EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and entered into
as of the 1st day of June, 2002 by and among GSV, Inc. (the "Parent"), a
Delaware corporation, Cybershop, LLC, a Delaware corporation (the "Purchaser")
and Polystick U.S. Corp., a New York corporation ("Seller").
W I T N E S S E T H:
WHEREAS, the Seller is the owner of those certain oil, gas and mineral
lease interests described in Exhibit A, of which it wishes to transfer and sell
to Purchaser the interests described in Exhibit B (the "Transferred
Interest(s)");
WHEREAS, the Purchaser desires to acquire the Transferred Interests, and
the Seller agrees to sell the Transferred Interests on the terms and subject to
the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
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SALE OF THE ASSETS
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Section 1.1 Assets Transferred. On the terms and subject to the
conditions set forth in this Agreement, the Seller will sell, transfer, convey,
assign and deliver to the Purchaser, and the Purchaser will purchase, on the
Closing Date (as defined in Section 2.1), the Transferred Interests, as more
specifically described in Exhibit B.
Section 1.2 Purchase Price. In consideration for the purchase by the
Purchaser of the Assets, the purchase price (the "Purchase Price") shall be
$550,000 cash and 850,000 shares of the Parent's common stock, par value $0.001
per share (the "Common Stock"). The parties further agree that the value of each
share of the Common Stock shall be the last sale price on the last trading day
immediately preceding the Closing.
ARTICLE II
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CLOSING; CLOSING DATE
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Section 2.1 Closing. The closing (the "Closing") of the acquisition of
the Transferred Interests and the transactions contemplated hereby shall be held
on May 29, 2002 at the offices of Xxxxx & Xxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 commencing at 10:00 a.m., New York, New York time, or such other
place, date and time as may be mutually agreed upon by the parties hereto.
Section 2.2 Closing Date. The Closing of the acquisition contemplated
herein shall be deemed to be effective as of June 1, 2002 (the "Closing Date").
As of the Closing Date, the Purchaser shall be entitled receive all of the
proceeds, including those described in Section 2.4, below, which are
attributable to the Transferred Interests.
Section 2.3 Further Assurance; Post Closing Cooperation. All
transactions at the Closing shall be deemed to have taken place simultaneously.
At the Closing, the Seller shall deliver all necessary assignments to the
Purchaser. The Seller will, from time to time, at the request of the Purchaser,
whether at or after the Closing, execute and deliver such other and further
instruments of conveyance, assignment, transfer and consent as the Purchaser or
its counsel may reasonably require for the conveyance and transfer of the
Transferred Interests to the Purchaser. Following the Closing, upon reasonable
advance notice, the Seller will afford the Purchaser, its counsel and its
accountants, during normal business hours, reasonable access to the books,
records and other data relating to the Transferred Interests in its possession
with respect to periods prior to the Closing and the right to make copies and
extracts therefrom, to the extent that such access may be reasonably required by
the requesting party for the management of the Transferred Interests.
Section 2.4 Payments and Obligations Post Closing.
a. The Purchaser and the Seller each acknowledge and agree
that all benefits and obligations attributable to the Transferred Interests
prior to the Closing Date shall be for and borne by the account of the Seller.
Accordingly, the Purchaser shall be liable to the Seller for (i) any benefits
received by the Purchaser which are attributable to the Transferred Interests
prior to the Closing Date and (ii) the reimbursement of any obligations paid by
the Seller attributable to the Transferred Interests after the Closing Date.
b. The Purchaser and the Seller each acknowledge and agree
that all benefits and obligations attributable to the Transferred Interests as
of and after the Closing Date shall be for and borne by the account of the
Purchaser. Accordingly, the Seller shall be liable to the Purchaser for (i) any
benefits received by the Seller which are attributable to the Transferred
Interests after the Closing Date and (ii) the reimbursement of any obligations
paid by the Purchaser attributable to the Transferred Interests prior to the
Closing Date.
c. The Purchaser and the Seller represent and warrant that
they shall each take all necessary action to timely effectuate payment of any
benefits or reimbursement of any obligations due to the other party pursuant to
Sections 2.4(a) and 2.4(b), above.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF THE SELLER
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The Seller hereby represents and warrants to the Purchaser as of the
Closing Date as set forth below. It is understood and agreed that the Seller has
delivered information to the Purchaser covering oil, gas and mineral leases, of
which the Transferred Interests only represent a part. All responsibility of the
Seller with respect thereto shall only cover the portion represented by the
Transferred Interests:
Section 3.1 Organization and Existence. The Seller is duly organized,
validly existing and in good standing under the laws of the State of New York.
