Exhibit 2.04
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), is dated April 11, 2000
and entered into by and between Empire Energy Corporation, a Utah corporation
("Empire") and Talisman Marketing, Inc., an Arizona corporation ("Talisman").
RECITALS
WHEREAS, Empire intends to purchase, and Talisman intends to sell, certain
of Talisman's assets used in connection with Talisman's business, upon the terms
and conditions of this Agreement, in return for 562,150 shares of newly issued
common stock of Empire.
WHEREAS, the asset purchase provided for hereby (the "Purchase") shall be
consummated in accordance with the terms and conditions hereof and shall be
consummated as of the date of the closing of this Agreement (the "Closing
Date");
NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and the provisions hereinafter contained, Empire and Talisman
agree as follows:
ARTICLE ONE
PURCHASE OF ASSETS
Section 1.1 Purchased Assets; Excluded Assets.
Purchased Assets. Subject to the terms and conditions of this Agreement, on
the Closing Date (as defined in Section 3.1), Talisman will sell to Empire, and
Empire will purchase from Talisman, certain of the assets used in connection
with the business of Talisman (collectively, the "Purchased Assets"), free and
clear of all security interests, liens, restrictions, claims, encumbrances or
charges of any kind ("Encumbrances"). The Purchased Assets shall include those
items described on Schedule A to this Agreement. As used in this Agreement,
capitalized terms not otherwise defined in this Agreement have the meanings set
forth in the Schedules.
Exhibit 2.04
Section 1.2 Liabilities Not Assumed.
Except for certain assumed liabilities described on Schedule B (the Assumed
Liabilities"), Empire will not assume and Talisman will pay and discharge, and
will indemnify and hold Empire harmless for any debts, obligations or
liabilities of Talisman, contingent or otherwise, including, without limitation,
those arising under any contracts or those resulting from any violation of any
securities law, rule or regulation, whether federal or state. Talisman will also
indemnify and hold Empire harmless for any breach by Talisman or its
shareholders of any representation, warranty or covenant of Talisman in this
Agreement or any other agreement or instrument executed or delivered pursuant to
this Agreement (each a "Related Agreement"), which representations, warranties,
and covenants shall survive the Closing (as defined in Section 3.1).
ARTICLE TWO
PURCHASE PRICE; PRORATIONS; ALLOCATIONS
Section 2.1 Purchase Price; Payment. The consideration to be paid by Empire
to Talisman for the Purchased Assets will be 562,150 shares of newly issued
restricted common stock of Empire and the assumption of the Assumed Liabilities
described on the attached Schedule B. At the Closing, Empire shall deliver its
stock certificate representing such shares to Talisman.
Section 2.2 Prorations. All taxes and assessments which are past due or
have become due upon any of the Purchased Assets on or before the Closing Date
will be paid by Talisman, together with any penalty or interests thereon.
Current personal property taxes will be prorated and adjusted between Empire and
Talisman as of the Closing on a due date basis.
Section 2.3 Allocations. The consideration for the Purchased Assets will be
allocated in accordance with Schedule C. This allocations will be conclusive and
binding for all purposed and each party will file all income and other tax
returns in a manner consistent with such allocation.
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Exhibit 2.04
ARTICLE THREE
CLOSING
Section 3.1 Closing Date. Subject to the terms and conditions of this
Agreement, the closing of the transaction contemplated by this Agreement and the
Related Agreements (the "Closing") will occur at a mutually agreeable time and
place of _________________, 2000.
Section 3.2 Actions to be Taken at the Closing.At the Closing, the parties
will take the following actions and deliver the following documents:
(a) Talisman shall deliver the Empire all necessary deeds,
conveyances, bills of sale, assurances, transfers, assignments and consents
including all necessary consents and approvals to the assignment of any leases
(whether equipment or otherwise), agreements, and contracts, and any other
documents necessary or required effectively to transfer the Purchased Assets to
Empire with good and marketable title, free and clear of all mortgages, liens,
charges, pledges, claims, security interests or encumbrances whatsoever.
