EXHIBIT 10.6
STOCK EXCHANGE AGREEMENT
BY AND AMONG
CAPCO ENERGY, INC.
CAPCO ASSET MANAGEMENT
AND
THE SHAREHOLDER OF
CAPCO ASSET MANAGEMENT
STOCK EXCHANGE AGREEMENT
STOCK EXCHANGE AGREEMENT made this 16th day of August, 2000, by and
among Capco Energy, Inc. a Colorado corporation ( " Purchaser " ), Capco Asset
Management, Inc. a Nevada corporation ("Company"), and the Shareholder of the
Company ("Shareholder").
WHEREAS, Purchaser desires to acquire all of the issued and outstanding
common stock of the Company, (the "Common Stock") in exchange for the
consideration and upon the terms described herein (the "Purchase"); and
WHEREAS, the Shareholder desires to sell all of the outstanding Common
Stock of the Company; and
WHEREAS, Shareholder has previously assigned all right, title and interest
in Greka Energy Corporation
(" Greka " ) common stock to the Company; and
WHEREAS, Company authorized Shareholder to engage in settlement discussions
with Greka on behalf of the Company with proceeds from said settlement reverting
to the Company; and
WHEREAS, the acquisition by Purchaser of the common stock of the Company
will be accomplished with a trade of common shares of Chaparral Resources, Inc.
( " Chaparral " ); and
WHEREAS, in order to avoid a purchase and sale agreement between Purchaser
and Chaparral and a subsequent assignment of the Chaparral common shares to
Shareholder, Purchaser authorized Shareholder to enter into the letter agreement
and amendments between Shareholder and Chaparral dated September 21, 2000, with
Purchaser bearing all costs in connection therewith; and
WHEREAS, Purchaser, the Company and Shareholder desire to make certain
representations, warranties, covenants and agreements in connection with the
Purchase and also desire to prescribe various conditions precedent to the
Purchase;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
provisions, and representations contained herein, THE PARTIES HERETO AGREE AS
FOLLOWS:
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ARTICLE 1
THE PURCHASE
1.1 Sale and Delivery of Common Stock. Subject to all the terms and
conditions of this Agreement, the Company and Shareholder shall transfer, convey
and deliver to Purchaser at the Closing (as defined in paragraph 1.2 hereof)
good, valuable and marketable title to the Common Stock, free and clear of all
liens, claims and encumbrances except those created by this Agreement in
exchange for the consideration described in this Article 1. The consideration
described in this Article 1 hereof shall be delivered to a closing agent
mutually agreeable to the parties hereto (the "Closing Agent"). Closing Agent
shall then disburse such consideration in accordance with this Agreement and
pursuant to joint written instructions to be prepared by the parties hereto in a
form substantially similar to that which is, attached hereto as Exhibit 1.1 and
delivered to Closing Agent at Closing.
1.2 Effective Date and Closing. The effective date of this transaction
shall be at closing (the " Effective Date" ). The closing of the transaction
contemplated herein (the "Closing") shall occur on the day on which all of the
obligations and conditions precedent contained herein are complied with. The
Closing date shall be immediately following the closing of the Greka Settlement
as disclosed by Capco Energy, Inc.(estimated to be October 30, 2000), (the
"Closing Date").
1.3 Purchase Price. Subject to the terms of Section 1.5 and subject to
all of the other terms and conditions set forth in the Agreement and in reliance
on the representations, warranties and covenants hereinafter set forth,
Purchaser shall deliver to Closing Agent 1,612,903 shares of Chaparral common
stock (hereinafter referred to as the "Purchase Price").
1.4 Payment of Purchase Price. The total Purchase Price shall be paid
as follows:
(a) Shareholder shall enter into a Letter Agreement with Chaparral to
acquire the 1,612,903 shares of Chaparral common stock. Purchaser shall deliver
directly to Chaparral all costs of the transaction. Shareholder shall consider
this transaction, a trade of stock of Chaparral for stock of the Company, rather
than a purchase of Chaparral stock.
