NOTE PURCHASE AGREEMENT
Exhibit
10.2
This
Note
Purchase Agreement (this
“Agreement”)
is
made and entered into as of the 1st
day of
September, 2005, between Xxxxxxxxx Mobile Fueling, Inc., a Florida corporation
(the “Company”)
and the
investors listed on Exhibit
A
(each, a
“Purchaser”
and
collectively, the “Purchasers”
and,
together with the Company, the “Parties”)
and
is
delivered and executed in connection with the Company’s sale of Units (as
defined below).
1. DESCRIPTION
OF UNITS.
(a) This
Agreement sets forth the terms and conditions under which each Purchaser
will
purchase such number of Units as set forth opposite such Purchaser’s name on
Exhibit
A
(the
“Transaction”).
The
purchase price for each Unit is $500,000. Each Unit shall consist of: (i)
a
$500,000 aggregate principal amount 10% promissory note due August 31, 2010
in
the form
attached
as Exhibit
B
(the
“Note”),
to be
collateralized by a first priority security interest on the collateral described
in the next sentence (the “Collateral”)
and
(ii)
a
warrant
to
purchase 50,000 shares of the Company’s common stock, $.01 par value
(“Common
Stock”),
in
the form attached as Exhibit
C
(the
“Warrant”).
The
exercise price of the Warrant shall be a per share price equal to the closing
bid price of the Common Stock on Nasdaq on the business day preceding the
Closing Date; provided, however, that under no circumstances shall such price
be
less than the fair market value of the Common Stock on such date as determined
by Nasdaq Stock Market Rule 4350(i)(1)(D)(i) or any successor rule. The
Collateral will consist of specified physical assets (excluding any form
of
inventory) to be owned by the Company or a wholly owned subsidiary of the
Company upon consummation of the Company’s next material acquisition (the
“Acquisition”)
to the
extent such assets are not subject to the first priority security interest
on
the Company’s assets held by Wachovia Bank, National Association, successor by
merger to Congress Financial Corporation (Florida) (“Wachovia”).
(b)
The
offer and sale of Units by the Company is limited to “accredited investors” as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act
of
1933, as amended.
(c) Except
with respect to the Collateral, each Purchaser acknowledges that the payment
of
principal and interest on the Note will be subordinated (i) to the rights
and
interests of Wachovia pursuant to and in connection with, and the payment
of all
existing and future amounts owed by the Company to Wachovia under, the Loan
and
Security Agreement by and between Wachovia and the Company dated September
26,
2002, as amended (the “Loan
Agreement”)
and
(ii) to any other credit facility into which the Company may subsequently
enter
to replace the Loan Agreement requiring that the lender rank in a senior
position to other debt of the Company (the “Replacement
Facility”
and,
together with the Loan Agreement, the “Permitted
Debt”).
The
Purchasers and the Company acknowledge that the Note will be expressly subject
to the terms and conditions of that certain Subordination Agreement effective
as
of January 21, 2003, by and among Wachovia, the Company and certain other
parties as if Purchaser were a subordinating party thereto. Upon request,
each
Purchaser will execute and deliver such other documents and instruments as
Wachovia or any current or subsequent commercial lender may reasonably request
to acknowledge and effect the foregoing subordination.
2. OFFER.
(a) Each
Purchaser, by signing this Agreement, (i) agrees to abide by, and be subject
to,
all applicable terms and conditions of the Note and the Warrant and (ii)
offers
to purchase the
aggregate principal amount of Units, and for the aggregate purchase price,
as
set forth opposite such Purchaser’s name on Exhibit
A
(each
such purchase price, an “Investment
Amount”
and
collectively the “Investment
Amounts”).
(b) The
Company shall have the right, in its sole and absolute discretion, to reject
or
accept each Purchaser’s offer to purchase Units pursuant to this Agreement. If
the Company accepts Purchaser’s offer, the Company shall execute this Agreement
and return a copy of the Agreement, and issue an original Note and an original
Warrant, to Purchaser. If the Company rejects Purchaser’s offer, the Company
shall return to Purchaser this Agreement, together with any payment made
by
Purchaser to the Company, without interest or deduction.
