PURCHASE AGREEMENT
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THIS AGREEMENT ("Agreement") is made effective the 9th day of January 1998,
between Cathay Global Investments, Inc. (hereinafter referred to as "CGI") and
its affiliates (including Georgia Resources, Inc. and C.I.S. Resources Limited
Liability Company) with principal offices at 0000 - 00xx Xxxxxx, Xxxxx 0000,
Xxxxxx, XX 00000 (hereinafter collectively referred to as "CGI" or "Sellers")
and Capital Aggregate Partners, LLC, a Colorado limited liability company with
offices at 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000
(hereinafter referred to as "CAP" or "Buyer"), for the purpose of acquiring the
interests of CGI in Amereco, Inc. and its subsidiaries including Omnivest
Resources, Inc. ("ORI") (hereinafter collectively referred to as "Amereco"), a
publicly-held Utah corporation. The parties to this Agreement may hereinafter
collectively be referred to as the "Parties."
RECITALS:
WHEREAS, CGI is the record and beneficial owner of an aggregate of
3,635,165 shares of common stock of Amereco (the "Shares"), along with options
to purchase an additional 1,563,994 shares of common stock of Amereco (the
"Options"). The forgoing Shares and Options of Amereco may hereinafter be
referred to collectively as the "CGI Securities"; and
WHEREAS, CGI holds a secured promissory note, dated April 18, 1997, made by
Amereco in the total amount of $1,023,869.59 as of January 9, 1998, comprised of
the principal amount of $947,618.81, plus accrued interest as of January 9, 1998
in the amount of $76,250.78, (the "Secured Cathay/Amereco Note"); and
WHEREAS, CGI also holds a secured promissory note made by Amereco in the
total amount of $1,587,495.94 as of January 9, 1998 comprised of the principal
amount of $1,496,973.14 (including $131,092.00 to be reimbursed to CGI pursuant
to paragraph 4 below) plus accrued interest as of January 9, 1998, in the amount
of $90,522.80 (the "Secured Congress Note"). The Secured Cathay/Amereco Note and
the Secured Congress Note may hereinafter sometimes be referred to collectively
as the "CGI Notes"; and
WHEREAS, Sellers desire to sell to Buyer and Buyer desires to purchase from
Sellers the CGI Securities and the CGI Notes, under the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the sums specified herein, the mutual
benefits to be derived hereby and the representations, warranties, covenants,
and agreements herein contained, the sufficiency of which are hereby accepted
and acknowledged, the Parties hereby incorporate the foregoing recitals into
this Agreement by reference and hereby covenant and agree as follows:
1. Recitals Confirmed. All of the recitals hereinabove stated are confirmed
by all of the Parties hereto as being in all respects true and correct and the
same are hereby incorporated by reference into this Agreement.
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2. Purchase and Sale of the CGI Securities. On the terms and subject to the
conditions hereinafter set forth, Sellers hereby agree to sell, transfer and
assign the CGI Securities and the CGI Notes to Buyer and Buyer hereby agrees to
purchase the CGI Securities and the CGI Notes from Sellers in accordance with
the terms hereof.
3. Purchase Price - CGI Securities. Buyer shall pay to Sellers, and Sellers
shall accept as full and fair consideration for the CGI Securities, six hundred
thousand dollars (US$600,000), payable as follows:
a) $200,000 on or before May 15, 1998; and
b) $400,000 on or before September 15, 1998.
3.1 Upon the execution of this Agreement, the title to the CGI
Securities shall be transferred to Buyer, with all rights appurtenant thereto.
The obligations for the May 15, 1998 and the September 15, 1998 payments shall
be evidenced by promissory notes in favor of CGI (the "$200,000 Note" and the
"$400,000 Note") attached hereto as "EXHIBIT A" and "EXHIBIT B." The $200,000
Note and the $131,092 Note referenced in Section 3.4 below shall be secured by
the CGI Securities, and the $400,000 Note shall be unsecured, providing however
that no distribution by CAP be made to the members of CAP unless and until the
$400,000 Note is paid in full to CGI.
