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| b) | Epitihia is the registered and beneficial owner
of the Shares, with good and marketable title thereto, free and clear of
any pledge, lien, charge, encumbrance or security interest of any kind and
Epitihia has the power and authority and right to sell the Shares in accordance
with the terms of this Agreement. |
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| c) | The Corporation is the registered and beneficial
owner of Quadra Products International Inc. and Penta Energy Products Inc.,
duly incorporated corporations under the laws of Barbados. |
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| 3. | SHARE TRANSFER |
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| 3.1 | First Tranche Transfer. The Parties agree
that: |
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| a) | Wescorp will deliver the First Tranche to Epitihia
on or before April 30, 2004. |
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| b) | Within fifteen days of receipt of the
First Tranche, Epitihia will transfer to Wescorp the undivided 50% of
the Vajar Shares. |
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| c) | If Wescorp fails to deliver any of the First
Tranche to Epitihia on or before April 30, 2004, Wescorp will cause to be
issued further Wescorp Shares to Epitihia representing ten percent (10%)
of the Wescorp Shares then due and outstanding. |
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| 3.2 | Second Tranche Transfer. The Parties agree
that: |
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| a) | Stage One. For Sales in the 2004 calendar year: | ||
| i. | If 2004 Sales are below three million dollars ($3,000,000) then Wescorp
will deliver to Epitihia 240,000 additional Wescorp Shares; |
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| ii. | If 2004 Sales are between three million dollars ($3,000,000) and three million and seven hundred and fifty thousand dollars ($3,750,000) then Wescorp will deliver to Epitihia, Wescorp Shares, according to the following formula:
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| iii. | If 2004 Sales are greater than three million seven hundred and fifty thousand dollars ($3,750,000) then Wescorp will deliver to Epitihia 300,000 additional Wescorp Shares. | ||
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| b) | Stage One Delivery. The
Wescorp Shares to be delivered under this subparagraph 3.2(a) will be
registered and delivered to Epitihia on or before April 1, 2005. |
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| c) | Stage Two. For Sales
in the 2005 calendar year: |
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| i. | If 2005 Sales are below four million five hundred
thousand dollars ($4,500,000) then Wescorp will deliver to Epitihia 400,000
additional Wescorp Shares; |
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| ii. | If 2005 Sales are between four million and five hundred thousand dollars ($4,500,000) and seven million and five hundred thousand dollars ($7,500,000) then Wescorp will deliver to Epitihia, Wescorp Shares, according to the following formula:
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| iii. | If 2005 Sales are greater than seven million and five hundred thousand
dollars ($7,500,000) then Wescorp will deliver to Epitihia 500,000 additional
Wescorp Shares. |
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| d) | Stage Two Delivery. The
Wescorp Shares to be delivered in under this subparagraph 3.2(c) will
be registered and delivered to Epitihia on or before April 1, 2006. |
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| e) | Stage Three. For
Sales in the 2006 calendar year: |
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| i. | If 2006 Sales are below six million dollars ($6,000,000)
then Wescorp will deliver to Epitihia 400,000 additional Wescorp Shares;
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| ii. | If 2006 Sales are between six million ($6,000,000) and eleven million and two hundred and fifty thousand dollars ($11,250,000) then Wescorp will deliver to Epitihia, Wescorp Shares, according to the following formula:
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| iii. | If 2006 Sales are greater than eleven million and
two hundred and fifty thousand dollars ($11,250,000) then Wescorp will
deliver to Epitihia 500,000 additional Wescorp Shares. |
||
| f) | Stage Three Delivery.
The Wescorp Shares to be delivered in under this subparagraph 3.2(e) will
be registered and delivered to Epitihia on or before April 1, 2007. |
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| g) | Further Shares. If
Wescorp fails to deliver any of the Second Tranche to Epitihia, Wescorp
will cause to be issued further Wescorp Shares to Epitihia representing
ten percent (10%) of the amount of Wescorp Shares then due and outstanding
on a cumulative monthly basis, until all such outstanding shares are provided
and transferred to Epitihia. |
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| h) | Carry Over. Any Wescorp
Shares outlined in this paragraph 3.2 not earned in a particular calendar
year, because the sales did not achieve the upper sales target-, shall
be carried over and added to the Wescorp Shares to be issued to Epitihia
in the next calendar year. For example, if, under paragraph 3.2(a), only
the 240,000 Wescorp Shares are issued versus the potential of 300,000
Wescorp shares, then the difference of 60,000 is added to the 500,000
potential shares available to Epitihia in paragraph 3.2(c). So the number
500,000 in subparagraphs 3.2(c)(ii) and 3.2(c)(iii) would change to |
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560,000. Similarly, any potential Wescorp shares not issued in paragraph 3.2(c) would carry forward and be added to the 500,000 shares in paragraph 3.2(e).
| 3.3 | Acceleration Clause.
