<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
MAY 29, 1998
------------------------------------------------
Date of Report (date of earliest event reported)
METEOR INDUSTRIES, INC.
----------------------------------------------------
Exact name of Registrant as Specified in its Charter
COLORADO 1-12401 84-1236619
- --------------------------- --------------- ---------------------------
State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
216 SIXTEENTH STREET, SUITE 730
DENVER, COLORADO 80202
-----------------------------------------------------------
Address of Principal Executive Offices, Including Zip Code
(303) 572-1135
--------------------------------------------------
Registrant's Telephone Number, Including Area Code
<PAGE>
<PAGE>
ITEM 5. OTHER EVENTS
On May 29, 1998, a wholly-owned subsidiary of Meteor Industries, Inc. (the
"Registrant") acquired all of the outstanding stock of Tri-Valley Gas Company
("Tri-Valley"), a petroleum marketing and distribution company doing business
in Colorado. The Registrant paid an aggregate of $2,414,500 in cash and a
$600,000 promissory note to the former shareholders of Tri-Valley, none of
whom are affiliated with the Company. The $600,000 promissory note bears
interest at 8% per annum and is payable in monthly installments through June
1, 2002.
The primary source of the cash for this acquisition was a $2,300,000 term loan
from Norwest Bank Colorado, NA. The note bears interest at the prime rate
plus 0.5% and is payable in monthly installments over a period of five years.
The Company also paid a $23,000 origination fee for this loan. The loan is
secured by all of the Company's equipment, general intangibles, inventory,
receivables and accounts.
Tri-Valley owns five commercial real estate sites. Located on those sites are
three gas stations, two warehouses and three office buildings. Tri-Valley
also owns a substantial quantity of equipment necessary to market refined
petroleum products, including approximately 1,750 propane tanks, 100 gasoline
and diesel fuel tanks and over 30 delivery vehicles. The company sells
propane, gasoline, diesel fuel, lubricants, and convenience store items to the
general public and to commercial customers.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
Exhibit No. 2.1* Agreement dated May 21, 1998 Filed herewith
by and among Fleischli Oil
Company, Inc., Meteor
Industries, Inc., Tri-Valley
Gas Company, and the Share-
holders of Tri-Valley Gas
Company
* Certain exhibits listed in the Agreement are not filed herewith. Copies of
the omitted exhibits will be furnished supplementally to the Commission upon
request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
METEOR INDUSTRIES, INC.
Dated: June 25, 1998 By /s/ Dennis R. Staal
Dennis R. Staal, Treasurer (Chief
Financial and Accounting Officer)]
AGREEMENT
BY AND AMONG
FLEISCHLI OIL COMPANY, INC.,
METEOR INDUSTRIES, INC.,
TRI-VALLEY GAS CO.
AND
THE SHAREHOLDERS OF
TRI-VALLEY GAS CO.
<PAGE>
<PAGE>
AGREEMENT
AGREEMENT, made this 21st day of May 1998, by and among Fleischli Oil
Company, Inc., a Wyoming corporation ("Purchaser"), Meteor Industries, Inc., a
Colorado Corporation ("Meteor"), Tri-Valley Gas Co. (the "Company"), a
Colorado corporation, and all of the shareholders of Tri-Valley Gas Co.
(collectively referred to as "Shareholders").
WHEREAS, Purchaser desires to acquire all of the issued and outstanding
common stock of Tri-Valley Gas Co. (the "Common Stock") in exchange for the
consideration and upon the terms described herein (the "Purchase"); and
WHEREAS, the Shareholders desire to sell all of the outstanding Common
Stock of the Company; and
WHEREAS, Purchaser, the Company and Shareholders desire to make certain
representations, warranties, covenants and agreements in connection with the
Purchase and also desire to prescribe various conditions precedent to the
Purchase;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
provisions, and representations contained herein, THE PARTIES HERETO AGREE AS
FOLLOWS:
ARTICLE 1
THE PURCHASE
1.1 SALE AND DELIVERY OF COMMON STOCK. Subject to all the terms and
conditions of this Agreement, the Shareholders shall transfer, convey and
deliver to Purchaser at the Closing (as defined in paragraph 1.2 hereof) good,
valuable and marketable title to the Common Stock, free and clear of all
liens, claims and encumbrances in exchange for the consideration described in
this Article 1. The consideration described in this Article 1 hereof shall be
delivered to a closing agent mutually agreeable to the parties hereto (the
"Closing Agent"). Closing Agent shall then disburse such funds in accordance
with this Agreement and pursuant to joint written instructions to be prepared
by the parties hereto in a form substantially similar to that which is
attached hereto as Exhibit 1.1 and delivered to Closing Agent at Closing.
1.2 EFFECTIVE DATE AND CLOSING. The effective date of this transaction
shall be December 31, 1997. The closing of the transaction contemplated
herein (the "Closing") shall occur at a mutually agreeable time and place, on
May 21, 1998, or the earliest date thereafter when the Purchaser has completed
its review of the exhibits provided by the Company with this Agreement and has
closed on its financing with Norwest, but in no event will the Closing be
after May 29, 1998 (the "Closing Date"). The Purchaser agrees to pay the
Shareholders in the aggregate at the Closing $500 per day for every day after
April 30, 1998, until Closing.
1.3 PURCHASE PRICE. Subject to adjustment pursuant to Section 1.4,
subject to the terms of Section 1.5 and subject to all of the other terms
and conditions set forth in the Agreement and in reliance on the
representations, warranties and covenants hereinafter set forth, Purchaser
shall pay to the Shareholders cash in the amount of $3,000,000, or $535.71 per
share of Common Stock plus $500 per day for every day after April 30, 1998,
pursuant to Section 1.2 herein (hereinafter referred to as the "Purchase
Price").
2
<PAGE>
<PAGE>
1.4 ADJUSTMENTS. The Purchase Price of the Common Stock shall be
adjusted as follows:
(a) During the three month period following the Closing, Purchaser
shall verify the accuracy of the accounts receivable, inventory, cash items
and payables (the "Verification") on the balance sheet of the Company as of
December 31, 1997 (the "December 31 Financials"). Notwithstanding Section
1.4(d), any price adjustment made because of an increase in the payables shall
be subject to the provisions of Section 2.31 regarding a $20,000 minimum and a
$400,000 cap. For purposes of Section 1.4, "cash items" shall be defined as
those items that comprise "Total Cash" in the December 31 Financials, and
"payables" shall be defined as those items that comprise "Total Liabilities"
in the December 31 Financials.
(b) If Purchaser's Verification of the Company's December 31
Financials shows that the Company's inventory, accounts receivables, cash
items or payables is different than the amounts reflected on the balance sheet
of the December 31 Financials, attached hereto as Exhibit 2.7, then the
Purchase Price, subject to Sections 1.4(c) and (d), shall be reduced by the
amount of any deficiency of assets or increased by the amount of any surplus
of assets. In addition, the Purchase Price shall be reduced by the amount of
any increase in the payables or increased by the amount of any decrease in the
payables.
(c) If, pursuant to this Section 1.4, Purchaser's Verification
requires an adjustment to the Purchase Price, then Purchaser will first submit
to the Shareholders the results of the Verification and Shareholders will have
the option of disputing the results for thirty (30) days after receipt of that
Verification. In the event that Shareholders choose to dispute those results,
the parties shall have ten (10) days from notification thereof during which
they will make reasonable good faith efforts to resolve such a dispute between
them after which either party so desiring may submit the dispute to mediation.
Such party shall give the other party a written notice to mediate the
unresolved dispute and all such mediation shall be before a single mediator of
the Judicial Arbitration Group in Denver, Colorado. If the parties have not
agreed within ten (10) days of the notice for mediation of the mediator to be
utilized at the Judicial Arbitration Group, the chief executive officer of the
Judicial Arbitration Group shall designate the individual within its
organization who will conduct the mediation. The parties' efforts to reach a
settlement will continue until the conclusion of the proceedings which shall
be deemed to occur when (i) a written settlement is reached, (ii) the mediator
concludes and informs the parties in writing that further efforts will not be
useful, or (iii) the parties agree in writing that an impasse has been
reached. The cost of the mediation will be borne equally between the
Shareholders, on the one hand, and Purchaser, on the other hand, but all other
costs involved in the mediation shall be borne separately by the parties
incurring them. Neither party may withdraw before the conclusion of the
proceedings. The parties regard the obligation to mediate as an essential
provision of this Agreement and one that is legally binding on them. In case
of a violation of such obligation by either party, the other may bring an
action to seek enforcement of such obligation in any court of law having
jurisdiction thereof, and the conclusion of the mediation shall be deemed a
condition precedent to the commencement of any judicial review of the dispute.
The parties hereby agree that in the event of a dispute of the Verification,
payments due pursuant to the Note Payable shall be deferred until the
conclusion of the mediation in accordance with the terms of this Agreement.
The parties agree to enter into mediation in good faith in an attempt to
resolve the dispute. In the event the parties fail to resolve the dispute by
3
<PAGE>
<PAGE>
the conclusion of the mediation, they may then resort to judicial review of
the dispute in the District Court of Arapahoe County, Colorado.
(d) If the net result of all adjustments under this Section 1.4 is
less than $2,000, no adjustments will be made. No adjustment under this
Section 1.4 shall also be considered a breach of any warranty or
representation under Article 2.