1.5 Distributions. Between the effective date of this transaction and
the Closing Date the Company may not pay to its Shareholder or employees any
dividends or bonuses without the written permission of the Purchaser.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHAREHOLDER
As an inducement to the Purchaser to enter into this Agreement, the
Company and the Shareholder hereby represent and warrant to Purchaser that:
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2.1 Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
2.2 Capital. All of the issued and outstanding shares of the Company are
duly and validly issued, fully paid, and non-assessable. There are no
outstanding subscriptions, options, rights, warrants, debentures, instruments,
convertible securities, or other agreements or commitments obligating the
Company, or any subsidiary to issue or to transfer from treasury additional
shares of its capital stock. Except for the common stock outstanding, there are
no other equity securities of the Company. No taxes or other payments to
governmental authorities will be due from the Purchaser upon transfer of the
Common Stock as contemplated by this Agreement.
2.3 Corporate Books and Records. The minute books of the Company contain
accurate records of all meetings and accurately reflect all other actions taken
by the Board of Directors, all committees of the Board of Directors and the
Shareholder of the Company. Complete and accurate copies of all such minute
books and of the stock register of the Company have been made available by the
Company for inspection by the Purchaser. At the Closing, all of those books and
records will be in the possession of the Company.
2.4 Subsidiaries. The Company does not have any subsidiaries or own any
interest in any other enterprise, except as described in Exhibit 2.4 attached
hereto.
2.5 Directors and Officers. Exhibit 2.5 to this Agreement contains the
names and titles of all directors and officers of the Company.
2.6 Financial Statements. Exhibit 2.6 to this Agreement includes true
and complete copies of the reviewed financial statements. The Company Financial
Statements are true, accurate and complete, and fairly present the financial
position of the Company.
2.7 Absence of Changes. Since the respective dates of the Financial
Statements, there has not been any change in the business of the Company, except
for changes in the ordinary course of business.
2.8 Absence of Undisclosed Liabilities. As of the respective dates of
the Financial Statements included in Exhibit 2.6, the Company did not have any
material 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 Financial Statements. As of the Closing Date, the Company does
not have any material liabilities not disclosed in the Company Financial
Statements.
2.9 Taxes. Within the times and in the manner prescribed by law, the
Company has filed all tax returns required by law and has paid all taxes,
assessments and penalties due and payable. The provisions for taxes, if any,
reflected in the Company Financial Statements, are adequate for any and all
taxes for the periods ending on the date of such financial statements and for
all prior periods, whether or not disputed. There are no present disputes as to
taxes of any nature payable by the Company.
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2.10 Compliance with Laws. The Company has complied in all material
respects with, and is not in violation of, applicable federal, state, or local
statutes, laws or regulations (including without limitation, any applicable
building, zoning, environmental, or other law, ordinance or regulation)
affecting its properties or the operation of its business.
2.11 Litigation. (1) The Company is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation pending or threatened against or affecting the Company or its
business, assets or financial condition (hereinafter referred to as "Actions");
(2) the Company is not in default with respect to any order, writ, injunction or
decree of any federal, state, local or foreign court, department, agency or
instrumentality applicable to them; (3) the Company is not engaged in any
lawsuits to recover monies due to it.
2.12 Authority. The Board of Directors of the Company has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and the Company and Shareholder have full power and
authority to execute, deliver and perform this Agreement and this Agreement is a
legal, valid and binding obligation of the Company and Shareholder, and is
enforceable in accordance with its terms.
2.13 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by the Company and Shareholder and the performance by the Company
and Shareholder of their obligations hereunder will not cause, constitute or
conflict with or result in (a) any breach or violation of any of the provisions
of or constitute a default under any license, indenture, mortgage, charter,
instrument, articles of incorporation, by-laws, or other agreement or instrument
to which the Company is a party, or by which it may be bound, nor will any
consents or authorizations of any party other than those hereto be required, (b)
an event that would permit any party to any agreement or instrument to terminate
such agreement or instrument or to accelerate the maturity of any indebtedness
or other obligation of the Company, or (c) an event that would result in the
creation or imposition of any lien, charge, or encumbrance on any asset of the
Company
2.14 Validity of the Company Shares. The shares of the Company Common
Stock to be delivered to Purchaser pursuant to this Agreement, when transferred
in accordance with the provisions of this Agreement, will be duly authorized
validly issued, fully paid and non-assessable; and free and clear of all liens,
claims and encumbrances.
