EXHIBIT 10.1
ITEM 1,(3)
AGREEMENT FOR PURCHASE AND SALE OF STOCK BETWEEN PHOENIX
RESOURCES TECHNOLOGIES, INC. AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
DATED August 12, 1996
AGREEMENT FOR PURCHASE AND SALE OF STOCK
THIS AGREEMENT FOR THE PURCHASE AND SALE OF STOCK (the
"Agreement") dated the 12th day of August 1996, is hereby Made and entered into
by and between PHOENIX RESOURCES TECHNOLOGIES, INC. (hereafter the "Seller") a
Nevada corporation, formerly known as ▇▇▇▇▇▇ RESOURCES, INC., and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. (hereafter the "Buyer"), an individual, which parties covenant and
agree as follows:
WHEREAS, on January 31. 1996, the Seller executed and delivered to the
Buyer the Agreement for Purchase and Sale of Stock (the "Original Purchase
Agreement"), whereby the Seller agreed to sell and the Buyer agreed to purchase
one hundred percent (100%) of the outstanding capital stock, both common and
preferred (hereafter referred to as the "HWP Shares"), of ▇▇▇▇▇▇ Wood Products.
Inc. ("HWP"), and
WHEREAS, as a part of the Original Purchase Agreement, the Seller
agreed that if it was unable to (a) pay off and liquidate, within sixty (60)
days, the obligations and indebtedness to Agriculture Production Credit
Association ('AgPCA") and Community Bank ("Bank") (such indebtedness and
obligations to AgPCA and the Bank being hereafter referred to collectively as
the "HWP Indebtedness") on certain properties of HWP to be retained by the
Seller under the terms of the Original Purchase Agreement (hereafter the
"Retained Properties"), or (b) substitute collateral therefor within thirty (30)
days therefrom so as to release the remaining assets of HWP and the personal
guarantee of the Buyer from liability on the HWP Indebtedness, it would give up
any and all rights, title, and interest in and to the Retained Assets and in the
stock (the "HWI Shares") of Houston Woodtech. Inc ("HWI"), a Texas corporation
wholly owned by HWP, and title to such Retained Assets and the HWI Shares would,
without need for further action by the parties, vest in the Buyer, and
WHEREAS, despite the intent of the parties in the Original Purchase
Agreement to transfer and convey the Retained Assets to the Seller, no such
transfers, conveyances, assignments, or other disposition of such Retained
Assets was ever made or consummated, and
WHEREAS, the Seller failed to pay off or liquidate the HWP Indebtedness
and failed to substitute collateral therefor within the time required by, and in
accordance with, the terms and conditions of the Original Purchase Agreement,
and
WHEREAS, as a result thereof, the Buyer, in accordance with the terms
and conditions of the Original Purchase Agreement, took possession and control
of the Retained Assets and the HWJ Shares and has used the Retained Assets and
has operated and transacted business for and on behalf of HWP and HWI since that
time, and
WHEREAS, the parties now desire to (a) amend, modify, and ratify such
Original Purchase Agreement so as to more accurately and specifically
memorialize and reflect the terms, conditions, and provision of the agreements
of the parties and (b) acknowledge, confirm, and ratify the acts, conduct, and
decisions of the Buyer in connection with his use and management of the Retained
Assets, the operations of the business of HWP and HWI, and the transactions
related thereto.
NOW THEREFORE, in consideration of the mutual promises, covenants,
releases, and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
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parties, intending to be legally bound hereby do hereby covenant and agree as
follows:
1. Purchase and Sale of HWP Shares. Upon the terms and subject to the
conditions set forth in this
2. Agreement, and upon the representations and warranties made herein by
the Seller hereunder, the Seller, on the Closing Date (as such term is
hereinafter defined) hereby agrees to sell, assign, transfer and
deliver to Buyer, and Buyer will purchase and acquire from the Seller,
any and all of the issued and outstanding HWP Shares, both common and
preferred. The exact number of shares of the HWP Shares to being sold
by the Seller hereunder is One Thousand (1000) common shares, $1.00
par value per share, and Two (2) preferred shares, $1,000.00 par value
per share.
2 Purchase and Sale of HWI Shares. Upon the terms and subject to the
conditions set forth in this Agreement, and upon the representations and
warranties made herein by the Seller hereunder, the Seller, on the Closing Date
(as such term is hereinafter defined), hereby agrees to sell, assign, transfer
and deliver to Buyer, and Buyer will purchase and acquire from the Seller, any
and all of the issued and outstanding HWJ Shares, both common and preferred. The
exact number of shares of the HWI Shares to being sold by the Seller hereunder
is _________ common shares, $_____ par value per share
3 Purchase Price. Upon the terms and subject to the conditions set forth in
this Agreement, in reliance upon the representations, warranties, covenants and
agreements of the Seller contained herein, and in consideration for the sale,
conveyance, assignment, transfer and delivery of the HWP Shares and the HWJ
Shares, Buyer agrees to pay to the Seller an aggregate purchase price (the
"Purchase Price") as follows:
(a) Transfer of Oil Properties. The Buyer hereby agrees to sell, transfer,
assign, and convey to Seller any and all right, title, and interest in
and to the Forty-Nine (49) oil ▇▇▇▇▇ (hereafter referred to as the
"Oil Properties") located in West Virginia, which Oil Properties are
more specifically described in Exhibit "A" attached hereto, which
Exhibit is incorporated herein by reference for all purposes.
