SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made this 29th of
June, 2005, by and among Hybrid Fuel Systems, Inc. a Georgia corporation
("HYFS"); DRV Energy, Inc, a Oklahoma corporation ("DRV"); and the persons
listed in Exhibit "A-1" hereof who are the owners of record of all the issued
and outstanding stock of DRV who execute and deliver the Agreement ("DRV
Stockholders"), based on the following:
Recitals
HYFS wishes to acquire all the issued and outstanding stock of DRV in
exchange for cash and stock of HYFS. The parties intend for this Agreement to
represent the terms and conditions of such tax-free reorganization, which
Agreement the parties hereby adopt.
Agreement
Based on the stated premises, which are incorporated herein by reference,
and for and in consideration of the mutual covenants and agreements hereinafter
set forth, the mutual benefits to the parties to be derived here from, and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed as follows:
ARTICLE 1
OTHER AGREEMENT
1.1 In addition to this Share Exchange Agreement within 30 days following the
Closing Date, Hybrid shall negotiate and enter an:
(a) Employment Agreement with Xxxxx Xxxxxxxxx;
(b) Employment Agreement with Xxxxxx Xxxxxxxxx
ARTICLE 2
EXCHANGE OF STOCK
2.1 Exchange of Shares/Payment of Cash. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 2.5 hereof), the DRV Stockholders shall assign, transfer, and
deliver to HYFS, free and clear of all liens, pledges, encumbrances,
charges, restrictions, or claims of any kind, nature, or description, all
issued and outstanding shares of common stock of DRV (the "DRV Shares")
held by DRV Stockholders which shares shall represent all issued and
outstanding shares of DRV common stock, and HYFS agrees to acquire such
shares on such date by issuing and delivering in exchange therefore an
aggregate of 11,612,903 unregistered shares of HYFS common stock, par
value $0.001 per share, (the "HYFS Common Stock") and payment of $400,000
in cash with $200,000 of such payment due at or prior to the Closing Date
and $200,000 due and payable January 1, 2006. Such shares HYFS Common
Stock shall be issued pro rata based on the number of DRV Shares held and
as set forth opposite the DRV Stockholder's respective names in Exhibit
"A-l".
2.2 Delivery of Certificates by DRV Stockholders. The transfer of DRV Shares
by the DRV Stockholders shall be effected by the delivery to HYFS at the
Closing (as set forth in Section 2.5 hereof) of a certificate issued to
HYFS representing all of the issued and outstanding shares of DRV.
2.3 Operation as Wholly-Owned Subsidiary. After giving effect to the
transaction contemplated hereby, HYFS will own all the issued and
outstanding shares of DRV and DRV shall be merged with HYFS.
2.4 Further Assurances. At the Closing and from time to time thereafter, the
DRV Stockholders shall execute such additional instruments and take such
other action as HYFS may reasonably request, without undue cost to the DRV
Stockholders in order to more effectively sell, transfer, and assign clear
title and ownership in the DRV Shares to HYFS.
2.5 Closing and Parties. The Closing contemplated hereby shall be held at the
principal office of HYFS in Tampa, Florida on or before 9:00 am. June 30,
2005, or on another date to be agreed to in writing by the parties (the
"Closing Date"). The Agreement may be closed at any time following
approval by a majority of the stockholders of HYFS Common Stock as set
forth in Section 5.2 hereof and the DRV Stockholders as set forth in
Section 6.2. The Closing may be accomplished by wire, express mail,
overnight courier conference telephone call or as otherwise agreed to by
the respective parties or their duly authorized representatives.
2.6 Repayment of Debt. That portion of the cash paid to Xxxxx XxxXxxxxx in the
course of this agreement shall constitute a repayment of debt and will
represent satisfaction in full for $126,557 currently owed to Xx.
XxxXxxxxx and any other cash debts owed as of the closing date.
2.7 Closing Events.
(a) HYFS Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article 5, HYFS shall deliver to DRV at Closing all the
following:
(i) A certificate of good standing from the secretary of State of
Georgia, certifying that HYFS is in good standing as a
corporation in the State of Georgia;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of HYFS executing
this Agreement and any other document delivered pursuant
hereto on behalf of HYFS;
(iii) Copies of the resolutions of HYFS's board of directors and
shareholder minutes or consents authorizing the execution and
performance of this Agreement and the contemplated
transactions, certified by the secretary or an assistant
secretary of HYFS as of the Closing Date;
(iv) The certificate contemplated by Section 5.3, duly executed by
the chief executive officer of HYFS;
(v) The certificate contemplated by Section 5.4, dated the Closing
Date, signed by the chief executive officer of HYFS;
(vi) Certificates for 11,612,903 shares of HYFS Common Stock in the
names of the DRV Stockholders and in the amounts set forth in
Exhibit "A-1" which shall be issued by HYFS's transfer agent
immediately following Closing or as expeditiously as possible
thereafter; and
In addition to the above deliveries, HYFS shall take all
steps and actions as DRV and DRV Stockholders may reasonably
request or as may otherwise be reasonably necessary to
consummate the transactions contemplated hereby.
(b) DRV Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article 0, XXX xxx/xx XXX Stockholder's shall deliver
to HYFS at Closing all the following:
(i) A certificate of good standing from the secretary of state of
Oklahoma, issued as of a date within five days prior to the
Closing Date certifying that DRV is in good standing as a
corporation in the State of Oklahoma;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of DRV executing
this Agreement and any other document delivered pursuant
hereto on behalf of DRV;
(iii) Copies of resolutions of the board of directors and of the
stockholders of DRV authorizing the execution and performance
of this Agreement and the contemplated transactions, certified
by the secretary or an assistant secretary of DRV as of the
Closing Date;
(iv) The certificate contemplated by Section 6.3, executed by the
chief operating officer of DRV; and
(v) The certificate contemplated by Section 6.4, dated the Closing
Date, signed by the chief operating officer of DRV.
In addition to the above deliveries, DRV shall take all
steps and actions as HYFS may reasonably request or as may
otherwise be reasonably necessary to consummate the
transactions contemplated hereby.
