Document:

ex10-6.htm

Exhibit 10.6

 

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement (this “Agreement”) is made and entered into this 8th day of August, 2011 (the “Effective Date”), by and between Petron Energy II, Inc., a Nevada corporation (“Petron” or the “Company”) and ASL Energy, LLC, a Texas limited liability company and or its assigns
(“ASL”) sometimes hereinafter being referred to individually as a “Party” and collectively as the “Parties”.

W I T N E S S E T H:

WHEREAS, ASL is in the oil and gas industry and works to, among other things, bring together purchasers and sellers of oil and gas interests, acquire and sell oil and gas interests and consult with companies in connection with the acquisition of funding for the purchase of oil and gas assets (the “Oil and Gas Services”);

WHEREAS, ASL manages and/or provides contacts and personnel to companies to provide oil and gas management services to such companies (the “Management Services”); and

WHEREAS, the Company desires to retain the services of ASL to provide business and management services, Oil and Gas Services and Management Services to the Company, upon the terms and conditions set forth below, and ASL is willing to undertake such obligations.

NOW, THEREFORE, in consideration for the promises and pledges contained below and other good and valuable consideration, which consideration the Parties acknowledge receipt of, and the promises and the mutual covenants, agreements, and considerations herein contained, the Parties hereto agree as follows:

1.            Term.  This Agreement shall be effective as of the Effective Date and shall continue until the fifth (5th) anniversary of the Effective Date (the “Initial Term”), and shall continue thereafter on a month-to-month basis unless either party provides the
non-terminating party at least thirty (30) days written notice of their intent to terminate this Agreement subsequent to the expiration of the Initial Term (collectively the “Term”).

(a) Termination by the Company. The Company shall have no right to terminate this Agreement unless (i) ASL shall have materially breached any material term or condition of this Agreement, and such breach is not remedied within thirty (30) days after the receipt of notice of such breach; provided, that if ASL commences and diligently pursues to cure such breach within the thirty (30) day period and such breach has not been cured, then, upon notice from ASL to Company, Company may not terminate this Agreement for an additional sixty (60) days so
long as ASL continues to diligently pursue such cure; or (ii) unless ASL has committed gross negligence or bad faith in connection with the Services it has agreed to provide to the Company hereunder; and then only with thirty (30) days written notice by the Company to ASL.

  

  

  

(b) Termination by ASL. ASL  shall have no right to terminate this Agreement unless (i) the Company shall have materially breached any material term or condition of this Agreement, and such breach is not remedied within thirty (30) days after the receipt of notice of such breach; provided, that if the Company commences and diligently pursues to cure such breach within the thirty (30) day period and such breach has not been cured, then, upon notice from the Company to ASL, ASL may not terminate this Agreement for an additional sixty (60)
days so long as the Company continues to diligently pursue such cure; or (ii) unless the Company has committed gross negligence or bad faith in connection with the Services it has agreed to provide to the ASL  hereunder; and then only with thirty (30) days written notice by ASL  to the Company.

(c) Termination by Mutual Consent of the Parties.  This Agreement can be terminated at any time with the mutual consent of both Parties.

2.            Services. The Company hereby engages ASL during the Term of this Agreement, to provide the services set forth below to the Company (collectively the “Services”):

(a) Providing the Oil and Gas Services;

(b) Providing the Management Services;

(c) Providing such other management and support services for the Company’s oil and gas properties and interests as may be reasonably requested from time to time by the Company;

 

 

(d) Providing assistance, guidance and consulting services to the Company in connection with potential oil and gas acquisitions and/or sale transactions and identifying assets to be contributed to or acquired by the Company (collectively “Transactions”), including bringing potential Transactions to the Company; helping the Company evaluate Transactions; performing due diligence in connection with Transactions; and helping to negotiate the terms of Transactions;

(e) Helping the Company to raise funding in order to complete Transactions, as requested by the Company and subject to applicable laws and regulations; and

(f) Providing services in connection with JV’s (as defined below in Section 3).

  

  

  

(g) ASL hereby accepts such engagement and agrees to perform the Services in accordance with the terms and conditions of this Agreement.

(h) The Parties agree that the Services provided by ASL to the Company are non-exclusive and that the Company has the right to engage additional consultants, finders or advisors separate from this Agreement and ASL’s rights hereunder.