In the event that Wescorp sells any of its Vajar Shares to any other
party, all Wescorp Shares due to and to be due to Epitihia, under the
terms of this Agreement, will be delivered to Epitihia forthwith. |
|
| 3.4 | Option to Terminate.
If any of the Wescorp Shares to be delivered to Epitihia under the
terms and conditions of this Agreement have not been delivered for a period
of 182 days after such delivery is due, Epitihia may at its option terminate
this Agreement, without notice or prior opportunity to cure. |
|
| 3.5 | No Damages. If Epitihia
terminates this Agreement under paragraph 3.4 above, the Parties agree
that such termination will not give rise to any liability, damages, or
other compensation to Epitihia. |
|
| 3.6 | Security. Wescorp
agrees to pledge to Epitihia the Vajar Shares as security to guarantee
Wescorp’s performance in this Agreement. Wescorp furthers agrees
to sign any documentation necessary under Barbados law to implement and
document this security. |
|
| 3.7 | Place of Delivery. Any
shares to be delivered will be delivered to the addresses of each party
outlined in paragraph 5.2 below. |
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| 4. | INDEMNIFICATION |
|
| 4.1 | Epitihia agrees to indemnify
and save harmiess Wescorp and the Corporation of and from any loss whatsoever
arising out of, under or pursuant to: |
|
| a. |
any material loss suffered by Wescorp
or the Corporation as a result of any breach or inaccuracy of representation,
warranty or covenant contained in this Agreement; and |
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| b. | all claims, demands, costs and expenses
reasonably incurred in respect of the foregoing. |
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| 5. | GENERAL |
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| 5.1 | Additional Assurances.
Each of the parties hereto will from time to time at the other’s
request and expense and without further consideration, execute and deliver
such other instruments of transfer, conveyance and assignment and take
such further actions as the other may require to more effectively complete
any matter provided for in this Agreement. |
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| 5.2 | Communications. Any communication to be given under this Agreement will be in writing and either delivered by hand, or transmitted by fax, to the address or fax number of each Party set out below. Epitihia Trust Wescorp Energy Inc. |
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or to any other address
or fax number any Party may designate in the manner set out above. Any
communication will be considered to have been given and received on the
day of delivery or transmission. |
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| 5.3 | Governing Law and Jurisdiction.
This Agreement will be governed by and construed in accordance with
the law of Barbados and will be treated in all respects as a Barbados
agreement. |
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| 5.4 | Submission to Jurisdiction.
Each Party will submit to the jurisdiction of the courts of Barbados. |
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| 5.5 | Time. Time will be
of the essence. |
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| 5.6 | Entire Agreement. This
Agreement constitutes the entire agreement between the Parties and supersedes
all prior negotiations and agreements between the Parties concerning its
subject matter. |
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| 5.7 | Successors. This
Agreement will enure to the benefit of and be binding upon each of the
Parties and each of the Parties’ respective heirs, successors and
permitted assigns. |
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| 5.8 | Gender and Number. Words
in one gender include all genders, and words in the singular include the
plural and vice versa. |
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| 5.9 | Interpretation Not Affected.
In this Agreement, using separate Parts, providing a table of contents,
and inserting headings are for convenient reference only and will not
affect how this Agreement is interpreted. |
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| 5.10 | Severability. If
any term of this Agreement is partially or wholly invalid or unenforceable,
the remainder of this Agreement will not be affected, and each remaining
term will be separately valid and enforceable. |
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| 5.11 | Currency. All transactions
referred to in this Agreement will be made in lawful currency of the United
States of America. Any reference to cash in this Agreement includes a
reference to cash, certified check, banker’s draft, wire, or electronic
transfer. |
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| 5.12 | Counterparts. This
Agreement may be signed by facsimile or original and executed in any number
of counterparts, and each executed counterpart will be considered to be
an original. All executed counterparts taken together will constitute
one agreement. |
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| 5.13 | Effective Date. The Effective Date of this Agreement is February 1, 2004. | |
TO EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement as of the Effective Date.
EPITIHIA TRUST
By:
_____________________
Bayshore Bank & Trust (Barbados) Corporation
Trustee
WESCORP ENERGY INC.
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
President and Authorized Signatory
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TO EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement as of January 14, 2004.
BAYSHORE BANK & TRUST (BARBADOS)
CORPORATION, AS TRUSTEE OF THE
EPITIHIA TRUST
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Authorized Signatory
WESCORP ENERGY INC.
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
President and Authorized Signatory
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