(b) Talisman shall deliver actual possession of the Purchased Assets
to Empire.
(c) Talisman shall deliver to Empire a certificate executed by the
President of Talisman on behalf of Talisman and under its corporate seal
certifying that as of the Closing Date all the representation set forth in
Article Four and all conditions set forth in Article Six of this Agreement shall
have been complied with except those conditions which have been specifically
waived by Empire.
(d) Talisman shall deliver to Empire subscription agreements in form
and substance satisfactory to Empire from each shareholder of Talisman who may
receive restricted stock of Empire in the event Talisman liquidates following
the Closing. Such subscription agreements shall contain representations that
such shareholders are acquiring their shares of Empire for investment purposes
only and not with a view toward redistribution or resale together with such
further representations that Empire deems reasonably necessary to comply with
all federal and state securities laws regarding the distribution of Empire
shares to the shareholders of Talisman.
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Exhibit 2.04
(e) At the Closing, Talisman shall deliver to Empire all books,
records, books of account, lists of suppliers and customers of Talisman, as they
relate to the Purchased Assets and all other documents, files, records, and
other data, financial or otherwise relating to the Purchased Assets, which
documents, books and records shall become the property of Empire. Empire agrees
that it will preserve the documents, books and records so delivered to it for a
period of five (5) years from the Closing Date, or for such other period as is
required by any applicable law, and will permit Talisman or its authorized
representatives reasonable access thereto in connection with the affairs of
Talisman relating to its tax matter, but Empire shall not be responsible or
liable to Talisman for or as a result of any loss or destruction of or damage to
any such documents, books or records.
(f) Empire will deliver the stock certificate representing 562,150
shares of its common stock to Talisman. Such stock certificate, as well as all
stock certificates which may subsequently be issued to the shareholders of
Talisman shall contain the following restrictive stock legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares
have been acquired for investment and may not be
offered, sold, or otherwise transferred in the absence
of an effective registration statement for the shares
under the Securities Act of 1933, or a prior opinion of
counsel satisfactory to the issuer, that registration is
not required under the Act.
(g) The parties will take such other actions and will execute and
deliver such other instruments, documents and certificates as are required by
the terms of this Agreement and the Related Agreements or as may be reasonably
requested by any party in connection with the consummation of the transactions
contemplated therein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Talisman represents and warrants as follows:
Section 4.1. No Breaches of Statute or Contract; Required Consents.
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Neither the execution and delivery of this Agreement or the related sale of
assets by Talisman nor compliance by Talisman with the terms and provisions
thereof will: (i) conflict with or result in a breach of any of the provisions
of the articles of incorporation, bylaws or other governing instruments of
Talisman, or any judgment, order, decree, or ruling to which Talisman is a
party, or any injunction to which it is subject of any court of governmental
authority or of any agreement, contract or commitment to which it is a party and
which is material to the financial condition of Talisman considered as a whole,
or (ii) require the affirmative consent or approval of any non-governmental
third party (apart from stockholder approval referred to elsewhere herein).
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Exhibit 2.04
Section 4.2. Authorization of Agreement.
Talisman has the corporate power to enter into this Agreement and to
perform its obligations hereunder; the execution, delivery and, subject to
requisite stockholder approval, the performance of this Agreement by Talisman
has been duly and validly authorized by the Board of Directors of Talisman, and
Talisman has taken, or will use its best efforts to take prior to the Closing
Date, all action required by law, its Articles of Incorporation and bylaws to
authorize the execution, delivery and performance of this Agreement and Related
Agreements.
Section 4.3. Further Representations.
(a) Talisman is duly organized, validly existing and in good standing as a
corporation under the laws of the State of Arizona; has full corporate power to
carry on its business as it is now being conducted, and to own and operate the
properties and assets it now owns or operates; and is duly qualified to do
business and is in good standing in each jurisdiction where the conduct of its
business or the ownership of its properties require such qualification.
