EXHIBIT 2.01
ASSET PURCHASE AGREEMENT
This Agreement is made and entered into this _____ day of May, 1998, by and
between Sunburst Acquisitions II, Inc., a Colorado Corporation (hereinafter
"Sunburst"), and Vector Energy Corporation, a Texas corporation (hereinafter
"Vector").
This Agreement sets forth the terms and conditions upon which Vector is
selling to Sunburst and Sunburst is purchasing and acquiring from Vector certain
operating properties, contract rights, and capital stock of a subsidiary
corporation.
NOW THEREFORE, in consideration of the foregoing, and in consideration of
the mutual covenants and promises hereinafter set forth, it is agreed as
follows:
1. Sale of Business Assets. On the terms, and subject to the conditions
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herein set forth, Vector shall convey, transfer, assign and deliver to Sunburst,
on a going concern basis, and Sunburst shall acquire and accept from Vector all
of the operating assets, contract rights and stock described in Exhibit A
attached hereto and incorporated herein by this reference.
2. Purchase Price. On the terms and subject to the conditions herein set
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forth, Sunburst shall, on the closing date:
2.01 Issue and deliver to Vector 19,710,000 shares of its authorized, but
previously unissued shares of common stock, to be registered in the name of
Vector or its designees;
2.02 Assume certain liabilities of Vector and of its wholly-owned
subsidiary, Vector Exploration, Inc., in accordance with the Asset Transfer
Agreement dated March 23, 1998, between Lisbon Development Company, LLC, and
Vector.
2.03 Sunburst shall assume and agree to be bound by all of the terms and
conditions of the purchase and sale agreement dated March 31, 1998, by and
between Vector, and Taurus Operating, Inc., pursuant to which Vector agreed to
acquire certain properties and assets owned by Taurus Operating, Inc., referred
to as the Xxxxxxxxx Field.
3. Representations and Warranties of Vector. Vector represents and
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warrants as follows:
3.01 Existence. Vector is a corporation duly organized, validly existing,
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and in good standing under the laws of the state of its incorporation, and is
duly qualified to do business in the states in which its properties are located.
3.02 Authorization. Vector has all authority necessary to enter into this
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Agreement, to perform all its obligations hereunder, and to convey, transfer or
assign all of the assets and properties described herein free and clear of all
liens, claims and encumbrances other than those to be specifically assumed by
Sunburst, as listed in Exhibit B attached hereto. This Agreement has been duly
executed and delivered on its behalf, and at the Closing all documents and
instruments required hereunder will have been duly executed and delivered. This
Agreement, and all such documents and instruments shall constitute legal, valid,
and binding obligations enforceable in accordance with their respective terms,
except to the extent enforceability may be affected by bankruptcy,
reorganizations, insolvency, or similar law affecting creditors' rights
generally.
3.03 Power. Vector's execution, delivery, and performance of this Agreement
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and the transactions contemplated hereby will not: (i) violate or conflict with
any provision of its certificate of incorporation, by-laws, or other governing
documents; (ii) result in the breach of any term or condition of, or constitute
a default or cause the acceleration of any obligation under any agreement or
instrument to which it is a party or by which it is bound; or (iii) violate or
conflict with any applicable judgment, decree, order, permit, law, rule, or
regulation.
3.04 Brokers. Vector has incurred no liability, contingent or otherwise,
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for brokers' or finder's fees in respect of this transaction, for which Sunburst
shall have any responsibility whatsoever.
3.05 Further Distribution. Vector (i) has such knowledge and experience in
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business and financial matter that it is capable of evaluating the merits and
risks of entering into and of carrying out its obligations in connection with
the transactions contemplated herein; (ii) has received to date all information
concerning Sunburst and other information relating to this Agreement which it
requested; and (iii) is able to bear the economic risk of ownership of the
securities of Sunburst for an indefinite period of time. Further, Vector
acknowledges that Sunburst is relying upon the representations contained in the
foregoing sentence and that absent such representations, the proposed
transaction would not be entered into and this Agreement would not be executed
and delivered by Sunburst.
