THE AGREEMENT
This Agreement ("Agreement") is made as of this 29th day of
March, l999, by and between Ravendale Financial Inc. ("Agent'),
Texas International Petroleum Inc., ("TIP"), and WolfStone
Corporation ("WSC"). The Companies may from time to time be
referred to hereinafter collectively as the "Constituents";
WHEREAS, Agent believes it to be in the best interests of
its clients who own one hundred (100%) percent of the authorized
and issued Common Stock of the closely held Subsurface Energy,
Inc., to sell these shares to TIP; and
HEREAS, TIP believes it will be beneficial to its energy
business and WSC believes it to be in the best interests of its
shareholders, to acquire 100% of the authorized and issued
shares of Subsurface Energy, Inc. ("SEI").
NOW THEREFORE. in consideration of the above stated, the
covenants, promises and representations of each Constituent to
this Agreement are as follows:
ARTICLE I
1.1 Organization. TIP is duly organized, validly existing and
in good standing in the State of Texas, U.S.A.; has all
necessary, powers to own its property and carry on its business
as now owned and operated by it in any geographic area in the
United States or elsewhere, wherein its business requires
qualification.
1.2 Capital Stock. Of the common shares of TIP authorized, and
outstanding, all are fully paid and non-assessable.
1.3 Subsidiaries. TIP has no subsidiaries, nor does it own any
interest in any other enterprise, excepting those known to
Constituents of this Agreement.
1.4 Financial Information. Property descriptions, lease
assignments. and valuations with geological documentation is
available for perusal upon request by any concerned shareholder
or state or federal agency. Neither Agent nor SEI makes nor
gives any warranty or guarantee, express or implied regarding
valuations or other financial reports documentation which is
given or made by any third party. WSC and TIP, hereby discharges
and indemnifies Agent, and SEI, against all debts, liabilities,
losses or obligations made or incurred in connection with any
valuations or other financial reports or documentation which is
given or made by any third party.
1.5 Litigation. SEI is not involved in any litigation, the
nature of which would be considered other than a common hazard of
conducting its business. It is not in default with respect to
any order, writ, injunction or decree of any court of the United
States or any foreign country,
1.6 Authority. Agent has the right to sell and is authorized
to sell it's client's shares of SEI, being the contracted Agent
for all the holders of the closely held, SEI, and is authorized
execute this Agreement and has full power and authority to
execute, deliver and perform this Agreement, and this Agreement
is a. legal, valid and binding obligation of Agent, and is
enforceable in accordance with its terms and conditions.
ARTICLE II
2.1 Organization. TIP, is duly organized validly existing and
in good standing in the State of Texas, U.S.A.. TIP has all
necessary powers to issue its shares, own its property, and
carry on its business as flew owned and operated by it in any
geographic area of the United States or elsewhere wherein its
business requires qualification.
2.2 Exchange of securities The following shares shall be
issued to Agent and/or assigns: l,604,797 TIP shares of $20.00
par, Convertible, Class A, Preferred Stock, earning a 6% dividend
per annum, in exchange for 3,209,594 $10.00 par, Common Shares of
SEI, from Agent, these being all of the issued and outstanding
shares of Subsurface. The Preferred Shares of TIP are convertible
any time after issuance, in total or in part, to Common Shares of
WSC. Restricted Common Stock of WSC received through conversion
shall bear a 12 month legend. The Preferred TIP shares to be
converted on a l = 1 ratio with WSC Common stock. The purchase
price of SEI is based. upon evaluation of this company's proven
producing reserves at $32,095,940.
Other Shares included in this transaction are 5,000 shares
of $40.00 par Convertible, Cumulative Class -B, Preferred Stock,
of' WSC, earning a 5% annual dividend, first payment, April 28,
2000, conversion ratio: 1=3 Common Shares; conversion at
discretion of holders any time after issuance. These shares to
be issued to persons for their efforts negotiating this
transaction. After conversion, and. at a later date, WSC,
according to internal agreement with its subsidiary will assist
by arranging the sale of 50,000 shares of the common stock,
through a stock brokerage firm at market value, but for no less
than $4.25, or, in lieu of being able to arrange this
transaction, or in event the market should fall below $4.25, WSC
shall purchase the 50,000 shares at a minimum of $4.25 per share,
at $25,000 per month for five months and $87,500. on the sixth
month. Sale or purchase of the first segment of the 50,000
shares shall be made and payment thereof to Agent or assigns
shall be due within 40 days from conversion date and payments as
detailed above shall continue on the sane date, for each of five
following months: 6 monthly payments in total.
