[ EXHIBIT 99.3 - AGREEMENT ]
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Agreement of Purchase and Sale of Assets (herein, "Agreement") is made
between Xxxxxxxx Xxxx Resources Inc. ("Buyer"), a Nevada corporation, and
Xenolix Technologies, Inc. ("Seller"), a Nevada Corporation, upon the terms and
conditions set out herein below.
Buyer desires to purchase from Seller and Seller desires to sell to Buyer, on
the terms and conditions of this Agreement, the assets of Seller specified below
in exchange for the shares and warrants to purchase shares of Buyer's common
stock as described below ("Transaction").
Accordingly, the parties agree as follows:
1. Transfer of Assets.
Seller agrees to sell, convey, transfer, assign, and deliver to Buyer, and
Buyer agrees to purchase and accept from Seller the asset, specified below:
(a) Specific Equipment.
Date of
Name of Equipment Purchase Cost Accum. NBV
----------------- -------- ---- ------ ---
Attritor 3/31/99 7 SL 34,000.00 12,140.00 21,860.00
Fork Lift 3/31/99 7 SL 1,500.00 535.00 965.00
Water Cooler 8/01/99 7 SL 25,000.00 8,627.00 16,373.00
Material Handling Equipment 4/10/99 7 SL 19,088.91 6,815.00 12,273.00
Spectrex 4/25/01 7 SL 5,140.00 734.00 4,406.00
Reactor 8/07/01 7 SL 17,500.00 2,500.00 15,000.00
Large Filter Press 5/18/00 7 SL 28,220.82 6,048.00 22,172.82
Kiln 5/25/00 7 SL 1,589.00 341.00 1,248.00
Small Filter Press 8/30/00 7 SL 6,824.32 1.950.00 4,874.32
Mixers2 6/13/00 7 SL 3,900.00 836.00 3,064.00
Air Compressor 6/27/00 7 SL 9,878.00 2,117.00 7,761.00
---------- ------------ ------------
Total 152,641.05 42,643.00 109,998.05
(Note: The reactor is being acquired pursuant to a lease-purchase agreement on
which there is a balance due of approximately $4,300. Seller will pay this
balance due prior to closing.)(99ale due of approximately $4,300.
(b) Other Equipment. All other parts, supplies, and similar items owned by
the Seller and used in connection with the Specific Equipment
described in subparagraph. The ownership and/or title of all such
"Specific Equipment" is to be vested in the name of Buyer (FKLR).
(c) Inventories. All inventories of raw materials, work in progress, and
finished product.
(d) Intellectual Property. All patents, patent applications, copyrights,
trade and service marks, trade secrets, processes, proprietary
processes licenses, royalty rights, and similar items related to the
business, as specified below. Buyer acknowledges that it has been
working with Seller's chief scientist, Dr. Xxxxx Xxxxxxx ("Xxxxxxx,"
including, unless the context indicates to the contrary, his
associates Xxxxxx Xxxxx and Xxxxxx Xxxxxxxx) for approximately two
weeks as part of its due diligence by reviewing the Seller's
technology. Such review did not include an independent chain of
custody process, which must be completed and the results sold to a
refinery of Buyer's choice. The Buyer was unable to perform a thorough
testing process because the process was initially in control of
Xxxxxxx.
(e) Therefore, the Buyer anticipates the maximum length of time an
independent chain of custody - due diligence inquiry leading to the
commercial production and sales of gold, platinum, and palladium will
not exceed six months from the date of signing of this agreement. The
criteria of such success is defined as Seller being able to sell
product to a designated refinery, which will purchase the finished
products of Au, Pt, Pd, at a net profit to Buyer. Upon failure to be
able to do so, the warrants to be issued pursuant to Section 2(b) and
(c) of this Agreement would then be canceled. Further, the issuance of
two warrants: one warrant for six months and another for twelve months
(both as described in Section 2 of this Agreement) (See exchange of
shares); is based upon the full and exclusive cooperation of Dr. Xxxxx
Xxxxxxx and his team (Viz, Xxxxxxxx, and Price), along with the Buyers
technical team. Upon completion of successful due diligence the six
months warrants would be vested and have an exercise period not less
than forty-five days from the successful completion of the due
diligence.
Xxxxxxx has been issued two patents by the United States Department of
Commerce Patent and Trademark Office (the "Patents") based upon its
research and development efforts to date, which Patents have been
assigned to Seller and will be further assigned to the Buyer as part
of the Intellectual Property being purchased. The first patent, Patent
No. 6,131,835, was for a " Methods For Treating Ores" that was made
from refractory ore containing gold, silver and platinum group metals.
