UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 30, 1998
METEOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Colorado 0-27968 84-1236619
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) identification No.)
216 Sixteenth Street, Suite 730, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 572-1135
(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
The information presented in this Item 1 describes a possible change in
control of the registrant.
The registrant ("Meteor") has received a copy of a document captioned
"Term Sheet" and dated December 30, 1998, between Nevada Manhattan Mining
Incorporated (also known as Nevada Manhattan Group, Inc.) ("Nevada") and
Capco
Acquisub, Inc. ("Capco"). A copy of the Term Sheet is attached hereto as
Exhibit 10.1.
Under the transaction described in the Term Sheet, Capco has agreed to
sell to Nevada 1,212,000 shares of the common stock of the registrant (the
"Shares") and has agreed to deliver to Nevada an additional 518,000 shares on
or before January 14, 1999. The consideration for the sale is $12,110,000 to
be paid as follows: $500,000 on December 30, 1998, $1,000,000 by March 16,
1999 and $530,500 per quarter until paid starting June 30, 1999. In
addition,
interest will be paid quarterly at the rate of 11% per annum on the balance
owed.
The 1,212,000 Shares represents 35% of Meteor's outstanding shares.
When
combined with the additional 518,000 shares, the total will represent
slightly
more than a majority of Meteor's outstanding shares.
To the knowledge of management, Capco currently owns a total of
1,240,000
shares of Meteor's common stock.
The $500,000 down payment was paid in cash by Nevada to Capco.
As additional consideration, Nevada agreed to grant Capco the option to
purchase from Nevada Manhattan from time to time prior to January 1, 2002,
15,000,000 shares of common stock of Nevada Manhattan at the exercise price
of
thirty-three and one-half cents and 2,000,000 shares of common stock at the
exercise price of sixty-five cents per share.
In connection with the transaction described above, Meteor's Board of
Directors agreed to give conditional consent to the transfer of the Shares
which are currently subject to a lock-up agreement between Capco and Meteor.
A copy of the lock-up agreement is attached hereto as Exhibit 10.2.
Meteor's consent is subject to the following conditions:
(1) The Shares shall remain subject to the existing lock-up and
Nevada shall abide by all of the terms thereof.
(2) Meteor shall have the right to reverse the transfer if by
January
29, 1999, Meteor's Board reasonably determines that on the basis of a
forthcoming due diligence review that one or more officers, directors,
principal shareholders or optionholders of Nevada shall have been convicted
of, or is currently under prosecution for, any felony or any misdemeanor
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involving fraud, or shall have entered into a consent decree with the U.S.
Securities and Exchange Commission (except what is disclosed in the current
form 10-K) or shall have been subjected to a civil judgment involving fraud
or
shall have committed an act of moral turpitude (collectively, the "Reversal
Conditions").
(3) Meteor shall receive 200,000 shares of Nevada common stock.
Also in connection with the transaction described above, Meteor's Board
of Directors expanded the size of the Board from five to seven members. The
Board of Directors resolved that, subject to the above transaction moving
forward and not being reversed, Meteor would fill the two vacancies created by
the expansion with two qualified Board members to be nominated by Nevada.
In addition, Nevada has agreed to vote for the full slate of seven
directors (including the five existing Meteor directors) until such time as
the current Board members approve and implement a fuel contract (estimated to
add up to $5,000,000 in annual operating income to Meteor) or approve and
implement such other transaction or opportunity which the existing Board
members reasonably believe would substantially benefit Meteor's
shareholders.
Also, Meteor has the right to remove the members nominated by Nevada if
within the next thirty days the Board reasonably determines on the basis of a
forthcoming due diligence review that one or more of the Reversal Conditions
has been met.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
[none]
(b) Pro Forma Financial Information
[none]
(c)Exhibits
The Company hereby files the following exhibits:
(10.1) Term Sheet, dated December 30, 1998.
(10.2) Lock-up Agreement, dated June 24, 1998.
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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 thereunto duly authorized.
METEOR INDUSTRIES, INC.
By: /s/Edward J. Names, President
Dated: January 7, 1998
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Exhibit 10.1
METEOR INDUSTRIES, INC.
Nevada Manhattan Mining Incorporated
Term Sheet
December 30, 1998
Company: METEOR INDUSTRIES, INC. ("Company"), a Colorado corporation.