3.            Joint Ventures.  ASL and the Company agree to form a joint venture relationship or relationships on the terms and conditions set forth below (the “JV”) in connection with any Transaction completed by ASL during the Term of this Agreement (unless otherwise mutually agreed by the Parties), pursuant to which ASL will serve as the initial
general partner or manager.  ASL may (i) cause funds to be invested, (ii) arrange financial and strategic partnerships and co-investments, and (iii) bring acquisition opportunities to the JV(s) and assist in asset disposition.  The Company will primarily source investment opportunities to the JV(s). In all cases, the Company shall have the right to veto any proposed deal that goes into the JV(s).

(a) Co-Investment Rights. ASL will have co-investment rights in deals booked through the JV.

 

(b) Affiliate Transactions. The JV will retain ASL to provide services to the JV, including, without limitation, management, technical, and related services, similar to those services which ASL has agreed to perform for the Company as provided herein.

(c) JV Distributions. ASL and the Company will share any JV distributions as mutually agreed upon on a case by case basis by the Parties.

 

(d) Participation Rights. The Company will allow ASL to participate on the same economic terms, as if in the JV, in any Transaction or other business the Company conducts that ASL arranges funding for or brings to the attention of the Company, directly or indirectly or on such other terms and conditions as the Parties may mutually agree.

(e) Assignment of Interests.  ASL shall be able to assign its interest in the JV(s) to affiliated parties (subject to applicable rules and regulations), and the Company shall have no right to approve or consent to such assignments.

(f) ASL’s Fees.  The Company confirms that ASL may have interests in the Transactions that it brings to the Company or performs services with in connection with the Transactions and ASL may receive fees or other consideration from buyers, sellers or related parties in connection with the Transactions (i.e., fees from parties on either or both sides of each Transaction), and the Company agrees and consents to ASL’s rights to receive such fees and ASL’s interests in such Transactions.

  

  

  

4.            Consideration. In consideration for ASL agreeing to perform the Services during the Term of this Agreement and in consideration for the Prior Services which the Company agrees and confirms were rendered by ASL, the Company agrees:

(a) To pay ASL (i) a one-time fee (which shall be considered a signing bonus) of $15,000, which will be payable upon execution of this Agreement; and (ii) a base management and service fee of $8,000 per month, during the Term (the “Monthly Consideration”), payable in advance on the first day of each month that this Agreement is in effect (beginning on the date of execution of this Agreement);

(b) To pay employees and consultants of ASL certain hourly rates for services both inside and outside of this Agreement, as privately negotiated between ASL and the Company from time to time and agreed in writing in advance between the Company and ASL; and

 

 

(c) That ASL shall be designated, during the Term of this Agreement, as the assignee of all outstanding shares (once designated) of Restaurant Concepts’ Series A Preferred Stock, which gives the holder thereof the right, voting in aggregate and as a class, to vote 51% of Restaurant Concepts’ outstanding voting shares on any and all shareholder matters (the “Preferred Stock”) during the term of such Preferred Stock.  Such rights as assignee shall provide ASL the right, but not obligation of
ownership of (subject to ASL meeting rules and regulations applicable to the transfer of such Preferred Stock) and/or the voting rights associated with such Preferred Stock (the “Assignment Rights”) in the event that Mr. Smith dies or becomes disabled.

(d) The Company agrees that ASL has been provided the Assignment Rights in connection with (a) the Prior Services and due to the fact that without ASL’s contribution of  Services, the Asset Purchase would not have been agreed to between Petron and Restaurant Concepts and the Assets (as defined therein) would not have been agreed to be acquired by Restaurant Concepts; and (b) the Services that ASL has agreed to provide hereunder.  The Company further agrees that such Assignment Rights are reasonable and fair.

(e) Mr. Floyd L. Smith, the initial recipient of the Preferred Stock, agrees and confirms by signing below that the Assignment Rights have been individually negotiated between Mr. Smith and ASL and that such rights are reasonable and fair.

(f) The Company shall reimburse ASL (and where possible will prepay on ASL’s or such designee’s behalf expenses incurred in travel and hotel matters) as well as other designees which are brought on by ASL to provide Services to ASL, including, but not limited to the Designees for which the Company acknowledges and authorizes and does not require any pre-approval with respect to transactions involving the Company, ASL, and One Energy associated entities, for any and all reasonable and actual expenses incurred by ASL and its designees in connection with Services to the Company, provided that expenses
shall require written pre-approval by the Company.

