SECURITIES PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇ REVERSE MERGER FUND, LLC
AS
BUYER
AND
CHISTE CORPORATION
THE COMPANY
AND
AZTORE HOLDINGS, INC.
THE
SELLING NOTEHOLDER
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is entered into as of
May 4, 2004, by and among ▇▇▇▇▇▇▇ Reverse Merger Fund, LLC, a Delaware limited
liability corporation ("BUYER"), Chiste Corporation, a Nevada corporation (the
"COMPANY"), and Aztore Holdings, Inc., (the "SELLING NOTEHOLDER"). Each of the
Buyer, the Company and the Selling Noteholder is referred to herein as a "PARTY"
and they may be referred to collectively as "PARTIES".
RECITALS
A. The Company desires and intends to sell the "SHARES" (as defined
below) to Buyer, in a privately negotiated transaction, at the price and on the
terms and conditions set forth below.
B. The Selling Noteholder owns the "NOTES" (as defined below) and
desires and intends to sell the Notes to Buyer, in a privately negotiated
transaction, at the price and on the terms and conditions set forth below.
C. Buyer desires and intends to purchase the Shares from the Company,
to purchase the Notes from the Selling Noteholder and to convert the Notes, all
at the prices, conversion rates and on the terms and conditions set forth below.
AGREEMENT
In consideration of the terms hereof, the Parties agree as follows:
ARTICLE I - DEFINITIONS
1.1. "ACT": As defined in Section 5.4.
1.2. "AGREEMENT": As defined in the opening paragraph hereof.
1.3. "BUYER": As defined in the opening paragraph hereof.
1.4. "CLOSING": As defined in Section 2.8.
1.5. "CLOSING DATE": The date, time and place of Closing as specified in
Section 2.8.
1.6. "COMPANY": As defined in the opening paragraph hereof.
1.7. "COMMON STOCK": As defined in Section 3.2(a).
1.8. "CONVERSION SHARES": As defined in Section 2.5.
1.9. "ENCUMBRANCE": Any lien, mortgage, deed of trust, pledge, security
interest, charge or other adverse claim or interest of any kind.
1.10. "ESCROW AGENT": As defined in the Escrow Agreement.
1.11. "ESCROW AGREEMENT": As defined in Section 2.6.
1.12. "FINANCIAL STATEMENTS": As defined in Section 3.4(a).
1.13. "GAAP": Generally accepted accounting principles in the United
States.
1.14. "GE LIABILITY": The amounts that are owed to a division of GE Capital
Colonial Pacific Leasing which has conversion rights.
1.15. "IRS": The United States Internal Revenue Service.
1.16. "KNOWLEDGE": Representations and warranties to a Party's knowledge
mean that in acquiring such knowledge, the Party representing and
warranting such knowledge has engaged in reasonable inquiry and
investigation.
1.17. "NOTES": The Notes to be purchased by Buyer from the Selling
Noteholder consist of secured convertible notes issued by the Company
to the Selling Noteholder and are specifically identified and
described on Schedule 1.16 hereto. The Notes bear interest at a rate
of 10% per annum and are convertible into shares of the Company's
Common Stock at a conversion price determined in any arm's length
transaction between the Company and a third Party under which the
Company receives cash or in kind more than $50,000 from the third
Party.
1.18. "NOTE PURCHASE PRICE": The aggregate purchase price for the Notes as
defined in Section 2.4.
1.19. "PERSON": Any person, corporation, partnership, joint venture,
association, organization, other entity or governmental or regulatory
authority.
1.20. "SEC": As defined in Section 3.7.
1.21. "SELLING NOTEHOLDER": As defined in the opening paragraph hereof.
1.22. "SHARE PURCHASE PRICE": The aggregate purchase price for the Shares
as defined in Section 2.2.
1.23. "SHARES": The capital stock of the Company to be purchased by Buyer,
consisting of 800,000 shares of the Company's Common Stock which, when
issued prior to any conversion of the Notes, will constitute not less
than 48% of the then issued and outstanding Common Stock of the
Company.
1.24. "TAX RETURNS": As defined in Section 3.6(a).
1.25. "TRANSACTION DOCUMENTS": This Agreement and each of the agreements,
certificates, instruments and documents executed or delivered pursuant
to the terms of this Agreement, including, but not limited to the
Escrow Agreement.
ARTICLE II - PURCHASE, SALE AND CONVERSION OF SECURITIES
2.1 PURCHASE AND SALE OF SHARES
On the terms and subject to the conditions of this Agreement, Buyer agrees
to purchase the Shares from the Company and the Company agrees to sell the
Shares to Buyer.
2.2 CONSIDERATION FOR SHARES
The aggregate purchase price for the Shares is Eighty Thousand Dollars
($80,000.00) ($0.10 per Share) (the "SHARE PURCHASE PRICE"), payable as set
forth in Section 2.6.
2.3 PURCHASE AND SALE OF NOTES
On the terms and subject to the conditions of this Agreement, Buyer agrees
to purchase the Notes from the Selling Noteholder and the Selling Noteholder
agrees to sell the Notes to Buyer.
2.4 CONSIDERATION FOR NOTES
The aggregate purchase price for the Notes is Three Hundred Sixty Thousand
Dollars ($360,000.00) (the "NOTE PURCHASE PRICE"), payable as set forth in
Section 2.7.
2.5 AMOUNT AND CONVERSION OF NOTES
The Parties agree that the amount owed Aztore under the Secured Notes is
Six Hundred and Sixty-Four Thousand Five Hundred Dollars ($664,500). On the
terms and subject to the conditions of this Agreement, Buyer, concurrently with
the Closing, will instruct the Escrow Agent to deliver the Notes to the Company
with instructions and the Notice of Election to Convert Notes, in substantially
the form attached hereto as Schedule 2.5, into 6,645,000 shares of the Company's
Common Stock (the "CONVERSION SHARES"), which Conversion Shares when aggregated
with the Shares, shall represent not less than 89.5% of the then issued and
outstanding Common Stock of the Company, after giving effect to the transactions
contemplated by this Agreement.
2.6 PAYMENT OF PURCHASE PRICE FOR SHARES
The Share Purchase Price shall be delivered by Buyer to the Escrow Agent to
be held in accordance with the terms of the escrow agreement attached hereto as
Exhibit A (the "ESCROW AGREEMENT") and, at the Closing, the Escrow Agent will,
by wire transfer pursuant to the wire transfer instructions attached hereto as
Schedule 2.6, deliver the Share Purchase Price to the Company.
2.7 PAYMENT OF PURCHASE PRICE FOR NOTES
The Note Purchase Price shall be delivered by Buyer to the Escrow Agent, to
be held pursuant to the Escrow Agreement and, at the Closing, the Escrow Agent
will, by wire transfer pursuant to the wire transfer instructions attached
hereto as Schedule 2.7, deliver the Note Purchase Price to the Noteholder.