3. CLOSING.
The
purchase and sale of the Units shall take place immediately upon execution
of
this Agreement and tender of the Investment Amounts (the “Closing”). Purchasers’
tender of the Investment Amounts shall constitute an agreement by the Purchasers
to close.
4. RECEIPT
OF DOCUMENTS. Purchaser
acknowledges receipt of a copy of: (a) this Agreement; (b) the Note; (c)
the
Warrant; (d) the form of Indenture attached as Exhibit
D
by and
between the Company and indenture trustee for the holders of the Notes (the
“Trustee”),
dated
of even date herewith (the “Indenture”);
(e)
the Company’s Annual Report on Form 10-K for the year ended June 30, 2004 (the
“10-K”);
(f)
the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005
(the “10-Q”);
and
(g) the form of Security Agreement attached as Exhibit
E
by and
between the Company and Trustee, to be executed upon consummation of the
Acquisition (the “Security
Agreement”);
(collectively, the “Documents”).
The
10-K, 10-Q and Proxy were furnished to the Purchasers via XXXXX.
5. USE
OF PROCEEDS; NO REFUNDS.
The
Investment Amounts shall be used by the Company: (a) to pay some or all of
the
cash portion of the Acquisition; and to the extent there are any remaining
Investment Amounts, (b) for general working capital purposes. Upon execution
and
delivery of this Agreement by the Company to each Purchaser, the Investment
Amounts shall not, under any circumstances, be refunded to such
Purchaser.
6. ADDITIONAL
DEBT.
The
Company agrees that, after the Closing, it shall not issue any new or
replacement debt, except for Permitted Debt, which ranks senior in any respect
to the Notes, without the prior written approval of the holders of at least
sixty-six and 2/3 percent (662/3%)
of the
principal amount of the Notes. Nothing herein shall be deemed to impair or
prevent the Company from incurring additional debt after the Closing, provided,
however, that all such future debt must be expressly subordinated to the
Permitted Debt.
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7. CONDITIONS
PRECEDENT. Notwithstanding
anything to the contrary contained in this Agreement, the obligations of
the
Company to close the Transaction shall be contingent upon the
following:
(a) consent
of Wachovia to the offering and the issuance of the Notes and the Warrants;
and
(b) consent
of the holders of a majority of the principal amount outstanding of the
Company’s 10% Senior Secured Notes due August 28, 2008 and the Company’s 10%
Senior Secured Notes due January 24, 2010, to the offering and the issuance
of
the Notes and the Warrants.
8. BOUND
BY INDENTURE AND SECURITY AGREEMENT. By
execution of this Agreement, Purchaser agrees that it will execute and be
bound
by the terms and conditions of the Indenture and the Security Agreement upon
consummation of the Acquisition.
9. REPRESENTATIONS
AND WARRANTIES OF PURCHASER.
Each
Purchaser represents and warrants to the Company as follows:
(a) Purchaser,
either alone or through Purchaser’s representative, as that term is defined
under Rule 501(h)
of
Regulation D
under
the
Securities Act (the
“Purchaser’s
Representative”),
if
any, has had an opportunity to ask questions of, and receive answers from,
duly
designated representatives
of
the
Company concerning the terms and conditions of this Agreement and has been
afforded an opportunity to examine such documents and other information which
Purchaser or Purchaser’s Representative, if any, has requested for the purpose
of answering any question Purchaser or Purchaser’s Representative, if any, may
have concerning the business and affairs of the Company.
(b) Purchaser’s
principal residence or domicile is located in the State set
forth
opposite such Purchaser’s name on Exhibit
A.
