EXHIBIT 10.1
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COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of June
27, 2002 by and between NuWay Energy, Inc., a Delaware corporation (the
"Company"), and Camden Holdings, Inc., a Nevada corporation (the "Purchaser").
RECITALS
WHEREAS, the Company desires to sell to Purchaser and Purchaser desires to
purchase from the Company One Million (1,000,000) shares of the Company's
restricted common stock (the "Common Stock") at a price of $0.25 per share,
subject to the terms and conditions of this Agreement and the other documents or
instruments contemplated hereby.
NOW, THEREFORE, the parties hereto hereby agree as follows:
AGREEMENT
Section 1. Sale and Issuance of Common Stock.
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Subject to the terms and conditions of this Agreement, the Company has
authorized the sale and issuance (the "Issuance") to Purchaser of the Common
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Stock. At the Closing (as defined in Section 2.1), the Company shall sell to
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Purchaser, and Purchaser shall purchase from the Company, the Common Stock at a
purchase price of $0.25 per share, for a total purchase price of Two Hundred
Fifty Thousand ($250,000) (the "Purchase Price") subject to the terms and
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conditions of this Agreement.
Section 2. The Closing.
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2.1 The Closing.
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The closing of the Issuance to Purchaser (the "Closing") shall take place
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simultaneously with the execution and delivery of this Agreement at the offices
of the Company.
2.2 Actions at the Closing.
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(a) At the Closing, or as soon thereafter as commercially practicable,
the Company shall deliver to Purchaser a stock certificate representing the
Common Stock.
(b) At the Closing, Seller shall execute and deliver to the Company a
promissory note in the amount of Two Hundred Fifty Thousand ($250,000) in the
form attached hereto as EXHIBIT A (the "Promissory Note") and a stock pledge
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agreement in the form attached hereto as EXHIBIT B (the "Stock Pledge
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Agreement").
Section 3. Representations and Warranties of the Company.
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The Company hereby represents and warrants to Purchaser as follows:
3.1 Organization.
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The Company is duly organized, validly existing and in good standing under
the laws of the State of Delaware and is qualified to conduct its business as a
foreign corporation in each jurisdiction where the failure to be so qualified
would have a material adverse effect on the Company.
3.2 Authorization of Agreement, Etc.
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The execution, delivery and performance by the Company of this Agreement,
the Promissory Note and the Stock Pledge Agreement and each other document or
instrument contemplated hereby or thereby (collectively, the "Financing
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Documents") have been duly authorized by all requisite corporate action by the
Company; and this Agreement and each other Financing Document have been duly
executed and delivered by the Company. Each of the Financing Documents, when
executed and delivered by the Company, constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting creditors'
rights and remedies generally, and subject as to enforceability to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3.3 Capitalization.
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The authorized capital stock of the Company consists of (i) 15,000,000
shares of common stock, of which 6,761,353 shares are issued and outstanding,
and (ii) 1,000,000 shares of preferred stock, none of which are issued or
outstanding.
Section 4. Representations and Warranties of Purchaser.
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Purchaser hereby represents and warrants to the Company as follows:
4.1 Authorization of the Documents.
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Purchaser has all requisite power and authority (corporate or otherwise) to
execute, deliver and perform this Agreement, the Financing Documents and each
other document or instrument contemplated hereby or thereby and the transactions
contemplated thereby, and the execution, delivery and performance by Purchaser
of the Financing Documents have been duly authorized by all requisite action by
Purchaser and each such Financing Document, when executed and delivered by
Purchaser, constitutes a valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
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4.2 Not an Affiliate; No Prior Investment.
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Purchaser is neither an officer, director or "affiliate" (as that term is
defined in Rule 405 of the Securities Act of 1933, as amended (the "Securities
Act"). Neither Purchaser nor any of its affiliates owned in the aggregate five
percent (5%) or greater percentage of Company common stock at or prior to the
Closing Date.
