ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 25-th day of August, 2005, by and among Caspian Services Inc., a
Nevada corporation (the "Company") acting through the company secretary Xx.
Xxxxx Xxxxxx, under the authority of the Board of Directors, and certain
individuals acting jointly and severely for the purpose of this agreement,
namely Mr. Tasybaev Radzh, and Mrs. Tasybaeva Saule ("Seller Parties"), on the
other hand.
RECITAL:
WHEREAS, Seller Parties wish to sell certain assets located in the
Atashi Village of Kazakhstan.
WHEREAS, The assets composed of the certain land sites held in the name
of the company Balykchi LLP, 100 % stock of which is controlled by Seller
Parties.
WHEREAS, the Company wishes to purchase the assets controlled by the
Seller Parties by means of acquiring the Seller Parties's interest in the
Balykchi LLP.
AGREEMENT:
In consideration of the mutual promises contained herein, the parties
hereby agree as follows:
1. Purchase and Sale; Closing.
(a) Purchase and Sale. Subject to the terms and conditions
hereinafter set forth, the Seller Parties hereby agrees to sell, convey,
transfer, and deliver to the Company, and the Company hereby agrees to purchase
from the Seller Parties, 100 % interest in the form of paid-in-capital of
Balykchi LLP, at the Purchase Price set forth below. Seller Parties agree that
the interest shall be represented by 100% paid-in-capital of the TOO Balykchi
LLP and being transferred to the Company's subsidiary Caspian Real Estate
Limited.
(b) Closing. The closing of the sale and purchase of the
interest described in Section 1(a) (the "Closing") shall take place upon
completion of the registration of interest transfer to the name of the Caspian
Real Estate Limited with the relevant registration authority or at such other
time as parties may in the future determine.
2. Amount, Payment and Application of Purchase Price. The total
consideration and method of payment shall be as follows:
(a) Consideration. At the Closing, as total consideration for
the purchase and sale of the interest, the Company shall pay to the Seller
Parties or their nominated agents, the sum of Three Million Nine Hundred and
Fifty Thousand Dollars (3,950,000.00 USD), (the "Purchase Price") payable
partially in cash in the amount of One million Nine Hundred and Fifty Thousand
Dollars (1,950,000.00 USD) and partially in the form of the Company issuing Two
Million Dollars (2,000,000.00 USD) worth of restricted common stock, share price
of which shall be determined as average closing price quoted during five days of
trading immediately presiding the closing date, issued to the Seller Parties.
(b) Delivery. At the Closing, the Seller Parties shall deliver
to the Company's designated person or agent company registration documents for
Balykchi LLP certified by relevant authority, together with all company
documents, property deeds, titles, accounting records, stamps, registration
certificates, and company property free of any encumbrances.
(c) Application. Immediately following the Closing, but in no
event more than ten days following the Closing, the Company shall take any and
all actions as are necessary to cause the application of the entire cash portion
of Purchase Price to be paid to the Seller Parties or their designated agents
specified in Exhibit B, herein, and the company restricted common stock to be
issued to the Seller Parties or their designated agents specified in Exhibit A.
3. Representations and Warranties of Seller Parties.
Each Seller Party hereby jointly and severally represents and warrants
to the Purchasers as follows:
(a) Organization of Company. Balykchi LLP is a company in the
form of limited liability partnership duly organized, validly existing, and in
good standing under the laws of the Republic of Kazakhstan and is licensed or
qualified to do business and in good standing in each other jurisdiction in
which it is required to be so licensed or qualified. The Company has all
requisite power and authority to own its properties and carry on its businesses
as presently and as proposed to be conducted.
(b) Authority. Each Seller Party has full, complete and
unrestricted legal right, power and authority to execute and deliver this
Agreement and to duly perform and observe the terms and conditions hereof.
(c) Validity. This Agreement constitutes the legal, valid and
binding obligation of each Seller Party, enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
conservatorship, receivership, liquidation, reorganization, moratorium or
similar laws or equitable principles affecting the enforcement of creditors'
rights generally.