The first patent was broadly based since the patent provides
protection for the "Treated Ores" containing precious metals
regardless of the method of producing the "Treated Ore". The second
patent, Patent No. 6,131,836, is somewhat narrower in scope since it
is for a specific method of producing the "Treated Ores" that is
covered in the first patent.
Seller represents and warrants that no person other than Seller has
any interest in any item of Intellectual Property.
Seller agrees to provide Buyer with copies of all items of
intellectual property described above and, if an item is not in a form
to be copied (such as a process largely in the minds of one or more
individuals), to provide Buyer with a description sufficient to give
Buyer a reasonable understanding of the item. Such copies and
information shall be given to Buyer within five business days of
execution of this Agreement. Buyer shall have the continued exclusive
cooperation of Dr. Xx Xxxxxxx after receipt of such information to
review it and determine to its reasonable satisfaction, whether such
information meets Buyer's understanding of what such information would
be based on prior meetings and telephone calls with representatives of
Seller. If, during such review, Buyer has questions or determines that
additional information is required, it will contact Seller promptly
and Seller will respond as quickly as practicable. As soon as Buyer
determines that it is satisfied with the information it has received,
it will so inform Seller by written notice.
(f) Liens on Assets. If any asset is subject to a lien or other security
interest or debt, it shall be removed before being transferred to
Buyer.
(g) Property Not Sold. Seller's property which is not being sold and
tansferred to Buyer in this Transaction consists solely of cash on
hand at the execution of this agreement in the amount under $50,000, a
non recourse note receivable in the amount of $610,629, and the
Seller's Xxxxxxx Processing Plant, the title to which is being held by
a third party trustee. Any cash or other consideration received by
Seller from the sale of its product or any other property after
execution of this Agreement shall be transferred to Buyer as part of
this Transaction, pursuant to section 1 (c).
(h) Liabilities Not Assumed. Buyer will not assume any liabilities of
Seller. Seller remains fully responsible for all of its outstanding
obligations on the date of closing, including but not limited to,
ordinary bills payable for operating and administrative items, utility
charges, rent, employee compensation and benefits, governmental fees,
charges, penalties and similar obligations, and taxes of all types,
federal, state and local, income, property/ad valorem, excise and
payroll. Xenolix agrees to assume certain obligations, which are due
to Xxxxxxx Xxxxx.
2. Exchange of Shares.
As payment for, and in consideration of the transfer of the Assets to
Buyer, Buyer shall deliver to Seller at the Closing the items specified in
subparagraphs (a) through (c) subject, however to the provisions of
subparagraphs (d) through (g) below:
(a) A certificate for 1,201,657 shares of Buyer's common stock, registered
in the name of Seller; [t what point may this certificate be "broken
up" and the shares distributed to Xenolix shareholders?]
(b) A warrant to buy 1,201,657 shares of Buyer's common stock at the
Strike Price within a six month period, beginning on the Agreement
Date (which period will be extended by Buyer if the due diligence is
successfully concluded as set out in Section 1(e), so that the warrant
holder has a minimum 45 days to exercise the warrant from the date
Buyer gives notice to Seller of such successful conclusion.
(c) A warrant to buy 1,201,657 shares of Buyer's common stock at the
Strike Price within a period of 12 months, beginning on the Agreement
Date.
(d) It is further agreed that the warrants in (b) and (c) will be put into
escrow, the holder to be selected by Buyer and Seller, until Buyer has
completed its due diligence, as provided in this Agreement. If the
process does not yield a production of Gold, Platinum, and Palladium
that can be sold to the designated refinery at a net profit to the
Buyer, Buyer has the right to cancel the warrants.
(e) "Insider Shares" from the initial shares, will be restricted for up to
14 months from Filing Date or until the date that Xenolix has complied
with the requirements of the Arizona Corporation Commission regarding
the completion of its rescission offer, whichever date is earlier. The
remaining number of initial shares 1,201,657 will become free trading
after the proper registration period.
(f) For purpose of this section 2, (i) the term "Strike Price" means the
average closing price of Buyer's stock on ten business days preceding
the execution of this agreement, and (ii) the term "Filing Date" means
the date a Registration Statement for the registration of shares to be
issued by Buyer to Seller in Section 2(a) is filed with the Securities
and Exchange Commission ("SEC"). Buyer agrees to file such
Registration Statement as soon as practicable.
