EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (herein, together with the exhibits
and
schedules attached hereto, referred to as this "Agreement"), dated
as of
December 14, 2006, by and among Hybrid Fuels, Inc., a Nevada
corporation (the
"Buyer"), on one hand, and Donald Craig, Douglas Dickie, Edward
Melenka and
Dwight Johnson (each a "Seller" and collectively, the "Sellers") on
the other
hand. Certain capitalized terms used in this Agreement shall have
the meanings
assigned to them in Section 9.1 hereof.
R E C I T A L S
A. The Sellers
own certain Assets (as such term is defined herein)
including, a hydroponic green grass growing system facility and
related
technology and intellectual property rights.
B. The Sellers
wish to sell to the Buyer the Assets, and the Buyer
wishes to buy from the Sellers the Assets, all upon the terms and
subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein, and
intending to be legally bound hereby, the parties hereto hereby
agree as
follows:
1. PURCHASE AND SALE
OF ASSETS
1.1 Sale and Transfer of Assets. Subject to the terms and
conditions of
this Agreement, on the Closing Date the Sellers, and each of them,
shall sell,
convey, assign, transfer and deliver to the Buyer, and the Buyer
shall purchase,
acquire and accept from the Sellers, all of the Sellers' right,
title and
interest in the assets set forth below (the "Assets"):
(a) Valid
Registered Lease (registered at the Kamloops (BC,
Canada) Land Title Office under No. LA140478) to the property
located at 15670
Sawmill Road, Oyama, BC , Canada including approvals from Ministry
of
Agriculture, Ministry of Environment, Municipal Buildings Permits
and all
requisite Engineering studies to obtain same.
(b) 1
Engineered, insulated Steel building with 160 X 70" c/w
6" concrete base, full plumbing and approved electrical systems
located at 15670
Sawmill Road, Oyama, BC , Canada,. Building includes 6 insulated
folding doors,
6 cattle pens 20' X 40' with complete feed bunks and aisles. 6,000
cfm Air/air
heat exchange system for moisture, odour and methane gas control.
Complete
hydroponics green grass growing system including ozone based mould
control
system and CO2 growth aid system.
(c)
1 Engineered,
insulated steel building 40 X 60" c/w 6"
concrete base, plumbing and approved lighting and electrical
systems located at
15670 Sawmill Road, Oyama, BC , Canada. The building contains a
complete ethanol
production system including soaking tank, 5 X 3,500 gallon
stainless steel
tanks, motors, agitators pumping and transfer system, distillation
apparatus
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including 4 stainless steel separation columns. The apparatus is
connected to an
outside gasifier/burner of our design for manure destruction and
generation of
energy to operate the ethanol system.
(d) 1 grain
handling system including storage bin, storage
building, roller mill and requisite electrical augers located at
15670 Sawmill
Road, Oyama, BC , Canada.
(e) 1 water well
and building including delivery system
located at 15670 Sawmill Road, Oyama, BC , Canada.
(f) All
Intellectual Property Rights developed during building
construction phase of the Assets listed above, includes, without
limitation,
engineering and proprietary design of the entire green grass
growing system.
Certain phases of the gasification system including turbine
generated electrical
power development in a loop system upon which patent rights are
being applied
for.
1.2 No Liabilities Assumed. Buyer shall not assume, and the
Sellers
shall be solely and exclusively liable with respect to, and shall
pay, perform
or discharge all liabilities of the Sellers.
1.3 The Buyer Shares. Subject to the terms and conditions of
this
Agreement, in consideration of the aforesaid sale, conveyance,
assignment,
transfer and delivery to the Buyer of the Assets, the Buyer shall
on the Closing
Date issue to the Sellers an aggregate of 3,720,000 shares of Buyer
common stock
(the "Buyer Shares") as follows:
Seller
Number Buyer Shares
------
-------------------
Donald Craig
1,193,333
Douglas Dickie
1,193,333
Edward Melenka
666,667
Dwight Johnson
666,667
Total
3,720,000
1.4 Transfer Taxes. Buyer shall pay any transfer and sales taxes
and
other similar taxes and filing fees that may be payable in respect
of the
aforesaid sale, conveyance, assignment, transfer and delivery of
the Assets. The
parties to this Agreement shall use commercially reasonable efforts
to minimize
the taxes and other fees arising out of the transactions provided
for or
contemplated by this Agreement (the "Transactions").
2. THE CLOSING
2.1 The Closing. Upon the terms and subject to the conditions of
this
Agreement, the consummation of the Transactions (the "Closing")
will take place
as soon as practicable after satisfaction or waiver of the
conditions set forth
in Section 6 hereof (other than the conditions with respect to
actions the
parties will take at the Closing), at 10:00 a.m., PDT time, at the
offices of
the Buyer, or at such other time or at such other place as shall be
agreed upon
by the parties. The date on which the Closing occurs is hereinafter
referred to
as the "Closing Date". The parties hereby agree that the Closing
shall be deemed
effective as of 12:01 A.M. PDT time on the Closing Date.
