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
FEBRUARY 9, 2000
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Date of Report (date of earliest event reported)
METEOR INDUSTRIES, INC.
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Exact name of Registrant as Specified in its Charter
COLORADO 0-27968 84-1236619
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State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
1401 BLAKE STREET, SUITE 200
DENVER, COLORADO 80202
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Address of Principal Executive Offices, Including Zip Code
(303) 572-1135
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Registrant's Telephone Number, Including Area Code
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ITEM 5. OTHER EVENTS.
On February 9, 2000, Meteor Industries, Inc. (the "Company") completed
the sale of its subsidiary, Meteor Stores, Inc. ("MSI"), to Capco Energy,
Inc. ("Capco"), an affiliate of the Company. The sale was made effective as
of December 31, 1999.
As of the date of this filing, MSI leases and operates twenty convenience
stores (three of which are third party leases which expire at the end of
February 2000) in Colorado and New Mexico which operate under the Conoco,
Phillips 66, Frontier, Sinclair and Diamond Shamrock brand names. The sale of
this operating subsidiary was made to allow the Company to focus on its core
business of commercial, wholesale and cardlock petroleum distribution. The
Company, through a five year supply contract with Capco, will continue to be
the supplier of refined petroleum products to these stores.
The total purchase price for the sale of MSI is $1,596,400. Year end
adjustments are expected to decrease the purchase price by approximately
$100,000. Two Hundred Fifty Thousand dollars was paid in cash at closing and
Capco also delivered a promissory note for $1,250,000 payable in monthly
installments of interest only during calendar year 2000 and the balance
amortized over a 10 year period with a balloon payment of the remaining
principal balance on December 31, 2001. Payments may be made either in cash
or shares of the Company's Common Stock at a value of $3.00 per share. The
promissory note bears interest at 9.25% per annum. The promissory note is
secured by the pledge of all of the outstanding shares of Meteor Stores, Inc.
and 210,000 shares of the Company's outstanding Common Stock held by a
majority-owned subsidiary of Capco.
Capco, through a majority-owned subsidiary, currently owns approximately
34% of the Company's Common Stock. Ilyas Chaudhary, a Director of the
Company, is an officer, director and a principal shareholder of Capco. Dennis
Staal, a Director of the Company, is also an officer of Capco and beneficially
owns 35,000 common shares of Capco and 2,286 shares of Series A Preferred
shares. Irwin Kaufman, a Director of the Company, is also a director of Capco
and owns 20,000 common shares of Capco. Edward Names, President and CEO of
the Company personally and through immediate family members may be deemed to
beneficially own 64,580 common shares of Capco and 2,286 shares of Series A
Preferred shares of Capco.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS. The following exhibits are filed herewith:
EXHIBIT
NUMBER DESCRIPTION LOCATION
10.1 Agreement with Capco Energy, Filed herewith electronically
Inc., as amended
10.2 Promissory Note from Capco Filed herewith electronically
Energy, Inc.
10.3 Pledge and Security Agreement Filed herewith electronically
with Capco Energy, Inc. and
Capco Asset Management, Inc.
10.4 Product Sales Agreement Filed herewith electronically
between Meteor Stores, Inc. and
Meteor Marketing, Inc.
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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, hereunto duly authorized.
METEOR INDUSTRIES, INC.
Dated: February 10, 2000 By /s/ Richard E. Kisser
Richard E. Kisser, Chief
Financial Officer
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AGREEMENT
BY AND AMONG
CAPCO ENERGY, INC.,
METEOR STORES, INC.,
METEOR INDUSTRIES, INC.
THE SOLE SHAREHOLDER OF
METEOR STORES, INC.
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AGREEMENT
AGREEMENT, made this 31st day of December, 1999, by and among Capco
Energy, Inc., a Colorado corporation ("Purchaser"), Meteor Stores, Inc. ("MSI"
or the "Company"), a New Mexico corporation, and Meteor Industries, Inc., the
sole shareholder of MSI ("Shareholder").
WHEREAS, Purchaser desires to acquire all of the issued and outstanding
stock of MSI, held by the Shareholder (the "Common Stock"), in exchange for
the consideration and upon the terms described herein (the "Purchase"); and
WHEREAS, the Shareholder desires to sell all of the outstanding Common
Stock of the Company; and
WHEREAS, Purchaser, the Company and Shareholder 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 Shareholder 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 except those created by this Agreement in
exchange for the consideration described in this Article 1.
1.2 Effective Date and Closing. The effective date of this transaction
shall be December 31, 1999 (the "Effective Date"). 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 shall be on or about December 29, 1999, or a
soon thereafter as reasonably practicable (the "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 deliver to
Shareholder the amount of $1,596,400 (hereinafter referred to as the
"Purchase Price").
