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exh10-1spinoffagree.txt
Exhibit 2
SUBSIDIARY SPINOFF DISTRIBUTION AGREEMENT
BY AND AMONG
PUROIL TECHNOLOGY INC., AN OREGON CORPORATION,
AND
EMISSION CONTROL INC., A NEVADA CORPORATION,
AS OF JANUARY 6, 2004
THIS SUBSIDIARY DISTRIBUTION AGREEMENT is made and entered into in
duplicate as of January 6, 2004 (this "Agreement"), by and between PUROIL
TECHNOLOGY INC., an Oregon corporation (the "Parent"), and EMISSION CONTROL
INC., a Nevada corporation (the "Subsidiary").
RECITALS:
A. The Board of Directors of the Parent and the Board of Directors of the
Subsidiary have determined that it is appropriate and desirable for the Parent
to spin off the Subsidiary into a publicly traded corporation by distributing to
the holders of the issued and outstanding shares of common stock, par value
$.001 per share, of the Parent certain issued and outstanding shares of common
stock, par value $.001 per share, of the Subsidiary in accordance with the
provisions of Article II of this Agreement (the "Distribution").
B. The parties to this Agreement have determined that it is necessary and
desirable to specify the principal corporate transactions required to effect the
Distribution and to specify other agreements that will relate to and govern
certain other matters prior to and following Distribution.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
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ARTICLE I
DEFINITIONS
As used in this Agreement, in addition to terms defined elsewhere in this
Agreement, the terms specified below in this Article I shall have the
definitions and meanings specified immediately after those terms, unless a
different and common meaning of the term is clearly indicated by the context,
and variants and derivatives of the following terms shall have correlative
meanings. To the extent that certain of the definitions and meanings specified
below suggest, indicate, or express agreements between or among parties to this
Agreement, or specify representations or warranties or covenants of a party, the
parties to this Agreement agree to the same, by execution of this Agreement. The
parties to this Agreement agree that agreements, representations, warranties,
and covenants expressed in any part or provision of this Agreement shall, for
all purposes of this Agreement, be treated in the same manner as other such
agreements, representations, warranties, and covenants specified elsewhere in
this Agreement, and the article or section of this Agreement within which such
an agreement, representation, warranty, or covenant is specified shall have no
separate meaning or effect on the same.
1.1 Action. Any demand, action, suit, arbitration, inquiry, action, or
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investigation by or before any federal, state, local, foreign, or international
Governmental Authority or any arbitration or mediation tribunal.
1.2 Affiliate. With respect to any specified Person, a Person that directly, or
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indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified Person.
1.3 Agent. The distribution agent appointed by the Parent to distribute the
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shares of the Subsidiary's Common Stock pursuant to the Distribution.
1.4 Agreement. This Subsidiary Spinoff Distribution Agreement, including all of
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its schedules and exhibits, if any, and all other documents specifically
referred to in this Agreement that have been or are to be delivered by a party
to this Agreement to another such party in connection with the Distribution or
this Agreement, and including all duly adopted amendments, modifications, and
supplements to or of this Agreement and such schedules, exhibits, and other
documents.
1.5 Audited Financial Statements. The balance sheet, income statement, statement
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of stockholders' equity, and statement of cash flows or, in each instance,
equivalent statements of the Subsidiary, as commonly provided to shareholders,
as of March 31, 2003, as reported on by the Auditors.
1.6 Auditors. Independent certified public accountants currently being retained
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by the Subsidiary for the purpose of auditing financial statements of the
Subsidiary.
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1.7 Business Day. Any day other than a Saturday, a Sunday or a day on which
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banking institutions located in the State of Nevada are authorized or
obligated by law or executive order to close.
1.8 Code. The Internal Revenue Code of 1986, as amended, or any successor
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legislation and the regulations promulgated pursuant thereto.
1.9 Distribution. The distribution to holders of shares of the Parent Common
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Stock to be effected pursuant to Article II of this Agreement, on a pro rata
basis, of the Subsidiary Common Stock determined by the shares of the Parent
Common Stock held of record as of the Record Date.
1.10 Distribution Date. The date, to be determined by the Board of Directors of
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the Parent and the Board of Directors of the Subsidiary, or such committee's of
those Boards of Directors as shall be duly authorized and designated by those
Boards of Directors, as of which the Distribution shall be effected.
1.11 Exchange Act. The Securities Exchange Act of 1934, as amended, together
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with the rules and regulations promulgated pursuant thereto.
1.12 Foreign Exchange Rate. With respect to any currency other than United
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States Dollars as of any date, the average of the bid and asked rates at 9:00
a.m., Pacific Time, on such date at which such currency may be exchanged for
United States Dollars as quoted by the Wall Street Journal.
