EXHIBIT 10.3
EXHIBIT 10.3
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement"), dated as of February 1, 2008,
is made and entered into by and between XXXXXXX XXXX ("Xxxx"), an individual,
with an address at 0000 Xxxxx Xxxxxx, Xxxxxxxxx, B.C., and XXXXXXXX ENERGY
CORPORATION (formally Endeavor Energy Corporation) ("HEC"), a Nevada Corporation
with an address at 0000 Xxxx Xxxxxxxxxx 00, Xxxxxx, Xxxxx 00000, FIRST ENDEAVOR
HOLDINGS, INC. ("FEH"), an Alberta Canada Corporation with an address at 0000
Xxxx Xxxxxxxxxx 00, Xxxxxx, Xxxxx 00000 and ENDEAVOR CANADA CORPORATION ("ECC")
an Alberta Canada Corporation with an address at 0000 Xxxx Xxxxxxxxxx 00,
Xxxxxx, Xxxxx 00000.
RECITALS
A. WHEREAS, FEH currently owns a 100% of the issued and outstanding
capital stock of ECC.
B. WHEREAS, King owns 6,500 shares of the issued and outstanding preferred
shares of HEC and 6,500,000 shares of the issued and outstanding preferred
shares of FEH.
C. WHEREAS, King desires to grant to HEC, and HEC desires to acquire from
King, an option to acquire all of King's preferred shares of HEC and FEH (the
HEC and FEH preferred shares collectively the "Option Interest"), on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the respective
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, King, HEC, FEH and ECC (individually, a "Party", and collectively,
the "Parties") hereby agree as follows:
ARTICLE I
THE OPTION
1.1 Grant of Option. King hereby grants to HEC an irrevocable and
exclusive option to purchase from King the Option Interest at any time during
the Option Period specified in Section 1.3 hereof, on the terms and conditions
set forth in this Agreement (the "Option").
1.2 Exercise of Option. The Option may be exercised by HEC, only in whole
with respect to all of the Option Interest, at any time during the Option Period
specified in Section 1.3 hereof by delivering to King written notice (the
"Option Notice") specifying (i) HEC's intention to exercise the Option with
respect to the Option Interest and (ii) specifying a place and date for the
Closing (the "Closing Date") which shall be at 10:00 a.m. on a date not later
than the 30th day after the date King receives the Option Notice; provided that
if such Closing Date falls on a Saturday, Sunday, or legal holiday, then the
Closing Date shall be held on the next succeeding business day. As used in this
Agreement "Closing" means the closing and consummation of the transactions
contemplated by this Agreement.
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1.3 Option Period. The Option may be exercised by HEC, as specified in
Section 1.2 hereof, at any time after the date of this Agreement until 5:00 p.m.
Central Standard Time, on June 30, 2008 the ("Option Period"). If HEC does not
exercise the Option granted by King on or before 5:00 p.m. Central Standard
Time, on June 30, 2008, then HEC shall not have any further rights under this
Agreement.
1.4 Option Payment. Simultaneously with the execution and delivery by
King, HEC and FEH of this Agreement, HEC shall deliver to King, as consideration
for the granting by King to HEC of the Option, the sum of $100.00, which sum
shall be paid by a certified or cashier's check made payable to the order of
King.
1.5 Purchase Price of Option Interest. The price to be paid by HEC to King
for the Option Interest shall be 100 shares of the common stock of ECC,
representing 100% of the issued and outstanding stock of ECC.
ARTICLE II
THE CLOSING
2.1 Delivery of Option Interest. The Option Interest purchased by HEC
pursuant to the terms and conditions of this Agreement shall be delivered to HEC
by King on the Closing Date, free and clear of all liens, encumbrances and
options, and subject to the other terms and conditions specified below.
2.2 Delivery of Purchase Price. On the Closing Date, HEC shall deliver to
King the common stock of ECC as set forth in Section 1.5 above, free and clear
all liens, encumbrances and options.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF KING
3.1 Representations and Warranties of King. In order to induce the other
Parties to enter into this Agreement and each transaction contemplated by this
Agreement, King represents and warrants, to the other Parties as follows:
(a) Authority; Enforceability. King has full right, power and
authority to execute and deliver this Agreement, to perform his
obligations under this Agreement and to consummate each
transaction contemplated by this Agreement. All actions required
to be taken by, or on the part of, King to authorize the
execution and delivery of this Agreement, the performance of his
obligations under this Agreement and the consummation of each
transaction contemplated by this Agreement, have been duly and
properly taken and this Agreement has been duly executed and
delivered by King and constitutes the legal, valid and binding
obligation of King r enforceable in accordance with its terms.