1.4 Adjustments. The Total Purchase Price of the Common Stock shall be
defined as $1,596,400. Such amount shall be adjusted as follows:
(a) During the three month period following the Closing, Purchaser shall
have an independent auditor of its choice audit (using generally accepted
accounting principles and practices; fixed assets and inventories and the
balance sheet and income statement of the Company as of December 31, 1999 (the
"Audit"). Such auditor shall present its audit report to Shareholder and to
Purchaser. If the audit report would result in a reduction of the purchase
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price under subsection (b) of this Section 1.4, below, and if Shareholder
disagrees with any portion of the audit report which is material to any such
adjustment, the Shareholder shall so notify the Purchaser in writing within
five (5) days and, the parties shall attempt to resolve such disagreement
through good faith bargaining. If the parties are not successful in resolving
such disagreement through bargaining within seven (7) days following
Shareholder's notice to Purchaser, the parties shall submit the disagreement
for arbitration under Section 13.4 below.
(b) If the Purchaser's Audit of the Company shows that the Company's
shareholder's equity is less than $1,596,400 then the Total Purchase Price
shall be reduced by the amount of such shareholder's equity deficiency.
1.5 Payment of Purchase Price. The total Purchase Price shall be paid
as follows:
(a) $250,000 of the total Purchase Price shall be paid to the
Shareholder, by certified or bank check or by electronic wire transfer of
immediately available funds, at Closing.
(b) $1,100,000 shall be paid at Closing in the form of 366,667shares of
Meteor common stock (the Meteor "Common Shares"). The Meteor Common Shares
shall be transferred, free and clear of all liens, claims and encumbrances.
Any adjustments under Section 1.4 above in excess of $246,400 will result in a
refund of Common Shares using a price of $3.00 per share.
(c) $246,400 shall be paid on or before March 31, 2000, subject to any
adjustments in the purchase price under Section 1.4 above.
1.6 Option to Repurchase Meteor Common Shares. Purchaser shall have the
right to repurchase all or part of the Meteor Common Shares transferred
pursuant to paragraph 1.5(b) at $3.00 per share plus .77% per month for each
unexercised month for eighteen months. These repurchased shares shall have
antidilutive provisions.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHAREHOLDER
As an inducement to the Purchaser to enter into this Agreement, the
Company and the Shareholder hereby represent and warrant to Purchaser that:
2.1 Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of New Mexico, 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.
2.2 Capital. The authorized capital stock of the Company consists of
2,500 shares common stock, no par value, of which 2,500 shares of common stock
are issued and outstanding including -0- shares that are currently held in the
treasury of the Company. 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
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outstanding, there are no other equity securities of the Company. No taxes or
other payments to governmental authorities will be due from the Purchaser upon
transfer of the Common Stock as contemplated by this Agreement.
2.3 Corporate Books and Records. The minute books of the Company
contain accurate records of all meetings and accurately reflect all other
actions taken by 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.
2.4 Subsidiaries. The Company does not have any subsidiaries or own
any interest in any other enterprise, except as described in Exhibit 2.4
attached hereto.
2.5 Directors and Officers. Exhibit 2.5 to this Agreement, contains the
names and titles of all directors and officers of the Company.
2.6 Financial Statements. Exhibit 2.6 to this Agreement, includes true
and complete copies of the unaudited financial statements of the Company for
the fiscal periods ended December 31,1998 and 1997, together with all related
notes and schedules thereto. Prior to Closing an unaudited balance sheet as
of October 31, 1999, and an unaudited income statement for the fiscal year
ending October 31, 1999, shall be delivered to Purchaser and be included as
part of Exhibit 2.6 (both sets of financial statements are hereinafter
referred to as the "The Company Financial Statements"). Except as set forth
in Exhibit 2.6, the Company Financial Statements shall have been prepared in
accordance with generally accepted accounting principals and practices of the
United States (hereinafter referred to as "GAAP"). Exhibit 2.6 sets forth
certain year-end adjustments and tailoring transactions, which will be made
and entered into to facilitate this Agreement. As revised by such adjustments
and tailoring transactions, 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.
2.7 Absence of Undisclosed Liabilities. As of the respective dates of
the Financial Statements included in Exhibit 2.6, 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 Financial Statements. As of the Closing Date, the
Company does not have any material liabilities not disclosed in the Company
Financial Statements, other than as listed on Exhibit 2.7. For purposes of
this Section 2.7, a material liability shall mean a liability of $25,000 or
more. Notwithstanding the definition of material liability in the preceding
sentence, total undisclosed liabilities shall not exceed $50,000.