2.15 Assets. The Company has good and marketable and insurable title to
all its property and such property is not subject to any liens, claims and/or
encumbrances other than disclosed in Exhibit 2.6.
2.16 Material Contracts. Exhibit 2.16 lists each of the following
material contracts and agreements (including, without limitation, oral and
informal arrangements. The Company has delivered, or will deliver on or before
the execution of this Agreement, to the Purchaser correct and complete copies of
all Material Contracts:
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2.17 Trade Names and Rights. The Company has no trademarks, service
marks, trade names, and copyrights required in its business. .
2.18 Proprietary and Intellectual Property Rights. The Company has
proprietary rights and intellectual property rights owned by or registered in
the name of the Company or any of its subsidiaries or used in the business of
the Company or any of its subsidiaries and is not in default in any material
respect, under any agreement relating to any proprietary right or intellectual
property right.
2.19 Employees. There are, except as disclosed in Exhibit 2.19, no
collective bargaining, bonus, profit sharing, severance, indemnification,
compensation or other agreements, trusts, funds, plans or arrangements
maintained by the Company or any subsidiary of the Company for the benefit of
its directors, officers or employees, and there are no employment, consulting,
severance or indemnification arrangements, agreements or understandings between
the Company or any of its affiliates
2.20 Labor Matters. There are no activities or controversies, including,
without limitation, any disputes with individuals, labor organizing activities,
proceedings preparatory thereto, unfair labor practice complaints, labor
strikes, disputes, slowdowns or work stoppages, pending or threatened, between
the Company or any of its employees.
2.21 Accounts Receivable. Notwithstanding any allowance for doubtful
accounts booked in the Company's Financial Statements, all accounts receivable
of the Company and including those created between the date of the Financial
Statements and the Closing, whether or not reflected in the Company Financial
Statements, represent transactions in the ordinary course of business, and are
current and collectible in the ordinary course of business in the amounts
recorded on the Books of the Company and arising from a bona fide, arms length
transaction
2.22 Inventories. All inventories of the Company whether or not
reflected in the Company Financial Statements, are of a quality and quantity
usable and salable in the ordinary course of business and comply in all material
respects with applicable standards and regulations of governmental authorities.
2.23 Accounts Payable. The accounts payable reflected on the Company
Financial Statements, and those reflected on the books of the Company at the
time of the Effective Date will, reflect all amounts owed by the Company in
respect of trade accounts due and other payables.
2.24 Insurance. The Company has insurance policies in full force and
effect, which provide for coverage 's, which are usual and customary in its
business as to amount and scope, and are adequate to protect the Company against
any reasonably foreseeable risk of loss
2.25 Title to and Utilization of Properties. Exhibit 2.25 attached
hereto lists all of the Company owned and leased properties, the Company owns
fee simple, insured title to all real property owned by it and has the unbridled
right to use the same, and is not aware of any claim, notice or threat to the
effect that its right to own and use such property is subject in any way to any
challenge, claim, assertion of rights, proceedings toward condemnation or
confiscation in whole or in part, or is otherwise subject to challenge.
No rights of first refusal encumber such Company owned Properties
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2.26 Facilities. The Company facilities are (as to physical plant and
structure) structurally sound and none of its facilities, nor any of the
vehicles or other equipment used by The Company in connection with its business,
has any material defects and all of them are in all material respects in good
operating condition and repair and are adequate for the uses to which they are
being put. None of such plants, structures, or equipment is in need of
maintenance and repairs except ordinary routine maintenance and repairs. All of
the Company's facilities comply with all laws and government regulations.
