Document:

mine_101.htm

EXHIBIT 10.1

 

RETURN OF ASSET AGREEMENT

 

THIS RETURN OF ASSET AGREEMENT (the “Agreement”) is dated the 28th day of May, 2013, by and among Minerco Resources, Inc., a Nevada corporation which is publicly traded on the Over-The-Counter Bulletin Board (OCTQB: MINE) hereinafter referred to as the “Buyer”, and ENERCOSA, a Corporation formed and operated under the laws of Honduras hereinafter referred to as the “Seller”, (hereinafter sometimes referred to collectively as the “Parties”).

WHEREAS, Buyer and Seller entered into an Asset Purchase Agreement on January 5, 2011 for One Hundred percent (100%) of all of the Buyer’s rights, title and interest in and to a certain Hydro-Electric Project located in Honduras known as the “Iscan Hydro-Electric Project” more specifically defined in Schedule 2.0 attached to the Asset Purchase Agreement, dated January 5, 2011, and incorporated therein by reference, (hereinafter sometimes referred to as the “Project”) for the consideration and upon the terms and subject to the conditions set forth in the Asset Purchase Agreement.

WHEREAS, Buyer desires to return to Seller, and Seller desires to receive from Seller, One Hundred percent (100%) of all of the Buyer’s rights, title and interest in and to a certain Hydro-Electric Project located in Honduras known as the “Iscan Hydro-Electric Project” more specifically defined in Schedule 2.0 attached to the Asset Purchase Agreement, dated January 5, 2011, and incorporated therein by reference, (hereinafter sometimes referred to as the “Project”) for the consideration and upon the terms and subject to the conditions set forth in the Asset Purchase Agreement.

NOW, THEREFORE, in consideration of the premises, the provisions and the respective agreements hereinafter set forth, the parties hereto hereby agree as follows:

1.             Return of Assets.

1.1           Agreement to Transfer and Return. Upon the terms and subject to the conditions set forth in this Agreement and upon the representations and warranties made herein by each of the parties to the other, on the Closing Date (as such term is hereinafter defined), Buyer shall return to Seller, and Seller shall acquire from Buyer, One Hundred percent (100%) of all of the Buyer’s rights, title and interest in and to a certain Hydro-Electric Project located in Honduras known as the “Iscan Hydro-Electric Project” more specifically defined in Schedule 2.0 attached to the Asset Purchase Agreement, dated January 5, 2011, and incorporated therein by reference, (hereinafter sometimes referred to as the “Project”) for the consideration and upon the terms and subject to the conditions set forth in the Asset Purchase Agreement.

1.2           Purchase Price. Upon the terms and subject to the conditions set forth in this Agreement, in reliance upon the representations, warranties, covenants and agreements of the Buyer contained herein, and in exchange for One Hundred percent (100%) of all of the Buyer’s rights, title and interest in and to the Project , Seller agrees to deliver to Buyer a royalty of Ten Percent (10%) of the adjusted gross revenues, derived after all applicable taxes, from the Project AND return any and all shares of the Buyer’s $.001 par value common stock of Buyer (“Buyer’s Shares”) as distributed to the Seller(s) as referenced in the Asset Purchase Agreement, dated January 5, 2011 (the “Purchase Price”).

 

  

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1.3           Payment of Purchase Price. The Purchase Price shall be payable as follows:

(a)           Seller shall return any and all shares of the Buyer’s $.001 par value common stock of Buyer (“Buyer’s Shares”) as distributed to the Seller(s) as referenced in the Asset Purchase Agreement, dated January 5, 2011 to Buyer or Buyers assign’s within 30 days of the transfer of title as defined in Section 1.4 herein.

(b)           Buyer shall return or cause to be transferred back to Seller One Hundred percent (100%) of all of the Buyer’s rights, title and interest in and to the Project within 30 days of the Closing as defined in Section 1.4 herein.

 

(c)           As additional consideration for this Agreement, Seller shall pay to Buyer a royalty of Ten Percent (10%) of the adjusted gross revenues, derived after all applicable taxes, from the Project.

 

1.4           Closing. The closing of the transaction contemplated herein (the "Closing") will be at the office of Buyer on or before May 28, 2013, or at such other place or at such other date and time as Seller and Buyer may mutually agree. Such date and time of Closing is herein referred to as the "Closing Date."

2.             Representations and Warranties of Buyer. The Buyer, represents and warrants to Seller as follows:

2.1           Existence and Good Standing. As of the Closing, The Project is duly licensed or qualified to do business and is in good standing under the laws of all other jurisdictions in which the character of the properties owned or leased by it therein or in which the transaction of its business makes such qualification necessary.

2.2           Corporate Authority. As of the Closing, the Project has all requisite corporate power and authority to own its properties and carry on its business as now conducted.