2.8 Termination.
(a) This Agreement may be terminated by the board of directors of either
HYFS or DRV at any time prior to the Closing Date if:
(i) There shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to
restrain, prohibit, or invalidate the transactions
contemplated by this Agreement and which, in the reasonable
judgment of such board of directors, made in good faith and
based upon the advice of its legal counsel, makes it
inadvisable to proceed with the transactions contemplated by
this Agreement;
(ii) Any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to
consummate such transactions or in the reasonable judgment of
such board of directors, made in good faith and based on the
advice of counsel, there is substantial likelihood that any
such approval will not be obtained or will be obtained only on
a condition or conditions which would be unduly burdensome,
making it inadvisable to proceed with the exchange;
In the event of termination pursuant to this paragraph
(a) of Section 2.7, no obligation, right, or liability shall
arise hereunder, and each party shall bear all of the expenses
incurred by it in connection with the negotiation,
preparation, and execution of this Agreement and the
transactions contemplated hereby.
(b) This Agreement may be tt 6 12 erminated at any time prior to the
Closing Date by action of the board of directors of HYFS if (i) DRV
shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of DRV contained herein shall be
inaccurate in any material respect or (ii) HYFS determines that
there has been or is likely to be any material adverse change in the
financial or legal condition of DRV. In the event of termination
pursuant to this paragraph (b) of this Section 2.7, no obligation,
right, remedy, or liability shall arise hereunder. All parties shall
bear their own costs incurred in connection with the negotiation,
preparation, and execution of this Agreement and the transactions
contemplated hereby.
(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of DRV if (i) HYFS shall
fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the
representations or warranties of HYFS contained herein shall be
inaccurate in any material respect, or (ii) DRV determines that
there has been or is likely to be any adverse change in the
financial or legal condition of HYFS. In the event of termination
pursuant to this paragraph (c) of this Section 1.07. no obligation,
right, remedy, or liability shall arise hereunder. All parties shall
each bear their own costs incurred in connection with the
negotiation, preparation, and execution of this Agreement and the
transactions contemplated hereby.
ARTICLE 3
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF HYFS
As an inducement to, and to obtain the reliance of DRV, HYFS represents
and warrants as follows:
3.1 Organization. HYFS is, and will be on the Closing Date, a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Georgia and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business in all material
respects as it is now being conducted, and there are no other
jurisdictions in which it is not so qualified in which the character and
location of the assets owned by it or the nature of the material business
transacted by it requires qualification, except where failure to do so
would not have a material adverse effect on its business, operations,
properties, assets or condition. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate
any provision of HYFS's articles of incorporation or bylaws, or other
agreement to which it is a party or by which it is bound.
3.2 Approval of Agreement. HYFS has full power, authority, and legal right and
has taken, or will take, all action required by law, its articles of
incorporation, bylaws, and otherwise to execute and deliver this Agreement
and to consummate the transactions herein contemplated. The board of
directors of HYFS has authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the HYFS stockholders and compliance with state
and federal corporate and securities laws.
3.3 Capitalization. The authorized capitalization of HYFS consists of
250,000,000 shares of common stock, $0.001 par value, of which
approximately 82,000,000 shares are issued and outstanding. All issued and
outstanding shares of HYFS are legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other right
of any person. There are no dividends or other amounts due or payable with
respect to any of the shares of capital stock of HYFS.
3.3 Financial Statements.
(a) Included in Schedule 3.4 are the financial statements which were
filed by HYFS in connection with HYFS's Form 10-KSB, as well as
quarterly audited financial statements filed with the Securities and
Exchange Commission ("SEC") as required by the 0000 Xxx.
(b) The financial statements of HYFS delivered pursuant to Section
3.3(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved as explained in the notes to such financial statements. The
HYFS financial statements present fairly, in all material respects,
as of their respective dates, the financial position of HYFS. HYFS
did not have, as of the date of any such financial statements,
except as and to the extent reflected or reserved against therein,
any liabilities or obligations (absolute or contingent) which should
be reflected therein in accordance with generally accepted
accounting principles, and all assets reflected therein present
fairly the assets of HYFS in accordance with generally accepted
accounting principles.
(c) HYFS has filed or will file as of the Closing Date all tax returns
required to be filed by it from inception to the Closing Date. All
such returns and reports are accurate and correct in all material
respect. HYFS has no material liabilities with respect to the
payment of any federal, state, county, local, or other taxes
(including any deficiencies, interest, or penalties) accrued for or
applicable to the period ended on the date of the most recent
balance sheet of HYFS, except to the extent reflected on such
balance sheet and all such dates and years and periods prior thereto
and for which HYFS may at said date have been liable in its own
right or as transferee of the assets of, or as successor to, any
other corporation or entity, except for taxes accrued but not yet
due and payable, and to the best knowledge of HYFS, no deficiency
assessment or proposed adjustment of any such tax return is pending,
proposed or contemplated. To the best knowledge of HYFS, none of
such income tax returns has been examined or is currently being
examined by the Internal Revenue Service and no deficiency
assessment or proposed adjustment of any such return is pending,
proposed or contemplated. HYFS has not made any election pursuant to
the provisions of any applicable tax laws (other than elections that
relate solely to methods of accounting, depreciation, or
amortization) that would have a material adverse affect on HYFS, its
financial condition, its business as presently conducted or proposed
to be conducted, or any of its respective properties or material
assets. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of HYFS.
3.4 Outstanding Warrants and Options. HYFS has no existing warrants or
options, calls, or commitments of any nature relating to the authorized
and unissued HYFS Common Stock, except as disclosed in documents which are
publicly filed by HYFS.
3.5 Information. The information concerning HYFS set forth in this Agreement
is complete and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under
which they were made, not misleading. HYFS shall cause the schedules
delivered by it pursuant hereto and the instruments delivered to DRV
hereunder to be updated after the date hereof up to and including the
Closing Date.
