EXHIBIT 99
SHARE SALE AND CONTRIBUTION AGREEMENT
Dated as of OCTOBER 21, 2003
By and Among
FUELNATION INC.
AND
FUELNATION TRAVEL CENTER, LLC
AND
XXXXXXX REAL ESTATE, LLC
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS ..............................................................1
ARTICLE II
TRANSFER AND ISSUANCE OF STOCK............................................5
2.1 Transfer by Controlling Shareholder..............................5
2.2 Contributed Assets...............................................5
2.3 Closing........................ .................................5
ARTICLE III
REPRESENTATIONS OF THE CONTROLLING SHAREHOLDER ...........................5
3. Representations of the Controlling Shareholder and Company.......5
3.1 Existence and Good Standing......................................5
3.2 Capital Stock....................................................5
3.3 Options and Warrants.............................................6
3.4 Due Authorization; Enforceability................................6
3.5 Subsidiaries.....................................................7
3.6 Financial Statements and No Material Changes. ...................7
3.7 Books and Records................................................8
3.8 Title to Properties..............................................8
3.9 Status of the Company............................................8
3.10 Owned Real Property; Leases......................................8
3.11 Material Contracts...............................................9
3.12 Consents and Approvals; No Violations............................9
3.13 Litigation.......................................................9
3.14 Taxes............................................................10
3.15 Liabilities......................................................10
3.16 Insurance........................................................10
3.17 Intellectual Properties..........................................11
3.18 Compliance with Laws.............................................11
3.19 Disclosure.......................................................11
3.20 Brokers' or Finders' Fees........................................11
3.21 SEC Filings......................................................11
ARTICLE IV
REPRESENTATIONS OF XXXXXXX................................................12
4. Representations of XXXXXXX. ....................................12
4.1 Existence and Good Standing of XXXXXXX; Power and Authority .....12
4.2 Consents and Approvals; No Violations............................12
4.3 Purchase for Investment. .......................................12
4.4 Brokers' or Finders' Fees. .....................................12
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ARTICLE V
SPECIAL PROVISIONS........................................................13
5.1 Voting Trust. ...................................................13
5.2 Controlling Shareholder..........................................13
5.3 Securities Law Matters...........................................13
5.4 Shareholder Consent; 10-day Standstill...........................13
ARTICLE VI
CONDITIONS TO XXXXXXX'X OBLIGATIONS......................... .............15
6. Conditions to XXXXXXX'x Obligations. ...........................15
6.1 Truth of Representations and Warranties. .......................15
6.2 Performance of Agreements........................................16
6.3 Opinions of the Controlling Shareholder and the language ........16
6.4 No Material Adverse Change. ....................................16
6.5 No Litigation Threatened.........................................16
6.6 Governmental Approvals...........................................16
6.7 Resignation of Directors and Officers............................16
6.8 Proceedings......................................................16
ARTICLE VII
CONDITIONS TO THE CONTROLLING SHAREHOLDER AND COMPANY ....................17
7. Conditions to the Controlling
Shareholder and Company Obligations..............................17
7.1 Truth of Representations and Warranties. .......................17
7.2 Performance of Agreements........................................17
7.3 Governmental Approvals. ........................................17
7.4 Proceedings. ...................................................17
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION .............................17
8 Representations and Warranties of Controlling shareholder .......17
8.1 Indemnification. ................................................17
8.2 Third Party Claims...............................................18
ARTICLE IX
TERMINATION AND ABANDONMENT ..............................................19
9.1 Termination. ...................................................19
9.2 Effect of Termination. .........................................19
ARTICLE X
ARBITRATION ..............................................................20
10.1 Nature of the Dispute. .........................................20
10.2 Rules of Arbitration. ..........................................20
10.3 Arbitration Procedure. .........................................20
10.4 Location; Language. ............................................20
10.5 Binding Decision and Award.......................................20
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ARTICLE XI
MISCELLANEOUS.............................................................20
11.1 Expenses. ......................................................21
11.2 Governing Law. .................................................21
11.3 Publicity. .....................................................21
11.4 Notices. .......................................................21
11.5 Parties in Interest. ...........................................22
11.6 Counterparts. ..................................................22
11.7 Entire Agreement. ..............................................22
11.8 Amendments. ....................................................22
11.9 Severability. ..................................................22
11.10 Third Party Beneficiaries. .....................................22
11.11 Facsimile Signatures.............................................23
LIST OF SCHEDULES
Schedule 3.2 - Capital Stock
Schedule 3.3 - Options and Warrants
Schedule 3.4(a) - Due Authorization; Enforceability
Schedule 3.4(b) - Directors and Officers
Schedule 3.5 - Subsidiaries
Schedule 3.11 - Material Contract
Schedule 3.12 - Consents and Approvals; No Violations
Schedule 3.15 - List of Liabilities
Schedule 3.16 - List of Insurance Coverages
Schedule 3.17 - List of Intellectual Properties
Schedule 8.1 - Escrow Agreement
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SHARE SALE AND CONTRIBUTION AGREEMENT
SHARE SALE AND CONTRIBUTION AGREEMENT ("this Agreement") dated as of
NOVEMBER 22, 2003, by and among:
(a) FUELNATION Inc., a Florida corporation, (the "Company"),
(b) FUELNATION TRAVEL CENTER, LLC and Xxxxxxx X. Xxxxxxxx for
himself and his nominees (the "Controlling Shareholder" or "Sellers"), and
(c) XXXXXXX Real Estate, LLC, a Florida Limited liability company
("XXXXXXX" or "Purchaser").
W I T N E S S E T H:
WHEREAS, the Controlling Shareholder's collectively and beneficially
own approximately 51% of the outstanding shares of common stock, par value
$.01 per share, of the Company (Officers, Directors, large shareholders and
the balance by Affiliated Persons), comprising approximately 51% of the
issued and outstanding share capital of the Company;
WHEREAS, the Company has authorized 100,000,000 shares of its common
stock of which less than 2,294,493 shares are issued and outstanding and
5,000,000 shares of preferred stock (Series A.B.C.) are authorized and none
are issued;
WHEREAS, XXXXXXX wishes to acquire, develop and finance the Travel
Center Project in Davie, Florida and simultaneously contract with FuelNation
to purchase the facility, from XXXXXXX, with assumption of the debt and the
issuance of common and Preferred Shares for the XXXXXXX equity; and
WHEREAS, XXXXXXX wishes to acquire from the Controlling
Shareholder's and the Company a sufficient number of shares of common stock,
and to be issued Series A Convertible Preferred stock, to provide XXXXXXX
with ownership of fifty-one percent (51%) of the issued and outstanding
shares of common stock of the Company (the "Shares") for his equity
contribution not to exceed twenty million dollars; and
WHEREAS, the Company has determined that it is in the best interest
of the Company and its shareholders that this transaction take place; and
WHEREAS, the parties desire to provide for the cancellation of
certain agreements to which the Company is a party as well as the
cancellation of certain indebtedness of the Company in connection with the
transactions provided for herein.
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
DEFINITIONS
-----------
1. Definitions. When used in this Agreement, the following terms
shall have the respective meanings specified therefore below (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined).
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"Affiliate" shall mean, with respect to any person, (i) any
other Person directly or indirectly controlling, controlled by, or under
common control with such specified Person, and (ii) the spouse, siblings,
parent, child or other immediate family member of such specified Person. For
the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities or partnership interests, by agreement or otherwise.
"Balance Sheet" shall have the meaning assigned to such term
in Section 3.6.
