EXHIBIT 10.1
PURCHASE AGREEMENT
BY AND BETWEEN
Sedco, Inc. and Capco Energy, Inc.
April 30, 2003
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, is made as of April 30, 2003, between Sedco, Inc.
("Purchaser") and Capco Energy, Inc. ("Seller").
WHEREAS, Seller owns 100% of the total capital of Meteor Enterprises, Inc. (the
"Asset");
WHEREAS, Purchaser desires to acquire and Seller desires to sell all of
its interest in the Asset in exchange for the consideration and upon the terms
described herein (the "Purchase"); and
WHEREAS, Purchaser and Seller desire to make certain representations,
warranties, covenants and agreements in connection with the Purchase;
NOW THEREFORE, in consideration of the mutual promises, covenants,
provisions and representations contained herein, the parties hereto agree as
follows:
ARTICLE I
THE PURCHASE
1.1 Sale and Delivery of Asset. Subject to all the terms and conditions of
this Agreement, Seller shall sell, transfer, convey, assign and deliver to
Purchaser at the Closing (as defined in paragraph 1.3 hereof) and Purchaser
shall purchase, acquire and accept from the Seller the Asset.
1.2 Effective Date and Closing. The effective date (the "Effective Date")
of this transaction shall be January 1, 2003. Closing of this transaction shall
be April 30, 2003.
1.3 Purchase Price. Subject to all of the terms and conditions set forth in
the Agreement and in reliance on the representations, warranties and covenants
hereinafter set forth, Purchaser shall deliver to Seller $2,500,000 and
4,000,000 shares of Network Fueling Corp. ("NFC") (hereinafter referred to as
the "Purchase Price"), at closing, as follows:
a) $300,000 previously loaned to Seller by Purchaser will be applied
to purchase price as a non-refundable portion of the purchase price.
b) A $1,200,000 promissory note, ("Note 1") bearing interest at the
annual rate of 7%. The note will be due on April 30, 2004. Interest payments
will be due on the first day of each month until paid, beginning June 1, 2003.
c) A $1,000,000 promissory note, ("Note 2") bearing interest at the
annual rate of 7%. The note will be due on October 31,2003. Interest payments
will be due on the first day of each month until paid, beginning June 1, 2003.
d) As additional security to Note 1 and Note 2 Purchaser shall deposit
3,000,000 shares of Sellers common stock with the Corporate Secretary of Seller.
e) 4,000,000 shares of NFC representing 36.3% of the total outstanding
stock of NFC.
f) Purchaser will obtain releases of all guarantees and co borrowings
of Seller related to the Asset within 90 days.
ARTICLE II
REPRESENTATIONS OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents
and warrants to Purchaser as of the Closing the following:
2.1 Organization. The Seller is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of Colorado, has all necessary
powers to own properties and to carry on its business as now owned and operated
by it.
2.2 Authority. The execution of this Agreement and the consummation of the
transactions contemplated herein have been authorized by the Seller and Seller
has the full power and authority to execute, deliver and perform this Agreement
and this Agreement is a legal, valid and binding obligation of the Seller, and
is enforceable in accordance with its terms and conditions, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
moratorium or other laws generally effecting the rights of creditors and general
principles of equity.
2.3 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by Seller and the performance by Seller of its obligations hereunder
will not cause, constitute, or conflict with or result in (a) any breach or
violation of any of the provisions of or constitute a default under any license,
indenture, mortgage, charter, instrument, certificate of incorporation, bylaw,
or other agreement or instrument to which Seller is a party, or by which it may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Seller, or (c) an event that would result in the creation or
imposition of any lien, charge, or encumbrance on any asset of Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, the Purchaser
represents and warrants to the Seller as of the date hereof and as of the
Closing the following:
3.1 Organization. Purchaser is duly organized, validly existing, and in
good standing, has all necessary powers to own assets and to carry on its
business as now owned and operated by it, and is duly qualified to do business
and is in good standing in each of the states where its business requires
qualification
3.2 Authority. The Purchaser has authorized the execution of this Agreement
and the transactions contemplated herein, and Purchaser has full power and
authority to execute, deliver and perform this Agreement and this Agreement is
the legal, valid and binding obligation of Purchaser, and is enforceable in
accordance with its terms and conditions, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, moratorium or other
laws generally effecting the rights of creditors and general principles of
equity.