Purchaser: NEVADA MANHATTAN MINING INCORPORATED, a Nevada corporation
("NM").
Stockholder: CAPCO ACQUISUB, INC., a Colorado corporation ("Stockholder").
Transaction:
For the consideration and on the terms and conditions described below, NM
hereby purchases from Stockholder, and Stockholder hereby sells to NM, One
Million Two Hundred Twelve Thousand (1,212,000) shares of the restricted
voting common stock of the Company (the "Initial Shares").
In addition, for the consideration and on the terms and conditions described
below, on or before January 14, 1999, Stockholder shall sell to NM an
additional Five Hundred Eighteen Thousand (518,000) shares of Company
common stock (the "Additional Shares", and, together with the Initial Shams,
the "Shares").
If Stockholder fails to deliver the Additional Shares in accordance with the
paragraph immediately above, NM may, as liquidated damages for loss of a
bargain and not as a penalty, in lieu of exercising its other rights
respecting such Additional Shares under this Term Sheet, if it shall so
elect,
either (i)demand that Stockholder pay NM, and Stockholder shall pay NM, Five
Hundred Thousand Dollars ($500,000) within 45 days or may (ii) by notice
to Stockholder reduce the Initial Consideration (defined below) payable
hereunder by Five Hundred Thousand Dollars ($500,000).
Consideration:
In the transaction contemplated by this Term Sheet (the "Transaction") NM
shall pay to the Stockholder the purchase price of $7.00 per Share, for a
total purchase price for (A) the Initial Shares, Eight Million Four Hundred
Eighty Four Thousand Dollars ($8,484,000) (the "Initial Consideration"), and
(B) the Additional Shares, Three Million Six Hundred Twenty Six Thousand
Dollars ($3,626,000) (the "Additional Consideration", and, together with the
Initial Consideration, the "Consideration") as follows: (i) Five Hundred
Thousand Dollars ($500,000) on the date hereof, (ii) One Million Dollars
($1,000,000)
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by March 16, 1999, and (iii) on each March 31, June 30, September 30 and
December 31 following March 31, 1999, NM shall pay to Stockholder, Five
Hundred Thirty Thousand Five Hundred Dollars ($530,500) until the
Consideration shall have been paid in full; provided, however, that if the
Additional Shares are not sold to NM as contemplated above, the total
amount of Consideration shall be the amount of the Initial Consideration as
reduced by NM pursuant to its liquidated damages rights as provided above,
and the amount of each installment of Consideration payable hereunder shall
be ratably reduced.
Interest:
In addition to the installments of Consideration to be paid by NM as provided
above, NM shall pay interest on any amount of the balance of the
Consideration not then paid at the rate of eleven percent (11%) per annum,
assuming a 365 day year, from the date hereof until the Consideration shall
have been paid in full. On any date an installment of Consideration shall be
paid or payable as provided above, all amounts of interest accrued and unpaid
shall be paid together with such installment. All amounts of Consideration
and interest thereon shall be paid in cash by wire transfer to such account of
Stockholder located in the United States as Stockholder shall specify to NM
in writing From time to time.
Representations and Warranties of NM:
NM hereby makes each of the following representations and warranties to
and for the benefit of Stockholder on the date hereof and as of the date of
any sale of the Additional Shares:
l. NM is a corporation duly organized, validly existing, and in good
standing under the laws of Nevada.
2. NM has full power and authority (including full corporate power and
authority) to execute and deliver this Term Sheet and to perform its
obligations hereunder. This Term Sheet constitutes the valid and
legally binding obligation of NM, enforceable in accordance with its
terms and conditions. NM need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Term Sheet.
3. Neither the execution and the delivery of this Term Sheet, nor the
consummation of the transactions contemplated hereby, will (A)
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violate any constitution, statute, regulation, rule, injunction,
judgement, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which NM is subject
or any provision of its charier or bylaws or (B) conflict with, result in
a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which NM is a party or
by which it is bound or to which any of its assets is subject.
4. NM has no liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions
contemplated by this Term Sheet for which Stockholder could
become liable or obligated.
