MEMBER INTEREST PURCHASE AGREEMENT Dated as of April 12, 2010 By and Among UNIVERSAL BIOENERGY INC. And NDR ENERGY GROUP LLC
Exhibit
2.1 Execution Copy
Dated as
of
April 12,
2010
By and
Among
UNIVERSAL
BIOENERGY INC.
And
NDR
ENERGY GROUP LLC
1
THIS MEMBER INTEREST PURCHASE
AGREEMENT (this
“AGREEMENT”)
is made
as of April 12,
2010, (the “EFFECTIVE DATE”), by and between UNIVERSAL BIOENERGY INC., a
Nevada corporation (the “Company”),
with its principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and NDR ENERGY GROUP LLC, a Maryland Limited Liability Company
(“NDR” and collectively with the Company,
the “Parties”)
(the “Members”),
with its principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇;
RECITALS
NDR
Energy Group LLC is engaged in the business of marketing energy and fuel
commodities such as natural gas, and transportation of petroleum fuels
throughout various regions of the United States.
Universal
Bioenergy Inc. is an alternative energy company, that markets alternative energy
products and other related energy product technologies.
WHEREAS, the Company and NDR have determined
that a business combination between NDR and the Company, to be effected by a
contribution described in Section 1.1 herein (the “Exchange”) in which the Company is granted
membership interests, (the “Interests”) in NDR in exchange for
consideration of shares of common stock in the Company (as further described in
Section 1.1 below), upon the terms and subject to the conditions set forth
herein, is advisable and in the best interests of their respective companies,
members and stockholders, and presents an opportunity for their respective
companies to achieve long-term strategic and financial benefits;
WHEREAS, the Company (i) has determined that
the Exchange is fair to, and in the best interests of, the Company and its
shareholders and (ii) has approved and declared the advisability of entering
into this Agreement;
WHEREAS, the parties hereto intend that the
Exchange qualify for income tax purposes as a tax-free exchange pursuant to the
Internal Revenue Code of 1986, as amended (the “Code”).
NOW, THEREFORE, in
consideration of the promises and the mutual covenants, representations and
warranties contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE
1
THE
EXCHANGE
Section
1.1 Exchange.
(a) Exchange
Consideration. At the effective time of the Closing (the “Effective Time”), automatically and without any
action on the part of any party, or other person:
2
(b) Membership Interests.
Subject to the terms and conditions set forth in this Agreement, NDR shall issue
the Company Forty-Nine percent (49%) of the Member Interests of NDR immediately
prior to the Effective Time and NDR shall receive the consideration as set forth
Section 1.1(c)
hereto (hereinafter, the “Exchange Consideration”).
(c) Rights as Member.
Within five (5) days following the Effective Time, the Company shall issue and
deliver to NDR, a certificate or certificate(s) of “Company” common stock (the
“Shares”), as set forth and disclosed in
Schedule
1.1.
(d) Exemption from
Registration. The Parties intend that the Shares to be issued by the
Company to the Members as part of the Exchange Consideration shall be exempt
from the registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”) pursuant to Section 4(2) of the
Securities Act and the rules and regulations promulgated there
under.
Section
1.2 Exchange
Procedures.
(a) At
or prior to the Closing, the Company will, in exchange for the Member Interests,
contribute the Shares, and such action shall be memorialized in the updated
Operating Agreement for NDR.
(b) Full Satisfaction of
Rights. All the Exchange Consideration for which the Interests shall have
been exchanged pursuant to this Article 1 shall be deemed to have been issued in
full satisfaction of all rights pertaining to the member Interests.
Section
1.3 Member Approval.
As required, the Members of NDR, have properly consented to the approval
and adoption of this Agreement and the Exchange.
Section
1.4 Closing. The
closing of the Acquisition and the other transactions contemplated by this
Agreement (the “Closing”) will be held at the offices of the
Company’s counsel, as disclosed in Schedule 1.4, (the Closing Agent), and shall
take place on or before March 31, 2010 (the “Closing Date”), or the earliest practicable and
mutually agreeable date following the satisfaction or waiver of all of the
conditions to closing set forth in Sections 6.1A, 6.11, 6.1J and 8.6, (and
otherwise in full in accordance with this Agreement), or at such other time or
date, and at such place, or by such other means of exchanging documents, as may
be agreed to by the parties hereto.
Section
1.5 ▇▇▇▇▇▇▇ Money Deposit.
Company shall deposit an ▇▇▇▇▇▇▇ money “good faith” deposit, (“the
Deposit”), made payable to escrow or the closing agent, as disclosed in Schedule
1.5. The Deposit will be non-refundable after all due diligence is complete and
approved in writing by Company.
Section 1.6 Restrictions
on Resale. None of the Shares issued as part of the Exchange
Consideration issuable in connection herewith will be registered under the
Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any
state, and cannot be transferred, hypothecated, sold or otherwise disposed of
until: (i) a registration statement with respect to such securities is declared
effective under the Securities Act, or (ii) the Company receives an opinion of
counsel for the interest holders, reasonably satisfactory to counsel for the
Company, that an exemption from the registration requirements of the Securities
Act is available.
3
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF NDR
NDR
represents and warrants to the Company that, except as disclosed in a Schedule
(numbered in accordance with the corresponding Section):
Section
2.1 Existence and
Power. NDR is a limited liability company duly formed, validly existing
and shall at “the Closing”, be in good standing under the laws of their state of
incorporation and have all limited liability company powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not, individually or
in the aggregate, have a Material Adverse Effect on NDR. NDR is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where such qualification is necessary, except for those
jurisdictions where failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect on NDR. NDR has heretofore delivered
to the Company true and complete copies of the Articles of Organization and
Operating Agreement of NDR (which includes a list of all Members and their
contributions) as currently in effect. In this Agreement, any reference to a
“Material Adverse Effect” means any event, change or effect
that is materially adverse to the condition (financial or otherwise),
properties, assets, liabilities, business, operations or results of operations
of NDR.
Section
2.2 Authorization.
The execution, delivery and performance by NDR of this Agreement, the
performance of their obligations hereunder, and the consummation of the
transactions contemplated hereby are within NDR powers and have been duly
authorized by all necessary action. Any action necessary in connection with the
execution and delivery of this Agreement, the performance of NDR obligations
hereunder and the consummation of the Exchange have been duly approved. This
Agreement has been duly and validly executed and delivered by NDR and is a
legal, valid and binding obligation of NDR enforceable against it in accordance
with its terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors’ rights generally or by
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity).