2.8 Taxes. To the best knowledge and belief of Shareholder, 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 the normal course of its business. To the best knowledge and
belief of Shareholder, the provisions for taxes, if any, reflected in the
Company Financial Statements, are reasonably adequate for taxes for the
periods ending on the date of such financial statements and for all prior
periods, whether or not disputed.
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2.9 Compliance with Laws. To the best of Shareholder's knowledge and
belief, the Company is in compliance in all material respects with, and is not
in violation of, applicable federal, state, or local statutes, laws or
regulations affecting its properties or the operation of its business.
2.10 Litigation. Except as shown on Exhibit 2.10 attached hereto, (1)
the Company is not a party to any suit, action, arbitration, or legal,
administrative or other proceeding, or governmental investigation pending or
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.
2.11 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 and Shareholder have 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 Shareholder, and is
enforceable in accordance with its terms.
2.12 Ability to Carry Out Obligations. To the best of the Shareholder's
knowledge and belief and except as shown on Exhibit 2.12 attached hereto, the
execution and delivery of this Agreement by the Company and Shareholder and
the performance by the Company and Shareholder 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. Purchaser
understands, as hereinafter set forth, upon Closing Shareholder intends and is
entitled to withdraw and cancel any guaranties executed by it to suppliers
and banks. The withdrawal and cancellation of such guaranties by Shareholder,
as here in above and here in after referred to shall not constitute any breach
or violation of this Agreement by the Company or Shareholder.
2.13 Validity of The Company Shares. The shares of the Company Common
stock to be delivered to Purchaser pursuant to this Agreement, when
transferred in accordance with the provisions of this Agreement, will be duly
authorized validly issued, fully paid and non-assessable; and free and clear
of all liens, claims and encumbrances.
2.14 Assets. The Company has good and marketable and insurable title to
all its property and such property is not subject to any liens, claims and/or
encumbrances other than disclosed in Exhibit 2.6. Exhibit 2.14 hereto lists
all plant property and equipment of the Company with a value of $ 10,000.
2.15 Material Contracts. Exhibit 2.15 lists each material contract and
agreement of the Company (such contracts and agreements listed, being
collectively referred to as "Material Contracts"). The Company has delivered,
or will deliver on or about the time of execution of this Agreement, to the
Purchaser correct and complete copies of all Material Contracts.
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2.16 Trade Names and Rights. Except as set forth in Exhibit 2.16
attached hereto, the Company owns all trademarks, service marks, trade names,
and copyrights required in its business. A list of trademarks, service marks,
trade names and copyrights owned by the Company is included in Exhibit 2.16.
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.
2.17 Employees. There are, except as disclosed in Exhibit 2.17 attached
hereto, 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 any of the foregoing and the Company. The Company's
employee handbook or manual and a complete description of all employee
benefits, is included as part of Exhibit 2.17 as of the effective date. All of
the Company's employees are at-will employees who have no rights to severance
pay.
2.18 Accounts Receivable. Except as covered by any allowance for
doubtful accounts booked in the normal course of business in the Company
Financial Statements, all accounts receivable of the Company, including those
created between the date of the Financial Statements and the Closing,
represent transactions in the ordinary course of business, and are current and
collectible in the ordinary course of business in the amounts recorded on the
Books of the Company.
2.19 Inventories. All inventories of the Company as of October 31, 1999
(to be updated at Closing as of the Effective Date), a complete list of which
is attached hereto as Exhibit 2.19, whether or not reflected in the Company
Financial Statements, 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.
2.20 Accounts Payable. The accounts payable reflected on the Company
Financial Statements, and those reflected on the books of the Company at the
time of the Effective Date will, reflect all amounts owed by the Company in
respect of trade accounts due and other payables.
2.21 Insurance. The Company has insurance policies in full force and
effect which provide for coverages which are usual and customary in its
business as to amount and scope, and are adequate to protect the Company
against any reasonably foreseeable risk of loss. Such policies will not
remain in full force and effect subsequent to Closing. Exhibit 2.21 attached
hereto identifies each of the Company's insurance policies, indicating the
carrier, amount of coverage, annual premium, risks covered, placing broker or
agent, and period through which the policy is paid up and other relevant
information as to each.
2.22 Title to and Utilization of Properties. Exhibit 2.22 attached
hereto lists all of the Company owned and leased properties. Except as
disclosed on Exhibit 2.22, the Company owns fee simple, insured title to all
real property owned by it and has the unbridled fight to use the same, and is
not aware of any claim, notice or threat to the effect that its fight to own
and use such property is subject in any way to any challenge, claim, assertion
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of rights, proceedings toward condemnation or confiscation in whole or in
part, or is otherwise subject to challenge. The Company has valid leases on
its leased properties and the expiration dates of such leases are disclosed on
Exhibit 2.22.