5. NM is not acquiring the Shares with a view to or for sale in
connection with any distribution thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
Representations and Warranties of Stockholder:
Stockholder hereby makes the representations and warranties appearing on
Exhibit A hereto to and for the benefit of NM on the date hereof and as of the
date of any sale of the Additional Shares.
Grant of Option:
NM hereby grants to Stockholder the option to purchase from NM from time
to time prior to January l, 2002 (the "Option Termination Date"), (i)
15,000,000 shares of common stock of NM at the exercise price of thirty-
three and one-half cents ($0.335) per share, and (ii) 2,000,000 shares of
common stock of NM at the exercise price of sixty-five cents ($.65) per
share (the "Options"). Each Option and its exercise price shall be ratably
adjusted for any stock split, reverse stock split or share dividend which
becomes effective after the date hereof and before the Option Termination
Date. Each Option may be assigned by Stockholder, and thereafter shall be
nonassignable.
NV Board Representation:
NM hereby agrees (A) promptly to cause one individual nominated by
Stockholder to be appointed as a member of the NM Board or Directors, and
(B) to cause one individual nominated by Stockholder to be included in each
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management slate of individuals proposed by NM to be elected as members
of the NM Board after the date hereof and prior to the Option Termination
Date. If at any time the aggregate number of shares of NM stock held by
Stockholder and purchasable by Stockholder under the Option shall be less
than Seven Million Five Hundred Thousand (7,500,00) shares, Stockholder's
rights under this paragraph shall cease and terminate.
Expenses:
Each Party shall bear such Party's own costs and expenses arising out of or
relating to the Transaction (including such Party's own attorneys fees and
expenses).
Assurances:
The Parties hereby agree to execute and deliver all documents and
instruments, and take such action as may be required, in order to effectuate
the terms and conditions set forth in this Term Sheet. (Stockholder shall not
disclose to any third party any information concerning the Transaction (or the
transactions contemplated by the Other Term Sheets) without the prior
written consent of NM.)
Due Diligence:
Anything to the contrary appearing in this Term Sheet notwithstanding, NM
shall have the right to rescind the Transaction by no later than February 15,
1999. Upon any such recission, NM shall return all of the Shares to
Stockholder, and Stockholder shall return to NM all Consideration and any
other consideration received by Stockholder hereunder, and them shall be no
further liability to either party.
The terms and conditions set forth in this Term Sheet shall be binding
and enforceable among the Parties. This Term Sheet and all transactions and
disputes arising out of or related hereto shall be governed by the laws of
California. The Parties contemplate that the Transaction will be
consummated in accordance with the terms of this Term Sheet, and that this
Term Sheet will be amended and restated in its entirety in definitive
documents by February 15, 1999, and the Parties agree to negotiate in good
faith such definitive documents, which will contain customary
representations,
warranties, covenants and conditions as reasonably required by NM. The
definitive documents shall include, without limitation, a pledge agreement
providing for a pledge of the Shares by NM to the Stockholder securing NM's
obligations to pay the Consideration and interest thereon, which pledge
agreement shall provide, among other things, that (i) the Shares pledged
thereunder shall be held by a pledge agent reasonably acceptable to the
parties hereto, and (ii) a ratable portion of the number of Shares pledged
thereunder shall be released from such pledge upon payment of each
installment
of Consideration (together with interest thereon). In the event that final
definitive documents either are not executed or not agreed upon between the
Parties, then it is expressly understood and agreed that this Term Sheet
shall
be in lieu of any such definitive documents and shall be enforceable in
accordance with the terms and conditions contained herein, and each Party
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shall be deemed to have made such additional representations and warranties
as
are consistent with those set forth herein and are reasonably customary in
transactions involving private purchases of control positions in, and
restricted stock of, a public company. All claims and disputes arising out
of or related to this Term Sheet shall exclusively be subject to resolution
by, and in accordance with the commercial rules or, the American Arbitration
Association by arbitration conducted in Los Angeles, California. The Parties
further agree that any arbitrator's order or judgment issued pursuant
hereto may be enforced in any court of competent jurisdiction, and that the
arbitrators appointed pursuant hereto shall have the right to award specific
performance. In the event any action is necessary to enforce the rights of
any
of the Parties, the prevailing party in any such action shall be
entitled to reasonable attorneys fees in addition to costs, including any
arbitrators' costs and expenses. In the event there is no prevailing Party,
each Party to such arbitration shall bear the fees, costs and expenses of the
arbitrators equally.
