FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT Made as of the 30th day of November, 2006
EXHIBIT
10.1
FIRST
AMENDMENT
TO
Made
as of the 30th
day of November, 2006
MARCH
2, 2007
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FIRST
AMENDMENT TO
THIS
AMENDING AGREEMENT is made effective as of the 2nd
day of
March, 2007.
AMONG:
COLD
FLOW ENERGY ULC,
a
corporation incorporated under the laws of Alberta (“Purchaser”)
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and
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SURGE
GLOBAL ENERGY, INC.,
a
corporation incorporated under the laws of Delaware (“Surge”)
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and
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PEACE
OIL CORP.,
a
corporation incorporated under the laws of Alberta (“Target
Company”)
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and
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1229679
ALBERTA INC., 1216848 ALBERTA LTD., ▇▇▇▇ ▇▇▇▇▇▇ (individually and as trustee
of
the CAIRNS FAMILY TRUST), ▇▇▇▇ ▇▇▇▇▇▇ (individually and as trustee of the ▇▇▇▇▇▇
FAMILY TRUST), ▇▇▇▇ ▇▇▇▇▇▇▇▇ (as trustee of the STOUTHEARTED TRUST), ▇▇▇▇▇
▇▇▇
(as trustee of the LIU FAMILY TRUST) and ▇▇▇▇▇▇ ▇▇ (as trustee of the MA FAMILY
TRUST),
the
shareholders of Target Company (each a “Shareholder”
and
collectively, “Shareholders”)
WHEREAS
Purchaser,
Surge, Target Company and Shareholders (collectively, the “Parties”) have
entered into that certain stock purchase agreement dated as of November 30,
2006
(the “Stock
Purchase Agreement”);
AND
WHEREAS
the
Parties have considered it desirable to amend, in the manner set forth herein
and among other things, certain provisions pertaining to the payment of the
Purchase Price;
NOW
THEREFORE THIS AGREEMENT WITNESSES THAT
in
consideration of the premises and the mutual covenants and agreements herein
contained and contained in the Stock Purchase Agreement, and for other good
and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the Parties agree as follows:
ARTICLE
1
INTERPRETATION
| 1.1 |
Amending
Agreement
|
“this
Amending Agreement”, “hereto”, “herein”, “hereof”, “hereby”, “hereunder” and
similar expressions refer to this First Amendment to Stock Purchase Agreement
and not to any particular article, section, subsection or other subdivision
hereof and includes any and every instrument supplemental or ancillary hereto
or
in implementation hereof.
-2-
| 1.2 |
Definitions
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Unless
otherwise defined herein, all capitalized terms used in this Amending Agreement
which are defined in the Stock Purchase Agreement shall, for all purposes
hereof, have the meanings given to such terms in the Stock Purchase Agreement
unless the context otherwise specifies or requires.
| 1.3 |
Interpretation
Not Affected By
Headings
|
The
division of this Amending Agreement into articles and sections and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation of this Amending Agreement.
ARTICLE
2
AMENDMENT
TO THE STOCK PURCHASE AGREEMENT
| 2.1 |
Amendment
to Section 2.1
|
Section
2.1 of the Stock Purchase Agreement is hereby amended by deleting Section 2.1
in
its entirety and replacing such section with the following new Section
2.1:
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“2.1
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Purchase
Price, Payment. As
full consideration for the sale, assignment, transfer and delivery
of the
Shares by Shareholders to Purchaser, Purchaser shall deliver (or
cause to
be delivered) to Shareholders, at the Closing, an aggregate $16,350,000
(the “Purchase
Price”),
payable in the following manner:
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(a)
a certified cheque or bank draft of immediately available funds
in an
aggregate amount of $600,000, such amount representing the Escrow
Amount;
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(b)
a certified cheque, bank draft or wire transfer of immediately
available
funds in an aggregate amount of $150,000, less accrued interest
on the
Escrow Amount;
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(c) a promissory note with an aggregate face amount of $1,500,000, bearing interest at the rate of 7% per annum, due and payable on June 30, 2007 unless earlier paid in full at Purchaser’s option (the “First Promissory Note”) and addressed to Newco; | |
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(d)
