EXHIBIT 10.4
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement"), is made and
entered into as of the 1st day of June, 2002, between Assure Energy, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
"Company"), and the purchasers listed on SCHEDULE 1 hereto (the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Purchasers and the Purchasers
desires to acquire from the Company, shares of the Company's Series A
Convertible Preferred Stock, par value $.0001 per share (the "Series A Preferred
Stock"), with an aggregate stated value of One Million Seven Hundred Fifty
Thousand Dollars ($1,750,000).
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and each Purchaser agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
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1.1 Certain Definitions. As used in this Agreement, and unless
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the context requires a different meaning, the following terms have the meanings
indicated:
"Agreement" shall have the meaning set forth in the introductory paragraph
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of this Agreement.
"Business Day" means any day except Saturday, Sunday and any day which
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shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.
"Certificate of Designation" means the Certificate of Designation of the
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Series A Convertible Preferred Stock, in the form of EXHIBIT A annexed hereto.
"Commission" means the Securities and Exchange Commission.
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"Common Stock" means shares of the Company's common stock, par value $.001
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per share.
"Company" shall have the meaning set forth in the introductory paragraph.
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"Conversion Date" shall have the meaning set forth in the Certificate of
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Designation.
"Conversion Price" shall have the meaning set forth in the Certificate of
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Designation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Losses" shall have the meaning set forth in Section 4.4(a) hereof.
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"Material" shall mean having a financial consequence in excess of $100,000.
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"Material Adverse Effect" shall have the meaning set forth in Section
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3.1(a).
"NASD" means the National Association of Securities Dealers, Inc.
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"Notice of Conversion" shall have the meaning set forth in EXHIBIT B
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annexed hereto.
"Notice of Exercise" shall have the meaning set forth in EXHIBIT B annexed
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hereto.
"OTCBB" shall mean the NASD over-the counter Bulletin Board(R).
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"Person" means an individual or a corporation, partnership, trust,
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incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Purchase Price" shall have the meaning set forth in Section 2.1(b).
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"Purchasers" shall have the meaning set forth in the introductory
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paragraph.
"Securities Act" means the Securities Act of 1933, as amended.
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"Series A Preferred Stock" shall have the meaning set forth in the recital.
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"Shares" shall have the meaning set forth in Section 2.1(a).
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"Subsidiaries" shall have the meaning set forth in Section 3.1(a).
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ARTICLE II
PURCHASE AND SALE OF CONVERTIBLE PREFERRED SHARES
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2.1 Purchase and Sale; Terms of Convertible Preferred Shares.
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(a) Subject to the terms and conditions set forth herein, the
Company shall issue and sell and the Purchasers shall purchase an aggregate of
One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) of Series A
Preferred Stock (the "Shares"). The Shares shall have the respective rights,
preferences and privileges as set forth in the Certificate of Designation to be
filed by the Company with the Secretary of State of Delaware as soon as
practicable following the execution of this Agreement, in the form annexed
hereto as Exhibit A. These rights, preferences, and privileges include (i) the
right to receive a 5% cumulative dividend, payable annually, in cash or common
stock of the Company, at the Company's option; (ii) the right of the Company to
redeem the Shares, at any time after the date of issuance, upon twenty one (21)
days prior written notice of redemption to the holder, at a price of $105 per
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Share plus all accrued but unpaid dividends; (iii) automatic redemption by the
Company on the fifth anniversary of the date of issuance at a price of $105 per
Share plus all accrued but unpaid dividends; (iv) the right of the holder to
convert Share principal into units of the Company, at the conversion price then
in effect, at any time within 15 days of the holder's receipt of a notice of
redemption from the Company or at any time commencing on the second anniversary
of the date of issuance, each unit consisting of one share of the Company's
common stock (the "Unit Shares") and one common stock purchase warrant
exercisable to purchase one share of the Company's common stock (the "Warrant
Shares") at a price of $1.75 per share at any time during the four (4) year
period commencing one year from the date of issuance of the units. The initial
conversion price is $1.50 of Share principal for each unit.
