Exhibit 99.5
PURCHASE AND SETTLEMENT AGREEMENT
THIS PURCHASE AND SETTLEMENT AGREEMENT (the "AGREEMENT") is entered into
effective as of July 1, 2003 (the "EFFECTIVE DATE") by and between AZTORE
HOLDINGS, INC., an Arizona corporation ("AZTORE"), DYNA-CAM ENGINE CORPORATION,
a Nevada corporation (the "COMPANY"), XXXXXXXX XXXXX ("XXXXX"), XXXXXX XXXXXX
("XXXXXX") and XXXXXX HOLDINGS, LTD., a Nevada corporation ("XXXXXX HOLDINGS").
Xxxxx, Xxxxxx and Xxxxxx Holdings are referred to herein as the "XXXXXX
SHAREHOLDERS." All of the foregoing are referred to herein as the "PARTIES"
collectively and each as a "PARTY" individually.
RECITALS
A. The Company, Aztore, the Xxxxxx Shareholders and Aero Marine Engine Corp.
have entered into a certain Disposition of Collateral and Settlement
Agreement dated June 30, 2003 (the "DISPOSITION AGREEMENT").
X. Xxxxx and Xxxxxx have agreed with the Company that as of June 30, 2003 they
are owed a total of at least $95,000 (the "WAGE CLAIMS").
X. Xxxxxx Holdings owns 23,874,756 common shares of the Company's common stock
(the "XXXXXX COMMON SHARES") and Xxxxx owns 75,000 shares of the Company's
Series A Preferred stock (the "XXXXX SERIES A SHARES"). The Xxxxxx Common
Shares and the Xxxxx Series A Shares are jointly referred to hereinafter as
the "XXXXXX SHARES."
D. The Company has and will have insufficient funds to pay the Wage Claims in
full due to the claims of other secured, judgment and unsecured creditors.
The Company does not have any source of funds to purchase the Xxxxxx
Shares.
E. The Parties desire to transfer any and all Wage Claims of whatever type and
any and all Xxxxxx Shares of whatever type to Aztore under the terms set
forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the above recitals, the following
representations, warranties, covenants and conditions, and other good and
valuable consideration, the receipt of which is acknowledged, the parties agree
as follows:
1. PURCHASE OF THE INTERESTS. Aztore hereby agrees to purchase, and the
Xxxxxx Shareholders hereby agree to sell, the Wage Claims and the Xxxxxx Shares
in consideration of the payment by Aztore of $40,000. Such payment and
performance of this Agreement shall occur immediately after the Closing of the
Disposition Agreement and the receipt of funds by Aztore under the Disposition
Agreement.
2. ALLOCATION OF THE PURCHASE PRICE. The Parties agree that the Purchase
Price shall be allocated as follows:
(a) $15,000 to the purchase of the Wage Claims;
(b) $15,000 to the purchase of the Xxxxx Series A Shares; and
(c) $10,000 for the purchase of the Xxxxxx Common Shares.
The Xxxxxx Shareholders acknowledge that the payment by Aztore to Xxxxxx
Holdings is good and sufficient consideration for the agreements herein.
3. COMPANY ACKNOWLEDGMENTS. The Company acknowledges that the performance
of the Disposition Agreement is valuable consideration to and in the best
interest of the Company. The Company further acknowledges that it has no ability
to satisfy the Wage Claims or to purchase the Xxxxxx Shares and that Aztore is
purchasing the Wage Claims and Xxxxxx Shares only after the Company has declined
to purchase such items. Based upon the foregoing, the Company waives any right
it may have to purchase the Wage Claims or Xxxxxx Shares in favor of Aztore and
acknowledges that Aztore's performance under this Agreement is a benefit to the
Company.
4. INDEMNIFICATION.
(a) The Xxxxxx Shareholders, jointly and severally, agree to indemnify,
defend and hold harmless Aztore and the Company and each of their officers and
directors, employees, shareholders, members, consultants, attorneys,
accountants, other professional, insurers, agents and all other entities related
to Aztore or the Company, including, but not limited to, assigns, controlling
corporations, subsidiaries or other affiliates (jointly, the "RELATED PARTIES")
from all losses, actions, damages, liabilities and expenses, including
attorney's fees and costs arising from, related to or in connection with the
actions and omissions of the Xxxxxx Shareholders, their affiliates and/or their
successors and assigns that occur, or with respect to omissions, fail to occur,
after the date hereof or from any claims made by any person through such party
related to the terms and performance of this Agreement.