3. Representations and Warranties of Sellers.
Seller represents and warrants that, it has valid ownership of all assets
described in section 1, and that it owns all such assets free and clear of
liens or claims by third parties.
4. Buyer represents and warrants that:
(a) Organization. It is a corporation duly continued from Canada, now
redomesticated and validly existing and in good standing under the
laws of Nevada, and has all necessary corporate powers to own its
properties and to carry on its business as now owned and operated.
(b) Capital Structure. The authorized capital stock of Buyer consists of
45,000,000 shares of common stock, having a par value of $0.001 per
share, and 5,000,000 shares of preferred stock, having a par value of
$0.001 per share. No preferred shares have been issued. Of the common
shares, 6,396,333 shares have been duly issued and are outstanding.
There are also outstanding options to purchase 3,927,000 shares and
warrants to purchase 74,500 shares.
(c) Financial Statements. Exhibit B to this Agreement sets forth audited
financial statements of Buyer for the fiscal years ended October 31,
2001, and October 31, 2000.
5. Seller's Obligations before Closing.
Buyer's Access to Premises and Information Buyer, including any agents it
may appoint, shall have full access during normal business hours to all
properties, books, accounts, records, contracts, and documents of or
relating to Seller's business. Seller shall furnish to Buyer and its agents
all data and information concerning the business, finances, and properties
of Seller that Buyer may reasonably request. Seller shall also allow Buyer
full access to Seller's processes, plant and other property, equipment, and
inventories of raw and processed material.
6. Buyer's Obligation Before Closing.
Business Information of Seller. Buyer agrees that, unless and until the
Closing has been consummated, Buyer and its officers, directors, and other
representative will hold in strict confidence, and will not use to the
detriment of Seller, all information with respect to the business of Seller
obtained in connection with this Transaction or this Agreement, except
insofar as it may be required by law, to be made public by means of a
filing with the SEC or other governmental office, and if the Transaction
contemplated by this Agreement is not consummated, Buyer will return to
Seller all documentation and written information received from Seller in
connection with this Transaction. Whether or not the Closing takes place.
Seller waives any cause of action, right, or claim arising out of the
access of Buyer or its agents to any trade secrets or other confidential
business of Buyer or its agents to any trade secrets or other confidential
business information of Seller from the date of this Agreement until the
Closing Date except for the intentional competitive misuse by Buyer or its
agents of such trade secrets or other confidential business information.
some question as to whether the Board
7. Conditions Precedent to Buyer's Performance.
(a) In General. The obligations of Buyer under this Agreement are subject
to the satisfaction, at or before the Closing, of all the conditions
set out below in this section 7. Buyer may waive any or all of these
conditions in whole or in part, provided, however, that no such waiver
of a condition shall constitute a waiver by Buyer of any of its other
rights or remedies at law under this Agreement.
(b) Seller's Certificate. Buyer shall have received a Certificate from
Seller executed by its chief executive officer , as of the Closing
Date, in form and substance satisfactory to Buyer, that :
1) This Agreement has been duly and validly authorized by Seller's
board of directors and, when executed and delivered by Seller,
will be valid and binding and enforceable in accordance with its
terms, except as limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors generally. [As noted
infra, the Company will have to obtain shareholder consent to
make this statement.] 2) With respect to the assets in Section 1
(a)-(e), Seller has good title to each asset for which ownership
is evidenced by a title, each asset (such as a patent) which is
created by authority of a governmental agency was validly issued
and remains valid and in good standing, all contract rights (such
as licenses) are valid and enforceable according to their terms,
and all other assets are validly owned and not subject to claims
by any third party. [This is subject to all of the qualifications
previously noted regarding this point.]
(c) Corporate Approval. The execution of this Agreement by Seller and the
performance of its covenants and obligations under it shall have been
duly authorized by all necessary corporate action, including, but not
limited to, written consent by a majority of seller's shareholders,
upon which this agreement is expressly made contingent. Such consent
must be obtained and notice thereof given to Buyer within 3 days of
the date of this Agreement.
(d) Consent. Seller certifies that it does not require the agreements or
consents of any third party to he consummation of the Transaction or
otherwise pertaining to the matters covered by this Agreement other
than the written consent of a majority of its shareholders in (c).
(e) Form of Documents. The form and substance of all certificates,
instruments, opinions, and other documents delivered to Buyer under
this Agreement shall be satisfactory in all reasonable respects to
Buyer and its counsel.