3.2 The CGI Securities shall be placed and held in escrow, pending the
completion of the May 15, 1998 payments, and pursuant to the escrow agreement
("Escrow Agreement") attached hereto marked "EXHIBIT C." All dividends or
distributions, if any, paid by Amereco with respect to any of the CGI Securities
will be delivered to the escrow agent, to be delivered in accordance with the
instructions contained in the Escrow Agreement.
3.3 Upon completion of the May 15, 1998 payments, the CGI Securities
shall be released by the escrow agent and delivered to Buyer in accordance with
the instructions contained in the Escrow Agreement.
3.4 Additionally as part of the above consideration and as
reimbursement for CGI's capital advances to Amereco, on or before May 15, 1998
Buyer shall pay to CGI a total of $131,092. This obligation shall be evidenced
by a promissory note (the "$131,092 Note") in favor of CGI and attached hereto
as "EXHIBIT D."
4. Purchase Price - CGI Notes and Reimbursement for CGI Advances.
Consideration for the assignment to Buyer of the CGI Notes and related
collateral, and reimbursement for advances made by CGI, will consist of the
following:
4.1 Simultaneously with the execution of this Agreement, Buyer shall
issue to CGI a "New 3-Year Note" in the amount of $1,023,869.59. The Secured
Cathay/Amereco Note and its related collateral shall be assigned to Buyer. The
New 3-Year Note and the Assignment of Note and Collateral to Buyer are attached
hereto as "EXHIBIT E" and "EXHIBIT F."
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4.2 Simultaneously with the execution of this Agreement, Buyer shall
issue to CGI a "New 5-Year Note" in the amount of $1,456,403.94. The Secured
Congress Note and its related collateral shall be assigned to Buyer. The New
5-Year Note and the Assignment of Note and Collateral to Buyer are attached
hereto as "EXHIBIT G" and "EXHIBIT H."
4.3 The CGI Notes and the assignments thereof shall be placed and held
in escrow pursuant to the Escrow Agreement, which will provide for the delivery
of the CGI Notes and assignments to Buyer, in accordance with the instructions
contained therein, providing for delivery of the Secured Cathay/Amereco Note and
its related collateral and assignment to Buyer upon satisfaction of the payments
under the New 3 -Year Note; and delivery of the Secured Congress Note and its
related collateral and assignment to Buyer upon satisfaction of the payments
under the New 5 -Year Note.
5. Conditions Precedent to Closing. The closing and all obligations of the
Parties under and pursuant to this Agreement are and shall be subject to the
following:
5.1 A loan advance to ORI made by CAP in the amount of $250,000 for
working capital, as evidenced by a deposit or wire transfer confirmation
reasonably satisfactory to CGI no later than January 16, 1998.
5.2 The representations and warranties of the Sellers being true and
correct as of the date of this Agreement (including but not limited to those
representations set forth in the Recitals of this Agreement).
5.3 Sellers furnishing certificates representing the CGI Securities
made the subject hereof in transferable form indorsed to Buyer with signatures
medallion guaranteed to the extent such securities are certificated, and
assignments, stock powers and/or other legally acceptable documentation for any
uncertificated CGI Securities made the subject hereof.
5.4 Duly executed documentation of all related agreements necessary to
effect the terms and conditions of this Agreement.
5.5 The Parties hereby agree to release and indemnify each other with
regard to any claims and/or causes of action (excluding claims involving fraud,
material breach of fiduciary responsibilities, gross negligence, or willful
misconduct) which have arisen or may arise from the actions of the Parties or
their relationships prior to the date of said release, and they shall execute a
release identical in form to that annexed hereto as EXHIBIT I ("Mutual Release")
for this purpose, which shall have the legal effect of a general waiver, release
and indemnification.
5.6 Each Seller shall execute and deliver to Buyer an irrevocable
proxy in the form annexed hereto as EXHIBIT J ("Irrevocable Proxy") appointing
Buyer as proxy to cast all votes represented by Sellers' shares.
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6. Representations and Warranties of Each Seller.