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(b) Title to Option Interest. As of the date hereof, King has good and
defensible title to the Option Interest subject to no mortgages,
liens, security interests, encumbrances, claims, or charges
whatsoever; and King will convey clear and unencumbered title to the
Option Interest to HEC on the Closing Date.
(c) Power and Authority to Execute and Deliver Option Agreement.
King has all right, power and authority to (a) execute and
deliver this Agreement to HEC and (b) to assign, sell, deliver
and convey to HEC the Option Interest as contemplated by this
Agreement, free and clear of any first refusal, preemptive right,
lien, claim, mortgage, pledge, voting trust or agreement,
buy-sell agreement or other similar agreement, or any other
restriction on sale, assignment or transfer.
(d) Absence of Conflicting Interest. The execution, delivery and
performance of this Agreement and the consummation of each
transaction contemplated by this Agreement by King does not and
will not (a) violate, conflict with or result in the breach of
any term, condition or provision of, or require the consent of
any other person under, (i) any law, ordinance or governmental
rule or regulation known to King to which King is subject, (ii)
any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or
authority which is known to King and which is applicable to King,
or (iii) any mortgage, indenture or other instrument, document,
agreement or understanding, oral or written, to which King is a
party, by which King may have rights or may be bound or affected,
and (b) give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing
rights or obligations of King thereunder. No authorization,
approval or consent of, and no registration or filing with any
governmental or regulatory official, body or authority is
required in connection with the execution, delivery or
performance of this Agreement or any transaction contemplated by
this Agreement by King.
(e) Litigation; Absence of Restrictions. No litigation, including
any arbitration, investigation or other proceeding, is pending in
which King is a party, or, to the knowledge of King after
reasonable investigation, has been threatened against King, which
relates to this Agreement or any transaction contemplated by this
Agreement, nor does King know of any reasonably likely basis for
any such litigation, arbitration, investigation or proceeding,
the result of which could materially adversely affect this
Agreement or any transaction contemplated by this Agreement.
King is not a party to nor subject to the provisions of any
judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or
authority which may materially adversely affect this Agreement or
any transaction contemplated by this Agreement. There are no
statutory restrictions which may materially adversely affect the
transactions contemplated by this Agreement.
(f) No Broker. Neither King nor any party acting on King's behalf has
agreed to pay any party a commission, finder's fee or similar
payment in regard to this Agreement or any matter related to this
Agreement or has taken any action on which a claim for payment could
be based.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HEC
4.01 Representations and Warranties of HEC. In order to induce the other
Parties to enter into this Agreement and each transaction contemplated by this
Agreement, HEC represents and warrants, to the other Parties as follows:
(a) Existence and Good Standing. HEC is a Corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada. HEC has all requisite power and authority to carry on its
business now being conducted. HEC is in good standing and is duly
qualified to do business in all jurisdictions where the character of
its properties or assets or the nature of its activities makes such
qualification necessary.
(b) Authority; Enforceability. HEC has full right, power and
authority to enter into this Agreement, to perform its
obligations under this Agreement and to consummate each
transaction contemplated by this Agreement. All necessary
actions by the board of directors, shareholders or other
representatives of HEC necessary for the due authorization,
execution and delivery of this Agreement, the performance of
HEC's obligations under this Agreement and the consummation of
each transaction contemplated by this Agreement, have been duly
taken.
(c) Absence of Conflicting Interest. The execution, delivery and
performance of this Agreement and the consummation of each
transaction contemplated by this Agreement by HEC does not and
will not (a) violate, conflict with or result in the breach of
any term, condition or provision of, or require the consent of
any other person under, (i) any law, ordinance or governmental
rule or regulation known to HEC to which HEC is subject, (ii) any
judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or
authority which is known to HEC and which is applicable to HEC
(iii) the governing documents of or any securities issued by HEC,
or (iv) any mortgage, indenture or other instrument, document or
understanding, oral or written, to which HEC is a party, by which
HEC may have rights or may be bound or affected, and (b) give any
party with rights thereunder the right to terminate, modify,
accelerate or otherwise change the existing rights or obligations
of HEC thereunder. No authorization, approval or consent of, and
no registration or filing with any governmental or regulatory
official, body or authority is required in connection with the
execution, delivery or performance of this Agreement or any
transaction contemplated by this Agreement by HEC.
