TERMINATION AND ASSIGNMENT AND ASSUMPTION AGREEMENT
Exhibit
10.2
THIS
TERMINATION AND ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is made
and entered into October 20, 2006, by and among ZONE MINING LIMITED, a Nevada
corporation (“Parent”), ZM ACQUISITION CORP., a Delaware corporation and
wholly-owned subsidiary of Parent (“Merger Sub”), and DRIVEITAWAY, INC., a
Delaware corporation (“DIA”), TRIDENT GROWTH FUND, L.P., a Delaware limited
partnership (“Trident”).
Recitals
WHEREAS,
Parent,
Merger Sub, DIA and Stonewell Partners LLP, the principal shareholder of DIA
(the “Principal Shareholder”) are parties to that certain Agreement and Plan of
Merger dated as of September 21, 2006 (the “Merger Agreement”); and
WHEREAS,
on
September 21, 2006, Parent and Merger Sub issued a 12% Senior Secured
Convertible Debenture in the principal amount of up to $1,000,000 (the “Parent
Debenture”) and a Common Stock Purchase Warrant (the “Parent Warrant”) to
acquire up to 500,000 shares of Parent’s common stock to Trident for an
aggregate purchase price of $1,000,000 (of which $800,000 has been advanced
by
Trident) pursuant to that certain Securities Purchase Agreement (the “ZM
Securities Purchase Agreement”), dated as of September 21, 2006, by and among
Parent, Merger Sub and Trident (the “Trident Financing”); and
WHEREAS,
in
connection with the Trident Financing, (i) each of Parent and Merger Sub granted
a first priority lien on all of their respective assets in favor of Trident
pursuant to that certain Security Agreement, dated as of September 21, 2006,
by
and among Parent, Merger Sub and Trident (the “ZM Security Agreement”), and (ii)
DIA granted a first priority lien on all of its assets in favor of Trident
pursuant to that certain Security Agreement, dated as of September 21, 2006,
by
and between DIA and Trident (the “DIA Security Agreement”); and
WHEREAS,
Parent
agreed to loan up to $1,000,000 (of which $800,000 has been advanced by Parent)
to DIA pursuant to that certain Promissory Note dated September 21, 2006 issued
by DIA in favor of Parent (the “DIA Note); and
WHEREAS,
Parent
has agreed to subordinate the obligations arising under the DIA Note to those
obligations arising out of the Trident Financing pursuant to that certain
Subordination Agreement, dated as of September 21, 2006, by and between Parent
and Trident (the “Subordination Agreement”); and
WHEREAS,
Parent,
Merger Sub, DIA and the Principal Shareholder have mutually agreed to terminate
the Merger Agreement; and
WHEREAS,
Parent
and DIA wish to amend the terms of the DIA Note; and
WHEREAS,
Parent
and Merger Sub wish to satisfy all of their obligations to Trident under the
Trident Financing (the “Trident Debt”), including cancellation of the Parent
Debenture and Parent Warrant, by (i) assigning all of its right, title and
interest in and to the DIA Note to Trident, (ii) the issuance by Parent to
Trident of a Common Stock Purchase Warrant (the “New Warrant”) to acquire
100,000 shares of Parent Common Stock, and (iii) the issuance by DIA to Trident
of 200,000 shares of the common stock of DIA (the “DIA Shares”);
and
1
WHEREAS,
Trident
has agreed to accept the items described in clauses (i) - (iii) above in
satisfaction of such obligations; and
WHEREAS,
the
Boards of Directors of Parent, Merger Sub and DIA have approved, and deem it
advisable and in the best interests of their respective companies and
stockholders to consummate, the transactions contemplated hereby upon the terms
and subject to the conditions set forth in this Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing premises and the representations, warranties,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE
I
ASSIGNMENT
AND ASSUMPTION; DISCHARGE; TERMINATION
1.1 Assignment
and Assumption; Discharge; Termination.