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This Term Sheet shall become effective upon the execution and delivery hereof
by each of the Parties, each of the parties to each thereof. All signatures
may be delivered in counterparts by facsimile or original counterpart. By
executing and delivering this Term Sheet, (i) NM acknowledges its receipt of
certificates representing the Initial Shares, and (ii) Stockholder hereby
acknowledges its receipt of $500,000 of Initial Consideration.
AGREED AND ACCEPTED BY:
Purchaser:
NEVADA MANHATTAN MINING INCORPORATED
BY:
Title:
Stockholder:
CAPCO ACQUISUB, INC.
BY:
Title:
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EXHIBIT A
1. The Stockholder is duly organized, validly existing, and in good standing
under the laws of Colorado.
2. The Stockholder has full power and authority (including full corporate
power and authority) to execute and deliver this Term Sheet and to perform
his
or its obligations hereunder. This Term Sheet constitutes the valid and
legally binding obligation of the Stockholder, enforceable in accordance with
its terms and conditions. The Stockholder need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Term Sheet.
3. Neither the execution and the delivery or this Term Sheet, nor the
consummation of the transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency,
or court to which the Stockholder is subject or, if the Stockholder is a
corporation, any provision of its charter or bylaws or (B) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or
cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Stockholder is a party or by
which it is bound or to which any of his or its assets is subject.
4. The Stockholder has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Term Sheet for which NM could become liable or obligated.
5. The Stockholder holds of record and owns beneficially the Shares which
Stockholder is selling to NM as of the date this representation is made, free
and clear of any restrictions on transfer (other than any restrictions under
the Securities Act and state securities laws and, except that, pursuant to
the
terms of an agreement with the Company, a copy of which has been delivered by
the Stockholder to NM (the "Stockholder Agreement"), the Shares may not be
sold at a date earlier than December 31, 1999), taxes, security interests,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. All restrictions on transfer of the Shares under the Stockholder
Agreement have been effectively waived with respect to the Transaction, and
the Transaction will not constitute or cause a breach of the Stockholder
Agreement. The Stockholder is not a party to any option, warrant, purchase
right, or other contract or commitment that could require the Stockholder to
sell, transfer, or otherwise dispose of any capital stock of the Company
(other than this Term Sheet). The Stockholder is not a party to any voting
trust,
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proxy, or other agreement or understanding with respect to the voting of any
capital stock of the Company.
6. The statements and information provided to NM by or on behalf of
Stockholder in, or in connection with, this Term Sheet (including the
representations and warranties contained herein and information provided
relating to NM's due diligence investigation concerning the Transaction) do
not, and will not, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make any such
statements
or information not misleading.
7. To the best knowledge of the Stockholder, Company has made all filings
with the Securities and Exchange Commission ("SEC") that it has been required
to make under the Securities Act and the Securities Exchange Act
(collectively
the "Company Public Reports"). Each of the Company Public Reports, as of its
respective date (and, with respect to the most recent Company Public Report,
as of the date hereof) has complied with the Securities Act and the
Securities
Exchange Act in all material respects.
8. To the best knowledge of the Stockholder, except for (i) liabilities
disclosed in the Company Public Reports, and (ii) liabilities which have
arisen after January 1, 1998 in the ordinary course of business (none of
which
results from, arises out of, relates to, is in the nature of, or was caused
by
any breach of contract, breach or warranty, tort, infringement, or violation
of law), none of Company or any of its subsidiaries has any liability
(whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether arising under environmental law or other applicable law or otherwise,
and whether due or to become due), including any liability for any taxes,
which, individually or in the aggregate, would have a material adverse effect
on Company.
9. The entire authorized capital stock of Company is as follows:
Class of Stock Authorized Number of Shares Issued and Outstanding
(excluding treasury shares)
Common Stock 10,000,000 3,458,892
(ii) Ninety Seven Thousand (97,000) shares of Company capital stock
are held in the Company's treasury. All of the issued and outstanding shares
of the Company's capital stock, and all capital stock of each of Company's
subsidiaries,
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have been duly authorized and are validly issued, fully paid, and
nonassessable. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Company or any of its
subsidiaries to issue, sell, or otherwise cause to become outstanding any of
its capital stock except for 350,534 options outstanding under the Employees
Stock Option Plan. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to
Company
or any of its subsidiaries except as reported in the Company Public Reports
except outstanding warrants to purchase 1,372,000 shares of Company common
stock.