4.3 Investment Intent. This Agreement is made with Purchaser in
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reliance upon Purchaser's representations to the Company, evidenced by
Purchaser's execution of this Agreement, that Purchaser is acquiring the Common
Stock for investment for Purchaser's own accounts, not as nominee or agent, and
not with a view to, or for resale in connection with, any distribution or public
offering thereof within the meaning of the Securities Act of 1933, as amended
(the "Securities Act").
4.4 Common Stock Not Registered. Purchaser understands and
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acknowledges that the offering of Common Stock pursuant to this Agreement will
not be registered under the Securities Act on the grounds that the offering and
sale of securities contemplated by this Agreement are exempt from registration
under the Securities Act pursuant to Section 4(2) thereof, and that the
Company's reliance upon such exemption is predicated upon Purchaser's
representations set forth in this Agreement. Purchaser understands and
acknowledges that the Common Stock must be held indefinitely unless the Common
Stock is subsequently registered under the Securities Act or an exemption from
such registration is available.
4.5 Knowledge and Experience. Purchaser (i) has such knowledge and
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experience in financial and business matters as to be capable of evaluating the
merits and risks of Purchaser's prospective investment in the Common Stock; (ii)
has the ability to bear the economic risk of Purchaser's prospective investment;
(iii) has been furnished with and has had access to such information as
Purchaser has considered necessary to verify the accuracy of the information
supplied; (iv) has had all questions which have been asked by Purchaser
satisfactorily answered by the Company; and (v) has not been offered the Common
stock by any form of advertisement, article, notice or other communication
published in any newspaper, magazine, or similar media or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any such media.
4.6 Not Organized to Purchase. Purchaser has not been organized for
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the purpose of purchasing the Common Stock. Purchaser is an accredited investor
as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
4.7 Holding Requirements. Purchaser understands that if the Company
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does not have a registration statement covering the Common Stock under the
Securities Act in effect when Purchaser decides to sell the Common Stock,
Purchaser may be required to hold the Common Stock for an indeterminate period.
Purchaser also understands that any sale of the Common Stock that might be made
by Purchaser in reliance upon Rule 144 under the Securities Act may be made only
in limited amounts in accordance with the terms and conditions of that rule.
4.8 Legend. Purchaser understands that each certificate
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representing the Common Stock shall be stamped or otherwise imprinted with a
legend in the following form:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD OR OFFERED
FOR SALE OR OTHERWISE HYPOTHECATED OR DISTRIBUTED EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT, OR (B)
PURSUANT TO A VALID EXEMPTION FROM SUCH REGISTRATION UNDER THE ACT AND
UNDER THE SECURITIES LAW OF ANY STATE AND UPON RECEIPT BY THE COMPANY OF AN
OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO IT THAT ANY SUCH
SALE IS IN COMPLIANCE WITH, OR NOT SUBJECT TO, THE ACT AND STATE SECURITIES
LAWS."
Where applicable, the Company shall remove such legend so as to facilitate
the sale of such shares, if and to the extent applicable, pursuant to Rule 144
under the Act, provided (in the case of Rule 144 sales) that if Purchaser
requests such removal, the Company shall have provided such documentation as the
Company and its transfer agent shall reasonably require in connection therewith.
Section 5. Indemnification.
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Purchaser hereby agrees to indemnify and defend (with counsel acceptable to
the Company) the Company and its officers, directors, employees and agents and
hold them harmless from and against any and all liability, loss, damage, cost or
expense, including costs and reasonable attorneys' fees, incurred on account of
or arising from:
(i) Any breach of or inaccuracy in Purchaser's representations,
warranties or agreements herein or in the Financing Documents;
(ii) Any action, suit or proceeding based on a claim that any of
Purchaser's representations and warranties were inaccurate or misleading, or
otherwise cause for obtaining damages or redress from the Company or any
officer, director, employee or agent of the Company under the Securities Act.
Section 6. Registration Rights.
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The Company shall use its commercially reasonable efforts to file a Form
SB-2 registration statement (or such other form that it is eligible to use) in
order to register the Common Stock for resale and distribution under the
Securities Act with the Securities and Exchange Commission within 180 days of
the Closing Date, and use its commercially reasonable efforts to cause such
registration statement to be declared effective as soon thereafter as
commercially practicable.
