EXHIBIT 4.3
Agreement dated the 27 th day of April, 2004
--
BETWEEN:
EPIC ENERGY INC.
("EPIC")
-and-
PROTEC INDUSTIRES INC.
("PROTEC")
OPTION TO PRUCHASE ("AGREEMENT")
--------------------------------
RECITALS:
1. EPIC, its subsidiaries and affiliates, a result of their
interests in Ukraine possess fixed and liquid assets, properties,
licenses, rights, and project opportunities.
2. EPIC possesses substantial technical expertise and food will with
the Ukrainian authorities which translate into a strategic
advantage in identifying and acquitting additional oil and gas
projects Ukraine.
3. EPIC has established a special contractual relationship with OMV,
and subsequently with RWE-dea, regarding the development of oil
and gas opportunities in the Black Sea.
4. EPIC, its subsidiaries and affiliates, as a result of their
international oil and gas activities and experience possess
additional exclusive and/or unique project opportunities in other
countries.
5. PROTEC possesses or has access to the funds necessary to finance
EPIC's existing oil and gas projects and EPIC's project
opportunities.
6. PROTEC desires to establish a partnership with EPIC whereby EPIC
finds and operates the oil and gas projects while PROTEC provides
the financing, with PROTEC acquiring a 49% interest in the share
structure of EPIC.
NOW THEREFORE IN CONSIDERATION of the mutual covenants herein contained and
an Option Fee of USD $500,000 to be paid by PROTEC to EPIC, the parties
hereto agree as follows:
1
1. DEFINITIONS: For the purposes of the Agreement, the following
terms shall have the following meanings:
a. "EPIC" shall mean EPIC ENERGY INC. and its subsidiaries and
afffiliates, and "PROTEC" shall mean PROTEC INDUSTRIESINC.;
b. "Execution Date" shall mean the day upon which the US
$500,000 is paid in full by Protec.
c. "Option Fee" shall mean the total sum of a down payment of
USD $500,000 payable as set forth below;
d. "Option Term" shall mean that period of time commencing on
the Execution Date and ending six (6) calendar weeks
thereafter;
e. "Closing Date: shall mean that date, within the Option Term
, upon which PROTEC shall sign final documents with EPIC
exercising ists Option to Participate.
f. "Expiration Date" shall mean that date upon which the offer
of the Option Agreement shall expire if Protec has failed to
pay the Option Fee.
2. GRANT OF OPTION. For and in consideration of the Option Fee
payeable to EPIC as set forth herein, EPIC does hereby grant to
PROTEC the exclusive right and Option ("Option") to acquire 49%
of EPIC's share interest, in common shares subject to approval of
the stock exchange authorities.
3. PAYMENT OF OTION FEE. PROTEC agrees to pay EPIC USD $5000,000
upon the Expiration Date of May 10, 2004, the offer of the Option
Agreement shall become null and void unless the Expriation Date
is extended in writing by mutual consent of both parties.
4. EXERCISE OF OPTION. PROTEC may exercise its exclusive option at
any time during the Option Term, upon completion of the
appropriate final documents with EPIC. In the event PROTEC does
not exercise its exclusive right granted by the Option during the
Option Term, EPIC shall be entitled to retain the Option Fee,
subject to the additional terms and conditions of this Agreement
and subsequently, this Agreement shall become absolutely null and
void and neither party hereto shall have any other liability,
obligation or duty hereinunder or pursuant to this Agreement.
5. CONTRACT(S) FOR PARTICIPATION. In the event that PROTEC chooses
to exercise its exclusive Option as provided for in the preceding
paragraph, both parties agree to execute one or more contracts in
accordance with the following terms and conditions:
a. PROTEC shall deliver a minimum of $15 million to a Trust
Account held on Epic's behalf by Epic's attorneys.
b. PROTEC shall commit to providing the financing of EPIC's
future oil and gas projects, subject to certain conditions
whereby PROTEC shall have the right to independently confirm
the economic viability of said projects.
2
c. EPIC shall obtain approval from the necessary stock exchange
authorities for Private Placement issuance of new common
shares from treasuryt such trhat Protec holds 49% of all
issued common shares.
d. EPIC shall provide PROTEC with the right to review Epic's
use of funds, work programs and budgets, and accounting
procedures.