1.5 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid as
follows:
(a) $2,400,000 of the Purchase Price plus $500 per day for every
day after April 30, 1998, pursuant to Section 1.2 herein shall be paid to the
Shareholders in immediately available funds at Closing.
(b) $600,000 of the Purchase Price shall be paid in the form of a
promissory note bearing interest at eight percent (8%) per annum payable in
equal monthly payments sufficient to amortize over three (3) years the
principal balance of the Note and interest thereon payable in arrears, with
all principal and interest being finally due and payable on the first day of
the month three (3) years after the date of Closing (such estimate monthly
payments are $18,805) (the "Note Payable"). The Note Payable shall be secured
by Deeds of Trust and Security Agreements on the real property and fixtures
owned by the Company and described in Exhibit 1.5(b-1) attached hereto. A
material default under the provisions of the Note Payable shall be considered
a default under the terms of this Agreement and shall release the Shareholders
from any responsibilities or liabilities with respect to this Agreement set
forth herein. The Note Payable will include standard provisions re notice of
default with a reasonable time to cure the default. The amount due
Shareholders pursuant to the Note Payable shall be subject to permitted
offsets described in paragraph 4.7 hereof. The Note Payable, Deed of Trust,
and Security Agreement shall be substantially in the form of Exhibits
1.5(b-2), 1.5(b-3), and 1.5(b-4), respectively attached hereto.
1.6 DISTRIBUTIONS. Between the Effective Date of this transaction and
the Closing Date the Company may not pay to its Shareholders or employees any
dividends or bonuses without the written permission of the Purchaser, except
for standard monthly directors' fees in the amount of $1,650 per director, and
standard annual reimbursements for health and disability insurance paid
through Closing which shall not exceed $5,000 per director.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHAREHOLDERS
As an inducement to the Purchaser to enter into this Agreement, the
Company and the Shareholders hereby represent and warrant to Purchaser that:
2.1 DEFINITION OF MATERIAL. For purposes of this Article 2, except for
the definition of material contracts in paragraph 2.17, and in those instances
where the amount can be computed, material shall be deemed in each instance
where it is used to be an amount in excess of $3,000.
2.2 ORGANIZATION. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of Colorado, has all necessary
corporate powers to own its properties and to carry on its business as now
owned and operated by it, and is duly qualified to do business and is in good
standing in each of the states where its business requires qualification.
4
<PAGE>
<PAGE>
2.3 CAPITAL. The authorized capital stock of the Company consists of
50,000 shares common stock, $1.00 par value, of which 5,600 shares of common
stock are issued and outstanding, and 1,000 shares of preferred stock, none of
which is issued and outstanding. All of the issued and outstanding shares of
the Company are duly and validly issued, fully paid, and non-assessable.
There are no outstanding subscriptions, options, rights, warrants, debentures,
instruments, convertible securities, or other agreements or commitments
obligating the Company, or any subsidiary to issue or to transfer from
treasury additional shares of its capital stock. Except for the common stock
outstanding, there are no other issued and outstanding equity securities of
the Company.
2.4 CORPORATE BOOKS AND RECORDS. The minutes included in the minute
books of the Company accurately reflect the actions described therein which
have been taken by the Board of Directors, all committees of the Board of
Directors and the shareholders of the Company. Complete and accurate copies
of all such minute books and of the stock register of the Company have been
made available by the Company for inspection by the Purchaser. At the
Closing, all of those books and records will be in the possession of the
Company.
2.5 SUBSIDIARIES. The Company does not have any subsidiaries or own any
interest in any other enterprise, except as described in Exhibit 2.5 attached
hereto.
2.6 DIRECTORS AND OFFICERS. Exhibit 2.6 to this Agreement, contains
the names and titles of all directors and officers of the Company.
2.7 FINANCIAL STATEMENTS. Exhibit 2.7 to this Agreement, includes true
and complete copies of the unaudited financial statements of the Company for
the fiscal periods ended April 30, 1997 and 1996, and the eight months ended
December 31, 1997, together with all related notes and schedules thereto.
Prior to Closing an unaudited balance sheet as of April 30, 1998, shall be
delivered to Purchaser and be included as part of Exhibit 2.7 (both sets of
financial statements are hereinafter referred to as the "Company Financial
Statements"). The balance sheets as of December 31, 1997 and April 30, 1998
included in the Company Financial Statements shall have been prepared in
accordance with the accounting principals which have been followed by the
Company during the period covered by the Company Financial Statements. The
Company Financial Statements are true, accurate and complete, and fairly
present the financial position of the Company as of the dates and for the
periods mentioned therein.
2.8 ABSENCE OF CHANGES. Since the December 31, 1997 Financial
Statements, there has not been any material change in the business (financial
or otherwise), sales levels, inventory levels in relation to sales, general
financial condition, assets, operations or prospects of the Company, except
for changes in the ordinary course of business, which changes have not
individually or in the aggregate been materially adverse. Since December 31,
1997, no dividends or distributions of any kind shall have been or will be
accrued to Shareholders, except for standard monthly directors fees in the
amount of $1,650 per director, and standard reimbursements for health and
disability insurance paid through Closing which shall not exceed $5,000 per
director.
2.9 ABSENCE OF UNDISCLOSED LIABILITIES. As of the Effective Date, the
Company did not have any material debt, liability, or obligation of any
nature, whether accrued, absolute, contingent or otherwise, and whether due or
to become due, that is not reflected in the Company Financial Statements.
5
<PAGE>
<PAGE>
2.10 TAXES. Within the times and in the manner prescribed by law, the
Company has filed all tax returns required by law and has paid all taxes,
assessments and penalties due and payable in accordance with such returns. To
the knowledge of the Company and the Shareholders, there are no present
disputes as to taxes of any nature payable by the Company. With respect to
real and personal property taxes, the Company has paid all such property taxes
when due and payable, but does not maintain a provision for such property
taxes on an accrual basis.
2.11 COMPLIANCE WITH LAWS. To the knowledge of the Company and the
Shareholders, the Company has complied in all material respects with, and is
not in violation of , applicable federal, state, or local statutes, laws or
regulations (including without limitation, any applicable building, zoning, or
other law, ordinance or regulation) affecting its properties or the operation
of its business. This subparagraph is not intended to cover environmental
matters which are covered in Subsection 2.27.
2.12 LITIGATION. Except as set forth in Exhibit 2.12, (1) the Company
is not a party to any suit, action, arbitration or legal, administrative or
other proceeding, or governmental investigation pending or, to the knowledge
of the Company and the Shareholders, threatened against or affecting the
Company or its business, assets or financial condition (hereinafter referred
to as "Actions"); (2) the Company is not in default with respect to any order,
writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to them; (3) the Company is
not engaged in any lawsuits to recover monies due to it. Exhibit 2.12 sets
forth an accurate list of all Actions in the past three years including
Actions commenced prior thereto which have not yet been resolved, by or
against the Company (or by or against any affiliate thereof and relating to
the business of the Company) or affecting any of the assets or properties of
the Company or its business. All government notices of non-compliance or
citations received in the last three years are listed in Exhibit 2.12.
2.13 AUTHORITY. The Board of Directors of the Company has authorized
the execution of this Agreement and the consummation of the transactions
contemplated herein, and the Company has full power and authority to execute,
deliver and perform this Agreement and this Agreement is a legal, valid and
binding obligation of the Company, and is enforceable in accordance with its
terms. Each Shareholder represents and warrants to the Purchaser that he has
full power and authority to execute, deliver and perform this Agreement and
the Agreement is a legal, valid and binding obligation of such Shareholder and
is enforceable in accordance with its terms.
2.14 ABILITY TO CARRY OUT OBLIGATIONS. Other than current banking
obligations and the agreement with Amoco as set forth in Exhibit 2.14, to the
knowledge of the Company and Shareholders, the execution and delivery of this
Agreement by the Company and Shareholders and the performance by the Company
and Shareholders of their obligations hereunder will not cause, constitute or
conflict with or result in (a) any breach or violation of any of the
provisions of or constitute a default under any license, indenture,
mortgage, charter, instrument, articles of incorporation, by-laws, or other
agreement or instrument to which the Company is a party, or by which it
may be bound, nor will any consents or authorizations of any party other
than those hereto be required, (b) an event that would permit any party to any
agreement or instrument to terminate such agreement or instrument or to
accelerate the maturity of any indebtedness or other obligation of the
Company, or (c) an event that would result in the creation or imposition of
any lien, charge, or encumbrance on any asset of the Company.
6
<PAGE>
<PAGE>
2.15 VALIDITY OF THE COMPANY SHARES. Each Shareholder represents and
warrants to the Purchaser that the shares of the Company's Common Stock to be
delivered by such Shareholder to Purchaser pursuant to this Agreement at
Closing will be duly authorized, validly issued, fully paid and
non-assessable; and free and clear of all liens, claims and encumbrances.
2.16 ASSETS. The Company has good and marketable title to all its
property and such property is not subject to any monetary liens, claims and/or
encumbrances other than disclosed in Exhibit 2.7. Exhibit 2.16 hereto lists
all plant property and equipment of the Company and the location of such
property with a value of $1,000 or more including all tanks even if the value
of such tank is less than $1,000.
2.17 MATERIAL CONTRACTS.
(a) The contracts set forth in subparagraph 2.17(a)(i) through
2.17(a)(viii) are considered "Material Contracts" for purposes of this
Agreement. Material Contracts shall include written contracts, agreements,
and other documents referred to in this subparagraph, and, to the knowledge of
the Company and Shareholders, oral contracts or agreements. Exhibit 2.17
lists all Material Contracts. The Company has delivered, or will deliver on
or before the execution of this Agreement, to the Purchaser correct and
complete copies of all Material Contracts.