(b) Assumption of A~PCA Indebtedness. The Buyer hereby agrees to execute
and deliver to the Seller, at the closing, a liabilities undertaking
in the form of Exhibit "B" attached hereto, which Exhibit is hereby
incorporated by reference herein for all purposes, assuming and
agreeing to pay any and all obligations and indebtedness of HWP and/or
HWI owing to AgPCA (hereafter referred to as the "AgPCA Indebtedness")
In addition, the Seller hereby transfers, assigns, and conveys to the
Buyer any and all rights, title, and/or interest in and to any
privileges, benefits, or other rights associated with the AgPCA
Indebtedness In connection with the assumption of the AgPCA
Indebtedness, the Seller hereby agrees to execute and deliver any and
all agreements, assignments, assumptions, or other documents or
instruments which may be necessary to authorize and/or allow the
assumption of such obligations by the Buyer and to transfer to the
Buyer any rights and benefits appurtenant thereto.
(c) Buyer's Promissory Note. The Buyer hereby agrees to execute and
deliver to the Seller his non-negotiable promissory note (hereafter
the "Buyer's Note") in the aggregate principal amount of One Million
Dollars and No/100 (51.000.000 00), in the form attached hereto as
Exhibit "C", which Exhibit is hereby incorporated by reference herein
for all purposes Such Buyer's Note shall bear interest at the rate of
six percent (6%) per annum and shall specifically provide that such
Buyer's Note shall not be negotiable by the Seller and shall contain
specific provisions that neither the Buyer nor any officer, director,
or shareholder of HWP or HWI shall have any individual or personal
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liability or obligation for the repayment of the indebtedness due
under such Note, and that the sole remedy for the payment and
enforcement of the Buyer's Note shall be to foreclose the Seller's
security interest in the collateral pledged to the Seller under the
terms of the Security Agreement described below Such Buyer's Note
shall not be assignable or transferable to any third party without the
prior written consent of the Buyer.
(d) Security Agreement; Collateral for Buyer's Note. In order to secure
the payment of the Buyer's Note, the Buyer hereby agrees to execute
and deliver to the Seller his Security Agreement for Pledge of
Instrument and Pledge Agreement (the "Security Agreement") granting to
the Seller a security interest in and pledging such property as the
parties shall hereafter, by separate agreement, mutually agree. Such
Security Agreement shall provide that neither the Buyer nor any
officer, director, or shareholder of HWP or HWJ shall have any
individual or personal liability or obligations under the Security
Agreement, and that the sole remedy for the payment and enforcement of
the Buyer's Note shall be to foreclose the Seller's security interest
in the collateral pledged to the Seller under the terms thereof.
Further such Security Agreement shall provide that the Seller, as the
secured party thereunder, will not at any time bring any action, suit,
or proceeding against the Buyer, HWP, HWI, or any of the officers,
directors, or shareholders thereof, to recover a money judgment for
any sum due under the terms of the Buyer's Note. In addition such
Security Agreement shall provide that the Seller hereby waives any
right to any deficiency judgment on said Buyer's Note and agrees to
look solely to the collateral for the satisfaction of any and all
claims asserted in connection with the payment or enforcement of the
Buyer's Note
(c) Delivery of Stock Certificates. At Closing, the Seller hereby agrees
to deliver to the Buyer any and all certificates evidencing the exact
number of the HWP Shares and the HWI Shares owned by the Seller or
HWP, but not less than one hundred percent (100%) of such outstanding
shares, such HWP Shares and HWI Shares shall be in a form ready for
transfer and duly endorsed to the Buyer. In addition, the Seller, at
the Closing, and from time to time thereafter as may be required,
hereby agrees to execute and deliver to the Buyer such other stock
powers, agreements. Documents, and instruments, and take such other
actions, as the Buyer, in his discretion, may deem necessary, in order
to more fully vest in the Buyer and perfect his title to (a) any and
all right, title, and interest in and to One Hundred Percent (100%) of
the HWP Shares and the HWI Shares and (b) any and all other right,
title, and interest, or claim or demand of any kind which the Seller
may have in. to, or upon any of the properties, assets, or business of
HWP and HWI. In the event that the Seller are unable to locate or
deliver the certificate or certificates representing the HWP Shares
and the HWI Shares, then the Seller hereby agrees to execute and
deliver to HWP, HWJ, and/or the Buyer, such affidavit(s) of lost
certificates as may be necessary to authorize and allow the boards of
directors of HWP and HWI to cancel any lost certificates and authorize
the reissuance thereof in accordance with the terms, conditions, and
provisions of this Agreement.
4 Closing. The closing of the purchase and sale of the HWP Shares and the
HWI Shares provided herein (the "Closing") will be on August 12. 1996. Such date
and time of Closing is herein referred to as the "Closing Date". The parties
hereby agree that the effective date of the transactions evidenced by this
Agreement shall will be April 30, 1996 (the "Effective Date").
5. Representations and Warranties of Seller and Joining Parties. The Seller
hereby represents and warrants to Buyer as follows
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(a) Existence. Good Standing; Corporate Authority; Compliance With Law.
The Seller is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation. The
Seller, HWP and HWI are duly licensed or qualified to do business as
foreign corporations and are in good standing under the laws of any
other jurisdiction in which the character of the property owned or
leased by them therein or in which the transaction of their business
makes such qualification necessary. The Seller, HWP, and HWI have all
requisite corporate power and authority to own their property and
carry on their business as now conducted. The Seller, HWP and HWI are
not in default with respect to any order of any court, governmental
authority or arbitration board or tribunal to which they are a party
or is subject, and the Seller, HWP, and HWI are not in violation of
any laws, ordinances, governmental rules or regulations to which they
are subject. The Seller, HWP, and HWI have obtained all licenses,
permits and other authorizations and have taken all action required by
applicable law or governmental regulation in connection with their
business as now conducted.