2.3           Compliance with Law. As of the Closing, the Project is not in default with respect to any order of any court, governmental authority or arbitration board or tribunal to which the Project and or the Buyer is a party or is subject, and the Project is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject. The Buyer has obtained all licenses, permits and other authorizations and has taken all actions required by applicable laws or governmental regulations in connection with its business as now conducted which are required and necessary for the Project viability.

2.4           Validity and Effect of Agreements. This Agreement constitutes, and all agreements and documents contemplated hereby when executed and delivered pursuant hereto will constitute, the valid and legally binding obligations of the Buyer enforceable in accordance with their terms, except that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws of general application now or hereafter in effect relating to the enforcement of creditors' rights generally and except that the remedies of specific performance, injunction and other forms of equitable relief are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefore may be brought.

 

  

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2.5           No Required Consents or Defaults. The execution and delivery of this Agreement by the Buyer does not and the consummation of the transactions contemplated hereby will not (i) require the consent of any person not a party to this Agreement, (ii) result in the breach of any term or provision of, or constitute a default under, or result in the acceleration of or entitle any party to accelerate (whether after the giving of notice or the lapse of time or both) any obligation under, or result in the creation or imposition of any lien, charge, pledge, security interest or other encumbrance upon any part of the Project pursuant to any provision of, any order, judgment, arbitration award, injunction, decree, indenture, mortgage, lease, license, lien, or other agreement or instrument to which Buyer or the Project is a party or by which any of them is bound, or violate or conflict with any provision of the by-laws or articles/certificate of incorporation which may relate to the Project as amended to the date of this Agreement.

2.6           Affiliated Entities. Except as otherwise disclosed in Schedule 2.6 attached hereto, the Project does not own, directly or indirectly, any interest in any corporation, business trust, joint stock corporation, partnership or other business organization or association.

2.7           Jurisdictions. Schedule 2.8 contains a list of all jurisdictions in which the Project is presently licensed or qualified to do business. Both the Buyer and the Project has complied in all material respects with all applicable laws of each such jurisdiction and all applicable rules and regulations of each regulatory agency therein. The Project has not been denied admission to conduct any type of business in any jurisdiction in which it is not presently admitted as set forth in such Schedule 2.8, has not had its license or qualifications to conduct business in any jurisdiction revoked or suspended, and has not been involved in any proceeding to revoke or suspend a license or qualification.

2.8           Records. The corporate minute books of the Project to be delivered to Buyer at the Closing shall contain true and complete copies of the articles of incorporation, as amended to the Closing Date, bylaws, as amended to the Closing Date, and the minutes of all meetings of directors and Buyer and certificates reflecting all actions taken by the directors or Buyer without a meeting, from the date of incorporation of the Project to the Closing Date is applicable.

2.11         Financial Statements. INTENTIONALLY OMITTED.

2.12         Undisclosed Liabilities. INTENTIONALLY OMITTED.

2.13         Absence of Certain Changes or Events. INTENTIONALLY OMITTED.

2.14         Taxes. The Project (i) has duly and timely filed or caused to be filed all federal, state, local and foreign tax returns (including, without limitation, consolidated and/or combined tax returns) required to be filed by it prior to the date of this Agreement which relate to the Project or with respect to which the Project or the assets or properties of the Project are liable or otherwise in any way subject, (ii) has paid or fully accrued for all taxes shown to be due and payable on such returns (which taxes are all the taxes due and payable under the laws and regulations pursuant to which such returns were filed), and (iii) has properly accrued for all such taxes accrued in respect of the Project or the assets and properties of the Project for periods subsequent to the periods covered by such returns. No deficiency in payment of taxes for any period has been asserted by any taxing body and remains unsettled at the date of this Agreement. Copies of all federal, state, local and foreign tax returns of the Project have been made available for inspection by Buyer.

 

  

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2.15         Title to the Project Property and Assets. The Project has good and marketable title to all of the properties and assets. None of such properties or assets is subject to a contract of sale not in the ordinary course of business, or subject to security interests, mortgages, encumbrances, liens or charges of any kind or character.

2.16         Condition of Personal Property. All tangible personal property, equipment, fixtures and inventories included within the assets of the Project are in good, merchantable or in reasonably repairable condition and are suitable for the purposes for which they are used. No value in excess of applicable reserves has been given to any inventory with respect to obsolete or discontinued products. To the best of the Buyer’s knowledge, all of the inventories and equipment, including equipment leased to others, are well maintained and in good operating condition.

2.17         Real Estate and Leases. INTENTIONALLY OMITTED.

2.18         List of Contracts and Other Data. INTENTIONALLY OMITTED.

2.19         Business Property Rights. INTENTIONALLY OMITTED.

2.20         No Breach or Default. As of the Closing, the Project is not in default under any contract to which it is a party or by which it is bound, nor has any event occurred which, after the giving of notice or the passage of time or both, would constitute a default under any such contract. Buyer have no reason to believe that the parties to such contracts will not fulfill their obligations under such contracts in all material respects or are threatened with insolvency.