2.23 Facilities. To Shareholder's best knowledge and belief, 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 and
are adequate for the uses to which they are being put. None of such plants,
structures, or equipment is in need of maintenance and repairs except ordinary
routine maintenance and repairs. Purchaser acknowledges that its
representatives have inspected such facilities and have found them to be sound
and free of obvious defects.
2.24 Environmental and Other Permits and Licenses, Related Matters.
(a) To Shareholder's best knowledge and belief, the Company currently
holds all the health and 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 Shareholder 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 is in all material respects in compliance with the permits and all
applicable Environmental Laws. Exhibit 2.24(a) identifies all permits that
will require the consent of any governmental authority to consummate the
transactions contemplated by this Agreement.
(b) To Shareholder's best knowledge and belief, 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) Except as disclosed in Exhibit 2.24(a): (i) Hazardous Materials have
not been generated, used, treated, handled or stored on, or transported to or
from (other than petroleum products handled, stored or transported in the
normal course of business), or released on any owned real property or leased
real property by the Company, and the Company and its Shareholder 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) the Company has reported all Releases of
Hazardous Material in accordance with Environmental Laws; (iii) the Company
has not Released any Hazardous Materials, and is not responsible or liable for
any Release of 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
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authority has requested or required to be remediated; (iv) the Company has
disposed of all wastes, including those containing Hazardous Materials, in
material compliance with all applicable Environmental Laws and environmental
permits; (v) there are no past, pending or threatened Environmental claims
against the Company or any of its assets or properties; (vi) the Company has
not transported or arranged for the transportation of any Hazardous Materials
to any location that is listed or proposed for listing on the National
Priorities List under CERCLA or on the CERCLIS or any analogous state list or
which is the subject of any environmental claim; and (vii) neither the Company
nor any governmental authority is conducting any remediation on or related to
the owned real property, the leased real property or the business of the
Company.
(d) To Shareholder's best knowledge and belief, Exhibit 2.24(d) sets
forth the age, contents or former contents of any storage tanks located on the
premises owned or operated by the Company. Except as set forth in Exhibit
2.24(d) the Company 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 2.24(d), all tanks and pipes pertinent thereto are presently
and have been in the past in good condition and tight.
(e) To the best knowledge and belief of Shareholder, 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 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
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 2.24 are defined as
follows:
Hazardous Materials - means (a) oil, petroleum and petroleum products,
radioactive materials, asbestos 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 exposure to which is regulated by any governmental authority.
Environmental Laws - means any law including but not limited to any
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. SS
6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. SS 6901 et
seq.; the Clean Water Act, 33 U.S.C. SS 1251 et seq.; the Toxic Substances
Control Act, 15 U.S.C. SS 2601 et seq.; the Clean Air Act, 42 U.S.C. SS 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. SS 300f et seq.; the Atomic
Energy Act, 42 U.S.C. SS 2011 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. SS 136 et seq.; and the Federal Food, Drug and
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Cosmetic Act, 21 U.S.C. SS 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.
2.25 Customers and Suppliers. Exhibit 2.25 lists all major customers and
suppliers which are material to the financial condition or operations of the
Company. Since October 31,1998, except as disclosed in Exhibit 2.25, 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 $10,000 per year, and
suppliers providing supplies and merchandise to the Company in the amount of
$10,000 per year.
2.26 Bank Accounts. Exhibit 2.26 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.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to the Company and the Shareholder to enter into this
Agreement, the Purchaser represents and warrants to the Company and
Shareholder that:
3.1 Organization. Purchaser is a corporation duly organized, validly
existing, and in good standing under the law of California, 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 Capital. As of the date of this Agreement, the authorized capital
stock of Purchaser consists of 150,000,000 shares of $.001 par value Common
Stock of which 1,000,000 shares of Common Stock are currently issued and
outstanding, and 10,000,000 shares of preferred stock $1.00 par value are
authorized of which 292,947 shares 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 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.
3.4 Ability to Carry Out Obligations. Except as described in Exhibit
3.4, 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
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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 of 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 Other information. None of the information and documents which
have been furnished or made available by the Purchaser or any of its
representatives to Seller or any of its representatives 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.
ARTICLE 4
COVENANTS
4.1 Investigative Rights. 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 to discuss
the financial condition of the Company.