"Balance Sheet Date" shall have the meaning assigned to such
term in Section 3.6.
"Closing" shall have the meaning assigned to such term in
Section 2.3.
"Closing Date" shall have the meaning assigned to such term in
Section 2.3.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in
effect at the date of this Agreement and any subsequent provisions of the
Code, amendatory thereof, supplemental thereto or substituted therefor.
"Company" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Company Options" shall have the meaning assigned to such term
in Section 3.2.
"Company Ordinary Shares" shall mean the Company's common
shares, with .01 par value.
"Company Preferred Shares" shall mean the Company's 5,000,000
authorized preferred shares, in which, up to 30,000 shares of Series A
Preferred stock will be issued at a purchase price of $1,000.00 per share.
One share of Series A Preferred Stock initially will be convertible into one
hundred fifty shares of common stock.
"Company Property" shall mean any real property and
improvements owned (directly, indirectly, or beneficially), leased, used,
operated or occupied by the Company and its subsidiaries.
"Condition" of any Person shall mean the business, properties,
assets, liabilities, operations, results of operations, condition (financial
or otherwise) or prospects of such Person.
"Contributed Assets" shall have the meaning assigned to such
term in Section 2.1.
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"Controlling Shareholder" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Consent" means the consent by FUELNATION TRAVEL CENTER, LLC to the
transfer of the contract interest in the Travel Center rights to the Company.
"Dispute" shall have the meaning assigned to such term in
Section 10.1.
"FUELNATION TRAVEL CENTER" means FUELNATION TRAVEL CENTER, LLC, a
Florida limited liability company.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Company or a subsidiary of the
Company would be deemed to be a "single employer" (i) within the meaning of
Section 414(b),(c), (m) or (o) of the Code or (ii) as a result of the Company
or a subsidiary of the Company being or having been a general partner of such
person.
"Fuel Supply Agreement" means the Fuel Supply Agreement by and
between a global refiner and Supply Company, or their designee, to be
arranged by our Director, Shaikh Isa Mohammed Isa Alkhalifa, as Licensor, and
FuelNation Travel Center, LLC as Licensee, which agreement will be negotiated
and a copy of which will be provided to the Company.
"Indemnified Party" shall have the meaning assigned to such
term in Section 8.3.
"Indemnifying Party" shall have the meaning assigned to such
term in Section 8.3.
"Intellectual Property" shall mean domestic and foreign
patents, patent applications, registered and unregistered trademarks, trade
names, internet domain names and service marks, registered and unregistered
copyrights, computer software programs, data bases, inventions, trade secrets
and proprietary information of any type, whether or not written.
"Liabilities" means the liabilities of the Company set forth
in Schedule 3.15 attached hereto.
"Liens" shall mean liens, security interests, options, rights
of first refusal, easements, mortgages, charges, indentures, deeds of trust,
rights of way, restrictions on the use of real property, encroachments,
licenses to third parties, leases to third parties, security agreements, or
any other encumbrances and other restrictions or limitations on use of real
or personal property or irregularities in title thereto.
"Loss" shall have the meaning assigned to such term in Section
8.1.
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"Material Constraints" means the material contracts affecting
the Company as set forth in Schedule 3.11 attached hereto..
"Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a limited liability company, a limited
liability partnership, a trust, an incorporated organization and a government
or any department or agency thereof.
"Plan" shall mean any "employee benefit plan" as defined in
Section 3(3) of ERISA subject to Title I of ERISA or any "plan" subject to
Section 4975 of the Code."
"Purchaser Indemnified Party" shall have the meaning assigned
to such term in Section 8.2.
"Returns" shall have the meaning assigned to such term in
Section 3.13(a).
"SEC Filings" means all documents, including 10K's, 10Q's,
8K's, and Information Statements filed by the Company with the Securities
Exchange.
"Shares" shall have the meaning assigned to such term in
Section 2.1.
"Subsidiaries" means those wholly-owned subsidiary
corporations of the Company as set forth in Schedule 3.4 attached hereto.
"Taxes" means all taxes, assessments, charges, duties, fees,
levies or other governmental charges, including, without limitation, all
income, franchise, profits, capital gains, capital stock, transfer, sales,
use, occupation, property, excise, severance, windfall profits, stamp,
license, payroll, value added, withholding and other taxes, assessments,
charges, duties, import, export or other custom duties, fees, levies or other
governmental charges of any kind whatsoever (whether payable directly or by
withholding and whether or not requiring the filing of a Return), all
estimated taxes, deficiency assessments, additions to tax, penalties and
interest and shall include any liability for such amounts as a result either
of being a member of a combined, consolidated, unitary or affiliated group or
of a contractual obligation to indemnify any person or other entity.
"XXXXXXX REAL ESTATE, LLC" shall have the meaning ascribed to it in
the preamble of this Agreement.
"Voting Trust" shall have the meaning assigned to such term in
Section 5.1.
ARTICLE II
TRANSFER AND ISSUANCE OF STOCK
-------------------------------
2.1 Transfer by Controlling Shareholder. Upon the terms and
subject to the conditions set forth in this Agreement the Controlling
Shareholder's and the Company agree to transfer and have issued to XXXXXXX,
and XXXXXXX, agrees to accept, on the Closing Date, a portion of the
Preferred shares representing FIFTY-ONE percent (51%) of the ownership
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interest in the Company (the "Shares") in consideration of the Contributed
Assets to be provided by XXXXXXX to the Company.
2.2 Contributed Assets. On the Closing Date, XXXXXXX shall
cause its right, title and interest in and to the PROPERTY to be contributed
to the Company (the "Contributed Assets"). Upon Certificate of Occupancy
issued on the Travel Center project, or any portion thereof, the additional
equity relating to the construction of the facility will be contributed and
the newly issued Series A Preferred shares will be issued in incremental
disbursements.
2.3 Closing. The effective date of the closing hereunder for
the transfers, exchanges and issuance of stock referred to in Sections 2.1
(the "Closing") shall be the day after the Company has completed the filing
of its Form 10Q for the quarter ending September 30, 2003, or as mutually
agreed between the parties, but no later than December 15, 2003, and the
additional closings will be done in incremental disbursements as Certificates
of Occupancy, and construction is completed (herein referred to as the
"Closing Date").
In connection therewith the Purchaser, on behalf of itself and
its designated directors, shall take such reasonable action as necessary to
assist the Company in filing the 10Q report promptly, including disclosure of
relevant information. If any delay is due to Purchaser, the date shall be
extended for such period.
ARTICLE III
REPRESENTATIONS OF THE CONTROLLING SHAREHOLDER
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3. Representations of the Controlling Shareholder's and Company.
The Controlling Shareholder's, and the Company, jointly and severally,
represent and warrant as follows:
3.1 Existence and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. The Company has the power to own its property and to carry
on its business as now being conducted. The Company is duly qualified to do
business and is in good standing in each jurisdiction in which the character
or location of the properties owned, leased or operated by the Company or the
nature of the business conducted by the Company makes such qualification
necessary, except for such jurisdictions where the failure to be so qualified
or licensed and in good standing would not have a material adverse effect on
the Condition of the Company.
3.2 Capital Stock. The Company has an authorized capitalization
consisting of 100,000,000 ordinary shares, with .01 par value, of which no
more than 2,294,493 shares are issued and are outstanding at Closing
(excluding treasury stock that has been redeemed by the Company). The Company
also has 5,000,000 authorized Preferred Shares, $.01 par value, of which no
shares are issued and outstanding. The Company does not have any other class
of capital stock authorized.