Section 7. Successors and Assigns.
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This Agreement shall bind and inure to the benefit of the Company,
Purchaser and their respective successors and assigns.
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Section 8. Final Agreement; Entire Agreement.
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This Agreement and the other writings and agreements referred to in this
Agreement or delivered pursuant to this Agreement are the final agreements
between the parties and contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, written and oral, signed or unsigned, among the parties with
respect thereto.
Section 9. Notices.
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All notices, demands and requests of any kind to be delivered to any party
in connection with this Agreement shall be in writing and shall be deemed to
have been duly given if personally delivered or if sent by
internationally-recognized overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
if to the Company, to:
NuWay Energy, Inc.
00000 Xxx Xxxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
with a copy to:
if to the Purchaser, to:
Camden Holdings, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxxxx;
or to such other address as the party to whom notice is to be given may have
furnished to the other parties to this Agreement in writing in accordance with
the provisions of this Section 10. Any such notice or communication shall be
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deemed to have been received (i) in the case of personal delivery, on the date
of such delivery, (ii) in the case of internationally-recognized overnight
courier, on the next business day after the date when sent and (iii) in the case
of mailing, on the third business day following that on which the piece of mail
containing such communication is posted.
Section 10. Amendments.
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This Agreement may not be modified or amended, or any of the provisions of
this Agreement waived, except by written agreement of the Company and Purchaser.
Section 11. Governing Law; Waiver of Jury Trial.
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All questions concerning the construction, interpretation and validity of
this Agreement shall be governed by and construed and enforced in accordance
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with the domestic laws of the State of California without giving effect to any
choice or conflict of law provision or rule (whether in the State of California
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California. In furtherance of the
foregoing, the internal law of the State of California will control the
interpretation and construction of this Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily or necessarily apply.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES),
THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
Section 12. Submission to Jurisdiction.
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Any legal action or proceeding with respect to this Agreement or the other
Financing Documents may be brought in the courts of the State of California and
the United States of America located in the City of Los Angeles, California and,
by execution and delivery of this Agreement, the Company hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Purchaser hereby irrevocably waives, in
connection with any such action or proceeding, any objection, including, without
limitation, any objection to the venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any such
action or proceeding in such respective jurisdictions. Purchaser hereby
irrevocably consents to the service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at its address as set forth
herein.
Section 13. Severability.
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It is the desire and intent of the parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the law and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
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Section 14. Independence of Agreements, Covenants, Representations and
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Warranties.
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All agreements and covenants hereunder shall be given independent effect so
that if a certain action or condition constitutes a default under a certain
agreement or covenant, the fact that such action or condition is permitted by
another agreement or covenant shall not affect the occurrence of such default,
unless expressly permitted under an exception to such covenant. In addition,
all representations and warranties hereunder shall be given independent effect
so that if a particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty concerning the same
or similar subject matter is correct or is not breached will not affect the
incorrectness of or a breach of a representation and warranty hereunder. The
exhibits and any schedules attached hereto are hereby made part of this
Agreement in all respects.
Section 15. Counterparts.
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This Agreement may be executed in any number of counterparts, and each such
counterpart of this Agreement shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and binding.
Section 16. Headings.
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The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 17. Preparation of Agreement.
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The Company prepared this Agreement and the Financing Documents solely on
its behalf. Each party to this Agreement acknowledges that: (i) the party had
the advice of, or sufficient opportunity to obtain the advice of, legal counsel
separate and independent of legal counsel for any other party hereto; (ii) the
terms of the transactions contemplated by this Agreement are fair and reasonable
to such party; and (iii) such party has voluntarily entered into the
transactions contemplated by this Agreement without duress or coercion. Each
party further acknowledges that such party was not represented by the legal
counsel of any other party hereto in connection with the transactions
contemplated by this Agreement, nor was he or it under any belief or
understanding that such legal counsel was representing his or its interests.
Each party agrees that no conflict, omission or ambiguity in this Agreement, or
the interpretation thereof, shall be presumed, implied or otherwise construed
against any other party to this Agreement on the basis that such party was
responsible for drafting this Agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the undersigned has duly executed this Common
Stock Purchase Agreement as of the date first written above.