4.2 Indemnification of the Company and Shareholder. Purchaser shall be
liable for and shall indemnify, defend and hold the Company and the
Shareholder and its officers, directors, affiliates, agents and the
Shareholder 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.
4.3 Indemnification of Purchaser. The Company and Shareholder shall be
liable for and shall agree to indemnify, defend and hold Purchaser and its
officers, directors, affiliates and agents 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 it shall incur or suffer, which
result from or relate to any breach of, or failure by the Company to perform
any of its 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 Shareholder under this
Agreement.
10
<PAGE>
4.4 Accounts Payable. With regard to all accounts payable and accrued
taxes as of the Effective Date, Purchaser will cause such amounts to be paid
according to the payment plan and/or requirements of the creditor or taxing
authority, without extension, delinquency or other material deviation from the
payment term and plan. Purchaser shall, within fifteen (15) days after
Closing, arrange for the release of Shareholder and other key employees of the
Company from personal guarantees relating to the business of the Company.
4.5 Shareholder's Cooperation After the Closing, Further Action. At
any, time and from time to time after the Closing, the Shareholder 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. 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.
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, if the Company and Shareholder shall be in
default of any of their representations, warranties, or covenants under this
Agreement.
5.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by the Company and Shareholder
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 when
made and on and as of the Closing Date with the same force and affect as if
made at the Closing.
5.3 Performance. Purchaser shall be reasonably satisfied that the
Company and Shareholder 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 Directors of the Company. Effective on the Closing Date the Board
of Directors of the Company shall be reorganized and be made up of four
individuals named by Purchaser.
5.6 Closing Documents. The Company and the Shareholder shall be
prepared to deliver the closing documents set forth in Article 6 of this
Agreement.
11
<PAGE>
5.7 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 special conditions specified in
Sections 6.2 hereof have been fulfilled.
ARTICLE 6
CONDITIONS PRECEDENT TO THE COMPANY'S
AND SHAREHOLDER'S PERFORMANCE
6.1 Conditions. The Company's and Shareholder'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 Company and Shareholder 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 Shareholder of any
other condition of or any of the Company's or Shareholder's 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.
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 Company and/or
Shareholder by Purchaser under this Agreement shall be true and accurate on
and as of the Closing Date as though made at that time.
(a) 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.
(b) Each party shall deliver such other documents or information
required to be furnished by Closing pursuant to this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 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.
7.2 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.
7.3 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.
12
<PAGE>
7.4 Entire Agreement. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings.
7.5 Choice of Law. This Agreement and its application shall be governed
by the laws of the State of Colorado.
7.6 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.
7.7 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: CAPCO ENERGY, INC.
2922 CHAPMAN AVENUE, SUITE 202
ORANGE, CA 92869
ATTENTION: IMRAN, JATTALA, VICE PRESIDENT
Shareholder: METEOR INDUSTRIES, INC.
1401 BLAKE STREET, SUITE 200
DENVER, COLORADO 80202
The Company: METEOR STORES, INC.
1401 BLAKE STREET, SUITE 200
DENVER, CO 80202
7.8 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.
7.9 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.
7.10 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.
7.11 Announcements. Purchaser, Shareholder 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. Nevertheless, 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
13
<PAGE>
applicable securities laws or the rules and regulations of the NASDAQ,
including a press release following the execution of this Agreement.
7.12 Expenses. Except as specifically provided in this Agreement, all
direct costs and expenses including legal, and any other out-of-pocket
expenses incurred by Shareholder, in connection with this transaction, shall
be paid by the Shareholder. 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.
7.13 Survival of Representations and Warranties. Except as otherwise
provided in this Section 9.13, 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 one year irrespective of any investigation made by or
on behalf of any party.
7.14 Assignment. This Agreement may not be assigned by operation of Law
or otherwise by the Shareholder, the Company or the Purchaser.
AGREED TO AND ACCEPTED as of the date first above written.
PURCHASER: CAPCO ENERGY, INC. SHAREHOLDER: METEOR INDUSTRIES, INC.
/s/ Ilyas Chaudhary /s/ Dennis R. Staal, Director
By ____________________________ ________________________________
SELLER: METEOR STORES, INC.
/s/ Paul W. Greaves, President
By ______________________________
14
<PAGE>
Exhibit 2.4
SUBSIDIARIES
Hatch Pyramid LLC
Socorro Pyramid LLC
Meteor Properties of Colorado LLC
Exhibit 2.5
DIRECTORS AND OFFICERS OF THE COMPANY
Paul W. Greaves President, Director
Richard E. Kisser Secretary/Treasurer, Director
Edward J. Names Director
Exhibit 2.6
FINANCIAL STATEMENTS
See attached.
