EXHIBIT 1.1.2.
PARTIAL RESCISSION AND MODIFICATION AGREEMENT
THIS PARTIAL RESCISSION AND MODIFICATION AGREEMENT, made this 23 day of
November, 2004, by and between XXXXXX BEAUMONT, INC., a Nevada corporation
("MBI") on behalf of itself and its shareholders, and XXXX XXXXXXXX
("Xxxxxxxx").
WITNESSETH:
WHEREAS, Xxxxxxxx is a representative of an alliance of shareholders of
Pan American Energy Corporation (PEA), a publicly held corporation; and
WHEREAS, PEA entered into merger negotiations with MBI; and
WHEREAS, a part of the consideration to the then shareholders of MBI
(the Original Shareholders) to consent to the merger of MBI and PEA, Xxxxxxxx
agreed to pay $3,000,000 to MBI to capitalize MBI; and
WHEREAS, based upon Xxxxxxxx'x entrance into a Promissory Note with a
principal balance of $3,000,000, the Original Shareholders consented to the
merger of MBI and PEA, with MBI the surviving corporation and with the Original
Shareholders receiving 13,000,000 shares of MBI common stock and the Xxxxxxxx
alliance of shareholders of PEA receiving 27,000,000 shares of MBI common stock;
and
WHEREAS, Xxxxxxxx has paid principal in the amount of $1,800,000 on the
Promissory Note but is delinquent in payments on the Promissory Note to the
extent of default; and
WHEREAS, MBI has delivered to Xxxxxxxx notice of such delinquency under
the Promissory Note; and
WHEREAS, the relative value of the Original Shareholders' shares of MBI
has suffered because of the delinquent payments of the Promissory Note; and
WHEREAS, Xxxxxxxx'x default under the Promissory Note would entitle the
Original Shareholders and MBI to rescind the merger; and
WHEREAS, the parties hereto desire to partially rescind the merger to
attempt to place the Original Shareholders in the economic position that they
would have enjoyed had the merger either not been consummated or had been
consummated as intended; and
WHEREAS, as a partial rescission of the merger, Xxxxxxxx has agreed to
deliver to the Original Shareholders a total of 1,000,000 free trading shares of
MBI stock acquired by the PEA shareholders in the merger, which will be divided
pro-rata by the Original Shareholders based upon their pre-merger stock
ownership of MBI, and
WHEREAS, in consideration of Xxxxxxxx'x failure to yet complete his
obligations related to the merger, the parties hereby agree to establish a
merger escrow fund of MBI common stock to ensure Xxxxxxxx'x performance of his
obligations related to the merger; and
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WHEREAS, MBI and Xxxxxxxx have agreed to modify the Promissory Note
(such modified Promissory Note shall be referred to herein as the "Note") to
provide for extended payment terms on the remaining principal balance of the
Note; and
WHEREAS, in further consideration of and exchange for the Note and the
waiver of past penalties and default interest, Xxxxxxxx has agreed to pledge
2,400,000 shares of common stock of MBI to be used at the discretion of Xxxxxx
Beaumont, Inc., subject to Board approval (the "Pledge Shares") as security for
the performance of Xxxxxxxx'x obligation under the Note; and
WHEREAS, in exchange for the partial rescission, the Note and the other
terms set forth above, including the Pledged Shares, MBI and the Original
Shareholders have agreed to waive the right to fully rescind the merger and to
enforce the terms of the original Promissory Note.
NOW, THEREFORE, the parties hereto agree as follows:
13. PARTIAL RESCISSION. Simultaneously with the execution
hereof, Xxxxxxxx shall deliver a certificate representing 1,000,000
shares of freely trading MBI common stock to the stock transfer agent
of MBI's choice to be distributed by the transfer agent pro-rata in
accordance with pre-merger share ownership to the persons listed on
Exhibit 1 as Original Shareholders.
14. MODIFICATION OF PROMISSORY NOTE. Simultaneously with the
execution hereof, Xxxxxxxx will execute and deliver to MBI a
modification of the Promissory Note in the form attached hereto as
Exhibit 2.
15. ESCROW OF PLEDGED SHARES. Simultaneously with the
execution hereof, Xxxxxxxx the parties hereto will execute and deliver
the Stock Pledge and Escrow Agreement in the form attached hereto as
Exhibit 3.
16. WAIVER OF RIGHTS. MBI, on behalf of itself and the
Original Shareholders, hereby agrees to waive its right to fully
rescind the merger of MBI and PEA based upon Xxxxxxxx'x failure to
fully fund the capitalization of MBI in a timely manner. The waiver is
specific to the funding obligation of Xxxxxxxx related to the merger
and does not compromise any right of rescission by either party hereto
for any claims other than Xxxxxxxx'x funding obligation, which may or
may not arise either before or after the date hereof and thereby give
either party the right to rescind the merger of MBI and PEA.
17. NOTICES. Any notices required or permitted to be given
hereunder shall be deemed to have been given when given personally, or
deposited in the United States mails, certified mail, return receipt
requested, postage prepaid, addressed to the party to whom given at the
following address:
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If to: Xxxxxx Beaumont, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
If to: Xxxx Xxxxxxxx
1West 0000 Xxx Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
Notification at the above addresses shall be binding upon a party unless written
notice of change of address has been given by the party to each other party to
the agreement.