Purchaser has received and reviewed this Agreement and the Documents and
acknowledges the Company made available to Purchaser and Purchaser’s
Representative, if any, at a reasonable time prior to the execution of this
Agreement, the opportunity to ask questions and receive answers concerning
the
business and affairs of the Company and the terms and conditions of the sale
of
the Units,
the Notes, the Warrants and the shares of Common Stock which may be obtained
by
exercise of the Warrants (collectively, the “Securities”)
as
contemplated by this Agreement and to obtain any additional information (which
the Company possesses or can acquire without unreasonable effort or expense)
as
may be necessary to verify the accuracy of information furnished to Purchaser
or
Purchaser’s Representative, if any. Purchaser (i)
is
able
to bear the loss of its entire investment without any material adverse effect
on
its economic stability, and (ii)
has
such
knowledge and experience in financial and business matters that it is capable
of
evaluating the merits and risks of the investment to be made by Purchaser
pursuant to this Agreement.
(c) Purchaser
and Purchaser’s Representative, if any, understand that the Securities are being
offered and sold only to “accredited investors” (as that term is defined under
Rule 501(a) of Regulation D), and Purchaser represents that Purchaser is
an
accredited investor. Purchaser and Purchaser’s Representative, if any understand
the Company is relying on Purchaser with respect to the accuracy of this
representation. Purchaser has completed and returned a copy of Schedule
A
and
Purchaser represents that the statements made therein are complete and
accurate.
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(d) Purchaser
and Purchaser’s Representative, if any, understand that this Agreement may not
comply with the information requirements of Regulation D
for
offers and sales to non-accredited investors (see Regulation D,
Rule
502(b)),
and,
consequently, Purchaser understands the significance of its representation
to
the Company that Purchaser is an accredited investor. Purchaser and Purchaser’s
Representative, if any, acknowledge that they were encouraged by the Company
to
request all additional information
which
might be material or important in order for Purchaser to make an informed
investment decision with respect to the Company.
(e) The
Securities
are
being purchased for investment purposes only for such Purchaser’s own account
and not with the view to, or for resale in connection with, any distribution
or
public offering. Purchaser and Purchaser’s Representative, if any, understand
that the Securities have not been registered under the Securities Act or
any
state securities
laws
by
reason of their contemplated issuance in transactions exempt from the
registration requirements of the Securities
Act
and
applicable state securities laws, and that the reliance of the Company and
others upon these exemptions is predicated in part upon the representation
by
Purchaser. Purchaser and Purchaser’s Representative, if any, understands that
the Securities may not be transferred or resold without the prior approval
of
the Company, which approval shall be granted so long as the proposed transfer
or
resale does not violate state or federal securities laws or this Agreement.
(f) Purchaser
and Purchaser’s Representative, if any, have carefully read this Agreement, the
Documents and the other information furnished to Purchaser by the Company
in
connection with this Agreement.
(g) Purchaser
was not solicited to purchase the Securities by any means of general
solicitation, including, but not limited to, the following: (i)
any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio;
or
(ii)
any
meeting where attendees were invited by any general solicitation or general
advertising.
(h) Purchaser
and Purchaser’s Representative, if any, are aware that the placement agent for
the Transaction, Philadelphia Brokerage Corporation, will receive (i) a cash
commission equal to four percent (4%) of the aggregate Investment Amounts
and
(ii) Warrants to purchase 10,000 shares of Common Stock for every Unit
($500,000) sold in the Transaction as compensation for its efforts in advising
the Company with respect to the Transaction.
(i) Purchaser
and Purchaser’s Representative, if any, are aware that the Units, including the
shares of Common Stock issuable
upon
exercise of the Warrant (“the Warrant
Stock”),
are
and will be, when issued, “restricted securities,”
as that
term is defined in Rule 144 of the rules and regulations promulgated under
the
Securities Act. Purchaser and Purchaser’s
Representative,
if any, are aware of the applicable limitations on the resale of the Warrant
Stock. Rule 144 only permits sales of “restricted securities” held for at least
one year and in transactions which otherwise comply with the requirements
of
such Rule. Purchaser and Purchaser’s Representative, if any, acknowledge that,
if Rule 144 is available to Purchaser for the sale of the Warrant Stock,
Purchaser may make only routine sales of the Warrant Stock in limited amounts
in
accordance with the terms and conditions of Rule 144. Purchaser and Purchaser’s
Representative, if any, are aware that while there is a trading market for
the
Common Stock on the Nasdaq Small Cap Market, the trading price for the Common
Stock has been highly volatile, the Common Stock has sometimes been thinly
traded and, while the Company currently meets the public information
requirements of Rule 144, there is no guarantee that it will do so at any
time
in the future.