3.6 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the schedules hereto, since the date of the most recent HYFS
balance sheet described in Section 3.3 and included in the information
referred to in Section 3.6:
(a) There has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or financial
condition of HYFS except as those specified in Article 1 hereto or
(ii) any damage, destruction, or loss to HYFS (whether or not
covered by insurance) materially and adversely affecting the
business, operations, properties, assets, or conditions of HYFS;
(b) To the best knowledge of HYFS, it has not become subject to any law
or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the
business, operations, properties, assets, or condition of HYFS.
3.8 Litigation and Proceeding. There are no material actions, suits, or
administrative or other proceedings pending or, to the knowledge of HYFS,
threatened by or against HYFS or adversely affecting HYFS or its
properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator
of any kind. HYFS does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award,
rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality.
3.9 Compliance With Laws and Regulations. HYFS has complied with all
applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that
noncompliance (i) could not materially and adversely affect the business,
operations, properties, assets, or condition of HYFS or (ii) could not
result in the occurrence of any material liability for HYFS. To the best
knowledge of HYFS, the consummation of this transaction will comply with
all applicable statutes and regulations, subject to the preparation and
filing of any forms required by state and federal securities laws.
3.10 Compliance with Security Laws. HYFS has complied with all applicable
security statutes and regulation of any federal, state or other
governmental entity or agency thereof, including the filing of any
required documents in regards to all sales of HYFS Stock. HYFS makes the
additional following securities disclosures as a material inducement to
DRV to enter into this transaction:
a) HYFS's common stock is currently traded on the Over The Counter
Bulletin Board ("OTCBB") and HYFS is in compliance with all
applicable securities rules and regulations regarding the OTCBB
trading of its securities; and
3.11 Material Contract Defaults. HYFS is not in default in any material
respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business,
operations, properties, assets, or condition of HYFS, and there is
no event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material respect
under any such contract, agreement, lease, or other commitment in
respect of which HYFS has not taken adequate steps to prevent such a
default from occurring.
3.12 No Conflict With Other Instruments. The execution of this Agreement and
the consummation of the transactions contemplated by this Agreement will
not result in the breach of any term or provision of, or constitute an
event of default under, any material indenture, mortgage, deed of trust,
or other material contract, agreement, or instrument to which HYFS is a
party or to which any of its properties or operations are subject.
3.13 HYFS Schedules. HYFS has delivered to DRV the following schedules, which
are collectively referred to as the "HYFS Schedules" and which consist of
the following separate schedules dated as of the date of execution of this
Agreement, all certified by a duly authorized officer of HYFS as complete,
true, and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of HYFS in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of HYFS approving this Agreement and the transactions
herein contemplated;
(c) A schedule setting forth the financial statements required pursuant
to Section 3.4(a) hereof, and
(d) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the HYFS
Schedules by Sections 3.1 through 3.13. HYFS shall cause the HYFS
Schedules and the instruments delivered to DRV hereunder to be
updated after the date hereof up to and including a specified date
not more than three business days prior to the Closing Date. Such
updated HYFS Schedules, certified in the same manner as the original
HYFS Schedules, shall be delivered prior to and as a condition
precedent to the obligation of DRV to close.
ARTICLE 4
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF
DRV
As an inducement to, and to obtain the reliance of, HYFS, DRV represents
and warrants as follows:
4.1 Organization. DRV is, and will be on the Closing Date, a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Oklahoma and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business in all material
respects as it is now being conducted, and there are no other
jurisdictions in which it is not so qualified in which the character and
location of the assets owned by it or the nature of the material business
transacted by it requires qualification, except where failure to do so
would not have a material adverse effect on its business, operations,
properties, assets or condition of DRV. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate
any provision of DRV's articles of incorporation or bylaws, or other
material agreement to which it is a party or by which it is bound.
4.2 Approval of Agreement. DRV has full power, authority, and legal right and
has taken, or will take, all action required by law, its articles of
incorporation, bylaws, or otherwise to execute and deliver this Agreement
and to consummate the transactions herein contemplated. The board of
directors of DRV have authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the DRV Stockholders and compliance with state
and federal corporate and securities laws.
4.3 Capitalization. The authorized capitalization of DRV consists of 50,000
shares of common stock, $1.00 par value, of which as of the date hereof
50,000 shares are issued and outstanding. All issued and outstanding
shares of DRV are legally issued, fully paid, and nonassessable and not
issued in violation of the preemptive or other right of any person. There
are no dividends or other amounts due or payable with respect to any of
the shares of capital stock of DRV.
4.4 Financial Statements.
(a) Included in Schedule 3.04 are the federal and state corporate tax
returns of DRV for the fiscal years ended 2003 and 2004 as well as
the unaudited balance sheet and income statement prepared by
management of DRV through the period ended May 31, 2005.
(b) The financial statements of DRV present fairly, as of their
respective dates, the financial position of DRV. DRV did not have,
as of the date of any such balance sheets, except as and to the
extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in
any financial statements or the notes thereto and all assets
reflected therein present fairly the assets of DRV.
(c) DRV has filed or will have filed as of the Closing Date all tax
returns required to be filed by it from inception to the Closing
Date. All such returns and reports are accurate and correct in all
material respects. DRV has no material liabilities with respect to
the payment of any federal, state, county, local, or other taxes
(including any deficiencies, interest, or penalties) accrued for or
applicable to the period ended on the date of the most recent
unaudited balance sheet of DRV, except to the extent reflected on
such balance sheet and adequately provided for, and all such dates
and years and periods prior thereto and for which DRV may at said
date have been liable in its own right or as transferee of the
assets of, or as successor to, any other corporation or entity,
except for taxes accrued but not yet due and payable, and to DRV's
knowledge no deficiency assessment or proposed adjustment of any
such tax return is pending, proposed or contemplated. Proper and
accurate amounts of taxes have been withheld by or on behalf of DRV
with respect to all material compensation paid to employees of DRV
for all periods ending on or before the date hereof, and all
deposits required with respect to compensation paid to such
employees have been made, in complete compliance with the provisions
of all applicable federal, state, and local tax and other laws. To
DRV's knowledge, none of such income tax returns has been examined
or is currently being examined by the Internal Revenue Service, and
no deficiency assessment or proposed adjustment of any such return
is pending, proposed, or contemplated. DRV has not made any election
pursuant to the provisions of any applicable tax laws (other than
elections that relate solely to methods of accounting, depreciation,
or amortization) that would have a material adverse affect on DRV,
its financial condition, its business as presently conducted or
proposed to be conducted, or any of its properties or material
assets. There are no tax liens upon any of the assets of DRV. There
are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any tax return of DRV.