1.13 GAAP. Generally accepted accounting principles, as in effect on the date of
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any statement, report or determination that purports to be, or is required to
be, prepared or made in accordance with GAAP. All references in this Agreement
to financial statements prepared in accordance with GAAP shall be defined and
mean in accordance with GAAP consistently applied throughout the periods to
which reference is made.
1.14 Governmental Authority. Any federal, state, local, foreign or international
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court, government, department, commission, board, bureau, agency, stock
exchange, securities quotation service, or other regulatory, administrative or
governmental authority.
1.15 Indemnifying Party. A Person who or which is obligated pursuant to this
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Agreement to provide indemnification.
1.16 Indemnitee. A Person who may seek indemnification pursuant to this
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Agreement.
1.17 Indemnity Payment. An amount that an Indemnifying Party is required to pay
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to an Indemnitee pursuant to Article V of this Agreement.
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1.18 IRS. The Internal Revenue Service.
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1.19 Parent. Puroil Technology Inc., an Oregon corporation, as defined in the
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preamble of this Agreement.
1.20 Parent Common Stock. The common stock, par value $.001 per share, of the
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Parent.
1.21 Parent Liabilities. At any point in time ("Determination Time"), the
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obligations of a person, whether known or unknown, contingent or absolute,
recorded on such person's books or not, arising or resulting in any way from
facts, events, agreements, obligations or occurrences that existed or transpired
at a prior point in time, or resulted from the passage of time to the
Determination Time, but not including obligations accruing or payable after the
Determination Time to the extent (but only to the extent) that such obligations
(i) result from previously existing agreements for services, benefits, or other
considerations, and (ii) accrue or become payable with respect to services,
benefits, or other considerations received by the person after the Determination
Time.
1.22 Person. Any individual, company, sole proprietorship, corporation, joint
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venture, association, joint stock company, fraternal order, cooperative, league,
club, society, organization, trust, estate, governmental agency, political
subdivision or authority, firm, municipality, congregation, partnership, or
other form of entity, whether active or passive.
1.23 Record Date. The date determined by the Board of Directors of the Parent
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and the Board of Directors of the Subsidiary, or such committee of those Boards
of Directors and the Board of Directors as shall be authorized and designated by
those Boards of Directors, as the record date for determining stockholders of
the Parent entitled to receive the Distribution.
1.24 References to Times. All references in this Agreement to times of the day
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shall be to Pacific time, except as otherwise specifically provided in this
Agreement.
1.25 Registration Statement. The registration statement on Form SB-2 to effect
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the registration of the Subsidiary Common Stock pursuant to the Securities Act.
1.26 Representative. With respect to any Person, any of such Person's directors,
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officers, employees, agents, consultants, advisors, accountants, partners,
managers, attorneys and representatives.
1.27 SEC. The Securities and Exchange Commission.
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1.28 Securities Act. The Securities Act of 1933, as amended, together with the
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rules and regulations promulgated pursuant thereto.
1.29 Subsidiary. EMISSION CONTROL INC., a Nevada corporation, as defined in
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the preamble of this Agreement.
1.30 Subsidiary Balance Sheet. The audited balance sheet of the Subsidiary as of
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March 31, 2003, and the notes thereto.
1.31 Subsidiary Business. All businesses and operations of the Subsidiary
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conducted by the Subsidiary.
1.32 Subsidiary Common Stock. The common stock, par value $.001 per share, of
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the Subsidiary.
1.33 Subsidiary Liabilities. At any point in time ("Determination Time"), the
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obligations of a person, whether known or unknown, contingent or absolute,
recorded on such person's books or not, arising or resulting in any way from
facts, events, agreements, obligations or occurrences that existed or transpired
at a prior point in time, or resulted from the passage of time to the
Determination Time, but not including obligations accruing or payable after the
Determination Time to the extent (but only to the extent) that such obligations
(i) result from previously existing agreements for services, benefits, or other
considerations, and (ii) accrue or become payable with respect to services,
benefits, or other considerations received by the person after the Determination
Time.
1.34 Third Party. A Person who is not a party to this Agreement.
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1.35 Third Party Claim. Any claim, suit, arbitration, inquiry, proceeding or
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investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal asserted by a
Third Party.
ARTICLE II
DISTRIBUTION
2.1 Record Date and Distribution Date. Subject to the satisfaction or waiver of
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the conditions specified in this Agreement, the Board of Directors of the Parent
and the Board of Directors of the Subsidiary, or such committees of those Boards
of Directors as shall be authorized and designated by those Boards of Directors,
shall establish the Record Date and the Distribution Date and any appropriate
procedures in connection with the Distribution.
2.2 The Agent. Prior to the Distribution Date, the Parent and the Subsidiary
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shall enter into an agreement with the Agent providing for, among other things,
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the distribution to the holders of Parent Common Stock of the appropriate shares
of the Subsidiary in accordance with this Article II.
