THIS
AGREEMENT TO SUBLICENSE (this
“Agreement”) is entered into this 9th
day of
June 2008, among Selection Oil Limited, a corporation formed under the laws
of
the Russian Federation (the “Sublicensor”), OJSE Smolenenergy, a corporation
formed under the laws of the Russian Federation (the “Sublicensee”) and Russoil
Corporation, a Nevada corporation (the “Parent”).
BACKGROUND
Sublicensee
and Parent have entered into a share exchange agreement that, if consummated,
the Sublicensee will become a wholly-owned subsidiary of the Parent (the
“Combination”). In the event the Combination is consummated, the Parent desires
that the Sublicensee receive from Sublicensor the Sublicense described herein
in
consideration for an aggregate of 4,000,000 shares of the common stock of the
Parent.
NOW,
THEREFORE,
in
consideration of the mutual covenants and promises herein contained, the parties
hereto, each intending to be legally bound, hereby agree as
follows:
Section
2.Sublicense. Subject
to the terms and conditions set forth in this Agreement, the Sublicensor agrees
to sell, assign, transfer, deliver and set over to Sublicensee, and Sublicensee
agrees to purchase from the Sublicensor all right, title and interest of the
Sublicensor in, to or with respect to, the all of its right, title and interest
in the Licensed Property, free and clear of any and all liens, encumbrances,
or
claims of any kind or nature.
ARTICLE
2
PURCHASE
PRICE
Section
2.1.Purchase
Price.
The
purchase price for the Licensed Property (the “Purchase Price”) shall be four
million (4,000,000) shares of the Common Stock of the Parent (the “Shares”) as
provided in Section 2.2 hereof.
Section
2.2.Payment
of Purchase Price.
Subject
to the terms and conditions of this Agreement, the Purchase Price shall be
delivered by the Parent to the Sublicensor on the Closing Date in the name
of
the Sublicensor or such other name or names as the Sublicensor may direct in
writing to the Parent.
ARTICLE
3
CLOSING
Section
3.1. Closing.
The
closing of the purchase and sale of the transactions contemplated hereby shall
take place at the offices of Gusrae, Kaplan, Bruno & Nusbaum PLLC, 120 Wall
Street, 11th
Floor,
New York, New York10005, commencing at 10:00 a.m. local time on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the parties to consummate the transaction contemplated hereby
(other than conditions with respect to actions the respective parties will
take
at the Closing itself), or such other date and time as the parties may mutually
determine (the “Closing Date”).
Section
3.2. Sublicensor’s
Delivery of the License and Closing Documents.
At
the
Closing, as conditions precedent to the Sublicensee’s and Parent’s obligations
under this Agreement, the Sublicensor shall deliver to the Sublicensee the
following, unless otherwise waived by the Sublicensee:
(a) Licenses,
Sublicenses, Bills of Sale and general and special assignments, with appropriate
powers of attorney assigning and transferring to the Sublicensee all of the
Sublicensor’s right, title and interest in the Licensed Property described on
Exhibit A hereto in form and substance acceptable to the Parent and Sublicensee
in each of their sole discretion; and
(b) Any
other
instruments, certifications, affidavits, and other documents reasonably
requested by counsel for the Parent and Sublicensee in order to effectuate,
perfect or otherwise document or record the transactions contemplated by this
Agreement, or for any other reasonable purpose under the terms of this
Agreement, and in such form and of such content as shall reasonably be
requested, provided that no such requested additional document shall materially
increase the obligations of the Sublicensor under this Agreement.
Section
3.3. Sublicensee
and Parent Closing Documents.
At
the
Closing, as conditions precedent to the Sublicensor’s obligations under this
Agreement, the Sublicensee shall deliver to Sublicensor the following, unless
otherwise waived by the Sublicensor:
(a) The
shares in the name of the Sublicensor or such other name or names as the
Sublicensor may, in writing, direct to the Parent; and
(b) Any
other
instruments, certifications, affidavits and other documents reasonably requested
by counsel for the Sublicensor in order to effectuate, perfect or otherwise
document or record the transactions contemplated by this Agreement, or for
any
other reasonable purpose under the terms of this Agreement, and in such form
and
of such content as shall reasonably be requested, provided that no such
requested additional document shall materially increase the obligations of
either the Parent or Sublicensee under this Agreement.
2
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES
Section
4.1 Representations
and Warranties of Sublicensor.
The
Sublicensor hereby represents and warrants to the Parent and Sublicensee as
follows:
(a)
The
Sublicensor is a corporation, duly organized, validly existing and in good
standing under the laws of the Russian Federation and has the full corporate
power and lawful authority to own all of its assets and properties and to carry
on its business as it is now being conducted.