(d) Consents and Approvals. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and the
performance by each Seller Party of the terms and conditions hereof shall not
(i) require the approval or consent of any governmental authority or the
approval or consent of any other person; or (ii) conflict with or result in a
breach or violation of any of the terms or conditions of or constitute (or with
notice or lapse of time or both would constitute) a default under any agreement,
statute, regulation, order, judgment or decree applicable to such party or any
instrument, contract or other agreement to which party is a party or to which
such party is bound or subject.
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(e) Financial Statements and Information. The financial
statements of the Balykch LLP represent shall be certified by the local public
accountant or auditor and shall provide a fare representation of the company's
financial condition during last three years of operations.
(f) Title to and Condition of Properties. Balykchi LLP has
good and marketable title to the assets reflected as owned (or current, valid
and binding leases with respect to assets reflected as leased) on its Most
Recent Financial Report (other than properties and assets disposed of in the
ordinary course of business since the date of such balance sheet), free and
clear of any mortgages, pledges, security interests, liens, charges and other
encumbrances. All real and personal property, fixtures and equipment comprising
the assets of Balykchi LLP are in good state of repair (ordinary wear and tear
excepted) and operating condition and are sufficient and adequate to conduct the
business on the date hereof.
(g) Pending Actions. There is no action, suit or proceeding
pending or, to the knowledge of the Seller Parties, threatened against or
affecting the Balykchi LLP, or any of its properties or rights, before any court
or by or before any governmental body or arbitration board or tribunal, nor is
there any judgment, decree, injunction or order of any court, governmental
department, commission, agency, instrumentality or arbitrator against the
company. In addition, to the knowledge of the Seller Parties, there does not
exist any basis for any action, suit, investigation or proceeding against the
Balykchi LLP in each case which, if adversely determined, would reasonably be
expected to have a material adverse effect on the business, assets, properties
or operating condition (financial or otherwise) of Balykchi as going concern (a
"Material Adverse Effect"). The foregoing includes without limitation, actions
pending or threatened against any Seller Party or against any employee,
prospective employee or consultant to the Balykch or Seller Party involving such
person's relationship to the Balykchi LLP or any of its property.
(h) Taxes. Balykchi LLP has duly and timely filed or caused to
be filed (or obtained valid, currently effective extensions for filing) all
Federal, state, local and foreign income, franchise, excise, payroll, sales and
use, property and withholding tax returns, reports, estimates and information
and other statements or returns (collectively "Tax Returns") required to be
filed by or on behalf of it pursuant to any applicable federal, state, local or
foreign tax laws for all years and periods for which such Tax Returns have
become due. All such Tax Returns were correct in all material respects as filed
and correctly reflect the Federal, state, local and foreign income, franchise,
excise, payroll, sales and use, property, withholding and other taxes, duties,
imposts and governmental charges (and charges in lieu of any thereof), together
with interest and penalties (collectively "Taxes") required to be paid or
collected by (or allocable to) the Company. Balykchi LLP (i) has paid or caused
to be paid all Taxes required to be paid by it through the date hereof except
for those Taxes, if any, being contested in good faith and (ii) has properly and
fully accrued on its Most Recent Financial Report (and on its books and records
if arising after the date thereof), all Taxes for any period from the date of
the last reporting period covered by such Tax Returns up to and including the
date hereof. There is no pending or potential audit, dispute or claim concerning
any tax return or tax liability of Balykch LLP as to which the company either
(i) has been notified in writing by any tax authority or (ii) has knowledge
based on personal contact with any agent of such authority.
(i) Compliance with Laws. The business and activities of the
Balykchi have been and are being conducted in compliance with all provisions of
all applicable Federal, state, local and foreign statutes, ordinances, rules and
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regulations. Balykchi LLP is not in violation of or in default under (i) any
order, judgment or decree of any court, arbitration panel or other tribunal or
(ii) any administrative order, rulemaking, procedure, policy or other published
declaration of (x) any Federal, state, local or foreign governmental agency or
other authority or (y) any professional society, board or other similar
organization, except in the case of clauses (i) or (ii) above, such violations
or defaults that would not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect. The company holds all governmental licenses,
permits, franchises and other governmental authorizations necessary to the
ownership of its properties or the conduct of its business as currently
conducted and as proposed to be conducted after the Closing, except for those
which failure to obtain would not have a Material Adverse Effect, and all such
licenses, permits, franchises and other governmental authorizations will remain
in full force and effect following the Closing.
