ASSET PURCHASE AGREEMENT
between
PETROL ENERGY, INC.
and
EURO TECHNOLOGY OUTFITTERS
August 19, 2002
TABLE OF CONTENTS
ARTICLE I Sale and Purchase; Liabilities Assumed 4
1.1 Asset Purchase 4
1.2 Operations Following Asset Purchase 4
1.3 Consideration for the Assets 4
1.4 Assumption of Liabilities 5
1.5 Allocation of Consideration 6
1.6 Accounts Receivable 6
1.7 Closing 6
1.8 Effective Time 6
ARTICLE II Representations and Warranties of Buyer 6
2.1 Corporate Organization 6
2.2 Authorization 6
2.3 Consents and Approvals 6
2.4 No Conflict 6
2.5 Brokers and Finders 7
ARTICLE III Representations and Warranties of Seller 7
3.1 Corporate Organization 7
3.2 Authorization 7
3.3 Consent and Approvals 7
3.4 Subsidiaries 8
3.5 Capitalization 8
3.6 Affiliates 8
3.7 Litigation 8
3.8 Stock Ownership and Authority 8
3.9 No Conflicts 8
3.10 Financial Statements 9
3.11 Absence of Certain Changes or Events 9
3.12 Taxes 9
3.13 Title to Assets 9
3.14 Compliance with Laws; Authorization 9
3.15 Employee Benefits Plans 10
3.16 Contracts 10
3.17 Books of Account; Records 10
3.18 Labor Relations 10
3.19 Environmental Matters 11
3.20 Brokers and Finders 11
ARTICLE IV Conditions Precedent to Obligations 11
4.1 Conditions to Obligations of Buyer 11
4.2 Conditions of Seller 12
ARTICLE V Closing 12
5.1 Deliveries of Seller at Closing 12
5.2 Deliveries of Buyer at Closing 13
ARTICLE VI Indemnification 13
6.1 Survival of Representations, Warranties and Agreements 13
6.2 Indemnification 13
6.3 Limitations on Indemnification 14
6.4 Procedure for Indemnification with Respect to Third-Party
Claims 14
6.5 Procedure for Indemnification with Respect to
Non-Third-Party Claims 15
ARTICLE VII Covenants 15
7.1 Covenant Against Hiring 15
7.2 Due Diligence Access 15
7.3 Conduct of Interim Operations 16
7.4 Tax Covenants 17
7.5 Changes to Disclosure Schedule 17
7.6 Liabilities 17
ARTICLE VIII Termination of Agreement 17
ARTICLE IX Miscellaneous Provisions 18
9.1 No Negotiations by Seller 18
9.2 Notice 18
9.3 Entire Agreement 19
9.4 Binding Effect; Assignment 19
9.5 No Third-Party Beneficiaries 19
9.6 Counterparts 19
9.7 Expenses 19
9.8 Waiver; Consent 19
9.9 Other and Further Covenants 20
9.10 Governing Law 20
9.11 Public Announcements 20
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered
into on August 19, 2002, between Petrol Energy, Inc., a Nevada corporation
("Seller"), and Euro Technology Outfitters, a Nevada Corporation ("Buyer").
WHEREAS, Seller is an oil and gas exploration and development company,
and desires to sell the Assets (as defined herein) upon the terms and
conditions hereinafter stated;
WHEREAS, Buyer desires to purchase the Assets from Seller ("Asset
Purchase") upon the terms and conditions hereinafter stated;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, the parties hereto agree as follows:
ARTICLE I
Sale and Purchase; Liabilities Assumed
1.1 Asset Purchase. At the Closing (as defined herein), to be effective
as of the Effective Time (as defined herein), Seller shall sell, convey,
assign, transfer and deliver to Buyer, free and clear of all liens and
encumbrances of any kind except those disclosed in the disclosure schedule
attached hereto (the "Disclosure Schedule") those assets, rights and
interests, tangible or intangible, which are listed by category on the
attached Exhibit A (the "Assets"), and all books and records which relate to
the Assets (except for books and records which Seller is required by law to
retain in its possession, copies of which will be provided to Buyer);
provided, however, that there shall be excluded from the Assets those assets
listed on the attached Exhibit A-1.
1.2 Operations Following Asset Purchase. The assets of Seller following
the Effective Time will be combined with the business of Buyer and will be
operated under the name Petrol Oil & Gas, Inc.
1.3 Consideration for the Assets.
The total consideration for the Assets shall be paid in ten million
nine hundred eighteen thousand three hundred (10,918,300) shares of
Rule 000 Xxxxxxxxxx Xxxxxx Shares of Euro Technology Outfitters
(Buyer) stock.
(a) The shares issued shall contain the following Legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SHARES, OR AN
OPINION SATISFACTORY TO THE ISSUER AND ITS COUNSEL TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED UNDER THE ACT.
(b) At the Effective Time, subject in all instances to each of the
terms, conditions, provisions and limitations contained in this Agreement,
the Seller shall sell, transfer, convey, and assign to the Purchaser, by
instruments satisfactory in form and substance to the Purchaser and its
counsel, and the Purchaser shall acquire from the Seller, the Acquired
Assets, subject to no Assumed Liabilities, in exchange for ten million nine
hundred eighteen thousand three hundred (10,918,300) shares of common stock
of Purchaser subject to the legend set forth above.