(b) Pursuant to its Articles of Incorporation, Talisman is authorized to
issue 100,000,000 shares of common stock, no par value, of which a total of
3,372,900 shares are each validly issued, fully paid and nonassessable. Talisman
has no other class of stock or convertible securities outstanding. There are no
existing options, warrants, calls, commitments or rights of any character to
purchase or otherwise acquire from Talisman shares of capital stock of any
class, no outstanding securities of Talisman that are convertible into shares of
capital stock of Talisman of any class, and no options, warrants or rights to
purchase from Talisman any such convertible securities.
(c) Talisman has heretofore delivered to Empire accurate and complete
copies of the balance sheet of Talisman at December 31, 1999 (the "Talisman 1999
Balance Sheet") and the related statements of income, stockholders' equity and
changes in financial position of Talisman from inception through December 31,
1999, in each case accompanied by the report thereon of Robert W. Howell,
Certified Public Accountant. Such audited balance sheet fairly presents the
financial position of Talisman at the date thereof and all such audited
statements of income, stockholders; equity and changes in financial position
present fairly the results of its operations, changes in stockholders; equity
and changes in financial position for the periods indicated, in conformity with
accounting principles generally accepted in the United States and consistently
applied.
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Exhibit 2.04
(d) Talisman has good and marketable title to all of the Purchased Assets
described on the attached Schedule A. All of such Purchased Assets are free and
clear of all mortgages, pledges, liens, charges, security interests or other
encumbrances of any nature whatsoever, except for mortgages, pledges, liens,
charges, security interests or other encumbrances as set forth in Schedule "B"
which have been specifically assumed by Empire, liens for current taxes not yet
due and payable, and imperfections of title, easements and encumbrances, if any,
that are not substantial in character, amount or extent and do not materially
detract from the value, or interfere with the present or proposed use, of the
property or assets subject thereto or affected thereby, or otherwise materially
impair business operations. All leases pursuant to which Talisman leases any
substantial amount of real or personal property are in good standing, valid and
effective in accordance with their respective terms, and under none of these
leases is there any existing default, event of default or event that with notice
or the lapse of time, or both, would constitute a default and in respect to
which Talisman has not taken adequate steps to prevent a default from occurring.
(e) Between December 31, 1999 and the date of this Agreement there has not
been any material adverse change in the financial condition or in the
operations, business or property of Talisman.
(f) The structures, equipment, computers, and other physical assets of
Talisman that are necessary to the operation of the business being conducted by
it are in good operating condition and repair, subject only to the ordinary wear
and tear of the business.
(g) Neither Talisman nor, to the knowledge of its shareholders, any other
party have breached any material provision of, or defaulted in any material
respect of the terms of any contract or agreement to which Talisman is a party
which would have a materially adverse effect upon the business or financial
condition of Talisman.
(h) Talisman will deliver such other lists, descriptions, information,
schedules, documents and reports as may reasonably be requested by Empire.
(i) To the best knowledge of its shareholders, there is no default or
claim, purported or alleged default, or statement of facts under which lack of
notice or the lapse of time, or both, would constitute a default on any
obligation to be performed by Talisman under any material lease, contract, plan
or other arrangement.
(j) No suit, action or legal, administrative or arbitration proceeding,
which might materially and adversely affect the overall financial condition,
business or property, including Purchased Assets, of Talisman is pending or, to
the knowledge of its shareholders, threatened.
(k) Its shareholders have no knowledge of any tax liability or claim by any
taxing authority for due but unpaid taxes, interest or penalties, nor has
Talisman been advised of any request or demand for audit by any taxing
authority.
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Exhibit 2.04
(l) Talisman owns or possesses, or reasonably believes it can acquire on
reasonable terms, adequate patent rights or other rights to use patent rights,
inventions, trademarks, service marks, trade names and copyrights necessary to
conduct the business now operated by it, and Talisman has not received any
notice of infringement of or conflict with asserted rights of others with
respect to any patent, patent rights, inventions, trademarks, service marks,
trade names or copyrights which, individually or in the aggregate, if subject of
an unfavorable decision, ruling or finding, would have a material adverse effect
upon the business, operations, properties, assets or condition, financial or
otherwise, of Talisman.