2.3 Delivery of Share Certificates to the Agent. Prior to or as of the
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Distribution Date, the Parent shall deliver to the Agent the share certificate
representing the issued and outstanding shares of Subsidiary Common Stock to be
distributed in connection with the Distribution. After the Distribution Date,
upon the request of the Agent, the Subsidiary shall provide all certificates for
shares of Subsidiary Common Stock or other evidence of ownership that the Agent
shall require in order to effect the Distribution.
2.4 Distribution. Except as otherwise contemplated by this Agreement, the Parent
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and the Subsidiary shall instruct the Agent to distribute, as of the
Distribution Date, shares of Subsidiary Common Stock, on a pro rata basis,
determined by the shares of the Parent Common Stock held by holders of record of
the Parent Common Stock on the Record Date. All shares of the Subsidiary Common
Stock issued in the Distribution shall be duly authorized, validly issued, fully
paid and nonassessable and the holders thereof will not be entitled to
preemptive rights. As soon as practicable after the Distribution Date
certificates for shares of the Subsidiary Common Stock will be mailed by the
Agent to such holders of record as of the Record Date.
2.5 Fractional Shares. No certificates or scrip representing fractional
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interests in a share of Subsidiary Common Stock will be issued. Instead, the
Agent, will, as soon as practicable after the Distribution Date, determine the
number of whole shares and fractional shares of the Subsidiary Common Stock
allocable to each holder of record of the Parent Common Stock as of the Record
Date, and to cause to be distributed to each such holder, in lieu of any
fractional share, one additional share of the Subsidiary Common Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARENT
The Parent hereby represents and warrants to the Subsidiary the following:
3.1 Organization And Qualification. The Parent is a corporation duly organized,
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validly existing, and in good standing pursuant to the laws of its jurisdiction
of incorporation and has the requisite corporate power and authority to conduct
its business as that business is now being conducted. The Parent is duly
qualified as a foreign corporation to do business, and in good standing, in each
jurisdiction where the character of the properties owned or leased by it, or the
nature of its activities, is such that qualification as a foreign corporation in
that jurisdiction is required by law.
3.2 Authority Relative to This Agreement. The Parent has the requisite corporate
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power and authority to enter into this Agreement and to carry out its
obligations created by this Agreement. The execution and delivery of this
Agreement and the consummation of the Distribution have been duly authorized and
approved by the requisite corporate authority of the Parent and no other
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corporate proceedings on the part of the Parent are necessary to approve and
adopt this Agreement or to approve the consummation of the Distribution. This
Agreement has been duly and validly executed and delivered by the Parent and
constitutes a valid and binding obligation of the Parent, enforceable in
accordance with its terms.
3.3 Absence of Breach; No Consents. The execution, delivery, and performance of
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this Agreement, and the performance by the Parent of its obligations created by
this Agreement, do not (i) conflict with or result in a breach of any of the
provisions of the Certificate of Incorporation (or similar charter document) or
Bylaws (or similar governing document) of the Parent; (ii) contravene any law,
ordinance, rule, or regulation of any state or political subdivision of either
or of the United States or of any applicable foreign jurisdiction, or contravene
any order, writ, judgment, injunction, decree, determination, or award of any
court or other authority having jurisdiction, or cause the suspension or
revocation of any authorization, consent, approval, or license, presently in
effect, which affects or obligates the Parent or any of its material properties,
except in any event when such contravention will not have a material adverse
effect on the business, condition (financial or otherwise), operations or
prospects of the Parent, and will not have a material adverse effect on the
validity of this Agreement or on the validity of the consummation the
Distribution; (iii) conflict with or result in a material breach of or default
pursuant to any material indenture or loan or credit agreement or any other
material agreement or instrument to which the Parent is a party or by which the
Parent may be affected or obligated; (iv) require the authorization, consent,
approval, or license of any third party; or (v) constitute any reason for the
loss or suspension of any permits, licenses, or other authorizations used in the
business of the Parent.
3.4 Brokers. No broker, finder, or investment banker is entitled to any
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brokerage, finder's, or other fee or commission in connection with this
Agreement or the Distribution or any related transaction based upon any
agreements, written or oral, made by or on behalf of the Parent. The Parent does
not have any obligation to pay finder's or broker's fees or commissions in
connection with the exercise of options to renew or extend real estate leases to
which the Parent is a party.
3.5 Full Disclosure. The documents, certificates, and other writings furnished
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or to be furnished by or on behalf of the Parent to the Subsidiary pursuant to
this Agreement, taken together in the aggregate, do not and will not contain any
untrue statement of a material fact, or omit to specify any material fact
necessary to make the statements made, considering the circumstances pursuant to
which they are made, not misleading.