Upon
the
terms and subject to the conditions set forth in this Agreement, on the Closing
Date (as defined below), the following transactions (the “Transactions”) shall
be deemed to be consummated:
(a) Parent
and DIA shall amend the DIA Note by execution and delivery of the Amended and
Restated Note in the form attached hereto as Exhibit
A
(the
“Amended and Restated DIA Note”);
(b) Parent
hereby assigns all of it right, title and interest in and to the Amended and
Restated DIA Note to Trident and Trident hereby accepts such assignment and
the
New Warrant and the DIA Shares in full and complete satisfaction of any and
all
obligations of Parent or Merger Sub to Trident related to the Trident Debt
and
shall release Parent and Merger Sub from their respective obligations related
to
the Trident Debt;
(c) In
consideration of the forgoing assignment, Parent, Merger Sub and Trident shall
terminate the ZM Securities Purchase Agreement, the ZM Security Agreement and
the Subordination Agreement and Trident shall deliver the Parent Debenture
and
Parent Warrant to Parent for cancellation; and
(d) DIA
and
Trident shall amend the DIA Security Agreement by execution and delivery of
the
Amended and Restated DIA Security Agreement in the form attached hereto as
Exhibit
B
(the
“Amended and Restated DIA Security Agreement”); and
2
(e) DIA
shall
issue the DIA Shares to Trident.
1.2 Closing
Date; Deliveries.
The
closing of the Transactions (the “Closing”) shall take place concurrent with the
execution hereof. At the Closing:
(a) DIA
shall
execute and deliver the Amended and Restated DIA Note to Parent;
(b) DIA
and
Trident shall execute the Amended and Restated DIA Security
Agreement;
(c) the
ZM
Securities Purchase Agreement, the ZM Security Agreement and the Subordination
Agreement shall be terminated and shall have no further force and
effect;
(d) Trident
shall deliver the Parent Debenture and the Parent Warrant to Parent for
cancellation;
(e) Parent
shall deliver the New Warrant to Trident;
(f) Parent
shall deliver the Amended and Restated DIA Note to Trident, which note shall
be
properly endorsed “payable to the order of Trident Growth Fund,
L.P.”;
(g) Parent,
Merger Sub and Trident shall execute the mutual general release substantially
in
the form attached hereto as Exhibit
C;
(h) Parent,
Merger Sub and DIA shall execute the mutual general release substantially in
the
form attached hereto as Exhibit
D;
(i) DIA
shall
deliver to Trident a stock certificate evidencing the DIA Shares;
(j) at
the
request and expenses of Parent, Trident shall execute and deliver all documents
necessary to release the liens on Parent’s and Merger Sub’s assets, including,
without limitation, UCC-3 termination statements; and
(k) each
of
the parties hereto shall execute any and all documents, certificates, consents
and agreements necessary to effectuate the Transactions as contemplated hereby.
3
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE PARTIES
Each
party hereto hereby makes the following representations and warranties to the
other parties hereto:
2.1 Authorization;
Validity and Effect of Agreement.
Each
party has the requisite power (corporate or otherwise) and authority to execute,
deliver and perform its obligations under this Agreement and the agreements
delivered at the Closing in accordance with Section 1.2 and to consummate the
Transactions. The execution and delivery of this Agreement and the agreements
delivered at the Closing in accordance with Section 1.2 by each such party
and
the performance by such party of its obligations hereunder and thereunder and
the consummation of the Transactions have been duly authorized by its board
of
directors or authorized person, as the case may be, and all other necessary
corporate or organizational action on the part of such party, and no other
corporate or organizational proceedings on the part of such party are necessary
to authorize this Agreement, the agreements delivered at the Closing in
accordance with Section 1.2 and the Transactions.
2.2 No
Conflict.
Each
party represents and warrants that neither the execution and delivery of this
Agreement, the performance of its obligations hereunder, nor the consummation
of
the Transactions, will: (i) conflict with the certificate of incorporation,
articles of incorporation, bylaws or other organizational documents of such
party or (ii) violate any statute, law, ordinance, rule or regulation applicable
to such party or any of its properties or assets.
2.3 Value
of
DIA Shares and New Warrant.
(a) DIA
acknowledges and agrees that the DIA Shares currently have a nominal
value.
(b) Parent
and Merger Sub acknowledge and agree that the New Warrant currently has a
nominal value.
ARTICLE
III
CERTAIN
COVENANTS
3.1 Further
Assurances.
Each
of
the parties hereto agrees to use its reasonable best efforts to take or cause
to
be taken all action, to do or cause to be done, and to assist and cooperate
with
the other party hereto in doing, all things necessary, proper or advisable
under
applicable laws to consummate and make effective, in the most expeditious manner
practicable, the Transactions, including, but not limited to: (i) the
satisfaction of the conditions precedent to the obligations of any of the
parties hereto; (ii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement or the
performance of the obligations hereunder; and (iii) the execution and delivery
of such instruments, and the taking of such other actions, as the other party
hereto may reasonably require in order to carry out the intent of this
Agreement.
