May 22, 2007 Surge Global Energy Inc. 12220 El Camino Real Suite 410 San Diego, CA 92130 USA Fax.; 858-704-5011 Attention: Mr. David Perez, Chief Executive Officer end Chairman of the Board and to Mr. David Perez 12220 El Camino Real Suite 410 San...
Exhibit
10.1
May
22,
2007
Surge
Global Energy Inc.
00000
Xx
Xxxxxx Xxxx
Xxxxx
000
Xxx
Xxxxx, XX 00000 XXX
Fax.;
000-000-0000
Attention:
Xx. Xxxxx Xxxxx, Chief Executive Officer end Chairman of the Board
and
to
Xx.
Xxxxx
Xxxxx
00000
Xx
Xxxxxx Xxxx
Xxxxx
000
Xxx
Xxxxx, XX 00000 XXX
Fax:
000-000-0000
Dear
Sirs;
For
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by both Surge Global Energy Inc. and Xxxxx Xxxxx (the
"Securityholders") and in consideration of the entering into by Signet Energy
Inc. ("Signet") of the letter agreement dated May 15, 2007 with Andora Energy
Corporation ("Andora") (the "Letter Agreement") relating to the proposed
combination of the businesses of Andora and Signet (the "Proposed Transaction"),
Signet, Andora and the Securityholders agree as follows:
Unless
otherwise defined herein capitalized terms shall have the meanings ascribed
thereto in the Letter Agreement.
1.
Ownership
of Shares
Signet
and Andora understand that the Securityholders are the beneficial owner,
directly or indirectly or exercise voting control over, of at least the number
of common shares (the "Shares") of Signet, set forth on page 5
hereof.
In
addition to the foregoing, the term "Shares" will be deemed to also include
any
stock dividend, stock split, recapitalization, reclassification, combination
or
exchange of shares of capital stock of Signet on, of, or affecting the
Securityholder's Shares or after the date of this Agreement.
2.
Revocation
of Previous Proxies
The
Securityholders hereby revoke any and all previous proxies with respect to
the
Securityholders' Shares.
3.
Covenants
of the Securityholders
The
Securityholders covenant and agree with Signet and Andora that, until the
Release Date, as defined below, to the extent the Proposed Transaction is
effected as set forth in the Letter Agreement and provided the board of
directors of Signet have received a written fairness opinion from their
financial advisors indicating that the transaction is fair from a financial
point of view to the shareholders of Signet, the Securityholders
shall:
1
|
(a)
|
attend
(either in person or by proxy) any meeting of the securityholders
of
Signet convened for the purposes of considering the Proposed Transaction
(including any adjournments and postponements thereof), and at such
meeting, vote all of the Shares in favour of the Proposed Transaction
and
all matters related thereto;
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|
(b)
|
vote
against (i) any extraordinary corporate transaction, such as a merger,
rights offering, reorganization, recapitalization, or liquidation
involving Signet other than the Proposed Transaction and any transaction
related thereto, (ii) a sale or transfer of a material amount of
assets of
Signet or the issuance of any securities of Signet (other than pursuant
to
the Signet's incentive share option plan), or (iii) any action that
is
reasonably likely to impede, interfere with, delay, postpone, or
adversely
affect in any material respect the Proposed
Transaction;
|
| (c) |
not
sell, transfer,
assign, pledge, or otherwise dispose of, or enter into any agreement
or
understanding relating to the sale, transfer, assignment or other
disposition of the Shares or permit any affiliate of the Securityholders
to do any of the foregoing;
|
|
(d)
|
not
exercise any rights of dissent or appraisal in respect of any resolution
approving the Proposed Transaction or any aspect thereof or matter
related
thereto, and not to exercise any other securityholder or optionholder
rights or remedies available at common law or pursuant to the Business
Corporations Act
(Alberta) or in any manner delay, hinder, prevent, interfere with
or
challenge the Proposed Transaction;
|
| (e) |
promptly
notify Signet upon any of undersigned’s representations or warranties
contained in this Agreement becoming untrue or incorrect in any material
respect prior to the Release Date, and for the purposes of this provision,
each representation and warranty shall be deemed to be given at and
as of
all times during such period (irrespective of any language which
suggests
that it is only being given as in the date hereof);
and
|
|
(f)
|
deposit
such number of their Shares into escrow on such terms and only to
the
extent as may be required by any stock exchange or other regulatory
body
in respect to the Proposed
Transaction.
|
For
the
purposes of this letter agreement (this "Agreement"), "Release Date" means
the
earlier of: (i) the time at which the Proposed transaction becomes effective
(the "Effective Time") on the date on which the Proposed Transaction becomes
effective (the “Effective Date"), which is to be no later than August 15, 2007
unless extended by mutual agreement by the parties to this Agreement; or
(ii) the date of the termination of the Letter Agreement or the arrangement
agreement entered into in connection with the Proposed Transaction.
4.
Representations
and Warranties of the Securityholders
Each
of
the Securityholders hereby covenants, represents and warrants to Signet and
Andora that:
| (a) |
the
Securityholder is the legal and beneficial owner of, or exercises
control
or direction over, the number of Shares set forth on page 5 hereof,
set
forth opposite its name, free and clear of all claims, liens, charges,
encumbrances and security interests;
and
|
2
| (b) |
the
Securityholder is duly authorized to execute and deliver
this Agreement and this letter is a valid and binding agreement
enforceable against the Securityholder in accordance with its terms,
and
the consummation by the Securityholder of the transaction contemplated
hereby will not constitute a material violation or breach of or default
under, or conflict with, any contract, commitment, agreement,
understanding or arrangement of any kind to which the Securityholder
will
be a party and by which the Securityholder will be bound at the time
of
such consummation.
|
All
of
the representations and warranties contained in this section 4 shall be valid
and true as if recited and repeated as at the Effective Time of the Proposed
Transaction.