2.27 Environmental and Other Permits and Licenses; Related Matters.
(a) The Company currently holds all the health and safety and other
permits, licenses, authorizations, certificates, exemptions and
approvals of governmental authorities (collectively, "PERMITS"),
including, without limitation, environmental permits, necessary for the
current use, occupancy and operation of each asset and property of the
Company and the conduct of its business, and all such permits and
environmental permits are in full force and effect. Neither the Company
nor any of the Shareholder has received any notice from any governmental
authority revoking, canceling, rescinding, materially modifying or
refusing to renew any permit or environmental permit or providing
written notice of violations under any environmental law which have not
been resolved. The Company is in all material respects in compliance
with the permits and all applicable Environmental Laws
(b) All equipment owned or used by the Company, is in substantial
compliance with all applicable Permits and Environmental, and can be
operated in the ordinary course of business in substantial compliance
with all applicable Permits and Environmental Laws.
2.28 Customers and Suppliers. Exhibit 2.28 lists all major customers
and suppliers, which are material to the financial condition or operations of
the Company
2.29 Bank Accounts. Exhibit 2.29 sets forth the names and locations of
all banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains current accounts of any nature and
the names of all persons authorized to draw thereon or make withdrawals
therefrom.
2.30 Share Ownership. The Shareholder holds all of the outstanding
common shares of the Company Common Stock as set forth in Exhibit 2.30 hereto.
Such shares are owned and the Shareholder' ownership is of record and
beneficially owned by each holder thereof, and such shares are not subject to
any claim, lien, encumbrance or pledge. Each Shareholder has authority to sell
and exchange such shares pursuant to this Agreement.
2.31 Other Information. None of the information and documents which have
been furnished or made available by The Company or any of its representatives to
Purchaser or any of its representatives in connection with the transactions
contemplated by this Agreement is materially false or misleading or contains any
material misstatement of fact or omits any material fact necessary to be stated
in order to make the statements and information therein not misleading.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to the Company and the Shareholder to enter into this
Agreement, the Purchaser represents and warrants to the Company and Shareholder
that:
3.1 Organization. Purchaser is a corporation duly organized, validly
existing, and in good standing under the law of Colorado, has all necessary
corporate powers to own properties and to carry on its business as now owned and
operated by it, and is duly qualified to do business and is in good standing in
each of the states were its business requires qualification.
3.2 Capital. All of the issued and outstanding shares of Purchaser are
duly and validly issued, fully paid and non-assessable.
3.3 Authority. The Board of Directors of Purchaser has authorized the
execution of this agreement and the transactions contemplated herein, and
Purchaser has full power and authority to execute, deliver and perform this
Agreement and this Agreement is the legal, valid and binding obligation of
Purchaser, and is enforceable in accordance with its terms and conditions.
3.4 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by Purchaser and the performance by Purchaser of its obligations
hereunder will not cause, constitute, or conflict with or result in (a) any
breach or violation of any of the provisions of or constitute a default under
any license, indenture, mortgage, charter, instrument, certificate of
incorporation, bylaw, or other agreement or instrument to which Purchaser is a
party, or by which it may be bound, nor will any consents or authorizations of
any party other than those hereto be required, (b) an event that would permit
any party to any agreement or instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation or Purchaser, or (c) an event
that would result in the creation or imposition of any lien, charge, or
encumbrance on any asset of Purchaser.
3.5 Directors and Officers. Exhibit 3.5 of this Agreement contains the
names and titles of all directors and officers of Purchaser.
3.6 Investment Intent. Purchaser is purchasing the Common Stock for its
own account for investment purposes and not with a view to public distribution.
Purchaser has the capacity to evaluate the merits and risks of the acquisition
of the Common Stock and understands that the Common Stock is subject to resale
restrictions under various state and federal securities laws.
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ARTICLE 4
COVENANTS
4.1 Investigative Rights. From the Effective Date of this transaction
until the Closing Date, the Company shall provide to Purchaser, and its counsel,
accountants, auditors, and other authorized representatives, reasonable access
to all of The Company's properties, books, contracts, commitments, and records
for the purpose of examining the same. The Company shall furnish Purchaser with
all information concerning its affairs as Purchaser may reasonably request.
Without in any manner reducing or otherwise mitigating the representations
contained herein, Purchaser and/or its representatives shall have the
opportunity to meet with accountants and attorneys to discuss the financial
condition of the Company. If the transaction contemplated hereby is not
completed, all documents received by Purchaser and/or its attorneys and
accountants shall be returned to the Company upon request.