4.5 Outstanding Warrants and Options. DRV has no issued warrants or options,
calls, or commitments of any nature relating to the authorized and
unissued DRV Common Stock.
4.6 Information. The information concerning DRV set forth in this Agreement
and in the schedules delivered by DRV pursuant hereto is complete and
accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under which they
were made, not misleading. DRV shall cause the schedules delivered by DRV
pursuant hereto to HYFS hereunder to be updated after the date hereof up
to and including the Closing Date.
4.7 Absence of Certain Changes or Events. Except as set forth in this
Agreement since the date of the most recent DRV balance sheet described in
Section 4.4(a) and included in the information referred to in Section 4.6:
(a) There has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or condition of
DRV or (ii) any damage, destruction, or loss to DRV materially and
adversely affecting the business, operations, properties, assets, or
conditions of DRV; and
(b) DRV has not (i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or
redeem, any of its capital stock; (iii) waived any rights of value
which in the aggregate are extraordinary and material considering
the business of DRV; (iv) made any material change in its method of
accounting; (v) entered into any other material transactions other
than those contemplated by this Agreement; (vi) made any material
accrual or material arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any
present or former officer or employee; or (vii) made any material
increase in any profit-sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement made to, for, or with their officers,
directors, or employees; and
(c) DRV has not (i) granted or agreed to grant any options, warrants, or
other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof, (ii) borrowed or agreed to borrow
any funds or incurred, or become subject to, any material obligation
or liability (absolute or contingent) except liabilities incurred in
the ordinary course of business; (iii) paid any material obligation
or liability (absolute or contingent) other than current liabilities
reflected in or shown on the most recent DRV balance sheet and
current liabilities incurred since that date in the ordinary course
of business; (iv) sold or transferred, or agreed to sell or
transfer, any of its material assets, properties, or rights, or
agreed to cancel, any material debts or claims; (v) made or
permitted any amendment or termination of any contract, agreement,
or license to which it is a party if such amendment or termination
is material, considering the business of DRV; or (vi) issued,
delivered, or agreed to issue or deliver any stock, bonds, or other
corporate securities including debentures (whether authorized and
unissued or held as treasury stock); and
(d) To the best knowledge of DRV, it has not become subject to any law
or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the
business, operations, properties, assets, or condition of DRV.
4.8 Title and Related Matters. Except as provided herein or disclosed in the
most recent DRV balance sheet of its properties, inventory, interests in
properties, technology, whether patented or unpatented and assets, which
are reflected in the most recent DRV balance sheet or acquired after that
date (except properties, interests in properties, and assets sold or
otherwise disposed of since such date in the ordinary course of business),
free and clear of all mortgages, liens, pledges, charges, or encumbrances,
except (i) statutory liens or claims not yet delinquent, and (ii) such
imperfections of title and easements as do not, and will not, materially
detract from or interfere with, the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially
impair present business operations on such properties. To the best
knowledge of DRV, its technology does not infringe on the copyright,
patent, trade secret, know-how, or other proprietary right of any other
person or entity and comprises all such fights necessary to permit the
operation of the business of DRV as now being conducted or as
contemplated.
4.9 Litigation and Proceedings. There are no material actions, suits, or
proceedings pending or, to the knowledge of DRV, threatened by or against
DRV or adversely affecting DRV, at law or in equity, before any court or
other governmental agency or instrumentality domestic or foreign, or
before any arbitrator of any kind. DRV does not have any knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule, or regulation of any court, arbitrator, or
governmental agency or instrumentality.
4.10 Material Contract Defaults. DRV is not in default in any material respect
under the terms of any outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, properties,
assets, or condition of DRV, and there is no event of default or other
event which, with notice or lapse of time or both, would constitute a
default in any material respect under any such contract, agreement, lease,
or other commitment in respect of which DRV has not taken adequate steps
to prevent such a default from occurring.
4.11 No Conflict With Other Instruments. The execution of this Agreement and
the consummation of the transactions contemplated by this Agreement will
not result in the breach of any term or provision of, or constitute an
event of default under, any material indenture, mortgage, deed of trust,
or other material contract, agreement, or instrument to which DRV is a
party or to which any of its properties or operations are subject.
4.12 Governmental Authorizations. DRV has all licenses, franchises, permits,
and other governmental authorizations that are legally required to enable
it to conduct its business in all material respects as conducted on the
date of this Agreement. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no
authorization, approval, consent, or order of or registration,
declaration, or filing with, any court or other governmental body is
required in connection with the execution and delivery by DRV of this
Agreement and the consummation by DRV of the transactions contemplated
hereby.
4.13 Compliance With Laws and Regulations. DRV has complied with all applicable
statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance would
not materially and adversely affect the business, operations, properties,
assets, or condition of DRV or except to the extent that noncompliance
would not result in the occurrence of any material liability for DRV. To
the best knowledge of DRV, the consummation of this transaction will
comply with all applicable statutes and regulations, subject to the
preparation and filing of any forms required by state and federal security
laws.
4.14 Subsidiary. DRV does not own, beneficially or of record, any equity
securities in any other entity.
4.15 DRV Schedules. DRV has delivered to HYFS the following schedules, which
are collectively referred to as the "DRV Schedules" and which consist of
the following separate schedules dated as of the date of execution of this
Agreement, and instruments and HYFS as of such date, all certified by the
chief executive officer of DRV as complete, true, and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of DRV and all amendments thereto in effect as of the date of
this Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of DRV approving this Agreement and the transactions
herein contemplated as referred to in Section 4.2;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of DRV since the most recent DRV balance sheet, required
to be provided pursuant to Section 4.4 hereof,
(d) A schedule setting forth the financial statements required pursuant
to Section 4.4(a) hereof, and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the DRV
Schedules by Sections 4.1 through 4.14.