Prior to Closing, all of the issued and outstanding Shares are owned
beneficially and of record by the Persons and in the proportions set forth of
Schedule 3.2 attached hereto, free and clear of all Liens. All outstanding
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Company shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable and are not subject to,
nor were they issued in violation of, any preemptive rights.
3.3 Options and Warrants. Except as set forth in Schedule 3.3
attached hereto, no shares of capital stock of the Company are authorized,
issued or outstanding and there are no outstanding or authorized options,
warrants, rights, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities, or other commitments
contingent or otherwise, relating to the capital stock of the Company,
pursuant to which the Company is or may become obligated to issue or purchase
shares of the capital stock of the Company or any securities convertible
into, exchanged for, or evidencing the right to subscribe for, any shares of
the capital stock of the Company (the "Company Options" and the "Company
Warrants"). The Company has no authorized or outstanding bonds, debentures,
notes or other indebtedness the holders of which have the right to vote (or
convertible or exchangeable into or exercisable for securities having the
right to vote) with the stockholders of the Company or any of its
subsidiaries on any matter other than the listed items.
3.4 Due Authorization; Enforceability.
(a) The Controlling Shareholder's and the Company have
the requisite corporate power and authority to execute and deliver this
Agreement and to perform their obligations hereunder. The execution and
delivery of this Agreement by each of the Controlling Shareholder's and the
Company and the performance of their obligation hereunder have been duly
authorized and approved by them and no other corporate or shareholder action
on the part of each of the Controlling Shareholder and the Company is
necessary to authorize the execution delivery and performance of this
Agreement by each of the Controlling Shareholder's and the Company, except as
set forth in Schedule 3.4(a) attached hereto. This Agreement has been duly
executed and delivered by each of the Controlling Shareholder's and the
Company and, assuming due execution of this Agreement and such other
Transaction Document by each other party thereto, is a valid and binding
obligation of each of the Controlling Shareholder and the Company enforceable
against each of them in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting the enforceability of
creditors' rights generally and by general equitable principles.
(b) The individuals listed on the Schedule 3.4 annexed hereto
constitute the current Board of Directors and the current officers of the
Company, each individual holds the position listed opposite their name. Upon
consummation of the closing hereunder, Xxxxxx Xxxxxxx shall also be appointed
to the Board of Directors and fill the position of President. Further, the
Board of Directors has determined that it is in the best interests of the
Company to consummate the transactions, contemplated by this Agreement.
(c) The transfer and issuance, as appropriate, of the Shares
pursuant to Sections 2.1 will vest in XXXXXXX, valid title thereto, free and
clear of any and all Liens or other adverse claims and also provide XXXXXXX
with full voting rights with respect to such Shares notwithstanding the
provisions of Florida Statute Section 607.0902. The Shares, upon transfer to
and issuance and delivery to XXXXXXX, will be duly authorized and validly
issued, fully paid and non assessable and shall not be subject to or issued
in violation of any preemptive rights.
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(d) To the extent that XXXXXXX shall receive less than
FIFTY-ONE percent (51%) ownership interest in the Company, for any reason,
including based on a breach of any representation or warranty or due to
options or warrants exercised after the Closing, in addition to all other
rights and remedies, the Company agrees to cause additional Preferred stock
to be authorized and issued in such amounts as necessary to provide for
XXXXXXX to have FIFTY-ONE percent (51%) ownership interest of the Company.
3.5 Subsidiaries. The Company owns the outstanding
capital stock of those companies disclosed on Schedule 3.5 attached hereto
(the "Subsidiaries") in the percentages set forth on Schedule 3.5.
3.6 Financial Statements and No Material Changes.
(a) The Controlling Shareholder and the Company have
heretofore furnished XXXXXXX with the balance sheets of the Company as
December 31, 2002, March 31, 2003 and June 30, 2003, and the related
consolidated statements of income, and cash flows for the year and the
quarter-annual periods then ended, the most recent annual statement certified
as set forth therein, and the unaudited balance sheet of the Company as at
June 30, 2003 and the related unaudited draft consolidated statements of
income, and cash flows for the 6-months then ended (the consolidated balance
sheet of the Company as at June 30, 2003 (the "Balance Sheet Date") is
hereinafter referred to as the "Balance Sheet"). Such financial statements,
including the footnotes thereto, except as indicated therein, have been
prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods indicated.
(b) The Balance Sheet fairly presents, in all material respects, the
financial condition of the Company and its subsidiaries at the date thereof
and, except as indicated therein, reflects all claims against and all debts
and liabilities of the Company and its subsidiaries, fixed or contingent, as
at the date thereof and the related statements of income, and cash flows
fairly present, the results of the operations of the Company and its
Subsidiaries and the changes in their financial position for the period
indicated.
(c) Subject to normal year-end adjustments and the absence of
footnotes thereto, the Balance Sheet fairly presents the financial
position of the Company and its Subsidiaries as of the date thereof and
reflects all material claims and all material debts and liabilities of the
Company and its Subsidiaries, fixed or contingent, as of the date thereof and
the related statements of income, and cash flows fairly present the results
of operations and cash flows of the Company and its Subsidiaries and the
changes in their financial position for the periods indicated. Such other
balance sheets of the Company referred to in (a) above fairly present the
financial condition of the Company and its Subsidiaries at the respective
dates thereof and, except as indicated therein, reflect all claims against
and all debts and liabilities of the Company and its Subsidiaries, fixed or
contingent, as at the respective dates thereof, and the related statements of
income, and cash flows fairly present the results of the operations of the
Company and its Subsidiaries and the changes in their financial position for
the periods indicated. Since the Balance Sheet Date there has been (x) no
material adverse change in the Condition, of the Company or its
Subsidiaries and (y) no change in the Condition of the Company or its
subsidiaries except in the ordinary course of business; and, to the best
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knowledge of each of the Controlling Shareholder, no fact or condition exists
or is contemplated or threatened which might cause such a change in the
future.
3.7 Books and Records. The respective minute books of the Company
and the Subsidiaries, as previously made available to XXXXXXX and its
representatives, contain accurate records of all meetings of, and corporate
action taken by (including action taken by written consent) the respective
shareholders and Boards of Directors of the Company and the Subsidiaries. The
Company nor its Subsidiaries have any of its records, systems, controls, data
or information recorded, stored, maintained, operated or otherwise wholly or
partly dependent upon or held by any means (including any electronic,
mechanical or photographic process, whether computerized or not) which
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company.
3.8 Title to Properties. Except for properties and assets reflected
in the Balance Sheet, or acquired since the Balance Sheet Date, which have
been sold or otherwise disposed of in the ordinary course of business, the
Company has good, valid and marketable title to (a) all of its properties and
assets (real and personal, tangible and intangible), including, without
limitation, all of the properties and assets reflected in the Balance Sheet,
except as indicated in the notes thereto, and (b) all of the properties and
assets purchased or otherwise acquired by the Company since the Balance Sheet
Date, in each case free and clear of all Liens except Permitted Liens.
3.9 Status of the Company. Except as set forth on Schedule 3.9, the
Company has not conducted any business, incurred any indebtedness, liability
or obligation, entered into any contract or arrangement, made any commitment
or engaged in any activity prior to the Closing Date other than in the
ordinary course of business.