4.2 Conduct of Business. From the Effective Date of this transaction and
except as approved in writing by Purchaser, the Company and the Shareholder
covenant that they: (1) shall conduct the Company's business in the normal
course, and shall not sell, pledge, or assign any assets, without the prior
written approval of Purchaser, except in the regular course of business; shall
not amend the Company's Articles of Incorporation or Bylaws, declare dividends,
redeem or sell stock or other securities, incur additional or newly-funded
liabilities, acquire or dispose of fixed assets, change employment terms, enter
into any material or long-term contract, guarantee obligations of any third
party, settle or discharge any balance sheet receivable for less amount, or
enter into any other transactions other than in the regular course of business;
(3) shall not directly or indirectly solicit, initiate, or encourage any
inquiries or proposals from, discuss or negotiate with, provide non-public
information to, or consider the merits of any unsolicited inquiry or proposal
from any person (other than the Purchaser) relating to the merger, consolidation
or acquisition of the Company or any of the assets or properties of the Company
(other than acquisitions of inventories in the ordinary course of business); or
(4) shall not agree or commit to do or authorize any of the foregoing, unless
such action complies with the terms of this Agreement.
4.3 Indemnification of the Company and Shareholder. Purchaser shall be
liable for and shall indemnify, defend and hold The Company and the Shareholder
and its officers, directors, affiliates, agents and the Shareholder harmless
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including
interest, penalties, and reasonable attorney fees, that they shall incur or
suffer, which result from or relate to any activities of the Company or
Purchaser subsequent to the Closing Date or which result from or relate to any
breach of, or failure by Purchaser to perform any of its representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be furnished by
Purchaser under this Agreement.
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4.4 Indemnification of Purchaser. The Company and Shareholder shall be
liable for and shall agree to indemnify, defend and hold Purchaser and its
officers, directors, affiliates and agents harmless against and in respect of
any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties, and
reasonable attorney fees, that it shall incur or suffer, which result from or
relate to any breach of, or failure by The Company to perform any of its
respective representations, warranties, covenants and agreements in this
Agreement or in any exhibit, schedule, certificate or other instrument furnished
or to be furnished by The Company or Shareholder under this Agreement.
4.5 Representations and Warranties. Through the Closing Date, each of
the parties shall refrain from taking any action, which would render any of its
representations or warranties in this Agreement inaccurate as of the Closing
Date.
ARTICLE 5
TAX MATTERS
5.1 Cooperation and Exchange of Information. The Company, the
Shareholder and the Purchaser will provide each other with such cooperation and
information as any of them reasonably may request of the other in filing any Tax
(as defined in Section 5.7) return determining a liability for Taxes or a right
to a refund of Taxes, or participating in or conducting any audit or other
proceeding in respect of Taxes.
ARTICLE 6
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE
6.1 Conditions. Purchaser's obligations hereunder shall be subject to
the satisfaction, at or before the Closing, of all the conditions set forth in
this Article 6. Purchaser may waive any or all of these conditions in whole or
in part without prior notice; so long as such waiver is in writing; and
provided, however, that no such waiver of a condition shall constitute a waiver
by Purchaser of any other condition or any of Purchaser's other rights or
remedies, at law or in equity, if the Company and Shareholder shall be in
default of any of their representations, warranties, or covenants under this
Agreement.
6.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by the Company and Shareholder in
this Agreement or in any written statement that shall be delivered to Purchaser
by the Company under this Agreement shall be true and accurate when made and on
and as of the Closing Date with the same force and affect as if made at the
Closing.
6.3 Performance. Purchaser shall be reasonably satisfied that the
Company and Shareholder shall have performed, satisfied, and complied with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied with by it, on or before the Closing Date.
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6.4 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against any party hereto on or before the Closing Date.
6.5 Acceptance by Shareholder. The holders of not less than 100% of the
issued and outstanding shares of Common Stock of the Company have agreed to sell
and deliver their shares to Purchaser in accordance with this Agreement.
6.6 Directors of the Company. Effective on the Closing Date the Board o
Directors shall be one.
6.7 Financial Conditions. No assets of the Company will be encumbered
other than by notes payable shown on the Company's Financial Statements.