2.8 CLOSING
The closing of the transactions contemplated herein (the "CLOSING") shall
be on May 4, 2004 at the offices of ▇▇▇▇▇▇▇ Investments, LLC, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or such other date, time, and place as
the Buyer, the Company and the Selling Noteholder shall agree (the "CLOSING
DATE"). At the Closing, each of Buyer, the Company, and the Selling Noteholder
shall take all such action and deliver all such funds, documents, instruments,
certificates and other items as may be required, under this Agreement or
otherwise, in order to perform or fulfill all covenants, conditions and
agreements on its part to be performed or fulfilled at or before the Closing
Date and to cause all conditions precedent to the Parties' obligations under
this Agreement to be satisfied in full.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
NOTEHOLDER
To induce Buyer to enter into and perform this Agreement, and except as is
otherwise set forth in the Disclosure Schedules, the Company and the Selling
Noteholder represent and warrant to Buyer as of the Closing as follows in this
Article III.
3.1 COMPANY ORGANIZATION; GOOD STANDING; CORPORATE AUTHORITY; ENFORCEABILITY
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the state of Nevada. The Company is duly qualified to
do business, and is in good standing in the states required due to (a) the
ownership or lease of real or personal property for use in the operation of the
Company's business; or (b) the nature of the business conducted by the Company,
except where the failure to be so qualified or in good standing would not have a
material adverse effect on the Company. The Company has all requisite power,
right and authority to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a Party, and to
carry out the transactions contemplated hereby and thereby.
All actions on the part of the Company and its officers and directors
necessary for the authorization, execution, delivery and performance of this
Agreement and the other Transaction Documents, the consummation of the
transactions contemplated hereby and thereby, and the performance of all of the
Company's obligations under this Agreement and the other Transaction Documents
have been taken or will be taken prior to the Closing. This Agreement has been,
and the other Transaction Documents to which the Company is a Party on the
Closing will be, duly executed and delivered by the Company, and this Agreement
is, and each of the other Transaction Documents to which it is a Party on the
Closing will be, a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
3.2 CAPITALIZATION
(a) The authorized capital stock of the Company consists of 65,000,000
shares of common stock, $0.001 par value (the "COMMON STOCK") of which 867,324
shares will be issued and outstanding prior to the Closing including 2,500
shares reserved for rounding in accordance with the Reverse Split which have not
yet been requested from the Company. The Company has an undesignated class of
Preferred Stock, $0.001 par value, with 8,552,801 shares authorized of which no
shares are issued and outstanding prior to Closing.
(b) The issued and outstanding capital stock of the Company, immediately
after the Closing, will consist of an aggregate of 8,312,324 shares of Common
Stock which will consist of 867,324 pre-Closing shares, 800,000 Shares purchased
by the Buyer pursuant to this Agreement and 6,645,000 shares issued upon
conversion of the Notes at the Closing.
(c) All shares of Common Stock that are issued and outstanding are, and as
of the Closing Date will be, duly authorized and validly issued, fully paid and
nonassessable, and issued in compliance with all applicable federal, state and
foreign securities laws.
3.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS
The execution, delivery and performance of this Agreement and the other
Transaction Documents by the Company, and the consummation of the transactions
contemplated hereby and thereby, will not (a) require any consent, approval or
authorization of, or declaration, filing or registration with, any Person that
has not been obtained or made at or prior to the Closing; (b) result in a
default (with or without the giving of notice or lapse of time, or both) under,
acceleration or termination of, or the creation in any Party of the right to
accelerate, terminate, modify or cancel, any agreement, lease, note or other
restriction, encumbrance, obligation or liability to which the Company is a
Party or by which it is bound or to which any assets of the Company are subject;
(c) result in the creation of any lien or encumbrance upon the Shares or other
securities of the Company; or (d) invalidate or adversely affect any permit,
license, authorization or status used in the conduct of the business of the
Company.
3.4 FINANCIAL STATEMENTS; OBLIGATIONS; NO LIABILITIES; ESCROW RESERVE
(a) The Company has provided to Buyer (i) audited balance sheets and
statements of operations, shareholders' equity and cash flows of the Company at
and for the fiscal years ended March 31, 2003, and accompanying notes; and (ii)
unaudited balance sheets as of December 31, 2003. All the foregoing financial
statements (including the notes thereto) are referred to as the "FINANCIAL
STATEMENTS" and are available in the public record (see, ▇▇▇.▇▇▇.▇▇▇). The
Financial Statements have been prepared in conformity with GAAP consistently
applied throughout the periods covered, except as may be indicated in the notes
thereto, and present fairly the financial position, results of operations and
changes in financial position of the Company at the dates and for the periods
indicated, subject, in the case of the unaudited financial statements, to normal
recurring period-end adjustments.
(b) IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE OF THE SHARES AND NOTES
PURSUANT TO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS IS PREDICATED ON THE
COMPANY HAVING NO LIABILITIES AT CLOSING OTHER THAN THOSE OBLIGATIONS ACCEPTED
BY BUYER. The Company will not, as of Closing, have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected in the Company's
Financial Statements and listed on Schedule 3.4 hereto ("LIABILITIES"). As a
condition of Closing, $15,000 will be paid to ▇▇▇▇▇ & ▇▇▇▇, LLP. Up to an
additional $15,000 will be paid by the Company to the Company's independent CPA
firm and its counsel upon the delivery of the March 31, 2004 Annual Report on
Form 10-KSB, with any remaining balance paid to Aztore as an expense
reimbursement. Any and all Liabilities listed on Schedule 3.4 to this Agreement,
shall be satisfied, in full, by the assumption of the Selling Noteholder of
these Liabilities ("ASSUMED LIABILITIES") and, pursuant to Section 9.2, has
agreed to indemnify Buyer against such Liabilities
(c) Seventy-five Thousand Dollars ($75,000.00) shall be withheld from the
Note Purchase Price and shall remain in Escrow for ninety (90) days from the
Closing Date (the "ESCROW RESERVE"). Upon the conversion of the GE Liability
into 245,000 shares of Common Stock, such conversion price having been
established by the $80,000 Purchase of Shares, $25,000 of the Escrow reserve
will be released. Upon the event of Selling Noteholder furnishing evidence
satisfactory to Buyer that all liabilities listed on Schedule 3.4 have been
fully satisfied or assumed; provided that there are no new Company liabilities
which pre-dated the Closing Date and were omitted from Schedule 3.4, and
provided that the Company's Annual Report on Form 10-KSB, for the fiscal year
ending March 31, 2004, has been filed, the Escrow Reserve will be released to
the Selling Noteholder. If any unsatisfied liabilities remain or have not been
assumed by the Noteholder after ninety (90) days from the Closing Date, an
Escrow Reserve in an amount equal to the unsatisfied liabilities will be
maintained, and only the remaining Escrow Reserve will be released to the
Selling Noteholder. Thereafter, the Escrow Reserve will be released to the
Selling Noteholder from time-to-time on a line item basis upon evidence
satisfactory to the Buyer that each remaining open line item liability has been
satisfied.
3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS
Except (a) as and to the extent reflected or reserved against in the
balance sheet; and (b) for liabilities and obligations incurred in the ordinary
course of business since the Financial Statements, the Company has not entered
into or agreed to enter into any transaction, agreement or commitment, suffered
the occurrence of any event or events or experienced any change in financial
condition, business, results of operations or otherwise that, in the aggregate
resulted in a material adverse change in the business, assets, operations of the
Company.
3.6 TAXES
(a) The Company has filed on a timely basis all reports, returns,
declarations, claims for refund, information returns, statements or other
similar documents, including any schedules or attachments thereto, and including
any amendment thereof with respect to any Taxes ("TAX RETURNS") that the Company
was required to file through its fiscal year ended March 31, 2003. No such Tax
Returns are currently the subject of audit or examination nor has the Company
been notified in writing, or otherwise, of any request for an audit or
examination.