(b)
The
Sublicensor’s execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
effectively authorized by the Sublicensor’s governing body; no further corporate
action on the part of the Sublicensor or any affiliate thereof is necessary
for
the execution, delivery and performance by Sublicensor of its obligations
arising under or pursuant to this Agreement or the consummation by it of the
transactions contemplated by this Agreement; and upon its execution and
delivery, this Agreement is a valid and binding obligation of the Sublicensor
and is enforceable against the Sublicensor in accordance with its
terms.
(c)
The
execution, delivery, and performance of this Agreement by the Sublicensor does
not, and the consummation of the transactions contemplated hereby will not,
result in any violation of or conflict with any provision of Sublicensor’s
governing documents.
(d)
No
consent of any person other than the Sublicensor’s governing body is required to
transfer the Licensed Property, free and clear, any and all mortgages, pledges,
liens, security interests, conditional sale agreements, title retention
arrangements, encumbrances, charges and equities of others that may
exist.
(e)
The
Sublicensor is not in default with respect to or in violation of any order,
writ, injunction or decree of any court or of any federal, state, municipal
or
other governmental department, commission, board, bureau, agency, authority
or
official, or to the best of the Sublicensor’s knowledge in violation of any law,
statute, rule or regulation to which it or its properties is or are subject,
where such default or violation would materially and adversely affect the sale
of the Licensed Property to Sublicensee and the Sublicensor represents that
it
has not received notice of any such default or any violations with respect
to
its operations which have not been cured.
(f)
There
is
no action, suit, proceeding or investigation pending or threatened against
or
affecting the Sublicensor and/or Sublicensor’s ability to grant the Sublicense
to Sublicensee as set forth herein, at law or in equity, or before any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality. To the best of Sublicensor’s knowledge, no facts
exist which could reasonably give rise to any such action, suit, proceeding
or
investigation.
3
(g)
The
execution, delivery and performance of this Agreement by the Sublicensor and
the
performance of this Agreement by the Sublicensor does not and will not (i)
result in a breach of, or constitute a default under, any loan agreement,
indenture or mortgage or any material lease, agreement, franchise, license,
permit or other undertaking to which Seller is a party or to which the
Sublicensor or any of its properties may be subject or bound, or (ii) result
in
a violation of any order, writ, injunction, decree or award of any court or
governmental authority to which the Sublicensor or any of its properties may
be
subject or bound, or (iii) result in a violation of any federal or state law,
statute, ordinance, rule or regulation applicable to Seller.
(h)
The
Licensed Property has been operated in compliance with all laws, ordinances,
rules, regulations and orders of all governmental entities. The Sublicensor
has
not received any written communication from a governmental authority that
alleges that the Sublicensor is not in compliance, in all material respects,
with all material federal, state, local or foreign laws, ordinances and
regulations or has not made all of the filings required by all such
entities.
(i)
The
Sublicensor is not a party to any material agreements, nor does it own or lease
any property, real or personal which are material to the operation of the
Licensed Property.
(j)
There
is
no claim, action, suit or proceeding pending or threatened against the
Sublicensor or any of its properties which, if adversely determined, will affect
or can reasonably be expected to affect materially and adversely, the Licensed
Property, or which seeks to prohibit, restrict or delay consummation of the
transactions contemplated hereby or to limit, in any manner, the right of the
Sublicensee to conduct any material aspect of the License after the Closing
Date, nor is there any judgment, decree, injunction, ruling or order of any
court, governmental department, commission, agency or instrumentality, or
arbitrator outstanding against the Sublicensor having, or which may in the
future have, any such effect, the Sublicensor has not been charged with, or,
to
the knowledge of the Sublicensor, is under investigation with respect to, any
violation of any provision of any federal or state law or administrative
regulation in respect of the Licensed Property; and the Sublicensor is not
a
party to or bound by any judgment, decree, injunction, ruling or order of any
court, governmental department, commission, agency or instrumentality,
arbitrator or any other person which has affected or may affect materially
and
adversely the Licensed Property.
(k)
No
representations or warranties by the Sublicensor in this Agreement, including,
but not limited to, the exhibits, schedules, certificates and other documents
or
instruments hereto delivered or entered into by the Sublicensor, and no
statement contained in any document, certificate, or other writing furnished
or
to be furnished by the Sublicensor to the Parent and Sublicensee pursuant to
the
provisions of this Agreement, contains or will contain any untrue statement
of
material fact or omits or will omit to state any material fact necessary in
order to make the statements herein or therein made, in the light of the
circumstances under which they were made, not misleading.