DRV shall cause the DRV Schedules and the instruments delivered to
HYFS hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing
Date. Such updated DRV Schedules, certified in the same manner as the
original DRV Schedules, shall be delivered prior to and as a condition
precedent to the obligation of HYFS to close.
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS OF
DRV
The obligations of DRV under this Agreement are subject to the
satisfaction of DRV, at or before the Closing Date, of the following conditions:
5.1 Shareholder Approval. HYFS shall obtain the written consent of a majority
of its stockholders to approve the transactions contemplated by this
Agreement, including the acquisition of DRV through the issuance of HYFS
common stock for all of the issued and outstanding Shares. Said written
consent shall be provided to DRV at closing.
5.2 Accuracy of Representations. The representations and warranties made by
HYFS in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes
therein permitted by this Agreement), and HYFS shall have performed or
complied with all covenants and conditions required by this Agreement to
be performed or complied with by HYFS prior to or at the Closing. DRV
shall be furnished with certificates, signed by duly authorized officers
of HYFS and dated the Closing Date, to the foregoing effect.
5.3 Officer's Certificates. DRV shall have been furnished with certificates
dated the Closing Date and signed by the duly authorized chief executive
officer of HYFS to the effect that to such officers best knowledge no
litigation, proceeding, investigation, or inquiry is pending or, to the
best knowledge of HYFS threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated by
this Agreement. Furthermore, based on certificates of good standing,
representations of government agencies, and HYFS's own documents and
information, the certificate shall represent, to the best knowledge of the
officer, that:
(a) This Agreement has been duly approved by HYFS's board of directors
and stockholders and has been duly executed and delivered in the
name and on behalf of HYFS by its duly authorized officers pursuant
to, and in compliance with, authority granted by the board of
directors of HYFS pursuant to a unanimous consent;
(b) There have been no material adverse changes in HYFS up to and
including the date of the certificate;
(c) All conditions required by this Agreement have been met, satisfied,
or performed by HYFS;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by HYFS
have been obtained and are in full force and effect or, if not
required to have been obtained, will be in full force and effect by
such tine as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body
pending or threatened against HYFS, wherein an unfavorable decision,
ruling, or finding could have an adverse effect on the financial
condition of HYFS, the operation of HYFS, or the acquisition and
reorganization contemplated herein, or any agreement or instrument
by which HYFS is bound or in any way contests the existence of HYFS.
5.4 No Material Adverse Change. Prior to the Closing Date, there shall not
have occurred any material adverse change in the financial condition,
business, or operations of HYFS, nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business, or
operations of HYFS.
5.5 Good Standings. DRV shall have received a certificate of good standing
from the secretary of State of Georgia, certifying that HYFS is in good
standing as a corporation in the State of Florida.
5.6 Other Items. DRV shall have received such further documents, certificates,
or instruments relating to the transactions contemplated hereby as DRV may
reasonably request.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF
HYFS
The obligations of HYFS under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
6.1 Shareholder Approval. HYFS shall obtain through a majority written consent
of its stockholders, authorization and approval for this Agreement and the
transactions contemplated hereby.
6.2 DRV Stockholders. Holders of all of the issued and outstanding DRV Shares
shall agree to this Agreement and the exchange of shares contemplated by
this Agreement.
6.3 Accuracy of Representations. The representations and warranties made by
DRV and the DRV Stockholders in this Agreement were true when made and
shall be true at the Closing Date with the same force and affect as if
such representations and warranties were made at and as of the Closing
Date (except for changes therein permitted by this Agreement), and DRV
shall have performed or compiled with all covenants and conditions
required by this Agreement to be performed or complied with by DRV prior
to or at the Closing. HYFS shall be furnished with a certificate, signed
by a duly authorized officer of DRV and dated the Closing Date, to the
foregoing effect.
6.4 Officer's Certificates. HYFS shall have been furnished with certificates
dated the Closing Date and signed by the duly authorized chief operating
officer of DRV to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of DRV,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and DRV's own documents, the certificate shall
represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by DRV's board of directors
and stockholders and has been duly executed and delivered in the
name and on behalf of DRV by its duly authorized officers pursuant
to, and in compliance with, authority granted by the board of
directors of DRV pursuant to a unanimous consent of its board of
directors and a majority vote of its stockholders;
(b) Except as provided or permitted herein, there have been no material
adverse changes in DRV up to and including the date of the
certificate;
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by DRV
have been obtained and are in full force and effect or, if not
required to have been obtained will be in full force and effect by
such time as may be required; and
(d) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body
pending or threatened against DRV, wherein an unfavorable decision,
ruling, or finding would have an adverse affect on the financial
condition of DRV, the operation of DRV, or the acquisition and
reorganization contemplated herein, or any material agreement or
instrument by which DRV is bound or would in any way contest the
existence of DRV.
6.5 No Material Adverse Change. Prior to the Closing Date, there shall not
have occurred any material adverse change in the financial condition,
business or operations of DRV, nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause of create any
material adverse change in the financial condition, business, or
operations of DRV.
6.6 Good Standing. HYFS shall have received a certificate of good standing
from the appropriate authority in the State of Oklahoma, dated as of a
date with five days prior to the Closing Date, certifying that the DRV is
in good standing as a corporation in the State of Florida.
6.7 Other Items. HYFS shall have received such further documents certificates
or instruments relating to the transactions contemplated hereby as HYFS
may reasonably request.