COMPANY:
NUWAY ENERGY, INC., a Delaware corporation
By:
Name: Xxxxxx Xxxxxxx
Title: President
PURCHASER:
CAMDEN HOLDINGS, INC.
By: _____________________________________
Name: Xxxx Xxxxxxxx
Title: President
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EXHIBIT A
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PROMISSORY NOTE
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$250,000 JUNE 27, 0000
XXXXXXX XXXXX, XXXXXXXXXX
FOR VALUE RECEIVED, the receipt and sufficiency of which is acknowledged,
CAMDEN HOLDINGS INC ("Maker"), hereby promises to pay to NUWAY ENERGY, INC.
("Holder"), at the address designated on the signature page of this Note, or at
such other place as Holder may designate by written notice to Maker, the
principal sum herein below described ("Principal Amount"), together with
interest thereon, in the manner and at the times provided and subject to the
terms and conditions described herein.
1. PRINCIPAL AMOUNT.
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The Principal Amount means the sum of two hundred fifty thousand
dollars ($250,000).
2. INTEREST.
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Interest on the Principal Amount from time-to-time remaining unpaid
shall accrue from the date of this Note at the lowest rate that may accrue
without causing the imputation of interest under the Internal Revenue Code.
Interest shall be computed on the basis of a three hundred sixty (360) day year
and a thirty (30) day month.
3. PAYMENT OF PRINCIPAL AND INTEREST.
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Subject to paragraph 8, below, Maker shall pay the Principal Amount
and all accrued and unpaid interest on the Principal Amount and all other
indebtedness due under this Note sixty (60) days from the date of this Note, on
August 26, 2002.
4. SECURITY/RELEASE OF SECURITY.
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Maker shall pledge as security for the repayment of all sums payable under this
Note 1,000,000 shares of NuWay Energy, Inc. common stock (the "Stock"). Maker
shall execute a Stock Pledge Agreement of even date herewith evidencing Holder's
security interest in the Stock. If, for a period of fifteen (15) consecutive
days, the fair market value of the Stock falls below all sums unpaid under this
Note, then Maker will be required to transfer to Holder, upon receipt of
Holder's written request, additional security, in any form acceptable to Holder,
in an amount equal to the difference between all sums due under this Note and
the fair market value of the Stock.
5. PREPAYMENTS.
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Maker shall have the right to prepay any portion of the Principal
Amount without prepayment penalty or premium or discount.
6. MANNER OF PAYMENTS/CREDITING OF PAYMENTS.
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Payments of any amount required hereunder shall be made in lawful
money of the United States or in such other property as Holder, in its sole and
absolute discretion, may accept, without deduction or offset, and shall be
credited first against accrued but unpaid late charges, if any, thereafter
against accrued but unpaid interest, if any, and thereafter against the unpaid
balance of the Principal Amount.
7. INTEREST ON DELINQUENT PAYMENTS.
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Any payment under this Note not paid when due shall bear interest at
the same rate and method as interest is charged on the Principal Amount from the
due date until paid.
8. ACCELERATION UPON DEFAULT.
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At the option of Holder, all or any part of the indebtedness of Maker
hereunder shall immediately become due and payable, irrespective of any agreed
maturity date, upon the happening of any of the following events of default:
(a) If any part of the Principal Amount and/or interest thereon
under this Note are not paid when due, provided, however, Maker shall be
entitled to a grace period of ten (10) days following written notice of such
event of default to cure said event of default;
(b) If Maker shall breach any non-monetary condition or obligation
imposed on Maker pursuant to the terms of this Note, provided, however, that if
any such breach is reasonably susceptible of being cured, Maker shall be
entitled to a grace period of thirty (30) days following written notice of such
event of default to cure;
(c) If Maker shall make an assignment for the benefit of
creditors;
(d) If a custodian, trustee, receiver, or agent is appointed or takes
possession of substantially all of the property of Maker;
(e) If Maker shall be adjudicated bankrupt or insolvent or admit
in writing Maker's inability to pay Maker's debts as they become due;
(f) If Maker shall apply for or consent to the appointment of a
custodian, trustee, receiver, intervenor, liquidator or agent of Maker, or
commence any proceeding related to Maker under any bankruptcy or reorganization
statute, or under any arrangement, insolvency, readjustment of debt,
dissolution, or liquidation law of any jurisdiction, whether now or hereafter in
effect;
(g) If any petition is filed against Maker under the Bankruptcy
Code and either (A) the Bankruptcy Court orders relief against Maker, or (B)
such petition is not dismissed by the Bankruptcy Court within thirty (30) days
of the date of filing; or
(h) If any attachment, execution, or other writ is levied on
substantially all of the assets of Maker and remains in effect for more than
five (5) days.