Section
2.3 Governmental
Authorization. The execution and delivery of this Agreement and the
performance by NDR of its obligations under this Agreement relating to the
Closing and the transactions contemplated hereby require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than (a) state corporate and securities laws or regulations of various
states or takeover laws, and (b) any other filings, approvals or authorizations
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect on NDR, or materially impair the ability of NDR to
consummate the Exchange and the transactions contemplated by this
Agreement.
Section
2.4 Non-contravention.
The execution and delivery by NDR of this Agreement and the consummation
by NDR of the transactions contemplated hereby and performance of its
obligations under this Agreement do not and will not (i) violate NDR’s Articles
of Organization and Operating Agreement, (ii) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (iii) require any consent or
other action by any Person (as defined herein) under, constitute a default
under, result in a violation of, conflict with, or give rise to any right of
termination, cancellation or acceleration of any right or obligation of NDR, or
to a loss of any benefit to which NDR is entitled under any provision of any
agreement or other instrument binding upon NDR, or any license, franchise,
permit, certificate, approval or other similar authorization affecting, or
relating in any way to, the assets or business of NDR , or (iv) result in the
creation or imposition of any Lien (as defined herein) on any asset of NDR .
“Lien” means, with respect to any property
or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or
other adverse claim of any kind in respect of such property or asset. “Person” shall include all natural persons,
corporations, business trusts, associations, limited liability companies,
partnerships, joint ventures and other entities and governments and agencies and
political subdivisions.
4
Section
2.5 Capitalization.
(a) As
of the date of this Agreement, the Managing Members hold 100% of the Member
Interests in NDR. The membership interests in NDR have been duly authorized and
validly issued and are fully paid and non-assessable and were not issued in
violation of any preemptive rights or other preferential rights of subscription
or purchase other than those that have been waived or otherwise cured or
satisfied. Except as set forth herein, as of the date hereof there are no
outstanding options, warrants, subscriptions, conversion or other rights,
agreements or other commitments obligating NDR to issue any interests or any
securities convertible into, exchangeable for or evidencing the right to
subscribe for any interests in NDR.
(b) There
are no outstanding obligations, contingent or otherwise, of NDR to redeem,
purchase or otherwise acquire any interests or other securities of
NDR.
(c)
NDR is not in violation of and has not violated any federal or state
securities laws in connection with any transaction relating to NDR, respectively
and/or any Affiliate, including without limitation, the acquisition of any
stock, business or assets of any third party or the issuance of any interest of
NDR.
(d) The
Interests will be duly authorized for issuance and when issued in accordance
with the terms of this Agreement, will be validly issued, fully paid and
non-assessable and the issuance thereof will not be subject to any preemptive or
other similar right.
Section
2.6 Compliance with Laws
and Court Orders. NDR holds all permits, licenses, variances, exemptions,
orders, franchises and approvals of all governmental entities necessary for the
lawful conduct of its business (the “Permits”), except where the failure so to
hold would not have a Material Adverse Effect on NDR. NDR is in compliance with
the terms of Permits, except where the failure to comply would not have a
Material Adverse Effect on NDR. NDR is and has been in compliance with, and to
the best knowledge of NDR is not under investigation with respect to and has not
been threatened to be charged with or given notice of any violation of, any
applicable law, rule, regulation, judgment, injunction, order or decree, except
for such matters as would not, individually or in the aggregate, have a Material
Adverse Effect on NDR.
Section
2.7 Litigation.
There is no action, suit, investigation, audit or proceeding pending
against, or to the best knowledge of NDR threatened against or affecting, NDR or
any of its assets or properties before any court or arbitrator or any
governmental body, agency or official.
Section
2.8 Finder’s Fees.
There is no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf of NDR who might be
entitled to any advisory fee, broker’s fees, commission or finder’s fees in
connection with the transactions contemplated by this Agreement.
Section
2.9 Financial
Statements. As disclosed or referred to in Schedule 2.9, NDR has provided
and / or will provide the Company with NDR’S audited, and/or unaudited Balance
Sheet, Consolidated Statement of Operations, Consolidated Statement of Changes
in Shareholders’ Equity and Consolidated Statement of Cash Flows as of and for
the year ended December 31, 2009 and December 31, 2008, (the “Balance Sheet”) for the year ended December 31,
2009 and December 31, 2008 (the “Balance Sheet Date”). Such financial statements (i) are
in accordance with the books and records of NDR, (ii) present fairly in all
material respects the financial condition of the NDR at the dates therein
specified and the results of its operations and changes in financial position
for the periods therein specified and (iii) have been prepared in accordance
with generally accepted accounting principles (“GAAP”) applied on a basis
consistent with prior accounting periods.
5
Section
2.10 Assets and Contracts. NDR
shall have provided the Company with all material agreements as disclosed in
Schedule 2.10. Except as expressly set forth in a schedule to this Agreement,
NDR is not a party to any written or oral agreement not made in the ordinary
course of business that is material to NDR. NDR does not own any real property.
Except as disclosed in Schedule 2.10, NDR is
not a party to or otherwise barred by any written or oral (a) agreement with any
labor union, (b) agreement for the purchase of fixed assets or for the purchase
of materials, supplies or equipment in excess of normal operating requirements,
(c) agreement for the employment of any officer, individual employee or other
Person on a full-time basis or any agreement with any Person for consulting
services, (d) bonus, pension, profit sharing, retirement, stock purchase, stock
option, deferred compensation, medical, hospitalization or life insurance or
similar plan, contract or understanding with respect to any or all of the
employees of NDR or any other Person, (e) indenture, loan or credit agreement,
note agreement, deed of trust, mortgage, security agreement, promissory note or
other agreement or instrument relating to or evidencing Indebtedness for
borrowed money or subjecting any asset or property of NDR to any Lien or
evidencing any Indebtedness, (f) guaranty of any Indebtedness, (g) lease or
agreement under which NDR is lessee of or holds or operates any property, real
or personal, owned by any other Person, (h) lease or agreement under which NDR
is lessor or permits any Person to hold or operate any property, real or
personal, owned or controlled by NDR, (i) agreement granting any preemptive
right, right of first refusal or similar right to any Person, (j) agreement or
arrangement with any Affiliate or any “associate” (as such term is defined in
Rule 405 under the Securities Act) of NDR or any present or former officer,
director or stockholder of NDR, (k) agreement obligating NDR to pay any royalty
or similar charge for the use or exploitation of any tangible or intangible
property, (l) covenant not to compete or other restriction on its ability to
conduct a business or engage in any other activity, (m) distributor, dealer,
manufacturer’s representative, sales agency, franchise or advertising contract
or commitment, (n) agreement to register securities under the Securities Act,
(o) collective bargaining agreement, or (p) agreement or other commitment or
arrangement with any Person continuing for a period of more than two months from
the Closing Date that involves an expenditure or receipt by NDR in excess of
$1,000. NDR maintains no insurance policies and insurance coverage of any kind
with respect to NDR, its business, premises, properties, assets, employees and
agents. Schedule
2.10 contains a true and complete list and description of each bank
account, savings account, other deposit relationship and safety deposit box of
NDR, including the name of the bank or other depository, the account number and
the names of the individuals having signature or other withdrawal authority with
respect thereto. Except as disclosed on Schedule 2.10, no
consent of any bank or other depository is required to maintain any bank
account, other deposit relationship or safety deposit box of NDR in effect
following the consummation of the Acquisition/Merger and the transactions
contemplated hereby. NDR has furnished to the Company true and complete copies
of all agreements and other documents disclosed or referred to in Schedule 2.10 or the
NDR Balance Sheet or the notes thereto, as well as any additional agreements or
documents, requested by the Company.