8. Conditions Precedent to Seller's Performance.
(a) In General. The obligations of Seller to sell and transfer the Assets
under this Agreement are subject to the satisfaction, at or before the
Closing, of all the following conditions. Seller may waive any of
these conditions in whole or in part; provided, however, that no such
waiver shall constitute a waiver by Seller of any of its other rights
or remedies, at law, if Buyer is in default of any of its
representations, warranties, or covenants under this Agreement.
(b) Accuracy of Buyer's Representation and Warranties. All representation
and warranties by Buyer in this Agreement or in any written statement
delivered by Buyer under this Agreement shall be true on and as of the
Closing Date as though such representation and warranties were made on
as of that date.
(c) Opinion of Buyer's Counsel. Buyer shall have furnished Seller with an
opinion, dated the Closing Date, of counsel for Buyer, in form and
substance satisfactory to Seller o the effect that:
(1) Buyer is a corporation duly continued, validly existing, and in
good standing under the laws of Nevada and has all requisite
corporate power to perform its obligations under this Agreement;
(2) All corporate proceedings required by law or by this Agreement to
be taken by Buyer on or before the Closing Date, in connection
with the execution of this Agreement and the consummation with
the Transaction, have been duly taken;
(3) Buyer has the corporate power and authority to acquire the Assets
for the consideration set forth in this Agreement;
(4) Every consent, approval, authorization, or order of any court or
governmental agency or body required for the consummation by
Buyer of the Transaction has been obtained and will be in effect
on the Closing Date;
(5) The shares of Buyer's common stock to be issued under this
Agreement, will be validly issued, fully paid, nonassessable, and
in full compliance with all federal and state securities laws;
and
(6) The consummation of the Transaction does not violate any
provision of any charter, bylaw, or resolution of Buyer or any
indenture, agreement, judgment, or order to which Buyer is a
party or by which Buyer is bound.
9. The Signing Date and Closing Date. The Signing shall take place by Tuesday,
April 9, 2002 at 5:00 P.M. and the Closing, with Seller's shareholders
approval by Monday April 15, 2002 at 5:00 P.M. PDT.
(a) Seller's Obligation at Closing. At the Closing, Seller shall deliver
to Buyer:
(1) Instruments of assignment and transfer of all of the Assets which
are the subject of the transaction.
(2) Simultaneously with the consummation of the transfer, Seller will
surrender to Buyer full possession and enjoyment of Assets to be
conveyed and transferred by this Agreement. Seller, at any time
before or after the Closing Date, will execute, acknowledge, and
deliver any further deeds, assignments, conveyances, and other
assurances, documents, and instruments of transfer reasonably
requested by Buyer, and will take any other action consistent
with the terms of this Agreement that may reasonably be requested
by Buyer.
(b) Buyer's Obligation at Closing. At the Closing, Buyer shall deliver to
Seller, a certificate representing the total number of shares of
Buyer's common stock to be issued and delivered under Section 2(a),
and shall deliver to the Trustee the warrants described in Section 2
(b) and (c).
(c) A copy of the warrant agreement and a specimen of the warrant are
attached as exhibit I and II.
10. Selling Parties' Obligations after Closing.
(a) Seller's Indemnity. Seller shall indemnify, defend, and hold harmless
Buyer against any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies,
including, interest, penalties, and reasonable attorneys' fees, that
Buyer shall incur or suffer, that arise, result from, or relate to any
breach of, or failure by Seller to perform, any of its
representations, warranties, covenants, or agreements in this
Agreement.
(b) Confidential information. Buyer acknowledges that it has obtained and
will obtain information from Seller that Seller deems confidential and
that Seller believes would be harmful to Seller if it became known to
Seller" competitors. Buyer agrees to keep nay-such information
confidential and agrees that this provision will survive and continue
in full force and effect whether or not the Transaction is
consummated.
(c) Seller's Association with Buyer. Seller agrees that after the Closing
Date it shall not use or employ in any manner directly or indirectly,
Buyer's name or any words that indicate that it is in some way
affiliated with Buyer, nor will Seller in any way make use of any
asset described in section 1(a)-(e).
11. Buyer's Obligation after Closing.
Buyer agrees to indemnify and hold harmless Seller against, and in respect
of, any and all claims, losses, expenses, costs, obligations, and
liabilities it may incur by reason of Buyer's breach of or failure to
perform any of its warranties, guarantees, commitments, representation or
covenants in this Agreement, or by reason of any act or omission of Buyer
after the Closing Date that constitutes a breach or default under, or a
failure to perform, any obligation, duty, or liability to Seller under any
loan agreement, lease, contract, order, or other agreement to which it is a
party or by which it is bound at the Closing Date, but only to the extent
to which Buyer expressly assumes these obligations, duties, and liabilities
under this Agreement.