3.06 Effective Agreement. The execution, delivery, and performance of this
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Agreement by Vector and the consummation of the transactions contemplated hereby
do not require the consent, waiver, approval, or authorization of any person or
public authority; do not result in a violation of any material breach of any
law, rule, or regulation applicable to Vector, and do not conflict with or
result in a breach of any of the governing instruments of Vector or, with or
without the giving of notice and/or the passage of time, any mortgage, deed of
trust, license, indenture, or other instrument or agreement, or any order,
judgment, or other restriction of any kind or character to which Vector is a
party.
3.07 Litigation. Vector is not a party to or threatened by any litigation,
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proceeding, or controversy before any court, governmental body, or
administrative agency which would have a Material Adverse Effect on the
transactions contemplated under this Agreement.
3.08 Compliance with Laws. The execution and performance of this Agreement
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by Vector does not violate any law or regulation of any jurisdiction or
governmental body or agency and does not require approval of, or filing with,
any governmental body or agency.
3.09 Representations, Statements and Certificates. No representation
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by Vector, nor any statement or certificate furnished or to be furnished by
Vector pursuant to this Agreement, or in connection with the transactions
contemplated herein, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.
4. Representations and Warranties of Sunburst. Sunburst represents and
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warrants as follows:
4.01 Organization, Capitalization, etc.
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(a) Sunburst is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Colorado, and as of the Closing
Date will be qualified to do business in the State of Texas, but will not be
qualified in any other state.
(b) The authorized capital stock of the Company consists of
100,000,000 shares, no par value common stock and 20,000,000 shares of preferred
stock of which 2,190,000 shares of common stock and no shares of preferred stock
are validly issued and outstanding, fully paid and non-assessable.
(c) Sunburst has the unqualified right to issue the common shares to
Vector as contemplated by the terms of this Agreement, and upon consummation of
the transactions contemplated by this Agreement, Vector will acquire good and
valid title to the Shares, free and clear of all liens, claims, options,
charges, and encumbrances of whatsoever nature.
4.02 Authority; No Violation. The execution and delivery of this Agreement
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by Sunburst and the consummation of the transactions contemplated hereby have
been duly authorized. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will constitute a
violation or default under any term or provision of the Articles of
Incorporation or bylaws of Sunburst, or of any contract, commitment, indenture,
other agreement or restriction of any kind or character to which Sunburst is a
party or by which Sunburst is bound.
4.03 Financial Statements. Sunburst has delivered to Vector audited
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financial statements for the period ending April 30, 1997, and which are
attached to the Company's First Amended Form 10-SB filed with the Securities and
Exchange Commission (the "Commission"). In addition, Sunburst has delivered to
Vector its unaudited financial statements for the periods ending July 31, 1997,
October 31, 1997, and January 31, 1998, which are attached to its Form 10-QSB
filed with the Commission for each such period. All such financial statements
are true and correct, and a fair and accurate presentation of the financial
condition and assets and liabilities (whether accrued, absolute, contingent, or
otherwise) of Sunburst as of the date thereof in accordance with generally
accepted principals of accounting applied on a consistent basis.
4.04 Tax Returns. Sunburst has duly filed all tax reports and returns
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required to be filed by it and has fully paid all taxes and other charges
claimed to be due from it by federal, state, or local taxing authorities
(including without limitation those due in respect of its properties, income,
franchises, licenses, sales, and payrolls); there are no liens upon any of
Sunburst's property or assets; there are not now any pending questions relating
to, or claims asserted for, taxes or assessments asserted against the Company.
4.05 Undisclosed Liabilities. Sunburst has no liabilities or obligations of
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any nature, whether absolute, accrued, contingent, or otherwise and whether due
or to become due, and does not know or have any reasonable ground to know of any
basis for the assertion against it of any liability or obligation of any nature
whatsoever.
4.06 Litigation. There are no actions, proceedings, or investigations
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pending or, to the knowledge of Sunburst, threatened against it, and Sunburst
does not know or have any reason to know of any basis for any such action,
proceedings, or investigation.
4.07 Disclosure. Sunburst has disclosed to Vector all facts material to its
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assets, prospects, and business. No representation or warranty by Sunburst
contained in this Agreement, and no statement contained in any instrument, list,
certificate, or writing furnished to Vector pursuant to the provisions hereof or
in connection with the transaction contemplated hereby, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading or
necessary in order to provide Vector with proper information as to Sunburst and
its affairs.