3.10 Owned Real Property; Leases. The SEC Filings reflect an
accurate and complete list of all Company owned and leased real estate,
together with any other material leases of personal property (including those
of the Subsidiaries). Each lease as described therein is in full force and
effect; all rents and additional rents due to date on each such lease have
been paid; subject to applicable adjustments for taxes and insurances, in
each case, the lessee has been in peaceable possession since the commencement
of the original term of such lease and is not in default thereunder and no
waiver, indulgence or postponement of the lessee's obligations thereunder has
been granted by the lessor; and there exists no event of default or event,
occurrence, condition or act (including the transfer and issuance of the
Shares hereunder) which, with the giving of notice, the lapse of time or the
happening of any further event or condition, would become a default under
such lease. The Company has not violated any of the terms or conditions under
any such lease in any material respect.
3.11 Material Contracts. All material contracts affecting the
Company and/or its Subsidiaries are described in the SEC Filings and outlined
on Schedule 3.11 attached hereto (the "Material Contracts"), except as set
forth in Schedule 3.11 and Material Contracts shall be canceled as of the
Closing with no continuing liability to the Company.
3.12 Consents and Approvals; No Violations.
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(a) Other than as set forth on Schedule 3.12 attached hereto, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in a violation or breach of,
conflict with, constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation,
payment or acceleration) under any Material Contract.
(b) Other than as set forth on Schedule 3.12 attached hereto, the
execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby will not: (1) violate
any provision of the certificate of incorporation or by-laws (or other
similar organizational documents) of the Company or any of the Company's
subsidiaries; (2) violate any statute, ordinance, rule, regulation, order or
decree of any court or of any governmental or regulatory body, agency or
authority applicable to the Company or any of the Company's subsidiaries or
by which any of their respective properties or assets may be bound; (3)
require the Company or any of the Company's subsidiaries to make or obtain
any filing with or permit, consent or approval of or give any notice to, any
governmental or regulatory body, agency or authority; or (4) result in a
violation or breach of, conflict with, constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of
termination, cancellation, payment or acceleration) under, or result in the
creation of any Lien upon any of the properties or assets of the Company or
any of the Company's subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise,
permit, agreement, lease, franchise agreement or other instrument or
obligation to which the Company or any of the Company's subsidiaries is a
party, or by which the Company or any of the Company's subsidiaries or any of
their respective properties or assets is bound except in the case of clauses
(3) and (4) above, for such violations, filings, permits, consents,
approvals, notices, breaches or conflicts which would not have a material
adverse effect on (i) the Condition of the Company and its subsidiaries,
taken as a whole, or (ii) the ability of the Company to consummate the
transactions contemplated hereby or to perform its obligations hereunder.
3.13 Litigation. There is no action, suit, proceeding at law or in
equity, arbitration or administrative or other proceeding by or before any
governmental or other instrumentality or agency, pending, threatened, against
or affecting the Company or the Subsidiaries, or any of their properties or
rights which would materially adversely affect the right or ability of the
Company or any of its Subsidiaries to carry on their respective business as
now conducted, or to own their respective assets, or which would materially
adversely affect the Condition of the Company and none of the Controlling
Shareholder nor the Company know of any valid basis for any such action,
proceeding or investigation. The Company is not subject to any judgment,
order or decree entered in any lawsuit or proceeding which would have a
material adverse effect on the Condition of the Company.
3.14 Taxes.
(a) Tax Returns. The Company has timely filed or
caused to be timely filed with the appropriate taxing authorities all
returns, statements, forms and reports for Taxes ("Returns") that are
required to be filed by, or with respect to the Company on or prior to the
Closing Date. Such Returns have accurately reflected and will accurately
reflect all liabilities for Taxes of the Company and of each of the Company
for the periods covered thereby.
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(b) Payment of Taxes. All Taxes and Tax liabilities of the Company
and of each of the Company's subsidiaries for all taxable years or periods
that end on or before the Closing Date and, with respect to any taxable year
or period beginning before and ending after the Closing Date, the portion of
such taxable year or period ending on and including the Closing Date ("Pre-
Closing Period") have been timely paid or accrued and adequately disclosed
and fully provided for on the books and records of the Company and of each of
the Subsidiaries.
(c) All Taxes which any of the Company or any of the Company's
subsidiaries is (or was) required by law to withhold or collect, have been,
or will be, duly withheld or collected; and have been, or will be, timely
paid over to the proper authorities to the extent due and payable.
3.15 Liabilities. Neither the Company nor any of its subsidiaries has
any outstanding claims, liabilities or indebtedness, contingent or otherwise,
except as set forth in the Balance Sheet or referred to in the footnotes
thereto, other than liabilities to trade creditors incurred subsequent to the
Balance Sheet Date in the ordinary course of business not involving
borrowings by the Company or any subsidiary of the Company. As of the date
hereof, the list of the liabilities of the Company is set forth in Schedule
3.15 attached hereto (the "Liabilities"). Except as set forth in said
Schedule 3.15, all liabilities shall be canceled and/or converted into equity
as of the Closing Date. Notwithstanding anything to the contrary set forth
herein, Purchaser shall have the right to claim any and all liabilities of
the Company, before, during and after the closing of this contract. In
addition, it is understood and agreed that the Company has been incurring
certain professional fees and related expenses in connection with the
completion of this transaction and complying with SEC requirements, which
expenses shall be assumed and paid by Purchaser and the allocation of
additional compensation will be adjusted to reimburse the Purchaser either in
cash, stock, preferred shares or other mutually agreed compensation.
3.16 Insurance. Set forth on Schedule 3.16 attached hereto is a
complete list of insurance policies which the Company and its subsidiaries
maintain with respect to their businesses, properties or employees. Such
policies are in full force and effect and are free from any right of
termination on the part of the insurance carriers. Such policies, with
respect to their amounts and types of coverage, are adequate to insure fully
against risks to which the Company, its subsidiaries and their property and
assets are normally exposed in the operation of their respective businesses.
3.17 Intellectual Properties. To the best of the Controlling
Shareholder knowledge and belief, the operation of the business of the
Company and its subsidiaries requires no rights under Intellectual
Property other than rights under Intellectual Property listed on Schedule
3.17 attached hereto and rights granted to the Company and its subsidiaries
pursuant to agreements listed on Schedule 3.17.
3.18 Compliance with Laws. The Company is in compliance in all
material respects with all applicable laws, statutes, ordinances,
regulations, orders, judgments and decrees of any government or political
subdivision thereof, whether domestic or foreign, or any agency or
instrumentality thereof, or any court or arbitrator, and has not received any
notice that any violation of the foregoing is being or may be alleged.
14
3.19 Disclosure. The financial statements (including the footnotes
thereto) referred to in Section 3.6 of this Agreement, any Schedule or
certificate attached hereto or delivered pursuant to this Agreement or any
document or statement in writing which has been supplied by or on behalf of
the Controlling Shareholder, or by any of the Company's directors or officers
in connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact, or omits any statement of a material
fact necessary in order to make the statements contained herein or therein
not misleading. There is no fact known to the Controlling Shareholder and the
Company, which would materially adversely affect the Condition of the Company
or any of its subsidiaries which has not been set forth in this Agreement,
the Balance Sheet and the related consolidated statements of income, and cash
flows (including the footnotes thereto), any Schedule or certificate attached
hereto or delivered pursuant to this Agreement or any document or statement
in writing which has been supplied by or on behalf of the Controlling
Shareholder, or by any of the Company's directors or officers in connection
with the transactions contemplated by this Agreement.