(c) There is no dispute, claim or proposed adjustment concerning any Tax
liability of the Company either (i) claimed or raised by any authority in
writing or (ii) based upon personal contact with any agent of such authority.
The Company is not a Party to nor has it been notified in writing or, otherwise,
that it is the subject of any pending, proposed or threatened action,
investigation, proceeding, audit, claim or assessment by or before the IRS or
any other governmental authority, and no claim for assessment, deficiency or
collection of Taxes, or proposed assessment, deficiency or collection from the
IRS or any other governmental authority which has not been satisfied, nor does
the Company have any reason to believe that any such notice will be received in
the future. The IRS has never audited any Tax Return of the Company. The Company
has not filed any requests for rulings with the IRS. There are no Tax liens of
any kind upon any property or assets of the Company, except for inchoate liens
for Taxes not yet due and payable. The Company has paid, or will pay by the
Closing, all taxes, assessments, and penalties due and payable.
3.7 SECURITIES FILINGS
The Company has filed or will have filed by Closing, all required filings
with the Securities and Exchange Commission (the "SEC").
3.8 CONTRACTS; LEASES; ASSETS
Except as indicated on Schedule 3.8 hereto, the Company is not a Party to
any contract, agreement or lease. At the Closing, the Company will have no
assets or personal property (other than its books and records) and no
liabilities (except as otherwise specified on Schedule 3.4).
3.9 CLAIMS AND LEGAL PROCEEDINGS
There are no claims, actions, suits, arbitrations, criminal or civil
investigations or proceedings pending or involving or, to the knowledge of the
Company or the Selling Noteholder, threatened against the Company before or by
any court or governmental or nongovernmental department, commission, board,
bureau, agency or instrumentality, or any other Person. To the knowledge of the
Company and/or the Selling Noteholder, there is no valid basis for any claim,
action, suit, arbitration, investigation or proceeding that could reasonably be
expected to be materially adverse to the business, assets, operations, prospects
or condition (financial or other) of the Company before or by any Person. There
are no outstanding or unsatisfied judgments, orders, decrees or stipulations to
which the Company is a Party that involve the transactions contemplated herein
or that would have a material adverse effect on the business, assets,
operations, prospects or condition (financial or other) of the Company.
3.10 CORPORATE BOOKS AND RECORDS
The Company has furnished to Buyer, at or prior to closing (or at such time
and place as shall be designated by Buyer), true and complete copies of (a) the
Certificate of Incorporation of the Company as currently in effect, including
all amendments thereto; and (b) the complete minute books of the Company
(including copies of all director and shareholder consents). Such minutes
reflect all meetings of the Company's shareholders, Board of Directors and any
committees thereof since the Company's inception, and such minutes accurately
reflect the events of and actions taken at such meetings. Computershare Trust
Company, Inc. (phone: ▇▇▇-▇▇▇-▇▇▇▇) is the transfer agent for the Company and
possesses stock transfer books that accurately reflect all issuances and
transfers of shares of capital stock of the Company since its inception.
3.11 FINDER'S FEES
The Company and the Selling Noteholder know of no person who rendered any
service in connection with the introduction of the Company or the Selling
Noteholder to the Buyer for a "finder's fee" or similar type of fee in
connection with the transaction contemplated hereby and agree to indemnify,
defend and hold Buyer harmless from any and all such claims.
ARTICLE IV - REPRESENTATION AND WARRANTIES OF SELLING NOTEHOLDER
4.1 GOOD TITLE
The Selling Noteholder owns the Notes free and clear of any lien,
encumbrance, adverse claim, restriction on sale, option or other right to
purchase and upon the consummation of the sale of the Notes as contemplated
hereby, Buyer will have good title to the Notes, free and clear of any lien,
encumbrance, adverse claim, restriction on sale, transfer, option or other right
to purchase.
4.2 AUTHORITY
The Selling Noteholder has all requisite power, right and authority to
enter into this Agreement and the other Transaction Documents to which it is a
Party, to consummate the transactions contemplated hereby and thereby, and to
sell and transfer the Notes. The Selling Noteholder has taken, or will take
prior to the Closing, all actions necessary for the authorization , execution,
delivery and performance of this Agreement and the other Transaction Documents
(including obtaining of any consents or approvals necessary to consummate the
transactions contemplated by this Agreement and the other Transaction Documents
in order to transfer the Notes free and clear of any lien, encumbrance, adverse
claim, restriction on sale, transfer or other right to purchase).
4.3 ENFORCEABILITY
This Agreement has been, and the other Transaction Documents to which the
Selling Noteholder is a Party on the Closing will be, duly executed and
delivered by the Selling Noteholder, and this Agreement is, and each of the
other Transaction Documents to which the Selling Noteholder is a Party on the
Closing will be, the legal, valid and binding obligation of such Selling
Noteholder, enforceable against such Selling Noteholder in accordance with its
terms.
4.4 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS
The execution, delivery and performance of this Agreement and the other
Transaction Documents by the Selling Noteholder, and the consummation of the
transactions contemplated hereby and thereby, will not (a) require any consent,
approval or authorization of, or declaration, filing or registration with, any
Person that has not been obtained or made at or prior to the Closing; or (b)
result in the creation of any lien or encumbrance upon the Notes.
4.5 CONVERSION
The Notes are convertible into shares of the Company's Common Stock at a
conversion price to be determined by any third Party, whereby the Company
receives in cash or in kind more than $50,000. The Buyer qualifies as such a
"third party" and Buyer's purchase of the Shares, as set forth herein,
constitutes an event permitting the Buyer, at the Closing, to convert the Notes
into 6,645,000 shares of the Company's Common Stock, such Shares to be issued to
the Buyer at the Closing.
4.6 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS
The execution, delivery and performance of this Agreement and the other
Transaction Documents by the Selling Noteholder, and the consummation of the
transactions contemplated hereby and thereby, will not (a) require any consent,
approval or authorization of, or declaration, filing or registration with, any
Person that has not been obtained or made at or prior to the Closing; (b) result
in the creation of any lien or encumbrance upon the Notes; or (c) invalidate or
adversely affect any permit, license, authorization or status used in the
conduct of the business of the Company.
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER
To induce the Company and the Selling Noteholder to enter into and perform
this Agreement, Buyer represents and warrants to the Company and the Selling
Noteholder as of the date of this Agreement and as of the Closing as follows in
this Article V:
5.1 ORGANIZATION
Buyer is a Delaware limited liability company whose address is ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Buyer has all requisite power
and authority to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which Buyer is a Party, and to
carry out the transactions contemplated hereby and thereby.
5.2 ENFORCEABILITY
This Agreement has been, and the other Transaction Documents to which Buyer
is a Party on the Closing will be, duly executed and delivered by Buyer, and
this Agreement is, and each of the other Transaction Documents to which Buyer is
a Party on the Closing will be, a legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.
5.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance by Buyer of this Agreement and the
other Transaction Documents to which it is a Party, and the consummation of the
transactions contemplated hereby and thereby, will not (a) constitute a
violation (with or without the giving of notice or lapse of time, or both) of
any provision of any law or any judgment, decree, order, regulation or rule of
any court, agency or other governmental authority applicable to Buyer; or (b)
require Buyer to obtain any consent, approval or authorization of, or
declaration, filing or registration with, any Person.