2.2(a) At the effective date hereto, there shall not, be any
outstanding subscriptions, options., rights, warrants,
debentures, convertible securities, preferred stock or other such
instruments or commitments unknown to TIP or WSC obligating SEI
to issue or transfer from the later firm's treasury, additional
shares of its capital stock of any class.
2.2(b) Agent shall, according to agreement with its clients,
be responsible for distribution of the certificates of $20.00 per
Convertible Preferred Stock an Common Stock, to the shareholders
of SEI. The certificates shall be issued in the names of the
shareholders, and in such denominations per shareholder as shall
be presented to TIP, and all issued certificates shall be
delivered to Agent, by express, certified mail.
2.3 Subsidiaries. TIP currently has no subsidiaries or
divisions. It is the intent that SEI shall become a division of
TIP, responsible for production and coordination with the field
management group.
2.4 Financial Information. All financial information of SEI is
currently known to the Constituents.
2.5 Litigation. SEI is not involved in any litigation, the
nature or which would he considered other than a common hazard of
conducting business. SEI is not in default with respect to any
order, writ, injunction or decree of any court of the United
States or any foreign country.
2.6 Authority Shareholders owning the legally required
percentage of voting stock in SEI, have authorized the execution
of this Agreement and consummation of the transaction
contemplated herein. Agent has full power and authority to
execute. deliver and perform this Agreement and this Agreement is
a lega1, valid and binding obligation of Agent and SEI, and is
enforceable in accordance with its terms and conditions.
ARTICLE III
3.1 Organization. WSC, the common shares of which will
ultimately be those shares received by the shareholders of SEI,
to be distributed at the time of conversion of the. TIP preferred
shares, was organized in the State of Minnesota, USA, November
26, 1971, under the name Minnesota Invaders Inc. WSC made its
initial public offering shortly thereafter. WSC has experienced
several name changes over the years. Prior to changing its name
to WolfStone, the Company name was Integrated Direct, Inc., with
the trading Symbol IDIR.
3.2 Domicile. WSC has experienced changes in domicile, the
most recent past was the State of Delaware. The public Company
domicile is now, the State of Nevada
3.3 Corporate headquarters and Operations Headquarters.
WSC's business headquarters is in the City of Woodbridge,
California; its operational headquarters is in the City of
Abilene, Texas.
3.4 Material Contracts. Neither TIP, nor WSC have any
material contracts to which either is a party, or by which it is
bound which would effect this transaction in a negative manner.
ARTICLE IV
4.1 Terms and Conditions This transaction shall be
accomplished by means of a tax free stock for stock exchange.
TIP shall acquire 100% of the authorized and issued stock, with
all assets and liabilities of SEI (3,209,594 shares, $l0.00
par), in exchange for 1,604,797 shares of $20.00 par,
Convertible, Cumulative class-A. Preferred Shares of TIP. The
purchase price of $32,095,947 was based on professional valuation
of SEI's proven, producing reserves. 5000 shares of WSC's
Convertible, Cumulative Class-B Preferred Stock, with voting
privileges, and earning a 5% annual dividend, shall be issued to
persons assisting the negotiations of this acquisition.
According to agreement between WSC and TIP, TIP's Convertible
Preferred Stock will become convertible to the Common Shares of
the publicly held WSC, instead of the common shares of TIP.