6.8 Tax Return. The Company shall complete, file and deliver a copy to
Purchaser, its federal and state income tax return for the year ended
6.9 Opinions. The Company shall deliver the opinion of its management
dated the Closing Date, in form and substance satisfactory to Purchaser, to the
effect that:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada.
(b) The Company's authorized and issued capital stock is as set forth in
paragraph 2.2 hereof.
(c) The execution and consummation of this Agreement have been duly
authorized and approved by the Company's Board of Directors and
consummation of this Agreement will not constitute or result in any
breach or default of the character described in paragraph 2.12 hereof of
which management has knowledge.
(d) The shares of Common Stock to be purchased by Purchaser pursuant to
this Agreement are duly and validly authorized and issued, and are fully
paid and nonassessable.
(e) Management has no knowledge of any undisclosed liabilities.
(f) Other such items as the Purchaser and the Shareholder shall mutually
agree.
6.11 Closing Documents. The Company and the Shareholder shall be
prepared to deliver the closing documents set forth in Article 7 of this
Agreement;
6.12 Purchaser's Board Approval. Within five (5) days following
execution of this Agreement, the Board of Directors of the Purchaser shall have
authorized the execution and delivery of this Agreement and the other
agreements, documents and instruments referenced herein, and the consummation of
the transactions contemplated hereby.
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6.13 Due Diligence. The Purchaser shall be satisfied in its discretion
with the results of its due diligence investigation of the Company.
6.14 Rights of First Refusal. All rights of first refusal held by any
person or entity relating to the Company or the business or any of the assets or
properties of the Company or the business shall have been waived (with each such
waiver to be in form and substance satisfactory to the Purchaser in its
reasonable discretion) or shall have expired without exercise.
6.15 Officer's Certificate. The Company shall have delivered to
Purchaser a certificate, dated the Closing Date, and signed by the President of
the Company, certifying that each of the conditions specified in Section 6.2
through 6.9 and 6.14 hereof have been fulfilled.
ARTICLE 7
CONDITIONS PRECEDENT TO THE COMPANY'S
AND SHAREHOLDER'S PERFORMANCE
7.1 Conditions. The Company's and Shareholder' obligations hereunder
shall be subject to the satisfaction, at or before the Closing, of all the
conditions set forth in this Article 7. The Company and Shareholder may waive
any or all of these conditions in whole or in part without prior notice; so long
as such waiver is in writing; and provided, however, that no such waiver of a
condition shall constitute a waiver by the Company and Shareholder of any other
condition of or any of the Company's or Shareholder' rights or remedies, at law
or in equity, if Purchaser shall be in default of any of its representations,
warranties, or covenants under this Agreement.
7.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Purchaser in this Agreement or
in any written statement that shall be delivered to the Company and/or
Shareholder by Purchaser under this Agreement shall be true and accurate on and
as of the Closing Date as though made at that time.
7.3 Performance. Purchaser shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
7.4 Absence of Litigation. No action, suit or preceding before any court
or any governmental body or authority, pertaining to the transactions
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Purchaser on or before the Closing Date.
7.5 Officers' Certificate. Purchaser shall have delivered to the Company
and Shareholder a certificate, dated the Closing Date and signed by the
President of Purchaser certifying that each of the conditions specified in
Sections 7.2 through 7.5 have been fulfilled.
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ARTICLE 8
CLOSING
8.1 Closing. The Closing of this transaction shall be held at the
offices of the Closing Agent; to be mutually agreed upon by the parties, on or
before October 30,2000, or as soon thereafter as reasonably practicable, or such
other place as shall be mutually agreed upon, and on such date as shall be
mutually agreed upon by the parties. At the Closing:
(a) Purchaser shall deliver the Chaparral shares to the Closing Agent as
required by Article I of this Agreement.
(b) Shareholder shall present the certificates representing its shares
of the Company being sold to Purchaser, and such certificates will be
duly endorsed; and
(c) Shareholder shall receive from the Closing Agent its share of the
Purchase Price.