5.4 INVESTMENT INTENT
Buyer represents and warrants to the Company and the Selling Noteholder
that Buyer is an "accredited investor," as such term is defined in Section 2(15)
of the Securities Act and Rule 501 of Regulation D promulgated there under, that
Buyer is purchasing the Shares, the Notes and the shares to be issued upon
conversion of the Notes for Buyer's own account, for investment purposes, in
Buyer's name and solely for Buyer's own beneficial interest and not as nominee
for, or on behalf of, or for the beneficial interest of, or with the intention
to transfer to, any other Person. Buyer understands and agrees that the Shares
and the shares issuable upon conversion of the Notes being acquired pursuant to
this Agreement have not been registered under the Act of 1933, as amended (the
"ACT") or under any applicable state securities laws and may not be sold,
pledged, assigned, hypothecated or otherwise transferred (a "TRANSFER") except
pursuant to an effective registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of which shall to be
established to the satisfaction of the Company at or prior to the time of
Transfer. The representations and warranties set forth in this Section 5.4 shall
survive the Closing.
5.5 SEC FILINGS AND LISTINGS
After the Closing, Buyer shall cause the Company to continue to make all
required SEC filings on a timely basis and shall cause the Company to continue
to maintain the listing of its stock for trading with the OTC BB or other
nationally recognized exchange or market with qualification and maintenance
requirements at least as great as the qualification and maintenance requirements
of the OTC BB, provided that the Company has filed its Annual Report on Form
10-KSB for the fiscal year ended March 31, 2004.
ARTICLE VI - CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer to perform and observe the covenants, agreements
and conditions to be performed and observed by it at or before the Closing shall
be subject to the satisfaction of the following conditions, which may be
expressly waived only in writing signed by Buyer.
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
Each of the representations and warranties of the Company and the Selling
Noteholder contained in this Agreement and the other Transaction Documents to
which each is a Party (including applicable Exhibits or Disclosure Schedules)
shall be true and correct as of the Closing Date as though made on that date;
except to the extent such representations and warranties are made as of a
specified date, in which case such representations and warranties shall be true
and correct as of the specified date.
6.2 PERFORMANCE OF AGREEMENTS
The Company and the Selling Noteholder shall have performed all obligations
and agreements and complied with all covenants and conditions contained in this
Agreement or any other Transaction Document to be performed and complied with by
them at or prior to the Closing.
6.3 DUE DILIGENCE
(a) The results of Buyer's due diligence investigation of the Company and
the Selling Noteholder (as it relates to the Notes) shall be satisfactory in all
reasonable respects to Buyer.
(b) The Financial Statements of the Company made available to Buyer shall
include the audited balance sheet for the Company's fiscal year ended March 31,
2003, and statements of operations, stockholders' equity and cash flows for the
twelve month period then ended; along with unaudited balance sheet, statements
of operation, stockholders' equity and cash flows through March 31, 2003.
(c) True and correct copies of all of the business and corporate records of
the Company shall have been delivered to Buyer (or shall be delivered to Buyer
at such time and place as Buyer directs), including but not limited to
correspondence files, bank statements, checkbooks, savings account books,
minutes of shareholder and directors meetings or consents, financial statements,
shareholder listings, and stock transfer records.
(d) The Company shall request that its auditors deliver to Buyer certified
copies of all work papers prepared by them in connection with the audited
financial statements for the fiscal years ended March 31, 2003 and March 31,
2002.
6.4 ESCROW AGREEMENT
The Escrow Agent and the Company shall have executed the Escrow Agreement.
6.5 RESIGNATIONS
Buyer shall have received copies of resignations, in substantially the form
attached hereto as Schedule 6.5, effective as of the Closing Date of all but one
of the officers of the Company and all but one of the directors of the Company.
The sole remaining officer of the Company, who shall serve as its President and
Chief Financial Officer shall have tendered his resignation, to be effective
upon the filing of the Company's Annual Report on Form 10-KSB. The sole
remaining director shall have tendered his resignation to be effective following
compliance with the requirements of Rule 14(f) (1).
6.6 RESOLUTIONS APPOINTING BUYER'S OFFICER AND DESIGNEE TO BOARD OF DIRECTORS
Buyer shall have received copies of a Board of Directors' resolution, in
substantially the form attached hereto as Schedule 6.6, appointing ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ to serve immediately as the Company's Secretary; to assume the
additional offices of President and Treasurer upon the filing of the Company's
Annual Report on Form 10-KSB and as the director designee, to be nominated to
the Board upon compliance with the requirements of Rule 14(f)(1).
6.7 ASSIGNMENT OF NOTE
The Selling Noteholder shall have delivered to the Escrow Agent a fully
executed Assignment of Notes, in substantially the form attached hereto as
Schedule 6.7, assigning to Buyer all right, title and interest in and to the
Notes.
6.8 ISSUANCE OF SHARES
The Company shall have delivered to the Escrow Agent certificates
representing the Shares or instructions to the Company's transfer agent
authorizing the issuance of the Share together with such corporate documents and
Board of Directors' resolutions required for such issuance.
6.9 ACCOUNTANTS
The Company and the Selling Noteholder shall have delivered to the Buyer an
undertaking by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.L.C., the Company's independent
public accountants that (a) they have been retained to prepare the Company's
Annual Report on Form 10-KSB for the fiscal year ending March 31, 2004 (the
"ANNUAL REPORT"); (b) that they will be able to complete the audit required for
the Annual Report; and (c) that they are ready, willing and able to be engaged
by the Company to serve as its certified public accountants for the purpose of
complying with its ongoing public reporting requirements.
ARTICLE VII - CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE SELLING
NOTEHOLDER
The obligations of the Company and the Selling Noteholder to perform and
observe the covenants, agreements and conditions to be performed and observed by
each of them at or before the Closing shall be subject to the satisfaction of
the following conditions, which may be expressly waived only in writing signed
by the Company and the Selling Noteholder.
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
Each of the representations and warranties of Buyer contained in this
Agreement and the other Transaction Documents to which it is a Party shall be
true and correct as of the Closing Date as though made on that date, except to
the extent such representations and warranties are made as of a specified date,
in which case such representations and warranties shall be true and correct as
of the specified date.
7.2 PERFORMANCE OF AGREEMENTS
Buyer shall have performed all obligations and agreements and complied with
all covenants and conditions contained in this Agreement or any other
Transaction Document to be performed and complied with by it at or prior to the
Closing.
7.3 APPROVALS AND CONSENTS
All consents, approvals, transfers of permits or licenses, and all
applications, and notices whether to public agencies, federal, state, local or
foreign, or otherwise, required to be obtained by Buyer for the consummation of
the transactions contemplated hereby shall have been obtained, and all waiting
periods specified by law shall have passed.
7.4 ESCROW AGREEMENT
The Escrow Agent and Buyer shall have executed and delivered the Escrow
Agreement and the Buyer shall have delivered the Share Purchase Price, the Note
Purchase Price and the Notice of Election to Convert Notes in substantially the
form as attached hereto as Schedule 7.4.