6.1 The CGI Securities are hereby represented by Sellers as being 100%
of the total outstanding Shares of Amereco, Inc. owned directly by Sellers, and
100% of the total number of Options to purchase Amereco securities owned
directly by Sellers.
6.2 To the best of Sellers' knowledge, information and belief, the CGI
Securities collectively represent at least 66.3% of the total outstanding equity
shares in Amereco.
6.3 To the best of Sellers' knowledge, information and belief, there
is no pending or threatened issue, litigation or other matter which may impair
the ability of each Seller to comply with and/or implement the terms and
conditions of this Agreement, and Amereco has no other liabilities to Sellers.
6.4 Sellers Cathay Global Investments, Inc., and Georgia Resources,
Inc. are corporations duly organized, validly existing and in good standing
under the laws of the State of Nevada. Seller C.I.S. Resources Limited Liability
Company is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Colorado.
6.5 To the best of Sellers' knowledge, information and belief, no
consents of governmental and other regulatory agencies, foreign or domestic, or
of other parties are required to be received by or on the part of Sellers to
enable them to enter into and carry out this Agreement in all material respects.
6.6 Each Seller, by itself and/or through its authorized
representative, has the power to enter into this Agreement and to carry out its
obligations hereunder. The authorized representative of Cathay Global
Investments, Inc., represents that it has authority to bind not only Cathay
Global Investments, Inc. but also the authority to bind the other Sellers, i.e.,
Georgia Resources, Inc. and C.I.S. Resources Limited Liability Company, for
purposes of carrying out the terms and conditions of this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, will be duly authorized by the controlling
members or Board of Directors (if applicable) of each Seller, and to the best of
each Seller's knowledge, information and belief, no other corporate or other
proceedings or approvals on the part of each Seller or any other party are
necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement constitutes
the valid and binding obligations of each Seller and is enforceable in
accordance with its terms.
6.7 Each Seller is the sole record and direct owner of the securities
of Amereco which are the subject of this Agreement and all securities owned by
each Seller are fully paid, and to the best of each Seller's knowledge,
information and belief, such securities are non-assessable, free and clear of
any and all liens, claims and encumbrances of any kind, nature or description.
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6.8 Each Seller and its authorized representative herein, has full
power, right and authority to execute and perform this Agreement in the time and
manner contemplated; and to sell the CGI Securities made the subject hereof. The
execution and performance of this Agreement and the delivery of the CGI
Securities referred to herein will not result in a breach of or violate the
provisions of any contract or agreement to which each Seller is a party or to
which the CGI Securities are the subject. Sellers are solely responsible for
ensuring that the proceeds from this transaction are properly allocated to the
applicable individuals or entities entitled thereto.
6.9 The CGI Securities contemplated herein may be restricted Rule 144
stock as promulgated under the Securities Act of 1933, and said securities may
not be sold within the U.S. on an exchange prior to the termination of the
applicable holding period, but may be sold in a private transaction subject to
the provisions of said Rule.
6.10 Sellers shall authorize and consent, and to the extent possible,
shall encourage the cooperation of Amereco and its officers, directors,
employees, attorneys, accountants, consultants, and other agents in providing
full and complete access at all reasonable times to all records and any
information pertaining to Amereco deemed necessary by Buyer.
6.11 The Parties shall cooperate with each other and provide any
further documentation reasonably necessary to carry out the terms of this
Agreement or for the subsequent assignment or transfer of CGI Securities.
6.12 Sellers hereby represent to Buyer that, to the best of their
knowledge, for the past several months Amereco has not been able to pay its
debts as they have become due.
7. Representations and Warranties of Buyer. By virtue of the execution of
this Agreement, Buyer hereby represents and warrants to Sellers as follows:
7.1 Buyer has full power and authority to purchase the CGI Securities
contemplated herein and to execute this Agreement and this Agreement is
enforceable against Buyer.
7.2 That it and/or its representatives and consultants have had access
to such records of Amereco as it and/or they wish to examine and are relying and
entering into this Agreement upon their own independent findings and the
findings of their own counsel and/or consultants, and upon no representations,
statements or warranties or any obligations to make any representations of
Sellers.