a promissory note with an aggregate face amount of $1,000,000,
bearing
interest at the rate of 7% per annum, due and payable on July 30,
2007
unless earlier paid in full at Purchaser’s option (the “Second Promissory
Note”)
and addressed to Newco;
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(e)
a
promissory note with an aggregate face amount of $1,500,000, bearing
interest at the rate of 7% per annum, due and payable on July 30,
2007
unless earlier paid in full at Purchaser’s option (the “Third
Promissory Note”
and collectively with the First Promissory Note and the Second
Promissory
Note, the “Promissory
Notes”)
and addressed to Newco;
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(f)
a
promissory note with an aggregate face amount of $1,600,000, bearing
no
interest, due and payable on December 31, 2007 unless earlier paid
in full
at Purchaser’s option (the “Granite
Note”)
and addressed to Newco; and
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(g) certificates
for an aggregate 8,965,390 exchangeable shares in the capital of
Purchaser
(the “Exchangeable
Shares”),
it being expressly acknowledged and agreed that such Exchangeable
Shares
shall be delivered to the Escrow Agent on behalf of the Shareholders
at
Closing, to be held by the Escrow Agent in accordance with a closing
escrow agreement substantially in the form attached hereto as Exhibit
2.1
(the “Closing
Escrow Agreement”)
and that, in the event the Escrow Agent is obligated to return
the
Exchangeable Shares to Surge pursuant to the Closing Escrow Agreement,
such Exchangeable Shares shall automatically be cancelled and the
Shareholders’ entire right, title and interest in and to the Exchangeable
Shares shall extinguish, without payment of any consideration to,
or any
right of compensation in favour of, the
Shareholders”.
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| 2.2 |
Amendment
to Section 2.2
|
Section
2.2 of the Stock Purchase Agreement is hereby amended by deleting Section 2.2
in
its entirety and replacing such section with the following new Section
2.2:
“2.2 Allocation
of Purchase Price. The
Purchase Price, except for the amount represented by the Granite Note, shall
be
allocated among Shareholders in the proportion set out under the column entitled
“Allocation of Purchase Price” adjacent to each Shareholder’s name as set forth
on the Schedule of Shareholders.
| 2.3 |
Supplement
to Section 4.2
|
Section
4.2 of the Stock Purchase Agreement is hereby supplemented by inserting a new
subsection 4.2(h) as follows:
“(h) Other
Agreements. The
Closing Escrow Agreement fully executed by Newco.”
| 2.4 |
Amendment
to Subsection 4.3(a) and
(f)
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Subsections
4.3(a) and (f) of the Stock Purchase Agreement are hereby amended by deleting
subsections 4.3(a) and (f) in their entirety and replacing such subsections
with
the following new subsection 4.3(a) and (f), respectively:
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“(a)
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Wire
Transfer. A
wire transfer to Burstall Winger LLP on behalf of the Shareholders
on or
before the Closing Date, in an amount equal to the amount set forth
in
subsection 2.1(b) and representing, together with the Escrow Amount
and
any accrued interest thereon, and the amounts set forth in subsections
2.1(c), (d), (e) and (f), the aggregate cash component of the Purchase
Price to be allocated among Shareholders pursuant to Section
2.2;
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(f)
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Other
Agreements. The
Exchange Agreement, the Support Agreement, the Closing Escrow Agreement,
the Promissory Notes, the Granite Note, fixed and floating charge
debentures addressed to Newco from each of the Purchaser, the Target
Company and Surge in the amount of $4,000,000 (the “Debentures”)
in the form attached as Exhibit 4.3(f)(I), a conveyance (the “Conveyance”)
back of the Assets in the form attached as Exhibit 4.3(f)(II),
a gross
overriding royalty agreement (the “▇▇▇▇
Agreement”)
in the form attached as Exhibit 4.3(f)(III), guarantees (the “Guarantees”)
in the form attached as Exhibit 4.3(f)(IV) and a pledge agreement
(the
“Pledge
Agreement”
and, collectively with the Debentures, the Promissory Notes, the
▇▇▇▇
Agreement, the Conveyance, and the Guarantees, the “Security
Documents”)
in the form attached as Exhibit
4.3(f)(V).