  

  

  

(g) “Designees” shall include, but not be limited to The Loev Law Firm, PC; LBB & Associates, Ltd., LLP; Michael Ussrey; David Drum; Carrington Coleman; Jackson Walker; Price Waterhouse Demark; Magnusson Lawyers Copenhagen, PwC Copenahgen, Comiskey and Co; and PT Platinum.  This Designees are only involved in the matters to close the various transactions between ASL, ONE Energy and Petron, RCNC and not required to be utilized afterwards by the Company.

5.            Indemnification.  Subject to the terms and conditions of this Agreement, the Company agrees to indemnify, defend and hold harmless ASL, its respective affiliates, its respective present and former directors, officers, shareholders, employees and agents and its respective heirs, executors, administrators, successors and assigns (the “Indemnified
Persons”), from and against any and all claims, liabilities and losses which may be imposed on, incurred by or asserted against any Indemnified Person, arising out of or resulting from, directly or indirectly to this Agreement, the Services or the transactions contemplated herein; provided, however, that the Company shall not be liable for any portion of any claims, liabilities or losses resulting from a material breach by ASL of its obligations under this Agreement or from an Indemnified Person’s gross negligence, fraud or willful misconduct.

6.            Limitation on Liability. Notwithstanding any other provision of this Agreement, none of the Parties shall be liable to the other Party or third parties for indirect, incidental, special (including multiple or punitive) or consequential damages, including – but not limited to – loss of anticipated profit, lost data and their re-establishment, loss of goodwill or any other indirect damages, claimed to be incurred by the other Party
whether such claim arises under contract, in tort (including strict liability) or otherwise.

7.            No Agency Relationship.  No partnership or agency relationship shall be formed pursuant to or in connection with this Agreement, whether implied or otherwise (except in connection with the formation of a JV).  Neither Party shall have any authority to negotiate, bind or enter into or execute agreements on behalf of the other Party, except as specifically provided above.

8.            Mutual Representations, Covenants and Warranties.  Each of the Parties, for themselves and for the benefit of each of the other Party hereto, represents, covenants and warranties that:

(a) Such Party has all requisite power and authority, corporate or otherwise, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and thereby. This Agreement constitutes the legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and general equitable principles;

 

 

  

  

  

(b) The execution and delivery by such Party and the consummation of the transactions contemplated hereby and thereby do not and shall not, by the lapse of time, the giving of notice or otherwise: (i) constitute a violation of any law; or (ii) constitute a breach of any provision contained in, or a default under, any governmental approval, any writ, injunction, order, judgment or decree of any governmental authority or any contract to which such Party is bound or affected;

(c) The Parties agree that, from time to time, each of them will take such other action and to execute, acknowledge and deliver such contracts, deeds, or other documents as may be reasonably requested and necessary or appropriate to carry out the purposes and intent of this Agreement and the transactions contemplated herein; and

(d) The Parties agree that in all dealings with each other, related to this Agreement that they shall act, at all times, in good faith and with due diligence.

9.   Confidentiality. ASL, and its officers, directors, employees and agents shall maintain in strict confidence and not copy, disclose or transfer to any other party

(a) all confidential business and financial information regarding the Company and its affiliates, including without limitation, projections, business plans, marketing plans, product development plans, pricing, costs, customer, vendor and supplier lists and identification, channels of distribution, and terms of identification of proposed or actual contracts, and (b) all other confidential information of the Company, except as otherwise required in connection with the Services which ASL has agreed to provide hereunder. In furtherance of the foregoing, ASL agrees that it shall not transfer, transmit, distribute, download or communicate, in any electronic, digitized or other form of media, any of the confidential
information of the Company, except as otherwise required in connection with the Services which ASL has agreed to provide hereunder. All communications regarding any possible transactions shall be kept confidential. The terms, conditions and requirements of this Section 10 shall survive any termination of this Agreement.  ASL, its officers, directors and employees shall not buy, sell, trade or advise any other party to buy, sell, or trade any of the Company’s securities in the open market based on confidential information regarding the Company.

10. Independent Contractor. ASL shall be deemed an independent contractor in the performance of the Services under this Agreement and none of its employees shall be considered employees of Company or any of its subsidiaries. Nothing in this Agreement shall be deemed to constitute either Party a partner, joint venturer, agent or legal representative of the other Party (except in connection with the formation of a JV), nor shall either Party have the right or authority to assume, create or incur any liability or
obligation, express or implied, against, in the name of, or on behalf of the other Party, except as expressly provided in this Agreement or authorized in writing by such other Party. ASL shall be solely responsible for all matters relating to the payment of its employees, including compliance with social security, withholding and all other similar regulations governing such matters, and ASL shall be solely responsible for the services performed hereunder.

