Exhibit 10.2 Subscription Agreement
SUBSCRIPTION AGREEMENT
May 11, 2004
Mr. Xxxxxxx Xxxxxxxx
President
Fleetclean Systems, Inc.
X.X. Xxx 000, 000 XXX 000 Xxxx
Xxxxxx, XX 00000
Telephone 000.000.0000
Facsimile 936.298.2769
Re: Subscription for 1,000,000 Series A Convertible Preferred Shares
Greetings:
1. SUBSCRIPTION. Subject to the terms and conditions of this Agreement, Systom
Trust Joint Venture, a Texas joint venture, subscribes for and agrees to
purchase One Million (1,000,000) shares of Series A Convertible Preferred Stock,
$.01 par value, of Fleetclean Systems, Inc., a Texas corporation (the
"Company"), at a price of $.2907 per share for total consideration of $290,700
(the "Consideration").
The undersigned is delivering to the Company herewith:
1. The Consideration, as described more fully in Exhibit A,
representing the aggregate purchase price of the One Million
Series A shares (the "Securities"); and
2. An executed Subscription Agreement;
3. A copy of the Form of Series A Certificate of Rights,
Designations and Preferences to be filed with the Texas
Secretary of State
The undersigned understands that the Consideration will be held by a
suitable Escrow Agent until the Securities are issued in the name of Subscriber.
Upon issuance of the certificate for the Securities, the Consideration will
become immediately available to the Company for general corporate purposes.
2. ACCEPTANCE OF SUBSCRIPTION. The undersigned acknowledges that the
management of the Company reserves the right, in its sole and absolute
discretion, to accept or reject this subscription, in whole or in part, and
that this subscription shall not be binding unless and until accepted by
the Company.
3. REPRESENTATIONS AND WARRANTIES. The undersigned hereby represents and
warrants to the Company as follows:
a) The undersigned has been furnished any materials relating to the Company,
its business and financial condition, the offering of Securities and any
other matter requested and has been afforded the opportunity to ask
questions and receive answers concerning the terms and conditions of the
offering and to obtain additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to
verify the accuracy of the information received from the Company.
b) The Company has answered all inquiries that the undersigned has made of it
concerning the Company, its business and financial condition, and the
offering of Securities.
c) The undersigned is: (1) an "accredited investor" as defined in the
Securities Act and Securities Act Rules or (2) the undersigned or the
undersigned together with his purchaser representative, if any, has such
knowledge and experience in financial and business matters to enable him to
utilize the information made available to him in connection with the
offering of the Securities, to evaluate the merits and risks of the
prospective investment, and to make an informed investment decision with
respect thereto or (3) the undersigned has a pre-existing relationship with
management of the Company.
d) The undersigned (i) has adequate means of providing for his or her current
needs and possible personal contingencies, (ii) has no need for liquidity
in this investment, (iii) is able to bear the economic risk of his
investment in the Securities and (iv) at the present time, can afford a
complete loss of such investment.
e) The undersigned is purchasing the Securities for his own account, for
investment, and not for distribution, assignment or resale to others, and
no other person has any direct or indirect beneficial interest in the
Securities.
f) The undersigned understands that (i) there is and will be no market for the
Securities of the Company, (ii) the sale of the Securities has not been and
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act") in reliance on the exemption for non-public offerings
provided by Section 4(2) of the Securities Act and Regulation D promulgated
thereunder and must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from registration is
available, (iii) the Company is under no obligation to register the
Securities on his or her behalf or to assist him or her in complying with
any exemption from registration, and (iv) the Securities may not be sold
pursuant to Rule 144 promulgated by the Securities and Exchange Commission
pursuant to the Securities Act unless all of the conditions of that Rule
are met.
g) The undersigned understands that no Federal or State agency has passed upon
the Securities, or made any determination as to the fairness of the
investment or any recommendation or endorsement of the Securities. The
undersigned will not transfer the Securities without registering or
qualifying the same under applicable state securities laws unless such
transfer is exempt under such laws.
4. INDEMNIFICATION. The undersigned agrees to indemnify and hold harmless the
Company, its officers, employees, shareholders and affiliates, and any
person acting on behalf of the Company, from and against any and all
damage, loss, liability, cost, and expense (including attorneys' fees)
which any of them may incur by reason of the failure by the undersigned to
fulfill any of the terms or conditions of this Agreement, or by reason of
any breach of the representations and warranties made by the undersigned
herein, or in any other document provided by the undersigned to the
Company. All representations, warranties and covenants contained in this
Agreement, and the indemnification contained in this paragraph 4, shall
survive the acceptance of this subscription.
5. COMPLIANCE WITH SECTION 4(2). The undersigned understands and agrees that
the following restrictions and limitations applicable to the purchase of
the Securities which are being sold in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act:
a. These Securities may not be sold, pledged, hypothecated or otherwise
transferred unless they are registered under the Securities Act and applicable
state securities laws or are exempt therefrom.
b. A legend to the following effect will be placed on any certificates
representing the Securities:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS THAT
TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT
UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY."
c. Stop transfer instructions to the transfer agent, if any, of the
Securities have been or will be placed with respect to the Securities so as to
restrict resale, pledge, hypothecation, or other transfer thereof, subject to
the provisions hereof, including the provisions of the legend referred to in
paragraph b. above.