12. Public Information
All filings required to be made with governmental authorities, all notices
to third parties, and all other items of public information concerning the
Transaction shall be coordinated between Buyer and Seller to the extent
practicable under the circumstances, each party shall give the other
advance notice of all such filings, notices, and other item. Nothing herein
shall prevent either party from taking any action that it is recommended to
take by its legal counsel.
13. Finder's or Broker's Fees.
Each party represents and warrants that is has not dealt with any broker or
finder nor any other third party in connection with the Transaction, and,
as far as it knows, no broker nor other person is entitled to any
commission or finder's fee or compensation of any nature whatsoever in
connection with the transaction.
14. Miscellaneous Provisions.
(a) Entire Agreement; Modification; Waiver. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter
contained in it and supersedes all prior and contemporaneous
agreements, representations, and understandings of the parties. No
supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by both parties. No waiver of any
provision of this Agreement shall be deemed a waiver of any other
provision nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making
it.
(b) Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies on any person
other than the parties to it and their respective successors and
assigns, nor to relieve or discharge the obligation or liability of
any third person to any party to this Agreement, nor to give any third
person any right of subrogation or action against any party to this
Agreement.
(c) Specific Performance and Waiver of Rescission Rights. Each party's
obligations under this Agreement are unique. If either party should
default in its obligations under this agreement, the parties
acknowledge that it would be impracticable to measure the resulting
damages; accordingly, the nondefaulting party, in addition to any
other available rights or remedies, may xxx for specific performance,
and the parties expressly waive the defense that a remedy in damages
will be adequate.
(d) Recovery of Litigation Costs. If any legal action, arbitration, or
other proceeding is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default, or misrepresentation
in connection with of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs
incurred in that proceeding, in addition to any other relief to which
it may be entitled.
(e) Conditions Permitting Termination. On the Closing Date, but subject to
paragraph (f) either party may terminate this agreement, without
liability to the other:
(1) If any bona fide action, arbitration or other proceeding shall be
pending against either party on the Closing Date that could
result in an unfavorable order that would prevent or make
unlawful the performance of this Agreement;
(2) If any governmental authority shall have objected at or before
the Closing Date to this Transaction or to any other action
required by or in connection with this Agreement.[
(f) Defaults Permitting Termination. If either Buyer or Seller materially
defaults in the due and timely performance of any of its warranties,
covenants, or agreements under this Agreement, the nondefaulting party
may on the Closing Date give notice of termination of this Agreement,
in the manner provided in section 14 (e). The notice shall specify
with particularity the default or defaults on which the notice is
based. The termination shall be effective five days after the Closing
Date, unless the specified default or defaults have been cured on or
before this effective date.
(g) Nature and Survival of Representations and Obligations. All
representations, warranties, covenants, and agreements of the parties
contained in this Agreement, or in any instrument, certificate,
opinion, or other writing provided for in it, shall survive the
Closing.
(h) Notices. All notices and other communications under this Agreement,
including a change of address, shall be in writing and shall be deemed
to have been duly given on the date of receipt if delivered personally
or by fax or on the second business day after mailing if mailed by
first class mail, registered or certified, postage prepaid, and
addressed as follows:
To Buyer:
--------
XXXXXXXX XXXX RESOURCES INC.
ATTN. Father Xxxxxxx Xxxxxx, President.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
FAX: (000) 000-0000 Tel : (000) 000-0000
To Seller:
---------
XENOLIX TECHNOLOGIES, INC.
ATTN. Austin Lett. President.
00 Xxxxxx Xxx. Xxxxx 000
Xxxxxx, Xxx Xxxxxx 00000
FAX: (000) 000-0000 Tel: (000) 000-0000
(i) Governing Law. This Agreement shall be governed by the laws of Nevada.
(j) This Agreement shall be executed by the officers of the parties as
provided below. In addition, each party shall provide the other with
the written consent to the Transaction by all its directors.
IN WITNESS WHEREOF, The parties to this Agreement have duly executed it as of
_____________, 2002.
BUYER: SELLER:
XXXXXXXX XXXX RESOURCES INC. XENOLIX TECHNOLOGIES, INC.
By: By:
--------------------------------- --------------------------------
Father Xxxxxxx Xxxxxx Austin Lett
President President
By: By:
--------------------------------- --------------------------------
Xxxxx X. Xxxxx Xxxxx X. Xxxxxx
Secretary Secretary