 

 

  

  

  

11. Assignment. All of the terms, provisions and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assigns.  This Agreement and the terms and conditions hereof shall be automatically assigned to, assumed by and transferred to Restaurant Concepts upon the consummation of the Asset Purchase (which assumption shall be a required term and condition of the Asset Purchase), without any
required action by either Party hereto or Restaurant Concepts (the “Assumption”).  Effective upon the Assumption, each reference herein to the “Company” or words of similar meaning shall be deemed to be automatically replaced by a reference to Restaurant Concepts (except where such references should clearly remain as references to Petron), and Restaurant Concepts, by agreeing to acquire the Assets of Petron and to affect the transactions contemplated by the Asset Purchase, shall be deemed to have confirmed, agreed to, certified, acknowledged and assumed the terms and conditions of this Agreement by its execution of the Asset Purchase and the closing of the transactions contemplated
therein. Following the Assumption, Petron shall have no further rights under, requirements or liabilities in connection with, or obligations under this Agreement, except as set forth in Section 4, Section 5(c), Section 5(d), Section 5(d), Section 6 (relating to Services performed by ASL prior to such Assumption date) and Section 13 (collectively the “Continuing Obligations”); notwithstanding the fact that Restaurant Concepts shall also be deemed to have agreed to and to be bound by the Continuing Obligations. ASL hereby consents and approves the Assumption.

 

12. Non-Circumvention.  In consideration for agreeing to provide the Services, which consideration the Company hereby confirms the adequacy and sufficiency of which, the Company agrees that prior to August 15, 2016, the Company shall not take any action at any time, directly or indirectly, to have any contact with shareholders of ONE Energy International Corp. (“ONE Energy”) or its affiliates or related
entities or any contact with agents or affiliates of ONE Energy, including Kristian Kondrup, Kriskon A/S, Tim Sparks and their affiliates; provided that it is understood and acknowledged by the Parties that Petromax is not treated as an affiliate of Kriskon A/S.  It is further agreed by the Company in consideration for ASL agreeing to perform the Services, that until August 15, 2016, ASL, ONE Energy and/or its assigns shall have all rights to exclusive dealings with Danish investors and all opportunities in Denmark. The Company further agrees that it shall not circumvent ASL, directly or indirectly, with its clients nor shall not take any actions to grant exclusivity of dealing with any party in China, Hong Kong, Denmark, Sweden or Japan, whatsoever without the prior written consent of ASL.   The provisions of this paragraph shall survive any termination of this
agreement,  until August 15 2016

13. Authority. The Parties warrant by their signature below that each is authorized to sign this Agreement, and in the event that any Party is an entity, that such signatory has full power to bind the Party, and that such Party has obtained all required approvals to enter into this Agreement.  The Parties further warrant that each has executed this Agreement of their own free will and accord and for purposes and consideration set forth.

14. Section Headings. Section headings are for convenience only and shall not define or limit the provisions of this Agreement.

 

15. Governing Law.  This Agreement shall be deemed to have been made in the State of Texas and shall be construed, and the rights and liabilities determined, in accordance with the law of the State of Texas, without regard to the conflicts of laws rules of such jurisdiction.

16. Severability.  Should any clause, sentence, paragraph, subsection, Section or Article of this Agreement be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement, and the Parties agree that the part or parts of this Agreement so held to be invalid, unenforceable or void will be deemed to have been stricken herefrom by the Parties, and the remainder will have the same force and effectiveness as if
such stricken part or parts had never been included herein.

17. Entire Agreement.  This Agreement and all other agreements and documents referred herein constitutes the entire agreement between the Company and ASL.  No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any party hereto to any other party concerning the subject matter hereof.  All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties
concerning the subject matter hereof are merged herein.

18. Successors. This Agreement shall be binding upon and inure to the benefit of the Company and ASL and their respective successors and assigns.  Any purchaser or acquiror of substantially all of the assets or outstanding securities of the Company shall be deemed a successor hereunder and shall further be deemed to have acquired and agreed to be bound by the terms and conditions of this Agreement.

 

19. Extended Meanings. In this Agreement words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders. The word “person” includes an individual, body corporate, partnership, trustee or trust or unincorporated association, executor, administrator or legal representative.