1.4 Assumption of Liabilities.
(a) In connection with the acquisition by Buyer of the Assets as of the
Effective Time, Buyer shall assume only those liabilities under the Material
Contracts/Leases (as defined herein) of Seller that are expressly identified
on the attached Exhibit B. Buyer does not hereby, and will not at any time be
required to, assume, pay, perform or discharge any other obligations, claims,
liabilities, costs or expenses of Seller, including without limitation any of
the following: (i) any liability in respect of separation or severance pay to
any person employed by Seller; (ii) any liability under any plan, fund,
program, policy or arrangement under which any persons are provided or
promised pensions, retirement income, deferred compensation or profit-
sharing; (iii) any liability under any plan, fund, program or arrangement
under which any persons are provided or promised bonuses, incentive pay,
severance pay, vacations or vacation pay, salary continuation, medical
insurance or benefits, savings benefits, stock options, life insurance or
death benefits, travel or accident benefits or unemployment benefits; (iv)
any liability for occupational health and safety or environmental matters;
(v) any liability of Seller (including without limitation any liability or
potential liability with respect to any consolidated return filed or to be
filed by any person) for federal, state or local income or other taxes or
penalties or interest thereon; (vi) any pending or threatened litigation
against Seller or any affiliate of Seller; (vii) any loans or accounts
payable, including but limited to any intercompany loans, advances or other
obligations owed by Seller to any affiliate of Seller; and (viii) liability
of any kind, direct or indirect, fixed or contingent, arising out of,
resulting from or relating to actions taken or omitted to be taken by Seller
prior to, on or after the Closing Date.
(b) Notwithstanding anything to the contrary in this Agreement, to the
extent that the assignment hereunder of any Material Contract/Lease shall
require the consent of any other party (or in the event that any of the same
shall be non-assignable), neither this Agreement nor any action taken
pursuant to its provisions shall constitute an assignment or an agreement to
assign if such assignment or attempted assignment would constitute a breach
thereof or result in the loss or diminution thereof; provided, however, that
in each such case, Seller shall use its best efforts to obtain the consent of
such other party to an assignment to Buyer. If such consent is not obtained
and is waived by Buyer prior to the Closing, Seller shall cooperate with
Buyer in any reasonable arrangement designed to provide for Buyer the
benefits under any such contract from and after the Effective Time.
1.5 Allocation of Consideration. The parties agree on the written
allocation of the Consideration among the Assets attached hereto as Exhibit
A. The parties agree to file all federal, state and local tax returns in
accordance with such allocation.
1.6 Accounts Receivable. Seller shall retain its accounts receivable
and Buyer shall have no obligation to collect them for Seller.
1.7 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at 10:00 a.m., local time, on August 21, 2002, at
the officers of Securities Law Institute, at 0000 X. Xxxxxxxx Xx., Xxxxx 000,
Xxx Xxxxx, Xxxxxx, or on such other date or at such other place as the
parties may agree. The date and time of the Closing are sometimes referred to
herein as the "Closing Date".
1.8 Effective Time. The "Effective Time" shall mean 12:01 a.m., Las
Vegas local time, on the first business day following the Closing Date. The
parties agree that (i) between the Closing Date and the Effective Time the
business of Petrol Energy shall be operated for the benefit of and at the
risk of Seller and its stockholders (with Seller hereby agreeing to insure
against and hold Buyer harmless with respect to risk of loss or damage to the
Assets during such time) and (ii) the transfer of the Assets to Buyer and the
assumption of any liabilities hereunder by Buyer shall be effective from and
after the Effective Time without further action by the parties hereto.
ARTICLE 11
Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller that:
2.1 Corporate Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Nevada and has all
requisite power and authority to enter into this Agreement, perform its
obligations hereunder and consummate the Asset Purchase.
2.2 Authorization. All necessary and appropriate corporate action has
been taken by Buyer with respect to the execution and delivery of this
Agreement and the performance of its obligations hereunder, and this
Agreement constitutes a valid and binding obligation of Buyer enforceable
against it in accordance with its terms.
2.3 Consents and Approvals. To the best of Buyer's knowledge, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental or regulatory authority or agency is required
in connection with the execution and delivery of this Agreement by Buyer or
its performance of the terms hereof or for the validity or enforceability
thereof.
2.4 No Conflict. Neither the execution and delivery of this Agreement
by Buyer nor the consummation by Buyer of the Asset Purchase will (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation or ByLaws of Buyer, (ii) violate, conflict with or result in a
breach of any provision of, or constitute a default (or an event which, with
the giving of notice, the passage of time or otherwise, would constitute a
default) under, or entitle any party (with the giving of notice, the passage
of time or otherwise) to terminate, accelerate or cause a default under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Buyer, under any agreement,
indenture, or instrument, binding on Buyer or its properties or assets, or
(iii) violate any judgment, order, decree, stipulation, injunction or charge
of any court, administrative agency or commission or other governmental
authority or instrumentality by which Buyer is bound.
2.5 Brokers and Finders. Buyer has not employed any broker or finder or
incurred any liability for brokerage fees in connection with the Asset
Purchase.
ARTICLE III
Representations and Warranties of Seller
Seller represents and warrants to Buyer that;
3.1 Corporate Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Seller has all requisite power and authority and, except as set forth on the
Disclosure Schedule, all governmental licenses, authorizations, consents and
approvals necessary to own, lease and operate its respective properties and
conduct its respective businesses as presently or as currently proposed to be
conducted. Seller is not qualified to do business as a foreign corporation in
any jurisdiction, and neither the nature of the business conducted by it nor
the property it owns, leases or operates requires it to qualify to do
business as a foreign corporation in any jurisdiction except where the
failure to be so qualified would not have a Material Adverse Effect on
Seller. "Material Adverse Effect" as used in this Agreement means, with
respect to any event, act, condition or occurrence, a material adverse effect
upon any of (i) with respect to Seller, the properties, assets, liabilities,
business, results of operations, prospects or condition (financial or
otherwise) of Seller, and (ii) with respect to the Seller, or Buyer, the
ability of either Seller, or Buyer, as the case may be, to consummate the
Asset Purchase or to perform their obligations set forth herein.
3.2 Authorization. Seller has the power and authority, and its
stockholders have granted to it the capacity and legal right, to execute,
deliver and perform this Agreement and to consummate the Asset Purchase. This
Agreement has been executed and delivered by the Seller and constitutes the
valid and binding obligation of it. Seller's Board of Directors and a
majority of its stockholders have approved the execution, delivery and
performance of this Agreement by Seller.