6. PERFORNACE OBLIGATIONS. During the Option Term, each party shall
have certain performance obligations as follows:
a. EPIC shall return to "good standing" with the Toronto Stock
Exchange and resume trading in Canada. The parties shall
work together to establish trading in Frankfurt were a
listing already exists.
b. EPIC shall obtain all necessary approvals for the execution
of the proposed deal between EPIC and PROTEC.
c. EPIC's Ukranian subsidiary shall return to "good standing"
in Ukraine and restore cash flow.
d. PROTEC shall place into a special TRUST account a minimum of
$15 million to purchase 49% of EPIC common shares.
7. OTHER CONSIDERATIONS FROM EPIC. Epic provides to PROTEC during
the Option Term the following additional considerations:
a. PROTEC shall have the right to convert up to $250,000 of the
Option Fee into EPIC shares at a per- share price of USD
0.10 (ten cents), subject to approval of the Toronto Stock
Exchange.
b. Upon completion of PROTEC's obligations, PROTEC shall have
the right to place one director on Epic's Board.
8. OTHER CONSIDERATIONS FROM PROTEC. PROTEC provides to EPIC the
following additional considerations:
a. The voting rights of all shares purchased and/or earned by
PROTEC, its subsidiaries and affiliates shall be assigned to
a Voting Trust in cooperation with Xxxxxx X. Xxxxxxx'x
voting block such that no change in control of EPIC shall
occur. The parties understand that this will retain EPIC's
substantial tax credits that can accrue to the benefit of
all shareholders of EPIC.
9. DEFAULT BY EPIC; REMEDIES OF PROTEC. In the event EPIC fails to
perform its obligations as set forth is Paragraph 6, PROTEC shall
be entitled to demand reimbursement of up to $250,000 of the
Option Fee from the sale proceeds of EPIC's drilling rig assets
in Ukraine and shall have no further recourse against EPIC.
3
10. EXECUTION BY BOTH PARTIES. This Agreement shall not become
effective and binding until fully executed by both PROTEC and
EPIC.
11. NOTICE. All notices, demands and / or consents provided for in
this Agreement shall be in writing and shall be delive4red to the
parties hereto by fax with confirmation of receipt. Such notices
hall be deemed to have been served on the date receipted.
Subsequently, originals shall be delivered by hand or by
international courier.
All such notices and communications shall be addressed to EPIC at:
Epic Energy Inc.
0000, 000-0xx Xxx, XX
Xxxxxxx, XX Xxxxxx X0x 0X0
FAX: x0-000-000-0000
All such notices and communication shall be addressed to PROTEC at:
Protec Industries Inc.
----------------------
Villa Menotti
-------------
Xxxxxx Xxxxx
------------
X-0000 Xxxxx Xxxxxxx
--------------------
Fax: x00-000-00000
-------------------
12. FEE GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Alberta,
Canada.
13. SUCCESSORS AND ASSIGNS. This agreement shall apply to, inure to
the benefit of and be binding upon enforceable against the
parties hereto and their respective heirs, successors and or
assigns, to the extent as if specified at length throughout this
agreement.
14. TIME. Time is of the essence of this Agreement.
15. Headings. The headings inserted at the beginning of each
paragraph and/or subparagraph are for the convenience of
reference only and shall not limit or otherwise affect or be used
in the construction of any terms or provisions hereof.
16. Cost of this Agreement. Any cost and/or fees incurred by PROTEC
or EPIC in executing this Agreement shall be borne by the
respective party incurring such cost and/or fee.
4
17. Entire Agreement. This Agreement contains all of the terms,
promises, covenants, conditions and representations made or
entered into by or between EPIC and PROTEC and supercedes all
prior discussions and agreements wether written or oral between
EPIC and PROTEC with respect to the Option and all other matters
contained herein and constitutes the sole and entire agreement
between EPIC and PROTEC with respect thereto. This Agreement may
not be modified or amended unless such amendment is set forth in
writing and executed by both EPIC and PROTEC with the formalities
hereof.
IN WITNESS WHREOF, the duly authorized representatives of
the Parties have caused this Agreement to be executed on the
date first written above.
EPIC ENERGY INC.
Per:_____________________________
Name/Title: Xxxxxx X. Xxxxxxx, President & CEO
PROTEC INDUSTRIES INC.
Per: _____________________________
Name/Title: X. Xxxxxxxxx, President & CEO
5