The purchase price for each Share shall be $100 (the "Per Share
Consideration"). The Per Share Consideration multiplied by the number of Shares
to be purchased by the Purchasers as set forth in SCHEDULE 1 is referred to as
the "Purchase Price".
ARTICLE III
REPRESENTATIONS AND WARRANTS
3.1 Representations, Warranties and Agreements of the Company. The
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Company hereby makes the following representations and warranties to the
Purchasers, all of which shall survive the Closing:
(a) Organization and Qualification. The Company is a corporation,
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duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, with the requisite corporate power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. The Company has no subsidiaries other than Assure Oil & Gas Corp.,
and Xxxxxxxx.xxx International, Inc. (collectively, the "Subsidiaries"). Each
of the Subsidiaries is a corporation, duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, with the
full corporate power and authority to own and use its properties and assets and
to carry on its business as currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
would not, individually or in the aggregate, have a material adverse effect on
the results of operations, assets, prospects, or financial condition of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(b) Authorization, Enforcement. The Company has the requisite
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corporate power and authority to enter into and to consummate the transactions
contemplated hereby and to otherwise carry out its obligations hereunder. The
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby has been duly authorized by all
necessary action on the part of the Company. This Agreement when delivered in
accordance with the terms hereof will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
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insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
(c) Capitalization. The authorized, issued and outstanding capital
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stock of the Company is set forth on SCHEDULE 3.1(C). No shares of the Series A
Preferred Stock have been issued as of the date hereof. No shares of Common
Stock are entitled to preemptive or similar rights, nor is any holder of the
Common Stock entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company by virtue of this Agreement. Except
as disclosed in SCHEDULE 3.1(C), there are no authorized or outstanding options,
warrants, script, rights to subscribe to, registration rights, calls or
commitments of any character whatsoever relating to, or, except as a result of
the purchase and sale of the Series A Preferred Stock hereunder, securities,
rights or obligations convertible into or exchangeable for, or giving any person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective Certificate of Incorporation, bylaws or other charter
documents.
(d) Issuance of Shares. The Shares have been duly and validly
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authorized for issuance, offer and sale pursuant to this Agreement and, when
issued and delivered as provided hereunder against payment in accordance with
the terms hereof, shall be valid and binding obligations of the Company
enforceable in accordance with their respective terms. The Company has and at
all times while the Shares are outstanding will continue to maintain an adequate
reserve of shares of Common Stock to enable it to perform its obligations under
this Agreement and the Certificate of Designation. When issued in accordance
with the terms hereof, the underlying securities will be duly authorized,
validly issued, fully paid and non-assessable.
(e) No Conflicts. The execution, delivery and performance of this
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Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) conflict with or violate any
provision of its Certificate of Incorporation or bylaws (each as amended through
the date hereof) or (ii) be subject to obtaining any of the consents referred to
in Section 3.1(f), conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or its Subsidiaries is subject (including, but not limited to, those of
other countries and the federal and state securities laws and regulations), or
by which any property or asset of the Company or its Subsidiaries is bound or
affected, except in the case of clause (ii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect. The
business of the Company and its Subsidiaries is not being conducted in violation
of any law, ordinance or regulation of any governmental authority.
(f) Consents and Approvals. Neither the Company nor any
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Subsidiary is required to obtain any consent, waiver, authorization or order of,
or make any filing or registration with, any court or other federal, state,
local or other governmental authority in connection with the execution, delivery
and performance by the Company of this Agreement, except for the filing of the
Certificate of Designation with respect to the Series A Preferred Stock with the
Secretary of State of Delaware, which filing shall be effected as soon as
practicable following the execution of this Agreement.
(g) No Default or Violation. Neither the Company nor any
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Subsidiary (i) is in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except such conflicts or defaults
as do not have a Material Adverse Effect, (ii) is in violation of any order of
any court, arbitrator or governmental body, except for such violations as do not
have a Material Adverse Effect, or (iii) is in violation of any statute, rule or
regulation of any governmental authority which could (individually or in the
aggregate) (x) adversely affect the legality, validity or enforceability of this
Agreement, (y) have a Material Adverse Effect or (z) adversely impair the
Company's ability or obligation to perform fully on a timely basis its
obligations under this Agreement.