6
Section
2.11 Acquisition for Investment.
NDR is financially able to bear the economic risks of acquiring an
interest in the Company and the other transactions contemplated hereby, and have
no need for liquidity in this investment. NDR has such knowledge and experience
in financial and business matters in general, and with respect to businesses of
a nature similar to the business of the Company, so as to be capable of
evaluating the merits and risks of, and making an informed business decision
with regard to, the acquisition of the Shares. NDR is acquiring the Shares
solely for their own account and not with a view to or for resale in connection
with any distribution or public offering thereof, within the meaning of any
applicable securities laws and regulations, unless such distribution or offering
is registered under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such
registration is available. NDR has (i) received all the information they have
deemed necessary to make an informed investment decision with respect to the
acquisition of the Shares, (ii) had an opportunity to make such investigation as
they have desired pertaining to the Company and the acquisition of an interest
therein, and to verify the information which is, and has been, made available to
them and (iii) had the opportunity to ask questions of the Company concerning
the Company. NDR has received no public solicitation or advertisement with
respect to the offer or sale of the Shares. NDR realizes that the Shares are
“restricted securities” as that term is defined in Rule 144 promulgated by the
Securities and Exchange Commission under the Securities Act, the resale of the
Shares is restricted by federal and state securities laws and, accordingly, the
Shares must be held indefinitely unless their resale is subsequently registered
under the Securities Act or an exemption from such registration is available for
their resale. NDR understands that any resale of the Shares by them must be
registered under the Securities Act (and any applicable state securities law) or
be effected in circumstances that, in the opinion of counsel for the Company at
the time, create an exemption or otherwise do not require registration under the
Securities Act (or applicable state securities laws). NDR acknowledges and
consents that certificates now or hereafter issued for the Shares will bear a
legend substantially as follows:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER
ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION UNDER THE STATE ACTS OR PURSUANT TO EXEMPTIONS FROM SUCH
REGISTRATION OR QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE
SECURITIES ACT, THE EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT
AND RULE 144 THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER OF
THESE SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO THE
AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL NOT
VIOLATE THE SECURITIES LAWS.
Section
2.12 Tax Consequences. NDR has
reviewed with its own tax advisors the federal, state, local and foreign tax
consequences of the investment in the Company’s Shares. NDR is relying solely on
such advisors and not on any statements or representations of the Company, or
any of its agents and understands that NDR, (and not Company) shall be
responsible for NDR’s own tax liability (if any) that may arise as a result of
the investment in the Company’s Shares.
Section
2.13 Full Disclosure. Neither
this Agreement nor any exhibit or schedule hereto nor any statement, list or
certificate delivered by NDR pursuant hereto or pursuant to any written request
therefor, contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances in which they were made, not
misleading.
7
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to NDR that:
Section
3.1 Corporate Existence and
Power. The Company is a corporation duly incorporated and in good
standing under the laws of the State of Nevada. The Company has all powers and
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
At the Closing, the Company will be duly qualified to do business as a foreign
corporation and will be in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
Section
3.2 Authorization.
The execution, delivery and performance by the Company of this Agreement
and the consummation by the Company of the transactions contemplated hereby are
within the powers of the Company, and will, when executed by all the
Shareholders, have been duly authorized by all necessary action. This Agreement,
assuming the due authorization, execution and delivery thereof by the Company,
is a legal, valid and binding obligation of the Company, enforceable against it
in accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or
other similar laws now or hereafter in effect relating to creditors’ rights
generally or by general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
Section
3.3 Governmental
Authorization. The execution and delivery of this Agreement and the
performance by the Company of its obligations under this Agreement relating to
the Exchange, the Closing and the transactions contemplated hereby require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (a) compliance with any applicable requirements
of the Securities Act, or takeover laws, and (b) any other filings, approvals or
authorizations which, if not obtained, would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or materially impair
the ability of the Company to consummate the Exchange and the transactions
contemplated by this Agreement.
Section
3.4 Non-contravention.
The execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby and
performance of its obligations under this Agreement do not and will not (i)
violate the Company’s Certificate of Incorporation, (ii) assuming compliance
with the matters referred to in Section 7.3, violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (iii) require any consent or
other action by any Person under, constitute a default under, result in a
violation of, conflict with, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of the Company, or to a
loss of any benefit to which the Company, is entitled under any provision of any
agreement or other instrument binding upon the Company, or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Company or
(iv) result in the creation or imposition of any Lien on any asset of the
Company, except, in the case of clauses (ii), (iii) and (iv), for such matters
as would not, individually or in the aggregate, have a Material Adverse Effect
on the Company or materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement.
8
Section
3.5 Capitalization.
The authorized capital stock of the Company consists of 200,000,000
shares of Common Stock and 1,000,000 shares of Preferred Stock. As of December
31, 2009, 35,510,000 shares of Company Common Stock were issued and outstanding
and 331,080 shares of Company Preferred Stock were outstanding. The Shares have
been duly authorized and validly issued and are fully paid and non-assessable
and were not issued in violation of any preemptive rights or other preferential
rights of subscription or purchase other than those that have been waived or
otherwise cured or satisfied. There are no outstanding obligations, contingent
or otherwise, of the Company to redeem, purchase or otherwise acquire any
capital stock or other securities of the Company. The Company is not in
violation of and has not violated any federal or state securities laws in
connection with any transaction relating to the Company and/or an Affiliate,
including without limitation, the acquisition of any stock, business or assets
of any third party or the issuance of any capital stock of the
Company.