(m) The representations and warranties of its shareholders and Talisman
shall be as of the date of this Agreement and as of the date of the Closing
Date. All representations and warranties of Talisman are based upon knowledge
only of its officers and directors and no one else.
(n) Talisman further represents that, to the best of its knowledge, after
reasonable inquiry, it believes that all but approximately 15 of its
shareholders are "accredited" as that termis defined under Rule 144 promulgated
under the Securities Act of 1933. In support of its reasonable belief respecting
such share ownership, Talisman has obtained subscription agreements and/or
investor questionnaires wherein such shareholders represent to Talisman that
they are so accredited and no information has come to the attention of Talisman
that would lead Talisman to believe or conclude that such representations were
not true and correct when made.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF EMPIRE
Empire represents and warrants as follows:
Section 5.1. Accuracy of Information Statement and Exchange Act Filings.
The information concerning Empire contained, or incorporated by reference,
in the Exchange Act filings of Empire which have been provided to Talisman are
responsive in all material respects to the requirements of the appropriate forms
and related rules and regulations, and do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make such
information not misleading.
Section 5.2. Status of Empire Shares.
The shares of common stock to be issued to Talisman pursuant to this Asset
Purchase Agreement, when so issued, will be duly and validly authorized and
issued, fully paid and nonassessable.
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Exhibit 2.04
Section 5.3. No Breach of Contract; Required Consents.
Neither the execution and delivery of this Agreement nor compliance by
Empire with the terms of provisions hereof will: (i) conflict with or result in
a breach of any of the provisions of the Articles of Incorporation or bylaws or
other governing instruments of Empire, or any judgment, order, decree, or ruling
to which Empire is a party, or any injunction to which it is subject of any
court or government authority, or of any agreement, contract or commitment to
which Empire is a party and which is material to the financial condition or
results of operations or conduct of the business of Empire considered as a
whole, or (ii) require the affirmative consent or approval of any
non-governmental third party.
Section 5.4. Authorization of Agreement.
Empire has the corporate power to enter into this Agreement and to perform
its obligations hereunder; the execution, delivery and performance of this
Agreement by Empire have been duly and validly authorized and approved by the
Board of Directors of Empire; and Empire has taken, or will use its best efforts
to take prior to the Effective Date, all action required by law, its Articles of
Incorporation or bylaws to authorize the execution, delivery and performance of
this Agreement.
ARTICLE VI
CONDUCT AND TRANSACTIONS PRIOR
TO CLOSING DATE
Section 6.1. Access; Operation of Business between the date of this Agreement
and the Effective Date.
(a) Access. Talisman and Empire each agrees to furnish the other with such
financial and operating data and other information with respect to the business
and properties of it as the other shall from time to time reasonably request in
furtherance of consummating the purchase of assets; provided, however, that any
such investigation shall not affect any of the representations and warranties
hereunder. In the event of termination of this Agreement, Talisman and Empire
will each return to the other all documents and other material obtained from the
other in connection with the transactions contemplated hereby, and each shall
maintain the confidentiality of such materials.
(b) Talisman and Empire shall continue to conduct their business in
conformity with established industry practice in a diligent manner and will use
their best efforts to preserve intact their present business organizations and
preserve their relationships with persons having business dealings with them.
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Exhibit 2.04
(c) No Mergers. Talisman will not merge or consolidate with any other
corporation, or acquire any stock or, except in the ordinary course of business,
any business, property or assets of any other person, firm, association,
corporation or other business organization.
(d) No Securities Issuances. Talisman will not issue any shares of any
class of its capital stock, or enter into any contract, or grant any option,
warrant or right, calling for the issuance of any such shares, and will not
create or issue any securities convertible into any such shares or convertible
into securities in turn so convertible or enter into any contract, or grant any
option, warrant or right, calling for the issuance of any such convertible
securities.
Section 6.2. Preparation of Information Statement.