(h) Certain Fees. No fees or commission will be payable by the
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Company to any investment banker, broker, placement agent or bank with respect
to the consummation of the transactions contemplated hereby.
(i) Reporting Company. The Company is subject to the reporting
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requirements of Section 13 or Section 15(d) of the Exchange Act, and the Company
is current in its reporting requirements.
The Purchasers acknowledge and agree that the Company makes no representation or
warranty with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of the Purchasers. Each Purchaser
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hereby separately represents and warrants to the Company as follows:
(a) Organization; Authority. It the Purchaser is a corporation or
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limited partnership, it is duly incorporated or organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
formation with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated hereby and otherwise
to carry out its obligations hereunder. The acquisition of the Shares to be
purchased by the Purchaser hereunder has been duly authorized by all necessary
action on the part of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser and constitutes the valid and legally binding
obligation of the Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to, or affecting
generally the enforcement of, creditors rights and remedies or by other general
principles of equity.
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(b) Investment Intent. The Purchaser is acquiring the securities
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to be purchased by it hereunder for its own account for investment purposes only
and not with a view to or for distributing or reselling such securities or any
part thereof or interest therein, without prejudice, however, to such
Purchaser's right, subject to the provisions of this Agreement, at all times to
sell or otherwise dispose of all or any part of such securities in compliance
with applicable federal and state securities laws.
(c) Purchaser Status. At the time the Purchaser was offered the
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Shares to be acquired by it hereunder, it was and at the date hereof, it is an
"accredited investor" as defined in Rule 501(a) under the Securities Act.
(d) Experience of Purchaser. The Purchaser has such knowledge,
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sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of an investment in the securities to
be acquired by it hereunder, and has so evaluated the merits and risks of such
investment.
(e) Ability of Purchaser to Bear Risk of Investment. The
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Purchaser is able to bear the economic risk of an investment in the securities
to be acquired by it hereunder and, at the present time, is able to afford a
complete loss of such investment.
(f) Prohibited Transactions. The securities to be acquired by the
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Purchaser hereunder are not being acquired, directly or indirectly, with the
assets of any "employee benefit plan," within the meaning of Section 3(3) of the
Employment Retirement Income Security Act of 1974, as amended.
(g) Access to Information. The Purchaser has full access to the
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Company's filings with the Commission and acknowledges that it has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the Shares offered hereunder and the merits and risks of investing
in such Shares; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment in such Shares; and
(iii) the opportunity to obtain such additional information which the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the
investment.
(h) Reliance. The Purchaser understands and acknowledges that (i)
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the Shares being offered and sold to it hereunder are being offered and sold
without registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act under Section 4(2)
of the Securities Act and (ii) the availability of such exemption depends in
part on, and that the Company will rely upon the accuracy and truthfulness of,
the foregoing representations and such Purchaser hereby consents to such
reliance.
The Company acknowledges and agrees that each Purchaser makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
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ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
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4.1 Manner of Offering. The Shares are being issued pursuant to
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Section 4(2) of the Securities Act. The Shares, the Unit Shares and the
Warrant Shares will bear restrictions on transfer, and will carry a restrictive
legend with respect to the exemption from registration under the Securities Act.
The transfer and resale of the Shares, the Unit Shares and the Warrant Shares
may be made only pursuant to registration under the Securities Act or an
exemption from such registration.
4.2 Listing of Common Stock. The Company shall (a) use its best
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efforts to maintain the listing of its Common Stock on the NASD OTCBB or such
other exchange on which the Common Stock is then listed until expiration of the
period during which the Shares may be converted.
4.3 Conversion and Exercise Procedures. EXHIBIT B attached hereto and
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made a part hereof sets forth the procedures with respect to the conversion of
the Shares, including the forms of Notice of Conversion and Notice of Exercise
to be provided upon conversion or exercise, instructions as to the procedures
for conversion or exercise, the form of legal opinion, if necessary, that shall
be rendered to the Company and such other information and instructions as may be
reasonably necessary to enable the Purchaser or its permitted transferee(s) to
exercise the right of conversion or exercise smoothly and expeditiously.