(b) Capitalization. HWP has authorized capital stock consisting solely of
Two Hundred Thousand (200,000) shares of common stock, $1.00 par value
per share, of which One Thousand (1,000) shares and no more are
presently issued and outstanding. HWI has authorized capital stock
consisting solely of ____ shares of common stock, $ par value per
share, of which ____________ shares and no more are presently issued
and outstanding Except for rights granted pursuant to this Agreement,
there are no outstanding rights, warrants, options, subscriptions,
agreements or commitments giving any one any right to require HWP or
HWI to sell or issue any capital stock or other securities.
(c) Jurisdictions. Schedule 5(c) contains a list of all jurisdictions in
which the HWP and HWI are presently licensed or qualified to do
business. The Seller. HWP and HWI have complied in all material
respects with all applicable laws of each such jurisdiction and all
applicable rules and regulations of each regulatory agency therein.
HWP and HWJ have not been denied admission to conduct any type of
business in any jurisdiction in which they are not presently admitted
as set forth in such Schedule 5(c), have not had their license or
qualification to conduct business in any jurisdiction revoked or
suspended and has not been involved in any proceeding to revoke or
suspend a license or qualification.
(d) Records. The corporate minute books of HWP and HWJ shall be delivered
to Buyer at the Closing and will contain true and complete copies of
the articles of incorporation and by-laws, as amended to the Closing
Date, the minutes of all meetings of directors and shareholders and
certificates reflecting all actions taken by the directors or
shareholders without a meeting from the date of incorporation of HWP
and HWI to the Closing Date.
(e) Officers and Directors, Bank Accounts; Powers of Attorney; Insurance.
The officers and directors of HWP and HWI are as set forth in Schedule
5(e)-i Schedule 5(e)-2 sets forth (I) the name of each bank, savings
institution or other person with which HWP and/or HWI had or has an
account or safe deposit box and the names and identification of all
persons authorized to draw thereon or to have access thereto, (ii) the
names of all persons, if any, holding powers of attorney from the
Seller (with respect to the business or operations of HWP or HWI),
HWP, and/or HWJ and a summary statement of the terms thereof, and
(iii) a list of all insurance policies owned by HWP and/or HWI,
together with a brief statement of the coverage thereof.
(f) Financial Statements. The financial statements and books and records
of HWP and HWI fully and fairly set forth the financial condition and
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operations of HWP and HWI as of the dates indicated therein, and the
results of HWP's and HWI's operations for the periods indicated, and
have been prepared in accordance with generally accepted accounting
principles consistently applied, except as otherwise stated therein.
Undisclosed Liabilities. HWP and HWI do not have any liabilities or
obligations whatsoever, either accrued, absolute, contingent or
otherwise, which are not reflected or provided for in its financial
statements except those specifically described in the Schedules hereto
(g) Absence of Certain Changes or Events. Prior to the Effective Date
hereof, HWP and HWI have not.
(1) incurred any obligation or liability (fixed or contingent),
except normal trade or business obligations incurred in the
ordinary course of business and consistent with past practice,
none of which is materially adverse, and except in connection
with this Agreement and the transactions contemplated hereby;
(2) discharged or satisfied any lien, security interest or
encumbrance or paid any obligation or liability (fixed or
contingent), other than in the ordinary course of business and
consistent with past practice;
(3) mortgaged, pledged or subjected to any lien, security interest or
other encumbrance any of its assets or properties (other than
mechanic's. materialman's and similar statutory liens arising in
the ordinary course of business and purchase money security
interests arising as a matter of law between the date of delivery
and payment);
(4) transferred, leased or otherwise disposed of any of their assets
or properties except for a fair consideration in the ordinary
course of business and consistent with past practice or, except
in the ordinary course of business and consistent with past
practice, acquired any assets or properties;
(5) canceled or compromised any debt or claim, except in the ordinary
course of business and consistent with past practice.
(6) waived or released any rights of material value;
(7) transferred or granted any rights under any concessions, leases,
licenses, agreements, patents, inventions, trademarks, trade
names, service marks or copyrights or with respect to any
know-how;
(8) made or granted any wage or salary increase applicable to any
group or classification of employees generally, entered into any
employment contract with, or made any loan to, or entered into
any material transaction of any other nature with, any officer or
employee.
(9) entered into any transaction, contract or commitment not in the
ordinary course of business and this Agreement and the
transactions contemplated hereby;
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(10) suffered any casualty loss or damage (whether or not such Toss or
damage shall have been covered by insurance) which affects in any
material respect its ability to conduct business; or
(11) declared any dividends or bonuses, or authorized or affected any
amendment or restatement of its articles of incorporation or
by-laws or taken any steps looking toward dissolution or
liquidation
Between the date of this Agreement and the Closing Date, the
Seller will not do or attempt to do, on behalf of HWP and/or HWI,
any of the things listed in subparagraphs (1) through (11) above
(h) Taxes. HWP and HWI have (I) duly and timely filed or caused to be
filed all federal, state, local and foreign tax returns
(including, without limitation, consolidated and/or combined tax
returns) required to be filed by it prior to the date of this
Agreement which relate to their business or with respect to which
HWP or HWI, or their assets or properties, are liable or
otherwise in any way subject, (ii) paid or fully accrued for all
taxes shown to be due and payable on such returns (which taxes
are all the taxes due and payable under the laws and regulations
pursuant to which such returns were filed), and
(i) properly accrued for all such taxes accrued in respect of HWP
and/or HWI or the assets and properties of thereof for periods
subsequent to the periods covered by such returns. No deficiency
in payment of taxes for any period has been asserted by any
taxing body and remains unsettled at the date of this Agreement.
Copies of all federal and state income (or franchise) tax returns
of HWP and HWI have been made available for inspection by Buyer..