  

  

  

20. Effect of Facsimile and Photocopied Signatures. This Agreement may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Agreement signed by one party and faxed or scanned and emailed to another party (as a PDF or similar image file) shall be deemed to have been executed and delivered by the signing party as though an
original.  A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

[Remainder of page left intentionally blank.  Signature page follows.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above to be effective as of the Effective Date.

THE “COMPANY”

Petron Energy II, Inc.

 

 

/s/ Floyd L. Smith

Floyd L. Smith

President

“ASL”                      

ASL Energy, LLC

/s/ Daniel Vesco

Daniel Vesco

President

/s/ Floyd L. Smith

Floyd L. Smith

Personallyex10-7.htm

Exhibit 10.7

 

ASSET ACQUISITION AGREEMENT

This Asset Acquisition Agreement (this “Agreement”) is made and entered into this 8th day of August, 2011 (the “Effective Date”), by and between Petron Energy II, Inc., a Nevada corporation and its assigns (“Petron” or the “Company”) and ONE Energy Capital Corp., a Nevada corporation and its assigns
(“ONE Capital”) and ONE Energy International Corp., and its assigns (“ONE International”, and collectively with ONE Capital, “ONE Energy”) sometimes hereinafter being referred to each individually as a “Party” and collectively as the “Parties”.

W I T N E S S E T H:

WHEREAS, ONE Energy and certain of its Affiliates and Associations hold ownership in certain oil and gas leases and interests as set forth on Exhibit A attached hereto (the “Interests”);

WHEREAS, Petron desires to acquire the Interests from ONE Energy (and where applicable, its Affiliates and Associates and/or Security Owners), pursuant to the terms and conditions of this Agreement as set forth below (the “Acquisition”); and

WHEREAS, the Parties desire to set forth the terms and conditions pursuant to which Petron will complete the Acquisition.

NOW, THEREFORE, in consideration for the promises and pledges contained below and other good and valuable consideration, which consideration the Parties acknowledge receipt of, and the promises and the mutual covenants, agreements, and considerations herein contained, the Parties hereto agree as follows:

1.            Acquisition of the Interests.  In consideration for the Acquisition Consideration and subject to the satisfaction or waiver of the Closing Conditions, Petron agrees to enter into a superceding Definitive Agreement setting forth the Agreed Upon Transaction Structure with the relevant ONE Energy Entities (and where applicable, their Security Owners) to acquire the Interests, prior to the Deadline.

 

 

2.            Acquisition Consideration.  In consideration for the Acquisition of the Interests, Petron agrees to provide the relevant ONE Energy Entity (or its Security Owners depending on the Agreed Upon Transaction Structure) the following “Acquisition Consideration”:

(a) Shares of Convertible Preferred Stock which provide the holder(s) thereof the right to convert such shares into $5,910,000 of total value based on the trading price of Petron’s (or following the consummation of the Asset Purchase, Restaurant Concepts’) common stock on the date of such conversion (the “Aggregate Conversion Value”) based on the trading price of such common stock on the public market on which it then trades as calculated in such Convertible Preferred Stock designation (the
“Conversion Price”).

  

  

  

(b) The “Convertible Preferred Stock” shall be designated by the Board of Directors of Petron (or Restaurant Concepts following the Asset Purchase) and have the following rights, preferences and privileges, in addition to the Aggregate Conversion Value:

	
(i)  

	
Voting rights equal to one (1) vote per share of Convertible Preferred Stock on all shareholder matters, regardless of the number of shares of common stock such Convertible Preferred Stock may have the right to convert into;

	
  

	 

	
(ii)  

	
A blocker preventing the conversion of such Convertible Preferred Stock by the holder(s) thereof to the extent that subsequent to such conversion, such holders(s) would beneficially own in excess of 9.99% of the shares of common stock outstanding immediately after giving effect to such conversion (the “Conversion Limitation”).  Beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”).

	
(iii)  

	
A provision providing for the automatic conversion into common stock of (A) one half (1/2) of such Convertible Preferred Stock held by each holder on February 15, 2012 and (B) the remaining shares of Convertible Preferred Stock held by each holder thereof on September 15, 2012, based on the Trading Price on each conversion date, subject in each case to the Conversion Limitation, which may be waived by any holder thereof with sixty-one (61) days prior written notice to Petron.