4.2 Breach of Covenant. Should WSC fail to honor its agreement
to arrange for the sale of, or buy-back, of the shares, as
detailed in "2" and "4.1" above, or any part of the terms and
conditions of this Agreement any and all assetts and/or 0i1, gas
and mineral 1eases assigned and/or transferred to WSC and/or
TIP, Inc. by Agent shall be null and void and of no effect. In
such an event, Agent may rescind the assignment or transfer of
the assets and/or oil, gas and mineral leases without need of a
court order, and may Cite same in the Official Public Records of
the appropriate County Clerk's office. Further, should WSC fail
to perform its obligations under this Agreement, in whole or in
part, any and all assets and/or oil gas and mineral leases
assigned and/or transferred to WSC and/or TIP, Inc by Agent sha1l
be null and void and of no effect. In such an event, Agent may
rescind the assignment or transfer of the assets and/or oil, gas
and mineral leases without need of court order, and may file
same in the official public records of the appropriate county
Clerk's Office. In either event described above, Agent shall be
entitled to retain any and all sums tendered to and any arid all
stock issued to Agent by WSC pursuant to this Agreement, and
such retaining of said sums and stock is in addition to any other
rights available to Agent, including the right to xxx WSC for
breach of warranty, or breach of covenant under this Agreement.
ARTICLE V
5.1 Effective Date. This Agreement shall become Effective, upon
the execution by authorized, witnessed, signatures of the
Constituents. The exchange of physical shares involved in the
herein detailed transaction shall be accomplished expeditiously.
5.2 Counterparts. This Agreement may be. executed in one or
more counterparts each of which shall be deemed an original but
all which together shall constitute one and the same instrument.
This document may be executed by the Contituents, utilizing
facsimile transmission, to bind this Agreement, and it shall be
as legally binding as though executed in hard copy.
5.3 Hard Copy. The Constituents may utilize facsimile
transmission to legally bind this Agreement but the Constituents
shall at their convenience execute multiple (4) Hard Copies for
WSC. the publicly held corporation, for tiling with any
agencies in event this should be applicable.
ARTICLE VI
6.1 Non-waiver. The failure of any Constituent to this Agreement
to insist in any one or more cases upon the performance by
another Constituent, of any of the provisions terms or conditions
of this Agreement, or to fail to exercise any option herein
contained shall not be construed as a waiver or relinquishment of
any other provision term or condition of this Agreement. No
waiver by a Constituent or a breach by the other Constituent,
shall be construed as a waiver with respect to any other
subsequent breach.
6.2 Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only
and shall not define, limit, or add to the meaning of any
provision of this Agreement.
6.3 Notices. Any formal notices, or demands by a constituent
Company hereto, shall be in writing and of hard copy, and shall
be deemed to be duly given on the date of delivery by courier, or
"served" on the tenth day after mailing, if mailed to the
Constituent to which notice is being given, by first class,
registered or certified, postage prepaid to the headquarters
office of the Constituent, to its address as it may be at a given
time.
6.4 Venue. This Agreement and its application shall be
governed by the laws of the State of Texas and be construed by
the appropriate courts of the State of Texas. Venue shall be in
Xxxxxx County, Texas.
6.5 Binding Effect. This Agreement in all its terms and
conditions shall inure to and be binding upon the Corporate
successors, directors, senior officers, executors and assigns, of
each of the Constituent Companies and major shareholders thereof.
6.6 Mutual Consideration. The constituents hereto shall
cooperate with each other to achieve the mutually desired purpose
of this Agreement and shall execute such other and further
documents and take such other and further actions as may be
necessary or convenient to successfully accomplish the intention
of the transaction described herein, for the best interests of
each of the Constituent Companies.
6.7 Exhibits. Any exhibit referred to in this agreement, but
not currently available, shall be provided at the earliest
possible date. The representations by the Constituents hereto, of
this Agreement and in any Attachments or Addendums hereto, shall
survive the Effective Date hereof, and shall supercede any and
all prior agreements and understandings, if any, between the
Constituent Companies. and subsequent to the Effective Date of
this Agreement. can only be modified by resolutions ratified by
the Boards of Directors of each of the Constituent Companies or
by vote of shareholders carrying the right to vote a majority of
the controlling shares of the parent corporation.
IN WITNESS WHEREOF, Each or the Companies being Constituents
hereto have expressed their acceptance and agreement of the terms
and conditions of this Agreement by their duly authorized
representatives affixing their respective and witnessed
signatures below.
For WolfStone Corporation For Texas International Petroleum, Inc.
By: /s/ Xxxxx X. Xxxxx By: /s/ X.X. Xxxxxxx
Xxxxx X. Xxxxx, Acting Secretary XX Xxxxxxx, Director
For Ravendale Financial, Inc.
By: /s/ Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxx, Vice President