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION
This Agreement may be terminated at any time prior to the Closing: (a) by
mutual written consent of the Company, the Selling Noteholder, and Buyer;
(b) by the Company and/or the Selling Noteholder, if Buyer shall have
breached any of its representations, warranties or agreements;
(c) by Buyer, if the Company and/or the Selling Noteholder shall have
breached any of its representations, warranties or agreements; or
(d) by either the Company and/or the Selling Noteholder or the Buyer if the
Closing has not occurred by May 10, 2004; provided, however, that the right to
terminate this Agreement under this subsection (d) shall not be available to any
Party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before such
date;
8.2 EFFECT OF TERMINATION
In the event of the termination of this Agreement pursuant to Section 8.1,
there shall be no further obligation on the part of any Party, except that
Sections 3.11, 8.2, 10.1, 10.2 and 10.5 shall survive any such termination and
nothing shall relieve any Party from liability for any breach of this Agreement.
8.3 AMENDMENT
Buyer, the Company and the Selling Noteholder may amend, modify or
supplement this Agreement at any time, but only in writing duly executed on
behalf of each of the Parties to be bound thereby.
8.4 WAIVER
At any time prior to the Closing, any Party may (a) extend the time for the
performance of any obligation or other act of any other Party; (b) waive any
inaccuracy in the representations and warranties contained in any Transaction
Document; or (c) waive compliance with any agreement or condition in any
Transaction Document. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the Party or Parties to be bound.
The failure of any Party at any time or times to require performance of any
provisions shall in no manner affect its right at a later time to enforce the
same. No waiver by any Party of any condition or of any breach of any terms,
covenants, representations, warranties or agreements contained in this Agreement
shall be deemed to be a further or continuing waiver of any such condition or
breach in other instances or a waiver of any other condition or any breach of
any other terms, covenants, representations, warranties or agreements.
ARTICLE IX - SURVIVAL AND INDEMNIFICATION
9.1 SURVIVAL
Except as otherwise explicitly set forth herein or in the other Transaction
Documents, the representations and warranties contained in this Agreement or the
other Transaction Documents shall terminate upon, and shall not survive, the
Closing.
9.2 INDEMNIFICATION
The Selling Noteholder agrees to defend, indemnify and hold harmless the
Buyer from and against, and to reimburse the Buyer with respect to all
liabilities, losses, costs and expenses, including without limitation,
reasonable attorneys' fees and disbursements, asserted against or incurred by
the Buyer by reason of or arising out of, or in connection with any of the
Assumed Liabilities or the failure of the Company and the Selling Noteholder to
disclose all outstanding options or warrants to purchase shares of the Company's
common stock or any other dilutive securities.
ARTICLE X - GENERAL
10.1 EXPENSES
Whether or not the transactions contemplated by this Agreement are
consummated, except as set forth in Section 3.11, each Party shall each pay its
own fees and expenses for the negotiation, preparation and carrying out of this
Agreement and the other Transaction Documents (including legal and accounting
fees and expenses); provided, however, that, should any action be brought
hereunder, the attorneys' fees and expenses of the prevailing Party shall be
paid by the other Party to such action.
10.2 CONSEQUENTIAL DAMAGES
No Party shall be liable to the other Parties for any special, indirect,
incidental or consequential damages resulting from any breach of this Agreement.
10.3 ASSIGNMENT
This Agreement shall not be assigned by operation of law or otherwise,
except that Buyer may assign all or any of its rights and obligations to any of
its affiliates. In the event of any such permitted assignment, Buyer shall
guarantee the performance of such obligations by such assignee.
10.4 NOTICES
Unless otherwise provided, any notice under this Agreement shall be given
in writing and shall be deemed effectively given (a) upon personal delivery to
the Party to be notified; (b) upon confirmation of receipt by fax by the Party
to be notified; (c) one (1) business day after deposit with a reputable
overnight courier, prepaid for overnight delivery and addressed as set forth
below; or (d) three (3) days after deposit with the U.S. Post Office, postage
prepaid, registered or certified with return receipt requested and addressed to
the Party to be notified at the address indicated for such Party below, or at
such other address as such Party may designate by advance written notice to the
other Parties given in the foregoing manner.
TO BUYER: ▇▇▇▇▇▇▇ Reverse Merger Fund, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TO THE COMPANY: Chiste Corporation
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TO THE SELLING NOTEHOLDER: Aztore Holdings, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
10.5 GOVERNING LAW, DISPUTE RESOLUTION AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado, without giving effect to the conflicts of laws
principles thereof. All disputes, controversies or claims ("DISPUTES") arising
out of or relating to this Agreement shall in the first instance be the subject
of a meeting between a representative of each Party who has decision-making
authority with respect to the matter in question. Should the meeting either not
take place or not result in a resolution of the Dispute within twenty (20)
business days following notice of the Dispute to the other Party, then the
Dispute shall be resolved in a binding arbitration proceeding to be held in
Denver, Colorado, in accordance with the international rules of the American
Arbitration Association. The Parties agree that a panel of three arbitrators
shall be required. Any award of the arbitrators shall be deemed confidential
information for a minimum period of five years. The arbitrators may award
attorneys' fees and other arbitration related expense, as well as pre- and
post-judgment interest on any award of damages, to the prevailing Party, in
their sole discretion.
10.6 SUCCESSORS AND ASSIGNS
The terms and conditions of this Agreement shall inure to the benefit of
and be binding on the respective successors and assigns of the Parties.
10.7 SEVERABILITY
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement, and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
10.8 ENTIRE AGREEMENT; COUNTERPARTS
This Agreement and the Transaction Documents constitutes the entire
agreement among the Parties with respect to this subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the Parties with respect to this subject matter. This Agreement may be executed
in two or more counterparts, which taken together shall constitute one
instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties hereto have entered into and signed this
Agreement as of the date and year first above written.
BUYER
▇▇▇▇▇▇▇ REVERSE MERGER FUND, LLC
By:______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
COMPANY
CHISTE CORPORATION
By:______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
SELLING NOTEHOLDER
AZTORE HOLDINGS, INC.
By:______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
EXHIBIT A
---------
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is dated May 4, 2004, and made by
and among Chiste Corporation, a Nevada corporation (the "Company"), Aztore
Holdings, Inc. (the "Selling Noteholder"), ▇▇▇▇▇▇▇ Reverse Merger Fund, LLC, a
Delaware limited liability corporation ("Buyer") and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, solely
in his capacity as escrow agent (the "Escrow Agent"). The Company, the Selling
Noteholder and Buyer are sometimes referred to herein as the "Interested
Parties."
Pursuant to that certain Securities Purchase Agreement (the "Purchase
Agreement"), dated as of May 4, 2004, by and among the Interested Parties:
(1) The Company is agreeing to sell and Buyer is agreeing to purchase,
subject to the terms and conditions set forth in the Purchase
Agreement, the Shares (as defined in the Purchase Agreement);
(2) The Selling Noteholder is agreeing to sell and Buyer is agreeing to
purchase, subject to the terms and conditions set forth in the
Purchase Agreement, the Notes (as defined in the Purchase Agreement);
(3) The Buyer is electing to convert the Notes subject to the terms and
conditions set forth in the Purchase Agreement.