(d) Litigation; Absence of Restrictions. No litigation, including
any arbitration, investigation or other proceeding, is pending in
which HEC is a party, or, to the knowledge of HEC after
reasonable investigation, has been threatened against HEC, which
relates to this Agreement or any transaction contemplated by this
Agreement, nor does HEC know of any reasonably likely basis for
any such litigation, arbitration, investigation or proceeding,
the result of which could materially adversely affect this
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Agreement or any transaction contemplated by this Agreement. HEC is
not a party to nor subject to the provisions of any judgment, order,
writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which may
materially adversely affect this Agreement or any transaction
contemplated by this Agreement. There are no statutory restrictions
which may materially adversely affect this Agreement or any
transaction contemplated by this Agreement.
(e) No Broker. Neither HEC nor any party acting on HEC's behalf has
agreed to pay any party a commission, finder's fee or similar
payment in regard to this Agreement or any matter related to this
Agreement or has taken any action on which a claim for payment could
be based.
ARTICLE V
COVENANTS OF KING DURING OPTION PERIOD
King covenants and agrees that from and after the date of this Agreement
and until the termination of the Option Period:
5.01 Negative Pledge. King shall not grant or permit to exist any
mortgage, lien, security interest, encumbrance, claim or charge applicable to
any of the Option Interest unless such mortgage, lien, security interest,
encumbrance, claim or charge shall expressly be made subject to the prior right
of HEC under the Option granted pursuant to this Agreement to acquire any Option
Interest from King free and clear of any such mortgage, lien, security interest,
encumbrance, claim or charge whatsoever.
5.02 Further Assurances. King agrees that on and after the Closing Date,
he will, upon reasonable request, take any and all steps necessary to place HEC
in control of the Option Interest purchased by HEC on the Closing Date and will
do, execute, acknowledge and deliver or cause to be done, executed, acknowledged
and delivered, all such further acts, deeds, assignments, transfers,
conveyances, stock power and powers of attorney as may be reasonably required by
HEC for the better transferring and confirming of such Option Interest to HEC.
ARTICLE VI
INDEMNIFICATIONS
6.01 General Indemnification by King. King agrees to indemnify, hold
harmless and defend HEC after the Closing Date against and in respect of any
of the following matters:
(a) Any and all damages, losses, expenses, liabilities or deficiencies
arising out of or attributable to any misrepresentation or any
breach of the warranties, representations, covenants and agreements
of King contained in this Agreement;
(b) Any and all damages, losses, expenses, liabilities or deficiencies
incurred or paid by HEC as a result of a claim of any kind arising
from the ownership of the Option Interest prior to the Closing Date;
and
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(c) All demands, assessments, judgments, costs and expenses
(including reasonable legal fees and other expenses of
litigation, both at the trial and appellate level) arising from
or in connection with any action, suit, proceeding or claim
incident to any of the matters in subparts (a) and (b) of this
Section 6.01 which are ultimately determined by a court of
competent jurisdiction to constitute a matter for which
indemnification is required under this Agreement.
6.02 General Indemnification by HEC. HEC agrees to indemnify, hold
harmless and defend King after the Closing Date against and in respect of any of
the following matters:
(a) Any and all damages, losses, expenses, liabilities or deficiencies
arising out of or attributable to any misrepresentation or any
breach of the warranties, representations and agreements of HEC
contained in this Agreement;
(b) All demands, assessments, judgments, costs and expenses
(including reasonable legal fees and other expenses of
litigation, both at the trial and appellate level) arising from
or in connection with any action, suit, proceeding or claim
incident to any of the matters in subpart (a) of this Section
6.02 which are ultimately determined by a court of competent
jurisdiction to constitute a matter for which indemnification is
required under this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES
7.01 Conditions Precedent to Obligations of King. The obligations of King
to sell, assign and convey the Option Interest to HEC pursuant to the terms and
conditions of this Agreement are subject to the following conditions:
(a) Correctness of Representations and Warranties. All representations
and warranties of HEC in this Agreement shall be true and correct at
Closing with the same effect as if made at the time of Closing.
(b) Performance of Covenants. All covenants and agreements required by
this Agreement to be performed by HEC shall have been performed.
(c) No Legal Proceedings. The Parties shall have not commenced or had
commenced against any of the Parties, or any of the individuals
comprising the Parties, any proceeding under any bankruptcy,
insolvency or receivership law, and no legal proceeding is
instituted or threatened involving the Parties or the Option
Interest or any portion thereof or seeking to prohibit or obtain
damages from the Parties with respect to: (i) the execution,
delivery and performance of this Agreement, (ii) the consummation of
the transactions contemplated by this Agreement, or (iii) to
otherwise void this Agreement or any transaction contemplated by
this Agreement.