(j) Title to Shares. The HWP Shares and the HWI Shares are duly
authorized, validly issued, fully paid and nonassessable and are
owned by the Seller free and clear of all liens, encumbrances,
Charges, assessments and adverse claims. The HWP Shares and the
HWI Shares are subject to no restrictions with respect to
transferability to Buyer in accordance with the terms of this
Agreement. Upon transfer of the HWP Shares and the HWI Shares by
the Seller, the Buyer will. as a result, receive good and
marketable title to all of such Shares, free and clear of all
liens, encumbrances, charges, assessments, restrictions and
adverse claims
(k) Title to Property and Assets. HWP and HWI have good and
marketable title to all of the properties and assets used by them
in the conduct of their business (including, without limitation.
the properties and assets reflected in its balance sheets except
an>' thereof since disposed of for value in the ordinary course
of business), and none of such properties or assets is, except as
disclosed in said balance sheets or the Schedules hereto, subject
to a contract of sale not in the ordinary course of business or
to security interests, mortgages, encumbrances, liens or charges
of any kind or character.
(l) Real Estate. Schedule 5(1) contains a list of all real property
owned by HWP and HWJ or in which HWP or HWI have a leasehold or
other interest and of any lien, charge or encumbrance thereupon.
Such Schedule also contains a description identifying all such
real property and the significant rental terms (including rents,
termination dates and renewal conditions). The improvements upon
such properties and use thereof by HWP or HWI conform to all
applicable lease restrictions zoning and other local ordinances
(m) List of Contracts and Other Data. Schedule 5(m) sets forth the
following
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(1) (I) all computer software, patents and registrations for
trademarks, trade names, service marks and copyrights which
are unexpired as of the date hereof and are used in
connection with the operation of HWP's and HWI's business,
all applications pending on said date for patents or for
trademark, trade name, service ▇▇▇▇ or copyright
registrations, and all other proprietary rights, owned or
held by HWP or HWI and which are reasonably necessary to. or
primarily used in connection with, their business, and (ii)
all licenses granted by or to HWP or HWI and any and all
other agreements to which they are a party and which relate,
in whole or in part, to any items of the categories
mentioned in (I) above or to other proprietary rights which
are reasonably necessary to, or used in connection with,
HWP's and HWI's business;
(2) All collective bargaining agreements, employment and
consulting agreements, executive compensation plans, bonus
plans. profit-sharing plans, deferred compensation
agreements, employee pension or retirement plans, employee
stock purchase and stock option plans, group life insurance,
hospitalization insurance or other plans or arrangements
providing for benefits to employees of HWP and/or HWI;
(3) All contracts, understandings and commitments (including.
without limitation. mortgages, indentures and loan
agreements) to which either HWP or HWI is a party, or to
which HWP or HWJ or any of their assets or properties is
subject, and which are not specifically referred to above;
(4) The names and current annual compensation rates of all
employees of HWP and HWI; and
(5) All customer backlog which is represented by firm purchase
orders, identifying the customers, products and purchase
prices
True and complete copies of all documents and complete
descriptions of all oral understandings, if any, referred to
above have been provided or made available to Buyer and its
counsel
(n) No Breach or Default. Neither HWP nor HWJ is in default under any
contract to which it is a party or by which it is bound, nor has any
event occurred which, after the giving of notice or the passage of
time or both, would constitute a default under any such contract. The
Seller has no reason to believe that the parties to such contracts
will not fulfill their obligations under such contracts in all
material respects or are threatened with insolvency.
(0) Labor Controversies. Neither HWP nor HWI is a party to any collective
bargaining agreement. There are not any controversies between HWP or
HWJ and any of their employees which might reasonably be expected to
materially adversely affect the conduct of their business, or any
unresolved labor union grievances or unfair labor practice or labor
arbitration proceedings pending or, to the knowledge of the Seller,
threatened relating to HWP's and HWI's business and, to the knowledge
of the Seller, there are not any organizational efforts presently
being made or threatened involving any of HWP's or HWI's employees.
Neither the Seller, HWP, nor HWI have received notice of any claim
that HWP or HWI have not complied with any laws relating to the
employment of labor, including any provisions thereof relating to
wages, hours, collective bargaining, the payment of social security
and similar taxes, equal employment opportunity, employment
discrimination and employment safety, or that HWP and/or HWI may be
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liable for any arrears of wages or any taxes or penalties for failure
to comply with any of the foregoing.
(p) Litigation. Except as set forth in Schedule 5(p), there are no
actions, suits or proceedings with respect to HWP or HWI involving
claims by or against such entitles pending or, to the knowledge of the
Seller, threatened against HWP and HWI, at law or in equity, or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality. To the knowledge
of the Seller, no basis for any action, suit or proceeding exists, and
there are no orders, judgments, injunctions or decrees of any court or
governmental agency with respect to which HWP or HWI have been named
or is a party which apply, in whole or in part, to the business of HWP
or HWI, the assets or properties thereof, or the HWP Shares or the HWI
Shares, or which would result in any material adverse change in the
business or prospects of HWP or HWI.