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Exhibit 10.2
AGREEMENT
AGREEMENT, made this 24th day of June, 1998, by and among Meteor
Industries, Inc., a Colorado corporation ( "Purchaser" or the "Company") and
Capco Acquisub, Inc., a Colorado corporation and its parent corporation Capco
Resources Ltd. (hereinafter collectively referred to as "Seller").
WHEREAS, Purchaser desires to acquire up to 533,000 shares of Meteor
Industries, Inc.'s common stock owned and held by the Seller, (the "Common
Stock") in exchange for the consideration and upon the terms described herein
(the "Purchase"); and
WHEREAS, the Seller desires to sell up to 533,000 shares of Common
Stock; and
WHEREAS, Purchaser and Seller 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 Seller 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.
1.2 Closing. The closing of the transaction contemplated herein (the
"Closing") shall occur at a mutually agreeable time and place, on the
earliest
practicable date following the day on which all of the obligations and
conditions precedent contained herein are complied with. The Closing date is
anticipated to be July 28, 1998, or a soon thereafter as reasonably
practicable (the "Closing Date").
1.3 Purchase Price. Subject to the terms and conditions set forth in
the Agreement and in reliance on the representations, warranties and
covenants
hereinafter set forth, Purchaser shall pay $2,000,000 for 533,000 shares of
the Common Stock.
1.4 Payment of Purchase Price. The total Purchase Price shall be paid
as follows:
1. $1,250,000 of the total Purchase Price shall be paid upon
signing
this Agreement.
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2. $750,000 shall be paid at Closing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this Agreement, the
Seller hereby represents and warrants to Purchaser that:
2.1 Organization. Capco Acquisub, Inc. is a corporation duly
organized, validly existing, and in good standing under the laws of Colorado,
has all necessary powers to own its properties and to carry on its business
as
now owned and operated by it. Capco Resources Ltd. is a corporation duly
organized, validly existing and in good standing under the laws of the
Province of Alberta, Canada, has all necessary powers to own properties and
to
carry on its business as now owned and operated.
2.2 Authority. The Seller has authorized the execution of this
Agreement and the consummation of the transactions contemplated herein, and
the Seller has full power and authority to execute, deliver and perform this
Agreement and this Agreement is a legal, valid and binding obligation of the
Seller, and is enforceable in accordance with its terms.
2.3 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by the Seller and the performance by the Seller 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, articles
of incorporation, by-laws, or other agreement or instrument to which the
Seller 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, or
(b) an event that would result in the creation or imposition of any lien,
charge, or encumbrance on Common Stock.
2.4 Share Ownership. The Seller holds 1,771,550 shares of the
Company's
outstanding Common Stock in the name of Capco Acquisub, Inc. ("Capco"). Such
shares are owned of record and beneficially by Capco and 1,745,000 of such
shares are not subject to any claim, lien, encumbrance or pledge. Seller has
authority to sell, and limit the future sales of such shares (in accordance
with paragraph 4.3 herein) pursuant to this Agreement. The balance of 26,550
shares are currently held as collateral for a loan but shall be released
prior
to Closing.
2.5 Other Information. None of the information and documents which
have
been furnished or made available by the Seller to Purchaser in connection
with
the transactions contemplated by this Agreement is 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.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to the Seller to enter into this Agreement, the
Purchaser represents and warrants to the Seller 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
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 Authority. The Board of Directors of Purchaser has 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.
3.3 Ability to Carry Out Obligations. Other than as described in the
attached Exhibit 3.3, 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.
ARTICLE 4
COVENANTS
4.1 Transfer of Shares. The Seller agrees that after the date hereof
and through the Closing, without the Purchaser's consent, the Seller will not
sell, transfer, mortgage, pledge or otherwise dispose of or encumber all or
any part of the 1,771,550 shares of Common Stock owned or controlled by
Seller.