3.3 Consent and Approvals. To the best of Seller's knowledge, and
except as set forth in the disclosure schedule attached hereto (the
"Disclosure Schedule"), no consent, approval, order or authorization of, or
declaration or filing with, any governmental or regulatory authority or
agency is required in connection with the execution and delivery of this
Agreement by Seller or its performance of the terms hereof or for the
validity or enforceability thereof as to it and him.
3.4 Subsidiaries. Seller has no subsidiaries and holds no direct or
indirect beneficial interest in any corporation, partnership, joint venture,
limited liability company, or other entity or enterprise.
3.5 Capitalization. The authorized capital stock of Seller consists
solely of (1) 100,000,000 shares of common stock, 6,918,300 of which are
issued and outstanding (the "Stock") and (2) 10,000,000 shares of preferred
stock, of which there are no issued and outstanding. All outstanding shares
of common stock of Seller are validly authorized, issued, fully paid and
nonassessable. Except as set forth in the Disclosure Schedule, there are no
outstanding subscriptions, options (including employee stock options),
warrants, puts, calls, agreements, understandings, or other commitments or
rights of any type to which Seller is a party, or by which any such party is
bound, relating to the issuance, sale or transfer by Seller of any securities
of Seller. There are no outstanding securities which are convertible into or
exchangeable for any shares of capital stock of Seller. Seller has no
obligation of any kind to issue any additional securities or to repurchase,
redeem or otherwise acquire any of the Stock.
3.6 Affiliates. Seller has not had any direct or indirect interest in
any corporation, partnership, limited liability company, or any other entity
which is involved in any way with, competes with, or conducts any business
similar to any business conducted by Seller or Buyer.
3.7 Litigation. Except as set forth in the Disclosure Schedule, there
is no claim, litigation, arbitration, action, suit, proceeding, investigation
or inquiry, administrative or judicial, pending or, to the best knowledge of
Seller, threatened, against Seller or Seller's assets or business, at law or
in equity, before any federal, state or local court, regulatory agency, or
governmental authority which is reasonably likely to have a Material Adverse
Effect on Seller. Except as set forth on the Disclosure Schedule, Seller is
not a party to or subject to the provisions of any judgment which may have a
Material Adverse Effect on it.
3.8 Stock Ownership; Authority and Consent. The stockholders own
beneficially and of record all the issued and outstanding common stock of
Seller. A majority of the stockholders have given their written consent
authorizing the Seller to enter into this Agreement and to consummate the
Asset Purchase.
3.9 No Conflicts. Except as set forth on the Disclosure Schedule,
neither the execution and delivery of this Agreement by Seller nor the
consummation by Seller of the Asset Purchase will (i) conflict with or result
in a breach of any provision of the Articles of Incorporation or the Bylaws
of Seller, (ii) violate, conflict with or result in the breach of any term,
condition or provision under any law or regulation applicable to Seller or
any of Seller's assets, (iii) except for third-party consents to assignment
required under the Material Contracts/Leases, violate, conflict with or
result in a breach of any provision of, or constitute a default (or an event
which, with the giving of notice, the passage of time or otherwise, would
constitute a default) under, or entitle any party (with the giving of notice,
the passage of time or otherwise) to terminate, accelerate or cause a default
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Seller under, any
agreement, indenture, or instrument binding on Seller or upon any of their
respective properties or assets, or (iv) violate any judgment, order, decree,
stipulation, injunction or charge of any court, administrative agency or
commission or other governmental or regulatory authority or instrumentality
by which Seller is bound.
3.10 Financial Statements. The unaudited financial statements
(consisting solely of an asset and liability list) of Seller for August 1,
2002 heretofore delivered to Buyer, are accurate in all material respects,
and have been furnished to Buyer (the "Financial Statements").
3.11 Absence of Certain Changes or Events. Except as set forth on the
Disclosure Schedule, since date of the Financial Statements, there has not
been any event or change relating to the business of Seller that has had or
would be reasonably likely to have a Material Adverse Effect on Seller or
Seller's Financial Statements.
3.12 Taxes.
(a) For purposes of this Agreement, (i) "Tax" or "Taxes" shall
mean all Federal, state, local and foreign taxes and assessments, including
all interest, penalties and additions imposed with respect to such amounts;
(ii) "Pre-Effective Tax Period" shall mean all taxable periods ending before
or including the Effective Time; and (iii) "Returns" means returns, reports
or forms, including information returns.
(b) (i) Seller has filed or caused to be filed in a timely manner
(within any applicable extension periods) all Tax Returns required to be
filed by such party by the Internal Revenue Code of 1986, as amended, (the
"Code") or by applicable State, local or foreign Tax law, and each such
Return is complete and accurate, (ii) all Taxes of Seller shown as due on
such Returns have been duly and timely paid or accrued and (iii) no Tax liens
have been filed and no claims are being asserted in a writing received by
Seller with respect to any Taxes.
3.13 Title to Assets. Except as set forth on the Disclosure Schedule,
Seller has marketable title to all furniture, fixtures, equipment, and
machinery (the "Fixed Assets") and good title to all other Assets, in all
cases free and clear of all liens, charges, security interests or other
encumbrances of any nature whatsoever. Except as set forth in the Disclosure
Schedule, all of the Fixed Assets are usable in the regular and ordinary
course of business.
3.14 Compliance with Laws; Authorization. To the best of Seller's
knowledge, except as set forth on the Disclosure schedule, Seller is in
compliance in all material respects with all applicable laws, statutes,
orders, rules, regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered, by any federal or state court or governmental
authority applicable to Seller, its business or its properties (collectively,
the "Applicable Laws"). To the best of Seller's knowledge, except as set
forth on the Disclosure Schedule, Seller is not under investigation with
respect to, nor has it been charged with or given notice of any violation of,
any of the Applicable Laws. For purposes hereof, Seller will be deemed in
compliance in all material respects with Applicable Laws if a violation
thereof would not have a Material Adverse Effect on the continued operations
of Seller in the manner in which it is currently conducting its business.