Maker shall notify Holder immediately if any event of default which is described
in sub-paragraph (c) through sub-paragraph (h), above, occurs.
9. COLLECTION COSTS AND ATTORNEYS' FEES.
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Maker agrees to pay Holder all costs and expenses, including
reasonable attorneys' fees, paid or incurred by Holder in connection with the
collection or enforcement of this Note or any instrument securing payment of
this Note, including without limitation, defending the priority of such
instrument or conducting a trustee sale thereunder. In the event any litigation
is initiated concerning the enforcement, interpretation or collection of this
Note, the prevailing party in any proceeding shall be entitled to receive from
the non-prevailing party all costs and expenses including, without limitation,
reasonable attorneys' and other fees incurred by the prevailing party in
connection with such action or proceeding.
10. NOTICE.
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Any notice to either party under this Note shall be given by personal
delivery or by express mail, Federal Express, DHL or similar airborne/overnight
delivery service, or by mailing such notice by first class or certified mail,
return receipt requested, addressed to such party at the address set forth
below, or to such other address as either party from time to time may designate
by written notice. Notices delivered by overnight delivery service shall be
deemed delivered the next business day following consignment for such delivery
service. Mailed notices shall be deemed delivered and received in accordance
with this provision three (3) days after deposit in the United States mail.
11. USURY COMPLIANCE.
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All agreements between Maker and Holder are expressly limited, so that
in no event or contingency whatsoever, whether by reason of the consideration
given with respect to this Note, the acceleration of maturity of the unpaid
Principal Amount and interest thereon, or otherwise, shall the amount paid or
agreed to be paid to Holder for the use, forbearance, or detention of the
indebtedness which is the subject of this Note exceed the highest lawful rate
permissible under the applicable usury laws. If, under any circumstances
whatsoever, fulfillment of any provision of this Note shall involve transcending
the highest interest rate permitted by law which a court of competent
jurisdiction deems applicable, then the obligations to be fulfilled shall be
reduced to such maximum rate, and if, under any circumstances whatsoever, Holder
shall ever receive as interest an amount that exceeds the highest lawful rate,
the amount that would be excessive interest shall be applied to the reduction of
the unpaid Principal Amount under this Note and not to the payment of interest,
or, if such excessive interest exceeds the unpaid balance of the Principal
Amount under this Note, such excess shall be refunded to Maker. This provision
shall control every other provision of all agreements between Maker and Holder.
12. JURISDICTION; VENUE.
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This Note shall be governed by, interpreted under and construed and
enforced in accordance with the laws of the State of California. Any action to
enforce payment of this Note shall be filed and heard solely in Los Angeles
County, California.
MAKER:
CAMDEN HOLDINGS INC
0000 Xxxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
_________________________
By: Xxxx Xxxxxxxx
Its: President
HOLDER'S ADDRESS:
NUWAY ENERGY, INC.