(q) ERISA. Neither HWP nor HWJ has engaged in any transaction with respect
to any employee benefit plan (a "Plan" as defined in Section 3(3) of
ERIS, maintained by HWP or HWJ in connection with which it could be
subjected to either a civil penalty assessed pursuant to Section
502(I) of ERISA or a tax imposed by Section 4975 of the Internal
Revenue Code of 1986, as amended. No material liability to the Pension
Benefit Guaranty Corporation (the "PBGC"), other than annual premium
payments, has been or is expected by the Seller to be incurred b>' HWP
or HWI with respect to any Plan. There has been no reportable event
(within the meaning of Section 4043(b) of ERISA), which at the time of
such event required notification within thirty (30) days to the PBGC,
with respect to any Plan. There has been no other reportable event
with respect to any Plan which could result in a material liability to
Buyer or HWP or HWI as a result thereof. There has been no event or
condition which presents a material risk of termination of any such
Plan by the PBGC. Neither HWP nor HWI is now, nor has ever been, under
any obligation to make any payments or contributions to any
Multi-employer Plan (as that term is used under Section 3(37) of
ERISA, and such entities do not have any accrued liability under
Section 4201 of ERISA for any complete or partial withdrawal from a
Multi-employer Plan. Full payment has been made of all amounts which
HWP or HWI is required under the terms of each Plan to have paid as
contributions to such Plan as of the last day of the most recent
fiscal year of such Plan ended prior to the date hereof, and no
accumulated funding deficiency (as defined in Section 302 of ERISA and
Section 412 of the Internal Revenue Code of 1986, as amended), whether
or not waived, exists. Schedule 5(q) also contains a complete and
accurate list of each employee benefit plan and related trust subject
to ERISA to which HWP or HWI is a party or contributes. Each such Plan
and related trust complies in all material respects in form and
operation with the requirements of ERISA and any other applicable
statutes, orders, governmental rules and regulations. All reports and
other filings with respect to such Plans required by statute or
regulation have been filed. HWP and HWI do not now have, nor have they
ever previously formed, maintained or terminated, a defined benefit
plan HWP and HWI do not have a defined contribution plan (purchase
money or target benefit) for which there is an accrued benefit.
(r) No Brokers. Neither the Sellers, HWP, nor HWI has entered into any
contract, arrangement or understanding with any person or firm which
may result in the obligation of Buyer. HWP. and HWI to pay any
finder's fees, brokerage or agent's commissions or other like payments
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in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby, and the Seller
is aware of any claim or basis for any claim for payment of any
finder's fees, brokerage or agent's commissions or other like payments
in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
(s) Validity and Effect of Agreements. This Agreement constitutes, and all
agreements and documents contemplated hereby when executed and
delivered pursuant hereto for value received will constitute, the
valid and legally binding obligations of the Seller enforceable in
accordance with their terms, subject as to enforcement to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. The consummation of the transactions contemplated hereby
does not require the consent of any third party not obtained, will not
result in the material breach of any term or provision of, or
constitute a default under, any order, judgment, injunction, decree,
indenture, mortgage, lease, lien, other agreement or instrument to
which the Seller, HWP, or HWJ is a party or by which any of them is
bound, and will not violate or conflict with any provision of the
by-laws or articles of incorporation of the Seller, HWP. or HWI.
(t) No Misrepresentation or Omission. No representation or warranty by the
Seller as set forth herein or in any other paragraph or provision of
this Agreement, or in any certificate or other document furnished or
to be furnished by the Seller pursuant hereto, contains or will
contain any untrue statement of a material fact or omits or will omit
to state a material fact necessary to make the statements contained
therein not misleading or will omit to state a material fact necessary
in order to provide Buyer with accurate information as to HWP and HWI.
6. Representations and Warranties of Buyer. The Buyer hereby represents and
warrants to the Seller as follows;
(a) Authority. Buyer has all requisite power and authority to enter into
this Agreement and to take all actions required by this Agreement.
(b) Validity and Effect of Agreements. This Agreement constitutes, and all
agreements and documents contemplated hereby when executed and
delivered pursuant hereto for value received will constitute, the
valid and legally binding obligations of the Buyer, enforceable in
accordance with their terms, subject as to enforcement to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. The consummation of the transactions contemplated hereby
does not require the consent of any third party not obtained, will not
result in the material breach of any term or provision of, or
constitute a default under, any order, judgment, injunction, decree,
indenture,. Mortgage, lease, lien, other agreement or instrument to
which Buyer is a party or b> which he is bound.
7 Indemnification by Seller
(a) Upon the terms set forth herein, and with respect to any act,
event, incident, occurrence or claim which occurred prior to the date hereof,
the Seller hereby covenants and agrees to indemnify and hold the Buyer, HWP, and
HWI harmless against, and will reimburse said parties (or HWP or HWI at Buyer's
request) on demand for any claim, payment, loss, cost, damage, injury, harm, or
expense (including attorneys fees and reasonable costs of investigation incurred
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in defending against such claim) made or incurred by Buyer. HWP, or HWI at any
time after the Closing Date, including any aforementioned claim that results
from any omission, misrepresentation, breach of warranty, or nonfulfillment of
any term, provision, covenant or agreement on the part of the Seller contained
in this Agreement, or from any misrepresentation in, or omission from, any
agreement, document, certificate or other instrument furnished or to be
furnished to Buyer pursuant to this Agreement.
(b) Conditions of Indemnification. With respect to any actual or
potential claim, any written demand, the commencement of any action, or the
occurrence of any other event which involves any matter or related series of
matters (a "Claim") against which a party hereto is indemnified (the
"Indemnified Party") by the other party (the "Indemnifying Party") under the
provisions hereof;
(1) Promptly after the Indemnified Party first receives written
documents pertaining to the Claim, or if such Claim does not
involve a third party Claim, promptly after the Indemnified
Party first has actual knowledge of such Claim, the
Indemnified Party shall give notice to the Indemnifying Party
of such Claim in reasonable detail and stating the amount
involved, if known, together with copies of any such written
documents. The Indemnifying Party shall have Ten (10) days
from the personal delivery or mailing of the Claim notice (the
"Notice Period") to notify the indemnified Party (I) whether
or not it disputes its liability to the Indemnified Party
hereunder with respect to such Claim, and (ii) notwithstanding
any such dispute, whether or not it desires, at its sole cost
and expense, to defend the Indemnified Party against such
Claim.