(d) Purchase Price. HEC shall have delivered the ECC common stock as the
Purchase Price.
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7.02 Conditions Precedent to Obligations of HEC: The obligations of HEC to
purchase the Option Interest from King pursuant to the terms of this Agreement
are subject to the following conditions:
(a) Correctness of Representations and Warranties. All representations
and warranties of King in this Agreement shall be true and correct
at Closing with the same effect as if made at the time of Closing.
(b) Performance of Covenants. All covenants and agreements required by
this Agreement to be performed by King shall have been performed.
(c) No Legal Proceedings. The Parties shall have not commenced or
had commenced against any of the Parties, or any of the
individuals comprising the Parties, any proceeding under any
bankruptcy, insolvency or receivership law, and no legal
proceeding is instituted or threatened involving the Parties or
the Option Interest or any portion thereof or seeking to
prohibit or obtain damages from the Parties with respect to: (i)
the execution, delivery and performance of this Agreement, (ii)
the consummation of the transactions contemplated by this
Agreement, or (iii) to otherwise void this Agreement or any
transaction contemplated by this Agreement.
(d) Execution of Stock Power and Delivery of Certificate. King shall
have executed and furnished to HEC a Stock Power and Stock
Certificates for each of the HEC and FEH preferred stock
certificates held by King, conveying the Option Interest to HEC.
ARTICLE VIII
TERMINATION
8.01 Causes of Termination. This Agreement and the rights and obligations
of the Parties may be abandoned and terminated by HEC in its sole discretion if
any suit, action or other proceeding by or before any court or other
governmental body shall be, on or before 5:00 p.m., Central Standard Time, on
June 30, 2008, pending or threatened seeking to invalidate this Agreement or
restrain or prohibit the transactions contemplated by this Agreement or
questioning in any manner the proceedings or authorities under which this Option
or the Option Interest are being issued or affecting the validity thereof. HEC
may terminate this Agreement pursuant to this Section 8.01 by giving notice to
King pursuant to this Agreement setting forth the terms and conditions of this
Section 8.01 being breached. King shall have no rights of termination under
Section 8.01 of this Agreement.
8.02 Automatic Termination. This Agreement shall terminate automatically
upon the earlier of the following: (a) the failure of a Party to remedy the
breach of any representation, warranty, covenant or agreement contained in this
Agreement, to the satisfaction of the other Parties to this Agreement, after
having received a notice given pursuant to this Agreement setting forth the
representation, warranty, covenant or agreement of this Agreement being
breached; or (b) if the Option shall not have been exercised by HEC on or before
5:00 p.m., Central Standard Time, on June 30, 2008.
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8.03 Effect of Termination. Upon termination of this Agreement as provided
in this Article VIII, this Agreement shall forthwith become void, and there
shall be no further obligation or liability hereunder on the part of any Party
except to the extent that such termination results from the willful breach by a
Party of any of such Party's representations, warranties, covenants or
agreements set forth in this Agreement.
ARTICLE IX
MISCELLANEOUS
9.01 Knowledge of the Parties. All representations and warranties stated
herein to be the knowledge or the best knowledge of a Party shall be based upon
reasonable investigation by the Party representing the same.
9.02 Survival of Representations and Warranties. The representations and
warranties of the Parties contained in this Agreement shall be true and correct
on the Closing Date, and shall survive the Closing Date.
9.03 Notices. Any notice, request, instruction or other documents to be
given hereunder by any Party to another Party shall be given in writing,
delivered personally or mailed by registered or certified mail, postage-paid:
(a) If to HEC, addressed to:
0000 Xxxx Xxxxxxxxxx 00,
Xxxxxx, Xxxxx 00000
(b) If to King, addressed to:
0000 Xxxxx Xxxxxx
Xxxxxxxxx, X.X.
(c) If to the FEH, addressed to:
0000 Xxxx Xxxxxxxxxx 00,
Xxxxxx, Xxxxx 00000
(d) If to ECC, addressed to:
0000 Xxxx Xxxxxxxxxx 00,
Xxxxxx, Xxxxx 00000
Any notice so addressed and mailed is deemed given five days after the date so
mailed. Any communication so delivered in person is deemed given when receipted
for by, or actually received by, the person. Any Party may, by proper written
notice under this Agreement to the other Parties, change the address or
individual to which notice is sent to that Party.