00000 Xxx Xxxxxx Xxx., Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn.: Chief Financial Officer
EXHIBIT B
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STOCK PLEDGE AGREEMENT
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This STOCK PLEDGE AGREEMENT (hereinafter "Agreement") is made and entered
into as of the27th day of June, 2002, by and between Camden Holdings Inc, a
Nevada corporation ("Pledgor") and NuWay Energy, Inc., a Delaware corporation
("Pledgee") with reference to the following facts:
RECITALS
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WHEREAS, Pledgor has executed in favor of Pledgee a promissory note (the
"Note"), a copy of which is attached hereto as Exhibit "A" and is incorporated
herein by this reference, for the sum of Two Hundred Fifty Thousand Dollars
($250,000); and
WHEREAS, Pledgor desires to pledge to Pledgee the interest of Pledgor in
certain common stock, which is included on Exhibit "2", attached hereto and
incorporated herein by this reference, pursuant to the terms of this Agreement,
for the purpose of securing payment of the Note.
THEREFORE, in consideration of mutual covenants and promises contained
herein, and for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement (hereinafter collectively
"parties" and individually "party") agree as follows:
AGREEMENT
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1. PLEDGE OF STOCK AND PROCEEDS.
--------------------------------
(a) Original Pledge. As collateral security for the payment
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and/or performance of all of Pledgor's presently existing or hereinafter arising
obligations and liabilities to Pledgee under the Note, Pledgor hereby pledges,
grants and assigns to Pledgee a continuing security interest in the following:
(i) One Million (1,000,000) shares of the Common Stock of
NuWay Energy, Inc. (the "Stock"); and
(ii) the proceeds of the Stock including, without limitation,
any and all dividends, cash, instruments and other property from time-to-time
received, receivable, or otherwise distributed in respect of or in exchange for
any of the Stock ("Proceeds"). (The Stock and the Proceeds shall hereinafter be
collectively referred to as the "Collateral").
(b) Increase in Security. If, for a period of fifteen (15) consecutive
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days, the fair market value of the Stock falls below all sums due under the
Note, then Pledgor will be required to transfer to Pledgee, upon receipt of
Pledgee's written request, additional security, in any form acceptable to
Pledgee, in an amount equal to the difference between all sums due under the
Note and the fair market value of the Stock.
(c) Delivery of Stock Power to Pledgee. Pledgor shall deliver to
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Pledgee, concurrently with the execution of this Agreement, the Stock along with
an Assignment of Corporate Shares in the form of Exhibit "3" attached hereto and
incorporated herein by this reference ("Stock Assignment"), signed by Pledgor,
in blank, such Stock Assignment to be used by Pledgee in accordance with the
terms of this Agreement.
(d) Pledgee's Acceptance of Collateral and Appointment as
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Pledgor's Attorney-In-Fact. Pledgee hereby agrees to accept the Collateral and
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agrees to hold and dispose of the Collateral in accordance with and subject only
to the terms of this Agreement. Pledgor hereby irrevocably appoints Pledgee as
Pledgor's attorney-in-fact to arrange for the transfer of the Collateral and to
do and perform all actions that are necessary or appropriate in order to effect
the terms of this Agreement.
(e) Release of Collateral. Pledgee shall release the Collateral
-----------------------
from this Agreement and return the Collateral to Pledgor upon satisfaction in
full of Pledgor's obligations under the Note.
2. MATTERS PERTAINING TO THE COLLATERAL.
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(a) Voting and Consensual Rights. Pledgor shall retain the right
-----------------------------
to vote the Stock and to exercise any other rights pertaining to the Stock,
provided, however, so long as Pledgor is in "Default" as defined in Paragraph 3
of this Agreement, Pledgee shall vote the Stock and exercise any rights
pertaining to the Stock.
(b) Rights to Dividends and Distributions. So long as Pledgor is
--------------------------------------
not in Default and except as expressly limited below, Pledgor shall be entitled
to receive and retain any proceeds distributed on account of the Stock.
Notwithstanding the foregoing, Pledgee, rather than Pledgor, shall be entitled
to collect and receive all of the following types of proceeds, which shall be
added to and shall become a part of the Collateral:
(i) all proceeds paid or payable other than in cash, and all
instruments and other property distributed in respect of, or in exchange for,
the Stock;
(ii) all proceeds paid or payable with respect to the Stock
in connection with a partial or total liquidation or dissolution of the issuing
corporation or in connection with a reduction of capital, capital surplus or
paid-in surplus of the issuing corporation; and
(iii) all proceeds distributed in redemption of, or in
exchange for, the Stock.