4.4 Indemnification.
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(a) The Company shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless each
Purchaser and its respective officers, directors, agents, employees and
affiliates, each Person who controls the Purchaser (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) (each such
Person, a "Control Person") and the officers, directors, agents, employees and
affiliates of each such Control Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out
of, or relating to, a breach or breaches of any representation, warranty,
covenant or agreement by the Company under this Agreement.
(b) Each Purchaser, severally and not jointly, shall
notwithstanding termination of this Agreement and without limitation as to time,
indemnify and hold harmless the Company, its officers, directors, agents and
employees, each Control Person and the officers, directors, agents and employees
of each Control Person, to the fullest extent permitted by applicable law, from
and against any and all Losses, as incurred, arising out of, or relating to, a
breach or breaches of any representation, warranty, covenant or agreement by the
Purchaser under this Agreement.
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4.5 Merger or Consolidation. Until all of the Shares have either been
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converted or redeemed, the Company and each Subsidiary will not, in a single
transaction or a series of related transactions, (i) consolidate with or merge
with or into any other Person, or (ii) permit any other Person to consolidate
with or merge into it, unless either (A) the Company shall be the survivor of
such merger or consolidation or (B) the surviving Person shall expressly assume
by supplemental agreement all of the obligations of the Company under the Shares
and this Agreement.
4.6 Piggyback Registration Rights. Piggyback registration rights shall
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apply with regard to the Unit Shares and the Warrant Shares until such time that
the Unit Shares and Warrant Shares may be sold pursuant to Rule 144 under the
General Rules and Regulations under the Securities Act of 1933, as amended.
Such piggyback registration rights shall not be applicable however, to Company
registration statements relating solely to (i) employee benefit plans or (ii)
business combinations.
ARTICLE V
MISCELLANEOUS
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5.1 Fees and Expenses. Except as set forth in this Agreement, each
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party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. Each Purchaser shall be responsible for any taxes payable by the
Purchaser that may arise as a result of the investment hereunder or the
transactions contemplated by this Agreement. Whether or not the transactions
contemplated hereby and thereby are consummated or this Agreement is terminated,
the Company shall pay (i) all costs, expenses, fees and all taxes incident to
and in connection with: (A) the issuance and delivery of the Shares and, upon
conversion thereof, the Unit Shares and the Warrant Shares, (B) the grant of
piggyback registration rights, and (C) the preparation of certificates for the
Shares and, upon conversion thereof, the Unit Shares and Warrant Shares
(including, without limitation, printing and engraving thereof), (ii) all fees
and expenses of counsel and accountants of the Company and (iii) all expenses
and fees of listing on securities exchanges, if any.
5.2 Entire Agreement; Amendments. This Agreement, together with all of
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the Exhibits and Schedules annexed hereto, contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.
This Agreement shall be deemed to have been drafted and negotiated by both
parties hereto and no presumptions as to interpretation, construction or
enforceability shall be made by or against either party in such regard.
5.3 Notices. Any notice or other communication required or permitted
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to be given hereunder shall be in writing and shall be deemed to have been duly
given upon facsimile transmission (with written transmission confirmation
report) at the number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business Day
during normal business hours where such notice is to be received) whichever
shall first occur. The addresses for such communications shall be:
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If to the Company: Assure Energy, Inc.
c/o Assure Oil & Gas Corp.
The Exchange Tower
Box 427, 130 King Street West
Suite 1800
Toronto, Ontario, Canada M5X 1E3
Attn: Xxxxxx Xxxxx-Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With copies to: Xxxxxx Gottbetter & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Purchaser: See SCHEDULE 1 attached hereto
or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.
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5.4 Amendments; Waivers. No provision of this Agreement may be waived
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or amended except in written instrument signed, in the case of an amendment, by
both the Company and the Purchasers, or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
5.5 Headings. The headings herein are for convenience only, do not
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constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of the parties and their respective successors and
permitted assigns. The assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.