The Operating Agreement covering the Transferred Interests is attached hereto as
Exhibit C. The Seller has full power and authority to own and hold the
properties and assets it now owns and holds and to carry on its businesses as
and where such properties are now owned or held and such business is now
conducted. The Seller is duly licensed or qualified to do business as a foreign
corporation or limited partnership, as applicable, and are in good standing in
each jurisdiction in which the character of the properties and assets now owned
or held by them or the nature of the business now conducted by them requires
them to be so licensed or qualified and where the failure so to qualify might
reasonably be expected to have a Material Adverse Effect, as defined below.
Section 3.2 Authority; Binding Effect. This Agreement has been duly
authorized, executed and delivered by the Seller and constitutes the legal,
valid and binding obligation of the Seller.
Section 3.3 No Material Adverse Change. Since the Closing Date, there
does not exist and there has not occurred any event that (singly or together
with any other such events) would reasonably be expected to have a material
adverse effect on the Transferred Interests (a "Material Adverse Effect").
Section 3.4 Balancing. To the best of the Seller's knowledge, as of the
Closing Date, there is no gas, oil or mineral imbalance with respect to the
Transferred Interests.
Section 3.5 Ownership. The Seller is the owner of good and valid title
to the Transferred Interests free and clear of any material lien, claim or
encumbrance. There is no suit, action, claim, investigation or inquiry by any
Governmental or Regulatory Authority, and no legal, administrative or
arbitration proceeding pending or, to the Seller's knowledge, threatened against
the Seller with respect to the execution, delivery and performance of this
Agreement or the transactions contemplated hereby. Record title is currently
held by Century Royalty, L.L.C. ("Century"), which has transferred equitable
ownership by the transfer document attached as Exhibit D hereto and which Seller
will cause record title to be transferred to Purchaser at the Closing. The
Seller represents and warrants that, following the Closing, it will promptly
supply the Purchaser with copies of all filing receipts it receives relating to
the transfer of record title, as recorded with any local, state or federal
governmental authority.
Section 3.6 Financial Information. Seller represents that it has
previously delivered to the Purchaser a true and correct copy of Seller's
revenues and expenses with respect to the Transferred Interests, as charged each
month for the period from November 2001 through March 2002. Seller further
covenants and agrees to promptly supply the Purchaser with copies of any revenue
invoices and/or expense invoices Seller (including Century) receives with
respect to the Transferred Interests for the period from March 2002 through May
2002.
Section 3.7 Disclosure. To the best of the Seller's knowledge, the
Seller has disclosed all known conditions and risks that may materially affect
the production attributable to the Transferred Interests. Neither this
Agreement, the exhibits and schedules hereto or any other document or
certificate delivered by the Seller to the Purchaser or its attorneys or agents
in connection herewith or therewith or with the transactions contemplated hereby
or thereby, when read or considered together, contains any untrue statement of a
material fact nor omits to state a material fact necessary in order to make the
statements contained herein or herein not misleading.
Section 3.8 General Business. From the date hereof until the Closing,
the Seller covenants that it will, with respect to the conduct of business
within its control (it being understood that the Seller is not the operator of
the Transferred Interests):
a. file on a timely basis all notices, reports or other filings
required to be filed with or reported to any federal, state, municipal or other
governmental department, commission, board, bureau, agency or any
instrumentality of any of the foregoing wherever located; and
b. file on a timely basis all applications or other documents
necessary to maintain, renew or extend any material permit, license, variance or
any other approval required by any governmental authority necessary or required
for the continuing operation of its business, whether or not such approval would
expire before or after the Closing Date.