To the extent the foregoing proceeds exceed the amount of Pledgor's obligations
and liabilities under the Note and/or this Agreement, Pledgor shall be entitled
to receive these excess proceeds.
In the event and for so long as Pledgor is in Default, Pledgee shall
be paid any proceeds with respect to the Stock; provided, however, Pledgee shall
apply such payments against the outstanding balance of the Note.
(c) Stock Adjustments. In the event that, during the term of this
-----------------
Agreement, any stock dividend, reclassification, readjustment, or other change
is declared or made in the capital structure of the issuing corporation, all
new, substituted and additional shares or other securities issued with respect
to the Stock by reason of any such change shall be delivered to and held by
Pledgee under the terms of this Agreement in the same manner as the Stock.
3. DEFAULT AND REMEDY ON DEFAULT.
---------------------------------
At the option of Pledgee, upon the happening of any of the following
events of default ("Default"), Pledgee shall have all of the rights and remedies
set forth therein:
(a) Default Under Note. If an event of default, as set forth in
--------------------
paragraph 9 of the Note, occurs and is not cured as specifically provided
therein; or
(b) Default Under This Agreement. If Pledgor defaults in the due
-----------------------------
performance or observance of any representation or obligation under this
Agreement.
4. PLEDGOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
-------------------------------------------------------
Pledgor represents, warrants and covenants to Pledgee as follows:
(a) Upon delivery to Pledgee as contemplated hereby, the
Collateral will be free of any security interests, liens, pledges or
encumbrances created by Pledgor (except for the security interest created
hereby), or any claims of third parties of any nature whatsoever, charges,
escrows, options, rights of first refusal, or other agreements, restrictions,
arrangements, commitments or obligations, written or oral, created by Pledgor,
affecting the legal or beneficial ownership of the Collateral.
(b) From and after the date hereof, Pledgor shall not make any
agreements restricting in any manner the transferability of the Collateral or
otherwise affecting the Collateral;
(c) Pledgor shall, at Pledgor's expense, take any steps necessary
to preserve Pledgee's rights in the Collateral against any claims of third
parties; and
(d) Pledgor has arrangements for keeping informed of changes or
potential changes affecting the Collateral (including, without limitation,
rights to convert, rights to subscribe, payment of dividends, reorganization or
other exchanges, tender offers and voting rights), and Pledgee shall not have
any responsibility or liability for informing Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto.
5. MISCELLANEOUS.
--------------
(a) It is acknowledged by each party that such party either had
separate and independent advice of counsel or the opportunity to avail himself
or itself of same. This Agreement was prepared by each party in conjunction
with counseling from such party's respective attorney or the opportunity to
obtain such counseling. In light of these facts it is acknowledged that no
party shall be construed to be solely responsible for the drafting of this
Agreement, and therefore any ambiguity shall not be construed against any party
as the alleged draftsman of it. Each party shall pay all costs and expenses
incurred or to be incurred by such party in negotiating and preparing this
Agreement and in performing and complying with all representations, warranties,
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by such party, including legal fees.
(b) Each party agrees, without further consideration, to cooperate
and diligently perform any further acts, deeds and things and to execute and
deliver any documents that may be reasonably necessary to consummate, evidence,
confirm and/or carry out the intent and provisions of this Agreement, all
without undue delay or expense. Pledgor shall reimburse Pledgee for any costs
and expenses incurred by Pledgee in connection with any breach or default of
Pledgor under this Agreement, including collection efforts, whether or not suit
is commenced or judgment is entered. Furthermore, should any party institute or
should the parties otherwise become a party to any action or proceeding to
enforce or interpret this Agreement, the prevailing party in any such action or
proceeding shall be entitled to receive from the non-prevailing party all costs
and expenses of prosecuting or defending the action or proceeding. This
Agreement and the rights of each party under this Agreement shall be governed
by, interpreted under, and construed and enforced in accordance with the laws of
the State of Delaware.