ARTICLE 7
SPECIAL COVENANTS
7.1 Activities of HYFS and DRV.
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the respective schedules to be delivered by
HYFS and DRV pursuant hereto or as permitted or contemplated by this
Agreement, HYFS and DRV will each:
(i) Carry on its business in substantially the same manner as it
has heretofore;
(ii) Maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations under
material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve its business
Organization intact, to retain its key employees, and to
maintain its relationships with its material suppliers and
customers;
(v) Duly and timely file for all taxable periods ending on or
prior to the Closing Date all federal, state, county, and
local tax returns required to be filed by or on behalf of such
entity or for which such entity may be held responsible and
shall pay, or cause to pay, all taxes required to be shown as
due and payable on such returns, as well as all installments
of tax due and payable during the period commencing on the
date of this Agreement and ending on the Closing Date; and
(vi) Fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state
laws and all rules, regulations, and orders imposed by federal
or state governmental authorities.
(b) From and after the date of this Agreement and except as provided
herein until the Closing Date, HYFS and DRV will not:
(i) Make any change in its articles of incorporation or bylaws;
(ii) Enter into or amend any material contract, agreement, or other
instrument of any of the types described in such party's
schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary
course of business; and
(iii) Enter into any agreement for the sale of DRV securities
without the prior approval of the other party.
7.2 Access to Properties and Records. Until the Closing Date, DRV and HYFS
will afford to the other party's officers and authorized representatives
full access to the properties, books, and records of the other party in
order that each party may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of DRV or HYFS and
will furnish the other party with such additional financial and other
information as to the business and properties of DRV or HYFS as each party
shall from time to time reasonably request.
7.3 Indemnification by DRV. DRV will indemnify and hold harmless HYFS and its
directors and officers, and each person, if any, who controls HYFS within
the meaning of the Securities Act, from and against any and all losses,
claims, damages, expenses, liabilities, or actions to which any of them
may become subject under applicable law (including the Securities Act and
the Securities Exchange Act) and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting
in liability, insofar as such losses, claims, damages, expenses,
liabilities, or actions arise out of or are based upon any untrue
statement or alleged untrue statement of material fact contained in any
application or statement filed with a governmental body or arising out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary in order to make
the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by DRV expressly for use therein. The
indemnity agreement contained in this Section 7.3 shall remain operative
and in full force and effect, regardless of any investigation made by or
on behalf of HYFS and shall survive the consummation of the transactions
contemplated by this Agreement for a period of one year.
7.4 Indemnification by HYFS. HYFS will indemnify and hold harmless DRV, the
DRV Stockholders, DRV's directors and officers, and each person, if any,
who controls DRV within the meaning of the Securities Act, from and
against any and all losses, claims, damages, expenses, liabilities, or
actions to which any of them may become subject under applicable law
(including the Securities Act and the Securities Exchange Act) and will
reimburse them for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any claims or actions,
whether or not resulting in liability, insofar as such losses, claims,
damages, expenses, liabilities, or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in any application or statement filed with a governmental body
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary
in order to make the statements therein not misleading, but only insofar
as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing by HYFS expressly for use
therein. The indemnity agreement contained in this Section 7.4 shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of DRV and shall survive the
consummation of the transactions contemplated by this Agreement for a
period of one year.
7.5 The Acquisition of HYFS Common Stock. HYFS and DRV understand and agree
that the consummation of this Agreement including the issuance of the HYFS
Common Stock to DRV in exchange for the DRV Shares as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. HYFS and DRV agree that such transactions shall
be consummated in reliance on exemptions from the registration and
prospectus delivery requirements of such statutes which depend, among
other items, on the circumstances under which such securities are
acquired.
(a) In order to provide documentation for reliance upon exemptions from
the registration and prospectus delivery requirements for such
transactions, the signing of this Agreement and the delivery of
appropriate separate representations shall constitute the parties
acceptance of, and concurrence in, the following representations and
warranties:
(i) The DRV Stockholders acknowledge that neither the SEC nor the
securities commission of any state or other federal agency has
made any determination as to the merits of acquiring HYFS
Common Stock, and that this transaction involves certain
risks.
(ii) DRV Stockholders have such knowledge and experience in
business and financial matters that they are capable of
evaluating such business risks.
(iii) All information which the DRV Stockholders have provided to
HYFS or their representatives concerning their suitability and
intent to hold shares in HYFS following the transactions
contemplated hereby is complete, accurate, and correct.
(iv) The DRV Stockholders acknowledge that the shares of HYFS
Common Stock must be held and may not be sold, transferred,
or otherwise disposed of for value unless they are
subsequently registered under the Securities Act or an
exemption from such registration is available. HYFS is not
under any obligation to register the HYFS Common Stock under
the Securities Act except as stated in this Agreement.
The certificates representing the HYFS Common Stock will
bear a legend in substantially the following form so
restricting the sale of such securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING
OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
(b) In connection with the transaction contemplated by this Agreement,
HYFS shall file, with the assistance of its legal counsel, such
notices, applications, reports, or other instruments as may be
deemed by it to be necessary or appropriate in an effort to document
reliance on such exemptions, and with the appropriate regulatory
authority in the states where the DRV Stockholders reside unless an
exemption requiring no filing is available in such jurisdictions,
all to the extent and in the manner as may be deemed by HYFS to be
appropriate.
(c) The DRV Stockholders acknowledge that the basis for relying on
exemptions from registration or qualifications are factual,
depending on the conduct of the various parties, and that no legal
opinion or other assurance will be required or given to the effect
that the transactions contemplated hereby are in fact exempt from
registration or qualification.
7.6 Securities Filings. HYFS shall be responsible for the preparation and
filing of any required forms, or documents, deemed necessary by HYFS and
its legal counsel, with the Securities and Exchange Commission and in any
jurisdiction which would require a filing with a governmental agency as a
result of the transactions contemplated in this Agreement.
7.7 Sales of Securities Under Rule 144, If Applicable.
(a) HYFS will use its best efforts to at all times satisfy the current
public information requirements of rule 144 promulgated under the
Securities Act so that its stockholders can sell restricted
securities that have been held for one year or more or such other
restricted period as required by rule 144 as it is from time to time
amended.