3.20 Brokers' or Finders' Fees. No agent, broker, person or firm
acting on behalf of either the Controlling Shareholder or the Company, is, or
will be, entitled to any commission or brokers' or finders' fees from any of
the parties hereto, or from any Affiliate of any of the parties hereto, in
connection with any of the transactions contemplated by this Agreement.
3.21 SEC Filings. All SEC Filings are accurate, complete and in
compliance with applicable federal regulations except that the 10Q Report for
the period ended September 30, 2003 has not been filed as of the date hereof.
ARTICLE IV
REPRESENTATIONS OF XXXXXXX
--------------------------
4. Representations of XXXXXXX. XXXXXXX represents, warrants and
agrees as follows:
4.1 Existence and Good Standing of XXXXXXX REAL ESTATE, LLC; Power and
Authority. XXXXXXX is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Florida. XXXXXXX
has the power and authority to enter into, execute and deliver this Agreement
and perform its obligations hereunder. This Agreement has been duly
authorized and approved by all required corporate action of XXXXXXX. This
Agreement has been duly executed and delivered XXXXXXX and, assuming the due
execution and delivery hereof, this Agreement constitutes a valid and binding
obligation of XXXXXXX, enforceable against XXXXXXX in accordance with its
terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
effecting the enforcement of creditors' rights generally and to general
equitable principles.
4.2 Consents and Approvals; No Violations. The execution and delivery
of this Agreement by XXXXXXX and the consummation by XXXXXXX of the
transactions contemplated hereby will not: (1) violate any provision of its
articles or regulations; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority applicable to XXXXXXX or by which any of its
properties or assets may be bound; (3) require XXXXXXX to make or obtain any
filing with or permit, consent or approval of or give any notice to, any
governmental or regulatory body, agency or authority except for required SEC
15
filings; (4) result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or give rise
to any right of termination, cancellation, payment or acceleration) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, franchise, permit, agreement, lease, franchise agreement
or other instrument or obligation to which XXXXXXX is a party, or by which
any of its properties or assets is bound except in the case of clauses (3)
and (4) above for such violations, filings, permits, consents, approvals,
notices, breaches or conflicts which could not have a material adverse effect
on the ability of XXXXXXX to consummate the transactions contemplated hereby
or to perform its obligations hereunder.
4.3 Purchase for Investment. XXXXXXX will acquire the Shares for its own
account for investment purposes only and not with a view toward any resale or
distribution thereof; provided, however, that the disposition of the Shares by
XXXXXXX shall at all times remain within the sole control of XXXXXXX.
4.4 Brokers' or Finders' Fees. No agent, broker, person or firm acting on
behalf of XXXXXXX is, or will be, entitled to any commission or brokers' or
finders' fees from any of the parties hereto, or from any Affiliate of the
parties hereto, in connection with any of the transactions contemplated by this
Agreement.
ARTICLE V
SPECIAL PROVISIONS
------------------
5.1 Voting Trust. The Controlling Shareholder's are retaining preferred
shares and some common stock of the Company ("Retained Shares"). In connection
therewith, at the closing, the Shareholders agree to grant to XXXXXXX/or its
designee an irrevocable proxy for the Retained Shares providing the right of
XXXXXXX to vote the shares on behalf of Controlling Shareholder's for a period
of six (6) months after the Closing Date.
5.2 Controlling Shareholder agree that the Retained Shares shall be
subject to a lock up whereby they shall not be entitled to sell the Retained
Shares for a period of six (6) months after the Closing Date, unless to settle
debts for the company, and pursuant to Section 5.5 below.
5.3 Securities Law Matters. XXXXXXX is acquiring the Shares for its
account, and not with a view to any sale, distribution or disposition in
violation of any federal or state securities laws. XXXXXXX has been given the
opportunity to obtain any information or documents, and to ask questions and
receive answers about such documents which BRAUSER deems necessary to evaluate
the merits and risks related to his investment in the Company and XXXXXXX
understands and has taken cognizance of all risk factors related to such
transactions. XXXXXXX acknowledges that the Shares will be characterized as
"restricted securities" under the federal securities laws since as they are
being acquired directly in a transaction not involving a public offering and
that all certificates and instruments evidencing the Shares will bear a
restrictive legend substantially similar to the following:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE
AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND
QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL
16
AND STATE SECURITIES OR BLUE SKY LAWS OR IF AN EXEMPTION
FROM SUCH REGISTRATION OR QUALIFICATIONS IS APPLICABLE.
5.4 Shareholder Consent; 10-day Standstill.
(a) Promptly after the Closing Date the Company agrees to solicit the
consent of at least a majority of its shareholders (the "Consenting
Shareholders") pursuant to a consent solicitation statement (the "Consent")
filed with the Securities Exchange Commission of 1934 (the Commission") on
Schedule 14A, or any successor schedule thereto, promulgated by the Commission
under Section14 of the Securities Exchange Act of 1934, as amended. The Consent
shall request the Consenting Shareholders to:
(1) authorize a Rights Offering to Existing shareholders(i)establish an
audit committee (ii) Changing FuelNation Inc. to a holding company and pushing
all operations and assets down into wholly owned subsidiaries; and
(2) elect the Directors set forth on Schedule 3.4(b) hereto, to hold
office until the next annual meeting of shareholders and until their successors
have been elected. In addition, upon request of XXXXXXX, the Consent shall
include any such information as is set forth in Rule 14f-1 of the Exchange Act,
notwithstanding the applicability or inapplicability of such rule. (b) Conduct
of Business of the Company and the Company's Subsidiaries. Unless otherwise
consented to in writing and except as expressly contemplated by this Agreement,
during the period from the date of this Agreement to the time the shareholder
actions contemplated by Section 5.4(a) have been obtained, neither the Company
nor any of the Company's officers and directors will take any action not in the
ordinary course of business, including, without limitation:
(i) amend or propose to amend its Certificate of Incorporation or
Bylaws in any material respect;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or
propose to issue, grant, sell, pledge or dispose of any shares of,
or any options, warrants, commitments, subscriptions or rights of
any kind to acquire or sell any shares of, the capital stock or
other securities of the Company or any of the Company's
subsidiaries, including, but not limited to, any securities
convertible into or exchangeable for shares of stock of any class
of the Company or any of the Company's subsidiaries, except for
the issuance of shares pursuant to the exercise of any company
stock options and/or company warrants outstanding immediately
following the execution of this Agreement in accordance with their
present terms;
(iii) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock, other than dividends to the holders
of Preferred Shares in accordance with the present terms of the
Company Preferred Stock and dividends or distributions to the
Company or a subsidiary of the Company, or directly or indirectly
redeem, purchase or otherwise acquire or offer to acquire any
shares of its capital stock or other securities;
(iv) create, incur or assume any indebtedness for borrowed money or
issue any debt securities or make any loans;
17
(v) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or
otherwise) for the obligations of any person (other than the
Company or a subsidiary of the Company); (b) make any capital
expenditures or make any advances or capital contributions to, or
investments in, any other person; (c) voluntarily incur any
material liability or obligation (absolute, accrued, contingent or
otherwise); or (d) sell, transfer, mortgage, pledge or otherwise
dispose of, or encumber, or agree to sell, transfer, mortgage,
pledge or otherwise dispose of or encumber, any assets or
properties, real, personal or mixed, material to the Company and
its subsidiaries taken as a whole;
(vi) increase in any manner the compensation of any of its officers or
employees or enter into, establish, amend or terminate any
employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit sharing,
health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other
compensation or benefit plan, policy, agreement, trust, fund or
arrangement with, for or in respect of, any stockholder, officer,
director, employee, consultant or affiliate other than, in any
such case referred to above, as may be required by Law or as
required pursuant to the terms of agreements in effect immediately
following the execution of this Agreement;
(vii) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of
the Company or of any of its subsidiaries;
(viii) except as may be required as a result of a change in law or as
required by the SEC, change any of the accounting principles or
practices used by it;
(ix) make any tax election or settle or compromise any income tax
liability;
(x) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business and consistent with past practice
of liabilities reflected or reserved against in, or contemplated
by, the financial statements (or the notes thereto) of the
Company;
(xi) directly or indirectly, solicit or encourage the initiation of any
inquiries or proposals regarding any merger, sale of assets, sale
of share of capital stock or securities convertible into capital
stock, or similar transactions involving the Company or any of its
subsidiaries, or provide any information to, or conduct
discussions with, any third party with respect to any of the
foregoing;
(xii) waive, amend or allow to lapse any term or condition of any
confidentiality or standstill agreement to which the Company or
any subsidiary is a party; or
(xiii) agree in writing or otherwise to take, any of the foregoing
actions or any action which would make any of the representations
or warranties of the Company contained in this Agreement untrue or
incorrect in any material respect.