5.7 No Third Party Beneficiaries. This Agreement is intended for the
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benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
5.8 Governing Law; Venue; Service of Process. The parties hereto
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acknowledge that the transactions contemplated by this Agreement and the
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exhibits hereto bear a reasonable relation to the State of New York. The
parties hereto agree that the internal laws of the State of New York shall
govern this Agreement and the exhibits hereto. Any action to enforce the terms
of this Agreement or any of its exhibits shall be brought exclusively in the
state and/or federal courts situate in the County and State of New York.
Service of process in any action by Purchaser to enforce the terms of this
Agreement may be made by serving a copy of the summons and complaint, in
addition to any other relevant documents, by commercial overnight courier to the
Company at its address set forth in this Agreement.
5.9 Survival. The representations and warranties of the Company and
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the Purchaser contained in Article III and the agreements and covenants of the
parties contained in Article IV and this Article V shall survive the Closing (or
any earlier termination of this Agreement).
5.10 Counterpart Signatures. This Agreement may be executed in two or
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more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
5.11 Severability. In case any one or more of the provisions of this
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Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
5.12 Limitation of Remedies. With respect to claims by the Company or
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any person acting by or through the Company for remedies at law or at equity
relating to or arising out of a breach of this Agreement, liability, if any,
shall, in no event, include loss of profits or incidental, indirect, exemplary,
punitive, special or consequential damages of any kind.
5.13 Omnibus Provision. Anything contained herein notwithstanding, in
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the event that the Common Stock ceases to be listed for trading on the OTCBB,
then any reference thereto in this Agreement shall be deemed to be a reference
to (a) the principal national securities exchange on which the Common Stock is
then listed or admitted to trading, or (b) if the Common Stock is not then
listed or admitted to trading on any national securities exchange, Nasdaq, or
(c) if the Common Stock is not then listed or admitted to trading on Nasdaq,
then the over-the-counter market reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions of
reporting prices).
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Company:
ASSURE ENERGY, INC.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: President
Purchasers:
PRIVATE INVESTMENT COMPANY, LTD
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: President
FIELDSTON TRADERS LIMITED
By: /s/ Xxxxx Xxx
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Name: Xxxxx Xxx
Title: Attorney-in-Fact
BELESARIUS INDUSTRIES INC.
By: /s/ D.A. Kent
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Name: D. A. Kent
Title: President
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Schedule 1
Purchasers
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Name and Address of Purchaser Purchase Price No. of Shares
----------------------------------- --------------- ---------------
Private Investment Company Ltd. $ 1,250,000 12,500
Xxxxxxx Xxxxx
Xxxx Xxxxxx
X.X. Xxx 00
Xxxxx Xxxx
Turk & Caicos Islands, BWI
----------------------------------- --------------- ---------------
Fieldston Traders Limited $ 250,000 2,500
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
----------------------------------- --------------- ---------------
Belesarius Industries Inc. $ 250,000 2,500
X.X. Xxx X-00000
Xxxxxxxx, Xxxxxxx
----------------------------------- --------------- ---------------
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Schedule 3.1(c)
Capitalization
--------------
The authorized capital stock of the Company consists of (i) 100,000,000
shares of Common Stock, of which 24,684,000 shares are issued and outstanding or
authorized for issuance; and (ii) 5,000,000 shares of preferred stock of which
no shares have been issued or authorized for issuance other than the Shares of
Series A Preferred Stock.
The Company has authorized the issuance of 2,400,000 A Warrants entitling
the holders thereof to acquire one share of the Company's common stock at $.50
per share, at any time or from time to time during the four-year period
commencing on April 23, 2003 and expiring on April 22, 2007. The A Warrants
have registration rights as set forth in that certain Registration Rights
Agreement between the Company and the warrantholders dated as of April 23, 2002.
The Company has authorized the issuance of 2,400,000 B Warrants entitling
the holders thereof to acquire one share of the Company's common stock at $1.00
per share, at any time or from time to time during the four-year period
commencing on April 23, 2003 and expiring on April 22, 2007. The B Warrants
have registration rights as set forth in that certain Registration Rights
Agreement between the Company and the warrantholders dated as of April 23, 2002.
The Company has authorized the issuance of 1,400,000 common stock purchase
warrants which entitle the holders to purchase one share of the Company's common
stock at $1.50 per share for a period of four (4) years commencing May 8, 2003.
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