3.6 Parent's Ownership Representations. The Parent represents and warrants to
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the Subsidiary that the Parent owns the shares of the Subsidiary Common Stock
free and clear of any and all liens, claims, encumbrances, and rights of Third
Parties.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SUBSIDIARY
The Subsidiary hereby represents and warrants to the Parent the following:
4.1 Organization And Qualification. The Subsidiary is a corporation duly
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organized, validly existing, and in good standing pursuant to the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to conduct its business as that business is now being conducted. The
Subsidiary is duly qualified as a foreign corporation to do business, and in
good standing, in each jurisdiction where the character of the properties owned
or leased by it, or the nature of its activities, is such that qualification as
a foreign corporation in that jurisdiction is required by law.
4.2 Authority Relative to This Agreement. The Subsidiary has the requisite
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corporate power and authority to enter into this Agreement and to carry out its
obligations created by this Agreement. The execution and delivery of this
Agreement and the consummation of the Transaction have been duly authorized and
approved by the requisite corporate authority of the Subsidiary and no other
corporate proceedings on the part of the Subsidiary are necessary to approve and
adopt this Agreement or to approve the consummation of the Transaction. This
Agreement has been duly and validly executed and delivered by the Subsidiary and
constitutes a valid and binding obligation of the Subsidiary, enforceable in
accordance with its terms.
4.3 Absence of Breach; No Consents. The execution, delivery, and performance of
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this Agreement, and the performance by the Subsidiary of its obligations created
by this Agreement, do not (i) conflict with or result in a breach of any of the
provisions of the Articles of Incorporation (or similar charter document) or
Bylaws (or similar governing document) of the Subsidiary; (ii) contravene any
law, ordinance, rule, or regulation of any state or political subdivision of
either or of the United States or of any applicable foreign jurisdiction, or
contravene any order, writ, judgment, injunction, decree, determination, or
award of any court or other authority having jurisdiction, or cause the
suspension or revocation of any authorization, consent, approval, or license,
presently in effect, which affects or obligates the Subsidiary or any of its
material properties, except in any event when such contravention will not have a
material adverse effect on the business, condition (financial or otherwise),
operations or prospects of the Subsidiary, and will not have a material adverse
effect on the validity of this Agreement or on the validity of the consummation
the Distribution; (iii) conflict with or result in a material breach of or
default pursuant to any material indenture or loan or credit agreement or any
other material agreement or instrument to which the Subsidiary is a party or by
which the Subsidiary may be affected or obligated; (iv) require the
authorization, consent, approval, or license of any third party; or (v)
constitute any reason for the loss or suspension of any permits, licenses, or
other authorizations used in the business of the Subsidiary.
4.4 Brokers. No broker, finder, or investment banker is entitled to any
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brokerage, finder's, or other fee or commission in connection with this
Agreement or the Distribution or any related transaction based upon any
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agreements, written or oral, made by or on behalf of the Subsidiary. The
Subsidiary does not have any obligation to pay finder's or broker's fees or
commissions in connection with the exercise of options to renew or extend real
estate leases to which the Subsidiary is a party.
ARTICLE V
INDEMNIFICATION
5.1 Indemnification. (a) From and after the Distribution Date, the Parent shall
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retain or assume, as the case may be, and shall indemnify, defend and hold
harmless of the Subsidiary, and each of its Representatives and Affiliates, from
and against, all Parent Liabilities.
(b) From and after the Distribution Date, the Subsidiary shall retain or
assume, as the case may be, and shall indemnify, defend and hold harmless the
Parent and each of its Representatives and Affiliates, from and against, all
Subsidiary Liabilities.
(c) If any Indemnity Payment required to be made hereunder is denominated
in a currency other than United States Dollars, the amount of such payment, at
the election of the Indemnifying Party, may be reimbursed in local currency or
shall be translated into United States Dollars using the Foreign Exchange Rate
for such currency determined in accordance with the following:
5.2 Procedure for Indemnification. (a) If any Indemnitee receives notice of the
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assertion of any Third Party Claim with respect to which an Indemnifying Party
is obligated pursuant to this Agreement to provide indemnification, such
Indemnitee shall give such Indemnifying Party notice thereof promptly after
becoming aware of such Third Party Claim; provided, however, that the failure of
any Indemnitee to give notice as provided in this Section 5.2 shall not relieve
any Indemnifying Party of its obligations pursuant to this Article V, except to
the extent that such Indemnifying Party is actually prejudiced by such failure
to give notice. Such notice shall describe such Third Party Claim in reasonable
detail and, if practicable, shall indicate the estimated amount of the
Indemnifiable Loss that has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party, at such Indemnifying Party's own expense and
through counsel chosen by such Indemnifying Party (which counsel shall be
reasonably satisfactory to the Indemnitee), may elect to defend any Third Party
Claim. If an Indemnifying Party elects to defend a Third Party Claim, then,
within 15 Business Days after receiving notice of such Third Party Claim or
sooner (but in no event less than 5 Business Days) if the nature of such Third
Party Claim so requires), such Indemnifying Party shall notify the Indemnitee of