Section 3.9 Investment Representations.
a. Disclosure of Information. The Seller has had an
opportunity to ask questions and receive answers from the Purchaser regarding
the terms and conditions of the Common Stock as well as the business,
properties, prospects and financial condition of the Purchaser. Seller has
reviewed the set of risk factors relating to the Parent's business, a copy of
which is attached hereto as Schedule 4.4.
b. Accredited Investor. The Seller is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). The Seller is
experienced in evaluating and investing in private placement transactions of
securities of companies in a similar stage of development, is able to fend for
itself and can bear the economic risk of this investment.
c. Purchase Entirely for Own Account. This Agreement is made
with the Seller in reliance upon its representation to the Purchaser, which by
the Seller's execution of this Agreement the Seller hereby confirms, that the
Common Stock to be acquired by the Seller will be acquired for investment for
the Seller's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Seller has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, the Seller further represents that it
does not presently have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or to any
third person, with respect to any of the Common Stock and the Seller has not
been formed for the specific purpose of acquiring the Common Stock.
d. No Public Market. The Seller understands that no public
market now exists for the Common Stock and that the Purchaser has made no
assurances that a public market will ever exist for the Common Stock.
e. Restricted Common Stock. The Seller understands that the
Common Stock has not been, and will not be, registered under the Securities Act
by reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Seller's representations as
expressed herein. The Seller understands that the Common Stock constitutes
"restricted securities" under applicable U.S. federal and state securities laws
and regulations, and that pursuant to these laws, the Seller must hold the
Common Stock indefinitely unless the Common Stock is registered with the
Securities and Exchange Commission and qualified by state authorities or an
exemption from such registration and qualification requirements is available.
The Seller acknowledges that if an exemption from registration or qualification
is available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Common
Stock, and requirements relating to the Purchaser which are outside of the
Seller's control and which the Purchaser is under no obligation, and may not be
able, to satisfy.
f. Legends. It is understood that the Common Stock, and any
securities issued in respect thereof or exchange therefor, may bear the
following legend and any legend required by the Blue Sky laws of any state of
the United States to the extent such laws are applicable to the shares
represented by the certificate so legended:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE DISTRIBUTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE ISSUER
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND
LAWS."
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER
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The Purchaser hereby represents and warrants to the Seller that as of
the Closing Date and as of the Closing Date:
Section 4.1 Organization and Existence. The Parent and the Purchaser are
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
Section 4.2 Authority; Binding Effect. This Agreement has been duly
authorized, executed and delivered by each of the Parent and the Purchaser, and
is the legal, valid and binding obligation of each.
Section 4.3 Authorization, Validity and Issuance of Common Stock. The
Common Stock to be issued pursuant to Section 1.2, upon ratification of this
Agreement by the board of directors of the Parent, will be duly authorized.
Subject to the foregoing, upon delivery of the Purchase Price pursuant to
Section 1.2, upon ratification of this Agreement by the board of directors of
the Parent, will be validly issued, fully paid and non-assessable, free and
clear of all liens, claims, encumbrances and rights of first refusal, other than
liens, claims and encumbrances created by the Seller and will not be subject to
any preemptive or similar rights. The Common Stock issued or to be issued
pursuant to this Agreement may not be sold, disposed, transferred or otherwise
distributed without an effective registration statement related thereto or an
opinion of counsel in a form satisfactory to the Parent that registration of the
Common Stock is not required under the Securities Act of 1933 or under any
applicable state securities laws.
Section 4.4 Disclosure. The Parent and the Purchaser have delivered to
the Seller a set of risk factors relating to the Parent's business, a copy of
which is attached hereto as Schedule 4.4.
Section 4.5 Investment Risk. The Purchaser acknowledges the inherent
risk associated with the purchase and ownership of oil and gas interests, and
has performed due diligence to its satisfaction with respect to the Transferred
Interests.
ARTICLE V
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CONDITIONS OF THE PARTIES OBLIGATIONS AT CLOSING
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Section 5.1 Conditions of the Seller's Obligations.
a. Purchase Price. The Seller shall have received payment in
full of the Purchase Price set forth in Section 1.2.