6. NO WAIVER. Notwithstanding any of the representations, warranties,
acknowledgments, or agreements made herein by the undersigned, the undersigned
does not thereby or in any other manner waive any of the rights granted him
under Federal or State securities laws.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof, and neither this
Agreement nor any provision hereof shall be waived, changed, discharged, or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge, or termination is sought.
8. NOTICES. Any notice, demand, or other communication which any party may be
required, or may elect, to give anyone interested hereunder shall be
sufficiently given if (a) deposited, postage prepaid, in the United States mail,
registered or certified mail, addressed to: in the case of the Company as set
forth on the first page hereof, and in the case of the undersigned at the
address set forth on the signature page hereof or at such other address as the
undersigned shall so notify the Company pursuant hereto, or (b) delivered
personally at such address.
9. BINDING EFFECT. Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors, legal representatives and assigns.
If the undersigned is more than one person, the obligations of the undersigned
shall be joint and several and the agreements, representations, warranties, and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his respective heirs, executors, administrators,
successors, legal representatives and assigns.
10. ASSIGNABILITY. The undersigned agrees not to transfer or assign this
Agreement, or any of the undersigned's interest herein.
11. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
12. FORM OF OWNERSHIP. Please state the name of the person(s) to be placed on
the books and records of the Company as the owner of the Securities.
SYSTOM TRUST JOINT VENTURE
IN WITNESS WHEREOF, the undersigned has executed this Agreement on May 11, 2004
in Houston, Texas.
Systom Trust Joint Venture
By: /S/ XXXXX XXXXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
SYSTOM TRUST JOINT VENTURE
0000 Xxxxx Xxxxx 000
Xxxxxxx, Xxxxx 00000
In accepting the foregoing Subscription Agreement, the Company, and the
executive officer signing this Subscription Agreement on the Company's behalf as
its agent represent and warrant that to the best of their knowledge, information
and belief:
A. All of its periodic reports filed with the Securities and Exchange
Commission do not contain any untrue statements of material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made not misleading.
B. The Company's financial statements and materials provided to assist
the investor complete its due diligence fairly presents, in all material
respects, the financial condition of the Company through the date of this
Subscription Agreement.
Accepted and Agreed:
May 15, 2004
Fleetclean Systems, Inc.
By: /S/ XXXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
EXHIBIT A
THE CONSIDERATION
Systom Trust Joint Venture ("Investor") has proposed and Fleetclean Systems,
Inc. (the "Company") has agreed that the consideration payable for the One
Million shares of Series A Convertible Preferred Stock shall consist of
1. $290,700 in cash; or
2. $53,200 in cash, plus the assumption of liability to the Company's Debenture
Holders ($237,500 at 12/31/2003) and Investor's agreement to indemnify the
Company for any and all claims from the Company's Debenture Holders.
The Form of the Assumption and Indemnity Agreement shall be as follows:
Systom Trust Joint Venture ("Investor") does hereby agree to assume all of the
liabilities of Fleetclean Systems, Inc., a Texas corporation (the Company), to
its Convertible Debenture Holders as shown by the Company's most recent
financial statements and Investor shall, to the best of its ability, use its
resources to satisfy, compromise and/or discharge the liabilities herein assumed
within 12 months from the date hereof or alternatively to cause such liabilities
to be converted into equity of the Company.
Systom Trust Joint Venture ("Investor") shall indemnify and hold Fleetclean
Systems, Inc., a Texas corporation (the "Company"), harmless from any and all
liability, cost, loss or damage which Fleetclean Systems, Inc., a Texas
corporation, may suffer or incur as a result of any claim, demand or judgment
against Fleetclean Systems, Inc., a Texas corporation arising out of a claim by
any Holder of the Company's Convertible Debentures.
Dated: May ___, 2004
Systom Trust Joint Venture
By:
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
ASSUMPTION AND INDEMNITY AGREEMENT
KNOW ALL MEN
BY THESE PRESENTS THAT
Systom Trust Joint Venture ("Investor") does hereby agree to assume all of the
liabilities of Fleetclean Systems, Inc., a Texas corporation (the Company), to
its Convertible Debenture Holders as shown by the Company's most recent
financial statements and Investor shall, to the best of its ability, use its
resources to satisfy, compromise and/or discharge the liabilities herein assumed
within 12 months from the date hereof or alternatively to cause such liabilities
to be converted into equity of the Company.
Systom Trust Joint Venture ("Investor") shall indemnify and hold Fleetclean
Systems, Inc., a Texas corporation (the "Company"), harmless from any and all
liability, cost, loss or damage which Fleetclean Systems, Inc., a Texas
corporation, may suffer or incur as a result of any claim, demand or judgment
against Fleetclean Systems, Inc., a Texas corporation arising out of a claim by
any Holder of the Company's Convertible Debentures.
Dated: May 15, 2004
Systom Trust Joint Venture
By: /S/ XXXXX XXXXXXXXX
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
