Share Purchase Agreement
Exhibit
16.1
This Share Purchase Agreement (“Agreement”), dated as
of June 24, 2009, is entered into by and between Sunrise Energy Resources, Inc.,
a corporation organized and existing under the laws of the State of Delaware
(“Sunrise” or
the “Company”),
and Millington Solutions LLC, a limited liability company organized and existing
under the laws of the United Kingdom (“Millington”) and
together with Sunrise, the “Parties”).
W i t n e
s s e t h:
Whereas,
Sunrise is the owner of 100% of the ownership stake (“the Subsidiary Shares”) of
the Company’s wholly owned sole operating subsidiaries in the Ukraine: Esko
Pivnich, LLC and Pari, LLC (“the Subsidiaries”);
Whereas,
Millington is the holder of convertible debenture notes of tranches XX-0000,
XX-0000, CD-1011 and CD-1013 issued by the Company (“the Notes”) for the total
amount outstanding of $5,864,837 including principal and accrued
interest;
Whereas,
Millington desires to surrender the Notes to the Company in exchange for
receiving from the Company 100% ownership interest in the Subsidiaries, in
accordance with and subject to the terms of this Agreement.
Whereas,
Sunrise desires to accept the Notes from Millington in exchange for 100%
ownership interest in the Subsidiaries (“Subsidiary Shares”), in accordance with
and subject to the terms of this Agreement;
Whereas,
upon the consummation of the transaction Millington shall fully control the
Subsidiaries and hereby agrees to assume any and all obligations associated with
the Subsidiaries and fully indemnify and release the Company, its officers and
its stockholders from any and all claims whether existing prior to this
Agreement or arising after this Agreement is consummated. Upon consummation of
the transaction Sunrise shall cease to be a shareholder of the
Subsidiaries.
Whereas,
upon the consummation of the transaction the Notes accepted by the Company shall
be cancelled and shall be deemed null and void.
Now,
Therefore, in consideration of the premises and of the mutual covenants,
representations, warranties and agreements herein contained, the Parties hereto
agree as follows:
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Section
1. Definitions And Interpretations
1.1. Defined Terms.
In this Agreement the following words
and expressions shall have the following meanings (such meaning to be equally
applicable to both the singular and plural terms of the terms
defined):
“Agreement” shall have the meaning
provided in the introductory paragraph;
“Closing” shall have the meaning
provided in Section 2.4.;
“Closing Date” shall have the meaning
provided in Section 2.4.1;
“Company” means Sunrise Energy
Resources, Inc.;
“Confidential Information” shall have
the meaning provided in Section 4.1;
“Notes”
shall have the meaning provided in the recitals;
“Effective
Closing Date” shall have the meaning provided in Section 2.4.1;
“Subsidiaries” shall have the meaning
provided in the recitals;
“Subsidiary Shares” shall have the
meaning provided in the recitals;
“Party”
or “Parties” means Sunrise Energy Resources, Inc. and Millington Solutions
LLC;
“Transaction” shall have the meaning
provided in the recitals;
1.2. Principles of
Construction.
(a) All references to Articles,
Sections, subsections and Appendixes are to Articles, Sections, subsections and
Appendixes in or to this Agreement unless otherwise specified. The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term “including” is not
limiting and means “including without limitations.”
(b) In the computation of periods of
time from a specified date to a later specified date, the word “from” means
“from and including”; the words “to” and “until” each mean “to but excluding”;
and the word “through” means “to and including.”
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(c) The Table of Contents hereto and
the Section headings herein are for convenience only and shall not affect the
construction hereof.
(d) This Agreement is the result of
negotiations among and has been reviewed by the respective
Party. Accordingly, this Agreement shall not be construed against any
Party merely because of such Party’s involvement in its
preparation.
(e) Wherever in this Agreement the
intent so requires, reference to the neuter, masculine or feminine shall be
deemed to include each of the other, and reference to either the singular or the
plural shall be deemed to include the other.
Section
2. The Transaction
2.1. Transaction is conditioned upon
Sunrise’s Board Approval
Sunrise and Millington agree that the
Transaction and this Agreement are subject to the approval of the Sunrise Board
of Directors (the “BOD”). Should no approval be granted by the BOD,
or should the BOD reject the transaction, within 45 days following the date of
this Agreement, this Agreement shall be void and shall have no effect on either
of the Parties.
2.2. Consideration
In consideration for the surrender of
the Notes, Sunrise agrees to transfer the Subsidiary Shares to
Millington.
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2.3.