3.15 Employee Benefits Plans. Except as set forth in the Disclosure
Schedule:
(a) Seller has never directly or indirectly maintained or
contributed to, nor is Seller directly or indirectly maintaining or
contributing, for the benefit of the current and/or former employees of
Seller, any employee benefit plan, including, without limitation, any
"employee benefit plan" (as defined in Section (3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), any employment or
severance contract, any stock option plan or any plan of deferred
compensation (individually, a "Plan" and collectively the "Plans") . Seller
does not have any commitment, whether formal or informal, to create any such
plans.
(b) Seller does not directly or indirectly maintain or contribute
to (or have an obligation to contribute to) any plan, fund or program which
provides medical, health, hospitalization, life, disability or other
insurance, vacation, deferred compensation, pension, bonus, stock options,
stock purchase rights, or other employee benefits with respect to present or
former employees of Seller, other than the full time employees of Seller.
(c) The consummation of the Asset Purchase will not entitle any
current or former employee of Seller to severance pay, unemployment
compensation or any other payment.
3.16 Contracts. Seller has made or will make available to Buyer all
contracts, agreements, and instruments to which Seller is a party, including
all amendments and supplements thereto, which are material to the business
operations, assets, properties or condition (financial or otherwise) of
Seller (the "Material Contracts"). Except as set forth on the Disclosure
Schedule, each Material Contract is legally valid and binding against Seller,
in full force and effect and enforceable against Seller in accordance with
its terms, except where the invalidity or non-binding nature would not have a
Material Adverse Effect on Seller.
3.17 Books of Account; Records. To the best of Seller's knowledge,
Seller's general ledgers, stock record books, minute books and other
corporate records relating to the assets, contracts and leases of Seller are,
in all material respects, true, correct and complete.
3.18 Labor Relations.
(a) There is no collective bargaining agreement to which Seller is
a party, collective bargaining agreement currently being negotiated by
Seller, or union or collective bargaining unit representing any of Seller's
employees.
(b) Seller has complied in all material respects with all
applicable laws, rules and regulations relating to the employment of labor or
the termination thereof, including those related to wages, salary
withholdings, employee health and safety, bonus, vacation pay and severance
pay, working hours, and benefits for employees and former employees, and the
payment and withholding of taxes and other sums as required by appropriate
governmental authorities, or is holding for payment not yet due to such
authorities all amounts required to be withheld from such employees and
former employees of Seller and is not liable to any person or entity
(including any governmental entity) for any arrears of wages, commissions and
benefits for employees, taxes, penalties or other sums for failure to comply
with any of the foregoing, other than amounts not yet due and payable in the
ordinary course or business.
(c) Except as set forth in the Disclosure Schedule, Seller is not
a party to any employment contract or agreement with respect to any of its
employees, nor has Seller in any other manner limited its right to terminate
the employment relationship with its employees.
3.19 Environmental Matters. To the best of Seller's knowledge, Seller is
and has been in compliance in the conduct of its business with all applicable
environmental laws and regulations or any order, decree, judgment, or
injunction issued, entered, promulgated or approved thereunder.
3.20 Brokers and Finders. Seller has not employed any broker or finder
or incurred any liability for brokerage fees, commissions or finders' fees in
connection with the Asset Purchase.
ARTICLE IV
Conditions Precedent to Obligations
4.1 Conditions to Obligations of Buyer. Each and every obligation of
Buyer to be performed under this Agreement shall be subject to the
satisfaction by Seller at or prior to the Closing Date of each of the
following conditions (unless waived in writing by Buyer);
(a) Representations and Warranties. The representations and
warranties set forth in Article III of this Agreement shall have been true
and correct in all material respects when made and shall be true and correct
in all material respects at and as of the Closing Date as though such
representations and warranties were made as of the Closing Date.
(b) Performance of Agreement. Seller shall have fully performed
and complied with the covenants, conditions and other obligations under this
Agreement which are to be performed or complied with by them at or prior to
the Closing Date.
(c) Consents. All applicable third-party approvals or consents,
including consents and approvals under Material Contracts/Leases, shall have
been received or satisfied.
(d) No Adverse Change. There shall not have been any Material
Adverse Effect with respect to Seller or its business since the date of this
Agreement.
(e) No Adverse Proceeding. There shall not be pending or
threatened any claim, action, litigation or proceeding (judicial or
administrative) or governmental investigation against Buyer or Seller for the
purpose of enjoining or preventing the consummation of this Agreement, or
otherwise claiming that this Agreement or the consummation of the Asset
Purchase is illegal.
(f) Certificate. Seller shall have delivered to Buyer at the
Closing a certificate signed on its behalf by one of its officers, dated the
date of Closing, to the effect that the conditions set forth in subsections
(a) through (e) of this Section 4.1 have been satisfied to the best knowledge
of such officer.
(g) General Conveyance, Transfer, Assignment, and Xxxx of Sale
Agreement. At the Closing, Buyer and Seller shall execute and deliver the
General Conveyance, Transfer, Assignment, and Xxxx of Sale Agreement in the
form attached hereto as Exhibit C (the " General Conveyance, Transfer,
Assignment and Xxxx of Sale Agreement").
4.2 Conditions of Seller. Each and every obligation of Seller to be
performed under this Agreement shall be subject to the satisfaction by Buyer
at or prior to the Closing Date of the following conditions (unless waived in
writing by Seller):
(a) Representations and Warranties. The representations and
warranties of Buyer set forth in Article II of this Agreement shall have been
true and correct when made, and shall be true and correct at and as of the
Closing Date as though such representations and warranties were made as of
the Closing Date.