2.21         Labor Controversies. As of the Closing, the Project is not a party to any collective bargaining agreement. There are not any controversies between the Project and any of its employees which might reasonably be expected to materially adversely affect the conduct of its business, or any unresolved labor union grievances or unfair labor practice or labor arbitration proceedings pending or threatened relating to its business, and there are not any organizational efforts presently being made or threatened involving any of the Project's employees. The Buyer on behalf of the Project has not received notice of any claim that the Project has not complied with any laws relating to the employment of labor, including any provisions thereof relating to wages, hours, collective bargaining, the payment of social security and similar taxes, equal employment opportunity, employment discrimination and employment safety, or that the Project is liable for any arrears of wages or any taxes or penalties for failure to comply with any of the foregoing.

2.22         Litigation. As of the Closing, there are no actions, suits or proceedings with respect to the Project involving claims by or against Buyer or the Project which are pending or threatened against Buyer or the Project, at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality in any jurisdiction in the world. No basis for any action, suit or proceeding exists, and there are no orders, judgments, injunctions or decrees of any court or governmental agency with respect to which Buyer or the Project has been named or to which Buyer or the Project is a party, which apply, in whole or in part, to the business of the Project, or to any of the assets or properties of the Project or which would result in any material adverse change in the business or prospects of the Project.

 

  

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2.23         Bank Accounts. INTENTIONALLY OMITTED.

2.24         Powers of Attorney. There are no persons holding powers of attorney from the Project.

2.25         Insurance. INTENTIONALLY OMITTED.

2.26         No Brokers. Neither Buyer nor the Project has entered into any contract, arrangement or understanding with any person or firm which may result in the obligation of Buyer or the Project to pay any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiations leading to this Agreement or the consummation of the transactions contemplated hereby, and neither Buyer nor the Project are aware of any claim or basis for any claim for payment of any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiations leading to this Agreement or the consummation of the transactions contemplated hereby.

2.27         No Misrepresentation or Omission. No representation or warranty by Buyer in this Article 2 or in any other Article or Section of this Agreement, or in any certificate or other document furnished or to be furnished by Buyer pursuant hereto, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained therein not misleading or will omit to state a material fact necessary in order to provide Buyer with accurate information as to the Project.

3.             Representations and Warranties of Seller. Seller represents and warrants to Seller as follows:

3.1           Existence and Good Standing. As of the Closing, Seller is a corporation duly incorporated, validly existing and in good standing under the laws of Honduras. Seller is duly licensed or qualified to do business as a foreign corporation and is in good standing under the laws of all other jurisdictions in which the character of the properties owned or leased by it therein or in which the transaction of its business makes such qualification necessary.

3.2           Corporate Authority. As of the Closing, Seller has all requisite corporate power and authority to own its properties and carry on its business as now conducted.

3.3           Compliance with Law. As of the Closing, Seller is not in default with respect to any order of any court, governmental authority or arbitration board or tribunal to which Seller is a party or is subject, and Seller is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject. Seller has obtained all licenses, permits or other authorizations and has taken all actions required by applicable laws or governmental regulations in connection with its business as now conducted.

 

  

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3.4           Authorization; Validity and Effect of Agreements. The execution and delivery of this Agreement and all agreements and documents contemplated hereby by Seller, and the consummation by it of the transactions contemplated hereby, have been duly authorized by all requisite corporate action. This Agreement constitutes, and all agreements and documents contemplated hereby when executed and delivered pursuant hereto will constitute, the valid and legally binding obligations of Seller enforceable in accordance with their terms, except that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws of general application now or hereafter in effect relating to the enforcement of creditors' rights generally and except that the remedies of specific performance, injunction and other forms of equitable relief are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefore may be brought. The execution and delivery of this Agreement by Seller does not and the consummation of the transactions contemplated hereby will not (i) require the consent of any third party, (ii) result in the breach of any term or provision of, or constitute a default under, or result in the acceleration of or entitle any party to accelerate (whether after the giving of notice or the lapse of time or both) any obligation under, or result in the creation or imposition of any lien, charge, pledge, security interest or other encumbrance upon any part of the Project pursuant to any provision of, any order, judgment, arbitration award, injunction, decree, indenture, mortgage, lease, license, lien, or other agreement or instrument to which Seller is a party or by which it is bound, and (iii) violate or conflict with any provision of the by-laws or articles of incorporation of Seller as amended to the date of this Agreement.

4.             Other Covenants and Agreements.

4.1           Indemnification by Seller. Upon the terms and subject to the conditions set forth in Section 4.4 hereof, Seller agree to indemnify and hold Buyer and the Project harmless against, and will reimburse Buyer (or the Project if Buyer so requests) on demand for, any payment, loss, damage (including incidental and consequential damages), cost or expense (including reasonable attorney's fees and reasonable costs of investigation incurred in defending against such payment, loss, damage, cost or expense or claim therefore) made or incurred by or asserted against Buyer or the Project at any time after the Closing Date in respect of any omission, misrepresentation, breach of warranty, or nonfulfillment of any term, provision, covenant or agreement on the part of Seller contained in this Agreement, or from any misrepresentation in, or omission from, any certificate or other instrument furnished or to be furnished to Buyer pursuant to this Agreement.