5.
Representations
and Warranties of Signet
Each
of
Signet and Andora hereby represents and warrants to and covenants with the
Securityholders as representations and warranties that will survive completion
of the transactions contemplated hereby, that it is duly authorized to execute
and deliver this Agreement, this Agreement has been duly executed and delivered
by it and, upon acceptance by the Securityholders, this Agreement will be a
valid and binding agreement, enforceable against it in accordance with its
terms
and neither the execution of this Agreement nor the consummation by it of the
transactions contemplated hereby will constitute a violation or breach of or
default under, or conflict with, any restriction of any kind or any contract,
commitment, agreement, understanding or arrangement to which it is a party
and
by which it is bound. Each of Signet and Andora covenants and agrees that it
shall comply, in all material respects, with the terms and conditions contained
in the Letter Agreement.
6.
Termination
In
the
event that the Letter Agreement or the arrangement agreement which is to be
executed in connection with the Proposed Transaction is terminated in accordance
with the respective terms thereof, this Agreement shall immediately terminate.
In addition, in the event the terms of this Agreement and/or the obligations
of
the Securityholders' hereunder would reasonably be expected to expose any
Securityholder to a claim for a breach of a duty, fiduciary or otherwise, such
Securityholder may terminate this Agreement upon written notice to the other
parties hereto.
7.
Amendment
Except
as
expressly set forth herein, this Agreement constitutes the entire agreement
between the parties and may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by each
of the parties hereto.
8.
Assignment
No
party
to this Agreement may assign any of its rights or obligations under this
Agreement without the prior written consent of the other parties.
9.
Disclosure
Prior
to
first public disclosure of the existence and terms and conditions of this
Agreement, neither of the parties hereto shall disclose the existence of this
Agreement or any details hereof, or the possibility of the Proposed Transaction
or any terms or conditions or other information concerning the Proposed
Transaction to any person other than the Securityholder's advisors, without
the
prior written consent of the other party hereto, except to the extent required
by law. The existence and terms and conditions of this Agreement may be
disclosed by Signet and Andora in the press release issued in connection with
the execution of the Letter Agreement, and other public disclosure documents
in
accordance with applicable securities
legislation.
3
10.
Further
Assurances
Subject
to the terms and conditions herein, the Securityholders and Signet agree to
use
commercially reasonable efforts to take, or cause to be taken, all action and
to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations, to consummate the transactions contemplated
by
this Agreement and the Letter Agreement.
11.
Notice
Any
notice, document or other communication required or permitted to be given to
the
parties under this Agreement shall be in writing and be either hand delivered
or
faxed (with a following letter) as follows:
|
(a)
|
to
the Securityholders at the address and fax number listed on the first
page
of this Agreement;
|
| (b) |
to
Signet:
|
Signet
Energy Inc.
0000,
000-0xx Xxxxxx XX
Xxxxxxx,
XX X0X 0X0
Attention:
Executive
Chairman and Chief Executive Officer
Fax: (000)
000-0000;
| (c) |
to
Andora:
|
Andora
Energy Corporation
000,
000
00xx Xxxxxx XX
Xxxxxxx,
XX X0X 0X0
Attention:
Chief
Executive Officer
Fax: (000)
000-0000;
and
shall
be deemed to be received by the party to whom such notice is given on the date
of delivery or transmission.
12.
Successors
This
Agreement will be binding upon, enure to the benefit of and be enforceable
by
the Securityholders and their respective successors.
13.
Time
of the Essence
Time
shall be of the essence of this Agreement.
14.
Applicable
Law
This
Agreement shall he governed by and construed in accordance with the laws of
the
Province of Alberta and the laws of Canada applicable therein and the courts
of
such Province shall have exclusive jurisdiction over any dispute hereunder
to
which jurisdiction the parties attorn.
4
15.
Counterpart
Execution
This
Agreement may be signed by fax and in counterparts, which, together, shall
be
deemed to constitute one valid and binding agreement and delivery of such
counterparts may be effected by means of telecopier.
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Yours
truly,
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||
|
SIGNET
ENERGY INC.
|
||
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Per:
/s/ X.X. Xxxxx Xxxxxxx
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||
|
X.X.
Xxxxx Xxxxxxx
Executive
Chairman and Chief Executive Officer
|
||
|
ANDORA
ENERGY CORPORATION
|
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Per:
/s/ Xxxxx Xxxxxx
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||
|
Name:
Xxxxx Xxxxxx
Title:
VP Finance & CFO
|
Acceptance
by the Securityholders
The
foregoing is hereby accepted as of and with effect from the date first above
written and the undersigned hereby confirms that the undersigned beneficially
owns or exercises control or direction over:
|
11,350,000
Shares;
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||
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SURGE
GLOBAL ENERGY INC.
|
||
|
Name
of Securityholder
|
||
|
00000
Xx Xxxxxx Xxxx, Xxxxx 000
|
||
|
Xxx
Xxxxx, XX 00000 XXX Fax: 000.000.0000
|
||
|
Signatures
of authorized signatories on behalf of
|
||
|
SURGE
GLOBAL ENERGY INC.
|
||
|
/s/
Xxxxx Xxxxx
|
||
|
Xxxxx
Xxxxx, Chairman & Director
|
||
|
850,000
Shares;
|
||
|
/s/
Xxxxx Xxxxx
|
||
|
XXXXX
XXXXX
|
||
|
00000
Xx Xxxxxx Xxxx, Xxxxx 000
|
||
|
Xxx
Xxxxx, XX 00000 XXX Fax:
000.000.0000
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5