(b) Upon being informed in writing by any person holding restricted
stock of HYFS as of the date of this Agreement that such person
intends to sell any shares under rule 144 promulgated under the
Securities Act (including any rule adopted in substitution or
replacement thereof), HYFS will certify in writing to such person
that it is in compliance with rule 144 current public information
requirements to enable such person to sell such person's restricted
stock under rule 144, as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock is
presented to HYFS's transfer agent for registration or transfer in
connection with any sales theretofore made under rule 144, provided
such certificate is duly endorsed for transfer by the appropriate
person(s) or accompanied by a separate stock power duly executed by
the appropriate person(s) in each case with reasonable assurances
that such endorsements are genuine and effective, and is accompanied
by an opinion of counsel satisfactory to HYFS and its counsel that
such transfer has complied with the requirements of rule 144, as the
case may be, HYFS will use its best efforts to cooperate with the
shareholder and/or transfer agent with the registration or transfer
in connection with any sales made under rule 144.
ARTICLE 8
MISCELLANEOUS
8.1 Brokers. HYFS and DRV agree that there were no other finders or brokers
involved in bringing the parties together or who were instrumental in the
negotiation, execution, or consummation of this Agreement. Further, HYFS
and DRV each agree to indemnify the other against any claim by any third
person for any commission, brokerage, or finder's fee or other payment
with respect to this Agreement or the transactions contemplated hereby
based on any alleged agreement or understanding between such party and
such third person, whether express or implied, from the actions of such
party.
The covenants set forth in this section shall survive the Closing
Date and the consummation of the transactions herein contemplated.
8.2 No Representation Regarding Tax Treatment. No representation or warranty
is being made by any party to any other regarding the treatment of this
transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding
the treatment of this transaction for federal and state income taxes and
on no representation, warranty, or assurance from any other party or such
other party's legal, accounting, or other adviser.
8.3 Governing Law. This Agreement shall be governed by, enforced and construed
under and in accordance with the laws of the State of Florida.
8.4 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication
confirmed by registered or certified mail, postage prepaid, or if sent by
prepaid overnight courier addressed as follows:
If to HYFS, to: 00000 Xxxxxxx Xxxxx,
Xxxxx, Xxxxxxx 00000
If to DRV, to: 0000 XX 00xx
Xxxxxxxx Xxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in
the manner for giving notices, hereunder, and any such notice or
communication shall be deemed to have been given as of the date so
delivered or sent by facsimile or telecopy transmission or other
electronic communication, or one day after the date so sent by overnight
courier.
8.5 Attorney's Fees. In the event that any party institutes any action or suit
to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable
attorneys' fees, incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
8.6 Schedules, Knowledge. Whenever in any section of this Agreement reference
is made to information set forth in the schedules provided by HYFS or DRV
such reference is to information specifically set forth in such schedules
and clearly marked to identify the section of this Agreement to which the
information relates. Whenever any representation is made to the
"knowledge" of any party, it shall be deemed to be a representation that
no officer or director of such party, after reasonable investigation, has
any knowledge of such matters.
8.8 Entire Agreement. This Agreement represents the entire agreement between
the parties relating to the subject matter hereof All previous agreements
between the parties, whether written or oral, have been merged into this
Agreement. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof. There are
no other courses of dealing, understandings, agreements, representations,
or warranties, written or oral, except as set forth herein.
8.8 Survival; Termination. The representations, warranties, and covenants of
the respective parties shall survive the Closing Date and the consummation
of the transactions herein contemplated for a period of six months from
the Closing Date, unless otherwise provided herein.
8.9 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which taken together
shall be but a single instrument.
8.10 Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and such remedies may be enforced concurrently, and no
waiver by any party of the performance of any obligation by the other
shall be construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time prior to the
Closing Date, this Agreement may be amended by a writing signed by all
parties hereto, with respect to any of the terms contained herein, and any
term or condition of this Agreement may be waived or the time for
performance thereof may be extended by a writing signed by the party or
parties for whose benefit the provision is intended.
8.11 In addition to the Shares delivered pursuant to this Agreement, HYFS shall
also issue 140,000 to various employees of DRV according to a schedule
provided by DRV for this purpose.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first above written.
Hybrid Fuel Systems, Inc. DRV Energy, Inc.
a Georgia corporation a Oklahoma corporation
By: By:
----------------------- ----------------------
Name: Xxxx Xxxxxx Name: Xxxxx Xxxxxxxxx
As: Chief Executive Officer As: President
Individually as sole shareholder
of DRV Energy, Inc.
By:
Name: Xxxxx Xxxxxxxxx
Exhibit A-l
DRV Energy, Inc.
List of Stockholders and Designees
------------------------------------- ----------------------------------- -----------------------------------
Number of HYFS
Name of Shareholder Shares to be received Signature
------------------------------------- ----------------------------------- -----------------------------------
Xxxxx XxxXxxxxx 11,612,903
------------------------------------- ----------------------------------- -----------------------------------
SECRETARY'S CERTIFICATE
AND
CERTIFICATE OF INCUMBENCY
OF
DRV ENERGY, INC.
I, Xxxxx Xxxxxxxxx hereby certify that I am now, and at all times
mentioned herein have been, the duly elected, qualified, and acting Secretary of
DRV Energy, Inc.. ("DRV" or the "Corporation"), a corporation duly organized and
validly existing under the laws of the State of Oklahoma, and as such officer, I
have access to the records of DRV, which records reflect that:
1. Resolutions. Attached hereto as Annex I and incorporated herein by
reference is a true and correct copy of resolutions which have been duly
adopted by the unanimous written consent of the members of the Board of
Directors and Shareholders of the Corporation; none of such resolutions
have been amended, modified, or repealed in any respect, and all of such
resolutions are in full force and effect on the date hereof.
2. Incumbency. The following named individuals are duly elected, qualified
and acting officers of the Corporation holding the offices set forth
opposite their respective names as of the date hereof, and the signatures
set opposite the respective names and titles of said officers are their
true, authentic and genuine signatures.