Both Talisman and Empire acknowledge that they will participate in the
preparation of an information statement or similar package to be sent to the
shareholders of Talisman relating to the disclosure of the transaction
contemplated by this Agreement and the opportunity to exercise dissenter's
rights.
Section 6.3 Stockholder Approval of Talisman.
Talisman acknowledges and represents that the execution of consent minutes
which approve and ratify this Agreement shall constitute all necessary
shareholder approval of the transaction contemplated hereby as is necessary
under Arizona law.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF EMPIRE AND TALISMAN
Section 7.1. General Conditions.
The obligations of the parties hereto to effect the Asset Purchase shall be
subject to the following conditions:
(a) No Governmental Proceedings. No governmental action or proceeding shall
have been instituted or be threatened at the Closing Date by or before a court
or other governmental body, agency or authority to restrain or prohibit the
transactions contemplated by this Agreement.
(b) No Litigation. There shall be no litigation pending at the Closing Date
challenging the authority of either Empire or Talisman or the officers or
directors of either to enter into this Agreement or seeking to restrain or
prohibit the transactions contemplated hereby, which the Board of Directors of
either Empire or Talisman shall reasonably believe to present a substantial risk
either of restraining or prohibiting such transactions or of resulting in the
award of material damages or other relief.
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Exhibit 2.04
(c) Statutory Requirements and Approvals. All statutory requirements for
the valid consummation by Talisman and Empire of the transactions contemplated
by this Agreement and the Plan shall have been fulfilled; no approvals of the
transactions contemplated by this Agreement shall be required from any federal
or state governmental agency or authorities.
Section 7.2. Conditions of Obligation of Empire.
The obligation of Empire to effect the Asset Purchase shall be subject to
the following conditions:
(a) Representations and Warranties of Talisman to be True. The
representations and warranties of Talisman herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time, except to the extent waived hereunder or affected by the transactions
contemplated herein; Talisman shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it at or prior to the Closing Date; and Talisman shall have
delivered to Empire a certificate of Talisman in form and substance satisfactory
to Empire, dated the Closing Date and signed by its President or Vice President
to all such effects.
Section 7.3. Conditions of Obligation of Talisman.
The obligations of Talisman to effect the Asset Purchase shall be subject
to the following conditions:
(a) Representations and Warranties of Empire to be True. The
representations and warranties of Empire herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time, except to the extent waived hereunder or affected by the transactions
contemplated herein; Empire shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it prior to the Closing Date; and Empire shall have delivered
to Talisman a certificate of Empire in form and substance satisfactory to
Talisman, dated the Closing Date and signed by its President and its principal
financial officer, to all such effects.
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Exhibit 2.04
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Continuation of Representations and Warranties.
Empire and Talisman agree that the representations, warranties and
covenants of Empire and Talisman contained herein or in any instrument or
certificate delivered hereunder shall survive the Closing Date, regardless of
any investigation or inquiry by or on behalf of Empire and Talisman.
Section 8.2. Indemnification by Talisman.
Talisman agrees to indemnify and hold harmless Empire and each person, if
any, who controls Empire within the meaning of Section 15 of the 1933 Act
against any and all losses, liabilities, claims, damages and expenses (including
interest, expenses of litigation and attorney's fees) arising out of or as a
result of any inaccuracy or breach of any of the representations, warranties and
covenants of Talisman contained in this Agreement and contained in any
instrument, schedule or certificate delivered to Empire pursuant to this
Agreement, or the defense or settlement of any claim asserted against Empire
challenging any such representation, warranty and covenant, or the failure or
default of Talisman to perform or observe any covenant or condition under this
Agreement.
Section 8.3. Indemnification by Empire.
Empire agrees to indemnify and hold harmless Talisman and each person, if
any, who controls Talisman against any and all losses, liabilities, claims,
damages and expenses (including interest, expenses of litigation and attorneys'
fees) arising out of or as a result of any inaccuracy or breach of any of the
representations, warranties and covenants of Empire contained in this Agreement
and contained in any instrument or certificate, delivered to Talisman pursuant
to this Agreement, or the defense or settlement of any claim asserted against
Talisman challenging any such representation, warranty and covenant, or the
failure or default of Empire to perform or observe any covenant or condition
under this Agreement.