Section
3.6 SEC Reporting and
Compliance.
(a) The
Company filed a registration statement on Form SB-2 under the Securities Act,
which became effective on or about June 29, 2006. Except as disclosed on
Schedule 3.6, the Company has timely filed with the U.S. Securities and Exchange
Commission (the “Commission”) all
registration statements, proxy statements, information statements and reports
required to be filed pursuant to the Securities Exchange Act of1934, as amended
(the “Exchange Act”). The Company has not filed with the
Commission a certificate on Form 15 pursuant to Rule 12h-3 of the Exchange Act.
The Company has informed NDR that true and complete copies of the registration
statements, information statements and other reports (collectively, the “Company SEC Documents”) filed by the Company with the
Commission are available to them, and they are therefore advised to referred to
the latest reports filed with the “Commission. None of the Company SEC
Documents, as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained therein not misleading. The Company is not an investment
company within the meaning of Section 3 of the Investment Company Act of 1940,
as amended. The shares of Company Common Stock are quoted on the
Over-the-Counter (OTC) Pink Sheets under the symbol “▇▇▇▇.▇▇”. Between the date
hereof and the Closing Date, the Company shall continue to bring up to date and
satisfy the filing requirements of the Exchange Act and all other requirements
of applicable securities laws. The Company SEC Documents include all
certifications and statements required of it, if any, by (i) Rule 13a-14 or
15d-14 under the Exchange Act, and (ii) 18 U.S.C. Section 1350 (Section 906 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002), and each of such certifications and statements
contain no qualifications or exceptions to the matters certified therein other
than a knowledge qualification, permitted under such provision, and have not
been modified or withdrawn and neither the Company nor any of its officers has
received any notice from the Commission questioning or challenging the accuracy,
completeness, form or manner of filing or submission of such certifications or
statements. The Company has otherwise complied with the Securities Act, Exchange
Act and all other applicable federal and state securities laws.
Section
3.7 Financial Statements.
The balance sheets and statements of operations, stockholders’ equity and
cash flows contained in the Company (the “Company Financial Statements”) as filed with the U.S. Securities
and Exchange Commission (a) have been prepared in accordance with GAAP applied
on a basis consistent with prior periods (and, in the case of unaudited
financial information, on a basis consistent with year-end audits), (b) are in
accordance with the books and records of the Company and (c) present fairly in
all material respects the financial condition of the Company at the dates
therein specified and the results of its operations and changes in financial
position for the periods therein specified.
9
Section
3.8 Litigation.
There is no action, suit, investigation, audit or proceeding pending
against, or to the best knowledge of the Company threatened against or
affecting, Company or any of its assets or properties before any court or
arbitrator or any governmental body, agency or official.
Section
3.9 Auditor’s Review and
Disclosure. The Company’s auditors during their review of the Company’s
records and related documentation has advised the Company of its findings
regarding the conversion of some of the Company’s prior debt from notes to
preferred stock as disclosed in Schedule 3.9.
Section
3.10 Finder’s Fees. There is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of Company who might be entitled to any
advisory fee, broker’s fees, commissions or finder’s fees in connection with the
transactions contemplated by this Agreement.
Section
3.11 Disclosure. Neither this
Agreement nor any exhibit or schedule hereto nor any statement, list or
certificate delivered to the Company pursuant hereto or pursuant to any written
request therefor, contains an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein, in light of the circumstances in which they were made, not
misleading.
ARTICLE
4
INDEMNIFICATION
Section
4.1 Indemnification
by the Company.
The
Company shall indemnify, defend and hold harmless NDR, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior to
the date hereof or who becomes prior to the Closing, an officer, director,
member or partner of NDR, any subsidiary or affiliate thereof or an employee of
NDR, any subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “LLC Indemnified Parties”) against all losses, claims,
damages, costs, expenses (including attorneys’ fees), liabilities or judgments
or amounts that are paid in settlement of or in connection with any threatened
or actual claim, action, suit, proceeding or investigation based in whole or in
part on or arising in whole or in part out of (i) any breach of this Agreement
by the Company or any subsidiary or affiliate thereof, including but not limited
to failure of any representation or warranty to be true and correct at or before
the Closing, or (ii) any act, omission or conduct of any officer, director or
agent of the Company or any subsidiary or affiliate thereof prior to the
Closing, whether asserted or claimed prior to, at or after, the Closing, or
(iii) relating to the consummation of the transactions contemplated herein, and
any action taken in connection therewith (the “NDR Indemnified Liabilities”). Any NDR Indemnified Party wishing
to claim indemnification under this Section 4.1, upon learning of any such
claim, action, suit, proceeding or investigation, shall notify the Company, but
the failure so to notify shall not relieve the Company from any liability that
it may have under this Section 4.1, except to the extent that such failure would
materially prejudice the Company. NDR Indemnified Parties shall permit the
Company (at the expense of the Company) to assume the defense of any NDR
Indemnified Liabilities.
10
Section
4.2 Indemnification
by NDR
NDR shall
indemnify, defend and hold harmless each of the Company, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior to
the date hereof or who becomes prior to the Closing, an officer, director or
partner of the Company, any subsidiary or affiliate thereof or an employee of
the Company, any subsidiary or affiliate thereof and their respective heirs,
legal representatives, successors and assigns (the “Company Indemnified Parties”) against all losses, claims,
damages, costs, expenses (including attorneys’ fees), liabilities or judgments
or amounts that are paid in settlement of or in connection with any threatened
or actual claim, action, suit, proceeding or investigation based in whole or in
part on or arising in whole or in part out of (i) any breach of this Agreement
by the Members or affiliate thereof, including but not limited to failure of any
representation or warranty to be true and correct at or before the Closing, or
(ii) any act, omission or conduct of any officer, director or agent of NDR or
any subsidiary or affiliate thereof prior to the Closing, whether asserted or
claimed prior to, at or after, the Closing, or (iii) relating to the
consummation of the transactions contemplated herein, and any action taken in
connection therewith (the “Company Indemnified Liabilities”). Any Company Indemnified Party
wishing to claim indemnification under this Section 4.2, upon learning of any
such claim, action, suit, proceeding or investigation, shall notify the Members,
but the failure so to notify shall not relieve the Members from any liability
that they may have under this Section 4.2, except to the extent that such
failure would materially prejudice the Members.