4.2 Lock Up. Seller hereby agrees not to sell, transfer, mortgage,
pledge or hypothecate any of its Common Shares for eighteen months after the
date of Closing. However, if after April 15, 1999, the shares of Meteor
Industries, Inc.; trade at greater than $7.50 per share, over a two month
period of time, then this lock up requirement shall be terminated. Evidence
of
this lock up agreement shall be included in the restrictive legend on all
remaining 1,238,550 shares of Common Stock owned by Seller. This legend will
read substantially as follow:
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"The transfer of the shares represented by this certificate is subject to
certain lock-up provisions contained in an agreement between Meteor
Industries, Inc., and Capco Acquisub, Inc., dated June 24, 1998. A copy of
this agreement is on file with Meteor Industries, Inc., and is available for
inspection by anyone wishing to purchase, purchasing or otherwise acquiring
an
interest in any of the shares represented by this certificate."
4.3 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.
ARTICLE 5
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE
5.1 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 5. 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.
5.2 Accuracy Of Representations. Except as otherwise permitted by
this
Agreement, all representations and warranties by the Seller in this Agreement
or in any written statement that shall be delivered to Purchaser by the
Seller
under this Agreement shall be true and accurate when made and on and as of
the
Closing Date with the same force and effect as if made at the Closing.
5.3 Performance. Purchaser shall be reasonably satisfied that the
Seller 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.
5.4 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.
5.5 Private Placement. Purchaser shall have closed a private placement
of notes and warrants with Westport Resources Investment Services, Inc. on
the
terms described in the Letter of Intent attached hereto as Exhibit 5.5.
5.6 Officer's Certificate. The Seller 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 and covenants in this
Agreement has been fulfilled.
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ARTICLE 6
CONDITIONS PRECEDENT TO THE SELLER'S PERFORMANCE
6.1 Conditions. The Seller's obligations hereunder shall be subject
to
the satisfaction, at or before the Closing, of all the conditions set forth
in
this Article 6. The Seller 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 Seller of any other condition of or any of the Seller's rights
or
remedies, at law or in equity.
6.2 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 Seller by
Purchaser
under this Agreement shall be true and accurate on and as of the Closing Date
as though made at that time.
6.3 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.
6.4 Officers' Certificate. Purchaser shall have delivered to the
Seller
a certificate, dated the Closing Date and signed by the President of
Purchaser
certifying that each of the conditions and covenants of the Purchaser
included
in this Agreement has been fulfilled.
ARTICLE 7
CLOSING
7.1 Closing. The Closing of this transaction shall be held at the
offices of Krys, Boyle, Freedman and Sawyer, P.C. on July 28, 1998, or as
soon
thereafter as reasonably practicable, or such other place as shall be
mutually
agreed upon, and on such date as shall be mutually agreed upon by the
parties.
At the Closing:
(a) Purchaser shall deliver a certified or cashiers checks for $750,000 to
the
Seller.
(b) 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.
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(c) Purchaser shall deliver 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.
(d) The Seller 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.
(e) The Seller shall deliver a signed Consent and/or Minutes of the Seller
approving this Agreement. Such Minutes shall be certified by the officers of
Seller.
(f) Seller shall have the required legend typed on all certificates to
conform with the lock up requirements in paragraph 4.3 of this Agreement.
(g) Seller shall deliver a certificate in the name of Meteor Industries, Inc.
for 533,000 shares of the Company's Common Stock.
(h) Each party shall deliver such other documents or information required
to be furnished by Closing pursuant to this Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 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.
8.2 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.
8.3 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, (ii) 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 one breach by another party shall be construed as a
waiver with respect to any other or subsequent breach.
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8.4 Entire Agreement. This Agreement contains the entire Agreement
and
understanding between the parties hereto, and supersedes all prior agreements
and understandings.
8.5 Choice of Law. This Agreement and its application shall be
governed by the laws of the State of Colorado.
8.6 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.
8.7 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, President
Meteor Industries, Inc.
216 16th Street, Suite 730
Denver, CO 80202
with copy to:
Jon Sawyer
Krys, Boyle, Freedman & Sawyer, P.C.
600 Seventeenth Street, Suite 2700, South Tower
Denver, CO 80202
Seller:
Capco Resources Ltd. and Capco Acquisub, Inc.