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9.04 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the Parties and delivered to the other Parties, it being understood that all
Parties need not sign the same counterpart. It shall not be necessary in making
proof of this Agreement or the terms and provisions of this Agreement to produce
or account for more than one of such counterparts.
9.05 Gender; Titles. Within this Agreement, words of any gender shall be
held and construed to include any other gender, and words in the singular number
shall be held and construed to include the plural, unless the context otherwise
requires. Titles appearing at the beginning of any subdivisions of this
Agreement are for convenience only, do not constitute any part of such
subdivisions, and shall be disregarded in construing the language contained in
such subdivisions.
9.06 Assignment. Except as otherwise provided in this Agreement, this
Agreement is made solely for the benefit of the Parties and no other person,
partnership, trust, association or corporation shall acquire or have any right
under or by virtue of this Agreement. Neither this Agreement nor the Option
shall be assignable by the Parties.
9.07 Entire Agreement; No Third Party Beneficiaries. This Agreement (a)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the Parties with respect to the
subject matter of this Agreement; and (b) is solely for the benefit of the
Parties and their respective heirs, legal representatives and successors and
does not confer on any other Person any rights or remedies hereunder. No Party
is entering into this Agreement on a basis of any promise or representation
other than those appearing within the four corners of this Agreement.
9.08 Severability. If any term or provision of this Agreement conflicts
with the laws under which this Agreement is to be construed, or if any term or
provision of this Agreement or its application to any person or in any
circumstances is held to be invalid or unenforceable to any extent by a court of
competent jurisdiction, such term or provision shall be invalid or unenforceable
only to the extent of such invalidity or unenforceability without invalidating
or rendering unenforceable the remainder of such term or provision or any
remaining terms and provisions in this Agreement, and the application of this
Agreement to other persons and in other circumstances shall not be effected by
such finding of invalidity or unenforceability and all the terms and provisions
of this Agreement shall be construed to give effect to the remaining terms and
provisions and shall be enforced to the greatest extent permitted by law.
9.09 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive law of the State of Texas without giving effect
to the principles of conflicts of law thereof.
9.10 Further Assurances; Further Cooperation. The Parties shall undertake
to perform their obligations under this Agreement, to satisfy all conditions,
and to cause the transactions contemplated by this Agreement to be carried out
in accordance with the terms of this Agreement. Each Party shall, at any time
and from time to time after Closing, execute, acknowledge
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(where appropriate) and deliver such further instruments and documents and take
such other action as may be reasonably requested by another Party in order to
carry out the intent and purpose of this Agreement.
9.11 No Disclosure. No Party may disclose any of the terms, conditions or
provisions of this Agreement to any third party, except as required under
applicable law.
9.12 Fees, Costs and Expenses. All legal fees and other expenses and costs
incurred by the Parties in connection with the negotiation of this Agreement and
the consummation of the transactions contemplated by this Agreement shall be
paid by the Party that incurs such fess, costs and expenses.
9.13 Waivers. At any time prior to the Closing, the Parties may, to the
extent legally allowed: (a) extend the time for the performance of any of the
obligations or other acts of the other Parties, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive performance of any of the covenants or
agreements, or satisfaction of any of the conditions, contained herein. Any
agreement on the part of a Party to any such extension or waiver shall be valid
only if set forth in a written instrument signed on behalf of such Party. Except
as provided in this Agreement, no action taken pursuant to this Agreement,
including any investigation by or on behalf of any Party, shall be deemed to
constitute a waiver by the Party taking such action of compliance with any
representations, warranties, covenants or agreements contained in this
Agreement. The waiver by any Party, whether by conduct or otherwise, of a breach
of any provision hereof shall not operate or be construed as a waiver of any
prior or subsequent breach of the same or any other provisions hereof.
9.14 Definition of Person. As used in this Agreement, the term "Person"
(whether or not capitalized) means any natural person, corporation, company,
limited or general partnership, joint stock company, joint venture, association,
limited liability company, limited liability partnership, trust, bank, trust
company, land trust, business trust or other entity or organization, whether or
not a Governmental Authority.
[Remainder of Page Intentionally Left Blank - Signatures on Following
Page]
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DULY EXECUTED by the Parties as of the day and year first above written.
/s/ Xxxxxxx Xxxx
---------------------------------------
Xxxxxxx Xxxx
Xxxxxxxx Energy Corporation
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
First Endeavor Holdings, Inc. and Endeavor Canada Corporation execute
this Agreement for the purpose of acknowledging and ratifying the
transactions set forth herein.
First Endeavor Holdings, Inc.
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
Endeavor Canada Corporation
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
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