Exhibit 2.7
UNDISCLOSED LIABILITIES
Conoco upgrades contingent liability for approximately $650,000. Requires
purchase of Conoco products.
Exhibit 2.10
LITIGATION
None.
Exhibit 2.12
ABILITY TO CARRY OUT OBLIGATIONS
This transaction will require the consent of Norwest Bank. Consent has been
requested and will be obtained before the audit adjustment period.
<PAGE>
Exhibit 2.14
ASSETS
See attached.
Exhibit 2.15
MATERIAL CONTRACTS
- Hillco, Inc. Lease
- Graves Oil & Butane Co., Inc. Lease
1. 551 E. Main, Farmington, NM (#144)
2. 761 S. Miller, Farmington, NM (#143)
3. 1721 E. 20th Avenue, Farmington, NM (#141)
4. 191 Alameda, NW, Albuquerque, NM (#121)
- Limited Liability Lease
1. 9160 Coors NW, Albuquerque, NM (#122) - Coors Pyramid LLC
2. 603 Franklin, Hatch, NM (#103) - Hatch Pyramid LLC
3. 3920 Bloomfield Highway, Farmington, NM (#142) - Bloomfield Pyramid
LLC
4. 105 . Main, Ft. Morgan, CO (#303) - Meteor Carroll, LLC
5. 530 W. Platte, Ft. Morgan, CO (#304 - Mustangs) -
Meteor Properties of Colorado LLC
6. 321 East 8th Avenue, Yuma, CO (#306 - Threshers) - Meteor
Properties of Colorado LLC
7. 1113 W. Edison, Brush, CO (#305 - Diggers) - Meteor Properties of
Colorado LLC
- Meteor Marketing, Inc. Supply Agreement
(SEE ATTACHED)
Exhibit 2.16
TRADE NAMES AND RIGHTS
Conoco, Inc.
Phillips 66
Diamond Shamrock
Sinclair
Frontier
Exhibit 2.17
EMPLOYEES
See attached.
<PAGE>
Exhibit 2.19
INVENTORIES
See Attached.
Exhibit 2.21
INSURANCE
See attached.
Exhibit 2.22
TITLE TO AND UTILIZATION OF PROPERTIES
See Attached.
Exhibit 2.24
ENVIRONMENTAL AND OTHER PERMITS AND LICENSES
2.24(a) Environmental and Other Permits and Licenses
2.24(b) Environmental and Other Permits and Licenses; Related Matters
2.24(d) Age, Contents or Former Contents of Any Storage Tanks Located
on Premises Owned or Operated by Company
Exhibit 2.25
CUSTOMERS AND SUPPLIERS LISTS
See attached.
Exhibit 2.26
BANK ACCOUNTS
See attached.
Exhibit 3.4
ABILITY TO CARRY OUT OBLIGATIONS
None.
<PAGE>
Exhibit 3.5
DIRECTORS AND OFFICERS OF PURCHASER
<PAGE>
AMENDMENT TO AGREEMENT
This Amendment to that certain Agreement, made the 31st day of December,
1999, which was entered into by and among Meteor Industries, Inc. and Capco
Energy, Inc. and Meteor Stores, Inc. is made this 8th day of February, 2000.
First: Article 1.4(b) shall be deleted in its entirety and replaced by the
following:
(b) The Purchase Price shall be adjusted downward by the tax affected
operating loss of the Company for November and December of 1999.
No Audit adjustments to the Company's balance sheet or pro forma
balance sheet included in Exhibit 2.6 shall result in a Purchase
Price adjustment.
Second: Section 1.5(b) of the Agreement is amended to read as follows:
1.5 $1,250,000 shall be paid at Closing in the form of a note. The
note shall bear interest of 9.25%. Payments on the note shall be interest
only during calendar year 2000. The remaining payments on the note will be
calculated based on a ten-year amortization, with a balloon payment of the
unpaid principal balance on December 31, 2001. The first payment will be due
on April1, 2000. The note shall be secured by all of the outstanding shares
of Meteor Stores, Inc. and 210,000 shares of common stock of Meteor
Indus-tries, Inc. The payments can either be made in cash or in shares of
Meteor Industries, Inc. common stock valued for note payment purposes at $3.00
per share. Any adjustment under Section 1.4 in excess of $96,400 will result
in a reduction of the note.
Third: Section 1.6 shall be deleted in its entirety.