Section
4.3 Survival of
Indemnification
All
rights to indemnification under this Article 4 shall survive the consummation of
the Exchange and the termination of this Agreement. The provisions of this
Article 4 are intended to be for the benefit of, and shall be enforceable by,
each party hereto, and his or her heirs and representatives.
ARTICLE
5
COVENANTS
OF THE PARTIES
The
parties hereto agree that:
Section
5.1 Reasonable Best
Efforts. Subject to the terms and conditions of this Agreement, each
party hereto will use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement.
Section
5.2 Filings; Other
Action. Subject to the terms and conditions herein provided, the Company
and NDR shall promptly use reasonable best efforts to cooperate with one another
in (i) determining whether any filings are required to be made with, or
consents, permits, authorizations or approvals are required to be obtained from,
any third party, the United States government or any agencies, departments or
instrumentalities thereof or other governmental or regulatory bodies or
authorities of federal, state, local and foreign jurisdictions in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and (ii) timely making all such filings and
timely seeking all such consents, permits, authorizations or approvals, and
(iii) taking or causing to be taken, all other actions and do, or cause to be
done, all other things necessary, proper or advisable to consummate and make
effective the transactions contemplated hereby.
Section
5.3 Notices of
Certain Events. In addition to any other notice required to be given by
the terms of this Agreement, each of the parties shall promptly notify the other
party hereto of:
(a) any
notice or other communication from any person alleging that the consent of such
person is or may be required in connection with any of the transactions
contemplated by this Agreement;
(b)
any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any
actions, suits, claims, investigations or proceedings commenced or, to its
knowledge threatened against, relating to or involving or otherwise affecting
such party that, if pending on the date of this Agreement that relate to the
consummation of the transactions contemplated by this
Agreement.
11
Section
5.4 Access to
Information; Confidentiality.
(a) Following
the date hereof, until consummation of all transactions contemplated hereby, the
Company, on the one hand, and the Members, on the other, will give to the other
party, its counsel, financial advisers, auditors and other authorized
representatives reasonable access to the offices, properties, books and records
of such party, furnish to the other party and its representatives such financial
and other data and information as such party and its representatives may
reasonably request and instruct its own employees and representatives
(including, without limitation, insurance agents and underwriters) to cooperate
with the other party in its investigations. Any investigation pursuant to this
Section shall be conducted in such manner as not to interfere unreasonably with
the conduct of the business of the other parties. No investigation pursuant to
this Section shall affect any representation or warranty made by any party
hereunder.
(b) All
information obtained by the Company or the Members in connection with the
transactions contemplated hereby shall be kept confidential and will not be used
for any purpose unrelated to the consummation of the transactions contemplated
by this Agreement. Should the Closing not occur for any reason, all such
information and copies thereof shall promptly be returned to each respective
party.
Section
5.5 Conduct of Ordinary
Business. In addition to the conditions discussed herein, consummation of
the acquisition is subject to NDR having conducted its business in the ordinary
course of operations, consistent with past practice and use all reasonable
efforts to maintain and preserve intact its business organization and the good
will of those having business relationships with it, and retain the services of
its present officers and key employees, during the date hereof and the date of
closing, and there having been no material adverse change in NDR’ business,
financial condition or prospects.
Except as
expressly contemplated or permitted by this Agreement, or as required by
applicable law, rule or regulation, NDR shall not;
(a)
issue, sell, grant, dispose of, pledge or
otherwise encumber, or authorize or propose the issuance, sale, disposition or
pledge or other encumbrance of any of its Member Interests;
(b) other
than in the ordinary course of business consistent with past practice, incur any
indebtedness for borrowed money or guarantee any such indebtedness or make any
loans, advances or capital contributions to, or investments in, any other person
other than the Company or its direct or indirect wholly owned subsidiaries,
except pursuant to contracts or agreements in force at the date of this
Agreement;
(c) sell,
transfer, mortgage, encumber or otherwise dispose of any of its properties or
assets with a minimum value in excess of $10,000 to any individual, corporation
or other entity other than a direct or indirect wholly owned subsidiary of the
NDR, or cancel, release or assign to any such person any indebtedness in excess
of $10,000 or any claims related thereto, in each case that is material to the
NDR and its subsidiaries, taken as a whole, except (i) in the ordinary course of
business consistent with past practice, or (ii) pursuant to contracts or
agreements in force at the date of this Agreement;
(d) other
than in the ordinary course of business consistent with past practice, make any
material acquisition or investment in a business either by purchase of stock or
securities, merger or consolidation, contributions to capital, loans, advances,
property transfers, or purchases of any properly or assets of any other
individual, corporation or other entity other than a direct or indirect wholly
owned subsidiary of NDR, except pursuant to contracts or agreements in force at
the date of this Agreement;
12
(e)
increase in any manner the compensation of any of its directors,
officers or employees or enter
into, establish, amend or terminate any NDR Company Benefit Plans, for or in
respect of, any stockholder, officer, director, other employee, agent,
consultant or affiliate other than (i) as required pursuant to the terms of
agreements or Company Benefit Plans, in each case in effect on the date of this
Agreement, and (ii) increases in salaries, wages and benefits of employees who
are not directors or executive officers of the Company made in the ordinary
course of business and in a manner consistent with past practice;
(f) amend
its charter, bylaws, or similar organizational documents; or
(g) make
any commitment to take any of the actions prohibited by this Section
5.5.
Section
5.6 No
Solicitation.
(a)
NDR agrees to work in good faith expeditiously
towards a closing. From the date hereof, NDR agrees that it will not, while they
are under this agreement for the sale of the NDR to Company, take any action to
solicit, initiate, encourage or assist the submission of any proposal,
negotiation or offer from any person or entity, (directly, indirectly, or
through third parties) other than the Company, relating to the sale of the NDR,
or the acquisition, sale, lease, license or other disposition of NDR or any
material part of the stock or assets of NDR, and shall notify Company promptly
of any inquiries by any third parties in regards to the foregoing.
(b) In
the event that NDR breaches this “no-solicitation” obligation and, prior to the
closing, or termination of this Purchase Agreement, closes any of the
above-referenced transactions without providing the Company with the opportunity
to invest on the same terms as the other parties to such transaction, then NDR
shall pay to the Company, Thirty Thousand ($30,000) Dollars, upon the closing of
any such transaction as liquidated damages. NDR will not disclose the terms of
this Agreement to any person other than its Officers, members of the Board of
Managers and NDR’s accountants and attorneys; and will not disclose the terms to
other potential Investors, unless they are acceptable to the Company, as lead
Investor, without the written consent of the Company.