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2.2 Deliveries by the Sellers. At the Closing, each of the Sellers
shall
deliver or cause to be delivered to the Buyer, as indicated, the
following:
(a) duly executed instruments of assignment, assumption and
bill
of sale assigning all Assets and such other forms of assignment of
the Assets as
are required under applicable law in order to record the transfer
of the Assets
from the Sellers to the Buyer; and
(b) such other duly executed, good and sufficient instruments
of
sale, conveyance, assignment or transfer, in form and substance
reasonably
acceptable to Buyer's counsel, executed by one or more of the
Sellers,
reasonably necessary so as to vest in Buyer good and valid title in
and to the
Assets (including, with respect to any Assets located or to be
located in any
jurisdiction, one or more bills of sale or similar conveyance
documents as may
be required under the law of the applicable jurisdiction to validly
convey,
assign and transfer such Assets).
2.3 Deliveries by the Buyer. At the Closing, the Buyer shall
deliver or
cause to be delivered to the Seller (unless previously delivered),
the
following:
(a) Certificates for the Buyer Shares; and
(b) Such other documents and certificates duly executed as may
be required to be delivered by the Buyer pursuant to the terms of
this Agreement
and such other duly executed instruments of conveyance and transfer
as may be
reasonably requested by the Sellers prior to the Closing Date.
3. REPRESENTATIONS AND
WARRANTIES OF THE SELLER
Each of the Sellers hereby jointly and severally represents and
warrants
to the Buyer as follows:
3.1 Authority; Binding Nature of Agreement. The Seller has all
requisite
power and authority to execute and deliver this Agreement and to
consummate the
Transactions. This Agreement has been duly and validly executed and
delivered by
the Seller and constitutes a valid and binding agreement of the
Seller,
enforceable against Seller in accordance with its terms, subject to
(i) laws of
general application relating to bankruptcy, insolvency and the
relief of debtors
and (ii) rules of law governing specific performance, injunctive
relief and
other equitable remedies.
3.2 Consents and Approvals; No Violations. No filing with, and
no
permit, authorization, consent or approval of, any Person or
Governmental
Entity, domestic or foreign, is necessary for delivery of this
Agreement or for
the consummation by the Seller of the Transactions, except for the
Third Party
Consents. To the actual knowledge of the Seller without further
investigation
(the "Knowledge of Seller"), neither the execution and delivery of
this
Agreement by the Seller nor the consummation by the Seller of the
Transactions
nor compliance by the Seller with any of the provisions hereof will
(a) except
for obtaining the Third Party Consents set forth on Schedule I (the
"Required
Third Party Consents"), result in a violation or breach of, or
constitute (with
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or without due notice or lapse of time or both) a default (or give
rise to any
right of termination, cancellation or acceleration) under, or
require any
consent under, any of the terms, conditions or provisions of any
agreement,
contract, understanding, arrangement, instrument, note, guaranty,
indemnity,
representation, warranty, deed, assignment, power of attorney,
purchase order,
sales order, work order, insurance policy, benefit plan,
commitment, covenant,
assurance or undertaking of any nature to which the Seller is a
party or by
which it or any of its respective properties or assets (including
the Assets)
are bound; (b) violate any order, writ, injunction or decree, or
any provision
of any federal, state, local or foreign law, statute, treaty, rule,
regulation
or ordinance applicable to the Seller; or (c) result in the
imposition or
creation of any liens, charges, security interests, options,
claims, mortgages,
pledges, proxies, voting trusts or agreements, obligations,
understandings or
arrangements or other restrictions on title or transfer of any
nature whatsoever
("Encumbrances") upon or with respect to the Assets.
3.3 Good Title Conveyed. The instruments to be executed and
delivered by
the Seller to the Buyer at the Closing will effectively vest in the
Buyer all of
Seller's right, title and interest in and to the Assets free and
clear of all
Encumbrances.
3.4 Litigation. There is no litigation pending or to the Knowledge
of
Seller threatened, with respect to the Assets.
3.5 Brokers. Seller has not agreed or become obligated to pay, or
has
taken any action that might result in any Person claiming to be
entitled to
receive, any brokerage commission, finder's fee or similar
commission or fee in
connection with any of the Transactions.
3.6 Solvency; Liabilities. The Seller is not (a) "insolvent" (as
defined
in Section 101(32) of the Bankruptcy Code of 1978, as amended (the
"Bankruptcy
Code")), (b) engaged in business with unreasonably small capital or
assets (as
contemplated by the Bankruptcy Code, the Uniform Fraudulent
Conveyance Act, as
amended, the Uniform Fraudulent Transfer Act, as amended, or other
similar laws)
or (c) unable to pay or provided for the payment of all of its
remaining
liabilities and obligations as and when due.