This Agreement is entered into pursuant to the terms of the Purchase
Agreement. As more fully described in the Purchase Agreement, each of the
Interested Parties has agreed that the Purchase Price (as defined in the
Purchase Agreement) for the Shares and the Notes be deposited in escrow to be
administered pursuant to this Agreement. Further, the Interested Parties have
agreed that the Buyer will elect to convert the Notes (as set forth in the
Purchase Agreement) into Conversion Shares (as that term is defined in the
Purchase Agreement).
The Interested Parties desire to arrange for such escrow and appoint
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ as escrow agent (defined as the "Escrow Agent" in the Purchase
Agreement) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement and intending to be legally bound, the Interested
Parties hereto do hereby agree as follows:
1. Appointment of Escrow Agent. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ is hereby appointed to act as
Escrow Agent in accordance with the terms hereof, and he hereby accepts such
appointment. Escrow Agent shall have all the rights, powers, duties and
obligations provided herein.
2. Establishment of Escrow Fund and the Escrow Account.
2.1 Cash Deposit and Escrow Account. Buyer shall deliver to the Escrow
Agent, on the date hereof, cash in immediately available funds in an
aggregate amount equal to $440,000.00 (the "Purchase Price" or "Escrow
Fund"). The Purchase Price consists of $80,000.00, which represents the
Share Purchase Price (as that term is defined in the Purchase Agreement),
and $360,000.00, which represents the Note Purchase Price (as that term is
defined in the Purchase Agreement). The Escrow Agent shall deposit the
Purchase Price in the ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust Account, a non-interest
bearing account. The Interested Parties understand, acknowledge and agree
that all of the Escrow Agent's client funds may be deposited in a single
unsegregated account, and that the Purchase Price will be deposited in such
an unsegregated account.
2.2 Purpose of Escrow Fund. The Escrow Fund shall be available solely for
the purposes set forth in the Purchase Agreement.
2.3 Closing Documents. The Escrow Agent will accept delivery of, and will
hold until the Closing (as defined in the Purchase Agreement) any and all
documents to be delivered at the Closing by the Company and the Selling
Noteholder pursuant to the Purchase Agreement (collectively, the "
Deliverables").
3. Release of Escrow Fund.The Escrow Agent will disburse and pay over the Escrow
Fund and the Closing Documents as follows:
3.1 Consummation of Sale.
3.1.1 On or prior to the Closing Date, the referenced party shall
deposit the following Deliverables, with the Escrow Agent:
(a) The Company shall deliver (i) an original stock certificate
or certificates representing the Shares, issued in the name of
the Buyer and/or instructions to the Company's transfer agent,
supported by duly authorized and executed Board of Directors'
Minutes approving the issuance; (ii) copies of letters of
resignation in the form as set forth in Schedule 6.5 to the
Purchase Agreement; and (iii) copies of a Board of Directors'
resolution in the form as set forth in Schedule 6.6 to the
Purchase Agreement.
(b) The Selling Noteholder shall deliver a fully executed
Assignment of Notes in the form as set forth in Schedule 6.7 to
the Purchase Agreement.
(c) The Buyer shall deliver (i) the Share Purchase Price; (ii)
the Note Purchase Price; and (iii) the Notice to Convert Notes in
the form as set forth in Schedule 7.4 to the Purchase Agreement.
3.1.2 On the Closing Date, upon receipt by Escrow Agent of all of the
Deliverables, the Escrow Agent shall disburse the Escrow Fund as
follows:
i. On Behalf of the Company: As set forth in Schedule 2.6 to
the Purchase Agreement (i) $15,000.00 to ▇▇▇▇▇ & Roca, LLP
in full settlement of all outstanding fees and expenses due
to the law firm for services provided to the Company and
(ii) up to $15,000.00 to the Company's professional advisors
in connection with and upon the delivery of the Company's
Annual Report on Form 10-KSB for the fiscal year ended March
31, 2004, with any remaining balance delivered to the
Selling Noteholder.
ii. To the Selling Noteholder: $285,000.00 of the Note
Purchase Price as set forth in Schedule 2.7 to the Purchase
Agreement.
iii. Escrow Reserve: $75,000.00 will be maintained by the
Escrow Agent as an Escrow Reserve, as that term is defined
in the Purchase Agreement, to be released to the Selling
Noteholder upon the following events:
1. $25,000.00 upon the conversion of the GE Liability,
as more fully set forth in Section 3.4 (c) of the
Purchase Agreement and Section 5 of the Release
and Settlement Agreement dated May 3, 2004 (the
"Settlement Agreement");
2. The remaining balance upon the satisfaction of all
liabilities set forth in Schedule 3.4 to the
Purchase Agreement in accordance with Sections 3,
4, and 5 of the Settlement Agreement.
3.2 Dispute Notice. Notwithstanding Section 3.1, if on or before the
Closing Date, the Escrow Agent receives a notice from Buyer (a "Dispute
Notice"), which Dispute Notice challenges the validity of any of the
Deliverables, and which Dispute Notice sets forth the basis for such
challenge (which basis Escrow Agent reasonably believes to be in good
faith) then the Escrow Agent will not disburse either the Escrow Fund to
the Company or the Selling Noteholder or the Deliverables to the Buyer
unless and until (i) the Escrow Agent has received written instructions in
respect of such disbursement from the Interested Parties, acting jointly;
or (ii) the Interested Parties deliver to Escrow Agent a copy of an order
of a court of competent jurisdiction providing for the disbursement of the
Escrow Fund and the Deliverables (a "Court Order"), together with an
opinion, satisfactory in form, scope and substance to the Escrow Agent, of
counsel satisfactory to the Escrow Agent certificate, stating that, in the
unqualified opinion of such counsel, such order is not subject to appeal,
or that the appeal period with respect to such order has elapsed and no
appeal has been taken, together with evidence reasonably satisfactory to
Escrow Agent that a copy of the Court Order has been delivered to the other
of them, in which case the Escrow Agent shall disburse the Escrow Fund in
accordance with the Court Order on the tenth (10th) Business Day following
the Escrow Agent's receipt of the Court Order. For purposes of this
Agreement, the term "Business Day" shall mean any day other than a day on
which banks in the State of Colorado.
3.3 Other Instructed Disbursements. The Escrow Agent will make
disbursements from the Escrow Fund and the Deliverables in accordance with
any joint written directions which are executed by the Interested Parties
within two (2) Business Days after receipt of such directions or at any
later time specified in such directions. Any such directions given pursuant
to the preceding sentence will supersede any prior Dispute Notice.
4. Escrow Agent.
4.1 No Liability. In taking any action hereunder, the Escrow Agent shall in
no event be liable for any act performed or omitted to be performed by it
hereunder in the absence of gross negligence, willful misconduct or bad
faith in breach of the terms of this Agreement; and it shall be under no
obligation to institute or to defend any action, suit or legal proceeding
in connection herewith or to take any other action likely to involve it
unless first indemnified to its satisfaction by the party or parties that
desire it to take such action. In case any claim or litigation is brought
against Escrow Agent in respect of which indemnity may be sought hereunder,
Escrow Agent shall give prompt notice of that claim or litigation to the
parties, and the parties, upon receipt of that notice, shall have the
obligation and the right to assume the defense of such claim or litigation;
provided that failure of Escrow Agent to give the notice shall not relieve
the parties from any of their obligations to indemnify Escrow Agent unless
that failure prejudices the defense of any of such litigation by said
parties. Escrow Agent may employ separate counsel and participate in the
defense.