7.3 The execution of this Agreement will not result in a breach of or
constitute a default under any existing agreement, indenture or other instrument
to which Buyer is a party or by which Buyer or Shares may be bound or affected.
7.4 Buyer has not been induced by any statements, representations or
warranties (whether expressed, implied in fact or implied by law) of any kind,
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nature or description made by Sellers, their agents, servants or employees other
than those set forth in this Agreement and are making this purchase and will
accept the CGI Securities, on an "as is" basis (except as to warranty of title)
in accordance with and subject to the terms hereof. Relevant documents and
information have been reviewed and evaluated by Buyer and/or its accountants and
counsel for this transaction, and no representations have been expressed or
implied by Sellers concerning the viability or soundness of Amereco, or its
ability to pay its debts as they may come due.
7.5 Buyer qualifies as both a sophisticated and accredited investor as
defined by Rule 501 of Regulation D of the Securities Act of 1933. Buyer did not
learn of the opportunity to acquire the CGI Securities or the CGI Notes through
any form of public advertising or general solicitation.
7.6 Buyer will proceed in good faith and will use their best efforts
to promptly and diligently satisfy the conditions precedent to closing, and will
promptly notify Sellers in the event it reasonably believes that such conditions
are unlikely to be fulfilled.
7.7 Neither Xxxxx Xxx, Xxxxxxxxx X. Xxxxx, Xx. nor their family
members, associates, or affiliates are participating in the equity or debt
aspects of this transaction with Buyer.
7.8 Buyer, in conjunction with Amereco, will use their best efforts to
make arrangements for additional financing in an amount of up to $2,000,000 by
September 15, 1998, including the financing described in Paragraph 5.1 above.
8. Expenses. Each party will pay their own expenses in connection with the
transaction contemplated by this Agreement.
9. Signatures. Facsimile signatures shall be acceptable for purposes of
binding the Parties to this Agreement and its related exhibits. This Agreement
may be executed in counterparts each of which so executed shall be deemed an
original and constitute one and the same Agreement.
10. Amendment. This Agreement may not be amended except by an instrument in
writing signed by each of the Parties hereto.
11. Waiver. At any time prior to the execution of this Agreement, the
Parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other Parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto; and (iii) waive compliance with any of the
Agreements or conditions contained herein. Notwithstanding the foregoing and
subsequent to the execution hereof, any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by all Parties to this Agreement. The failure of
any party to insist upon strict performance of any of the provisions of this
Agreement shall not be construed as a waiver of any subsequent default of the
same or similar nature or of any other provision, term, condition, warranty, or
representation contained herein.
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12. Broker, Finder and Investment Banking Fees. Sellers and Buyer hereby
represent and warrant to each other that except for the relationship of First
Capital Investments, Inc. to Buyer, no broker, finder or investment banker has
been authorized, engaged, or is entitled, directly or indirectly, to any
brokerage, finder's or other fee or commission in connection with the
transaction contemplated herein. Sellers shall not be responsible for any fees
owed to First Capital Investments, Inc. The Parties shall indemnify and hold
each other harmless from liability, including attorneys fees, arising out of any
claim to compensation as a broker or finder by an individual, firm or entity
claiming entitlement thereto.
13. Binding Effect. All of the terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of and be enforceable by the
respective heirs, representatives, executors, administrators, successors and
assigns of the Parties hereto.
14. Entire Agreement. Each of the Parties hereby covenants that this
Agreement is intended to and does contain and embody herein all of the
understandings and agreements, both written and oral, of the Parties hereto with
respect to the subject matter of this Agreement, and that there exists no oral
agreement or understanding, express or implied, whereby the absolute, final and
unconditional character and nature of said Agreement shall be in any way
invalidated, empowered or affected. There are no representations or warranties
other than those set forth herein. This Agreement supersedes any prior
understandings or agreements concerning the subject matter hereof. Any
warranties or representations of the Parties set forth herein shall survive the
execution and delivery of this Agreement and the closing hereunder.