(i) each contract, agreement, invoice, and purchase order for
the purchase of inventory, spare parts, other materials or personal property
with any supplier or for the furnishing of services to the Company or
otherwise related to the business under the terms of which the Company: (A)
is likely to pay or otherwise give consideration of more than $10,000 in the
aggregate during the twelve month period ending December 31, 1998, (B) is
likely to pay or otherwise give consideration of more than $10,000 in the
aggregate over the remaining term of such contract, or (C) cannot be canceled
by the Company without penalty of $2,000 or more in the aggregate on 30 days'
or less notice;
(ii) each contract, agreement, invoice, and purchase order
for the sale of Inventory or other personal property or for the furnishing of
services by the Company which: (A) is likely to involve consideration of more
than $10,000 in the aggregate during the twelve month period ending December
31, 1998, (B) is likely to involve consideration of more than $10,000 in the
aggregate over the remaining term of the contract, or (C) cannot be canceled
by the Company without penalty of $2,000 or more in the aggregate on 30 days'
or less notice;
(iii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research, marketing
consulting and advertising contracts and agreements to which the Company is a
party;
(iv) all management contracts, employment agreements and
contracts with independent contractors or consultants (or similar
arrangements) to which the Company is a party and which are not cancelable
without penalty or further payment on 30 days' or each contract, agreement,
invoice, and purchase order for less notice;
(v) all contracts and agreements relating to indebtedness of
the Company in an amount exceeding $3,000;
7
<PAGE>
<PAGE>
(vi) all contracts and agreements that limit the ability of
the Company to compete in any line of business or with any person or in any
geographic area or during any period of time;
(vii) all contracts and agreements between or among the
Company and any affiliate, officer, director, employee or shareholder of the
Company, now in effect; and
(viii) all other contracts and agreements, whether or not
made in the ordinary course of business, which are material to the Company or
the conduct of the business.
(b) Each Material Contract is valid and binding on the respective
parties thereto and is in full force and effect. Neither Company nor any
Shareholder has received any actual notice that the Company is in breach of or
default under any Material Contract or that any event occurred or failed to
occur which, with the giving of notice or passage of time or both, would
constitute a breach of or default under any Material Contract.
(c) No other party to any Material Contract is in breach thereof
or default thereunder in any material respect nor has any event occurred or
failed to occur which, with the giving of the notice or passage of time or
both, would constitute a material breach of or default under any Material
Contract by any other party to any Material Contract.
(d) There is no contract, agreement or other arrangement granting
any Person any preferential right to purchase any of the properties or assets
of the Company.
2.18 TRADE NAMES AND RIGHTS. Except for branded product lines marketed
by the Company, the Company owns all trademarks, service marks, trade names,
and copyrights required in its business, a list of which is attached hereto
as Exhibit 2.18. Except for branded product lines marketed by the Company,
no other person or entity owns any trademark, trademark registration or
application, service mark, trade name, copyright, or copyright registration or
application the use of which is necessary or material in connection with the
present or contemplated operations of the Company's business.
2.19 EMPLOYEES. There are, except as disclosed in Exhibit 2.19, no
collective bargaining, bonus, profit sharing, severance, indemnification,
compensation or other agreements, trusts, funds, plans or arrangements
maintained by the Company or any subsidiary of the Company for the benefit of
its directors, officers or employees, and there are no employment,
consulting, severance or indemnification arrangements, agreements or
understandings between the Company or any of its affiliates. Exhibit 2.19
identifies each person whose income from the Company in the fiscal year ended
December 31, 1997, or whose income from the Company in the fiscal year begun
immediately thereafter, is at a rate exceeding $5,000 per annum. Exhibit 2.19
describes any contractual arrangement for the employment or compensation of
each such person whether written or oral. To the knowledge of the Company and
Shareholders, the Company is not, and following the Closing will not be, bound
by any express contract or agreement to employ directly or as a consultant or
otherwise, any individual or entity for any specific period of time or until
any specific age except as specified in agreements in writing identified in
Exhibit 2.19. The Company's employee handbook or manual and a complete
description of all employee benefits, is included as part of Exhibit 2.19.
2.20 LABOR MATTERS. To the knowledge of the Company and Shareholders,
there are no activities or controversies, including, without limitation, any
8
<PAGE>
<PAGE>
disputes with individuals, labor organizing activities, proceedings
preparatory thereto, unfair labor practice complaints, labor strikes,
disputes, slowdowns or work stoppages, pending or threatened, between the
Company or any of its employees.
2.21 ACCOUNTS RECEIVABLE. All accounts receivable of the Company and
including those created between the date of the Financial Statements and the
Closing, whether or not reflected in the Company Financial Statements,
represent transactions in the ordinary course of business. Exhibit 2.21
specifically identifies all receivables and aging breakdowns of the Company as
of April 30, 1998. See provisions of Section 9.1 hereof.
2.22 INVENTORIES. All inventories of the Company as of the Closing Date
are of a quality and quantity usable and salable in the ordinary course of
business and comply in all material respects with applicable standards and
regulations of governmental authorities. A complete list of the inventories
of the Company as of April 30, 1998, is attached hereto as Exhibit 2.22. The
estimated age of all grease and oil inventory is included in Exhibit 2.22.
Items included in such inventories are carried on the books of the Company,
and are valued on the Financial Statements on the basis of average cost.
2.23 ACCOUNTS PAYABLE. The accounts payable reflected on the December
31 Financials will reflect all material amounts owed by the Company in respect
of trade accounts due and other payables. Exhibit 2.23 specifically
identifies all such payables as of April 30, 1998.
2.24 INSURANCE. The Company has insurance policies in full force and
effect as listed in Exhibit 2.24. Except as disclosed in Exhibit 2.24, the
Company has not within the past three (3) years received any notice of
cancellation of any insurance agreement or any notice of nonrenewal or of
uninsurability or any notice or other communication regarding any unusual or
extraordinary risk posed by any aspect of the business of the Company. The
Company shall provide Purchaser all insurance policies and all copies of
claims made under existing policies.
2.25 TITLE TO AND UTILIZATION OF PROPERTIES. Exhibit 2.25 attached
hereto lists all of the Company owned and leased properties. The Company owns
fee simple title to all real property owned by it and has the right to
use the same in the manner it is currently being used, and is not aware of any
claim, notice or threat to the effect that its right to own and use such
property is subject in any way to any challenge, claim, assertion of rights,
proceedings toward condemnation or confiscation in whole or in part, or is
otherwise subject to challenge contrary to the interests of the Company. No
rights of first refusal encumber such Company owned Properties. The Company
has valid leases on its leased properties and the expiration date of such
leases are disclosed on Exhibit 2.25.
2.26 FACILITIES. To the knowledge of the Company and Shareholders, the
Company facilities are (as to physical plant and structure) structurally sound
and none of its facilities, nor any of the vehicles or other equipment used by
the Company in connection with its business, has any material defects and all
of them are in all material respects in good operating condition and repair,
ordinary wear and tear excepted. To the knowledge of the Company and
Shareholders, none of such plants, structures, or equipment is in need of
maintenance and repairs except ordinary routine maintenance and repairs.
Subject to the knowledge requirement in the preceding two sentences, all
buildings, vehicles and equipment are being transferred on an "as is, where
is" basis. Except for the underground storage tanks described in Exhibit
9
<PAGE>
<PAGE>
2.27(b), all of the Company's facilities materially comply with all laws and
government regulations.
2.27 ENVIRONMENTAL AND OTHER PERMITS AND LICENSES; RELATED MATTERS.
(a) The Company, to its knowledge, and to the knowledge of the
Shareholders currently holds all the health, safety and other permits,
licenses, authorizations, certificates, exemptions and approvals of
governmental authorities (collectively, "PERMITS"), including, without
limitation, environmental permits, necessary for the current use, occupancy
and operation of each asset and property of the Company and the conduct of its
business, and all such permits and environmental permits are in full force and
effect. Neither the Company nor any of the Shareholders has received any
notice from any governmental authority revoking, canceling, rescinding,
materially modifying or refusing to renew any permit or environmental permit
or providing written notice of violations under any environmental law which
have not been resolved. The Company, to its knowledge, is in material
compliance with the permits and all applicable Environmental Laws. Exhibit
2.27(a) identifies all permits that will require the consent of any
governmental authority to consummate the transactions contemplated by this
Agreement.
(b) Except as described in Exhibit 2.27(b), to the Company's
knowledge and to the knowledge of the Shareholders, all equipment owned or
used by the Company, including, but not limited to above ground storage tanks,
underground storage tanks, and piping associated with such tanks, is in
substantial compliance with all applicable Permits and Environmental Laws
including the Federal and State 1998 underground storage tank requirements and
can be operated in the ordinary course of business in substantial compliance
with all applicable Permits and Environmental Laws.
