ASSET
PURCHASE, SETTLEMENT AND MUTUAL RELEASE AGREEMENT
BETWEEN
BETTER
BIODIESEL, INC.
A
Colorado Corporation
(BBI)
and
RON
CRAFTS, MARY CRAFTS, JAMES CRAWFORD, JOHN CRAWFORD LYNN DEAN
CRAWFORD and CULINARY CRAFTS, LLC, a Utah Liability
Company
(Shareholders)
December
__, 2007
ASSET
PURCHASE, SETTLEMENT AND MUTUAL RELEASE AGREEMENT
This Asset Purchase,
Settlement and Mutual Release Agreement (this “
Agreement ”) is made this ____ day of December,
2007 (the “ Effective Date ”), by and
between Better Biodiesel, Inc., a Colorado corporation
(“ BBI ”), Domestic Energy Partners, LLC,
a Utah limited liability company, and wholly owned subsidiary
of Better Biodiesel (“ DEP ”), and Ron
Crafts, Mary Crafts (collectively with Ron Crafts, the
“ Crafts ”), James Crawford, John
Crawford, Lynn Dean Crawford (collectively with James
Crawford and John Crawford, the “ Crawfords
”), and Cullinary Crafts, LLC, a Utah limited liability
company (collectively with the Crafts and the Crawfords, the
“ Shareholders ”). The parties
hereto are referred to herein each as a “ Party
” and collectively as the “ Parties
.”
WHEREAS, BBI is engaged in
the business of biodiesel technology development and
biodiesel fuel production and distribution (the “
Business ”);
WHEREAS, BBI owns 100% of
the membership interests in DEP (the “ DEP
Membership Interests ”);
WHEREAS,
for various business reasons, it is the desire of BBI to
separate a portion of the Business (the “ Separated
Business ”) from BBI, and to enable the Shareholders
to concentrate their efforts to operate the Separated Business
through DEP while BBI thereafter continues to develop,
diversify, and operate the remaining portion of the
Business;
WHEREAS,
excepting the Separated Business, BBI and its management do
not intend to sell Business;
WHEREAS,
neither DEP nor the Shareholders have any plan or intention to
sell DEP or the assets or operations of DEP;
NOW
THEREFORE, in consideration of the foregoing, the mutual
covenants of the Parties set forth in this Agreement, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:
Recitals .
The foregoing recitals are
hereby acknowledged to be true and are hereby incorporated
into the Agreement as if set forth herein in
full.
Definitions .
“ Affiliate
” has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange
Act.
“ Assigned
Assets ” has the meaning set forth in Section 3(a)
below.
“ Assigned
Contracts ” has the meaning set forth in Section
3(c) below.
“ Assumed
Liabilities ” has the meaning set forth in Section
3(b) below.
“ BBI ”
has the meaning set forth in the preface above.
“ Business
” has the meaning set forth in the preface
above.
“ Claims
” has the meaning set forth in Section 8
below.
“ Closing
” has the meaning set forth in Section 4
below.
“ Crafts
” has the meaning set forth in the preface
above.
“ Crawfords
” has the meaning set forth in the preface
above.
“ Damages
” shall mean any and all costs, losses, damages,
liabilities, demands, claims, suits, actions, judgments,
causes of action, assessments or expenses, including
interest, penalties, fines and attorneys' fees and expenses
incident thereto, incurred in connection with any claim for
indemnification arising out of this Agreement, and any and
all amounts paid in settlement of any such
claim.
“ DEP ”
shall mean Domestic Energy Partners, LLC, a Utah limited
liability company, and its wholly owned subsidiaries,
Domestic Energy Leasing, LLC, a Utah limited liability
company, and Domestic Energy Licensing, LLC, a Utah limited
liability company.
“ DEP Membership
Interest ” has the meaning set forth in the preface
above.
“ Effective
Date ” the meaning set forth in the preface
above.
“ Liability
” means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due), including
any liability for Taxes.
“ Party
” and “ Parties ” have the meanings
set forth in the preface above.
“ Person
” means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture,
an unincorporated organization or a governmental entity (or
any agency or political subdivision thereof).
“ Separated
Business ” has the meaning set forth in the preface
above.
“
Shareholders ” has the meaning set forth in the
preface above.
“ Tax ”
means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental
assessments, customs duties, capital stock, franchise,
profits, withholding, social security (or similar),
unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative,
minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether
disputed or not.
Basic Transaction .
(a)
Transfer of Assets to DEP . BBI has
assigned, transferred, and delivered to DEP all of the
personal property, assets, tangible and intangible, including
the goodwill associated therewith, in connection with, and
that are necessary and desirable in, the operation of the
Separated Business, including but not limited to the assets
described in Exhibit C (the “ Assigned Assets
”) of each of the consent resolutions of BBI and DEP
(including its subsidiaries), dated as of the date hereof,
approving the transactions contemplated by this Agreement
(collectively, the “ Consent Resolutions
”), free and clear of any and all current and existing
debts, obligations, claims, limitations, liens and/or any
other encumbrances whatsoever, excepting any professional
liens that may exist in favor of the law firm of Workman
Nydeggar on the intellectual property included in the
Assigned Assets.
(b)
Assumption of Liabilities by DEP . On and subject to
the terms and conditions of this Agreement, the Shareholders
agree and acknowledge that DEP has assumed all of BBI’s
liabilities, and have retained DEP’s liabilities, if
any, in connection with, or obligations owed to, any of Ron
Crafts, Culinary Crafts, LLC, or the Crawfords, as listed on
Exhibit D of the Consent Resolutions (the “ Assumed
Liabilities ”). Except for the Assumed
Liabilities, the Parties agree and acknowledge that DEP has no
liabilities other than the Assumed Liabilities. The
Parties acknowledge the potential existence of professional
liens in favor Workman Nydegger that may exist on the
intellectual property included in the Assigned Assets and that
DEP is not assuming any payment obligation to Workman
Nydegger.