Section 5.2 Conditions of the Purchaser's Obligations.
a. Assignment Agreement. The Seller shall have executed and
delivered the Assignment Agreement relating to the Transferred Interests,
substantially in the form and to the effect of Exhibit E hereto.
b. Management Agreement. The Purchaser shall have received an
executed Management Agreement, between the Purchaser and the Seller,
substantially in the form and to the effect of Exhibit F hereto.
c. Option Agreement. The Purchaser shall have received an
executed Option Agreement, between the Purchaser and the Seller, substantially
in the form and to the effect of Exhibit G hereto.
d. Satisfactory Due Diligence. The Seller shall have delivered
the following items to the Purchaser prior to the Closing and the results of due
diligence by the Purchaser based thereon shall have been satisfactory to the
Purchaser: (i) an independent engineer's report, by Xxxxxxxx Petroleum
Consultants, Inc., dated as of March 29, 2002, setting forth the estimated oil
and gas reserves of the Transferred Interests and the expected cash flow and
revenues therefrom, (ii) a true and correct copy of the Operating Agreement
covering the Transferred Interests, in the form of Exhibit C hereto and (iii)
the financial information referenced in Section 3.6 herein.
ARTICLE VI
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MISCELLANEOUS
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Section 6.1 Survival of Representations and Warranties. The
representations and warranties in this Agreement shall survive the Closing for a
period of one (1) year following the Closing Date. All covenants, agreements and
indemnities contained herein which, by their terms, are to be performed after
the Closing shall survive the Closing.
Section 6.2. Notices. Any notice, request, instruction, correspondence
or other document to be given hereunder by either party to the other (herein
collectively called "Notice") shall be in writing and delivered in person or by
courier service requiring acknowledgment of receipt of delivery or mailed by
certified mail, postage prepaid and return receipt requested, or by telecopier,
as follows:
If to the Parent or Purchaser, addressed to:
GSV, Inc.
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Gilad Gat, President
(000) 000-0000 (fax)
with a copy to:
Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
(000) 000-0000 (fax)
If to the Seller, addressed to:
Polystick U.S. Corp.
1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx
Section 6.3 Governing Law. The provisions of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of New York and the federal laws of the United States. Each party hereto hereby
irrevocably and unconditionally (a) consents and submits to the exclusive
jurisdiction of the courts of the State of New York and of the United States of
America located in the State of New York (each a "New York Court") for any
actions, suits or proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby, (b) agrees that any such action, suit or
proceedings may be brought or maintained only in a New York Court and in no
other forum, (c) agrees that service of any process, summons, notice or document
by U.S. Registered or certified mail to such party at the address specified in
Section 6.2 shall be effective service of process in any such action, suit or
proceeding in any New York Court, and (d) irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of or related to this Agreement or the transactions contemplated hereby in
any New York Court, and further irrevocably and unconditionally waives and
agrees not to plead a claim in any such court that any such action, suit or
proceeding has been brought in an inconvenient forum.
Section 6.4 Entire Agreement; Amendments and Waivers. This Agreement
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. The failure of a party to exercise any right or remedy shall not be
deemed or constitute a waiver of such right or remedy in the future. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (regardless of whether similar), nor shall
any such waiver constitute a continuing waiver unless otherwise expressly
provided.
Section 6.5 Binding Effect and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns; but neither this Agreement nor any of the
rights, benefits or obligations hereunder shall be assigned, by operation of law
or otherwise, by any party hereto without the prior written consent of the other
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any person or entity other than the parties hereto and their respective
permitted successors and assigns, any rights, benefits or obligations hereunder.
Section 6.6 Severability. If any provision of the Agreement is rendered
or declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, the parties hereto
shall promptly meet and negotiate substitute provisions for those rendered or
declared illegal or unenforceable, but all of the remaining provisions of this
Agreement shall remain in full force and effect.
Section 6.7 Execution. This Agreement may be executed in multiple
counterparts each of which shall be deemed an original and all of which shall
constitute one instrument.
EXECUTED as of the date first set forth above.
PURCHASER:
CYBERSHOP, LLC
By:_________________________
Gilad Gat, President
PARENT:
GSV, INC.
By:_________________________
Gilad Gat, President
SELLER:
POLYSTICK U.S. CORP.
By:_________________________
President