4
ARTICLE
IV
MISCELLANEOUS
4.1 Entire
Agreement.
This
Agreement and the schedules and exhibits hereto contain the entire agreement
between the parties and supersede all prior agreements and understandings,
both
written and oral, among the parties with respect to the subject matter hereof.
4.2 Amendment
and Modifications.
This
Agreement may not be amended, modified or supplemented except by an instrument
or instruments in writing signed by the party against whom enforcement of any
such amendment, modification or supplement is sought.
4.3 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided,
however,
that no
party hereto may assign its rights or delegate its obligations under this
Agreement without the express prior written consent of the other parties hereto.
Except as expressly set forth herein, nothing in this Agreement is intended
to
confer upon any person not a party hereto (and their successors and assigns)
any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
4.4 Headings;
Definitions.
The
Section and Article headings contained in this Agreement are inserted for
convenience of reference only and will not affect the meaning or interpretation
of this Agreement. All references to Sections or Articles contained herein
mean
Sections or Articles of this Agreement unless otherwise stated. All capitalized
terms defined herein are equally applicable to both the singular and plural
forms of such terms.
4.5 Severability.
If
any
provision of this Agreement or the application thereof to any person or
circumstance is held to be invalid or unenforceable to any extent, the remainder
of this Agreement shall remain in full force and effect and shall be reformed
to
render the Agreement valid and enforceable while reflecting to the greatest
extent permissible the intent of the parties.
5
4.6 Notices.
All
notices hereunder shall be sufficiently given for all purposes hereunder if
in
writing and delivered personally, sent by documented overnight delivery service
or, to the extent receipt is confirmed, telecopy, telefax or other electronic
transmission service to the appropriate address or number as set forth
below.
|
If
to the Parent or Merger Sub:
|
with
a copy to:
|
|||
|
Zone
Mining Limited
000
Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx
000
Xxxx
Xxxxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxxxxxxx, President
|
Fox
Rothschild LLP
000
Xxxxx Xxxxx, Xxxxxxxx 0
Xxxxxxxxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxx, Esquire
|
|||
|
If
to DIA:
|
with
a copy to:
|
|||
|
Driveitaway,
Inc.
c/o
Xxxx Xxxxxxxxx
00
Xxxx Xxxxxx Xxxx
Xxxxxxx,
XX 00000
|
Xxxxxxxx
Xxxxxxxxx & Xxxxxx PC
0000
Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx,
XX 00000
Attention:
Xxxxx X. North, Esquire
|
|||
|
If
to Trident:
|
with
a copy to:
|
|||
|
Trident
Growth Fund, L.P.
000
Xxxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxxx St. Xxxxxx
|
Apple Xxxxxx
& Xxxx, L.L.P.
000
Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attn:
Xxxx Xxxx, Esquire
|
4.7 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Texas, without regard to the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
4.8 Counterparts.
This
Agreement may be executed in two or more counterparts and delivered by facsimile
transmission, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
[Signature
page follows]
6
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date first above
written.
| ZONE MINING LIMITED | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Xxxxxxx X. Xxxxxxxxxx
President
|
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|
ZM
ACQUISITION CORP.
|
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| |
|
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| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Xxxxxxx
X. Xxxxxxxxxx
President
|
||
|
DRIVEITAWAY,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxx | |
|
Xxxxx
X. Xxxx
Chairman
|
||
|
TRIDENT
GROWTH FUND, L.P.
|
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| By: | TRIDENT MANAGEMENT, LLC, its general partner | |
|
|
||
| By: | /s/ Xxxxxx Xxxx | |
|
Xxxxxx Xxxx Authorized
Member
|
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7
EXHIBIT
A
FORM
OF AMENDED AND RESTATED PROMISSORY NOTE
8
EXHIBIT
B
FORM
OF AMENDED AND RESTATED SECURITY AGREEMENT
9
EXHIBIT
C
FORM
OF MUTUAL GENERAL RELEASE (TRIDENT)
10
EXHIBIT
D
FORM
OF GENERAL
RELEASE (PARENT)
11