(c)
Transfer of Contracts to DEP . BBI has, and
has caused its subsidiaries to, assign, transfer, and convey
to DEP all of the contracts, in connection with, and that are
necessary and desirable in, the operation of the Separated
Business, including but not limited to the contracts described
in Exhibit E of the Consent Resolutions (the “
Assigned Contracts ”), free and clear of any and
all debts, obligations, claims, limitations, liens and/or any
other encumbrances whatsoever (excepting those contractual
obligations arising directly from the Assigned
Contracts).
(d)
Distribution of DEP Membership Interests . At the
Closing (as defined below), BBI will distribute 100% of the
outstanding membership interests of DEP to the Shareholders,
in the amounts shown on Schedule 3(c) hereto, in consideration
of and exchange for 15,750,000 shares of common stock in BBI
held by the Shareholders in the amounts shown in Schedule 3(c)
hereto (the “ BBI Stock ”). At
the Closing, the Shareholders shall deliver one or more
certificates representing such shares in BBI.
Closing .
The closing of the
transaction contemplated by this Agreement (the “
Closing ”) will take place at the offices of
BBI, or such other location agreed to by the Parties, and
shall be effective upon the Shareholder’s transfer of
the BBI stock to the BBI.
Representations and Warranties of BBI . BBI represents and
warrants to the Shareholders that the statements contained in this
Section 4 are correct and complete as of the Effective
Date.
(a)
Organization of the BBI . Better Biodiesel,
Inc. is a corporation duly organized, validly existing and in
good standing under the laws of the state of
Colorado. Domestic Energy Partners, LLC, is a
limited liability company and wholly owned subsidiary of
Better Biodiesel, Inc., validly existing and in good standing
under the laws of the state of Utah. Domestic Energy Leasing,
LLC, is a Utah limited liability company and wholly owned
subsidiary of Domestic Energy Partners, LLC, and Domestic
Energy Licensing, LLC, is a Utah limited liability company
and wholly owned subsidiary of Domestic Energy Partners, LLC;
both validly existing and in good standing under the laws of
the state of Utah.
(b)
Authorization of Transaction . BBI has full
power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of BBI,
enforceable in accordance with its terms and
conditions.
(c)
Assignment of Assets . BBI has assigned, transferred,
and delivered to DEP all of the Assigned Assets.
(d)
Title to Assets . At the execution of this
Agreement by the Parties, DEP will have good and marketable
title to all of the Assigned Assets, free and clear of any
Liabilities (other than the Assumed Liabilities), including
all debts, obligations, claims, limitations, liens, security
interests, restrictions on transfer and/or any other
encumbrances whatsoever on Assigned Assets, excepting any
professional liens in favor of the law firm of Workman
Nydeggar that may exist on the intellectual property included
in the Assigned Assets.
(e)
Assumed Liabilities . At the execution of
this Agreement by the Parties, DEP will have no Liabilities
other than the Assumed Liabilities, and there will exist no
defaults or notices thereof with respect to any of the Assumed
Liabilities.
(f)
Assignment of Contracts . At the execution of this
Agreement by the Parties, DEP will have no contracts other
than the Assigned Contracts. All of the Assigned
Contracts are in full force and effect, and there are no
breaches, defaults, or notices of thereof with respect to any
of the Assigned Contracts.
(g)
Noncontravention . Neither the execution and
the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any
government, governmental agency, or court to which BBI or any
of its subsidiaries is subject or, as applicable, any
provision of its charter or bylaws or (ii) conflict with,
result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice
under any agreement, contract, lease, license, instrument or
other arrangement to which BBI or any of its subsidiaries is a
party or by which any of the Shareholders is bound or to which
BBI’s or any of its subsidiaries’ assets is
subject. The Shareholders do not need to give any
notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions
contemplated by this Agreement.
(h)
Brokers’ Fee . BBI will have no
Liability or obligation to pay any fees or commissions to any
broker, finder or agent with respect to the transactions
contemplated by this Agreement for which the Shareholders
could become liable or obligated.
(i)
Limitation of Representations and Warranties
. Except for the representations and warranties of
the Shareholders expressly set forth in Section 6 below, BBI
has not relied upon any representations and warranties in
making its determination to enter into this Agreement and
consummate the matters provided for herein
(j)
Disclosure . The representations and
warranties contained in this Section 5 above do not contain
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and
information contained in this Section 5 above not
misleading.
(k)
Indemnification . In the event BBI (i) breaches or is
deemed to have breached any of the representations and
warranties contained in this Agreement or (ii) fails to
perform or comply with any of the covenants and agreements set
forth in this Agreement, BBI shall hold harmless, indemnify
and defend Shareholders, and each of its directors, officers,
shareholders, attorneys, representatives and agents, from and
against any Damages incurred or paid by the acquirer to the
extent such Damages arise or result from a breach by BBI of
any such representations or warranties or a violation of any
covenant in this Agreement.
Representations and Warranties of the Shareholders . The
Shareholders represent and warrant to BBI that the statements
contained in this Section 6 are correct and complete as of the
Effective Date.
(a)
Organization of Culinary Crafts . Culinary
Crafts, LLC, is a limited liability company duly organized,
validly existing, and in good standing under the laws of the
State of Utah.
(b)
Authorization of Transaction . Each of the
Shareholders has full power and authority (including full
corporate power and authority) to execute and deliver this
Agreement and to
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