	
(iv)  

	
The shares of common stock issuable in connection with the conversion of the Convertible Preferred Stock held by each holder thereof shall also be subject to a lock-up, pursuant to which each holder thereof may not sell any shares of common stock issuable upon conversion of the Convertible Preferred Stock for the first year after the issuance of such Convertible Preferred Stock; only 70% of such shares of common stock which any holder holds during months thirteen (13) to eighteen (18) after the Company’s filing of a Current Report on Form 8-K disclosing the closing of the Company’s planned Asset Purchase Agreement (the
“Asset Purchase”) relating to the acquisition of the assets of Petron Energy II, Inc.; and can freely sell such shares with no sales restriction thereafter (subject in each case to Applicable Laws).

  

  

  

(c) Payment of $53,000 upon execution of this Agreement and others pursuant to a list attached hereto.

3.            Acquisition Type.  The Acquisitions may be affected by the Parties’ entry into a:

 

(a) Share Exchange Agreement;

 

(b) Merger;

(c) Asset Purchase Agreement; or

(d) Such other agreement reflecting such other transaction structure as the parties’ thereto (and where applicable, their Security Owners) shall mutually approve (such approved agreement and structure being defined herein as the “Agreed Upon Transaction Structure”).

(e)  Each Acquisition of Interests and each transaction with a separate ONE Energy Entity may be structured differently, with the pro rata amount of the total Acquisition Consideration payable as determined by ONE Energy (and agreed upon by such ONE Energy Entities and where applicable Security Owners) in its sole and absolute discretion, to (A) the various ONE Energy Entities (or in the event that a Share Exchange or similar transaction is agreed to, the Security Owners of such ONE Energy Entities); and/or (B) allocated to the purchase of the various Interests as determined by ONE Energy (and the
applicable ONE Energy Entity) in its sole and absolute discretion.

(f) Any Agreed Upon Transaction Structure shall be structured as to comply in all respects with Applicable Laws.

4.            Deadline. This Agreement shall be effective as of the Effective Date and shall bind the Parties and require them to complete the Acquisition, subject only to the satisfaction (or waiver) of the Closing Conditions prior to sixty days (the “Deadline”), provided that this Agreement can be terminated at any time with the mutual consent of all Parties
hereto.  In the event the Closing Conditions are not satisfied (or waived) prior to the Deadline and the Deadline is not otherwise extended by the Parties in writing prior to such Deadline, this Agreement shall be terminated and be of no force and effect.

5. Assignment and Successors.

(a) All of the terms, provisions and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assigns.  This Agreement and the terms and conditions hereof shall be automatically assigned to, assumed by and transferred from Petron to Restaurant Concepts of America Inc., a Nevada corporation (“Restaurant Concepts”), upon the consummation of the proposed Asset Purchase Agreement (the
“Asset Purchase”) between Petron and Restaurant Concepts, without any required action by any Party hereto or Restaurant Concepts (the “Assumption”).  Effective immediately upon the Assumption, each reference herein to the “Company”, “Petron” or words of similar meaning shall be deemed to be automatically replaced by a reference to Restaurant Concepts and Restaurant Concepts, by agreeing to acquire the assets of Petron and to affect the transactions contemplated by the Asset Purchase, shall be deemed
to have automatically confirmed, agreed to, certified, acknowledged and assumed the terms and conditions of this Agreement by its execution of the Asset Purchase. Following the Assumption, Petron shall have no further rights under, requirements or liabilities in connection with, or obligations under this Agreement, except as set forth in Section 10 (collectively the “Continuing Obligations”); notwithstanding the fact that Restaurant Concepts shall also be deemed to have agreed to and to be bound by the Continuing Obligations. ONE Energy hereby consents and approves the Assumption.   For the sake of clarity and in an abundance of caution, effective as of the Asset Purchase, the Convertible Preferred Stock issuable in connection with the Acquisition shall be designated in
Restaurant Concepts and convertible into Restaurant Concepts common stock and Restaurant Concepts shall enter into the Definitive Agreements with the relevant ONE Energy Entities and where applicable Security Owners.

 

  

  

  

(b) Petron agrees that the Interests are owned by ONE Energy and various of its Affiliates and Associates and confirms, agrees and ratifies the assignment by ONE Energy, without the required consent or approval of Petron, of certain portions of the Acquisition Consideration to ONE Energy’s Affiliates and Associates and/or the Security Owners of its Affiliates and Associates, without the prior approval or consent of Petron.

(c) Each reference herein to Petron shall refer to Petron and its successors or assigns, including, but not limited to Restaurant Concepts.  Each reference herein to ONE Energy shall refer to ONE Energy and its successors and assigns, including, but not limited to its Affiliates and Associates and designated ONE Energy Entities.