Fourth: Exhibit 2.15 is amended to include the following disclosures:
a. Limited Liability Lease No. 1 (Coors Road #8) is an operating
agreement instead of a lease and such operating agreement shall
stay in effect until such time as the other LLC interest holders
are bought out. (See Coors Pyramid LLC agreement)
b. Limited Liability Lease No. 2 is canceled and the Hatch store is
to be operated pursuant to the LLC agreement
c. Limited Liability leases Nos. 5, 6, 7 expire on January 31,
2000.
d. Leases for the Byers and Simla locations are hereby added to the
list and are attached.
e. The CFN Agreement , the Cardlock Agreement and updated Product
Sales Agreement attached are hereby added to Exhibit 2.15
f. Meteor Marketing, Inc. will continue to occupy the Las Cruces
Bulk Plant and warehouse at the rate of $2,500 per month until
a new Operator/Tenant can be found.
g. The two LLC agreements (Hatch and Coors) are hereby added as
part of Exhibit 2.15 and attached hereto.
h. The liquor license between El Boracho and Meteor Stores, Inc. is
hereby added as an additional exhibit and attached hereto.
<PAGE>
i. The sublease with Coastal Transport regarding the 4208 S.
Broadway warehouse shall be added as part of Exhibit 2.15 and is
attached hereto.
j. McLanes and ATM agreements shall be added as part of 2.15 and
are attached hereto.
Exhibit 2.24 is amended as follows:
a. Additional updated Environmental Status Reports relating to the
following properties are hereby added to Exhibit 2.24 and are
attached hereto.
1. 761 S. Miller, Farmington
2. No. 3 at 20th Street, Farmington
3. Lohman St., Las Cruces
4. Byers, Colorado Store
5. Simla, Colorado Store
6. Quik Chek , Las Cruces
7. Elks Store, Las Cruces
b. New automatic tank gauging systems are being installed at the
2nd and Alameda , Albuquerque location and the Deming, New
Mexico locations. This shall be accomplished and paid for by
Meteor Industries, Inc. by March, 2000.
Fifth: Exhibit 2.22 shall be amended by adding a list of all Company leases
and identifying the Lessor, the present monthly rental payments, the
expiration dates and other relevant data. Such list is attached
hereto and shall include Fort Morgan location.
Agreed to and accepted as of the date first above written.
PURCHASER: CAPCO ENERGY, INC. SHAREHOLDER: METEOR INDUSTRIES, INC.
/signed/ Imran Jattala /signed/ Edward J. Names
By:___________________________________ By:__________________________________
COMPANY: METEOR STORES, INC.
/signed/ Imran Jattala
By:___________________________________
2
PROMISSORY NOTE
$1,250,000.00 December 31, 1999
Capco Energy, Inc., a Colorado corporation, ("Obligor"), for value
received, hereby promises to pay to the order of Meteor Industries, Inc.
("Payee"), in lawful money of the United States at the address of Payee set
forth below, the principal sum of One Million Two Hundred Fifty Thousand and
00/100 Dollars ($1,250,000.00), together with simple interest on the unpaid
principal at the rate of nine and one quarter percent (9.25%) per annum.
Subject to the provisions for acceleration herein the payments on this Note
during calendar year 2000 shall be interest only payments paid monthly.
Beginning on January 1, 2001, and subject to the provisions for acceleration
herein, payments shall be made on all unpaid principal together with all
accrued interest amortized over ten years, in equal monthly payments, with
a balloon payment of the remaining principal balance on December 31, 2001.
The first payment which shall include interest on this Note for three months
in the amount of $28,906 shall be due on April 1, 2000. Payments can be made
in cash or in shares of Meteor Industries common stock to be valued for note
payment purposes at $3.00 per share.
This Note may be prepaid, in whole or in part, at any time without
permission or penalty in cash or in Meteor common stock valued at the closing
price on the day of payment. Interest shall be computed on the basis of a
360-day year and actual days elapsed. This Note shall be prepaid upon Payee's
request if Obligor or its parent company completes a public offering of common
stock.
If payment on this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State of Colorado, such payment shall be made on
the next succeeding business day and such extension of time shall be included
in computing interest in connection with such payment.
Immediately upon the occurrence of an "Event of Default" (as defined
below), Payee may, at its option, declare immediately due and payable the
entire unpaid principal amount of this Note, together with all interest
thereon, plus any other amounts payable at the time of such declaration
pursuant to this Note. An Event of Default shall be defined as each of the
following: (i) failure of Obligor to make any payment of interest and/or
principal within thirty (30) days after the due date; (ii) Obligor shall admit
in writing its inability to pay its debts as they become due, shall make a
general assignment for the benefit of creditors or shall file any petition for
action for relief under any bankruptcy, reorganization, insolvency or
moratorium law, or any other law or laws for the relief of, or relating to,
debtors; or (iii) an involuntary petition shall be filed against Obligor under
any bankruptcy, reorganization, insolvency or moratorium law, or any other law
or laws of for the relief of, or relating to, debtors unless such petition
shall be dismissed or vacated within thirty (30) days of the date hereof.