(2) If the Indemnifying Party disputes its liability with respect
to such Claim or the amount thereof (whether or not the
Indemnifying Party desires to defend the Indemnified Party
against such Claim as provided below), such dispute shall be
resolved in accordance with subparagraph (7) below. Pending
the resolution of any dispute by the Indemnifying Party of its
liability with respect to any Claim, such Claim shall not be
settled without the prior written consent of the Indemnified
Party
(3) If the Indemnifying Party desires to defend the Indemnified
Party against the Claim, then the Indemnifying Party shall
have the right, at its sole cost, expense and ultimate
liability regardless of the outcome, and through counsel of
its choice, to litigate, defend, settle or otherwise attempt
to resolve such Claim, except that the Indemnified Party may
elect, at any time and at the Indemnified Party's sole cost,
expense and ultimate liability, regardless of the outcome, and
through counsel of its choice, to litigate, defend. settle or
otherwise attempt to resolve such Claim. If the Indemnified
Party so elects (for reasons other than the Indemnifying
Party's failure or refusal to provide a defense to such
Claim), then the Indemnifying Party shall have no obligation
to indemnify the Indemnified Party with respect to such Claim,
but such disposition will be without prejudice to any other
right the Indemnified Party may have to indemnification under
subparagraph (2) or (3) above, regardless of the outcome of
such Claim. In any event, Buyer and the Seller shall fully
cooperate with each other and their respective counsel in
connection with any such litigation, defense, settlement or
other attempted resolution.
(4) If the Indemnifying Party elects not to defend the Indemnified
Party against such Claim, whether by not giving the
Indemnified Party timely notice as provided above or
otherwise, then the amount of any such Claim or, if the same
be defended by the Indemnifying Party, then that portion
thereof as to which such defense is unsuccessful, in each
case, shall be conclusively deemed to be a liability of the
Indemnifying Party hereunder, unless the Indemnifying Party
shall have disputed its liability to the Indemnified Party
hereunder as provided above, in which event such dispute shall
be resolved as provided in subparagraph (7) below.
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(5) In the event an Indemnified Party should have a Claim against
the Indemnifying Party hereunder that does not involve a Claim
being asserted against or sought to be collected from it by a
third party, the Indemnified Party shall promptly send a
notice with respect to such Claim to the Indemnifying Party.
If the Indemnifying Party disputes its liability with respect
to such Claim, such dispute shall be resolved in accordance
with subparagraph (7) hereof, if the Indemnifying Party does
not notify the Indemnified Party within the Notice Period that
it disputes such Claim, the amount of such Claim shall be
conclusively deemed a liability of the Indemnifying Party
hereunder.
(6) Upon the determination of the liability for indemnification as
provided herein, the appropriate party shall pay to the other,
as the case may be, within Ten (10) days after such
determination, the amount of any claim for indemnification
made hereunder. In the event that the Indemnified Party is not
paid in full for any such claim pursuant to the foregoing
provisions promptly after the other party's obligation to
indemnify has been determined in accordance herewith, it shall
have the right, notwithstanding any other rights that it may
have against any other person or corporation, to setoff the
unpaid amount of any such Claim against any amounts owed by it
under this Agreement or any other agreements entered into
pursuant to this Agreement. Upon the payment in full of any
claim, either by setoff or otherwise, the entity making
payment shall be subrogated to the rights of the Indemnified
Party against any person, firm or corporation with respect to
the subject matter of such Claim
(7) All disputes under this Paragraph 7(b)(7) shall be settled by
arbitration in Dallas, Texas, pursuant to the Commercial
Arbitration Rules of the American Arbitration Association.
Arbitration may be commenced at any time by any party hereto
giving written notice to each other party to a dispute that
such dispute has been referred to arbitration under this
subparagraph (7). Within Ten (10) days after the date of that
written notice initiating arbitration, the Buyer and the
Seller shall have each selected a single arbitrator and
notified the other of the identity of their selections. The
two selected arbitrators shall together select the third
arbitrator within the next ten-day period. Any award rendered
by the arbitrators shall be conclusive and binding upon the
parties hereto; provided, however, that any such award shall
be accompanied by a written opinion of the arbitrators giving
the reasons for the award This provision for arbitration shall
be specifically enforceable by the parties and the decision of
the arbitrators in accordance herewith shall be final and
binding and there shall be no right to appeal therefrom Each
party shall pay its own expenses of arbitration and the
expenses of the arbitrators shall be equally shared; provided,
however, that if in the opinion of the arbitrators any claim
for indemnification or any defense or objection thereto was
unreason-able, the arbitrators may assess, as part of his
award, all or any part of the arbitration expenses of the
other party (including reasonable attorneys' fees and fees of
the arbitrators) against the party raising such unreasonable
claim defense or objection.
(8) To the extent that arbitration may not be legally permitted
hereunder and the parties to any dispute hereunder may not at
the time of such dispute mutually agree to submit such dispute
to arbitration, any party may commence a civil action in a
court of appropriate jurisdiction to solve disputes hereunder.
Nothing contained in this subparagraph (8) shall prevent the
parties from settling any dispute by mutual agreement at any
time
(9) The indemnification rights of the parties hereunder are
independent of and in addition to such rights and remedies as
the parties may have at law or in equity or otherwise for any
misrepresentation breach of warranty or failure to fulfill any
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agreement or covenant hereunder on the part of any party
hereto including without limitation the right to seek specific
performance rescission or restitution none of which rights or
remedies shall be affected or diminished hereby.