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| 2.5 |
Supplement
to Section 4.3
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Section
4.3 of the Stock Purchase Agreement is hereby supplemented by inserting a new
subsection 4.3(h) as follows:
“Section
4.3(h) a wire transfer to Burstall Winger LLP on behalf of the Shareholders,
in
amount equal to $20,000, such amount the legal fees incurred by the Shareholders
in connection with the preparation of this agreement and certain ancillary
agreements”.
| 2.6 |
Amendment
to Subsection 6.2(a)
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Subsection
6.2(a) of the Stock Purchase Agreement is hereby amended by deleting Subsection
6.2(a) in its entirety and replacing such subsection with the following new
Subsection 6.2(a):
“6.2 Capitalization.
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(a)
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The
authorized capital of Purchaser consists of an unlimited number
of Common
Shares and an unlimited number of Exchangeable Shares (collectively,
“Purchaser
Stock”),
of which 1,000 Common Shares designated in the name of Callco and
no
Exchangeable Shares are and will be, immediately prior to Closing,
issued
and outstanding. No other shares of capital stock or securities
of
Purchaser are issued or
outstanding.”
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| 2.7 |
Amendment
to Section 6.3
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Section
6.3 of the Stock Purchase Agreement is hereby amended by deleting Section 6.3
in
its entirety and replacing such subsection with the following new Section
6.3:
“6.3 Authority;
Binding Nature of Agreements.
Purchaser
has all requisite corporate power and authority to execute and deliver this
Agreement, the Security Documents to which it is a party and all other
Transaction Agreements to which it is a party and to carry out the provisions
of
this Agreement, the Security Documents to which it is a party and the other
Transaction Agreements. The execution, delivery and performance by Purchaser
of
this Agreement, the Security Documents to which it is a party and the other
Transaction Agreements have been approved by all requisite action on the part
of
Purchaser. This Agreement has been duly and validly executed and delivered
by
Purchaser. Each of this Agreement, the Security Documents to which it is a
party
and the other Transaction Agreements constitutes, or upon execution and
delivery, will constitute, the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles related to or limiting creditors’ rights generally
and by general principles of equity.”
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| 2.8 |
Amendment
to Section 8.3
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Section
8.3 of the Stock Purchase Agreement is hereby amended by deleting Section 8.3
in
its entirety and replacing such subsection with the following new Section
8.3:
“8.3 Authority;
Binding Nature of Agreements.
Surge
has
all requisite corporate power and authority to execute and deliver this
Agreement, the Security Documents to which it is a party and all other
Transaction Agreements to which it is a party and to carry out the provisions
of
this Agreement, the Security Documents to which it is a party and the other
Transaction Agreements. The execution, delivery and performance by Surge of
this
Agreement, the Security Documents to which it is a party and the other
Transaction Agreements have been approved by all requisite action on the part
of
Surge. This Agreement has been duly and validly executed and delivered by Surge.
Each of this Agreement, the Security Documents to which it is a party and the
other Transaction Agreements constitutes, or upon execution and delivery, will
constitute, the legal, valid and binding obligation of Surge, enforceable
against Surge in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles related to or limiting creditors’ rights generally and by
general principles of equity.”
| 2.9 |
Amendment
to Section 8.5
|
Section
8.5 of the Stock Purchase Agreement is hereby amended by deleting Section 8.5
in
its entirety and replacing such subsection with the following new Section
8.5:
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“8.5
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No
Subsidiaries. Other than Purchaser, Callco, Signet and
▇▇▇▇▇▇▇, Surge does not own any shares of capital stock or other
securities of, or control, directly or indirectly, any other Entity
and
has never owned, beneficially or otherwise, any shares or other
securities
of, or any direct or indirect equity interest in, any
Entity.”
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| 2.10 |
Amendment
to Exhibit A - Certain
Definitions
|
| (a) |
Exhibit
A to the Stock Purchase Agreement is hereby amended by inserting
the
following new definition immediately following the definition for
“Business Day”:
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“Callco” shall
mean 1294697 Alberta Ltd., a corporation incorporated under the laws of
Alberta;”
| (b) |
Exhibit
A to the Stock Purchase Agreement is hereby amended by inserting
the
following new definition immediately following the definition for
“Miscellaneous Interests”:
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“Newco” shall
mean 1304146 Alberta Ltd., a corporation incorporated under the laws of
Alberta;”
| 2.11 |
Form
of Closing Escrow
Agreement
|
The
Stock
Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
a
new Exhibit 2.1 - Closing
Escrow Agreement in
the
form attached hereto as Exhibit A.