its intent to do so. Such Indemnitee shall thereupon use reasonable efforts to
make available to such Indemnifying Party, at such Indemnifying Party's expense,
such assistance in support of the prosecution or defense of such litigation as
the Indemnifying Party may reasonably request, including without limitation, the
right to assert in the name of the Indemnitee such rights, claims, counterclaims
or defenses that such Indemnitee would be or would have been permitted to assert
in such litigation or in the prosecution of a claim or counterclaim against a
Third Party or in defense against such Third Party Claim had the Distribution
not occurred. Such Indemnifying Party shall pay such Indemnitee's reasonable
out-of-pocket expenses incurred in connection with such cooperation. Except as
specified in this Agreement, after notice from an Indemnifying Party to an
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Indemnitee of its election to assume the defense of a Third Party Claim, such
Indemnifying Party shall not be liable to such Indemnitee pursuant to this
Article V for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof. If an Indemnifying Party
elects not to defend against a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in this Section 5.2 within the period of
15 (or 5, if applicable) Business Days described above, such Indemnitee may
defend, compromise and settle such Third Party Claim; provided, however, that no
such Indemnitee may compromise or settle any such Third Party Claim without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
(c) Notwithstanding the foregoing, the Indemnifying Party shall not,
without the prior written consent of the Indemnitee, settle or compromise any
Third Party Claim or consent to the entry of any judgment which does not include
as an unconditional term thereof the delivery by the claimant or plaintiff to
the Indemnitee of a written release from all Liability in respect of such Third
Party Claim.
(d) If an Indemnifying Party chooses to defend or to seek to compromise
any Third Party Claim, the related Indemnitee shall make available to such
Indemnifying Party any personnel or any books, records or other documents within
its control or which it otherwise has the ability to make available that are
necessary or appropriate for such defense.
(e) Any claim on account of an Indemnifiable Loss arising out of or due to
the failure to pay, perform or discharge in due course its respective
Liabilities by any party who has an obligation with respect thereto but which
does not result from a Third Party Claim shall be asserted by written notice
given by the Indemnitee to the Indemnifying Party. Such Indemnifying Party shall
have a period of 30 days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such 30-day
period, such Indemnifying Party shall be deemed to have refused to accept
responsibility to make payment. If such Indemnifying Party does not respond
within such 30-day period or rejects such claim in whole or in part, such
Indemnitee shall be free to pursue such remedies as may be available to such
party.
(f) If the amount of any Indemnifiable Loss shall, at any time subsequent
to the payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
(g) In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right or claim, including without
limitation, permitting the Indemnifying Party to bring suit against such Third
Party in the name of the Indemnitee.
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ARTICLE VI
FURTHER ASSURANCES
In addition to the actions specifically provided for elsewhere in this Agreement
and unless otherwise expressly provided in this Agreement, each of the parties
hereto shall use its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things reasonably necessary, proper
or advisable under applicable laws, regulations and agreements to consummate and
make effective the transactions contemplated by this Agreement. Without limiting
the foregoing, each party hereto shall cooperate with the other party, and
execute and deliver, or use its reasonable efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any governmental or regulatory authority or any other Person
under any permit, license, agreement, indenture or other instrument, and take
all such other actions as such party may reasonably be requested to take by any
other party hereto from time to time, consistent with the terms of this
Agreement, in order to effectuate the provisions and purposes of this Agreement
and the transactions contemplated hereby. Without limiting the generality of the
foregoing, the Parent, as a stockholder of Subsidiary prior to the Distribution,
shall ratify any actions which are reasonably necessary or desirable to be taken
by the Subsidiary to effectuate the transactions contemplated by this Agreement
in a manner consistent with the terms of this Agreement.
ARTICLE VII
ACCESS TO INFORMATION
7.1 Access to Information. From and after the Distribution Date and upon
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reasonable notice, the Parent and the Subsidiary shall afford to the other and
to the other's Representatives at the expense of the other party, reasonable
access and duplicating rights during normal business hours to all Information
developed or obtained prior to the Distribution Date within such party's
possession relating to the other party or its business, insofar as such access
is reasonably requested by such other party, but subject to the applicable
confidentiality provisions and restricted use provisions, if any, specified in
this Agreement and any confidentiality restrictions imposed by law. In addition,
without limiting the foregoing, Information may be requested pursuant to this
Section 7.1 for audit, accounting, claims, intellectual property protection,
litigation and tax purposes, as well as for purposes of fulfilling disclosure
and reporting obligations. In each case, the requesting party agrees to
cooperate with the other party to minimize the risk of unreasonable interference
with the other party's business. In the event access to any Information
otherwise required to be granted herein is restricted by law or otherwise, the
parties agree to take such actions as are reasonably necessary, proper or
advisable to have such restrictions removed or to seek an exemption therefrom or
to otherwise provide the requesting party with the benefit of the Information to
the same extent such actions would have been taken on behalf of the requesting
party had such a restriction existed and the Distribution not occurred.