(c) The Company, to its knowledge and to the knowledge of its
Shareholders, has, except as disclosed in Exhibit 2.27(c): (i) not
generated, used, treated, handled or stored on, or transported to or from, or
released on any Company owned or leased real property, any Hazardous Materials
(other than Hazardous Materials handled, stored or transported in the normal
course of business), and the Company and its Shareholders are unaware of any
such generation, use, treatment, handling, storage, transportation, or release
by any other person or entity, including but not limited to any predecessor in
interest; (ii) reported all known Releases of Hazardous Material in accordance
with Environmental Laws; (iii) not Released any Hazardous Materials which must
be Remediated under applicable Environmental Law (including, but not limited
to, any Release which results in the presence of Hazardous Materials in the
environment in quantities or amounts that exceed Remediation action levels
specified by regulation or by governmental policy or guideline) or that any
person or entity or governmental authority has requested or required to be
remediated; (iv) disposed of all wastes, including those containing Hazardous
Materials, in material compliance with all applicable Environmental Laws and
environmental permits; (v) no past, pending or threatened Environmental claims
against it or any of its assets or properties; (vi) not transported or
arranged for the transportation of any Hazardous Materials to any location
that was not at the time of shipping, if then required by law, a properly
permitted and licensed Hazardous Material facility or any location that was
listed or proposed for listing on the National Priorities List under CERCLA or
on the CERCLIS or any analogous state list or which was the subject of any
environmental claim; and (vii) not conducted, nor is it or any governmental
authority conducting any remediation on or related to the owned real property,
the leased real property or the business of the Company.
10
<PAGE>
<PAGE>
(d) Exhibit 2.27(d) sets forth the contents or to the Company's
knowledge and to the knowledge of its Shareholders the former contents of any
storage tanks located on the premises owned or operated by the Company.
Except as set forth in Exhibit 2.27(d), and to the knowledge of the Company
and to the knowledge of its Shareholders, it has not owned or operated any
underground storage tanks as defined in the Resource Conservation and Recovery
Act ("RCRA"). Except as set forth in Exhibit 2.27(d), to the knowledge of the
Company and the Shareholders, all tanks and pipes pertinent thereto are
presently and have been in the past in good condition and tight.
(e) To the knowledge of the Company and to the knowledge of its
Shareholders, there are no wastes, drums or containers disposed of or buried
on, in or under the ground or any surface waters located on the premises
currently or previously owned or operated by the Company. Neither the Company
nor any third parties, to the Company's knowledge and to the knowledge of its
Shareholders, have disposed of or buried any wastes, drums or containers on,
in or under the ground or any surface waters located on the premises owned or
operated by the Company. Neither the Company nor any party acting on behalf
of the Company, to the Company's knowledge and to the knowledge of its
Shareholders, disposed of or buried, or arranged to dispose of or bury, any
waste, drums or containers in or on the premises of a third party other than
those pursuant to and in compliance with RCRA.
(f) Certain capitalized terms used in this Section 2.27 are
defined as follows:
Hazardous Materials - means (a) oil, petroleum and petroleum
products, radioactive materials, in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contain polychlorinated biphenyls, and radon gas, (b) any other chemicals,
materials or substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar import, under
any applicable Environmental Law, and (c) any other chemical, material or
substance regulated because of its hazardous or toxic nature and exposure to
which is regulated by any governmental authority with jurisdiction over the
Company's assets.
Environmental Laws - means any law including but not limited
to any applicable federal, state, local, law, ordinance, regulation or rule
now in effect and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to the environment, health, safety or Hazardous Materials, including,
without limitation, CERCLA; the Resource Conservation and Recovery Act, 42
U.S.C. S.S. 6901 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. S.S. 6901 et seq.; the Clean Water Act, 33 U.S.C. S.S. 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. S.S. 2601 et seq.; the Clean Air
Act, 42 U.S.C. S.S. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. S.S.
300f et seq.; the Atomic Energy Act, 42 U.S.C. S.S. 2011 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. S.S. 136 et seq.; and the
Federal Food, Drug and Cosmetic Act, 21 U.S.C. S.S. 301 et seq. and the state
or local equivalents of these laws.
Release - means disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and
the like into or upon any land, water or air or otherwise entering into the
environment.
11
<PAGE>
<PAGE>
2.28 CUSTOMERS AND SUPPLIERS. Exhibit 2.28 lists all major customers
and suppliers which are material to the financial condition or operations of
the Company. Since December 31, 1997 and except as disclosed in Exhibit 2.28
there has been no adverse change in the business relationship of the Company
with any such customer or supplier. It is understood and agreed that
"material" customers and suppliers provided for in this Section are defined as
customers purchasing product from the Company in excess of $60,000 per year,
and suppliers providing supplies and merchandise to the Company in the amount
of $40,000 per year.
2.29 BANK ACCOUNTS. Exhibit 2.29 sets forth the names and locations
of all banks, trust companies, savings and loan associations and
other financial institutions at which the Company maintains current accounts
of any nature and the names of all persons authorized to draw thereon or make
withdrawals therefrom.
2.30 OTHER INFORMATION. None of the information and documents which
have been furnished or made available by the Company or any of its
representatives to Purchaser or any of its representatives in connection with
the transactions contemplated by this Agreement is, to the Company's knowledge
and to the knowledge of its Shareholders, materially false or misleading or
contains any material misstatement of fact or omits any material fact
necessary to be stated in order to make the statements and information therein
not misleading.
2.31 LIMITATION OF LIABILITY. Except for any claims made because of a
breach of the warranties and representations of Shareholders and/or the
Company set forth in Sections 2.2, 2.3, 2.5, 2.6, 2.13 and 2.15, which shall
have no limitations, any other claim for a breach of the warranties and
representations contained in Articles 2 or 5 are payable only if the claims,
in the aggregate, exceed Twenty Thousand Dollars ($20,000), and the maximum
liability of the Shareholders shall not exceed Four Hundred Thousand Dollars
($400,000), in the aggregate. Once one or more of the Shareholders have paid
claims aggregating $400,000, no Shareholder and their respective successors
and assigns shall have any liability to Purchaser, Meteor or to other
successors or assigns of any of them arising out of or relating to a breach of
any warranty or representation contained in Articles 2 or 5. Any payments
made by the Shareholders for environmental or regulatory costs pursuant to
Section 4.8(b)(ii) shall be credited against the $400,000 aggregate in the
preceding sentence. Any claim for a breach of the warranties and
representations contained in Articles 2 or 5 shall be brought within the time
limitation set forth in Section 10.14 hereof.
2.32 SHARE OWNERSHIP. Exhibit 2.32 hereto sets forth the names of the
persons who hold all of the Company's outstanding Common Stock and number of
shares owned by each Shareholder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to the Company and the Shareholders to enter into this
Agreement, the Purchaser represents and warrants to the Company and
Shareholders that:
3.1 ORGANIZATION. Purchaser is a corporation duly organized, validly
existing, and in good standing under the law of Colorado, has all necessary
corporate powers to own properties and to carry on its business as now owned
12
<PAGE>
<PAGE>
and operated by it, and is duly qualified to do business and is in good
standing in each of the states were its business requires qualification.
3.2 CAPITAL. As of the date of this Agreement, the authorized capital
stock of Purchaser consists of 10,000,000 shares of $.001 par value Common
Stock of which 1,000 shares of Common Stock are currently issued and
outstanding, and 5,000,000 shares of preferred stock $.001 par value, are
authorized and none are currently outstanding. All of the issued and
outstanding shares of Purchaser are duly and validly issued, fully paid and
non-assessable.
3.3 AUTHORITY. The Board of Directors of Purchaser and Meteor have
authorized the execution of this agreement and the transactions
contemplated herein, and Purchaser has full power and authority to execute,
deliver and perform this Agreement and this Agreement is the legal, valid and
binding obligation of Purchaser, and is enforceable in accordance with its
terms and conditions.
3.4 ABILITY TO CARRY OUT OBLIGATIONS. The execution and delivery of
this Agreement by Purchaser and the performance by Purchaser of its
obligations hereunder will not cause, constitute, or conflict with or result
in (a) any breach or violation of any of the provisions of or constitute a
default under any license, indenture, mortgage, charter, instrument,
certificate of incorporation, bylaw, or other agreement or instrument to which
Purchaser is a party, or by which it may be bound, nor will any
consents or authorizations of any party other than those hereto be required,
(b) an event that would permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or other
obligation or Purchaser, or (c) an event that would result in the creation or
imposition of any lien, charge, or encumbrance on any asset of Purchaser.
3.5 DIRECTORS AND OFFICERS. Exhibit 3.5 of this Agreement contains the
names and titles of all directors and officers of Purchaser.
3.6 INVESTMENT INTENT. Purchaser is purchasing the Common Stock for its
own account for investment purposes and not with a view to public
distribution. Purchaser has the capacity to evaluate the merits and
risks of the acquisition of the Common Stock and understands that the Common
Stock is subject to resale restrictions under various state and federal
securities laws.
ARTICLE 4
COVENANTS
4.1 INVESTIGATIVE RIGHTS. From the Effective Date of this transaction
until the Closing Date, the Company shall provide to Purchaser, and its
counsel, accountants, auditors, and other authorized representatives,
reasonable access to all of the Company's properties, books, contracts,
commitments, and records for the purpose of examining the same. The
Company shall furnish Purchaser with all information concerning its affairs as
Purchaser may reasonably request. Without in any manner reducing or
otherwise mitigating the representations contained herein, Purchaser and/or
its representatives shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of the Company. If the
transaction contemplated hereby is not completed, all documents received by
Purchaser and/or its attorneys and accountants shall be returned to the
Company upon request.