18
5.5 Lock-Up Agreement. The Controlling Shareholder's agree that, without
the prior written consent of Company and XXXXXXX, the undersigned will not
directly or indirectly, offer, sell, sell short, transfer, hypothecate, pledge,
or otherwise dispose of, and shall maintain a minimum of 90% of their existing
ownership interests, Common Stock or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or derivatives of Common
Stock (or to enter into any agreement or transaction which is designed to
effect, or could be expected to result in, any such transaction) (each of the
foregoing referred to as a "Disposition") for the period through March 1, 2004.
Included therein there shall be Series A Preferred shares held in escrow
pursuant to section 8.1(b) below. Notwithstanding the foregoing, the Controlling
Stockholders may transfer any or all of the shares in his name which exceed the
amounts set forth above. In addition, Controlling Shareholders further agrees to
execute a further pledge or Lock-Up Agreement as requested by XXXXXXX to confirm
this restriction.
5.6 Further Lock-Up Agreement. In consideration of XXXXXXX'x agreement to
contribute the Contributed Assets and consummate the transactions under this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the officers and affiliates agree
that, without the prior written consent of XXXXXXX and the Company, they will
not, directly or indirectly, individually or jointly, offer, sell, sell short,
transfer, hypothecate, pledge, or otherwise dispose of the shares of Common
Stock or other securities convertible into or exchangeable or exercisable for
shares of Common Stock or derivatives of Common Stock (or to enter into any
agreement or transaction which is designed to effect, or could be expected to
result in, any such transaction) (each of the foregoing referred to as a
"Disposition") for the period through March 1, 2004. Notwithstanding the
foregoing, such stockholders together may transfer up to 30,000 shares of stock,
without restriction and may transfer any or all of the shares by gift, will or
intestacy provided that it shall be a condition to any such permitted transfer
by gift, will or intestacy that the transferee execute an agreement stating that
the transferee is receiving, and holding the securities subject to the
provisions of this Lock-Up Agreement, and there shall be no further transfer of
such shares except in accordance with this Lock-Up Agreement.
ARTICLE VI
CONDITIONS TO XXXXXXX'X OBLIGATIONS
---------------------------------
6. Conditions to XXXXXXX'x Obligations. XXXXXXX'x obligation hereunder,
including those set forth under Sections 2.1 and 2.2 on the Closing Date is
conditioned upon satisfaction, at or prior to the Closing, of the following
conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties of the Controlling Shareholder and the Company, contained in this
Agreement or in any Schedule attached hereto shall be true and correct in all
respects on and as of the Closing Date, and each of the Controlling Shareholder
and the Company shall have delivered to XXXXXXX a certificate, dated the Closing
Date, to such effect.
6.2 Performance of Agreements. All of the agreements of each of the
Controlling Shareholder and the Company to be performed prior to the Closing
pursuant to the terms of this Agreement shall have been duly performed in all
19
material respects, and each of the Controlling Shareholder and the Company shall
have delivered to XXXXXXX a certificate, dated the Closing Date, to such effect.
6.3 Opinions of the Controlling Shareholder and the language. The
Controlling Shareholder and the Company have furnished XXXXXXX with a favorable
opinion of counsel, dated the Closing Date, in form and substance reasonably
satisfactory to XXXXXXX and its counsel, providing that the Controlling
Shareholder and the Company have the full right and authority to transfer the
Shares to XXXXXXX.
6.4 No Material Adverse Change. Prior to the Closing Date there shall have
been no material adverse change in the Condition of the Company and the
Controlling Shareholder and the Company shall have delivered to XXXXXXX a
certificate, dated the Closing Date, to such effect.
6.5 No Litigation Threatened. No material action or proceedings shall have
been instituted or threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby, and the Controlling Shareholder and the Company shall have delivered to
XXXXXXX a certificate, dated the Closing Date, to such effect.
6.6 Governmental Approvals. All other governmental and third party
consents, waivers and approvals, if any, disclosed on any Schedule attached
hereto or necessary to permit the consummation of the transactions contemplated
by this Agreement shall have been received.
6.7 Resignation of Directors and Officers. Each of the existing Directors
and Officers of the Company shall agree to resign and provide their resignations
as Directors and Officers to the Purchaser, upon request.
6.8 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be satisfactory in form and substance to XXXXXXX and its counsel, and
XXXXXXX shall have received copies of all such documents and other evidences as
they or their counsel may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
ARTICLE VII
CONDITIONS TO THE CONTROLLING SHAREHOLDER AND COMPANY
-----------------------------------------------------
7. Conditions to the Controlling Shareholder and Company Obligations. The
transfer of the Shares by the Controlling Shareholder and the Company pursuant
to Section 2.1 on the Closing Date is conditioned upon satisfaction, at or prior
to such date, of the following conditions:
7.1 Truth of Representations and Warranties. The representations and
warranties of XXXXXXX contained in this Agreement shall be true and correct in
all respects on and as of the Closing Date.
7.2 Performance of Agreements. All of the agreements of XXXXXXX to be
performed prior to the Closing pursuant to the terms of this Agreement shall
have been duly performed in all material respects, and XXXXXXX shall have
delivered to the Controlling Shareholder and the Company a certificate, dated
the Closing Date, to such effect.
20
7.3 Governmental Approvals. All other governmental consents and approvals,
if any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
7.4 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to the Controlling
Shareholder and the Company, and their counsel, and the Controlling Shareholder
and the Company shall have received copies of all such documents and other
evidences as they or their counsel may reasonably request in order to establish
the consummation of such transactions and the taking of all proceedings in
connection therewith.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
--------------------------------------------
8. The representation and the warranties of the Controlling Shareholder
and the Company, on the one hand, and XXXXXXX, on the other hand, contained in
this Agreement or in any Schedule attached hereto shall survive the closing for
a period of two (2) years, except that the representations of the Controlling
Shareholder contained in Paragraphs 3.1, 3.2, 3.3 and 3.4 shall survive the
closing for the applicable statute of limitations.