4.2           Indemnification by Buyer. Upon the terms and subject to the conditions set forth in Section 4.4 hereof, Buyer agrees to indemnify and hold Seller harmless against, and will reimburse Seller on demand for, any payment, loss, damage (including incidental and consequential damages), cost or expense (including reasonable attorney's fees and reasonable costs of investigation incurred in defending against such payment, loss, damage, cost or expense or claim therefore) made or incurred by or asserted against Seller at any time after the Closing Date in respect of any omission, misrepresentation, breach of warranty, or nonfulfillment of any term, provision, covenant or agreement on the part of Buyer contained in this Agreement, or from any misrepresentation in, or omission from, any certificate or other instrument furnished or to be furnished to Seller pursuant to this Agreement.

4.3           Tax Indemnity. INTENTIONALLY OMITTED.

 

  

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4.4           Conditions of Indemnification. With respect to any actual or potential claim, any written demand, the commencement of any action, or the occurrence of any other event which involves any matter or related series of matters (a "Claim") against which a party hereto is due to be indemnified (the "Indemnified Party") by the other party (the "Indemnifying Party") under Sections 4.1, 4.2 or 4.3 hereof:

(A)           Promptly (and in no event no more than 30 days) after (i) Seller (if Seller are the Indemnified Party), or (ii) the President of the Buyer or the Project (if Buyer or the Project is the Indemnified Party) first receives written documents pertaining to the Claim, or if such Claim does not involve a third party Claim (a "Third Party Claim"), promptly (and in no event no more than 30 days) after (i) Seller (if Seller are the Indemnified Party), or (ii) the President of the Buyer or the Project (if Buyer or the Project is the Indemnified Party) first has actual knowledge of such Claim, the Indemnified Party shall give notice to the Indemnifying Party of such Claim in reasonable detail and stating the amount involved, if known, together with copies of any such written documents.

(B)           The Indemnifying Party shall have no obligation to indemnify the Indemnified Party with respect to any Claim if the Indemnified Party fails to give the notice with respect thereto in accordance with Section 4.4(A) hereof.

(C)           If the Claim involves a Third Party Claim, then the Indemnifying Party shall have the right, at its sole cost, expense and ultimate liability regardless of the outcome, and through counsel of its choice (which counsel shall be reasonably satisfactory to the Indemnified Party), to litigate, defend, settle or otherwise attempt to resolve such Third Party Claim; provided, however, that if in the Indemnified Party's reasonable judgment a conflict of interest may exist between the Indemnified Party and the Indemnifying Party with respect to such Third Party Claim, then the Indemnified Party shall be entitled to select counsel of its own choosing, reasonably satisfactory to the Indemnifying Party, in which event the Indemnifying Party shall be obligated to pay the fees and expenses of such counsel. Notwithstanding the preceding sentence, the Indemnified Party may elect, at any time and at the Indemnified Party's sole cost, expense and ultimate liability, regardless of the outcome, and through counsel of its choice, to litigate, defend, settle or otherwise attempt to resolve such Third Party Claim. If the Indemnified Party so elects (for reasons other than the Indemnifying Party's failure or refusal to provide a defense to such Third Party Claim), then the Indemnifying Party shall have no obligation to indemnify the Indemnified Party with respect to such Third Party Claim, but such disposition will be without prejudice to any other right the Indemnified Party may have to indemnification under Section 4.1, 4.2 or 4.3 hereof, regardless of the outcome of such Third Party Claim. If the Indemnifying Party fails or refuses to provide a defense to any Third Party Claim, then the Indemnified Party shall have the right to undertake the defense, compromise or settlement of such Third Party Claim, through counsel of its choice, on behalf of and for the account and at the risk of the Indemnifying Party, and the Indemnifying Party shall be obligated to pay the costs, expenses and attorney's fees incurred by the Indemnified Party in connection with such Third Party Claim. In any event, Buyer, the Project and Seller shall fully cooperate with each other and their respective counsel in connection with any such litigation, defense, settlement or other attempted resolution.

 

  

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4.5           Taxes and Expenses.

(A)           Seller hereby covenant and agree to assume and pay all taxes arising from or relating to the transactions as contemplated by this Agreement. Except as otherwise specifically provided for in this Agreement, Seller shall be individually responsible for and shall personally pay all costs, liabilities and other obligations incurred by Seller in connection with the performance of and compliance with all transactions, agreements and conditions contained in this Agreement to be performed or complied with by Seller, including legal and accounting fees. In no event shall any of such taxes, costs, liabilities or other obligations be paid by or incurred on behalf of the Project.