Name Title Specimen Signature
Xxxxx XxxXxxxxx President __________________
3. Articles and Bylaws. True and complete copies of the articles of
incorporation and the bylaws of the Corporation, as amended to date and
which are presently in full force and effect, are attached hereto as Annex
2 and Annex 3, respectively, and incorporated herein by reference.
4. No resolution has been adopted by the Board of Directors nor has action
been taken by the Corporation, its officers, directors, or shareholders in
contemplation of the dissolution of the Corporation.
IN WITNESS WHEREOF, I have duly executed this Certificate effective this
29th day of June, 2005.
--------------------
Secretary
ANNEX I
Resolutions of Board of Directors
and Shareholders of DRV Energy, INC.
The undersigned, being the entire Board of Directors and Shareholders of
DRV Energy Inc.., a Oklahoma corporation ("DRV" or the "Corporation"), hereby
consent to and unanimously adopt the following resolutions by written action,
acting without meeting pursuant to the Oklahoma statutes and the Corporation's
Bylaws.
WHEREAS, the Shareholders of DRV desire to enter into that certain Share
Exchange Agreement ("Share Exchange") whereby HYFS will acquire all of the
issued and outstanding stock of DRV, in exchange for 11,612,903 unregistered
shares of stock of HYFS plus cash payment in the amount of $400,000 in a
transaction intended to qualify as a tax-free exchange pursuant to ss.
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
WHEREAS, in connection with the Share Exchange, the Board of Directors and
Shareholders have reviewed all of the documentation encompassing the transaction
which includes the Agreement and the Exhibits and Schedules to the Agreement
(the "Transaction Documents"); and
WHEREAS, the Board of Directors and Shareholders deem it to be in the best
interest of the Corporation to enter into the Transaction Documents on behalf of
the Corporation and to consummate the Share Exchange contemplated between the
parties.
NOW THEREFORE, it is
RESOLVED, that the Board of Directors hereby approves, adopts and
ratifies the Transaction Documents and all of their terms and
conditions and shall cause the Transaction Documents to be executed
together with all necessary consents; and
RESOLVED, that the Shareholders hereby approve, adopt and ratify the
Transaction Documents and all of their terms and conditions and
shall cause the Transaction Documents to be executed together with
all necessary consents; and
RESOLVED, that Xxxxx Xxxxxxxxx, the President of DRV is hereby
authorized and directed to execute and deliver the Transaction
Documents for and on behalf and in the name of the Corporation, with
such changes in the terms and provisions thereof as the officer
executing the same shall, in such officer's sole discretion, deem
necessary or desirable and in the best interest of the Corporation,
such officer's signature being conclusive evidence that such officer
did so deem any such changes to be necessary or desirable and in the
best interest of the Corporation; and
FURTHER RESOLVED, that the President of the Corporation is hereby
authorized, empowered and directed to perform all acts and do all
things which such officer may deem necessary or desirable to
consummate the Share Exchange contemplated by the Transaction
Documents; and
FURTHER RESOLVED, that the Secretary of the Corporation is hereby
authorized, empowered and directed to certify and attest any
documents which the Secretary may deem necessary or appropriate to
consummate the Reorganization contemplated by the Transaction
Documents on behalf of the Corporation; and
FURTHER RESOLVED, that the Secretary of the Corporation is directed
to certify this written consent and the contents of these
resolutions and deliver such certification in support of the
authority of the above officers to act on behalf of the Corporation;
and
FURTHER RESOLVED, that the Directors and Shareholders are hereby
authorized to execute this Written Action and that upon such
execution, this Written Action is approved, adopted and ratified as
the act and deed of the Directors and Shareholders of the
Corporation.
DDATED this 29th day of June 2005.
Sole Shareholder of DRV Energy, Inc.
Xxxxx XxxXxxxxx
OFFICER'S CERTIFICATE
I, Xxxxx Xxxxxxxxx, the President of DRV Energy, Inc.., a Oklahoma
corporation ("DRV"), hereby certify, pursuant to that certain Share Exchange
Agreement by and between DRV and White Knight SST, Inc., dated the __th day of
June 2005 (the "Agreement") as follows:
The representations and warranties made by DRV in this Agreement were true
when made and shall be true at the Closing Date with the same force and effect
as if such representations were made at and as of the Closing Date (except for
changes therein permitted by this Agreement or by mutual consent of the
parties), and DRV shall have performed or complied with all covenants and
conditions required by this Agreement to be performed or complied with by DRV
prior to or at the Closing.
Dated this __th day of June 2005.
Xxxxx Xxxxxxxxx
President
Resolutions of Board of Directors
and Shareholders of Hybrid Fuel Systems, Inc.
The undersigned, being the entire Board of Directors of Hybrid Fuel
Systems, Inc. a Georgia corporation ("Hybrid" or the "Corporation"), hereby
consent to and unanimously adopt the following resolutions by written action,
acting without meeting pursuant to Florida statutes and the Corporation's
Bylaws.
WHEREAS, Hybrid desires to enter into that certain Share Exchange
Agreement ("Share Exchange") whereby HYFS will acquire all of the issued and
outstanding stock of DRV Energy, Inc., in exchange for 11,612,903 unregistered
shares of stock of HYFS plus cash payment in the amount of $400,000 payable with
$200,000 at closing and $200,000 January 1, 2006.
WHEREAS, in connection with the Share Exchange, the Board of Directors
have reviewed all of the documentation encompassing the transaction which
includes the Agreement and the Exhibits and Schedules to the Agreement (the
"Transaction Documents"); and
WHEREAS, the Board of Directors deem it to be in the best interest of the
Corporation to enter into the Transaction Documents on behalf of the Corporation
and to consummate the Share Exchange contemplated between the parties.
NOW THEREFORE, it is
RESOLVED, that the Board of Directors hereby approves, adopts and
ratifies the Transaction Documents and all of their terms and
conditions and shall cause the Transaction Documents to be executed
together with all necessary consents.
There being no further business to come before the Board, the Meeting was
adjourned the 29th day of June, 2005.
Xxxx Xxxxxxx, Chairman of the Board
Xxxx Xxxxxx, Director
Xxxxx Xxxxx, Director