8.1 Indemnification.
(a) The Controlling Shareholder and the Company agree, jointly and
severally, to indemnify and hold XXXXXXX and its Affiliates and their
respective officers, directors, employees, agents and Affiliates and their
respective successors and assigns (each a "Purchaser Indemnified Party")
harmless from damages, losses, liabilities, obligations, claims of any kind,
interest or expenses (including, without limitation, reasonable attorneys'
fees and expenses) ("Loss") suffered or paid, directly or indirectly, as a
result of, in connection with or arising out of (i) the failure of any
representation or warranty made by each of the Controlling Shareholder and
the Company, in this Agreement (whether or not contained in Article III) or
in any Schedule attached hereto to be true and correct in all respects as of
the date of this Agreement and as of the Closing Date (without giving effect
to any "materiality," "material adverse effect" or similar qualification), or
(ii) any breach or alleged breach by any of the Controlling Shareholder, of
any of their covenants or agreements contained herein.
(b) Further, the truth and accuracy of the above representations
and warranties of the Seller and the Company shall also be secured by the
pledge of Series A Preferred Shares of the Company owned by Seller which
shall be reduced pursuant to the terms of the Pledge and Escrow Agreement and
annexed hereto as Exhibit 8.1(b).
(c) XXXXXXX agrees to indemnify, defend and hold the Controlling
Shareholder and the Company, (each a "Stockholder Indemnitee") harmless from
Losses, suffered or paid, directly or indirectly, as a result of, in
connection with or arising out of (i) the failure of any representation or
warranty made by XXXXXXX in this Agreement (whether or not contained in
Article IV) to be true and correct in all respects as of the date of this
Agreement and as of the Closing Date and (ii) any breach or alleged breach by
XXXXXXX of any of the covenants or agreement contained herein.
21
(d) The obligations to indemnify and hold harmless pursuant to this
Section 8.1 shall survive the consummation of the transactions contemplated
by this Agreement for a period of two (2) year period, subject to claims for
indemnification filed prior to the end of the two (2) year period being
finally resolved after the resolve of this period. 8.2 Third Party Claims. If
a claim by a third party is made against any Person entitled to
indemnification pursuant to Section 8.1 hereof (an "Indemnified Party"), and
if such party intends to seek indemnity with respect thereto under this
Article VIII, such Indemnified Party shall promptly notify the party
obligated to indemnify such Indemnified Party (the "Indemnifying Party") of
such claims; provided, that the failure to so notify shall not relieve the
Indemnifying Party of its obligations hereunder, except to the extent that
the Indemnifying Party is actually and materially prejudiced thereby. The
Indemnifying Party shall have thirty days (30) after receipt of such notice
to assume the conduct and control, through counsel reasonably acceptable to
the Indemnified Party at the expense of the Indemnifying Party, of the
settlement or defense thereof; provided that (i) the Indemnifying Party shall
permit the Indemnified Party to participate in such settlement or defense
through counsel chosen by such Indemnified Party, provided that the fees and
expenses of such counsel shall be borne by such Indemnified Party and (ii)
the Indemnifying Party shall promptly assume and hold such Indemnified Party
harmless from and against the full amount of any Loss resulting therefrom. So
long as the Indemnifying Party is reasonably contesting any such claim in
good faith, the Indemnified Party shall not pay or settle any such claim.
Notwithstanding the foregoing, the Indemnified Party shall have the right to
pay or settle any such claim, provided that in such event it shall waive any
right to indemnity therefor by the Indemnifying Party for such claim unless
the Indemnifying Party shall have consented to such payment or settlement. If
the Indemnifying Party does not notify the Indemnified Party within 30 days
after the receipt of the Indemnified Party's notice of a claim of indemnity
hereunder that it elects to undertake the defense thereof, the Indemnified
Party shall have the right to contest, settle or compromise the claim but
shall not thereby waive any right to indemnity therefor pursuant to this
Agreement. The Indemnifying Party shall not, except with the consent of the
Indemnified Party, enter into any settlement that does not include as an
unconditional term thereof the giving by the Person or Persons asserting such
claim to all Indemnified Parties of an unconditional release from all
liability with respect to such claim or consent to entry of any judgment.
ARTICLE IX
TERMINATION AND ABANDONMENT
----------------------------
9.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the Closing:
(a) by mutual consent of the Controlling Shareholder and the Company,
on the one hand, and of XXXXXXX, on the other hand;
(b) by XXXXXXX, if Shareholder consent and the Closing shall not have
occurred by DECEMBER 15, 2003; provided, that the right to terminate this
Agreement under this Section 9.1(b) shall not be available to XXXXXXX if
22
their failure to fulfill any of their obligation under this Agreement shall
be the cause of the failure of the Closing to occur on or before such date;
or
(c) by either the Controlling Shareholder and the Company, on the one
hand, or XXXXXXX, on the other hand, if there has been a material breach of
any covenant or a material breach of any representation or warranty of
XXXXXXX, the Controlling Shareholder, or the Company, respectively.
9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.1 by XXXXXXX, on the one hand, or by the
Controlling Shareholder, on the other hand, written notice thereof shall
forthwith be given to the other parties specifying the provision hereof pursuant
to which such termination is made, and this Agreement shall be terminated and
there shall be no liability under this Agreement on the part of any Party
hereto. Nothing in this Section 9.2 shall relieve any party of liability for any
willful breach of this Agreement, nor invalidate the Warrants issued by the
Company to the Purchaser, as the Holder named therein, pursuant to a separate
Warrant Agreement to be dated November 21, 2003, which shall remain in full
force and effect and shall not be effected by termination of this Agreement.
ARTICLE X
ARBITRATION
-----------
10.1 Nature of the Dispute. Any dispute arising out of or relating to this
Agreement, including without limitation, the interpretation of any provision of
this Agreement or the breach, termination or invalidity of this Agreement (a
"Dispute") shall be settled exclusively and finally by arbitration. It is
specifically understood and agreed that any Dispute may be submitted to
arbitration irrespective of the magnitude thereof, the amount in controversy or
whether such Dispute would otherwise be considered justifiable or ripe for
resolution by a court.
10.2 Rules of Arbitration. The Arbitration shall be conducted in
accordance with the Rules of Arbitration of the American Arbitration Association
("AAA") as in effect on the date of this Agreement (the "AAA Rules"), except to
the extent that the AAA Rules conflict with the provisions of this Section 10.2,
in which event the provisions of this Section 10.2 shall control.
10.3 Arbitration Procedure. The arbitral tribunal shall consist of three
(3) arbitrators. The parties agree that the choice of arbitrators shall be as
follows: (i) if there are only two sides to a Dispute, one arbitrator shall be
appointed by each side and the third shall be selected by the two
party-appointed arbitrators or, failing agreement, by the AAA, in accordance
with the AAA Rules, or (ii) if there are more than two sides to a Dispute, then
the three arbitrators shall be appointed by the parties to the Dispute in
accordance with the AAA Rules established for the appointment of a sole
arbitrator. If the parties are not able to agree on all three arbitrators then
the AAA shall appoint the remaining one, two or three arbitrators.
10.4 Location; Language. The arbitration shall be conducted in Fort
Lauderdale, Florida, or such other place in the United States of America as
mutually agreed by the parties to the arbitration proceeding.
23
10.5 Binding Decision and Award. Any decision or award of the arbitral
tribunal shall be final and binding upon the parties to the arbitration
proceeding. The parties hereby waive to the extent permitted by law any rights
to appeal or to review of such award by any court or tribunal. The parties agree
that the arbitral award may be enforced against the parties to the arbitration
proceeding or their assets wherever they may be found and that a judgment upon
the arbitral, and that the arbitrator(s) may award attorneys' fees and costs to
the prevailing party.
ARTICLE XI
MISCELLANEOUS
--------------
11.1 Expenses. The parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
11.2 Governing Law. The interpretation and construction of this Agreement,
and all matters relating hereto, shall be governed by the laws of the State of
Florida applicable to agreements executed and to be performed solely within such
State.