(B)           Except as otherwise specifically provided for in this Agreement, Seller will assume and pay all costs, liabilities and other obligations incurred by Seller in connection with the performance of and compliance with all transactions, agreements and conditions contained in this Agreement to be performed or complied with by Seller, including legal and accounting fees.

4.6           Exclusive Dealing. INTENTIONALLY OMITTED.

 

4.7           Public Announcements. Neither Seller nor Buyer will at any time, without the prior written consent of the other, make any announcement, issue any press release or make any statement with respect to this Agreement or any of the terms or conditions hereof except as may be necessary to comply with any law, regulation or order; provided, however, that subsequent to the Closing Buyer may disclose the consummation of the transaction herein contemplated without the consent of the Seller.

5.             Conditions of Closing.

5.1           Seller’s Conditions of Closing. The obligation of Seller to purchase and pay for the Project shall be subject to and conditioned upon the satisfaction (or waiver by Seller) at the Closing of each of the following conditions:

(A)          All representations and warranties of Buyer contained in this Agreement and the Schedules hereto shall be true and correct at and as of the Closing Date, Buyer shall have performed all agreements and covenants and satisfied all conditions on its part to be performed or satisfied by the Closing Date pursuant to the terms of this Agreement, and Seller shall have received a certificate of the Buyer dated the Closing Date to such effect.

(B)           There shall have been no material adverse change since the date of the Unaudited Balance Sheet in the financial condition, business or affairs of the Project, and the Project shall not have suffered any material loss (whether or not insured) by reason of physical damage caused by fire, earthquake, accident or other calamity which materially affects the value of its assets, properties or business, and Buyer shall have received a certificate of the Buyer dated the Closing Date to such effect.

(C)           Buyer shall have delivered to Seller evidence, satisfactory to the Seller in the sole and exclusive judgment of Seller, of the Project's certifying as of a date reasonably close to the Closing Date that the Project has filed all required reports, paid all required fees and taxes, and is, as of such date, in good standing and authorized to transact business.

 

  

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(D)           Buyer shall have delivered to Seller certificates and other instruments together with all other documents necessary or appropriate to validly transfer the Project to Seller free and clear of all security interests, liens, encumbrances and adverse claims.

(E)            Neither any investigation of the Project by Seller, nor the Schedules attached hereto or any supplement thereto nor any other document delivered to Seller as contemplated by this Agreement, shall have revealed any facts or circumstances which, in the sole and exclusive judgment of Seller and regardless of the cause thereof, reflect in an adverse way on the Project or its financial condition, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospects.

(F)           The approval and all consents from third parties and governmental agencies required to consummate the transactions contemplated hereby shall have been obtained.

(G)           No suit, action, investigation, inquiry or other proceeding by any governmental body or other person or legal or administrative proceeding shall have been instituted or threatened which questions the validity or legality of the transactions contemplated hereby.

(H)           As of the Closing, there shall be no effective injunction, writ, preliminary restraining order or any order of any nature issued by a court of competent jurisdiction directing that the transactions provided for herein or any of them not be consummated as so provided or imposing any conditions on the consummation of the transactions contemplated hereby, which is unduly burdensome on Seller.

 

(I)             As of the Closing, there shall have been no material adverse change in the amount of issued and outstanding common stock of the Project.

 

5.2           Buyer’s Conditions of Closing. The obligation of Buyer to sell the Project shall be subject to and conditioned upon the satisfaction (or waiver by Buyer) at the Closing of each of the following conditions:

(A)           All representations and warranties of Seller contained in this Agreement shall be true and correct at and as of the Closing Date and Seller shall have performed all agreements and covenants and satisfied all conditions on its part to the performed or satisfied by the Closing Date pursuant to the terms of this Agreement.

(B)           The approval and all consents from third parties and governmental agencies required to consummate the transactions contemplated hereby shall have been obtained.

(C)           No suit, action, investigation, inquiry or other proceeding by any governmental body or other person or legal or administrative proceeding shall have been instituted or threatened which questions the validity or legality of the transactions contemplated hereby.

 

  

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(D)           As of the Closing, there shall be no effective injunction, writ, preliminary restraining order or any order of any nature issued by a court of competent jurisdiction directing that the transactions provided for herein or any of them not be consummated as so provided or imposing any conditions on the consummation of the transactions contemplated hereby, which is unduly burdensome on Buyer.

 

(G)           As of the Closing, there shall have been no material adverse change in the amount of issued and outstanding common stock of Seller.

 

6.             Termination.

6.1           Methods of Termination. The transactions contemplated herein may be terminated and/or abandoned at any time before or after approval thereof by Seller and Buyer, but not later than the Closing:

6.1.1         By mutual consent of Buyer and Seller; or

6.1.2         By Seller, if any of the conditions provided for in Section 5.1 hereof shall not have been met or waived in writing by Seller at or prior to Closing; or

6.1.3         By Buyer, if any of the conditions provided for in Section 5.2 hereof shall not have been met or waived in writing by Buyer at or prior to Closing.