7.2 Confidentiality. From and after the Distribution Date, each of Parent and
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the Subsidiary shall hold, and shall use its reasonable best efforts to cause
its employees, Affiliates and Representatives to hold, in strict confidence all
Information concerning or belonging to other party obtained by it prior to the
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Distribution Date or furnished to it by such other party pursuant to this
Agreement and shall not release or disclose such Information to any other
Person, except its Representatives, who shall be obligated by the provisions of
this Section 6.06; provided, however, that Parent and Subsidiary and their
respective employees, Affiliates and Representatives may disclose such
Information to the extent that (a) disclosure is compelled by judicial or
administrative process or, in the opinion of such party's counsel, by other
requirements of law, or (b) such party can prove that such Information was (1)
available to such party after the Distribution Date from Third Party sources
other than employees or former employees of either party, their Affiliates,
former Affiliates, Representatives or former Representatives, on a
nonconfidential basis prior to its disclosure to such party after the
Distribution Date by the other party, (2) in the public domain through no fault
of such party, (3) lawfully acquired by such party from Third Party sources
other than employees or former employees of either party, their Affiliates,
former Affiliates, Representatives or former Representatives, after the time
that it was furnished to such party pursuant to this Agreement or the Other
Agreements or (4) is independently discovered or developed after the
Distribution Date by employees of such party. Notwithstanding the foregoing,
each of the Parent and the Subsidiary and their respective Representatives and
Affiliates shall be deemed to have satisfied its obligations pursuant to this
Section 7.2 with respect to any Information if it exercises the same care with
regard to such Information as it takes to preserve confidentiality for its own
similar Information.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS
The obligations of the parties hereto to consummate the Distribution are subject
to the satisfaction, as determined by each party, in its sole discretion, of
each of the following conditions:
8.1 Obligations of the Parent.
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(1) The Distribution shall have been approved by Board of Directors of the
Parent;
(2) The Registration Statement shall have been filed with the SEC and
shall have become effective, and no stop order with respect thereto shall be in
effect;
(3) All material authorizations, consents, approvals and clearances of
federal, state, local and foreign governmental agencies required to permit the
valid consummation by the parties hereto of the transactions contemplated by
this Agreement shall have been obtained; and all statutory requirements for such
valid consummation shall have been fulfilled.
(4) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, shall be in effect preventing the consummation of the Distribution;
(5) The foregoing conditions are for the sole benefit of the Parent and
shall not give rise to any duty on the part of the Parent or its Board of
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Directors to waive or not waive any such condition. Any determination made by
the Board of Directors of the Parent in good faith on or prior to the
Distribution Date concerning the satisfaction or waiver of any or all of the
conditions set forth in this Agreement shall be conclusive.
8.2 Obligations of the Subsidiary.
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(1) The Distribution shall have been approved by Board of Directors of the
Subsidiary;
(2) The Registration Statement shall have been filed with the SEC and
shall have become effective, and no stop order with respect thereto shall be in
effect;
(3) All material authorizations, consents, approvals and clearances of
federal, state, local and foreign governmental agencies required to permit the
valid consummation by the parties hereto of the transactions contemplated by
this Agreement shall have been obtained; and all statutory requirements for such
valid consummation shall have been fulfilled.
(4) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, shall be in effect preventing the consummation of the Distribution;
(5) The foregoing conditions are for the sole benefit of the Subsidiary
and shall not give rise to any duty on the part of the Subsidiary or its Board
of Directors to waive or not waive any such condition. Any determination made by
the Board of Directors of the Subsidiary in good faith on or prior to the
Distribution Date concerning the satisfaction or waiver of any or all of the
conditions set forth in this Agreement shall be conclusive.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. Any notice, direction or instruction required or permitted to be
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given pursuant to this Agreement shall be given in writing by (a) telegram,
facsimile transmission or similar method, if confirmed by mail as provided in
this Agreement, (b) by mail, if mailed postage prepaid, by certified mail,
return receipt requested; or (iii) hand delivery to any party to this Agreement
at the address of such party specified below. If given by telegram or facsimile
transmission or similar method or by hand delivery, such notice, direction or
instruction shall be deemed to have been given or made on the day on which such
notice, direction or instruction was delivered, and if mailed, such notice,
direction or instruction shall be deemed to have been given or made on the
second (2nd) business day following the day after which such notice, direction
or instruction was mailed. Any party to this Agreement may, from time to time by
similar notice, give notice of any change of address and, in such event, the
address of such party shall be deemed to be changed accordingly. The address,
telephone number and facsimile transmission number for the notice of each party
are:
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If to the Parent: PUROIL TECHNOLOGY INC.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇▇▇. ▇▇▇. ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
If to the Subsidiary: EMISSION CONTROL INC.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇▇▇. ▇▇▇. ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
9.2 Recovery of Enforcement Costs. In the event any party to this Agreement
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shall institute any action or proceeding to enforce any provision of this
Agreement, to seek relief from any violation of this Agreement, or to otherwise
obtain any judgment or order relating to or arising from the subject matter of
this Agreement, each prevailing party in such action or proceeding shall be
entitled to receive from each losing party such prevailing party's actual
attorneys' fees and costs incurred to prosecute or defend such action or
proceeding.