(b) Performance of Agreement. Buyer shall have fully performed and
complied with the covenants, conditions and other obligations under this
Agreement which are to be performed or complied with by it at or prior to the
Closing Date.
(c) Consents. All applicable third-party approvals or consents
shall have been received or satisfied.
(d) No Adverse Proceedings. There shall not be pending or
threatened any claim, action, litigation or proceeding (judicial or
administrative) or governmental investigation against Buyer, or Seller for
the purpose of enjoining or preventing the consummation of the Asset
Purchase, or otherwise claiming that this Agreement or the consummation of
the Asset Purchase is illegal.
(e) Certificate. Buyer shall have delivered to Seller at the
Closing a certificate signed on its behalf by one of its officers, dated the
date of the Closing Date, to the effect that the conditions set forth in
subsections (a) through (d) of this Section 4.2 have been satisfied to the
best knowledge of such officer.
(f) Purchase Price. Buyer shall have paid the Consideration at the
Closing in accordance with Section 1.3 hereof.
(g) No Adverse Change. There shall not have been any Material
Adverse Effect with respect to Buyer or its business since the date of this
Agreement.
ARTICLE V
Closing
5.1 Deliveries of Seller at Closing. At the Closing, Seller will
deliver or cause to be delivered to Buyer the following at Seller's expense:
(a) The certificate referred to in Section 4.1(f) of this
Agreement.
(b) A copy of the Articles of Incorporation of Seller and all
amendments thereto certified by the Secretary of State of Nevada.
(c) Certified copies of minutes reflecting the authorization by
the Board of Directors of Seller and by the majority of its stockholders of
the execution, delivery and performance of this Agreement and consummation of
the Asset Purchase.
(d) The General Conveyance, Transfer, Assignment, and Xxxx of Sale
Agreement.
5.2 Deliveries of Buyer at Closing. At the Closing, Buyer will deliver
or cause to be delivered to Seller the following;
(a) Certificate of Euro Technology Outfitters representing ten
million nine hundred eighteen thousand three hundred (10,918,300) shares of
common stock which represents the Price as set forth in Section 1.3 (a)
hereof;
(b) The certificate referred to in Section 4.2(e) of this
Agreement;
(c) Certified copies of resolutions adopted by the Board of
Directors of Buyer authorizing the execution, delivery and performance of
this Agreement and consummation of the Asset Purchase.
ARTICLE VI
Indemnification
6.1 Survival of Representations, Warranties and Agreements. Subject to
the limitations set forth in Section 6.3 of this Agreement, all
representations, warranties and covenants of the parties contained herein
shall survive execution and delivery of this Agreement.
6.2 Indemnification.
(a) Subject to the limitations set forth in Section 6.3 of this
Agreement, Seller hereby covenants and agrees to indemnify and hold harmless
Buyer, from and against any and all losses, liabilities, damages, demands,
claims, suits, actions, judgments or causes of action, assessments, costs and
expenses, including, without limitation, interest, penalties, attorney's
fees, any and all expenses incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation
(collectively, "Damages"), asserted against, resulting to, imposed on or
incurred or suffered by Buyer directly or indirectly, as a result of or
arising from (i) any breach of any of the representations, warranties or
covenants made by Seller, (ii) any liability of Seller not specifically
assumed by Buyer hereunder, (iii) any Federal income Taxes attributable to
Seller, any state, local or foreign income or franchise Taxes attributable to
Seller, or any sales, use or similar Taxes for any Pre-Effective Tax Period,
and (iv) Seller's operation of the business prior to the Effective Time
(collectively, "Buyer's Indemnifiable Claims").
(b) Buyer hereby covenants and agrees to indemnify and hold
harmless Seller, from and against any and all Damages asserted against,
resulting to, imposed on or incurred or suffered by Seller, directly or
indirectly, as a result of or arising from (i) any breach of any of the
representations, warranties or covenants made by Buyer in this Agreement,
(ii) any liability specifically assumed by Buyer hereunder and (iii) Buyer's
operation of the business after the Effective Time (collectively, "Seller's
Indemnifiable Claims").
(c) Buyer's Indemnifiable Claims and Seller's Indemnifiable Claims
are collectively referred to hereinafter as "Indemnifiable Claims."
6.3 Limitations on Indemnification. Rights to Indemnification hereunder
are subject to the following limitations:
(a) The obligation of indemnity provided herein with respect to
the representations and warranties set forth in Section 3.12 shall terminate
on the expiration of the periods of limitations applicable to assessment and
collection of federal, state, local and foreign taxes, taking into account
any extensions of such periods of limitations approved by Seller prior to the
date hereof.
(b) The obligations of indemnity provided herein with respect to
the representations and warranties set forth in Articles II and III (except
Section 3.12 of this Agreement) shall terminate on the second anniversary of
the Closing Date.
(c) The foregoing provisions of this Section notwithstanding, if,
prior to the termination of any obligation to indemnify as provided for
herein, written notice of a claimed breach is given by Buyer, Seller, or a
suit or action based upon a claimed breach is commenced against any party, no
party shall be precluded from pursuing such claimed breach or suit or action,
or from recovering from the other party hereunder (whether through the courts
or otherwise) on the claim, suit or action, by reason of the termination
otherwise provided for above.
6.4 Procedure for Indemnification with Respect to Third-Party Claims.
(a) If a party (the "Indemnitee") determines to seek
indemnification under this Article with respect to Indemnifiable Claims
resulting from the assertion of liability by third parties, it shall give
notice to the other party (the "Indemnifying Party") within 30 days of the
Indemnitee's becoming aware of any such Indemnifiable Claim; the notice shall
set forth such information with respect thereto as is then reasonably
available to the Indemnitee. In case any such liability is asserted against
the Indemnitee, and the Indemnitee notifies the Indemnifying Party thereof,
the Indemnifying Party will be entitled, if it so elects by written notice
delivered to the Indemnitee within 30 days after receiving the Indemnitee's
notice, to assume the defense thereof with counsel reasonably satisfactory to
the Indemnitee at all times during the defense of such liability.