4.2 Acceptance of Appointment. The Escrow Agent hereby accepts its
appointment and agrees to act as Escrow Agent under the terms and
conditions of this Agreement.
4.3 Resignation. The Escrow Agent (or any successor) may at any time during
the term hereof resign its position hereunder by giving 30 days' prior
written notice of its intention to resign to the Interested Parties. Such
resignation shall be effective upon the appointment of a successor escrow
agent reasonably acceptable to the Interested Parties who shall have agreed
to serve in accordance with the terms hereof. The Escrow Agent may be
removed by the joint action of the Interested Parties, with or without
cause, at any time upon 30 days' prior written notice to the Escrow Agent,
which notice may be waived by Escrow Agent. Notwithstanding any resignation
or removal of the Escrow Agent pursuant to this Section 4.3, Escrow Agent
shall continue to serve in its capacity as escrow agent until (i) a
successor escrow agent is appointed and has accepted such appointment, and
(ii) the Escrow Fund has been transferred to and received by such successor
escrow agent. The Interested Parties shall promptly take the necessary
action to appoint a successor escrow agent in accordance with Section 4.4
below.
4.4 Appointment of Successor Escrow Agent. If at any time the Escrow Agent
shall resign, be removed or otherwise become incapable of acting as escrow
agent pursuant to this Agreement, or if at any time a vacancy shall occur
in the office of the Escrow Agent for any other cause, a mutually
acceptable successor escrow agent shall be appointed by the Interested
Parties by a written instrument delivered to the successor escrow agent. If
no successor escrow agent has been appointed at the effective date of
resignation or removal of the Escrow Agent or within 30 days after the time
the Escrow Agent became incapable of acting or a vacancy occurred in the
office of escrow agent, any party hereto may petition a court of competent
jurisdiction for an appointment of a successor escrow agent. Upon the
appointment and acceptance of any successor escrow agent hereunder, the
Escrow Agent shall transfer the Escrow Fund to its successor. Upon receipt
by the successor escrow agent of the Escrow Fund, the Escrow Agent shall be
discharged from any continuing duties or obligations under this Agreement,
but such discharge shall not relieve the Escrow Agent from any liability
incurred prior to such event, and the successor escrow agent shall be
vested with all rights, powers, duties and obligations of the Escrow Agent
under this Agreement.
4.5 Liability.
(a) Each Interested Party acknowledges and agrees that the Escrow
Agent (i) shall not be responsible for the Purchase Agreement, or for
determining or compelling compliance therewith, and shall not
otherwise be bound thereby, (ii) shall be obligated only for the
performance of such duties as are expressly and specifically set forth
in this Agreement on its part to be performed, each of which are
ministerial (and shall not be construed to be fiduciary) in nature,
and no implied duties or obligations of any kind shall be read into
this Agreement against or on the part of the Escrow Agent, (iii) shall
not be obligated to take any legal or other action hereunder which
might in its judgment involve or cause it to incur any expense or
liability unless it shall have been furnished with acceptable
indemnification, (iv) may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction
(including, without limitation, wire transfer instructions, whether
incorporated herein or provided in a separate written instruction),
instrument, statement, certificate, request or other document
furnished to it hereunder and believed by it to be genuine and to have
been signed or presented by the proper person, and shall have no
responsibility for determining the accuracy thereof, and (v) may
consult counsel satisfactory to it, including in-house counsel, and
the written opinion or advice of such counsel in any instance shall be
full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the written opinion or advice of such counsel.
(b) In no event shall the Escrow Agent be liable for indirect,
punitive, special or consequential damage or loss (including but not
limited to lost profits) whatsoever, even if the Escrow Agent has been
informed of the likelihood of such loss or damage and regardless of
the form of action.
(c) The Escrow Agent shall have no more or less responsibility or
liability on account of any action or omission of any book-entry
depository, securities intermediary or other sub-escrow agent employed
by the Escrow Agent with the consent of Buyer and Selling Shareholders
than any such book-entry depository, securities intermediary or other
sub-escrow agent has to the Escrow Agent, except to the extent that
such action or omission of any book-entry depository, securities
intermediary or other sub-escrow agent was caused by the Escrow
Agent's own gross negligence or willful misconduct.
(d) The Escrow Agent may act in reliance upon any instructions signed
on signature believed by it to be genuine, and may assume that any
person who gives any written instructions, notice or receipt, or makes
any statements in connection with the provisions hereof, has been duly
authorized to do so. The Escrow Agent shall have no duty to make
inquiry as to the genuineness, accuracy or validity of any statements
or instructions or any signatures on statements or instructions.
4.6 Indemnification.
(a) Each of the Interested Parties covenant and agree, jointly and
severally, to indemnify the Escrow Agent (and each of its
shareholders, directors, officers, employees and agents) and hold it
(and such shareholders, directors, officers, employees and agents)
harmless from and against any loss, liability, damage, cost and
expense of any nature incurred by the Escrow Agent arising out of or
in connection with this Agreement or with the administration of its
duties hereunder, including, but not limited to, attorney's fees and
other costs and expenses of defending or preparing to defend against
any claim of liability unless and except to the extent such loss,
liability, damage, cost and expense shall be caused by the Escrow
Agent's gross negligence or willful misconduct. The foregoing
indemnification and agreement to hold harmless shall survive the
termination of this Agreement.
5. Notices; Wiring Instructions.
5.1 Notices.
(a) All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall
be delivered personally, sent by facsimile transmission or sent by
overnight package delivery service. Any such notice will be deemed
given when so delivered if delivered during business hours on a
business day or if not, on the next succeeding business day. All such
notices shall be addressed as follows:
(i) If to the Company:
Chiste Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(ii) If to the Selling Noteholders:
Aztore Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(iii) If to the Buyer:
▇▇▇▇▇▇▇ Reverse Merger Fund, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Member
(iv) If to the Escrow Agent:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(v) Wiring Instructions. Any funds to be paid to or by the Escrow
Agent hereunder shall be sent by wire transfer pursuant to
the following instructions
Bank: Commercial Federal Bank
ABA: ▇▇▇▇▇▇▇▇▇
Credit: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust Account
Account: ▇▇▇▇▇▇▇▇
A/C Address: Omaha, Nebraska
Reference: Chiste Corporation
6. Binding Effect; Third Parties. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, representatives, successors and assigns. This Agreement is not
intended to confer any rights or remedies hereunder on any other person other
than the parties hereto.
7. Amendments. This Agreement may be amended, modified or supplemented at any
time or from time to time in a writing executed by the Company, the Selling
Noteholder, Buyer and the Escrow Agent; provided, however, that any amendment to
the payment instructions shall require the joint approval of the Interested
partiesNo supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by each of the parties. No waiver of any of
the provisions of this Agreement shall be deemed to constitute a waiver of any
other provision hereof, whether or not similar, nor shall any waiver constitute
a continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
8. Governing Law; Jurisdiction; Venue. This Agreement will be governed by the
laws of the State of Colorado without regard to conflicts of laws principles. In
any action or proceeding between any of the parties arising out of or relating
to this Agreement or any of the transactions contemplated by this Agreement,
each of the parties: (a) irrevocably and unconditionally consents and submits to
the exclusive jurisdiction and venue of the state courts of the State of
Colorado located in the County of Arapahoe State of Colorado, and to the
jurisdiction of the United States District Court for the District of Colorado,
and (b) agrees that all claims in respect of such action or proceeding may be
heard and determined exclusively in any Colorado state or federal court sitting
in the State of Colorado. It is the intention of the parties hereto that the
situs of the Escrow Account is and shall be administered in the state in which
the principal office of the Escrow Agent from time to time acting hereunder is
located.