4.08 SEC Filings. Sunburst is a reporting company under the Securities and
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Exchange Act of 1934 (as amended) and has filed on a timely basis all reports
required to be filed with the Securities and Exchange Commission.
5. Closing.
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The closing under this Agreement shall take place at 0000 Xxx Xxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx, at 10:00 a.m. on May 8, 1998, or at such other date or time
as the parties may mutually agree in writing.
6. Conditions Precedent to Closing by Sunburst.
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The obligations of Sunburst to purchase the assets under this Agreement are
subject to the satisfaction, at or before the closing, of all the conditions set
out below in this paragraph 6. Sunburst may waive any or all of these conditions
in whole or in part without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by Sunburst of any of its other rights
or remedies, at law or in equity, if Vector shall be in default of any of its
representations, warranties, or covenants under this Agreement. The conditions
are as follows:
6.01 Except as otherwise permitted by this Agreement, all representations
and warranties by Vector in this Agreement or in any written statement that
shall be delivered to Sunburst under this Agreement be true on and as of the
closing date as though made at that time.
6.02 Vector shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by it on or before the closing date.
6.03 During the period from the date hereof to the closing date, there
shall not have been any material adverse change in the financial condition or
the results of operations of Vector, and Vector shall not have sustained any
material loss or damage to its assets, whether or not insured, that materially
affects its ability to conduct a material part of its business.
6.04 Sunburst and its counsel, accountants and other representatives shall
have full access during normal business hours to all properties, books,
accounts, records, contracts and documents of or relating to Vector. Vector
shall furnish or cause to be furnished to Sunburst and its representatives all
data and information concerning the business, finances and properties of Vector
and its subsidiary that may reasonably be requested.
6.05 Vector shall have established to the reasonable satisfaction of
Sunburst that following completion of the transactions described herein,
Sunburst will have total assets of not less than $11,500,000 liabilities of not
more than $7,100,000, and net equity of not less than $4,400,000.
7. Conditions Precedent to Closing by Vector.
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The obligations of Vector to transfer the assets under this Agreement are
subject to the satisfaction, at or before the closing, of all the conditions set
out below in this paragraph 7. Vector may waive any or all of these conditions
in whole or in part without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by Vector of any of its other rights or
remedies, at law or in equity, if Sunburst shall be in default of any of its
representations, warranties, or covenants under this Agreement. The conditions
are as follows:
7.01 Except as otherwise permitted by this Agreement, all representations
and warranties by Sunburst in this Agreement or in any written statement that
shall be delivered to Vector under this Agreement be true on and as of the
closing date as though made at that time.
7.02 Sunburst shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by it on or before the closing date.
7.03 During the period from the date hereof to the closing date, there
shall not have been any material adverse change in the financial condition or
the results of operations of Sunburst, and Sunburst shall not have sustained any
material loss or damage to its assets, whether or not insured, that materially
affects its ability to conduct a material part of its business.
7.04 Vector and its counsel, accountants and other representatives shall
have full access during normal business hours to all properties, books,
accounts, records, contracts and documents of or relating to Sunburst. Sunburst
shall furnish or cause to be furnished to Vector and its representatives all
data and information concerning the business, finances and properties of
Sunburst and its subsidiary that may reasonably be requested.
7.05 Xxxxxxx Xxxxx and Xxx Xxxxxx shall each have executed letters of
resignation as officers and directors of Sunburst and shall have agreed to
appoint successor directors designated by Vector to serve for their remaining
unexpired terms.
8. Miscellaneous.
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8.01 Expenses. Vector shall be responsible for payment of all legal and
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accounting fees incurred by Sunburst in connection with completion of the
transaction described herein.
8.02 Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto, their successors and assigns.
8.03 Prior Agreements; Amendments. This Agreement supersedes all prior
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agreements and understandings between the parties with respect to the subject
matter hereof. This Agreement may be amended only by a written instrument duly
executed by the parties hereto or their respective successors or assigns.
8.04 Headings. The section and paragraph headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.
8.05 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Colorado.
8.06 Counterparts; Facsimile Treated as Original. This Agreement may be
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executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Facsimile signatures on counterparts shall be treated as originals.
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement
as of the day and year first above written.
SUNBURST ACQUISITIONS II, INC. VECTOR ENERGY CORPORATION
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