Transfer of the Notes and the Subsidiary Shares upon
Closing
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2.3.1. Subject to the terms, conditions
and warranties set forth in this Agreement, on the Closing Date, (i) Millington
shall surrender the original Notes to the Company for cancellation; and (ii) in consideration
for the Notes, Sunrise shall transfer to Millington the Subsidiary Shares, by
way of amending the Subsidiaries’s Bylaws to reflect the transfer of
ownership to Millington, and deliver an executed amended bylaws to Millington
(collectively, the “Closing”).
2.4.
Closing.
2.4.1. The Closing shall take place at
10:00 A.M. at the offices of Sunrise Energy Resources, Inc., at 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 on the earlier of (i) the 60th day
following the date of this Agreement, or (ii) the date on which all the
conditions precedent, conditions and warranties set forth in this Agreement
shall have been satisfied or waived (the “Closing
Date”). Notwithstanding the actual Closing Date, March 30,
2009 shall be deemed the effective closing date hereof (the “Effective Closing
Date”).
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Section
3. Representations and Warranties
3.1. Representations and Warranties of
Sunrise
3.1.1. Sunrise represents, warrants and
agrees with Millington as follows:
(a) Sunrise
is duly organized, validly existing and in good standing under the laws of the
State of Delaware. Sunrise has the power and authority to enter into,
execute and deliver this Agreement and to perform its obligations
hereunder.
(b) The
entire issued and outstanding capital stock of the Subsidiaries is owned
by
Sunrise. All
of the shares of the Subsidiaries have been duly authorized, are validly issued,
fully paid and non-assessable.
(c) All
financial and other information concerning the Subsidiaries, which Sunrise has
furnished or will furnish to Millington (i) is true, accurate and complete as of
its date and in all material respects except to the extent such information is
superseded by information marked as such, (ii) does not omit any material fact,
not misleading and (iii) presents fairly the financial condition of the
organization as of the date and for the period covered thereby.
(d) Subsidiaries
are duly organized, validly existing and in good standing under the laws of the
Ukraine. Sunrise has the power and authority to enter into, execute
and deliver this Agreement and to perform its obligations
hereunder. This Agreement had been duly authorized and, except cases
set forth hereunder, is approved by Sunrise’s respective corporate actions and
constitutes its legally valid and binding obligation and is enforceable against
Sunrise in accordance with the terms hereof.
(e) Sunrise
presently has the power to transfer and deliver the Subsidiary Shares to
Millington free and clear of any restrictions on transfer, security interests,
options, warrants, purchase rights or other contracts or commitments that could
require them to sell, transfer, or otherwise dispose of the Subsidiary
Shares. The delivery to Millington of the Subsidiary Shares and stock
powers evidencing the transfer of the Subsidiary Shares to Millington pursuant
to the provisions of this Agreement will transfer to Millington good and
marketable title thereto, free and clear of all liens, encumbrances restrictions
and claims of any kind.
(f) Upon
execution and delivery of the amended bylaws of the Subsidiaries evidencing the
transfer of the Subsidiary Shares to Millington in accordance with the terms of
this Agreement, Millington shall acquire and thereafter own 100% of the equity
of the Subsidiaries.
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3.2. Representations and Warranties of
Millington
3.2.1. Millington represents, warrants
and agrees with Sunrise as follows:
(a) Millington
is of the Closing Date, the lawful owner of record of all of the Notes, and
presently has the power to transfer and deliver the Notes to Sunrise free and
clear of any restrictions on transfer, security interests, options, warrants,
purchase rights or other contracts or commitments that could require them to
sell, transfer, or otherwise dispose of the Notes. The delivery to
Sunrise of the Notes and powers evidencing the transfer of the Notes to Sunrise
pursuant to the provisions of this Agreement will transfer to Sunrise good and
marketable title thereto, free and clear of all liens, encumbrances restrictions
and claims of any kind.
(b) Upon
Closing of the Transaction Millington shall rescind any and all claims to the
Company whether existing prior to the Effective Closing Date or arising
afterwards including without limitation the amounts due to Millington under the
Notes of $5,864,837. Millington shall not present any claims to the Company in
the future.
(c) Upon
Closing of the Transaction Millington shall indemnify and release the Company,
its officers and directors and its shareholders against any possible claims that
relate to the Subsidiaries, whether existing prior to the Effective Closing Date
or arising afterwards. The above claims shall include, without limitations, any
and all environmental remediation liability related to the Subsidiaries’ oil
& gas exploration and development activities in Ukraine.
(d) Millington
has conducted a comprehensive due diligence of the Subsidiaries to Millington’s
satisfaction in all material respects.