(d) Purchaser shall deliver an officer's certificate, dated the Closing
Date, stating that all representations, warranties, covenants and
conditions set forth in this Agreement on behalf of Purchaser are true
and correct as of, or have been fully performed and complied with by,
the Closing Date.
e) The Company shall deliver a certificate, dated the Closing Date,
stating that all representations, warranties covenants and conditions
set forth in this Agreement on behalf of the Company are true and
correct as of, or have been fully performed and complied with by, the
Closing Date.
(f) Each party shall deliver such other documents or information
required to be furnished by Closing pursuant to this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 Captions and Headings. The Article and paragraph/section headings
through this Agreement are for convenience and reference only, and shall in no
way be deemed to define, limit, or add to the meaning of any provision of this
Agreement.
9.2 No Oral Change. This Agreement and any provision hereof, may not be
waived, changed modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
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9.3 Waiver. Except as otherwise expressly provided herein, no waiver of
any covenant, condition, or provision of this Agreement shall be deemed to have
been made unless expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants, or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions, covenants,
or conditions, (i) the acceptance of performance of anything required by this
Agreement to be performed with knowledge of the breach or failure of a covenant,
condition, or provision hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one breach by another party shall
be construed as a waiver with respect to any other or subsequent breach.
9.4 Entire Agreement. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings.
9.5 Choice of Law. The laws of the State of California shall govern
this Agreement and its application.
9.6 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.7 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of receipt if served personally on the party to whom notice is
to be given, by telecopy or telegram, or mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
Purchaser: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
Capco Energy, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
The Company: Capco Asset Management
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Shareholder: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Capco Resources Ltd.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
9.8 Binding Effect. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.
9.9 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
13
9.10 Brokers. Each of the parties hereto shall indemnify and hold the
other harmless against any and all claims, losses, liabilities or expenses which
may be asserted against it as a result of its dealings, arrangements or
agreements with any broker, finder or person, including ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
9.11 Announcements. Purchaser Shareholder and the Company will consult
and cooperate with each other as to the timing and content of any announcements
of the transactions contemplated hereby to the general public or to employees,
customers or suppliers. Except to the extent that the parties consent in writing
otherwise, no party to this Agreement shall make, or cause to be made, any press
release or public announcement in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media.
Notwithstanding the preceding sentence, the parties agree that the Purchaser or
an affiliate of the Purchaser may make such disclosure (on Form 8-K, by press
release or otherwise) regarding the terms of this Agreement and the transactions
contemplated hereby as it deems necessary to comply with applicable securities
laws or the rules and regulations of any Exchange, including a press release
following the execution of this Agreement.
9.12 Expenses. Except as specifically provided in this Agreement, all
costs and expenses including legal, accounting and any other out-of-pocket
expenses incurred by the Company or its Shareholder, in connection with this
transaction, shall be paid by the Shareholder. All costs and expenses including
legal, accounting and any other out-of-pocket expenses incurred by the
Purchaser, in connection with this transaction, shall be paid by the Purchaser.
9.13 Survival of Representations and Warranties. Except as otherwise
provided in this Section 9.13, the representations, warranties, covenants and
agreements of the parties set forth in this Agreement or in any instrument,
certificate, opinion, or other writing providing for in it, shall survive the
Closing for a period of five years irrespective of any investigation made by or
on behalf of any party. Notwithstanding the above, the representations and
warranties set forth in Article 5 relating to tax issues shall survive for a
period equal to the applicable statute of limitations with respect to any
circumstances described therein or related thereto.
9.14 Assignment. This Agreement may not be assigned by operation of Law
or otherwise by the Shareholder, the Company or the Purchaser.
9.15 No Third Party Beneficiaries. This Agreement shall be binding upon
and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person, including, without limitation, any employee or former
employee of the Company, any legal or equitable right, benefit or remedy of any
nature whatsoever, including, without limitation, any rights of employment for
any specified period, under or by reason of this Agreement.
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9.16 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity without the necessity of demonstrating the inadequacy of
monetary damages.
AGREED TO AND ACCEPTED as of the date first above written.
CAPCO ENERGY, INC.
/signed/
By --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
CAPCO ASSET MANAGEMENT, INC
/signed/
By -------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CAPCO RESOURCES LTD.
/signed/
By -------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President