3.3 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by Purchaser and the performance by Purchaser of its obligations
hereunder will not cause, constitute, or conflict with or result in (a) any
breach or violation of any of the provisions of or constitute a default under
any license, indenture, mortgage, charter, instrument, certificate of
incorporation, bylaw, or other agreement or instrument to which Purchaser is a
party, or by which it may be bound, nor will any consents or authorizations of
any party other than those hereto be required, (b) an event that would permit
any party to any agreement or instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation of Purchaser, or (c) an event
that would result in the creation or imposition of any lien, charge, or
encumbrance on any asset of Purchaser.
ARTICLE IV
COVENANTS
4.1 Release of Obligations. Purchaser shall have released Seller of all
obligations, contingent or otherwise, relating to or in any way connected to or
with the Asset.
4.2 Indemnification by Purchaser. Purchaser agrees to indemnify, defend and
hold harmless Seller, and the respective officers, representatives, agents,
employees of Seller and successors and assigns of the Seller from and against:
(1) Any and all losses resulting from any guarantees or co-borrowings
by the Seller of any liabilities of Meteor Enterprises or its subsidiaries, and
any misrepresentation or breach of any representation or warranty or
non-fulfillment of any covenant or agreement on the part of Purchaser under the
terms of this Agreement;
(2) Any liability or assessment relating to any losses (including tax
liability or assessment) related to Seller or this Agreement or the transactions
contemplated hereby;
(3) All actions, suits, proceedings, arbitration's, demands,
assessments, judgments, costs and expenses, including attorney's fees and
disbursements, incident to the foregoing; and
(4) All claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including interest,
penalties, and reasonable attorney fees, that they shall incur or suffer, which
result from or relate to any activities of the subsidiaries of Meteor
Enterprises, Inc. or Purchaser prior to, on or subsequent to the Closing Date or
which result from or relate to any breach of, or failure by Purchaser to perform
any of its representations, warranties, covenants or agreements in this
Agreement or in any schedule, certificate, exhibit or other instrument furnished
or to be furnished by Purchaser under this Agreement.
4.3 Fairness Opinion Seller shall obtain a Fairness Opinion from an
Investment Banker or third party assessment company before July 31, 2003. In the
event the Fairness Opinion rendered indicates this transaction is not fair then
the transaction shall be rescinded and the Stock shall be returned to Seller and
all consideration, except the $300,000 non-refundable portion, shall be returned
to the Purchaser.
ARTICLE V
MISCELLANEOUS
5.1 Captions and Headings. The Articles and paragraph/section headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit or add to the meaning of any provisions of
this Agreement.
5.2 No Oral Change. This Agreement and any provision hereof, may not be
waived, changed, modified or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
5.3 Waiver. Except as otherwise expressly provided herein, no waiver of any
covenant, condition, or provision of this Agreement shall be deemed to have been
made unless expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants, or conditions of
this Agreement to exercise any option herein contained shall not be construed as
a waiver or relinquishment for the future of any such provisions, covenants, or
conditions, (ii) the acceptance of performance of anything required by this
Agreement to be performed with knowledge of the breach or failure of a covenant,
condition, or provision hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one breach by another party shall
be construed as a waiver with respect to any other subsequent breach.
5.4 Entire Agreement. This Agreement contains the entire Agreement and
understandings between the parties hereto, and supersedes all prior agreements
and understandings with respect to the subject matter hereof.
5.5 Choice of Law, Jurisdiction and Venue. This Agreement and the rights
and obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of Colorado without regard to conflict of
laws principles. Any action at law or in equity directly or indirectly in
connection with, related to or in any way connected to this Agreement or any
provisions hereof, shall be litigated exclusively in the state or federal courts
located California. The parties hereto irrevocably waive any rights such party
may otherwise have to transfer or change the venue of any litigation brought or
arising in connection with this Agreement.