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(j) Purchaser
and Purchaser’s Representative, if any, understand that, in the absence of an
effective registration statement covering the shares at the time of issuance,
any and all certificates representing the Warrant Stock shall bear a legend
substantially as follows, which legend Purchaser has read and
understands:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”)
OR THE
SECURITIES LAWS OF ANY STATE AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE ACT. SUCH SHARES MAY NOT BE OFFERED FOR SALE,
SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION THEREUNDER, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF COUNSEL TO THE ISSUER.
(k) Purchaser
and Purchaser’s Representative, if any, acknowledge and warrant that, in making
this investment decision, they have made their own independent assessment
of the
merits and risks of an investment in the Securities based on their examination
and evaluation of the Company, its business, operations, financial condition,
future prospects and the skills and qualifications of its officers, directors
and employees. Purchaser and Purchaser’s Representative, if any, have consulted
Purchaser’s own attorney, business or tax advisors for legal, business or tax
advice concerning an investment in the Securities and have not relied on
the
Company.
(l) Purchaser
and Purchaser’s Representative, if any, represent and warrant that, except as
set forth in this Agreement and in the Documents, no representations or
warranties have been made to the Purchaser or Purchaser’s Representative, if
any, by the Company or any agent, employee, representative or affiliate of
the
Company and that, in entering into this transaction and subscribing for Units,
neither the Purchaser nor the Purchaser’s Representative, if any, is relying on
any information other than that contained in this Agreement, the Documents,
and
other written information obtained from the Company in the course of the
independent investigation by Purchaser or Purchaser’s Representative, if
any.
(m)
Purchaser and Purchaser’s Representative, if any, acknowledge that at such time,
if ever, as the Warrant Stock is registered with the Securities and Exchange
Commission, sales of such securities will still be subject to federal and
state
securities laws which may require, among other things, Purchaser’s Warrant Stock
to be sold through a registered broker-dealer or in reliance upon an exemption
from state registration.
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(n) Purchaser
and Purchaser’s Representative, if any, represent and warrant that Purchaser can
bear the economic risk of loss of Purchaser’s entire investment in the Company.
Purchaser and Purchaser’s Representative, if any, understand that an investment
in the Company involves substantial risks, including, without limitation,
those
described in the Documents, including but not limited to the PPM, the 10-K
and
the 10-Q.
10. INDEMNIFICATION
BY PURCHASER.
Purchaser agrees that it shall indemnify and hold harmless the Company and
its
officers, directors, employees, agents and professional advisors from and
against any and all loss, damage, liability, or expense, including costs
and
reasonable attorneys’ fees, that any one or more of the foregoing may incur by
reason of, or in connection with, any (i) misrepresentation, inaccurate
statement or material omission or (ii) breach of any warranties or failure
to
fulfill any covenants, agreements or obligations, by Purchaser or Purchaser’s
Representative, if any, in this Agreement.
11. AUTHORIZATION.
Purchaser authorizes the Company and its officers, employees and agents to
investigate Purchaser’s personal and business background including, without
limitation, communication with any employer, former employer, business
associate, government agency, bank or other credit reference. Purchaser
authorizes any person, organization or entity that may have any knowledge
or
information concerning Purchaser’s personal or business background to provide
such information to the Company as the Company may request.
12. NO
BROKERS OR FINDERS.
Other
than the compensation to be paid to Philadelphia Brokerage Corporation, no
person, firm or corporation has or will have, as a result of any act or omission
by such Purchaser, any right, interest or valid claim against Purchaser or
the
Company for any commission, fee or other compensation as a finder
or
broker, or in any similar capacity, in connection with the transactions
contemplated by this Agreement.
13. MISCELLANEOUS.
(a) This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Florida.
The
Parties submit to the exclusive jurisdiction of the courts located in Broward
County, Florida, with respect to any dispute arising under this Agreement
and
the transactions contemplated hereby.