13
<PAGE>
<PAGE>
4.2 CONDUCT OF BUSINESS. Except as set forth on Exhibit 4.2, from the
Effective Date, the Company and the Shareholders covenant that they: (1) shall
conduct the Company's business in the normal course, and shall not sell,
pledge, or assign any assets, without the prior written approval of Purchaser,
except for the sale of inventory and tanks in the regular course of business
and at market value; (2) shall not amend the Company's Articles of
Incorporation or Bylaws, declare dividends, redeem or sell stock or other
securities, incur additional or newly-funded liabilities, acquire or
dispose of fixed assets, change employment terms, enter into any material
or long-term contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less amount, or enter into any
other transactions other than in the regular course of business; or (3) shall
not agree or commit to do or authorize any of the foregoing, unless such
action complies with the terms of this Agreement. Prior to Closing, the
Shareholders shall be entitled to withdraw their investment account balances
from the Company.
4.3 INDEMNIFICATION OF THE COMPANY AND SHAREHOLDERS. Purchaser shall be
liable for and shall indemnify, defend and hold the Company, its officers and
directors and the Shareholders harmless against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries and deficiencies, including interest, penalties, and reasonable
attorney fees, that they shall incur or suffer, which result from or relate to
any activities of the Company or Purchaser subsequent to the Closing Date or
which result from or relate to any breach of, or failure by Purchaser to
perform any of its representations, warranties, covenants or agreements in
this Agreement or in any schedule, certificate, exhibit or other instrument
furnished or to be furnished by Purchaser under this Agreement.
4.4 INDEMNIFICATION OF PURCHASER. Subject to the provisions of Sections
2.31 and 4.7, the Shareholders shall be jointly and severally liable for and
shall agree to indemnify, defend and hold Purchaser, its officers and
directors harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties, and reasonable attorney fees,
that they shall incur or suffer, which result from or relate to any breach of,
or failure by the Company or Shareholders to perform any of their respective
representations, warranties, covenants and agreements in this Agreement or in
any exhibit, schedule, certificate or other instrument furnished or to be
furnished by the Company or Shareholders under this Agreement.
4.5 CONSULTING SERVICES. The Shareholders shall make themselves
available to Purchaser, at reasonable times, to provide advice and
information for one year without charge. Mr. Gordley agrees to provide
additional consulting services to the Company or Purchaser on an as needed
basis for a two-year period after the Closing Date on an hourly basis at a
rate of $50 per hour.
4.6 ACCOUNTS PAYABLE AND PERSONAL GUARANTEES. With regard to all
accounts payable as of the Closing Date, Purchaser will cause such amounts to
be paid according to the payment plan and/or requirements of the creditor,
without extension, delinquency or other material deviation from the payment
term and plan. Purchaser understands and agrees that it is the intention of
Shareholders to withdraw all personal guarantees relating to the Company.
4.7 ENVIRONMENTAL, REGULATORY AND TRANSACTION EXPENSE SHARING BY THE
PARTIES HERETO.
14
<PAGE>
<PAGE>
LIMITATION OF CERTAIN LIABILITIES AND COST SHARING.
Notwithstanding any other provision of this Agreement to the contrary, the
terms and provisions of this Section 4.7 shall govern irrespective of any
conflict herewith by any other provision of this Agreement.
(a) Shareholders and Purchaser hereby agree to share equally
certain transaction costs related to this transaction as set forth below up to
the limits described below. Beyond those limits, each party shall pay their
own costs relating to such transaction costs incurred by them.
DESCRIPTION OF TRANSACTION COST LIMIT
Purchaser's Legal Fees $10,000.00
Shareholders' Legal Fees $15,000.00
Purchaser's Verification Fees $15,000.00
Purchaser's General Due Diligence
(limited to outside consultants and out-of-
pocket expenses) $10,000.00
Purchaser's Environmental Due Diligence
Expenses of outside consultants $25,000.00
(b) Shareholders and Purchaser hereby agree, subject to the
limitations set forth in Section 10.14, to share equally costs which may be
incurred by the Company after Closing for (i) upgrading the storage tanks,
whether above ground or underground, as described in Exhibit 2.27(b), and (ii)
remediation costs, if any, incurred by the Company after Closing related to
environmental contamination of any of the sites at which the Company conducts
operations utilizing the tanks described in Exhibit 2.27(d) (the "Remediation
Properties") which occurred prior to the date of Closing which are not paid by
the State of Colorado Corrective Action Fund subject to the limits described
below. Excluded from the provisions of this subparagraph shall be any
contamination which occurred at said site after the Closing. Costs incurred
by the Company beyond those limits shall be paid for by the Company without
contribution or liability of the Shareholders.
DESCRIPTION OF ENVIRONMENTAL
AND REGULATORY COSTS LIMIT
(i) Tank replacements and Remodels (see
description in Exhibit 4.7) $200,000.00
(ii) Remediation costs (including reasonable
costs of pursuing reimbursement from the
Colorado Corrective Action Fund) on the
Remediation Properties relating to con-
tamination which occurred prior to the
Closing Date which are not paid by the State
of Colorado Corrective Action Fund (due to
no fault of Purchaser) $350,000.00
(c) Prior to Purchaser or the Company making a claim against the
Shareholders for remediation costs to the limit described above, the Company
shall reasonably exhaust remedies for payment or reimbursement for such costs
from the State of Colorado Corrective Action Fund to a final administrative
denial; provided, however, the Shareholders agree to pay or have set off
against the Note Payable their share of the deductible amount of the
remediation costs under the Corrective Action Fund actually incurred by the
Purchaser and/or the Company on a per site basis.
15
<PAGE>
<PAGE>
(d) To the extent the Purchaser and/or Company believes it has a
claim against the Shareholders for any costs or expenses under the provisions
of this Section 4.7, Purchaser shall submit such claim to the Shareholders in
writing, substantiated by such documentary evidence as is the basis for such
claim, and the Shareholders shall have ten (10) business days in which to
agree and make payment of such claim, or provide written notice to Purchaser
of the Shareholders' dispute of such claim. If the Shareholders dispute such
claim, the Shareholders and Purchaser shall follow the mediation procedure
outlined in Section 1.4(c) of this Agreement. Purchaser shall have the right
to set off against amounts due the Shareholders under the Note Payable the
amounts Shareholders acknowledge are due from them to Purchaser under the
provisions of this Section 4.7 or the Accounts Receivable Guarantee pursuant
to Section 9.1 hereof or to the extent disputed by Shareholders, such amount
as is finally determined by a court of competent jurisdiction to be the
liability of Shareholders hereunder. If Shareholders dispute a Purchaser's
claim of set off, pending a final determination as to the amount of the
Purchaser's set off against the Note Payable, Purchaser may defer payments on
the Note Payable up to the amount of Purchaser's claim.
4.8 SHAREHOLDERS' COOPERATION AFTER THE CLOSING; FURTHER ACTION. At any
time and from time to time after the Closing, the Shareholders shall execute
and deliver to the Purchaser such other instruments and take such other
actions as the Purchaser may reasonably request more effectively to vest title
to the Shares in the Purchaser and, to the full extent permitted by law, to
put the Purchaser in actual possession and operating control of the Company
and its assets, properties and the business consistent with the provisions of
this Agreement, provided such actions do not cause the Shareholders to incur
additional material liabilities. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things necessary, proper or advisable under applicable
laws, and execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and to consummate and
make effective the transactions contemplated hereby. The Company and the
Shareholders will provide such information (including financial information)
as is reasonably required by Purchaser for any Report on Form 8-K to be filed
by Purchaser with the Securities and Exchange Commission in connection with
this transaction.
4.9 CONFIDENTIALITY.
(a) Each of the Shareholders covenants and agrees to, and will
cause his respective affiliates, trustees, beneficiaries, employees and agents
to: (i) treat and hold as confidential (and not disclose or provide access to
any person to) all information relating to trade secrets, processes, price
lists, customer lists, raw materials, supplier lists, pricing and marketing
plans, policies and strategies, operations methods, and any other intellectual
property rights or other confidential information with respect to the business
or the Company; (ii) in the event that such Shareholder or any of his
affiliates, trustees, beneficiaries, employees or agents become legally
compelled to disclose any information, provide the Purchaser with prompt
written notice of such requirement so that the Purchaser may seek a protective
order or other remedy or waive compliance with this Section 4.9; and (iii)
promptly furnish (prior to or at the Closing) to the Purchaser any and all
copies (in whatever form or medium) of all such confidential information then
in the possession of such Shareholder or any of his respective affiliates,
trustees, beneficiaries, employees and agents and destroy any and all
additional copies then in his possession of such information and of analyses,
compilations, studies or other documents prepared, in whole or in part, on the
basis thereof; PROVIDED, HOWEVER, that this sentence shall not apply to any
16
<PAGE>
<PAGE>
information that, at the time of disclosure, is available publicly and was not
disclosed in breach of this Agreement by such Shareholder or his affiliates,
trustees, beneficiaries, employees or agents.