Attention: Sultan Mahmud
2236 South Broadway, Suite K
Santa Maria, CA 93456
8.8 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.
8.9 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other
and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
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8.10 Expenses. Except as specifically provided in this Agreement, all
costs and expenses including legal, and any other out-of-pocket expenses
incurred by the Seller, in connection with this transaction shall be paid by
Seller. 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.
8.11 Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties set forth in this
Agreement shall survive the Closing.
8.12 Assignment. This Agreement may not be assigned by operation of
law or otherwise by the Seller or the Purchaser.
8.13 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.
"PURCHASER"
METEOR INDUSTRIES, INC.
By:
"SELLER"
CAPCO ACQUISUB, INC.
By:
CAPCO RESOURCES LTD.
By:
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AMENDMENT TO AGREEMENT BETWEEN METEOR INDUSTRIES. INC.
AND CAPCO ACQUISUB. INC. DATED JUNE 24.1998
Amendment to Agreement made this 10th day of August, 1998, by and
among
Meteor Industries, Inc., a Colorado corporation ( "Purchaser" or the
"Company") and Capco Acquisub, Inc., a Colorado corporation and its parent
corporation Capco Resources Ltd. (hereinafter collectively referred to as
"Seller").
WHEREAS, Purchaser and Seller desire to amend their agreement dated
June 24, 1998 (the "Agreement").
Now, therefore the parties hereto agree as follows:
(1) Paragraph 1.2 of the Agreement is amended to set the Closing Date to
August 12, 1998.
(2) paragraph 1.4.2 is amended to read as follows:
"$250,000 cash shall be paid at Closing and a note for $500,000 payable in
equal monthly installments for 18 months with interest at 10% shall be
executed in the form attached hereto as Exhibit 1.4.2."
(3) paragraph 2.4 is amended to remove:
"but shall be released prior to Closing"
from the last sentence.
(4) Paragraph 4.1 is amended to read in its entirety as follows:
"Except for the 26,500 shares which are now pledged by the Seller, the Seller
agrees that after the date hereof and through the Closing, without the
Purchaser's consent, the Seller will not sell, transfer, mortgage, pledge or
otherwise dispose of or encumber all or any part of the remaining 1,745,000
shares of Common Stock owned or controlled by Seller."
(5) paragraph 4.2 is amended to read in its entirety as follows:
"Seller hereby agrees not to sell, transfer, mortgage, pledge or hypothecate
any of its Common Shares for eighteen months after the date of Closing.
However, if after April 15, 1999, the shares of Meteor Industries, Inc. trade
at greater than $7.50 per share, over a consecutive two month period of time,
then this lock up requirement shall be terminated. Evidence of this lock up
agreement shall be included in the restrictive legend on 1,212,000
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shares of Common Stock owned by Seller. The additional 26,550 Common Shares
now pledged by the Seller shall be considered part of this lock up agreement
in that they shall not be sold or repledged, but such shares shall not
require
a legend on the certificates. This legend will read substantially as follows:"
"The transfer of the shares represented by this certificate is subject to
certain lock-up provisions contained in an agreement between Meteor
Industries, Inc., and Capco Acquisub, Inc., dated June 24, 1998. A copy of
this agreement is on file with Meteor Industries, Inc., and is available for
inspection by anyone purchasing or otherwise acquiring any of the shares
represented by this certificate."
(6) Paragraph 7.1 shall be amended to set the Closing Date to August 12,
1998,
and require the Purchaser to deliver $250,000 in cash and the duly executed
Note attached hereto as Exhibit 1.4.2.
(7) Exhibit 3.3 to the agreement shall read as follows:
"This agreement may violate Purchaser's covenants to Norwest Bank of
Colorado,
N.A. contained in its Credit and Security Agreement dated May 22, 1998;
however, Norwest has consented to the use of Meteor's line of credit to close
the transaction."
(8) In all other respects, the Agreement shall remain unchanged
AGREED TO AND ACCEPTED as of the date first above written.
"PURCHASER"
METEOR INDUSTRIES, INC.
By:
"SELLER"
CAPCO ACQUISUB, INC.
By
Name:
Title:
CAPCO RESOURCES LTD.
By
Name:
Title:
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