3.7 No Registration. The Seller acknowledges and agrees that the
Buyer
Shares will be offered and sold to the Seller without such offer
and sale being
registered under the Securities Act, or under any state securities
or "blue sky"
laws of any state of the United States ("U.S."), and will be issued
to the
Seller in an offshore transaction outside of the U.S. in accordance
with a safe
harbour from the registration requirements of the Securities Act
provided by
Regulation S. As such, the Seller further acknowledges and agrees
that the Buyer
Shares will, upon issuance, be "restricted securities" within the
meaning of the
Securities Act. The Seller understands that the Buyer Shares may
not be offered
or sold in the U.S. or, directly or indirectly, to U.S. Persons, as
that term is
defined in Regulation S, except in accordance with the provisions
of Regulation
S, pursuant to an effective registration statement under the
Securities Act, or
pursuant to an exemption from, or in a transaction not subject to,
the
registration requirements of the Securities Act and in each case in
accordance
with applicable state and federal securities laws.. Neither the
Securities and
Exchange Commission (the "SEC") nor any other securities commission
or similar
regulatory authority has reviewed or passed on the merits of the
Buyer Shares.
The statutory and regulatory basis for the exemption claimed for
the offer of
the Buyer Shares, although in technical compliance with Regulation
S, would not
be available if the offering is part of a plan or scheme to evade
the
registration provisions of the Securities Act or any applicable
state and
federal securities laws
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3.8 Seller Not a U.S. Person. The Seller is not a U.S. Person
(as
defined in Regulation S under the Securities Act). The Seller is
not acquiring
the Buyer Shares for the account or benefit of, directly or
indirectly, any U.S.
Person.
3.9 Purchase Entirely for Own Account. The Seller understands that
the
Buyer is making this Agreement with the Seller in reliance upon the
Seller's
representation to the Buyer, which by the Seller's execution of
this Agreement
the Seller hereby confirms, that the Seller is outside the U.S.
when receiving
and executing this Agreement and is acquiring the Buyer Shares as
principal for
the Seller's own account, not as a nominee or agent, and not with a
view to the
resale or distribution of any part thereof, and that the Seller has
no present
intention of selling, granting any participation in, or otherwise
distributing
the same. By executing this Agreement, the Seller further
represents that the
Seller does not have any contract, undertaking, agreement or
arrangement with
any person to sell, transfer or grant participations to such person
or to any
third person, with respect to any of the Buyer Shares.
3.10 No Underwriter. The Seller is not an underwriter of, or dealer
in,
the common shares of the Buyer, nor is the Seller participating,
pursuant to a
contractual agreement or otherwise, in the distribution of the
Buyer Shares.
3.11 Investment Experience. The Seller acknowledges that it is able
to
fend for itself, can bear the economic risk of its investment and
has such
knowledge and experience in financial or business matters that it
is capable of
evaluating the merits and risks of the investment in the Buyer
Shares and has
the ability to bear the economic risks of its prospective
investment and can
afford the complete loss of such investment.
3.12 No Directed Selling Efforts. The Seller acknowledges that
the
Seller has not acquired the Buyer Shares as a result of, and will
not itself
engage in, any "directed selling efforts" (as defined in Regulation
S under the
Securities Act) in the U.S. in respect of the Buyer Shares which
would include
any activities undertaken for the purpose of, or that could
reasonably be
expected to have the effect of, conditioning the market in the U.S.
for the
resale of the Buyer Shares; provided, however, that the Seller may
sell or
otherwise dispose of the Buyer Shares pursuant to registration of
the Buyer
Shares pursuant to the Securities Act and any applicable state and
federal
securities laws or under an exemption from such registration
requirements and as
otherwise provided herein.
3.13 No General Solicitation. The Seller is not aware of any
advertisement of any of the Buyer Shares and is not acquiring the
Buyer Shares
as a result of any form of general solicitation or general
advertising including
advertisements, articles, notices or other communications published
in any
newspaper, magazine or similar media or broadcast over radio or
television, or
any seminar or meeting whose attendees have been invited by general
solicitation
or general advertising.
3.14 Disclosure of Information. The decision to execute this
Agreement
and acquire the Buyer Shares hereunder has not been based upon any
oral or
written representation as to fact or otherwise made by or on behalf
of the
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Buyer, and such decision is based entirely upon a review of
information (the
receipt of which is hereby acknowledged) which has been filed by
the Buyer with
the SEC. The Seller and the Seller's advisor(s) have had a
reasonable
opportunity to ask questions of and receive answers from the Buyer
in connection
with the distribution of the Buyer Shares hereunder, and to obtain
additional
information, to the extent possessed or obtainable without
unreasonable effort
or expense, necessary to verify the accuracy of the information
about the Buyer.
The Seller acknowledges that it has had access to all the
information it
considers necessary or appropriate for deciding whether to purchase
the Buyer
Shares. Notwithstanding the Buyer's representations