(b) All information furnished by any Shareholder or the Company to
the Purchaser pursuant to this Agreement shall be treated as the property of
such Shareholder or the Company until the Closing Date and shall be kept
confidential by the Purchaser until the Closing Date. If the Closing does not
occur, the Purchaser shall return to the Shareholders or the Company all
documents and other materials containing, reflecting or referring to such
information, shall keep confidential all such information, and shall not use
such information for any competitive purpose. The Purchaser's obligation to
keep such information confidential and to not use such information shall
continue indefinitely from the date the transactions contemplated by this
Agreement are abandoned and shall extend to the directors, officers, employees
and agents of the Purchaser. The Purchaser shall take all necessary action to
inform such persons of the obligation of confidentiality set forth in this
Section 4.9(b). The obligation to keep such information confidential shall
not apply to any information which the Purchaser can demonstrate (i) was
already in its possession prior to the disclosure thereof by any Shareholder
or the Company to the Purchaser, (ii) was then available to the public, (iii)
became known to the public through no fault of the Purchaser or any of its
directors, officers, employees or agents, or (iv) was disclosed to the
Purchaser by a third party unaffiliated with the Purchaser who, to the
knowledge of the Purchaser, was not bound by an obligation of confidentiality
to the Shareholders or the Company, nor shall the obligation to keep such
information confidential apply to disclosures required to be made in
accordance with any law.
(c) Each of the Shareholders agrees and acknowledges that remedies
at law for any breach of his obligations under Section 4.9(a) hereof are
inadequate and that in addition thereto the Purchaser and/or the Company shall
be entitled to seek equitable relief, including injunctive relief and specific
performance, in the event of any such breach, without the necessity of
demonstrating the inadequacy of monetary damages. The Purchaser agrees and
acknowledges that remedies at law for any breach of its obligations under
Section 4.9(b) hereof is inadequate and that in addition thereto the Company
and/or the Shareholders shall be entitled to seek equitable relief, including
injunctive relief and specific performance, in the event of any such breach,
without the necessity of demonstrating the inadequacy of monetary damages.
4.10 PRESERVATION OF ASSETS AND RELATIONSHIPS. After the date hereof and
through the Closing, the Company shall use its best efforts to preserve intact
the assets and properties of the Company and to keep available the services of
its officers and employees and maintain good relationships with suppliers,
customers and others having business relationships with the Company.
4.11 TRANSFER OF SHARES. Each of the Shareholders agrees that after the
date hereof and through the Closing, without the Purchaser's consent, such
Shareholder will not sell, transfer, mortgage, pledge or otherwise dispose of
or encumber all or any part of the Common Stock.
4.12 AGREEMENT TO VOTE. Each of the Shareholders agrees to vote or
cause to be voted his Common Stock in favor of the transactions contemplated
by this Agreement and against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company or the Shareholders under this Agreement.
17
<PAGE>
<PAGE>
4.13 REPRESENTATIONS AND WARRANTIES. Through the Closing Date, each of
the parties shall refrain from taking any action which would render any of its
representations or warranties in this Agreement inaccurate as of the Closing
Date.
4.14 COVENANT NOT TO COMPETE.
(a) Each Shareholder acknowledges and agrees that he possesses
information unique and proprietary to the Company and that Purchaser would not
be willing to enter into this Agreement if such Shareholder, after the Closing
Date, could compete with the Company or Purchaser because such competition by
such Shareholder would severely injure the Company or Purchaser no matter
where in the geographic areas listed below such competition occurred.
Accordingly and in consideration for $100 of the Purchase Price (or $25 per
Shareholder) and the mutual covenants and agreements contained herein, each
Shareholder agrees that for a period of five (5) years from the Closing Date,
such Shareholder shall not directly or indirectly, whether as an owner,
stockholder, partner, employee, independent contractor, or otherwise, compete
with the Company or Purchaser or any affiliate of the Company or Purchaser in
the bulk distribution or retail sale of liquid petroleum fuels anywhere within
the trade areas of the Company, Purchaser or Meteor existing as of the Date of
Closing in the States of New Mexico, Colorado, and Wyoming. The period, the
geographical area and the scope of the restrictions on Shareholders'
activities are divisible so that if any provision of the restriction is
invalid, that provision shall automatically be modified to the extent
necessary to make it valid. The provisions of this Section 4.14 shall be in
addition to any other similar agreements entered into by the Company and
certain individual Shareholders and shall not serve to supplant or reduce the
effect of such other agreements. The parties hereto agree and acknowledge
that many of the rights conveyed by this Section 4.14 are of a unique and
special nature and that the Company and Purchaser will not have an adequate
remedy at law in the event of failure of Shareholders to abide by its terms
and conditions, nor will money damages adequately compensate for such injury.
It, therefore, is agreed between the parties that in the event of breach by a
Shareholder of Shareholders' agreements contained in this Section 4.14, the
Company and Purchaser shall have the rights against the offending Shareholder,
among other rights, to damages sustained thereby and to an injunction to
restrain such Shareholder from the prohibited acts. Nothing herein contained
shall in any way limit or exclude any and all other rights granted by law or
equity to the Company or Purchaser.
(b) Nothing in this Section 4.14 shall be construed to prevent
each Shareholder from owning, as a passive investment, up to the five percent
(5%) of the debt or equity securities of any company whether privately-held
or publicly-traded, which may be considered competitive with the Company or
the Purchaser, so long as a Shareholder does not act as a consultant, advisor,
officer, director, or employee of such company.
4.15 COVENANT TO MAINTAIN TRI-VALLEY GAS CO. ENTITY. Purchaser agrees
to maintain as a separate corporation, Tri-Valley Gas Co., for a period of two
years from the Closing, and to maintain adequate and customary levels of
insurance during this period.
4.16 DUE DILIGENCE. If, prior to Closing, Purchaser discovers any facts
that make any of the representations or warranties of the Company or the
Shareholders materially inaccurate, Purchaser shall notify the Shareholders of
such facts prior to Closing.
18
<PAGE>
<PAGE>
ARTICLE 5
TAX MATTERS
5.1 COOPERATION AND EXCHANGE OF INFORMATION. The Company, the
Shareholders and the Purchaser will provide each other with such cooperation
and information as any of them reasonably may request of the other in filing
any Tax (as defined in Section 5.6) return determining a liability for Taxes
or a right to a refund of Taxes, or participating in or conducting any audit
or other proceeding in respect of Taxes.
5.2 CONVEYANCE TAXES. The Shareholders shall be liable for, and the
Shareholders covenant and agree that they shall hold the Purchaser harmless
against, any transfer or conveyance Taxes which become payable in connection
with the transactions contemplated by this Agreement.
5.3 INDEMNIFICATION.
(a) The Shareholders shall be liable for and shall indemnify,
defend and hold harmless the Purchaser, the Company and any successors thereto
from and against all Taxes imposed on the Shareholders or the Company with
respect to the Company for (i) all years or periods of the Company ending on
or prior to April 30, 1997, and (ii) from and against any gain recognized by
the Shareholders or the Company upon or as a result of the transactions
contemplated by this Agreement.
(b) The Purchaser shall be liable for and shall indemnify, defend
and hold harmless the Shareholders from and against all Taxes for: (i) all
years or periods of the Company commencing after April 30, 1997, and (ii)
taxes occasioned by an election, if any, made by Purchaser pursuant to Section
338 of the Internal Revenue Code or any analogous provision of state or local
law.
5.4 RETURNS.
(a) The Company shall prepare and timely file any income and
franchise Tax reports and returns for any period which ends on or prior to the
Effective Date and which are required to be filed before the Closing. All
such returns and reports shall be prepared using Tax accounting methods and
principles, including depreciation methods and other accounting methods which
may be elected or adopted annually, which are consistent with those used in
the returns and reports of the filing party for preceding Tax periods, unless
a different treatment is required by law. In preparing such returns and
reports, neither the Shareholders nor the Company shall make any election with
respect to the computation of any item of income, deduction or credit of the
Company inconsistent with the preparation of prior years Tax returns. The
Company shall deliver to the Purchaser a complete and accurate copy of each
return and report prepared by it pursuant to this paragraph, and make
available to the Purchaser copies of the permanent financial records
(including tax workpapers) with respect to the Company used to prepare such
return or report upon request by Purchaser any time prior to Closing.
(b) The Purchaser or the Company shall timely prepare and file all
other required Tax returns and reports for the Company which include any
period on or prior to the Effective Date and are due after the Closing Date.
The Shareholders shall not challenge and agree to be bound by any returns and
reports prepared and filed by the Purchaser or the Company pursuant to the
provisions of this paragraph (b), provided that such returns and reports are
prepared and filed on a basis substantially consistent with prior years.
19
<PAGE>
<PAGE>
(c) The Shareholders shall promptly provide to the Purchaser after
the date hereof a true and complete copy of any amendment or adjustment to a
return or report of Taxes or other document filed with or issued by a Tax
authority after the Effective Date to the extent that such amendment or
adjustment affects the Purchaser's or the Company's liability for Taxes
hereunder.
5.5 DEFINITION OF TAX. The capitalized term Tax as used in this Article
5 is defined as follows:
TAX or TAXES means any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect
thereto) imposed by any government or taxing authority, including, without
limitation: taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, minimum, alternative
minimum, estimated, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net worth;
taxes or other charges in the nature of excise, withholding, stamp, transfer,
value added, or gains taxes; license, registration and documentation fees; and
customs' duties, tariffs, and similar charges. Specifically excluded from the
foregoing definition of tax or taxes shall be real and personal property
taxes.
ARTICLE 6
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE
6.1 CONDITIONS. Purchaser's obligations hereunder shall be subject to
the satisfaction, at or before the Closing, of all the conditions set forth in
this Article 6. Purchaser may waive any or all of these conditions in whole
or in part without prior notice; so long as such waiver is in writing; and
provided, however, that no such waiver of a condition shall constitute a
waiver by Purchaser of any other condition or any of Purchaser's other rights
or remedies, at law or in equity, if the Company and Shareholders shall be in
default of any of their representations, warranties, or covenants under this
Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by the Company and
Shareholders in this Agreement or in any written statement that shall be
delivered to Purchaser by the Company under this Agreement shall be true and
accurate in all material respects when made and on and as of the Closing Date
with the same force and affect as if made at the Closing.