6.            ONE Energy Closing Conditions.  ONE Energy shall have delivered or caused to be delivered to Petron the following, on or prior to the Deadline, unless the delivery of which has been waived by Petron:

(a) PCAOB Audited financial statements of the Interests (in the event the Agreed Upon Transaction Structure is an asset acquisition or similar transaction involving only the acquisition of the Interests) or the appropriate ONE Energy Entity (in the event the Agreed Upon Transaction Structure is a Share Exchange, Merger or similar transaction involving the acquisition of the related ONE Energy Entity), and where required, interim and pro forma financial statements as required by Form 8-K and Regulation S-K;

 

 

 

 

 

 

  

  

  

(b) Where the Agreed Upon Transaction Structure requires the approval of the Board of Directors, Managers and/or Security Owners of any ONE Energy Entity, minutes of the respective Directors, Managers and/or Security Owners approving the Agreed Upon Transaction Structure and the Definitive Agreement(s); and

(c) Executed Definitive Agreement(s) and such other documents, materials, confirmations and ancillary documents that are required to be provided pursuant to the terms of the Definitive Agreement(s).

7. Petron Closing Conditions.  Petron shall have delivered or caused to be delivered to ONE Energy, the following on or prior to the Deadline, unless the delivery of which has been waived by ONE Energy (or where applicable, the respective ONE Energy Entity):

(a) Where the Agreed Upon Transaction Structure requires the approval of the Board of Directors and/or shareholders of Petron, minutes of the respective Directors and shareholders of Petron approving the Agreed Upon Transaction Structure and the Definitive Agreement(s);

(b) Executed Definitive Agreement(s) and such other documents, materials, confirmations and ancillary documents that are required to be provided pursuant to the terms of the Definitive Agreement(s); and

(c) Obtained DTC eligibility or taken steps to be approved for DTC eligibility within four days of execution of the Asset Purchase Agreement between Petron and Restaurant Concepts Inc.

8.            Non-Circumvention. In consideration for One Energy entering into this Agreement, which Petron hereby confirms the adequacy and sufficiency of, Petron agrees that prior to the Deadline (in each case, as and if extended), neither it, nor its Affiliates, officers, directors, consultants, or employees will (i) deal with, discuss, enter into any written or oral agreement or understanding with,
solicit, or respond to any solicitation, directly or indirectly, with any person, firm or entity in connection with any transaction similar to or affecting the Acquisition, without the prior written consent of One Energy, (ii) circumvent One Energy or this Agreement in any manner, (iii) participate in business dealings that would adversely impact the proposed Acquisition, or (iv) deal with, contact, enter into any written or oral agreement or understanding with, or solicit any companies, whether public or private in connection with an Acquisition or sale of the Interests.

9.            Mutual Representations, Covenants and Warranties.  Each of the Parties, for themselves and for the benefit of each of the other Party hereto, represents, covenants and warranties that:

(a) Such Party has all requisite power and authority, corporate or otherwise, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and thereby. This Agreement constitutes the legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and general equitable principles;

 

  

  

  

(b) The execution and delivery by such Party and the consummation of the transactions contemplated hereby and thereby do not and shall not, by the lapse of time, the giving of notice or otherwise: (i) constitute a violation of any law; or (ii) constitute a breach of any provision contained in, or a default under, any governmental approval, any writ, injunction, order, judgment or decree of any governmental authority or any contract to which such Party is bound or affected;

(c) The Parties agree that, from time to time, each of them will take such other action and to execute, acknowledge and deliver such contracts, deeds, or other documents as may be reasonably requested and necessary or appropriate to carry out the purposes and intent of this Agreement and the transactions contemplated herein; and

(d) The Parties agree that in all dealings with each other, related to this Agreement that they shall act, at all times, in good faith and with due diligence.

10.   Confidentiality. Petron, and its officers, directors, employees and agents shall maintain in strict confidence and not copy, disclose or transfer to any other party (a) all confidential business and financial information regarding ONE Energy and each ONE Energy Entity and their Affiliates and Associates, including without limitation, information regarding the Interests and projections, business plans, marketing plans, product development plans, pricing, costs, customer, vendor and supplier lists
and identification, channels of distribution, and terms of identification of proposed or actual contracts, and (b) all other confidential information of ONE Energy, each ONE Energy Entity and each Affiliate and Associate thereof, except in connection with or in furtherance of the Acquisition. The terms, conditions and requirements of this Section 10 shall survive any termination of this Agreement.