8. Releases by Buyer. In consideration for the promises payments covenants
and agreements set forth herein, the Buyer for himself and for and on behalf of
his employees agents, accountants, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, legal
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, and assigns, either individually, singularly or
jointly, whether named herein or not, do hereby forever release, acquit and
discharge the Seller and its employees, officers, directors, shareholders,
agents, assigns, insurers, bonding companies, affiliates, subsidiaries, parent
companies, legal representatives, accountants, and attorneys, either
individually, singularly or jointly, whether named herein or not, all and each
of them, of and from, without limitation, any and all actions or causes of
action, claims, demands, debts, damages, expenses, compensation, attorneys fees,
loss or detriment of any character whatsoever whether past, present or future,
whether known or unknown, in contract or tort, statutory or at common law,
arising out of the Original Purchase Agreement, any previous transaction between
the parties for the purchase and/or sale of the HWP Shares, the HWI Shares, and
other transactions relating thereto, occurring or existing at an>' time prior to
the effective date of this Agreement, which were or might have been asserted by
any of them in any claim or action, based upon any act, event, omission or
relationship by or between such parties, whether or not the same has actually
been sued upon, asserted, or alleged.
9. Releases by Seller. In consideration for the promises, payments,
covenants, and agreements set forth herein, the Seller, for itself, and for and
on behalf of any and all of its officers, directors, shareholders, agents.
assigns, insurers, bonding companies, affiliates, Subsidiaries, parent
companies, legal representatives. accountants. and attorneys, either
individually, singularly or jointly, whether named herein or not, do hereby
forever release. acquit and discharge the Buyer. HWP, HWI, and any and all of
their respective officers, directors, shareholders, agents, insurers, bonding
companies, affiliates, subsidiaries, parent companies, attorneys, accountants,
estates, legal ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, and assigns, either
individually, singularly or jointly, whether named herein or not, and hereby
agree to indemnify and hold them harmless, all and each of them, of and from,
without limitation, any and all actions or causes of action, claims, demands,
debts, damages, expenses, compensation, attorneys fees, loss or detriment of any
character whatsoever whether past, present or future, whether known or unknown,
in contract or tort, statutory or at common law, arising out of the Original
Purchase Agreement, any' previous transaction between the parties for the
purchase and/or sale of the HWP Shares the HWJ Shares, and other transactions
relating thereto, occurring or existing at any time prior to the effective date
of this Agreement, which were or might have been asserted by any of them in any
claim or action, based upon any act, event, omission or relationship by or
between such parties, whether or not the same has actually been sued upon,
asserted, or alleged.
10. Survival of Obligations. Notwithstanding the provisions of Paragraphs 8
and 9 above, nothing contained herein shall be interpreted or construed to
release, discharge, and/or otherwise affect the duties, Obligations, agreements,
promises, Covenants, and/or liabilities of the Seller under this Agreement and
an y documents, instruments, or documents executed in connection herewith.
11. Taxes and Expenses. The Seller hereby covenants and agrees to assume
and pay all federal income taxes on the transfer to Buyer of the HWP Shares and
the HWI Shares hereunder. The Seller shall be responsible for and shall pay all
costs, liabilities and other obligations incurred by the Seller in connection
with the performance of and compliance with all transactions, agreements and
conditions contained in this Agreement to be performed or complied with by the
Seller, including legal and accounting fees.
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12. Buyer's Conditions of Closing. The obligation of Buyer to purchase the
HWP Shares and HWI Shares and to consummate the transactions hereunder shall be
subject to and conditioned upon the satisfaction at the Closing of each of the
following conditions;
(a) All representations and warranties of the Seller contained in this
Agreement and the Schedules hereto shall be true and correct at and as
of the Closing Date, the Seller shall have performed all agreements
and covenants and satisfied all conditions on their part to be
performed or satisfied by the Closing Date pursuant to the terms of
this Agreement, and Buyer shall have received a certificate of such
parties dated the Closing Date to such effect.
(b) The Seller shall have delivered to Buyer a Certificate of title
appropriate authority of the State of Nevada certifying as of a date
reasonably close to the Closing Date that the Seller has filed all
required reports, paid all required fees and taxes and is, as of such
date, in good standing and authorized to transact business as a
corporation;
(c) Ray and such other officers and directors of HWP and HWI as the Buyer
may require shall have delivered the written resignations, effective
on the Closing Date.
(d) The Seller shall have delivered to Buyer the certificates and other
instruments representing all of the HWP Shares and the HWI Shares,
duly endorsed for transfer or accompanied by appropriate stock powers
(in either case executed in blank or in favor of Buyer with the
execution thereof guaranteed by a bank or trust company), together
with all other documents necessary or appropriate to validly transfer
the HWP Shares and HWJ Shares to Buyer free and clear of all security
interests, Liens, encumbrances and adverse claims. In the event that
the HWP Shares and the HWI Shares cannot be found or located, the
Seller shall have executed and delivered any affidavits of lost
certificates as may be necessary for the issuance of new certificates.
(e) Any necessary approvals required under all loan agreements, indentures
or other debt documents of the Seller HWP, or HWI, and
(f) The Seller shall, at its own cost and expense, obtain a fairness
opinion from independent corporate counsel that the transactions
contemplated by this Agreement are fair to the Seller
13. Seller's Conditions of Closing. The obligations of the Seller to sell
the HWP Shares and HWI Shares and to consummate the transactions hereunder shall
be subject to and conditioned upon the satisfaction at the Closing of each of
the following conditions.
(a) All representations and warranties of Buyer contained in this
Agreement shall be true and correct at and as of the Closing Date and
Buyer shall have performed all agreements and covenants and satisfied
all conditions on its part to be performed or satisfied by the Closing
Date pursuant to the terms of this Agreement.