6.3 PERFORMANCE. Purchaser shall be reasonably satisfied that the
Company and Shareholders shall have performed, satisfied, and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
6.4 ABSENCE OF LITIGATION. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against any party hereto on or before the Closing
Date.
6.5 ACCEPTANCE BY SHAREHOLDERS. The holders of not less than 100% of
the issued and outstanding shares of Common Stock of the Company have
20
<PAGE>
<PAGE>
agreed to sell and deliver their shares to Purchaser in accordance with this
Agreement.
6.6 DIRECTORS OF THE COMPANY. Effective on the Closing Date all members
of the Board of Directors shall have submitted their resignations to take
effect on the Closing Date.
6.7 FINANCIAL CONDITIONS. Prior to Closing, the Company shall provide
to Purchaser unaudited financial statements dated April 30, 1998. There
shall be no material reduction in shareholders' equity from December 31, 1997
through Closing. At April 30, 1998, the assets of the Company shall include
all assets listed in the attached Exhibits 2.16, 2.18, 2.21 and 2.22. On the
Closing Date: (1) the Company's plant property and equipment before
depreciation shall not be less than $3,200,000; (2) the Company's total
liabilities including but not limited to accounts payable accrued expenses,
taxes payable, capital leases and notes payable of the Company shall not
exceed the value of its cash, accounts receivable and inventory by more than
$450,000; and (3) no assets of the Company will be encumbered other than by
notes payable shown on the Company's Financial Statements. The provisions of
this Section 6.7 are conditions precedent to the Closing and do not effect an
adjustment to the Purchase Price as do the provisions of Article 1.
6.8 TAX RETURNS. With respect to any federal and state tax returns
which are due for the Company for the fiscal year ended April 30, 1998, and
any subsequent periods through the Closing, the Company will have its
accountant prepare the returns, a Company officer will sign the returns, and
the Purchaser will pay the costs of preparing the returns.
6.9 LEGAL OPINION. The Company shall deliver the opinion of its
counsel dated the Closing Date, in form and substance satisfactory to counsel
for Purchaser, to the effect that:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado.
(b) The Company's authorized and issued capital stock is as set
forth in paragraph 2.3 hereof.
(c) The execution and consummation of this Agreement have been
duly authorized and approved by the Company's Board of Directors and
consummation of this Agreement will not constitute or result in any breach or
default of the character described in paragraph 2.14 hereof of which counsel
has knowledge without duty of inquiry other than to the Shareholders.
(d) The shares of Common Stock to be purchased by Purchaser
pursuant to this Agreement are duly and validly authorized and issued, and are
fully paid and nonassessable.
6.10 CLOSING DOCUMENTS. The Company and the Shareholders shall be
prepared to deliver the closing documents set forth in Article 8 of this
Agreement.
6.11 PURCHASER'S BOARD APPROVAL. On or prior to the execution of this
Agreement, the Board of Directors of the Purchaser and Meteor shall have
authorized the execution and delivery of this Agreement and the other
agreements, documents and instruments referenced herein, and the consummation
of the transactions contemplated hereby and thereby.
21
<PAGE>
<PAGE>
6.12 DUE DILIGENCE. The Purchaser shall be satisfied in its discretion
with the results of its due diligence investigation of the Company. Five days
prior to Closing, the Purchaser will acknowledge whether or not it is
satisfied with the results of its due diligence investigation.
6.13 RIGHTS OF FIRST REFUSAL. Except for Amoco's right of first
refusal, all rights of first refusal held by any person or entity relating to
the Company or the business or any of the assets or properties of the Company
or the business shall have been waived (with each such waiver to be in form
and substance satisfactory to the Purchaser in its reasonable discretion) or
shall have expired without exercise. The Company shall have provided notice
to Amoco of the execution of this Agreement together with the allocation by
Purchaser of the portion of the Purchase Price attributable to the properties
subject to Amoco's right of first refusal as set forth in Exhibit 6.13 hereto.
6.14 OFFICER'S CERTIFICATE. The Company shall have delivered to
Purchaser a certificate, dated the Closing Date, and signed by the President
of the Company, certifying that each of the conditions specified in Section
6.2, 6.4, 6.5, 6.6, 6.7, 6.9 and 6.13 hereof have been fulfilled.
6.15 CONSENT OF FIRST NATIONAL BANK OF STRASBURG. The Company,
Shareholders and Purchaser acknowledge that the consent of the First National
Bank of Strasburg ("Bank") is required to this transaction. As a condition
precedent to Closing, the Purchaser and Shareholders shall be responsible to
negotiate with the Bank in good faith to obtain the consent of the Bank to
this transaction upon terms and conditions acceptable to the Shareholders and
Purchaser. Purchaser and Meteor will provide such detailed information
concerning them as is reasonably requested by the Bank to allow it to consider
providing the required consent to this transaction. If mutually acceptable
consent is obtained wherein the Shareholders are not fully released from their
existing guarantees with the Bank, the Company, Purchaser and Shareholders
agree to execute such amendments to the Bank's loan documents as may be
necessary to cause a maturity date of such loan to be ninety (90) days
following the Date of Closing. The condition contained in this paragraph
shall be considered a mutual condition of the Shareholders and Purchaser and
to the extent that the Bank's consent is not obtained on terms acceptable to
Shareholders, Purchaser and the Company, then either the Shareholders or
Purchaser may terminate this Agreement for failure of this condition.
ARTICLE 7
CONDITIONS PRECEDENT TO THE COMPANY'S
AND SHAREHOLDERS' PERFORMANCE
7.1 CONDITIONS. The Company's and Shareholders' obligations hereunder
shall be subject to the satisfaction, at or before the Closing, of all the
conditions set forth in this Article 7. The Company and Shareholders may
waive any or all of these conditions in whole or in part without prior notice;
so long as such waiver is in writing; and provided, however, that no such
waiver of a condition shall constitute a waiver by the Company and
Shareholders of any other condition of or any of the Company's or
Shareholders' rights or remedies, at law or in equity, if Purchaser shall be
in default of any of its representations, warranties, or covenants under this
Agreement.
7.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by Purchaser in this Agreement
or in any written statement that shall be delivered to the Company and/or
22
<PAGE>
<PAGE>
Shareholders by Purchaser under this Agreement shall be true and accurate on
and as of the Closing Date as though made at that time.
7.3 PERFORMANCE. Purchaser shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it, on or before the Closing
Date.
7.4 RELEASE OF GUARANTEE. Subject to the provisions of Section 6.15,
Shareholders shall have been released from all personal guarantees executed by
them to suppliers and banks.
7.5 ABSENCE OF LITIGATION. No action, suit or preceding before any
court or any governmental body or authority, pertaining to the transactions
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Purchaser on or before the Closing Date.
7.6 LEGAL OPINION. The Purchaser shall deliver the opinion of its
counsel dated the Closing Date, in form and substance satisfactory to counsel
for the Company, to the effect that:
(a) The execution and consummation of this Agreement have been
duly authorized and approved by the Purchaser's Board of Directors.
(b) Execution of this Agreement will not constitute or result in
any breach or default of the character described in paragraph 3.4 hereof of
which counsel has knowledge.
7.7 OFFICERS' CERTIFICATE. Purchaser shall have delivered to the
Company and Shareholders a certificate, dated the Closing Date and signed by
the President of Purchaser certifying that each of the conditions specified in
Sections 7.2 through 7.6 have been fulfilled.
7.8 BANK CONSENT. Shareholders have obtained the consent and/or
purchased the Bank's loan as more fully described in Section 6.15 above.
ARTICLE 8
CLOSING
8.1 CLOSING. The Closing of this transaction shall be held at the
offices of the Closing Agent at a mutually agreeable time on May 21, 1998, or
the earliest date thereafter when the Purchaser has completed its review of
the exhibits provided by the Company with this Agreement and has closed on its
financing with Norwest, but in no event will the Closing be after May 29,
1998. At the Closing:
(a) Purchaser shall deliver immediately available funds for that
portion of the Purchase Price as required to be paid in cash pursuant to
Section 1.5 to the Closing Agent.
(b) Each Shareholder shall present the certificates representing
his shares of the Company being sold to Purchaser, and such certificates will
be duly endorsed; and
(c) Each Shareholder shall receive from the Closing Agent his or
her share of the Purchase Price as required to be paid in cash pursuant to
Section 1.5 in the form of immediately available funds based upon the
shareholders pro rata share.
23
<PAGE>
<PAGE>
(d) Purchaser shall deliver an officer's certificate, dated the
Closing Date, stating that all representations, warranties, covenants and
conditions set forth in this Agreement on behalf of Purchaser are true
and correct as of, or have been fully performed and complied with by, the
Closing Date.
(e) Purchaser shall deliver a signed consent and/or Minutes of the
Directors of Purchaser approving this Agreement and each matter to be
approved by the Directors of Purchaser under this Agreement. Such Minutes
shall be certified by an Officer of Purchaser.
(f) The Company and the Shareholders shall deliver a certificate,
dated the Closing Date, stating that all representations, warranties covenants
and conditions set forth in this Agreement on behalf of the Company are true
and correct as of, or have been fully performed and complied with by, the
Closing Date.