9. Attorneys' Fees. If there is a dispute between the Interested Parties over
the disbursement of the Escrow Fund, and such dispute results in a legal action
being initiated to resolve such dispute, the prevailing party in such action (as
between the Interested Parties) shall be entitled to recover its attorneys' fees
and expenses (whether incurred at trial, pre-trial investigation, on appeal, in
bankruptcy or otherwise) from the other party. This provision shall not alter
the right of the Escrow Agent to indemnification as set forth in Section 4.6
hereof.
10. Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
11. Integration. This Agreement and the Purchase Agreement constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Agreement and supersede all prior agreements and understandings with
respect thereto.
12. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
13. Headings; Construction. The descriptive headings used throughout this
Agreement are for convenience only and do not constitute a part of this
Agreement. The descriptive headings used throughout this Agreement are for
convenience only and do not constitute a part of this Agreement.
14. Time is of the Essence. With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
* * *
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
CHISTE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
SELLING NOTEHOLDER
Aztore Holdings, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
BUYER
▇▇▇▇▇▇▇ Reverse Merger Fund, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Managing Member
ESCROW AGENT
By: /s/ ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE 1.16
--------------
IDENTIFICATION OF NOTES
SCHEDULE 2.5
-------------
ELECTION TO CONVERT NOTES
The undersigned Noteholder hereby gives Notice to Chiste Corporation (the
"COMPANY") of its intent to convert the Notes into 6,645,000 shares of the
Company's $0.001 par value Common Stock.
The Holder hereby tenders to the Company the original Notes
Holder:
▇▇▇▇▇▇▇ Reverse Merger Fund, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Member
Date: May 4, 2004
SCHEDULE 2.6.
--------------
WIRE TRANSFER INSTRUCTIONS - SHARE PURCHASE
SCHEDULE 2.7.
--------------
WIRE TRANSFER INSTRUCTIONS - NOTE PURCHASE
SCHEDULE 3.4
-------------
LIABILITIES AS OF CLOSING
SCHEDULE 3.8
-------------
CONTRACTS AS OF CLOSING
SCHEDULE 6.5
-------------
RESIGNATIONS
To the Board of Directors of Chiste Corporation:
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, hereby resign as President and a Director of Chiste
Corporation, a Nevada corporation, and from all other offices held by me,
effective upon compliance with Rule 14(f)(1).
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Date: May 4, 2004
--------------------------------------------------------------------------------
To the Board of Directors of Chiste Corporation:
I, ▇▇▇▇▇ ▇▇▇▇, hereby resign as Chief Financial Officer, Secretary,
Treasurer and a Director of Chiste Corporation, a Nevada corporation, and from
all other offices held by me, effective immediately.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer, Secretary,
Treasurer and a Director
Date: May 4, 2004
SCHEDULE 6.6
-------------
CONSENT MINUTES BY THE DIRECTORS OF
CHISTE CORPORATION
MAY 4, 2004
In lieu of a Special Meeting of the Board of Directors of Chiste
Corporation, a Nevada corporation (the "Corporation"), the undersigned
directors, being all the directors of the Corporation, as authorized by Sec.
78.315.2 of the Nevada General Corporation Law and in accordance with the laws
of the State of Nevada and the By-Laws of the Corporation, hereby consent to the
adoption of the following resolution without a meeting, which action shall be as
valid and legal and of the same force and effect as though taken at a meeting
duly and validly noticed and held.
APPROVAL OF SECURITIES PURCHASE AGREEMENT
RESOLVED, that the Company is hereby authorized to entered into that
certain Securities Purchase Agreement, dated as of May 4, 2004, by and
among ▇▇▇▇▇▇▇ Reverse Merger Fund, LLC, a Delaware limited liability
corporation ("Buyer"), the Company, and Aztore Holdings, Inc., (the
"Selling Noteholder") for the sole purpose of making the representations
and warranties, and carrying out the obligations, of the Company as set
forth therein.
APPOINTMENT OF OFFICER AND DIRECTOR DESIGNEE
RESOLVED, that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is hereby immediately appointed as the
Secretary of the Company effective May 4, 2004.
FURTHER RESOLVED, that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is hereby immediately appointed
as the Treasurer of the Company effective May 4, 2004.
FURTHER RESOLVED; that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is hereby appointed as President
and Treasurer of the Company effective upon the filing of the Company's
Annual Report on Form 10-KSB and a Director of the Company, upon compliance
with Rule 14(f)(1):
RESIGNATION OF DIRECTORS AND OFFICERS
RESOLVED, that the appointment of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as Treasurer of the
Company pursuant to the aforementioned resolution shall occur, upon the
resignation of ▇▇▇▇▇ ▇. ▇▇▇▇, in accordance with the conditions of his
resignation as more fully set forth herein and in the resignation attached
hereto, and as the same are hereby accepted by the Company:
RESOLVED, that the appointment of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as the President,
Secretary, Treasurer and Director of the Company pursuant to the
aforementioned resolutions shall occur, upon the resignation of ▇▇▇▇▇ ▇.
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as directors and/or officers of the Company,
in accordance with the conditions of their resignations as more fully set
forth herein and in the resignations attached hereto, and as the same are
hereby accepted by the Company:
SALE OF SHARES
RESOLVED, that the Company has received a subscription for the purchase of
800,000 shares of its common stock from Buyer and, upon receipt of the
Purchase Price of Eighty Thousand Dollars ($80,000.00) from the Escrow
Agent, the officers and directors are hereby authorized and directed to
instruct Computershare Trust Company, Inc., as the Company's transfer
agent, to issue certificates representing the ownership of such Shares in
the name of the Buyer.
CONVERSION OF NOTES
RESOLVED, that having received from the Buyer the Notes with a duly
executed Notice of Election to Covert Notes into 6,645,000 shares of the
Company's common stock, the officers and directors of the Company are
hereby authorized and directed to accept the Election to Convert Notes into
Shares, to cancel such Notes and to instruct Computershare Trust Company,
Inc., as the Company's transfer agent, to issue certificates representing
the ownership of an aggregate of 6,645,000 shares of the Company's Common
Stock in the name of Buyer.
RELOCATION OF PRINCIPAL OFFICE
RESOLVED, that the principal executive offices of the Company be relocated
to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
GENERAL AUTHORIZATION
RESOLVED, that the proper officers of the Company are hereby authorized and
directed to take all such further action, and to execute and deliver all
such instruments and documents in the name and on behalf of the Company as
in their judgment shall be necessary, proper or advisable in order to fully
carry out the intent, and to accomplish the purposes of the foregoing
resolutions.
IN WITNESS WHEREOF, the directors of Chiste Corporation have executed these
Consent Minutes to be effective as of the date first set forth above.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Director
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇, Director
SCHEDULE 6.7
-------------
FORM OF ASSIGNMENT OF NOTE