9.3 Assignment. No party to this Agreement shall have the right, without the
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consent of the other parties to this Agreement, to assign, transfer, sell,
pledge, hypothecate, delegate, or otherwise transfer, whether voluntarily,
involuntarily or by operation of law, any of such party's rights or obligations
created by the provisions of this Agreement, nor shall the parties' rights
created by the provisions of the Agreement be subject to encumbrance or the
claim of creditors. Any such purported assignment, transfer, or delegation shall
be null and void.
9.4 Captions and Interpretations. Captions of the articles and sections of this
- ---------------------------------
Agreement are for convenience and reference only, and the words specified
therein shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction, or meaning of the provisions of this Agreement.
The language in all parts to this Agreement, in all events, shall be construed
in accordance with the fair meaning of that language, as if prepared by all
parties to this Agreement and not strictly for or against any party to this
Agreement. Each party to this Agreement has reviewed and read this Agreement
carefully. The rule of construction, which requires a court to resolve any
ambiguities against the drafting party, shall not apply in interpreting the
provisions of this Agreement.
9.5 Entire Agreement. This Agreement is the final written expression and the
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complete and exclusive statement of all the agreements, conditions, promises,
representations, warranties and covenants between the parties to this Agreement
with respect to the subject matter of this Agreement, and this Agreement
supersedes all prior or contemporaneous agreements, negotiations,
representations, warranties, covenants, understandings and discussions by and
between and among those parties, their respective representatives, and any other
person, with respect to the subject matter specified in this Agreement.
9.6 Waiver and Modification. No modification, supplement or amendment of this
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Agreement or of any covenant, representation, warranty, condition, or limitation
specified in this Agreement shall be valid unless the same is made in writing
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and duly executed by all parties to this Agreement. No waiver of any covenant,
representation, warranty, condition, or limitation specified in this Agreement
shall be valid, unless the same is made in writing and duly executed by the
party making the waiver. No waiver of any provision of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision of this Agreement,
whether or not similar, nor shall any waiver of any provision of this Agreement
constitute a continuing waiver of that provision.
9.7 Further Assurances. The parties to this Agreement shall from time to time
- ------------------------
sign and deliver any further instruments and take any further actions as may be
necessary to effectuate the intent and purposes of this Agreement.
9.8 Number and Gender. Whenever the singular number is used in this Agreement
- ----------------------
and, when required by the context, the same shall include the plural, and vice
versa; the masculine gender shall include the feminine and the neuter genders,
and vice versa.
9.9 Successors and Assigns. This Agreement and each of its provisions shall
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obligate the heirs, executors, administrators, successors, and assigns of each
of the parties to this Agreement. Nothing specified in this section, however,
shall be a consent to the assignment or delegation by any party of such party's
respective rights and obligations created by the provisions of this Agreement.
9.10 Third Party Beneficiaries. Except as expressly specified by the provisions
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of this Agreement, this Agreement shall not be construed to confer upon or give
to any person, other than the parties to this Agreement, any right, remedy or
claim pursuant to, or by reason of, this Agreement or of any term or condition
of this Agreement.
9.11 Severability. In the event any part of this Agreement, for any reason, is
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determined by a court of competent jurisdiction to be invalid, such
determination shall not affect the validity of any remaining portion of this
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated. It
is hereby declared the intention of the parties to this Agreement that those
parties would have executed the remaining portion of this Agreement without
including any such part, parts, or portion which, for any reason, may be
hereafter determined to be invalid.
9.12 Governmental Rules and Regulations. The Distribution is and shall remain
- ------------------------------------------
subject to any and all present and future orders, rules and regulations of any
duly constituted authority having jurisdiction of the Distribution.
9.13 Execution in Counterparts. This Agreement may be prepared in multiple
- ----------------------------------
copies and forwarded to each of the parties for execution. All of the signatures
of the parties to this Agreement may be affixed to one copy or to separate
copies of this Agreement and when all such copies are received and signed by all
of those parties, those copies shall constitute one agreement, which is not
otherwise separable or divisible. Counsel for the Subsidiary shall keep all of
such signed copies and shall conform one copy to show all of those signature
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and the dates thereof and shall mail a copy of such conformed copy to each of
those parties within thirty (30) days after the receipt by such counsel of the
last signed copy, and such counsel shall cause one such conformed copy to be
filed in the principal office of such counsel.