 

11. Authority. The Parties warrant by their signature below that each is authorized to sign this Agreement, and in the event that any Party is an entity, that such signatory has full power to bind the Party, and that such Party has obtained all required approvals to enter into this Agreement.  The Parties further warrant that each has executed this Agreement of their own free will and accord and for purposes and consideration set forth.

12. Definitions.  The following terms used throughout this Agreement shall have the definitions provided below:

(a) “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person, and in the case of any natural Person shall include all relatives and family members of such Person. For purposes of this definition, a Person shall be deemed to control another Person if such first Person and/or any relatives or family members of such first Person directly or indirectly owns or holds five percent (5%) or more of the ownership interests in
such other Person;

 

  

  

  

(b) “Applicable Laws” mean state or federal securities laws, including, but not limited to Rule 144 of the Securities Act of 1933, as amended;

(c) “Associate” when used to indicate a relationship with any Person, means (1) a corporation or organization (other than the Person or a majority-owned subsidiary of the Person) of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of equity securities, (2) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar capacity, and (3) any relative or
spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a Director or officer of the Person or any of its parents or subsidiaries.  When used in conjunction with Affiliate, as in “Affiliates and Associates”, such term shall also refer to Associates of Affiliates of the Person being referenced;

(d) “Definitive Agreement” means an agreement in form mutually agreeable by the parties thereto, evidencing the Agreed Upon Transaction Structure;

(e) “ONE Energy Entity” or “ONE Energy Entities” shall mean ONE Energy Capital Corp. a Nevada corporation; ONE Energy International Corp., a Nevada corporation; and/or their Affiliates and Associates (including Associates of Affiliates);

(f) “Security Owners” mean the shareholders, option holders, warrant holders, members and/or other security owners of a Person’s outstanding securities; and

(g) “Person” means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity.

13. Section Headings. Section headings are for convenience only and shall not define or limit the provisions of this Agreement.

 

 

14. Governing Law.  This Agreement shall be deemed to have been made in the State of Texas and shall be construed, and the rights and liabilities determined, in accordance with the law of the State of Texas, without regard to the conflicts of laws rules of such jurisdiction.

  

  

  

15. Severability.  Should any clause, sentence, paragraph, subsection, Section or Article of this Agreement be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement, and the Parties agree that the part or parts of this Agreement so held to be invalid, unenforceable or void will be deemed to have been stricken herefrom by the Parties, and the remainder will have the same force and effectiveness as if
such stricken part or parts had never been included herein.

16. Entire Agreement.  This Agreement and all other agreements and documents referred herein constitutes the entire agreement between Petron and ONE Energy.  No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any Party hereto to any other Party concerning the subject matter hereof.  All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties
concerning the subject matter hereof are merged herein.

17. Successors. This Agreement shall be binding upon and inure to the benefit of Petron and ONE Energy and their respective successors and assigns.  Any purchaser or acquiror of substantially all of the assets or outstanding securities of Petron (including, but not limited to Restaurant Concepts) shall be deemed a successor hereunder and shall further be deemed to have acquired and agreed to be bound by the terms and conditions of this Agreement.

 

18. Extended Meanings. In this Agreement words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders. The word “person” includes an individual, body corporate, partnership, trustee or trust or unincorporated association, executor, administrator or legal representative.

19. Effect of Facsimile and Photocopied Signatures. This Agreement may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Agreement signed by one party and faxed or scanned and emailed to another party (as a PDF or similar image file) shall be deemed to have been executed and delivered by the signing party as though an
original.  A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

Acquisition Acknowledgement.  Petron agrees hereby to complete the development of the 14 wells on the Redder lease, within six months from herein.  Petron also agrees to issue more preference shares similar to those being issued to the ONE Energy shareholders for their working interest shareholders in Redder.

[Remainder of page left intentionally blank.  Signature page follows.]

 

  

  

  

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above to be effective as of the Effective Date.

THE “COMPANY”

Petron Energy II, Inc.

           /s/ Floyd L. Smith

Floyd L. Smith

President

 

“ONE International”                                           

ONE Energy International Corp.

/s/ Daniel Vesco

Daniel Vesco

President

 

“ONE Capital”                                

ONE Energy Capital Corp.

 

/s/ Daniel Vesco

Daniel Vesco

President

  

  

  

EXHIBIT A

INTERESTS

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