Notwithstanding the foregoing, (i) the Indemnitee shall also have the right
to employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Indemnitee (so long as the
Indemnifying Party continues to defend such matter); (ii) the Indemnitee
shall not have any obligation to give any notice of any assertion of
liability by a third party unless such assertion is in writing; and (iii) the
rights of the Indemnitee to be indemnified hereunder in respect of
Indemnifiable Claims shall be deemed forfeited by its failure to give notice
pursuant to the foregoing only to the extent that the Indemnifying Party is
materially prejudiced by such failure to give notice. With respect to any
assertion of liability by a third party that results in an Indemnifiable
Claim, the parties hereto shall make reasonably available to each other all
relevant information in their possession material to any such assertion. The
Indemnifying Party may not compromise or settle an Indemnifiable Claim
without the written consent of the Indemnitee.
(b) In the event that the Indemnifying Party, within 30 days after
receipt of the aforesaid notice of an Indemnifiable Claim, fails to assume
the defense of the Indemnitee against such Indemnified Claim, the Indemnitee
shall have the right to undertake the defense and to compromise or settle
such action on behalf of and for the account and risk of the Indemnifying
Party.
6.5 Procedure for Indemnification with Respect to Non-Third-Party
Claims. If the Indemnitee asserts the existence of an Indemnifiable Claim
giving rise to Damages (but excluding claims resulting from the assertion of
liability by third parties), it shall give written notice to the Indemnifying
Party specifying the nature and amount of the claim asserted. If the
Indemnifying Party, within 30 days after the mailing of notice by the
Indemnitee, shall not give written notice to the Indemnitee announcing its
intent to contest such assertion of the Indemnitee, such assertion by the
Indemnitee shall be deemed accepted and agreed to by the Indemnifying Party.
ARTICLE VII
Covenants
7.1 Covenant Against Hiring. Seller understands that in Buyer's view it
is essential to the successful operation of its business that Buyer retain
substantially unimpaired Seller's current operating organization. Seller
covenants and agrees that neither of them, nor any affiliate of either of
them, without the prior written consent of Buyer, shall take any action which
would induce any employee or representative of Seller prior to the Effective
Time not to become or continue as an employee or representative of Buyer.
7.2 Due Diligence Access. From the date of this Agreement until the
Closing, to enable Buyer to conduct due diligence, and following the Closing
to the extent needed by Buyer and its accountants to conduct and complete a
financial audit of Seller and its operations, Seller shall make or cause to
be made available to Buyer: (i) members of management of Seller for personal
interviews; (ii) the Assets; and (iii) all books of account, contracts,
agreements, commitments, authorizations, insurance policies, records and
documents of every character relating to Seller's business for examination.
Accordingly, Seller shall permit Buyer and its representatives, attorneys,
accountants and agents to have access to the same at all reasonable times and
places.
7.3 Conduct of Interim Operations. From the date hereof to the Closing
Date:
(a) Affirmative Covenants. Seller shall do the following:
(1) Operations. Conduct its business as presently conducted in the
usual, regular, and ordinary course and scope, and do all things in the
ordinary course of business, consistent with past practice, necessary to
preserve, renew, and keep in full force and effect all rights and franchises
that are necessary to continue its business.
(2) Corporate Existence. Maintain its corporate existence, good
standing, and qualification to transact business in the State of Nevada.
(3) Compliance with Applicable Laws. Substantially comply with all
Applicable Laws and timely pay all amounts that, if unpaid, would have a
Material Adverse Effect on the Seller's business affairs or prospects.
(4) Insurance. Maintain all insurance.
(5) Litigation. Advise Buyer immediately of any lawsuit threatened
or filed against Seller.
(6) Material Loss. Immediately notify Buyer of any event causing
or that may reasonably be expected to cause a material loss to Seller with
respect to the Assets or result in a material decline in value of the Assets
or the Seller's business or prospects.
(7) Preservation of Business. Employ all reasonable efforts to
preserve the Seller's business intact, to keep available to Buyer the present
employees of the Seller, and to maintain good relations with suppliers and
customers and others having business relations with the Seller.
(b) Negative Covenants. Seller shall not do any of the following:
(1) New Encumbrances. Create, incur, assume, or suffer to exist
any new encumbrance (including, but not limited to, charges on property
purchased under conditional sales or other title retention agreements) on any
of the Assets other than in the ordinary course and scope of the Seller's
business.
(2) Disposition of Assets. Sell, dispose of, mortgage, pledge,
grant a security interest in or otherwise dispose of or encumber any Asset or
interests therein other than in the ordinary course and scope of the Seller's
business.
(3) Contracts. Enter into any contracts or agreements, or amend,
modify, or terminate any contracts or agreements, except in the ordinary
course and scope of the Seller's business;
(4) Compensation. Except for wage increases required by law or
governmental regulations, and merit or length of service increases granted in
the ordinary course and scope of the Seller's business consistent with past
practices, increase the compensation or benefits payable or to become payable
to any employee.
7.4 Tax Covenants.
(a) Seller and Buyer shall reasonably cooperate, and shall cause their
respective affiliates, officers, employees, agents, auditors and
representatives reasonably to cooperate, in preparing and filing all Returns
relating to Taxes, including maintaining and making available to each other
all records necessary in connection with Taxes and in resolving all disputes
and audits with respect to all taxable periods relating to Taxes.
(b) All transfer, documentary stamp, sales, use, registration and other
such Taxes and related fees (including any penalties, interest and additions
to Tax) incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by Seller; and Buyer shall cooperate in
timely making all filings as may be required to comply with the provisions of
such Tax laws.