6.2           Procedure Upon Termination. In the event of termination by Buyer or Seller, as applicable, pursuant to Section 6.1 hereof, written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated without further action by Buyer or Seller. If the transactions contemplated by this Agreement are so terminated:

 

6.2.1         Each party will redeliver all documents, work papers and other material of any other party relating to the transactions contemplated hereby, whether so obtained before or after the execution of this Agreement, to the party furnishing the same; and

 

6.2.2         No party hereto shall have any liability or further obligation to any other party to this Agreement except that if such termination is a result of the failure of any condition set forth in (i) Sections 5.1(A) through 5.1(F) and 5.1(I) hereof, then Buyer shall be entitled to recover from Seller all out-of-pocket costs which Buyer has incurred (including reasonable attorney's fees, accounting fees and expenses); and (ii) Sections 5.2(A) through 5.2(D) hereof, then Seller shall be entitled to recover from Buyer all out-of-pocket costs which Seller has incurred (including reasonable attorney's fees, accounting fees and expenses).

 

  

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7              Miscellaneous.

 

7.1           Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed given to a party when:

(i)             delivered by hand or by a nationally recognized overnight courier service (costs prepaid),

(ii)            sent by facsimile with confirmation of transmission by the transmitting equipment, or;

(iii)           received or rejected by the addressee, if sent by certified mail, postage prepaid and return receipt requested, in each case to last known place of business address.

 

7.2           Execution of Additional Documents. The parties hereto will at any time, and from time to time after the Closing Date, upon request of the other party, execute, acknowledge and deliver all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably required to carry out the intent of this Agreement, and to transfer and vest title to the Project being transferred hereunder, and to protect the right, title and interest in and enjoyment of all of the Project sold, granted, assigned, transferred, delivered and conveyed pursuant to this Agreement; provided, however, that this Agreement shall be effective regardless of whether any such additional documents are executed.

7.3           Binding Effect; Benefits. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors, executors, administrators and assigns. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective heirs, successors, executors, administrators and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.

7.4           Entire Agreement. This Agreement, together with the Exhibits, Schedules and other documents contemplated hereby, constitute the final written expression of all of the agreements between the parties, and is a complete and exclusive statement of those terms. It supersedes all understandings and negotiations concerning the matters specified herein. Any representations, promises, warranties or statements made by either party that differ in any way from the terms of this written Agreement and the Exhibits, Schedules and other documents contemplated hereby, shall be given no force or effect. The parties specifically represent, each to the other, that there are no additional or supplemental agreements between them related in any way to the matters herein contained unless specifically included or referred to herein. No addition to or modification of any provision of this Agreement shall be binding upon any party unless made in writing and signed by all parties.

7.5           Choice of Law; Venue; Jurisdiction; Attorneys’ Fees. The parties acknowledge and agree that this Agreement has been made in Texas, and that it shall be governed by, construed, and enforced in accordance with the laws of the State of Texas, without reference to its conflicts of laws principles. The parties also acknowledge and agree that any action or proceeding arising out of or relating to this Agreement or the enforcement thereof shall be brought in the Harris County Superior Court, and each of the parties irrevocably submits to the exclusive jurisdiction of that Court in any such action or proceeding, waives any objection the party may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of such action or proceeding shall be heard and determined only in that Court, and agrees not to bring any action or proceeding arising out of or relating to this Agreement or the enforcement hereof in any other court. The parties also acknowledge and agree that either or both of them may file a copy of this paragraph with any court as written evidence of the knowing, voluntary and bargained agreement between the parties irrevocably to waive any objections to venue or convenience of forum, or to personal or subject matter jurisdiction. The parties also acknowledge and agree that any action or proceeding referred to above may be served on any party anywhere in the world without any objection thereto. The parties also acknowledge and agree that the prevailing party in any such action or proceeding shall be awarded the party’s reasonable attorneys’ fees and costs (including, but not limited to, costs of court).

 

  

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7.6           Fair Meaning. The parties agree that the wording of this Agreement shall be construed as a whole according to its fair meaning, and not strictly for or against any of the parties to this Agreement, including the party responsible for drafting the Agreement.

7.7           Mutual Drafting. The parties hereto acknowledge and agree that they are sophisticated and have been represented by attorneys who have carefully negotiated the provisions of this Agreement. As a consequence, the parties also agree that they do not intend that the presumptions of any laws or rules relating to the interpretation of contracts against the drafter of any particular clause should be applied to this Agreement and therefore waive their effect.