(b) The Buyer shall have effected payment of the Purchase Price and. in
connection therewith, shall have executed and delivered the Buyer's
Note and the Security Agreement to the Seller in the form attached
hereto as Exhibit
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(c) The Buyer shall have executed and delivered to the Seller the
Liabilities Undertaking in the form attached hereto as Exhibit "B".
14. Superseding Agreement. The parties hereby acknowledge and agree that
this Agreement has been prepared, executed and delivered in amendment and
modification of the Original Purchase Agreement and is intended by the parties
to be the controlling agreement as to the rights, duties, and responsibilities
of the parties regarding the transactions made the subject thereof. The parties
specifically acknowledge that they have negotiated the terms and condition of
this Agreement with the expectation that any revisions, changes, deletions or
additional terms that may be set forth herein are intended by the parties as
such and that, in the vent that any conflict arises in the construction or
interpretation of the terms and/or provisions of this Agreement and the Original
Purchase Agreement, this Agreement shall govern and control.
15. Cooperation. The Seller agrees to cooperate with and assist the Buyer
in consummating the terms and conditions of this Agreement. The parties further
hereby agrees to execute and deliver such instruments. Assignments, or other
documents as may be reasonably necessary to effectuate and/or evidence the terms
of this Agreement.
16. Voluntariness; Advice of Counsel. This Agreement is fully and
voluntarily entered into by the parties hereto, and each of them, on the advice
of their counsel and have not relied upon the advice and/or direction of any
other party, Each party hereto states that they have read this Agreement,
obtained advice of counsel, understands all of its terms, and executes it
voluntarily and of their own free will and accord with the full knowledge and
understanding of its legal significance and consequences.
17. Notification of Parties All notices requests, demands and other
communications provided for hereunder shall be sent or communicated in writing
by certified mail, return receipt requested, courier, telex or tested telex,
telegram or cable (confirmed, in the case of a telex, telegram or cable, by a
letter delivered personally or dispatched by first class mail within twenty-four
(24) hours of the dispatch of such telex, telegram or cable), or facsimile
transmission telephonically confirmed, shall be mailed or sent or delivered to
the parties at their last known address. Any party may, by notice as provided
above, designate in writing a different address for the sending of notices. Any
such notice shall be effective as of the date of receipt by the receiving party.
18. Terms Contractual. It is expressly understood and agreed by all parties
that the terms hereof are contractual and not merely recitals, and that the
agreements contained herein and the consideration transferred are for the
purposes described herein, and to compromise doubtful and disputed claims, avoid
litigation and buy peace.
19. Entire Agreement; Merger. This Agreement, together with any and all
documents. instruments and agreements which may be executed in connection
herewith, embodies the entire agreement and understanding among the parties
hereto and supersedes all prior negotiations, agreements and understandings
relating to the subject matter hereof There exists no other agreements or
understandings between the parties, explicit or implicit. with respect to the
subject matter hereof. Each party acknowledges that it has expressly bargained
for a prohibition of any implied or oral amendments or modifications of any
kind, nature or character. Each party acknowledges and agrees that this
Agreement is fully integrated and not in need of parole evidence in order to
reflect the intentions of the parties, and that the parties intend the literal
words of this Agreement to govern the transactions described herein, and for all
prior negotiations, drafts and other extraneous communications to have no
significance or evidentiary effect whatsoever.
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20. Survival. All of the terms, conditions, warranties and representations
contained in this Agreement shall survive, in accordance with their terms,
delivery by Buyer of the consideration to be given by it hereunder and delivery
by the Shareholders of the consideration to be given by them hereunder, and
shall survive the execution hereof and the Closing hereunder.
21. Benefit. Each of the parties to this Agreement understand and agree
that this Agreement shall be binding upon and inure to the benefit of the
parties hereto as well as their respective employees, officers, directors,
shareholders, agents, affiliates, subsidiaries, parent companies, legal
representatives, accountants, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, legal representatives,
and assigns.
22. Waiver. The failure of either party to insist in any one or more
instances upon performance of any term or condition of this Agreement or any
applicable contracts hereunder shall not be construed as a waiver of its future
performance or rights thereunder. The obligations of either party with respect
to such term, covenant, or condition shall continue in force and effect.
23. Modification of Agreement. The parties further acknowledge and agree
that no waiver, amendment, modification, supplement, termination or other change
to this Agreement shall be effective unless the same shall be in writing and
signed by the party against whom such waiver or other modification is sought to
be enforced.
24. Severability. In the event any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not in any
manner affect the remaining provisions hereof, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provisions had never
been contained herein.
25. Governing Law. This Agreement and the other agreements executed in
connection herewith shall be enforced construed, and interpreted pursuant to the
laws of the State of Texas. This Agreement shall be performable by the parties
hereto in ▇▇▇▇▇▇ County Texas.
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26. Headings. Headings and captions are included solely for convenience of
reference and if there is any conflict between captions and the text of this
Agreement, the text shall control.
27. Counterparts. This Agreement may be executed in two (2) or more
counterparts each of which shall be deeme+d an original for all purposes but all
of which together shall constitute the same agreement.
28. Merger of Documents. This Agreement and all agreements and documents
contemplated hereby constitute one agreement and are interdependent upon each
other in all respects.
29. Incorporation of Exhibits and Schedules. All Exhibits and Schedules
attached hereto are by this reference incorporated herein and made a part hereof
for all purposes as if fully set forth herein.
IN WITNESS WHEREOF the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year hereinabove first
set forth.
SELLER:
PHOENIX RESOURCES TECHNOLOGIES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: President
BUYER:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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