(j) Absence of Certain Business Practices. Neither the Seller
Parties nor any officer, director, employee or agent of Balykchi LLP, nor any
other person or entity acting on behalf of the Seller Parties or Balykchi LLP,
acting alone or together, has (a) received, directly or indirectly, any rebates,
payments, commissions, promotional allowances or any other economic benefits,
regardless of their nature or type, from any person or entity with whom the
company has done business directly or indirectly, or (b) directly or indirectly,
given or agreed to give any gift or similar benefit to any person or entity who
is or may be in a position to help or hinder the business (or assist Balykchi in
connection with any actual or proposed transaction) which in the case of either
clause (a) or clause (b) above have not been fully and accurately described and
reflected in the company's financial statements and books and records and which,
(i) if not given in the past, would reasonably be expected to have had a
Material Adverse Effect or (ii) if not continued in the future, would reasonably
be expected to have a Material Adverse Effect.
(k) Broker. No Seller Party has committed any act or omission
which would give rise to any claim against any party hereto for a brokerage
commission, finder's fee, or other like payment in connection with the
transactions contemplated hereby. The Broker fees, if any, shall be paid by
Seller Parties out of their own money or out of the Purchase Price for the
brokerage services solicited and received by the Seller Parties.
4. Representations and Warranties of The Company.
(a) Unregistered Shares. The Seller Parties understand that
the issued shares of Company stock are not registered under the Securities Act
of 1933, as amended (the "Securities Act") and are not qualified and/or
registered under applicable state securities laws pursuant to specific
exemptions from registration and/or qualification contained in the Securities
Act and in applicable state securities laws. The Purchasers understand that the
foregoing exemptions depend upon, among other things, the bona fide nature of
their investment intent.
(b) Legend. The Seller Parties acknowledge that the Shares
will bear a legend which prohibits an offer to transfer or a transfer of all or
any portion of the Shares unless the Shares or portion thereof are registered
under the Securities Act or unless an exemption from registration is available
with respect to such resale or disposition.
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(c) Broker. The Company has not committed any act or omission
which would give rise to any claim against any party hereto for a brokerage
commission, finder's fee, or other like payment in connection with the
transactions contemplated hereby. The Broker fees, if any, shall be paid by the
Company out of its own money or in addition to the Purchase Price for the
brokerage services solicited and received by the Company.
5. Indemnification.
(a) Seller Parties' Agreement to Indemnify. Each Seller Party
jointly and severally agrees to indemnify the Company against, and to protect,
save and keep harmless each Purchaser from, and to assume liability for, payment
of all liabilities that may be imposed on or incurred by the Company as a
consequence of or in connection with (a) any breach by any Seller Party of a
representation or warranty contained in this Agreement; or (b) any failure by
any Seller Party to perform any agreement or covenant contained herein. The
foregoing indemnity shall include reasonable attorneys' fees incurred in
connection with the enforcement of this indemnity.
(b) Company's Agreement to Indemnify. The Company agrees to
indemnify each Seller Party against, and to protect, save and keep harmless each
Seller Party from, and to assume liability for, payment of all liabilities that
may be imposed on or incurred by any Seller Party as a consequence of or in
connection with (a) any breach by the Company of a representation or warranty
contained in this Agreement; or (b) any failure by the Company to perform any
agreement or covenant contained herein.