7.8           Jurisdiction, Service of Process. Any action or proceeding arising out of or relating to this Agreement shall be governed by Section 7.5 of this Agreement, and each of the parties irrevocably submits to the exclusive jurisdiction of each court identified therein in any such action or proceeding; waives any objection the party may now or hereafter have to venue or to convenience of forum; agrees that all claims in respect of the action or proceeding shall be heard and determined only in any such court; and agrees not to bring any action or proceeding arising out of or relating to this Agreement or any transaction contemplated hereby in any other court. The parties agree that either or both of them may file a copy of this paragraph with any court as written evidence of the knowing, voluntary and bargained agreement between the parties irrevocably to waive any objections to venue or to convenience of forum. Process in any action or proceeding referred to in the first sentence of this Section 10 may be served on any party anywhere in the world.

7.9           Survival. All of the terms, conditions, warranties and representations contained in this Agreement shall survive the Closing.

7.10         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

7.11         Headings. Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive or interpretive effect whatsoever.

 

7.12         Waivers. Either Buyer or Seller may, by written notice to the other, (i) extend the time for the performance of any of the obligations or other actions of the other under this Agreement; (ii) waive any inaccuracies in the representations or warranties of the other contained in this Agreement or in any document delivered pursuant to this Agreement; (iii) waive compliance with any of the conditions or covenants of the other contained in this Agreement; or (iv) waive performance of any of the obligations of the other under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including without limitation any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained in this Agreement. The waiver by any party hereto of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision hereunder.

 

  

Page 12

  

7.13         Merger of Documents. This Agreement and all agreements and documents contemplated hereby constitute one agreement and are interdependent upon each other in all respects

7.14         Incorporation of Exhibits and Schedules. All Exhibits and Schedules attached hereto are by this reference incorporated herein and made a part hereof for all purposes as if fully set forth herein.

7.15         Severability. If for any reason whatsoever, any one or more of the provisions of this Agreement shall be held or deemed to be inoperative, unenforceable or invalid as applied to any particular case or in all cases, such circumstances shall not have the effect of rendering such provision invalid in any other case or of rendering any of the other provisions of this Agreement inoperative, unenforceable or invalid.

7.16         Assignability. Neither this Agreement nor any of the parties' rights hereunder shall be assignable by any party hereto without the prior written consent of the other parties hereto.

7.17         Binding on Successors and Assigns. This Agreement shall be binding on and shall inure to the benefit of each party, its successors, and assigns. This Agreement and the rights and obligations hereunder shall not be assignable or transferable by either party without the prior written consent of the other party.

7.18         Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted successors or assigns, and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such successors or assigns, any legal or equitable rights, remedy or claim hereunder.

7.19         Authority of Signers. The parties represent and warrant that the person whose signature is set forth below on behalf of a party is fully authorized to execute this Agreement on behalf of that party.

 

INTENTIONALLY LEFT BLANK – SIGNATURE PAGE FOLLOWS

 

  

Page 13

  

 

IN WITNESS WHEREOF, the parties have executed this Return of Asset Agreement and caused the same to be duly delivered on their behalf on the day and year first above written.

 

	 	
SELLER:

	 
	 	 	 
	 	ENERCOSA	 
	 	 	 	 
	 	
By:

		 
	 	 	Leonardo Molina Romero	 
	 	Its:	President	 
	 	 	 	 
	 	 	 	 
	 	BUYER:	 
	 	 	 	 
	 	MINERCO RESOURCES, INC.,	 
	 	 	 	 
	 	By:		 
	 	 	John F. Powers	 
	 	Its:	President	 

 

 

Page 14zmtp_ex42.htm

EXHIBIT 4.2

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED MAY 29, 2013 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE.  COPIES OF THE PROSPECTUS ARE AVAILABLE FROM BROADRIDGE CORPORATE ISSUER, INC. THE INFORMATION AGENT BY CALLING  TOLL FREE XXX-XXX-XXXX.

ZOOM TELEPHONICS, INC.

 

Incorporated under the laws of the State of Delaware

NON – TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE

 

Evidencing Non–transferable Subscription Rights to Purchase Shares of Common Stock,

Par Value $0.01 Per Share, of Zoom Telephonics, Inc. at a Subscription Price of $0.28 per Share

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 PM NEW YORK CITY TIME ON AUGUST 9, 2013 UNLESS EXTENDED BY THE COMPANY.

THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of non-transferable subscription rights (“Rights”) set forth above. Each whole Right entitles the holder thereof to subscribe for and purchase,  subject to potential purchase limits for shareholders attempting to own 5% or more of our shares, one share of Common Stock, with a par value of $0.01 per share, of Zoom Telephonics, Inc., a Delaware corporation, (the “Company”), at a subscription price of 0.28 per share (the “Basic Subscription Privilege”), pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus. If any shares of Common Stock available for purchase in the Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their Basic Subscription Privilege (the “Excess Shares”), any Rights holder that exercises its Basic Subscription Privilege in full may subscribe for a number of Excess Shares consistent with the terms and conditions of the Rights Offering, as described in the Prospectus (the “Oversubscription Rights”).