(g) The Company shall deliver a signed Consent or Minutes of the
Directors of the Company approving this Agreement. Such Minutes shall be
certified by an officer of the Company.
(h) Each party shall deliver such other documents or information
reasonably required to be furnished by Closing pursuant to this Agreement.
ARTICLE 9
GUARANTEES
9.1 SHAREHOLDER GUARANTEE. The Shareholders ("Guarantors") hereby
jointly and severally unconditionally guarantee the collection of all
receivables on the April 30, 1998, balance sheet provided pursuant to Section
2.7 of this Agreement; provided that the Company will be allowed to provide a
reserve for bad debts of 3% of the accounts receivable on the April 30, 1998,
balance sheet which will reduce the amount of receivables being guaranteed.
After the Closing Date, the Company shall continue to follow all prior credit
and collection procedures and use all reasonable efforts to collect these
receivables. Any receivable guaranteed by the Shareholders pursuant to this
Article and not collected by the Company within 120 days after the Closing
Date shall be purchased by Shareholders and neither Purchaser nor the Company
will continue to do business with that customer until such time as the
purchased receivable is paid.
Guarantors hereby waive demand, all notice including notice of demand,
notice of default, protest, notice of protest, suit and diligence, and it
shall not be necessary for Purchaser, in order to enforce performance by
Guarantors, to first institute suit or exhaust its remedies against the
Company or Shareholders for performance of such obligations. Guarantors agree
that Guarantors' duties and liability under the terms of this guarantee
shall not be released, diminished, impaired, reduced, or affected by the
occurrence of either or both of the following events; (i) insolvency,
bankruptcy, or dissolution of Purchaser or the Company, or (ii) any neglect,
delay, omission, failure or refusal of Purchaser to take or prosecute any
action for the collection of an accounts receivable owed the Company
guaranteed by Guarantors. This guarantee is for benefit of Purchaser, its
successors and assigns. This guarantee is binding on Guarantors, and
Guarantors' successors, legal representatives, and assigns, and shall be
effective as of the Closing Date.
24
<PAGE>
<PAGE>
9.2 NON-ASSIGNABILITY. The Guarantee described in Section 9.1 is not
assignable, transferable, nor may it be delegated in any manner whatsoever by
Guarantors, except with the written consent of Purchaser.
9.3 GUARANTEE BY METEOR. Meteor hereby unconditionally guarantees the
performance by Purchaser of all of its promises, covenants and other
obligations under this Agreement.
Meteor hereby waives demand, all notice including notice of demand,
notice of default, protest, notice of protest, suit and diligence, and it
shall not be necessary for Shareholders, in order to enforce performance by
Meteor, to first institute suit or exhaust its remedies against the Purchaser
for performance of such obligations. Meteor agrees that its duties and
liability under the terms of this guarantee shall not be released,
diminished, impaired, reduced, or affected by the occurrence of any neglect,
delay, omission, failure or refusal of Shareholders to take or prosecute any
action for the satisfaction of the obligations of the Purchaser. This
guarantee is for benefit of Shareholders, their heirs, legal representatives
and assigns. This guarantee is binding on Meteor, and Meteor's successors,
legal representatives, and assigns, and shall be effective as of the Closing
Date.
9.4 NON-ASSIGNABILITY. The Guarantee described in Section 9.3 is not
assignable, transferable, nor may it be delegated in any manner whatsoever by
Meteor, except with the written consent of all Shareholders.
ARTICLE 10
MISCELLANEOUS
10.1 DEFINITION OF KNOWLEDGE. Except as provided in this Section,
statements in this Agreement made to the "knowledge" of a person shall mean
the knowledge that such person (where the person is an entity, the executive
officers of such entity) has or should have after having made a reasonable
inquiry of the officers and management personnel of the Company who would be
reasonably likely to have information relating to the fact in question.
10.2 CAPTIONS AND HEADINGS. The Article and paragraph/section headings
through this Agreement are for convenience and reference only, and shall in no
way be deemed to define, limit, or add to the meaning of any provision of this
Agreement.
10.3 NO ORAL CHANGE. This Agreement and any provision hereof, may not
be waived, changed modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
10.4 WAIVER. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against
whom such waiver is charged; and (i) the failure of any party to insist in any
one or more cases upon the performance of any of the provisions, covenants, or
conditions of this Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the future of any such
provisions, covenants, or conditions, (i) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of the
breach or failure of a covenant, condition, or provision hereof shall not be
deemed a waiver of such breach or failure, and (iii) no waiver by any party of
25
<PAGE>
<PAGE>
one breach by another party shall be construed as a waiver with respect to any
other or subsequent breach.
10.5 ENTIRE AGREEMENT. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings.
10.6 CHOICE OF LAW. This Agreement and its application shall be
governed by the laws of the State of Colorado.
10.7 COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.8 NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of receipt if served personally on the party to whom notice
is to be given, by telecopy or telegram, or mailing if mailed to the party
to whom notice is to be given, by first class mail, registered or certified,
postage prepaid, and properly addressed as follows:
Purchaser:
Edward J. Names, Director
Fleischli Oil Company, Inc.
216 16th Street, Suite 730
Denver, Colorado 80202
The Company:
Tri-Valley Gas Co.
P.O. Box 337
Byers, Colorado 80103
Shareholders:
Dave Gordley
57101 East 88th Avenue
Strasburg, Colorado 80136
Ronald Burchfield
1778 Arapahoe Street
Strasburg, Colorado 80136
Eugene Lamb
P.O. Box 653
Strasburg, Colorado 80136
Thomas H. Bradbury
P.O. Box 550
310 Front Street
Byers, Colorado 80103-0550
10.9 BINDING EFFECT. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.
10.10 MUTUAL COOPERATION. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other
26
<PAGE>
<PAGE>
and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
10.11 BROKERS. Each of the parties hereto shall indemnify and hold the
other harmless against any and all claims, losses, liabilities or expenses
which may be asserted against it as a result of its dealings, arrangements or
agreements with any broker, finder or person.
10.12 ANNOUNCEMENTS. Purchaser, Shareholders and the Company will
consult and cooperate with each other as to the timing and content of any
announcements of the transactions contemplated hereby to the general public or
to employees, customers or suppliers. Except to the extent that the parties
consent in writing otherwise, no party to this Agreement shall make, or cause
to be made, any press release or public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate
with any news media. Notwithstanding the preceding sentencing, the parties
agree that the Purchaser or an affiliate of the Purchaser may make such
disclosure (on Form 8-K, by press release or otherwise) regarding the terms of
this Agreement and the transactions contemplated hereby as it deems necessary
to comply with applicable securities laws or the rules and regulations of the
American Stock Exchange, including a press release following the execution of
this Agreement.
10.13 EXPENSES. Except as specifically provided in this Agreement, all
costs and expenses including legal, accounting and any other out-of-pocket
expenses incurred by the Company or its Shareholders, in connection with this
transaction, shall be paid by the Shareholders. All costs and expenses
including legal, accounting and any other out-of-pocket expenses incurred by
the Purchaser, in connection with this transaction, shall be paid by the
Purchaser.
10.14 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as otherwise
provided in this Section 10.14, the representations, warranties, covenants and
agreements of the parties set forth in this Agreement or in any instrument,
certificate, opinion, or other writing providing for in it, shall survive
the Closing for a period of two years irrespective of any investigation made
by or on behalf of any party. Notwithstanding the above, the representations
and warranties set forth in Article 5 relating to tax issues shall survive for
a period equal to the applicable statute of limitations with respect to any
circumstances described therein or related thereto. Purchaser agrees that it
must provide prompt notice to the Shareholders of any claims which are based
on a breach of these representations and warranties and intitiate any suit
related thereto prior to the end of the two year period. If a case or any
action is brought by a third party against the Company or the Purchaser which
is based on a breach of the representations or warranties, and the Purchaser
notifies the Shareholders of the commencement thereof, the Shareholders will
be entitled to participate in, and to the extent that they may wish, assume
the defense thereof, subject to the provisions herein stated, with counsel
reasonably satisfactory to the Purchaser. After notice from the Shareholders
to the Purchaser of their election so to assume the defense thereof, the
Shareholders will not be liable to the Purchaser under this Section for any
legal or other expenses subsequently incurred by the Purchaser in connection
with the defense thereof, other than reasonable costs of investigation.
10.15 ASSIGNMENT. This Agreement may not be assigned by operation of
Law or otherwise by the Shareholders, the Company or the Purchaser.
10.16 NO THIRD PARTY BENEFICIARIES. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
27
<PAGE>
<PAGE>
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person, including, without limitation, any employee or former
employee of the Company, any legal or equitable right, benefit or remedy of
any nature whatsoever, including, without limitation, any rights of employment
for any specified period, under or by reason of this Agreement.
10.17 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was 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 at law or equity without the necessity of demonstrating the inadequacy
of monetary damages.
AGREED TO AND ACCEPTED as of the date first above written.
METEOR INDUSTRIES, INC. FLEISCHLI OIL COMPANY, INC.
By /s/ Edward J. Names By /s/ Paul Greaves
Edward J. Names, President Paul Greaves, Chief Executive Officer
TRI-VALLEY GAS CO. SHAREHOLDERS:
By /s/ Dave Gordley /s/ Dave Gordley
Dave Gordley, General Manager Dave Gordley
/s/ Ronald Burchfield
Ronald Burchfield
/s/ Eugene Lamb
Eugene Lamb
/s/ Thomas H. Bradbury
Thomas H. Bradbury