(c) Notice of Claims and Potential Claims. The parties shall,
in a timely manner, provide each other with notice of all third party actions,
suits, proceedings, claims, demands or assessments subject to the
indemnification provisions of this Section 6 (collectively, "Third Party
Claims"), brought at any time following the date hereof, and shall otherwise
make available all relevant information material to the defense of any such
Third Party Claims. The indemnifying party shall have the right to participate
in and, to the extent it shall wish, to assume and undertake the defense of any
such Third Party Claim at its sole expense. No claim shall be settled or
compromised without the consent of the indemnifying party unless the
indemnifying party shall have failed, after the lapse of a reasonable time, but
in no event more than 30 days, after notice to it of such third Party Claim, to
participate in the defense of the same. The indemnified party shall have the
right to participate, with separate counsel (which counsel shall act in an
advisory capacity only), in any such defense. After notice by the indemnifying
party to the indemnified party of the indemnifying party's election to assume
the defense of any such Third Party Claim, the indemnifying party shall not be
liable to the indemnified party for any expenses of the indemnified party's
counsel that are subsequently incurred in connection with such defense;
provided, however, that the expense of such indemnified party's separate counsel
shall be paid by the indemnifying party if (i) the indemnifying party requests
such separate counsel to participate, or (ii) in the reasonable opinion of such
separate counsel, a significant conflict of interest exists between the
indemnifying party and the indemnified party that would make such separate
representation clearly advisable. A party's failure to give timely notice or to
provide copies of documents or to furnish relevant data in connection with any
Third Party Claim shall not constitute a defense (in part or in whole) to any
claim for indemnification or such party, except and only to the extent that such
failure shall result in any prejudices to the indemnifying party.
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6. General Provisions.
(a) Survival of Representation and Warranties. All representations and
warranties made by each Seller Party and the Company under this Agreement shall
survive for a period of three years following the Closing, whereupon they shall
expire.
(b) Sections and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
(c) No Waiver of Rights. No failure or delay on the part of any party
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, and no single or partial exercise of any such power, right or
privilege shall preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under this Agreement
are cumulative with, and not exclusive of, any rights or remedies otherwise
available. No waiver shall be binding unless in writing and signed by the party
to be charged or a qualified officer thereof.
(d) Notice. All notices hereunder shall be in writing and shall be
either personally delivered, transmitted by postage prepaid registered or
certified mail, return receipt requested, transmitted by telecopier, or
transmitted by internationally recognized courier service to the parties hereto
at their respective addresses. Except as otherwise specified herein, all notices
and other communications shall be deemed to have been duly given on receipt. For
purposes hereof, the addresses and telecopier numbers of the parties hereto
(until notice of a change thereof is given as provided herein) shall be as
follows:
If to any of the Seller Parties:
Mr/Mrs Tasybaev
________________________________
________________________________
________________________________
If to the Company:
c/o Caspian Services Inc.,
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Telecopier: (000) 000-0000
(e) Governing Law. This Agreement and the rights and
obligations of the parties hereto shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to the conflict
of law provisions thereof. The parties hereby irrevocably consent to, and waive
any objection to the exercise of, personal jurisdiction by the state and federal
courts located in the State of Nevada with respect to any action or proceeding
arising out of this Agreement.
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(f) Assignment; Successors. This Agreement shall inure to the
benefit of and be binding upon the heirs, successors and assigns of all parties.
(g) Further Assurances. The parties hereto agree that, from
time to time hereafter, and upon request, each of them will execute, acknowledge
and deliver such other documents and instruments as may be required to carry out
more effectively the terms and conditions of this Agreement.
(h) Entire Agreement; Modifications; Severability. This
Agreement, together with the other agreements referred to herein, constitutes
the entire agreement between the parties pertaining to the subject matter hereof
and supersedes all prior and contemporaneous agreements, representations and
understandings, written or oral, of the parties. This Agreement may not be
modified or amended except by a writing signed by each of the parties hereto
(and by a qualified officer if such party is a legal entity). The invalidity,
illegality or unenforceability for any reason of any one or more provisions of
this Agreement shall not affect the validity, legality or enforceability of the
remainder of this Agreement.
(i) Counterpart Originals. This Agreement may be (i) executed
simultaneously in two or more counterparts each of which shall be deemed an
original but all of which together shall constitute one and the same instrument,
and (ii) executed by facsimile, with the originals held by: Xxxxx X. Xxxxxxxx,
Esq., 000 Xxxxx 0000 Xxxxx , Xxxx, XX 00000 Telecopier: (000) 000-0000.
IN WITNESS WHEREOF, this Agreement has been executed by each of the
individual parties hereto on the date first above written.
On Behalf Of the Company:
Caspian Services Inc.
__________________________________
Seller Parties:
Mr. Tasybaev Radzh
__________________________________
Mrs. Tasybaeva Saule
__________________________________
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