(b) The Company and Aztore agree to indemnify, defend and hold harmless the
Xxxxxx Shareholders and their Related Parties from all losses, actions, damages,
liabilities and expenses, including attorney's fees and costs arising from,
related to or in connection with the actions and omissions of the Company,
Aztore, their affiliates and/or their successors and assigns that occur, or with
respect to omissions, fail to occur, after the date hereof or from any claims
made by any person through such party related to the terms and performance of
this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE XXXXXX SHAREHOLDERS. The Xxxxxx
Shareholders, jointly and severally, represent and warrant that:
(a) on the date of this Agreement, they have all necessary authority to
execute this Agreement;
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(b) the delivery of any shares in accordance with this Agreement will vest
good and marketable title to the Xxxxxx Shares in Aztore, unencumbered by any
liens, pledges or other security interests;
(c) there is no claim, action, suit or other proceeding pending, threatened
or known against the Xxxxxx Shareholders, which, if decided adversely, would
interfere with the consummation of the transaction contemplated hereby; and
(d) no approval or consent of any governmental authority or third party is
required for the transfer of the Xxxxxx Shares as contemplated by this
Agreement, and there is no legal or other restriction, which will prevent Aztore
from owning or voting the Xxxxxx Shares upon the consummation of the transaction
contemplated hereby.
6. REPRESENTATIONS OF AZTORE. Aztore represents to the Xxxxxx Shareholders
that Aztore:
(a) has had the opportunity to investigate the risk and value of the Xxxxxx
Shares;
(b) is an "ACCREDITED INVESTOR" as that term is defined under Rule 501(a)
of Regulation promulgated under the Securities Act of 1933.
(c) is in a financial position to hold the Xxxxxx Shares for an indefinite
period of time and is able to bear the economic risk and withstand a complete
loss of its investment in the Xxxxxx Shares;
(d) due to Aztore's relationship with the Company, it has all information
necessary to make the decisions to acquire the Xxxxxx Shares; and
(e) has not paid, and is not aware of any other person having paid or
agreed to pay, any commission to any person in connection with the purchase of
the Xxxxxx Shares.
7. RESTRICTION ON TRANSFER. Aztore acknowledges that:
(a) the Xxxxxx Shares are not being registered under the Securities Act of
1933 or relevant state securities laws but are being offered and sold pursuant
to exemptions from such laws;
(b) the Xxxxxx Shares are being purchased for Aztore's own account and for
investment and without the intention of reselling or redistributing the same,
that Aztore has made no agreement with others regarding any of the Xxxxxx Shares
and that Aztore's financial condition is such that it is unlikely that it will
be necessary to dispose of any of the Xxxxxx Shares in the foreseeable future.
8. DELIVERY AND COOPERATION. The Xxxxxx Shareholders will deliver or cause
the delivery of the Xxxxxx Shares along with all necessary documentation to
allow transfer including a medallion signature guarantee and appropriate
corporate resolutions. This Agreement will act as an assignment, without
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recourse other than as provided herein for the Wage Claims. If any further
documentation is required, the Xxxxxx Shareholders will immediately respond to
any Aztore requirements for any additional documentation.
9. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon Aztore,
the Company and the Xxxxxx Shareholders and their respective successors and
assigns.
(b) SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations and warranties made by the Xxxxxx Shareholders, Aztore or the
Company herein will survive the delivery of this Agreement and the Xxxxxx
Shares.
(c) SEVERABILITY. Should any part of this Agreement for any reason be
declared invalid or unenforceable, such decision will not affect the validity or
enforceability of any remaining portion, which remaining portion will remain in
force and effect as if this Agreement had been executed with the invalid portion
thereof eliminated, and it is hereby declared as the intention of the parties
hereto that the parties would have executed the remaining portion of this
Agreement without including therein any such part or portion which may, for any
reason, be hereafter declared invalid or unenforceable.
(d) GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona, without reference
to choice of law principles. The parties agree that the state and federal courts
sitting in Maricopa County, Arizona shall have sole jurisdiction and venue of
any action related to this Agreement.
(e) CAPTIONS. The descriptive headings of the various Sections or parts of
this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.
Aztore Holdings, Inc. Xxxxxx Holdings, Ltd.
/s/ X. X. Xxxxxxxx /s/ Xxxxxxxx Xxxxx
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By: X. X. Xxxxxxxx By: Xxxxxxxx Xxxxx
Its: President Its: President
Date: Date: 7/1/03
Dyna-Cam Engine Corporation Xxxxxx Xxxxxx, an individual
/s/ Xxxx Xxxx /s/ Xxxxxx Xxxxxx
------------------------------------ ------------------------------------
By: Xxxx Xxxx Date: 7/1/03
Its: President
Date:
Xxxxxxxx Xxxxx, an individual
/s/ Xxxxxxxx Xxxxx
------------------------------------
Date: 7/1/03
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