(l)
The
stock
proposed to be acquired by the Sublicensor hereunder will be acquired for
investment for its own account, and not with a view to the resale or
distribution of any part thereof, and the Sublicensor has no present intention
of selling or otherwise distributing the Parent Stock, except in compliance
with
applicable securities laws.
4
(m)
The
Sublicensor has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Parent.
(n)
The
Sublicensor understands that the Parent’s Stock has not been registered under
the Securities Act of 1933, as amended (the “Securities Act”) and, if issued in
accordance with the provisions of this Agreement, will be issued by reason
of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of the Sublicensor’s representations as expressed
herein.
(o)
The
Sublicensor understands that the Parent’s Stock is characterized as “restricted
securities” under the Securities Act inasmuch as this Agreement contemplates
that, if acquired by the Sublicensor pursuant hereto, the Parent’s Stock would
be acquired in a transaction not involving a public offering. The Sublicensor
further acknowledges that if the Parent’s Stock is issued to the Sublicensor in
accordance with the provisions of this Agreement, such Stock may not be resold
without registration under the Securities Act or the existence of an exemption
therefrom. The Sublicensor represents that it is familiar with Rule 144
promulgated under the Securities Act, as presently in effect, and understands
the resale limitations imposed thereby and by the Securities Act.
(p)
It
is
understood that the Parent’s Stock will bear the following legend or one that is
substantially similar to the following legend:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR UNDER APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT
THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH OPINION IS
REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY OF SUCH
EXEMPTION. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT SECURED BY SUCH SECURITIES TO THE EXTENT PERMITTED BY APPLICABLE FEDERAL
AND STATE SECURITIES LAWS; and
Any
legend required by the “blue sky” laws of any state to the extent such laws are
applicable to the securities represented by the certificate so
legended.
(q)
Sublicensor’s
Investor Status.
The Sublicensor’s shareholders shall (i) be “accredited investors” within the
meaning of Rule 501 promulgated under the Securities Act; or (ii) non-United
States persons as defined in Regulation S of the Securities Act.
5
Section
4.2. Representations
and Warranties of the Parent and Sublicensee.
The
Parent and Sublicensee hereby represents and warrants individually, and not
jointly, to the Sublicensor as follows:
(a)
Parent
and Sublicensee are corporations duly organized, validly existing and in good
standing under the laws of the State of Nevada and the Russian Federation,
respectively, and have the full corporate power and lawful authority to own
all
of their assets and properties and to carry on their respective businesses
as
they are now being conducted.
(b)
Each
of
the Parent’s and Sublicensee’s execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been
duly and effectively authorized by their respective governing bodies; no further
corporate action on the part of either the Parent or Sublicensee, or any
affiliate thereof is necessary for the execution, delivery and performance
by
either Parent or Sublicensee of their obligations arising under or pursuant
to
this Agreement or the consummation by either of them of the transactions
contemplated by this Agreement; and upon its execution and delivery, this
Agreement is a valid and binding obligation of each of the Parent and the
Sublicensee and is enforceable against the Parent and the Sublicensee in
accordance with its terms.
(c)
The
execution, delivery, and performance of this Agreement by either the Parent
and
the Sublicensee does not, and the consummation of the transactions contemplated
hereby will not, result in any violation of or conflict with any provision
of
either of their governing documents or any material instrument, contract, or
other agreement to which either of them is a party or to which either of their
material assets are bound or subject. The consummation of the transactions
contemplated hereby will not require the consent or approval of any person
other
than the Parent and the Sublicensee.
(d)
There
is
no action, suit, proceeding or investigation pending or threatened against
or
affecting either of the Parent or Sublicensee, at law or in equity, or before
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, to which either of them is or may
be
named a party or to which either of their property is or may be subject and
in
which an unfavorable outcome, ruling or finding in any such matter or for all
such matters, taken as a whole, might have a materially adverse effect on the
condition, financial or otherwise, or the operations of either of the Parent
or
Sublicensee.
ARTICLE
5
CONDITIONS
TO CLOSING
Section
5.1. Conditions
Precedent to Parent’s and Sublicensee’s Obligation to
Close.
The
obligation of the Parent and Sublicensee to purchase the Sublicense under this
Agreement is, at the option of either of Parent or Sublicensee, subject to
the
fulfillment prior to or at the Closing of each of the following
conditions:
(a) All
representations and warranties made by Sublicensor contained in Section 4.1
hereof shall be true in all material respects at and as of the Closing Date;
and
Seller shall have performed all obligations and agreements undertaken by it
herein and to be performed at or prior to the Closing.