| 2.12 |
Form
of Debenture
|
The
Stock
Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
a
new Exhibit 4.3(f)(I) - Debenture
in
the
form attached hereto as Exhibit B.
| 2.13 |
Form
of Asset Transfer Back
|
The
Stock
Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
a
new Exhibit 4.3(f)(II) - Asset
Transfer Back in
the
form attached hereto as Exhibit C.
| 2.14 |
Form
of Gross Overriding Royalty
Agreement
|
The
Stock
Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
a
new Exhibit 4.3(f)(III) - ▇▇▇▇
Agreement in
the
form attached hereto as Exhibit D.
| 2.15 |
Form
of Guarantees
|
The
Stock
Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
a
new Exhibit 4.3(f)(IV) - Guarantees
- in
the
form attached hereto as Exhibit E.
| 2.16 |
Form
of Pledge Agreement
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The
Stock
Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
a
new Exhibit 4.3(f)(V) -
Pledge Agreement- in
the
form attached hereto as Exhibit F.
ARTICLE
3
GENERAL
| 3.1 |
Effect
of Amending Agreement
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This
Amending Agreement amends the Stock Purchase Agreement to the extent set forth
herein, and the Stock Purchase Agreement shall, from this date forward, be
read
in conjunction with this Amending Agreement. The Stock Purchase Agreement and
this Amending Agreement shall, from this date forward, have effect as if all
the
provisions of the Stock Purchase Agreement and this Amending Agreement were
contained in one instrument. As amended hereby, all the terms and conditions
as
set forth in the Stock Purchase Agreement remain valid, binding and in full
force and effect upon the Parties.
| 3.2 |
Counterpart
and Facsimile Execution
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This
Amending Agreement may be executed in counterpart, each of which when so
executed in counterpart shall have the same effect as if each Party had joined
in executing one and the same document, and notwithstanding their date of
execution, each counterpart shall be deemed to be dated and effective as of
the
day and year first set forth above. Any counterparts delivered by facsimile
shall be deemed for all purposes to be original counterparts of this Amending
Agreement.
| 3.3 |
Governing
Law
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This
Amending Agreement shall, in all respects, be subject to and be interpreted,
construed and enforced in accordance with the laws in effect within the Province
of Alberta. Each Party hereby expressly attorns to the non-exclusive
jurisdiction of the courts of the Province of Alberta.
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| 3.4 |
Further
Assurances
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Each
of
the Parties hereto agrees to use reasonable commercial efforts to take, or
cause
to be taken, all such further actions and to do, or cause to be done, all things
necessary, proper or advisable to give effect to the true intent, meaning and
purpose of this Amending Agreement.
| 3.5 |
Enurement
|
The
provisions of this Amending Agreement shall enure to the benefit of, and be
binding upon, the Parties hereto and their respective successors and
assigns.
[Remainder
of Page Intentionally Blank]
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IN
WITNESS WHEREOF
each of
the Parties has caused this Amending Agreement to be executed by its proper
officers, duly authorized on its behalf, with effect as of the day and year
first set forth above.
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COLD
FLOW ENERGY ULC
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇
Authorized Signing Officer |
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By:
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Authorized Signing Officer |
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇
Authorized Signing Officer |
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Authorized Signing Officer |
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PEACE
OIL CORP.
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By:
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/s/ ▇▇▇▇
▇▇▇▇▇▇
Authorized Signing Officer |
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By:
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/s/ ▇▇▇▇
▇▇▇▇▇▇
Authorized Signing Officer |
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1229679
ALBERTA INC.
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By:
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/s/ ▇▇▇▇
▇▇▇▇▇▇
Authorized
Signing Officer
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By:
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Authorized Signing Officer |
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1216848
ALBERTA LTD.
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By:
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/s/ ▇▇▇▇▇▇
▇▇▇▇▇
Authorized Signing Officer |
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By:
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Authorized Signing Officer |
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Witness
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/s/
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ individually and as trustee of the Cairns Family Trust |
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Witness
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/s/
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇ individually and as trustee of the ▇▇▇▇▇▇ Family Trust
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Witness
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/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ as trustee of the Stouthearted Trust |
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/s/
signature
Witness
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/s/
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇ as trustee of the Liu Family Trust
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/s/
signature
Witness
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/s/
▇▇▇▇ ▇▇
▇▇▇▇ ▇▇
as trustee of the Ma Family Trust
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