Section
4. Confidential Information
4.1. Confidential Information
Defined.
Any and all information furnished
(whether before or after the date hereof) by or on behalf of any Party to this
Agreement, including, without limitation, by such Party’s financial advisors,
attorneys and accountants, or agents, to another Party to this Agreement, or to
such Party’s directors, officers, employees, affiliates, representatives,
including, without limitation, financial advisors, attorneys and accountants, or
agents shall be regarded as “Confidential
Information.” The term Confidential Information shall not,
however, include information which (i) is or becomes publicly available other
than as a result of a disclosure by the Party receiving such Confidential
Information, (ii) is or becomes available to a Party to this Agreement on a
non-confidential basis from a source (other than through another Party to this
Agreement) which is not prohibited from disclosing such information by a legal,
contractual or fiduciary obligation to another Party, (iii) was available to,
known by or within the possession of a Party to this Agreement prior to its
being furnished by (or on behalf of) another Party, or (iv) is independently
developed by or on behalf of a Party to this Agreement not in violation of the
terms of this Agreement.
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4.2. Confidentiality.
The Parties undertake to keep any and
all Confidential Information provided with regard to this Agreement confidential
and will not, without the other Party’s prior written consent, disclose such
Confidential Information in any manner whatsoever and will not use any
Confidential Information other than in connection with the Transaction; provided, however, that they
may reveal the Confidential Information to their respective representatives (a)
who need to know the Confidential Information (and who agree to use such
Confidential Information in accordance with this Agreement) for the purpose of
evaluating the Transaction and (b) who are informed by the respective Party of
the confidential nature of the information provided.
4.3. Survival of
Confidentiality.
The undertakings and representations
made above shall survive the Closing Date and shall expire for all purposes in
the date numerically corresponding to the Closing Date in the twelfth month
after the Closing Date.
Section
5. Miscellaneous
5.1. Expenses.
Each of the Parties shall bear its own
expenses in connection with the transactions contemplated by the
Agreement.
5.2. Governing Law.
The interpretation and construction of
this Agreement, and all matters relating hereto, shall be governed by the laws
of the State of New York applicable to agreements executed and to be wholly
performed solely within such state.
5.3.
Notices.
Any notice or other communication
required or permitted under this Agreement shall be sufficiently given if
delivered in person or sent by facsimile or by overnight registered mail,
postage prepaid, addressed as follows:
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If to
Sunrise Energy Resources, Inc. to:
Sunrise Energy Resources,
Inc.
000 Xxxxxxx Xxxxxx, Xxxxx
000
Xxx Xxxx, XX 00000
Attention: Mr. Konstantin Tsiryulnikov,
CEO
If to
Millington, to:
Millington
Solutions Limited
Xxxxx
000, 000 Xxxxxx Xxxxxx,
Xxxxxx
X0X 0XX
Attention:
Xxxxxxx Xxxxxx, Director
Or such
other address or number as shall be furnished in writing by any such Party, and
such notice or communication shall, if properly addressed, be deemed to have
been given as of the date so delivered or sent by facsimile.
5.4. Parties in Interest.
This Agreement may not be transferred,
assigned or pledged by any Party hereto, other than by operation of
law. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
5.5. Entire Agreement.
This Agreement and the other documents
referred to herein contain the entire understanding of the Parties hereto with
respect to the subject matter contained herein. This Agreement shall supersede
all prior agreements and understandings between the Parties with respect to the
transactions contemplated herein.
5.6. Amendments.
This Agreement may not be amended or
modified orally, but only by an agreement in writing signed by the
Parties.
5.7. Severability.
In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
5.8. Counterparts.
This Agreement may be executed in any
number of counterparts, including counterparts transmitted by telecopier or
facsimile transmission, any one of which shall constitute an original of this
Agreement. When counterparts of facsimile copies have been executed
by all parties, they shall have the same effect as if the signatures to each
counterpart or copy were upon the same document and copies of such documents
shall be deemed valid as originals. The Parties agree that all such
signatures may be transferred to a single document upon the request of any
Party.
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In Witness
Whereof, each of the Parties hereto has caused its corporate name to be
hereunto subscribed by its officer(s) thereunto duly authorized as of the day
and year first above written.
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Sunrise
Energy Resources, Inc.
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Millington Solutions Limited | |||
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By:
/s/ Konstantin Tsiryulnikov
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By:
/s/ Xxxxxxx Xxxxxx
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Name:
Konstantin Tsiryulnikov
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Name:
Xxxxxxx Xxxxxx
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Title:
Chief Executive Officer
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Title:
Director
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