ARTICLE
6
CONDITIONS
PRECEDENT
Section
6.1 Conditions of
Obligations of the Company. The obligations of the Company to effect the
Exchange are subject to the satisfaction of the following conditions, any or all
of which may be waived in whole or in part by the Company:
(a)
Representations and Warranties. Each of the representations and
warranties of NDR set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date, except where the
failure to be so true and correct would not have a Material Adverse Effect on
NDR.
(b) Performance
of Obligations NDR. NDR shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing.
(c) receipt
and approval by the Company of NDR’s 2008 and 2009 year end audited financial
statements;
(d) execution
of this Agreement by all parties;
(e) the
obtaining of all requisite regulatory, administrative, or governmental
authorizations and consents;
13
(f) approval
of this Agreement by the Board of Managers of the NDR, and, if this Agreement is
structured as a Merger, approval thereof by the Board of Directors of the
Company and by the Board of Managers and majority of Members of
NDR;
(g) absence
of a material adverse change in the condition (financial or otherwise),
business, properties, assets or prospects of NDR;
(h) absence
of pending or threatened litigation, investigations or other matters affecting
NDR;
(i) satisfactory
completion by the Company, in its sole discretion, of a due diligence
investigation
of NDR;
(j) the
Company obtaining financing for the Loan or Line of Credit referenced herein in
Section 8.6;
(k) NDR
and the Company having entered into non-competition agreement(s) acceptable to
the Company.
(l) The
Operating Agreement of NDR, shall have been amended and revised to reflect the
Member Interests of the Company.
Section
6.2 Conditions of
Obligations of NDR. The obligations of NDR to effect the Exchange are
subject to the satisfaction of the following conditions, any or all of which may
be waived in whole or in part by the Company:
(a) Representations
and Warranties. Each of the representations and warranties of the Company set
forth in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date, except where the failure to be so true and correct
would not have a Material Adverse Effect on the Company.
(b) Performance
of Obligations of the Company. The Company shall have performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing Date.
(c) Execution
of this Agreement by all parties;
(d) the
obtaining of all requisite regulatory, administrative, or governmental
authorizations and consents;
(e) approval
of the this Agreement by the Board of Directors of the Company, and, if this
Agreement is structured as a Merger, approval thereof by the Board of Directors
of the Company and by the Board of Managers and majority of Members of
NDR;
(f) absence
of a material adverse change in the condition (financial or otherwise),
business, properties, assets or prospects of the Company;
(g) absence
of pending or threatened litigation, investigations or other matters affecting
the Company;
(h) the
Company obtaining financing for the Loan or Line of Credit referenced
herein;
(i) NDR
and the Company having entered into non-competition agreement(s) acceptable to
the Company.
14
ARTICLE
7
TERMINATION
Section
7.1 Termination.
This Agreement may be terminated and the Exchange may be abandoned at any
time prior to the Closing:
(a) By
mutual written consent of the parties hereto;
(b) By
the Company if (i) NDR shall have failed to comply in any material respect with
any of the covenants or agreements contained in this Agreement to be complied
with or performed by NDR; or (ii) any representations and warranties of NDR,
that are qualified by materiality, contained in this Agreement shall not have
been true and correct in any respect, or (iii) if the representations and
warranties of NDR set forth in this Agreement that are not so qualified shall
not be true and correct in all material respects when made, or on and as of the
Closing Date as if made on and as of Closing Date (except to the extent it
relates to a particular date); or (iv) failure of approval of this Agreement by
the Board of Directors of the Company; or (v) un-satisfactory completion by the
Company, in its sole discretion, of a due diligence investigation of
NDR;
(c) By
NDR if (i) the Company shall have failed to comply in any material respect with
any of the covenants or agreements contained in this Agreement to be complied
with or performed by them; or (ii) any representations and warranties of the
Company contained in this Agreement shall not have been true when made or on and
as of the Closing Date as if made on and as of the Closing Date (except to the
extent it relates to a particular date), except where the failure to be so true
and correct would not have a Material Adverse Effect on the
Company.
ARTICLE
8
ADDITIONAL
AGREEMENTS OF THE PARTIES
Section
8.1 Further Sale of
Member Interests. The Company and/or its assigns, is granted the right
and option to purchase a minimum of an additional Two Percent (2%) of NDR’s
“Membership Interests” for a period of Five (5)Years. Subject to the terms and
conditions set forth in this Agreement, the Company and/or its assigns intends
to exercise its option to purchase the other Two Percent (2%) of NDR’s
“Membership Interests”, at the “Closing”. NDR shall issue the Company and/or its
assigns Two Percent (2%) of the Member Interests of NDR immediately prior to the
Effective Time, and NDR shall receive the additional “Exchange Consideration” as
set forth and disclosed in Schedule 8.1.
Section
8.2 Assignments.
The Company may assign some or all of its rights hereunder prior to the
Closing to one or more of its subsidiaries or other assignees. After further
review, at the Company’s election, the Exchange may be modified so that the
Company acquires the “Membership Interests” through a merger between the Company
or one of its subsidiaries or assignees and NDR (the “Merger”).
Section
8.3 Adjustment.
The exchange consideration will be based on the audited and/or unaudited
financial statements and records of NDR for the past three (3) years, and will
be mutually established by the Company, and NDR, and will be subject to a
post-closing adjustment to account for any change in the accounts receivable and
inventory of the Company from January 1, 2010, to the Closing Date.
Section
8.4 Board of
Managers. Within three (3) Days after the Closing Date , NDR shall
appoint two (2) Seats on NDR’s Board of Managers to represent the interests of
the Company and its shareholders. In the event NDR is not controlled by a Board
of Managers, the appointments shall be as Managing Members.
15
Section 8.5 Services. The Company agrees
to perform or otherwise provide the following services, (directly and/or through
other parties), for NDR as needed: Provide technical and management assistance
to NDR, including (i) causing representatives of the Company to perform duties
as Board of Managers, and (ii) providing guidance and advice on such subjects as
strategic direction, marketing, operations, management, corporate finance, and
to assist NDR with its plans for growth and expansion. The Company will meet
with NDR regularly during each year at the Company’s facilities, and/or at other
mutually agreeable times and/or locations for such consultation, advice and to
review progress in achieving the Company’s plans. As compensation for the
“Management Support Services” to be performed by the Company hereunder, NDR will
pay the Company a management fee in the amount equal to Five (5%) Percent of
NDR’s gross revenues to be paid monthly (by the 5th day of
each month) based on the prior months revenues actually received.