(c) Any personal property or similar taxes with respect to the Assets
attributable to the Pre-Effective Tax Period shall be borne by Seller.
7.5 Changes to Disclosure Schedule. Between the date of this Agreement
and the Closing Date, Seller shall promptly inform Buyer of events,
circumstances, or other developments that occur between such dates that would
have been described in the Disclosure Schedule had such events, circumstances
or other developments occurred on or prior to the date of this Agreement.
Having so informed Buyer, Seller shall provide Buyer with such further
information regarding such event, circumstance or development as Buyer
reasonably requests. Within three business days of Buyer's receipt of such
additional information, Buyer shall notify Seller and shareholders that: (i)
Seller may amend the Disclosure Schedule to describe such event, circumstance
or other development, without liability to Seller; or (ii) Buyer intends to
terminate this Agreement pursuant Section 8.1(b).
7.6 Liabilities. Seller shall pay all of its liabilities as they become
due, whether due prior to, on or after the Effective Time (other than
liabilities expressly assumed hereunder by Buyer).
ARTICLE VIII
Termination of Agreement
This Agreement may be terminated at any time prior to the Closing:
(a) by mutual written consent of all parties;
(b) by either Buyer or Seller if any of the representations or
warranties of the other party contained herein shall be inaccurate or untrue
in an material respect and such inaccuracy cannot reasonably be expected to
be cured prior to the Closing;
(c) by either Buyer or Seller if any obligation, term or condition to
be performed, kept or observed by such other party hereunder has not been
performed, kept or observed in any material respect at or prior to the time
specified in this Agreement;
(d) by either Buyer or Seller if any permanent injunction or other
order of a court or other competent authority preventing the consummation of
the transactions contemplated by this Agreement shall have become final and
nonappealable;
(e) by either Buyer or Seller if not then in material breach of any of
its obligations hereunder, if the Closing has not occurred by December 31,
2002.
Any termination pursuant to this Section 8.1 shall be effective upon
notice thereof having been given to the non-terminating party in accordance
with Section 9.2 hereof.
No party hereto shall be liable to any other party hereto if this
Agreement is terminated pursuant to Section 8.1(a), (b) or (d).
ARTICLE IX
Miscellaneous Provisions
9.1 No Negotiations by Seller. Unless and until this Agreement has been
properly terminated pursuant to Article VIII hereof, Seller shall not
directly or indirectly, through any officer, director, agent, employee,
representative or otherwise, make, solicit, initiate or encourage the
submission of proposals or offers, or accept offers, from any person
(including any of its officers or employees) relating to any
recapitalization, merger, consolidation or other business combination
involving Seller, any sale of all or a substantial portion of the assets of
Seller, or the sale of any material equity interest in Seller (any of the
foregoing, a "Competing Transaction"). During such period, Seller shall not,
directly or indirectly, participate in any negotiations regarding, furnish to
any other person any information with respect to, or otherwise cooperate,
assist or participate in, any effort or attempt by any third party to propose
or effect any Competing Transaction. Seller shall notify Buyer of any
Competing Transaction or any inquiry relating to a possible Competing
Transaction and shall deliver to Buyer any information furnished to or by any
such third party.
9.2 Notice. All notices, requests, demands and other communications
required or permitted under this Agreement shall be deemed to have been duly
given and made if in writing and served either by personal delivery (which
shall include delivery by Federal Express or similar services) to the party
for whom it is intended or by being deposited postage prepaid, certified or
registered mail, return receipt requested (or such form of mail as may be
substituted therefore by postal authorities), in the United States mail,
bearing the address shown in this Agreement for, or such other address as may
be designated in writing hereafter by, such party:
If to Buyer: With a copy to:
Euro Technology Outfitters Xxxxxx X. Xxxxxxxxxx, Esq.
0000 X. Xxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxx Law Group
Xxx Xxxxx, Xxxxxx 00000 000 Xxxx Xxxxxxxx, Xxxxx 000
Attn: Xxxxxxx XxXxxx Xxx Xxxxx, Xxxxxxxxxx 00000
If to Seller: With a copy to:
Petrol Energy, Inc.
Xxxx Xxxxxxxx, President
0000 X. Xxxxxxxxx Xxx
Xxx Xxxxx, XX 00000
9.3 Entire Agreement. This Agreement, the Exhibits, the Appendices and
the Disclosure Schedule embody the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof, and supersede all
prior agreements and understandings relative to said subject matter.
9.4 Binding Effect; Assignment. This Agreement and the various rights
and obligations arising hereunder shall inure to the benefit of and be
binding upon Buyer, its representatives, successors and assigns, and Seller,
its representatives, successors and assigns. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be transferred or
assigned (by operation of law or otherwise) by any party hereto without the
prior written consent of the other parties, except that Seller shall assign
its rights hereunder, including all rights to the Share Portion and the
Option Portion, to its stockholders upon dissolution of Seller.
9.5 No Third-Party Beneficiaries. Nothing herein, expressed or implied,
is intended or shall be construed to confer upon or give to any person, firm,
corporation or legal entity, other than the parties hereto, any rights,
remedies or other benefits under or by reason of this Agreement.
9.6 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
9.7 Expenses. Each of the parties hereto will bear its own costs and
expenses (including legal, accounting and consulting fees and expenses)
incurred in connection with this Agreement and the Asset Purchase.
9.8 Waiver; Consent. This Agreement may not be changed, amended,
terminated, rescinded or discharged (other than in accordance with its
terms), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this
Agreement or any of the rights of a party hereto shall be effective or
binding unless such waiver shall be in writing and signed by the party
claimed to have given or consented thereto.
9.9 Other and Further Covenants. The parties shall, in good faith,
execute such other and further instruments, assignments or documents as may
be necessary for the consummation of the transactions contemplated by this
Agreement, and shall assist and cooperate with each other in connection with
these activities.