11.3 Publicity. Except as otherwise required by law, none of the parties
hereto shall issue any press release or make any other public statement, in each
case relating to, connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior approval of XXXXXXX on the one
hand and of the Controlling Shareholder and the Company on the other hand, to
the contents and the manner of presentation and publication thereof.
11.4 Notices. Any notice or other communication required or permitted
under this Agreement shall be sufficiently given if delivered in person or sent
by telecopy or by registered or certified mail, postage prepaid, addressed as
follows:
If to the Controlling Shareholder:
If to FUELNATION INC. OR FUELNATION TRAVEL CENTER, LLC to:
If to FuelNation:
FuelNation
0000 XX 00xx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telephone No. (000) 000-0000
Telecopier no. (000) 000-0000
With a copy to:
Sachs, Sax & Xxxxx
Northern Trust Plaza,
000 Xxxxxx Xxxx,
Xxxxx #0000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
24
If to XXXXXXX to:
Xxxxxx X. Xxxxxxx
XXXXXXX REAL ESTATE, LLC
000 XXXXXXX XXXXXX
XXXXXXX XXXXX, XXXXXXX 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
11.5 Parties in Interest. This Agreement may not be transferred, assigned,
pledged or hypothecated by any party hereto, other than by operation of law.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
11.6 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
11.7 Entire Agreement. This Agreement, including the other documents
referred to herein which form a part hereof, contains the entire understanding
of the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
11.8 Amendments. This Agreement may not be changed orally, but only by an
agreement in writing signed by each party hereto.
11.9 Severability. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof will not in any way be affected or impaired
thereby.
11.10 Third Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereto.
11.11 Facsimile Signatures. This Agreement may be executed by facsimile
signatures which shall have the same force and effect as if an original
signature.
IN WITNESS WHEREOF, each of XXXXXXX, the Controlling Shareholder and the
Company has caused its corporate name to be hereunto subscribed by its officer
thereunto duly authorized, and each of the Controlling Shareholder have signed
this Agreement, all as of the day and year first above written.
XXXXXXX REAL ESTATE, LLC
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
XXXXXX X. XXXXXXX
25
CONTROLLING SHAREHOLDERS:
By: /s/ Shaikh Isa Mohammed Isa Alkhalifa
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
By: /s/ X.X. Xxxxxxxxxx
-----------------------------------
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
The Company
FUELNATION INC.:
By: /s/
-----------------------------------
Xxxxxxx Xxxxxxx, President
Agreed as to Section 5.5:
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
By: /s/ Shaikh Isa Mohammed Isa Alkhalifa
-----------------------------------
26
SCHEDULE 3.2
------------
CAPITAL STOCK
-------------
Actual # Subject to Reverses: Effective Shares
To be supplied by the transfer agent
Total 2,300,000 or less
=================
SCHEDULE 3.3
------------
OPTIONS AND WARRANTS
--------------------
Name Amount Price Expiration Date
--------------------------------------------------------------------------------
NONE
SCHEDULE 3.4(a)
---------------
DUE AUTHORIZATION; ENFORCEABILITY
---------------------------------
Shareholder Consent pursuant to Section 14(c)(2) of the SEC Exchange Act.
SCHEDULE 3.4(b)
---------------
DIRECTORS AND OFFICERS
----------------------
Current Board of Directors: Current Officers:
-------------------------- ----------------
1. Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx, CEO,
CEO, Pres
2. Shaikh ISa Mohammed Isa Alkhalifa
3. Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx, Sec.
27
To be added:
4. Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx, Pres.
5.
SCHEDULE 3.5
-------------
SUBSIDIARIES
------------
None
SCHEDULE 3.11
-------------
MATERIAL CONTRACT
-----------------
1.
2.
SCHEDULE 3.12
-------------
CONSENTS AND APPROVALS; NO VIOLATIONS
-------------------------------------
None
Other than SEC filing of 10Q for September 30, 2003
SCHEDULE 3.15
-------------
LIST OF LIABILITIES
-------------------
See attached financials
28
SCHEDULE 3.16
--------------
LIST OF INSURANCE COVERAGES
---------------------------
To be supplied by Company
SCHEDULE 3.17
-------------
LIST OF INTELLECTUAL PROPERTIES
-------------------------------
None
SCHEDULE 8.1
-------------
ESCROW AGREEMENT
-----------------
November 21, 2003
Xxxxxx X. Xxxxxxx
XXXXXXX REAL ESTATE, LLC
000 XXXXXXX XXXXXX
XXXXXXX XXXXX, XXXXXXX 00000
Telephone No. (954)
Telecopier No. (954)
Re: List of Items to be Completed
Gentleman:
Reference is made to the Share Sale and Contribution Agreement by and among
FUELNATION INC. and FUELNATION TRAVEL CENTER, LLC ("Company")
____________________ ("Seller,") XXXXXXX REAL ESTATE, LLC, ("Purchaser"),
dated November 21, 2003, (the "Agreement").
This letter shall confirm that in connection with the execution of the above
referenced Share Sale and Contribution Agreement, there are certain
contingent matters that need to be resolved by the Company and/or the Seller
prior to the applicable closing taking place.
29
Attached to this letter as Exhibit A is a list of items to be completed in
order for the purchaser to be obligated to complete the closing under the
agreement. The agreement itself account for the time period for which these
conditions need to be satisfied. Further any conditions set forth herein may
be waived by the Purchaser as a condition to closing although such obligation
shall be retained by Seller and/or the Company as the case may be, pursuant
to the terms of the Agreement.
It is our understanding that the parties will collectively use their best
efforts in order to accomplish the completion of the contingencies in order
to effectuate the closing to take place as soon as possible.
I am requesting that the parties execute a copy of this letter in the space
provided below for that purpose, confirming their acceptance and agreement to
the conditions contained in this letter as well as the items to be completed
as
set forth in Exhibit A attached hereto.
Sincerely,
Confirm, agreed and accepted by:
FUELNATION Inc.:
/s/
--------------------------------------
by Xxxxxxx Xxxxxxx, President
XXXXXXX REAL ESTATE, LLC:
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------
by Xxxxxx X. Xxxxxxx, Manager
30
November 21, 2003
EXHIBIT A
LIST OF ITEMS TO BE COMPLETED
The Closing under the contract dated as of DECEMBER 15, 2003 shall
be contingent upon the following:
1. File form 8-K
2. 10-Q for the quarter ended September 30, 2003 to be filed.
3. Confirmation by transfer agent of exact number of Shares
outstanding, which shall be no more than 2,300,000 shares of
common stock plus the authorized shares for the employee stock
option plan.
4. Completion of pledge and possession of stock of controlling
shareholder in escrow as per terms of the escrow agreement.
5. Confirmation that all liabilities to be satisfied have been
properly terminated, except as provided in the Agreement.
6. Confirmation of termination of all existing contracts required
to be canceled as per the terms of the Agreement.
7. Issuance of binder for directors' and officers' liability
insurance.
8. Seller delivery of all schedules.
9. Xxxxxxx Real Estate completing the acquisition of Travel Center.
10. Executing Standard Asset Purchase Contract and receipt with
Xxxxxxx and FuelNation.
11. Xxxxxxx satisfying the construction lender of Xxxxxxx'x 35%
equity infusion for acquisition, development and financing of the
Travel Center. Equity not to exceed $20 million dollars from
Xxxxxxx.
31