9.14 Reservation of Rights. The failure of any party to this Agreement at any
- -----------------------------
time or times to require strict performance by any other party to this Agreement
of any of the warranties, representations, covenants, terms, conditions and
provisions specified in this Agreement shall not waive, affect or diminish any
right of such party failing to require strict performance to demand strict
compliance and performance therewith and with any other provisions, warranties,
terms, and conditions specified in this Agreement.
9.15 Survival of Covenants, Representations and Warranties. All covenants,
- ---------------------------------------------------------------
representations, and warranties made by each party to this Agreement shall be
deemed made for the purpose of inducing the other parties to this Agreement to
enter into and execute this Agreement. The representations, warranties, and
covenants specified in this Agreement shall survive the Distribution Date and
shall survive any investigation by any such party, whether before or after the
execution of this Agreement. The covenants, representations, and warranties of
the Company, on the one hand, the Subsidiary, on the other hand, are made only
to and for the benefit of each other and shall not create or vest rights in
other persons.
9.16 Concurrent Remedies. No right or remedy specified in this Agreement
- ---------------------------
conferred on or reserved to the parties to this Agreement is exclusive of any
other right or remedy specified in this Agreement or by law or equity provided
or permitted; but each such right and remedy shall be cumulative of, and in
addition to, every other right and remedy specified in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, and may be
enforced concurrently therewith or from time to time. The termination of this
Agreement for any reason whatsoever shall not prejudice any right or remedy
which any party may have, either at law, in equity, or pursuant to the
provisions of this Agreement.
9.17 Governing Law. This Agreement shall be deemed to have been entered into in
- -------------------
the State of Nevada, and all questions concerning the validity, interpretation,
or performance of any of the terms, conditions and provisions of this Agreement
or of any of the rights or obligations of the parties shall be governed by,
and resolved in accordance with, the laws of the State of Nevada, without regard
to conflicts of law principles. Any and all actions or proceedings, at law
or in equity, to enforce or interpret the provisions of this Agreement shall be
litigated in courts having sites within the State of Nevada. No claim, demand,
action, proceeding, litigation, hearing, motion or lawsuit resulting from or
with respect to this Agreement shall be commenced or prosecuted in any juris-
diction other than the State of Nevada, and any judgment, determination, finding
or conclusion reached or rendered in any other jurisdiction shall be null and
void. Each party to this Agreement hereby consents expressly to the jurisdiction
of any local, state or federal court located within the State of Nevada and
consents that any service of process in such action or proceeding may be made by
personal service upon such party wherever such party may be then located, or
by certified or registered mail directed to such party at such party's last
known address.
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9.18 Force Majeure. If any party to this Agreement is rendered unable,
- ---------------------
completely or partially, by the occurrence of an event of "force majeur
as
that term is defined later in this section) to perform such party's obligations
created by the provisions of this Agreement, such party shall give to each other
party to this Agreement prompt written notice of the event of "force majeure"
with reasonably complete particulars concerning such event; thereupon, the
obligations of the party giving such notice, so far as those obligations are
affected by the event of "force majeure," shall be suspended during, but no
longer than, the continuance of the event of "force majeure." The party to this
Agreement affected by such event of "force majeure" shall use all reasonable
diligence to resolve, eliminate and terminate the event of "force majeure" as
quickly as practicable. The requirement that an event of "force majeure" shall
be remedied with all reasonable dispatch as specified in this section, shall not
require the settlement of strikes, lockouts or other labor difficulties by the
party involved, contrary to such party's wishes, and the resolution of any and
all such difficulties shall be handled entirely within the discretion of the
party concerned. The term "force majeure" as used in this section shall be
defined as and mean any act of God, strike, civil disturbance, terrorism,
lockout or other industrial disturbance, act of the public enemy, war, blockade,
public riot, earthquake, tornado, hurricane, lightning, fire, public
demonstration, storm, catastrophe, flood, explosion, governmental action,
governmental delay, restraint or inaction, unavailability of equipment, and any
other cause or event, whether of the type enumerated specifically in this
section or otherwise, which is not reasonably within the control of the party to
this Agreement claiming such suspension.
9.19 Consent to Agreement. By executing this Agreement, each party to this
- ---------------------------
Agreement, for himself, herself, or itself, represents such party has read or
caused to be read this Agreement in all particulars, and consents to the rights,
conditions, duties and responsibilities imposed upon such party as specified in
this Agreement. Each party to this Agreement represents, warrants and covenants
that such party executes and delivers this Agreement of such party's own free
will and with no threat, undue influence, menace, coercion or duress, whether
economic or physical. Moreover, each party to this Agreement represents,
warrants, and covenants that such party executes this Agreement acting on such
party's own independent judgment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
PARENT: SUBSIDIARY:
PUROIL TECHNOLOGY INC., EMISSION CONTROL INC.,
an Oregon corporation a Nevada corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ --------------------------------
Its: Authorized Representative Its: President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Its: Secretary
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