Section 8.4. Notice.
Each indemnified party shall give prompt notice to each indemnifying party
of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this
Agreement. An indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties be liable for
the fees and expenses of more than one counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
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Exhibit 2.04
ARTICLE IX
MODIFICATION, WAIVERS AND ABANDONMENT
Section 9.1. Modification.
Talisman and Empire may, by mutual consent of the respective Board of
Directors, amend, modify or supplement this Agreement in such manner as may be
mutually agreed upon in a writing executed by Talisman and Empire at any time
before or after action thereon by the stockholders of Talisman and Empire;
provided, however, that no such amendment, modification or supplement shall
affect the rights of the stockholders of Talisman or Empire in a manner which is
materially adverse to such stockholders in the judgment of the Board of
Directors of Talisman and Empire, respectively.
Section 9.2. Waivers.
Each of Talisman and Empire may, pursuant to action by its respective Board
of Directors, by an instrument in writing, extend the time for or waive the
performance of any of the obligations of the other or waive compliance by the
other with any of the covenants or conditions contained herein; provided,
however, that no such waiver or extension shall affect the rights of the
stockholders of Talisman or Empire in a manner which would be materially adverse
to such stockholders.
Section 9.3. Abandonment.
The Asset Purchase may be abandoned before the Closing Date without
liability on the part of any party hereto exercising such right of abandonment
or restriction on the future activities of either party hereto:
(a) Mutual Consent. By the mutual consent of the Boards of Directors of
Empire and Talisman evidenced by a writing executed by Empire and Talisman or;
(b) Lapse of Time. By the Board of Directors of Empire or Talisman if the
Effective Date has not occurred on or prior to April 30, 2000; provided,
however, that such date shall be extended for up to twenty-five (25) days in the
event an order restraining or prohibiting the Exchange has been issued by any
public authority or court.
The power of abandonment provided for by this Section 9.3 may be exercised
by Empire or Talisman only by their respective Boards of Directors and will be
effective only after written notice thereof, signed on behalf of the party for
which it is given by its Chairman of the Board or President, shall have been
given to the other. Abandonment shall not affect any rights theretofore accruing
hereunder.
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Exhibit 2.04
ARTICLE X
ADDITIONAL MATTERS
Section 10.1. Closing.
The Closing of the Asset Purchase contemplated by this Agreement shall take
place at such time and place as may be convenient to all the parties but in no
event later than April 30, 2000.
Section 10.2. Notices.
All notices, requests, demands and other communications which are required
of permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered personally or when mailed by registered or certified mail,
postage pre-paid, as follows:
If to Empire to:
c/o Norman L. Peterson
11011 King Street, Suite 260B
Overland Park, Kansas 66210
If to Talisman to:
Gary J. Kershner
3290 S. Camino del Sol, Suite 140
Green Valley, AZ 85614
Section 10.3. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Utah.
Section 10.4. Entire Agreement.
This Agreement supersedes any and all oral or written agreements heretofore
made relating to the subject matter hereof and constitutes the entire agreement
of the parties relation to the subject matter hereof.
Section 10.5. No Implied Rights or Remedies.
Except as otherwise expressly provided herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or to give any person,
firm or corporation, other than Empire and Talisman and their stockholders, any
rights or remedies under or by reason of this Agreement.
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Section 10.6. Headings.
The headings in this Agreement are inserted for convenience of reference
only and shall not be part of, or control or affect the meaning of, this
Agreement.
Section 10.7. Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf and attested by its officers there unto duly
authorized, all as of the day and year first above written.
Empire Energy Corporation Talisman International, Inc.
a Utah corporation an Arizona corporation
By: /s/ Norman L. Peterson By: /s/ Gary J. Kershner
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Norman L. Peterson Gary J. Kershner
President Chairman of the Board
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