9.10 Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the laws of the State of Nevada, without
regard to any, such laws relating to choice or conflict of laws.
9.11 Public Announcements. Neither Buyer nor Seller shall, without the
prior written consent of the other, make any public announcement or any
release to trade publications or to the press or make any statement to any
competitor, customer or any other third party with respect to the
transactions contemplated herein, except such announcement, release or
statement necessary in the opinion of its counsel to comply with applicable
requirements of law. The parties hereto agree that upon execution of this
Agreement and on the Closing Date, they shall jointly prepare press releases
for appropriate dissemination, if any.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
PETROL ENERGY, INC.
By:/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx, President
EURO TECHNOLOGY OUTFITTERS
By:/s/ Xxxxxxx XxXxxx
Xxxxxxx X. XxXxxx, President
EXHIBIT A
ASSET LIST
ASSETS:
Cash $12,000.00
Leases 448,049.00
Total 460,049.00
EXHIBIT A-1
EXCLUDED ASSETS
Excluded Assets are to be considered any assets that do not directly relate
to the mineral leases and cash as described in Exhibit "A" hereto..
EXHIBIT B
LIABILITIES
MATERIAL CONTRACTS/LEASES TO BE ASSUMED
Leases $449,049.00
EXHIBIT C
GENERAL CONVEYANCE, TRANSFER, ASSIGNMENT AND XXXX OF SALE AGREEMENT
GENERAL CONVEYANCE, TRANSFER, ASSIGNMENT AND XXXX OF SALE
THIS GENERAL CONVEYANCE, TRANSFER, ASSIGNMENT AND XXXX OF SALE (this
"Assignment") effective as of August 19, 2002, is between Petrol Energy Inc.,
a Nevada corporation ("Seller") and Euro Technology Outfitters, a Nevada
corporation ("Buyer").
WITNESSETH:
WHEREAS, Seller is in the business (the "Business") of oil and gas
exploration and development;
WHEREAS, Seller and Buyer have entered into an Asset Purchase Agreement
dated as of August 19, 2002 ("the Purchase Agreement") providing, among other
things, for the sale by Seller and purchase by Buyer of the Assets (as
defined herein); and
WHEREAS, in order to effectuate the sale and purchase of the Assets as
aforesaid, Seller is executing and delivering this Assignment and Buyer is
delivering consideration as set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein and in the Purchase Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller hereby acts and agrees as follows:
1. Conveyance of Assets. Subject to Paragraphs 2 and 3 hereof, the Seller
hereby SELLS, CONVEYS, TRANSFERS, ASSIGNS AND DELIVERS unto Buyer and its
successors and assigns, forever, all the assets, rights, and properties
described in the following clauses (a) through (e) (collectively, the
"Assets").
(a) License and Permits. All right, title and interest of Seller in, to and
under all licenses, permits, authorizations and other rights of every kind
and character relating to the Business under any federal, state or local
statute, ordinance or regulation.
(b) Intangible Assets. All right, title and interest of Seller in, to an
under all trademarks, technology, know-how, data, copyrights, trade-names,
service marks, licenses, covenants by others not to compete, rights and
privileges used in the Business and the goodwill associated with the
Business in connection with which the marks are used.
(c) Contracts and Leases. All right, title and interest of Seller in, to and
under all contracts, leases and agreements to which it is a party or
beneficiary (the "Material Contracts/Leases"), all of which are set forth
in Exhibit A attached to the Purchase Agreement.
(d) Name. The name of "Petrol" and any variations thereupon.
(e) Prepaid Expenses, Cash. All prepaid expenses and deposits relating to
the Assets, all cash of Seller.
2. Excluded Assets. Notwithstanding the foregoing, Seller may retain on and
from the Closing Date, the assets used in, relating to or associated with the
Business listed on Exhibit A-1 to the Purchase Agreement.
3. Consideration. As consideration for the Assets, Buyer herewith delivers
to Seller, Ten Million Nine Hundred Eighteen Thousand Three Hundred
(10,918,300) Shares of common stock of Euro Technology Outfitters.
4. Assumption of Buyer. Buyer assumes only those liabilities associated
with the Material Contracts/Leases set forth on Exhibit B to the Purchase
Agreement.
5. Defined Terms. All capitalized terms used herein without definition
shall have the meanings assigned to them in the Purchase Agreement.
6. Counterparts. This Assignment may be executed in any number of
counterparts, and each counterpart hereof shall be deemed to be an original
instrument, but all such counterparts shall constitute but one assignment.
7. Further Assurances. From time to time, as and when requested by Buyer,
Seller shall execute and deliver or cause to be executed and delivered, such
documents and instruments and shall take, or cause to be taken, such further
or other actions as may be reasonably necessary to carry out the purposes of
this Agreement.
8. Controlling Agreement. It is contemplated that Seller may, at any time
or from time to time, execute acknowledge and deliver one or more separate
instruments of assignment and conveyance relating to certain of the Assets.
No such separate instrument of assignment or conveyance shall limit the scope
and effect of this Assignment. In the event that any conflict or ambiguity
exists as between this Assignment and any such separate instrument of
assignment, the terms and provisions of this Agreement shall govern and be
controlling.
9. Governing Law. The validity of this Assignment shall be governed by and
construed in accordance with the laws of the State of Nevada, excluding any
conflicts-of-law rule or principle which might refer to another jurisdiction.
10. Successors and Assigns. This Assignment shall bind Seller and its
successors and assigns and inure to the benefit of Buyer and its successors
and assigns.
11. Descriptive Headings. The descriptive headings of the several
Paragraphs, subparagraphs and clauses of this Assignment were inserted for
convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
EXECUTED as of the date first set forth above.
Seller:
Petrol Energy Inc.
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx, President
Buyer:
Euro Technology Outfitters
/s/ Xxxxxxx XxXxxx
Xxxxxxx X. XxXxxx, President