(c) The parties expressly acknowledge and agree that this
Agreement : (i) is the final, complete and exclusive statement of the parties'
agreement with respect to the subject matter hereof, (ii) supersedes any prior
or contemporaneous promises, assurances, guarantees, representations,
understandings, conduct, proposals, conditions, commitments, acts, course of
dealing, warranties, interpretations or terms of any kind, oral or written
(collectively "Prior Agreements"), and that any such Prior Agreements are of no
force or effect except as expressly set forth herein, and (iii) may not be
varied, supplemented or contradicted by evidence of such Prior Agreements or by
evidence of subsequent oral agreements. Any agreement hereafter made shall be
ineffective to modify, supplement or discharge the terms of this Agreement, in
whole or in part, unless such agreement is in writing and signed by the party
against whom enforcement of the modification, supplement or discharge is sought.
By execution hereof, the parties specifically disavow any desire or intention to
create a "third party" beneficiary contract, and specifically declare that no
person or entity, save and except for the parties and their permitted
successors, and assigns, shall have any rights hereunder nor any right of
enforcement hereof. No waiver of any breach of any agreement or provision
herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof. If any term or provision of this Agreement or the application thereof
to any person or circumstance shall, to any extent, be determined to be invalid,
illegal or unenforceable, then the remaining part of this Agreement shall
nevertheless not be affected thereby and shall continue in full force and effect
to the fullest extent provided by law. This Agreement is to be read, construed
and applied together with the Note, which, taken together, set forth the
complete understanding and agreement of the parties with respect to the matters
referred to herein and therein.
(d) Pledgor may not delegate its duties under this Agreement, in
whole or in part, without the prior written consent of Pledgee, which consent
may be withheld in Pledgee's sole and arbitrary discretion. Notwithstanding the
preceding sentence, no such delegation shall release Pledgor from any liability
or obligation under this Agreement without the written consent of Pledgee, which
consent may be withheld in Pledgee's sole and arbitrary discretion. Subject to
the foregoing, all of the representations, warranties, covenants, conditions and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of each party and such party's respective heirs, executors,
administrators, legal representatives, successors and/or assigns.
(e) The headings used in this Agreement are for convenience and
reference purposes only, and shall not be used in construing or interpreting
the scope or intent of this Agreement or any provision hereof. References to
this Agreement shall include all amendments or renewals thereof. As used in
this Agreement, each gender shall be deemed to include each other gender,
including neutral genders or genders appropriate for entities, if applicable,
and the singular shall be deemed to include the plural, and vice versa, as the
context requires.
(f) All notices, demands, requests, consents, approvals or other
communications ("Notices") given hereunder shall be as provided in the Note.
WHEREFORE, the parties hereto have executed this Agreement as of the date
first set forth above.
PLEDGOR:
CAMDEN HOLDINGS INC
0000 Xxxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
____________________________
By: Xxxx Xxxxxxxx
Its: President
PLEDGEE:
NUWAY ENERGY, INC.
00000 Xxx Xxxxxx Xxx., Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
_________________________
By: Xxxxxx Xxxxxxx
Its: President
EXHIBIT "1"
-----------
ARTICLE I LIST OF SHARES
1,000,000 shares of the common stock of NuWay Energy, Inc. represented by
certificate number _____________________.
EXHIBIT "2"
-----------
1.1 ASSIGNMENT OF CORPORATE SHARES
(WITHOUT CERTIFICATE)
FOR VALUE RECEIVED, the undersigned hereby assigns to NuWay Energy, Inc., a
Delaware corporation, as Pledgee under that certain Stock Pledge Agreement
entered into on June 27, 2002 by and between Camden Holdings Inc. and NuWay
Energy, Inc., one million (1,000,000) shares of the common stock of NuWay
Energy, Inc., represented by certificate number(s) ____________________ standing
in the undersigned's name on the books of said corporation, and does hereby
instruct and appoint the custodian of that corporation's stock books to so
transfer the said stock on the books of said corporation.
Dated: _____________________
CAMDEN HOLDINGS INC
______________________________
By: Xxxx Xxxxxxxx
Its: President
WITNESS:
__________________________________