Section 8.6 Working Capital Loan or Line of
Credit. The Company will provide, arrange, establish or otherwise make
available to NDR a loan or line of credit (the “Funds”), up to a principal
amount not to exceed One Million ($1,000,000) Dollars, for working capital to
help fund NDR’s growth and expansion. The “Funds” shall be disbursed to NDR in
monthly installments of not less than Twenty One Thousand ($21,000) Dollars (the
“Draw”) up to a period not to exceed four (4) years as determined by the Company
in accordance with NDR’s budget and achieving the stated revenue and profit
objectives as agreed upon in Section 8.8. The first payment for the “Draw” shall
be due and paid to NDR within Thirty (30) days after “the Closing Date “ of the
of the transaction. The “Draw” will be provided to NDR on a continuing monthly
basis until NDR’s monthly revenues equals or exceeds the amount of the “Draw” on
a consistent basis, and NDR’s revenues have stabilized, after which the Company
and NDR may increase, reduce or suspend the amount of the “Draw” based on, the
needs for the “Draw”, and NDR’s Management achieving the stated revenue and
profit objectives as agreed upon in Section 8.8. The Company reserves the right
to make the payment of the Funds to NDR on a quarterly basis if it deems
advisable. The loan will evidenced by a Promissory Note and other loan documents
as necessary, in favor of the Company, on terms and conditions agreed upon by
the Parties. As security for repayment of the loan or line of credit , NDR
agrees to pledge or assign its existing and future natural gas fuel contracts
/accounts, accounts receivable, and other future energy and/or energy services
contracts and/or accounts as collateral to perfect the Company’s security
interest.
Section 8.7 Audit of Books and Records.
The Company shall have the right to examine the books and records of NDR
and inspect its facilities and may request information at reasonable times and
intervals concerning the general status of NDR’s financial condition and
operations. All of the books, records, files, reports, contracts, financials and
customer accounts of the NDR shall be kept in good order at all times so as to
accurately reflect the business and financial condition of NDR.
Section
8.8 Management
Reports and Budgets.
(a) NDR
will provide the Company with a detailed financial budget for the operations of
NDR, for the current year of operations detailing capital costs and operations
expenses, and proforma profit and loss statement, projecting sales and income
for NDR for the first two years, and an associated proforma cash flow statement
and balance sheet (collectively the “Budget’). The company reserves the right to
review and approve the final ‘Budget” prior to the disbursement of the Funds and
the Draw, which approval will not be unreasonably withheld. This will help
facilitate the Company’s determination of when and how much funding tranches to
provide (pursuant to Section 8.6 herein) to NDR to meet the NDR’s projected
capital budget requirements and sales and operations expenses. NDR will provide
the Company with monthly executive management reports on the general status of
NDR’s operations, contracts, sales goals, capital projects, marketing/sales
efforts and financial condition, including Profit and Loss Statements, Cashflow
Statements and Balance Sheet and a budget variance report.
16
(b) Business Objectives -
Within thirty days (30) of the effective date of this Agreement, the Company and
NDR shall jointly establish a range of business related objectives, which shall
include but not be limited to; NDR’s sales of products and services, revenue
targets, operating profit, net profit, management and operations by which to
measure NDR’s management’s performance hereunder. These business objectives
shall be reviewed by the Company on a quarterly or on a semi-annual basis during
the term of this Agreement, to protect the interests of the Company and its
Shareholders. If NDR negligently fails to perform and achieve the conditions and
agreements, as mutually agreed to, as part of these business objectives
contained herein, then NDR may be considered to be in breach of this Agreement,
and Company will be entitled to remedies and other specific performance as
indicated in Section 9.16.
Section 8.9
Management. The Company agrees to the continued employment by NDR of ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, and ▇▇▇ ▇▇▇▇▇▇ with NDR. On or prior to the
Effective Date, NDR will enter into employment agreements with ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, and ▇▇▇ ▇▇▇▇▇▇, on such terms and conditions as would be
negotiated and agreed by them and NDR including mutually agreeable provisions
regarding term, base and incentive compensation, confidentiality, assignment to
us of intellectual property rights in past and future works products and
restrictions on competition, provided that such terms are acceptable to the
Company.
Section
8.10 Financing Facility - Line of Credit.
(a)
The
Company will on a “best efforts basis”, arrange, establish or otherwise make
available to NDR and the Company, a loan or line of credit (the “Facility”), up
to an estimated annual principal amount of Three Hundred Million ($300,000,000)
Dollars, or Twenty Five Million ($25,000,000) Dollars on a monthly basis to help
fund NDR’s growth and expansion. The Facility will be used for accounts
receivable financing of goods, products, services, invoices, and other business
interests as determined by the Company. The Company shall perform all the
required consulting, evaluation, financial and investment analysis, contract
negotiations, develop borrowing strategies, as deemed necessary for the purpose
of arranging an acceptable financial instrument for NDR and the Company. The
“Facility” obtained by the Company will be drawn on a major U.S. bank or similar
suitable financial institution, (the Lender) with favorable rates, terms and
conditions as described in the Facility Agreement. The Company and NDR hereby
acknowledge and agree that the Lender will require an automatic collections
systems to be set up and arranged via a Lock Box service. This will allow for
better cash management, accelerated collections, faster access to the funds,
direct deposit, and improved float management, from the receipt of the collected
funds, from the sale of the purchased goods and services. As security for the
Facility, NDR agrees to pledge or assign a first priority lien on its existing
and future natural gas fuel contracts /accounts, accounts receivable, and energy
services contracts and/or accounts as collateral to perfect the Company’s
security interest.
(b)
Sales Projections.
The management of NDR Energy believes (but cannot guarantee) that with the
establishment of the financing facility indicated above, that it may reach an
estimated one billion dollars ($1,000,000,000.00) in fuel sales at the end of
twelve (12) months and up to three billion dollars ($3,000,000,000.00) in fuel
sales at the end of twenty four (24) months after the closing. The management of
NDR Energy also believes that the estimated gross profit projected from sales in
year one may be up to twenty million dollars ($20,000,000.00) and estimated up
to sixty million dollars ($60,000,000.00) at the end of two (2)
years.
Section
8.11 Financial Covenants NDR also agrees to comply
with and perform in accordance with the financial and related covenants as
disclosed in Schedule 8.11.
17
ARTICLE
9
MISCELLANEOUS
Section 9.1
Survival of Representations and Warranties. The representations and
warranties and agreements contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Closing.
Section
9.2 Amendments; No Waivers.
(a)
Any
provision of this Agreement with respect to transactions other than the Exchange
contemplated hereby may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by the Company
and the Members; or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b)
No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
Section 9.3
Fees and Expenses. Except for all transfer taxes which shall be paid by
the Company, all costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost or expense.