6
(b)
Each
of
Sublicensor’s closing documents required by Section 3.2 hereof shall have been
delivered and shall be in full effect as of the time of Closing.
(c)
No
action, suit or proceeding shall have been threatened by any governmental agency
or body, before a court or governmental body, to restrain or prevent the
carrying out of the transactions contemplated by this Agreement or which seeks
other material relief with respect to any of such transactions; and as of the
Closing Date, there shall be no injunction, restraining order or decree of
any
nature of any court or governmental agency or body in effect which restrains
or
prohibits the consummation of the transactions contemplated hereby.
Section
5.2. Conditions
Precedent to the Sublicensor’s Obligation to Close.
The
obligation of the Sublicensor to grant the Sublicense under this Agreement
is,
at Sublicensor’s option, subject to the fulfillment prior to or at the Closing
of each of the following conditions:
(a)
All
representations and warranties made by both the Parent and Sublicensee contained
in Section 4.2 hereof shall be true in all material respects at and as of the
Closing Date; and each of them shall have performed all obligations and
agreements undertaken by it herein and to be performed at or prior to the
Closing.
(b)
Each
of
the Parent and the Sublicensee’s closing documents required by Section 3.3
hereof shall have been delivered and shall be in full effect as of the time
of
Closing.
(c)
No
action, suit or proceeding shall have been threatened by any governmental agency
or body, before a court or governmental body, to restrain or prevent the
carrying out of the transactions contemplated by this Agreement or which seeks
other material relief with respect to any of such transactions; and as of the
Closing Date, there shall be no injunction, restraining order or decree of
any
nature of any court or governmental agency or body in effect which restrains
or
prohibits the consummation of the transactions contemplated hereby.
(d)
The
Combination of Sublicensee and the Parent shall have been
consummated.
ARTICLE
6
MISCELLANEOUS
Section
6.1. Notices.
All
notices and other communications provided in connection with this Agreement
shall be in writing and shall be deemed effectively given in all respects (a)
when received, if manually delivered or delivered by overnight mail courier,
or
(b) upon deposit in a U.S. post office and directed to the intended addressee
by
certified or registered first class mail, postage prepaid (provided that
delivery thereof occurs within 72 hours after such deposits; otherwise delivery
shall be effective only upon actual receipt).
7
Notice
to
the Sublicensor shall be addressed to:
Selection
Oil Limited
12
Petrova Street
Moscow,
Russian Federation
Attn:
Dr.
Stefan Zhurek
or
at
such other address or to the attention to such other person as the Sublicensor
may designate by written notice to the other Parties.
or
at
such other address or to the attention to such other person as the Parent may
designate by written notice to the other Parties.
Notice
to
the Sublicensee shall be address to:
OJSE
Smolenenergy
121059
Russian
Federation
Moscow,
Ab No. 27
Russia
or
at
such other address or to the attention of such other person as the Sublicensee
may designate by written notice to the other Parties.
Section
6.2. Benefit.
This
agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors, and
assigns.
Section
6.3 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
New
York without reference to the choice of law principles thereof.
Section
6.4. Entire
Agreement. This
Agreement and the attachments hereto constitute the entire agreement between
the
parties hereto with respect to the subject matter hereof and supersede all
prior
agreements, understandings, and negotiations, whether oral or written, between
the parties hereto with respect to such subject matter.
Section
6.5.Amendment,
Waiver, Consents.
The
parties hereto may, by mutual agreement, amend any provision of this Agreement,
and any party hereto may grant, consent or waive any right to which it is
entitled under this Agreement or any condition to the obligations hereunder,
provided that each such amendment, consent or waiver shall be in
writing.
8
Section
6.6. Captions
and Sections References.
The
headings or captions to the various sections or other subdivisions of this
Agreement are for convenient reference only and neither form a part hereof
nor
are to be relied upon to interpret or modify any of the provisions of this
Agreement.
Section
6.7. Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original agreement, but all such counterparts taken together
shall
constitute but one and the same Agreement.
IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Agreement, intending to be legally bound
on or effective as of the date first set forth above:
RUSSOIL
CORPORATION
By:
/s/Silvestre
Hutchinson (L.S.)
Print
Name: Silvestre Hutchinson
Print
Title:
OJSE
SMOLENENERGY
By:
/s/Evgeny
Bagay (L.S.)
Print
Name: Evgeny Bagay
Print
Title: Managing Director
SELECTION
OIL LIMITED
By:
/s/V.K.
Utoplenikov (L.S.)
Print
Name: V.K. Utoplennikov
Print
Title: Chief Executive Officer
9
Dates Referenced Herein and Documents Incorporated by Reference