18. BINDING EFFECT AND BENEFITS. All provisions of this
agreement shall be binding upon, and shall inure to the benefit of, and
shall be enforceable by and against all the parties hereto, and their
respective heirs, legal representatives, successors and assigns.
Nothing in this agreement, express or implied, is intended to or shall
confer upon any person other than the parties hereto and their
respective heirs, legal representatives, successors or assigns, any
rights, remedies, obligations, or liabilities under or by reason of
this agreement.
19. ASSIGNMENT. This agreement is personal to each of the
parties hereto. No party may assign any rights or delegate any
obligations hereunder without first having obtained the written consent
of each other party.
20. AMENDMENT. No change, modification, or amendment of this
agreement shall be valid or binding upon any party hereto unless
expressed in a writing signed by the party against whom the same is
sought to be enforced.
21. NO WAIVER. The failure of any party to insist upon strict
performance of any obligation hereunder shall not be a waiver of such
party's right to demand strict compliance of that or any other
obligation in the future. No custom or practice of the parties at
variance with the terms hereof shall constitute a waiver, nor shall any
delay or omission of a party to exercise any rights arising from a
default impair the party's right as to said default or to any
subsequent default.
22. CONSTRUCTION. This agreement shall be interpreted, whether
as to validity, capacity, performance, or remedy, according to the
internal substantive laws of the State of Florida. Time is of the
essence of this Agreement. Titles or captions of articles and
paragraphs contained in this agreement are inserted only as a matter of
convenience and for reference, and in no way define, limit, extend, or
describe the scope of this agreement or the intent of any provisions
hereunder. Whenever required by the context, the singular number shall
include the plural, the plural the singular, and the masculine and
neuter gender shall include all genders. If any provision of this
agreement shall be determined to be unenforceable, the balance of the
agreement shall remain in full force and effect, and be interpreted as
if those such provisions had never been contained in the agreement.
This agreement may be executed in multiple copies, each of which shall
for all purposes constitute one agreement, binding upon the parties.
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23. INTEGRATION. This agreement contains the entire agreement
of the parties and supersedes all negotiations, tentative agreements,
representations, commitments, or arrangements made prior to the date
hereof. All prior agreements are merged into this agreement and all
representations and warranties, whether oral or written, are hereby
disclaimed and disavowed unless expressly reiterated in this agreement.
24. REMEDIES CUMULATIVE. The remedies of the parties under
this agreement are cumulative and shall not exclude any other remedies
to which any party may be lawfully entitled.
25. VENUE. Venue of any action brought to interpret or enforce
this agreement shall lie exclusively in the County of Sarasota,
Florida, if the action is brought in the courts of the State of
Florida; and if brought in the courts of the United States of America,
in the Middle District of Florida, Tampa Division.
26. FURTHER ASSURANCES. Each of the parties hereto will
execute, acknowledge, and supply such further documents, instruments,
and assurance as shall be reasonably necessary or appropriate in order
to carry out the full intent and purposes of this agreement.
27. INDEMNIFICATION. Each party hereto agrees to protect,
indemnify, defend and save harmless the other party hereto from and
against any and all liability, expense or damage of any kind or nature,
and from any suits, claims or demands, including reasonable legal fees
and expenses, on account of any matter or thing, whether in suit or
not, arising out of the party's breach or violation of any provision of
this agreement. This duty to indemnify shall survive the execution and
the closing of this agreement.
28. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in this agreement and in any
certificates delivered pursuant thereto shall survive the Closing Date
and shall remain in full force and effect thereafter for a period of
five years after the Closing Date, regardless of any investigation at
any time made by, or on behalf of, the party to whom the representation
or warranty has been given. In order to assert against any party hereto
the existence of a misrepresentation or breach of warranty, and obtain
indemnification therefor, such breach must be asserted in writing to
the party or parties against which asserted no later than the end of
the survival period with respect thereto as set out above.
29. SATISFACTION REQUIREMENT. If any agreement, certificate or
other right or any action taken or to be taken is by the terms of this
agreement required to be satisfactory to a party, the determination of
such satisfaction shall be made by the party in its sole and exclusive
judgment exercised in good faith.
30. FORCE MAJEURE. No party will be liable to the other for
its failure to perform or for delay in the performance of its
obligations to the extent such failure or delay results from causes
beyond its reasonable control, such as acts of God, fires, explosions,
wars or other hostilities, insurrections, revolutions, terrorist acts,
earthquakes, hurricanes and wind storms, floods, epidemics or
quarantine restrictions, unforeseeable governmental restrictions or
controls, or transportation embargoes or interruptions. However, if a
party is prevented from performing its obligations because of such
extraordinary circumstances for a period of 30 consecutive days, the
other party may terminate this Agreement immediately upon notice to the
other.
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31. ATTORNEY'S FEES. In any action to enforce the terms of this
Agreement, the prevailing party shall be entitled to collect a reasonable
attorneys' fee from the non-prevailing party.
IN WITNESS WHEREOF, this Partial Rescission and Modification Agreement
has been executed as of the date first above written.
XXXXXX BEAUMONT, INC.
By:
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As its Chief Executive Officer
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XXXX XXXXXXXX
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