(b) This
Agreement, the Note and the Warrant, together with the executed Indenture
and
the Security Agreement, will contain the entire agreement between the Company
and Purchaser with regard to the subject matter hereof and may not be modified
or waived except in a writing signed by both the Company and all parties
to each
such agreement; provided,
however,
that
Trustee shall not consent to any such amendment without the prior written
consent of the holders of at least sixty-six and 2/3 percent (662/3%)
of the
principal amount of the Notes.
6
(c) The
headings of this Agreement are for convenience and reference only, and shall
not
limit or otherwise affect the interpretation of any term or provision hereof.
(d) This
Agreement and the rights, powers, and duties set forth herein shall, except
as
otherwise expressly provided, be binding upon and inure to the benefit of,
the
heirs, executors, administrators, legal representatives, successors, and
assigns
of the Parties.
(e) This
Agreement and the rights and obligations hereunder shall not be assignable
or
transferable by the Purchaser or the Company without the prior written consent
of the other Parties, except (i) in the case of the Company, by operation
of law in connection with a merger, consolidation or sale of substantially
all
of its assets or (ii) in the case of a Purchaser, (1) to any Affiliates
(as
defined below) of the Purchaser or (2) to partners, members, beneficiaries
or other equity interest holders of the Purchaser; provided,
that in
each case referred to in (1) and (2) above, the third party
transferee
would have been eligible to be an original purchaser of Units pursuant to
this
Agreement and executes a counterpart signature page hereto becoming a
“Purchaser” hereunder, subject to all of the rights and obligations of this
Agreement. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the Parties and their
respective successors and assigns. “Person”
means
an individual, corporation, partnership, association, trust or other entity
or
organization, including a government or political subdivision or agency or
instrumentality thereof. “Affiliate”
means,
with respect to any Person, any other Person who, directly or indirectly,
owns
or controls, is under common ownership or control with, or is owned or
controlled by, such Person.
(f) This
Agreement is for the sole benefit of the Parties and their permitted assigns
and
nothing expressed or implied in this Agreement shall give or be construed
to
give to any Person, other than the Parties and such assigns, any legal or
equitable rights hereunder.
(g) If
any
legal action or any arbitration or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of
this
Agreement, the successful or prevailing party or parties shall be entitled
to
recover reasonable attorneys’ fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
(h) This
Agreement shall be construed in accordance with its intent and without regard
to
any presumption or any other rule requiring construction against the party
causing the same to be drafted.
(i) If
any
provision of this Agreement, or any portion of any provision, shall be deemed
invalid
or
unenforceable for any reason whatsoever, such invalidity or unenforceability
shall
not
affect the enforceability and validity of the remaining
provisions.
(j) This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original but all of which taken together shall constitute
one agreement. Signatures to this Agreement may be transmitted by
facsimile
and such transmission shall be deemed to be an original.
[Signature
page follows.]
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In
Witness Whereof,
the
Parties have caused this Agreement to be executed by their respective duly
authorized officers or persons as of the date first set forth
above.
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Xxxxxxxxx
Mobile Fueling, Inc.
By: ___________________________________
Xxxxxxx
X. Xxxxxxxxx,
President
and Chief Executive Officer
Purchasers
_________________________________________
Print
Name: ______________________________
Address:
______________________________
______________________________
Phone:
______________________________
Fax:
______________________________
SSN/EIN:
______________________________
_________________________________________
Print
Name: ______________________________
Address:
______________________________
______________________________
Phone:
______________________________
Fax: ______________________________
SSN/EIN:
______________________________
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Purchasers (Continued)
_________________________________________
Print
Name: ______________________________
Address:
______________________________
______________________________
Phone:
______________________________
Fax:
______________________________
SSN/EIN:
______________________________
_________________________________________
Print
Name: ______________________________
Address:
______________________________
______________________________
Phone:
______________________________
Fax: ______________________________
SSN/EIN:
______________________________
_________________________________________
Print
Name: ______________________________
Address:
______________________________
______________________________
Phone:
______________________________
Fax: ______________________________
SSN/EIN:
______________________________
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