15. Laws of the State of Colorado. This Agreement shall be governed by and
interpreted under and construed in all respects in accordance with the laws of
the State of Colorado irrespective of the place of domicile or residence of
either party. In the event of controversy arising out of the interpretation,
construction, performance or breach of this Agreement, the Parties hereby agree
and consent to the jurisdiction and venue of the District Court of Arapahoe
County, Colorado, and further agree and consent that personal service or process
in any such action or proceeding outside of Arapahoe County shall be tantamount
to service in person within Arapahoe County, Colorado and shall confer personal
jurisdiction upon said court.
16. Injunctive Relief. Solely by virtue of their respective execution of
this Agreement and in consideration of the mutual covenants of each other, the
Parties hereby agree, consent and acknowledge that, in the event of a breach of
this Agreement, the Parties will be without adequate remedy-at-law and shall
therefore, be entitled, in addition to any other remedies at law or equity to
which it may be entitled, to immediately redress any material breach of this
Agreement by temporary or permanent injunctive or mandatory relief obtained in
an action or proceeding instituted in the District Court of Arapahoe County,
Colorado without the necessity of proving damages and without prejudice to any
other remedies which the aggrieved party may have at law or in equity. For the
purpose of this Agreement, the Parties hereby agree and consent that upon a
material breach of this Agreement as aforesaid, the aggrieved party may present
a conformed copy of this Agreement to the aforesaid courts and shall thereby be
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able to obtain a permanent injunction enforcing this Agreement or barring,
enjoining or otherwise prohibiting the breaching party from circumventing the
express written intent of the Parties as set forth in this Agreement.
Furthermore, the aggrieved party shall be indemnified by the breaching party for
any damages incurred in reliance upon this Agreement or for representations made
herein.
In any action taken to enforce the terms of this Agreement through
injunction or otherwise, the prevailing party in any such action shall be
entitled to its related costs and attorney fees, including costs and fees
incident to appeal, if applicable.
17. Address of Parties. Each Party shall at all relevant times keep the
other informed of its principal place of business if different from that stated
herein, and shall promptly notify the other of any change, giving the address of
the new principal place of business.
18. Notices. All notices that are required to be or may be sent pursuant to
the provisions of this Agreement shall be sent by certified mail, return receipt
requested, or overnight package delivery service to each of the Parties at the
address appearing herein, and shall be effective from the date of mailing or the
date of the validated air xxxx.
19. Effective Date, Term. This Agreement will only be effective upon the
execution of this document, and shall remain effective until all material terms
and conditions are satisfied. Any representations or warranties expressed herein
shall survive the closing.
20. Time is of the Essence, Best Efforts, Good Faith and Fair Dealing. Time
is of the essence hereof, and each of the Parties shall use its best efforts to
comply herewith, and deal fairly and in good faith with the other party in all
respects concerning the terms and conditions of this Agreement, and to carry out
the intent of the Parties as set forth herein.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the Parties have executed this Agreement the day and
year first above written.
BUYER:
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CAPITAL AGGREGATE PARTNERS, LLC
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Manager
Authorized Representative
SELLERS:
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CATHAY GLOBAL INVESTMENTS, INC.
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, Vice President
Authorized Representative
C.I.S. RESOURCES LIMITED LIABILITY COMPANY
By Continental Integrated Services, Inc., its sole Member
By: /s/ Xxxx-Xxx Xx
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Xxxx-Xxx Xx, Secretary/Treasurer
GEORGIA RESOURCES, INC.
By:Xxxx-Xxx Xx
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Xxxx-Xxx Xx, Secretary/Treasurer
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EXHIBIT LIST
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A - $200,000 Note to CGI
B - $400,000 Note to CGI
C - Escrow Agreement
D - $131,092 Note
E - New 3 - Year Note to CGI for $1,023,869.59
F - Assignment of Note and Collateral to Buyer
G - New 5 - Year Note to CGI for $1,456,403.94
H - Assignment of Note and Collateral to Buyer
I - Mutual Release
J - Irrevocable Proxy