5.6 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.7 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of receipt if served personally on the party to whom notice is to be
given, by telecopy or telegram, or mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
Purchaser:
Ilyas Chaudhary
Sedco, Inc.
1401 Blake Street
Denver Colorado 80202
Seller:
Ilyas Chaudhary
Capco Energy, Inc.
1401 Blake Street
Denver Colorado 80202
5.8 Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and assigns of each of
the parties to this Agreement.
5.9 Mutual Cooperation. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
5.10 Expenses. Except as specifically provided in this Agreement, all
direct costs and expenses including legal, and any other out-of-pocket expense
incurred by Seller, in connection with this transaction, shall be paid by the
Seller. All costs and expenses including legal, accounting, and any other
out-of-pocket expenses incurred by the Purchaser, in connection with this
transaction, shall be paid by the Purchaser.
5.11 Assignment. This Agreement may not be assigned by operation of law or
otherwise by the Seller or the Purchaser
AGREED TO AND ACCEPTED as of the date first above written.
PURCHASER:
Sedco, Inc.
By: /s/ Ilyas Chaudhary
- -----------------------
Title: President
SELLER:
Capco Energy, Inc.
By: /s/ Dennis R. Staal
- -----------------------
Title: Director
Note 1
PROMISSORY NOTE
FIXED INTEREST
April 30, 2003
For value received the undersigned SEDCO, INC. (" Maker"), promises to pay Capco
Energy, Inc. (" Holder"), or order, the sum of One Million Two Hundred Thousand
Dollars ($1,200,000.00), together with interest from the date above on the
unpaid principal balance due at the rate of 7.00%. Interest shall accrue on the
principal amount of $1,200,000.00, commencing on April 30, 2003. Interest only
shall be payable Monthly, with the first payment due on June 1, 2003. Interest
shall be calculated on the basis of a 365-day year, and actual days elapsed. On
payment of the Note in full, interest accrued to the date of payment shall be
payable on the date of payment.
This note shall be due April 30, 2004. This note may be prepaid at any time or
from time to time in whole or in part without penalty, premium or permission.
This Note shall be secured with 3,000,000 shares of the common stock of Capco
Energy, Inc.
Should the Maker default in payment of any principal and/or interest, when due,
Maker shall be obligated to pay such costs, fees, expenses, including attorney's
fees, which may be incurred by Holder, or any such Holder hereof, in connection
with any and all enforcement proceedings. In the event of default hereunder,
Holder shall have the right to offset against any obligation payable to Maker
under Maker's any other contracts with Holder, such amounts as are necessary to
extinguish this Note as soon as possible after Maker's default.
By: ________________________________
SEDCO, INC. (Maker)
Note 2
PROMISSORY NOTE
FIXED INTEREST
April 30, 2003
For value received the undersigned SEDCO, INC. (" Maker"), promises to pay Capco
Energy, Inc. (" Holder"), or order, the sum of One Million Dollars
($1,000,000.00), together with interest from the date above on the unpaid
principal balance due at the rate of 7.00%. Interest shall accrue on the
principal amount of $1,000,000.00, commencing on April 30, 2003. Interest only
shall be payable Monthly, with the first payment due on June 1, 2003. Interest
shall be calculated on the basis of a 365-day year, and actual days elapsed. On
payment of the Note in full, interest accrued to the date of payment shall be
payable on the date of payment.
This note shall be due October 31, 2003. This note may be prepaid at any time or
from time to time in whole or in part without penalty, premium or permission.
This Note shall be secured with 3,000,000 shares of the common stock of Capco
Energy, Inc.
Should the Maker default in payment of any principal and/or interest, when due,
Maker shall be obligated to pay such costs, fees, expenses, including attorney's
fees, which may be incurred by Holder, or any such Holder hereof, in connection
with any and all enforcement proceedings. In the event of default hereunder,
Holder shall have the right to offset against any obligation payable to Maker
under Maker's any other contracts with Holder, such amounts as are necessary to
extinguish this Note as soon as possible after Maker's default.
By: ________________________________
SEDCO, INC. (Maker)
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