Section 9.4
Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto, but any such transfer or assignment will not
relieve the appropriate party of its obligations hereunder.
Section
9.5 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to the principles of conflicts of law
thereof.
Section 9.6
Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any federal
or state court located in the State of California, and each of the parties
hereby consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 9.11 shall be deemed effective service of
process on such party.
Section 9.7
Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto. No provision of this Agreement
is intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
18
Section 9.8
Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto and the documents and the instruments referred to herein),
constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder. The Company or NDR make no representations or warranties, except as
set forth in this Agreement.
Section
9.9 Captions. The captions herein are
included for convenience of reference only and shall be ignored in the
construction or interpretation hereof.
Section
9.10 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any parties. Upon
such a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.
Section 9.11 Notice.
Any notice, request or other communication hereunder shall be given in
writing and shall be served either personally, by overnight delivery or
delivered by mail, certified return receipt and addressed to the following
addresses:
|
(a)
|
If
to the Company:
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone
No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
With a
copy to:
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney
at Law
▇▇▇ ▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone
No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
|
(b)
|
If
to NDR:
|
NDR
Energy Group LLC
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇
Telephone
No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
19
Section
9.12 Confidentiality. Each of the parties hereto agrees
that it will not use, or permit the use of, any of the information relating to
the Company or NDR respectively furnished to each other in connection with this
Agreement (“Confidential Information”), except publicly available or
freely usable material as otherwise obtained from another source, in a manner or
for a purpose detrimental to the Company or NDR or the Agreement and the
transactions contemplated hereby and thereby; except this Agreement and its
terms and conditions may be published in accordance with the requirements of the
Exchange Act. NDR and the Company respectively, will cause its directors,
officers, employees, agents and representatives not to, disclose, divulge,
provide or make accessible any of the Confidential Information to any person or
entity, other than their responsible officers, employees, advisors or attorneys
or otherwise as required by law or regulation. The provisions of this paragraph
are in addition to, and shall not supersede, the Confidentiality Agreement,
dated as of January 5, 2010, between the Parties.
Section
9.13 Transaction Costs. Except as expressly provided in
this Agreement, each party shall pay its own fees and expenses (including,
without limitation, the fees and expenses of its agents, representatives,
attorneys, and accountants) incurred in connection with the negotiation,
drafting, execution, delivery, and performance of this Agreement and the
transactions it contemplates.
Section 9.14 Rules
of Construction. The Parties hereto agree that they have been represented
by counsel during the negotiation, preparation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or
document.
Section
9.15 Disclosure. Without the prior written consent of
the other party hereto, neither party hereto will, and each party hereto will
cause its directors, officers, employees, agents, other representatives and
affiliates not to, disclose to any person the fact that discussions or
negotiations are taking place concerning the transactions contemplated hereby,
the status thereof, or the existence of this Purchase Agreement and the terms
thereof, unless in the opinion of such party disclosure is required to be made
under the Securities Act of 1933 or the Securities Exchange Act of 1934, and
such disclosure is made after prior consultation with the other party. Neither
party will issue any public announcement concerning the transaction without the
approval of the other party, except as may be required by law (it being noted
that the parties have mutually approved a public announcement to be issued
simultaneously with the execution of this letter). NDR acknowledges that the
Company is a publicly traded company registered with the U.S. Securities and
Exchange Commission, and under the Securities Act of 1933 or the Securities
Exchange Act of 1934, this Purchase Agreement, and/or potential acquisition is
considered a material fact thereunder, and therefore requires public disclosure
in accordance with SEC law and guidelines.
Section 9.16 Specific Performance. The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement were not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof in addition to any other remedy to which they are entitled at law
or in equity. The parties agree that any breach of this Agreement could not be
adequately compensated in all cases by monetary damages alone. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
20
IN WITNESS WHEREOF, each of
the following individuals has caused this Agreement to be signed, and each party
that is not an individual has caused this Agreement to be duly executed under
seal by its respective authorized officer, all as of the day and year first
above written.
UNIVERSAL
BIOENERGY INC.
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Title:
President and
CEO
|
|
NDR
ENERGY GROUP, LLC
|
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇
|
|
Name:
▇▇▇▇ ▇▇▇
|
|
|
Title:
President & CEO – Managing
Member
|
|
|
By:
|
/s/
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Title:
Vice Marketing Strategy - Managing
Member
|
|
|
By:
|
/s/
▇▇▇ ▇▇▇▇▇▇
|
|
Name:
▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
Chief Operating Officer – Managing
Member
|
|
|
By:
|
/s/
▇▇▇ ▇. ▇▇▇▇▇▇
|
|
Name:
▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
Managing
Member
|
|
21
SCHEDULE
1.1
Section 1.1 The Exchange
(Additional Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
22
SCHEDULE
1.4
Section 1.4 Closing
(Additional Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
23
SCHEDULE
1.5
Section 1.5 ▇▇▇▇▇▇▇ Money Deposit
(Additional Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
24
SCHEDULE
2.9
Section 2.9 Financial Statements.
(Additional Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
25
SCHEDULE
2.10
Section 2.10 Assets
and Contracts. (Additional Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
26
SCHEDULE
3.6
Section 3.6 SEC Reporting and
Compliance (Additional Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
27
SCHEDULE
3.9
Section 3.9 Auditors Review and
Disclosure (Page 1) (Additional Disclosures)
28
Section
3.9 (Page 2)
NDR
ENERGY GROUP, LLC
|
By:
|
/s/
▇▇▇▇ ▇. ▇▇▇
|
|
Name: ▇▇▇▇
▇▇▇
|
|
|
Title: President
& CEO – Managing
Member
|
|
|
By:
|
/s/
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Title: Vice
Marketing Strategy - Managing
Member
|
|
|
By:
|
/s/
▇▇▇ ▇▇▇▇▇▇
|
|
Name: ▇▇▇
▇▇▇▇▇▇
|
|
|
Title: Chief
Operating Officer – Managing
Member
|
|
|
/s/
▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Name: ▇▇▇
▇▇▇▇▇▇
|
|
|
Title: Managing
Member
|
|
29
SCHEDULE
8.1
Section 8.1 Further
Sale of Member Interests (Additional
Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
30
SCHEDULE
8.11
Section
8.1 Financial
Covenants (Additional Disclosures)
|
/s/
RDC
|
/s/
GMR
|
|
________Company
Initial(s)
|
________NDR
Initial(s)
|
31