 

The Rights represented by this Subscription Rights Certificate may be exercised by completing the form below and by returning the full payment for each share of purchased Common Stock in accordance with the instructions contained herein.  You should receive your share certificates within one week of the expiration date of this rights offering, which expires August 9, 2013, unless there is an extension, which is unlikely but possible.  Shares issued upon exercise of the subscription rights may be sold, along with the Company's outstanding shares of common stock, on the over-the-counter market.

 

The Company is not offering, selling, or soliciting any purchase of shares in any state or other jurisdiction in which the rights offering is not permitted.

 

The Company’s ability to utilize its net operating loss carry forwards (NOLs) against future taxable income, if any, would be substantially limited if it were to undergo an ownership change within the meaning of Section 382 of the Internal Revenue Code.  The Company has the right, in its sole and absolute discretion, to limit the exercise of Rights, including instructing the subscription agent to limit or refuse to honor any exercise of Rights if that exercise of Rights might, in the Company’s sole and absolute discretion, result in a subscriber owning 5% or more of the Company’s Common Stock and jeapordize the Company’s NOLs.

 

 

		Dated May 29, 2013
	Frank Manning	 
	President and Chief Executive Officer	 

 

PLEASE COMPLETE, SIGN, AND DELIVER THE FOLLOWING

 

	
BOX 1. o

	
Please do not exercise my Subscription Rights for shares of Common Stock. (If you check this box, please skip to the Signature section on the other side of this page.)

	
BOX 2. o

	
Please exercise Subscription Rights and purchase shares of the Common Stock as set forth on the other side of this page.

 

(Please continue on the other side of this page.)

  

1

  

	 	
NUMBER OF SHARES

YOU’D LIKE TO BUY

	PAYMENT
	 	 	 
	Shares requested for Basic Subscription Rights*                 	 ____________   x $.28/share  = 	$___________  (line 1)
	 	 	 
	Shares requested for Oversubscription Rights Purchase**	 ____________   x $.28/share  =  	$___________  (line 2)
	 	 	 
	TOTAL PAYMENT REQUIRED  (sum of line 1 and line 2)	                                                         =	$___________ 

 

* Shares purchased with Basic Subscription Rights may not be more than the number of shares you owned at 5:00 p.m. Eastern on the record date, June 14, 2013.  In addition, the Company may limit or refuse some or all of any subscription, in its sole and absolute discretion, that would result in the subscriber owning 348,685 shares or more of the Company’s common stock, to avoid limitations on the availability of the Company’s net operating loss carry forwards.  If this occurs, you will receive a refund of part of your payment so that your net payment is only for the shares you actually buy.

I (we) owned, either directly or indirectly, this many shares at 5:00 p.m. EasternTime on June 14, 2013:  __________

** Shareholders must fully exercise their Basic Subscription Rights to be eligible for Oversubscription Rights purchase.  If you fully exercise your Basic Subscription Right, shares requested for Oversubscription Rights Purchase can be from zero to whatever number you'd like, subject to the limitations described in the rights offering prospectus.

 

	
BOX 3a. o

	
I certify that the purchase of shares of Common Stock pursuant to the Subscription  Rights (basic or oversubscription) will not result in my (our) owning either directly or indirectly, of record or beneficially, more than 348,685 shares of Common Stock.

 

OR

 

	
BOX 3b. o

	
The purchase of shares pursuant to the Subscription Rights (whether basic or oversubscription) would result in my (our) owning, either directly or indirectly, of record or beneficially, more than 348,685 shares of Common Stock.

 

	
BOX 4a. o

	
Payment in the following amount is enclosed: $ ____________

(This amount must equal the amount shown in “Total payment required” of Box 2 above and be a cashier’s or certified check drawn on a U.S. bank payable to “Broadridge FBO Zoom Telephonics”)

 

OR

 

	
BOX 4b. o

	
Please wire the total amount of Box 2 above to U.S. Bank, Minneapolis, MN, ABA No. XXXXXXX, Account No: XXXXXXXX for the benefit of “Broadridge, Subscription Agent for Zoom Telephonics”, referencing the rights holder’ name as the wire’s issuer.

 

	 	 	 	 	 
	SIGNATURE	 	NAME (Please type or print)	 	DATE

                                                                                                                                                              

Please send the shares to this name and address: ____________________________________________________

         ____________________________________________________

         ____________________________________________________

VALID DELIVERY REQUIRES YOU TO DELIVER THIS FORM AND PAYMENT, IF ANY,

BY HAND, MAIL, OR OVERNIGHT COURIER TO:

 

Broadridge Subscription Dept., ADDRESS HERE 

IF YOU SPECIFY THAT SHARES BE SENT TO SOMEONE OTHER THAN YOURSELF, PLEASE HAVE YOUR ABOVE SIGNATURE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANK, STOCK BROKER, SAVINGS & LOAN ASSOCIATION OR CREDIT UNION) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 17AD-15.

SIGNATURE GUARANTEE

 

	By:	 	 	 	 	 
	 	Name of Bank or Firm	 	Signature 	 	Name and title

                                                                                                                    

 

2

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