If Payee should institute collection efforts, of any nature whatsoever,
to attempt to collect any and all amounts due hereunder upon the default of
Obligor, Obligor shall be liable to pay to holder all reasonable costs and
expenses of collection incurred by Payee, including, without limitation,
reasonable attorney fees, whether or not suit or other action or proceeding be
instituted and specifically including but not limited to collection efforts
that may be made through a bankruptcy court.
<PAGE>
This Note shall be governed by and construed and interpreted in
accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Note as of the
day and year first above written. Any payment shall be deemed made upon
receipt by Payee. Payee or Obligor may change their address for purposes of
this paragraph by giving to the other party notice in conformance with this
paragraph of such new address.
"OBLIGOR"
CAPCO ENERGY, INC.
/signed/ Imran Jatalla
By:____________________________________
Print Name: Imran Jatalla
Title: Executive Vice President
"GUARANTOR"
CAPCO ASSET MANAGEMENT, INC.
/signed/ John R. Aitken
By:____________________________________
Print Name: John R. Aitken
Title: President
2
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT is made and entered into as of the
31st day of December 1999, by Capco Energy, Inc., a Colorado corporation and
Capco Asset Management, Inc. (a majority-owned subsidiary of Capco Energy,
Inc.) (such entities are collectively hereinafter called "Pledgor"), whose
offices are located at 2922 E. Chapman Avenue, Suite 202, Orange, California
92869, in favor of Meteor Industries, Inc.; and its successors and assigns
(hereinafter called "Secured Party"), whose address is 1401 Blake Street,
Suite 200, Denver, Colorado 80202.
1. RECITALS
1.1 Secured Party has entered into an Agreement dated December 31,
1999, and amended February 8, 2000, by and among Secured Party, Capco Energy,
Inc. and Meteor Stores, Inc. ("MSI") (the "Purchase Agreement") and has
received a promissory note, executed by Capco Energy, Inc. and Guaranteed by
Capco Asset Management, Inc., in the amount of $1,250, 000 ("Note") for the
sale of all of the outstanding stock of MSI to Pledgor pursuant to the
Agreement.
1.2 The Purchase Agreement requires the Pledgor to deliver to Secured
Party a pledge and security interest in 210,000 shares of the issued and
outstanding common stock of Meteor Industries, Inc., a Colorado corporation,
now owned or hereafter acquired by Pledgor and all of the outstanding shares
of Meteor Stores, Inc.
1.3 Pledgor is the owner of 210,000 shares of the common stock of the
Meteor Industries, Inc. and all of the outstanding shares of Meteor Stores,
Inc. (the "Common Stock").
2. PLEDGE OF STOCK
2.1 Pledgor hereby grants to Secured Party a security interest in the
Common Stock, together with all earnings thereon, all additions thereto, all
proceeds thereof from sale or otherwise, all substitutions therefor, and all
securities issued with respect thereto as a result of any stock dividend,
stock split, warrants or other rights, reclassification, readjustment or other
change in the capital structure of the Company, and the securities of any
corporation or other properties received upon the conversion or exchange
thereof pursuant to any merger, consolidation, reorganization, sale of assets
or other agreement or received upon any liquidation of the Company or such
other corporation (all hereinafter called the "Pledged Securities").
2.2 Upon the execution of this Agreement, Pledgor has delivered to the
Secured Party certificates for the Pledged Securities, together with
appropriate stock transfer powers therefor duly executed by Pledgor in blank,
with signatures guaranteed free and clear of any prior lien, claim, charge or
encumbrance.
2.3 Secured Party shall receive, hold and dispose of the Pledged
Securities subject and pursuant to all the terms, conditions and provisions
hereof until the Obligation (defined below) bas been discharged in full. Agent
shall be under no duty to exercise, or to withhold the exercise of, any of the
rights, powers, privileges and options expressly or implicitly granted to
Secured party in this Agreement, and shall not be responsible for any failure
to do so or delay in so doing.
<PAGE>
3. RELEASE OF AND LEGEND ON SHARES
Upon receipt by the holder of the Note of funds in the amount of the
required principal and interest due under the terms of the Note, the
certi-ficates of the Pledged Securities shall be released from this Agreement
and delivered to Pledgor, free and clear of all liens, claims and encumbrances
(the "Released Certificates"), and the stock legend set forth in Section 3.2
below shall be removed from the Released Certificates.
A legend shall be placed on the certificates evidencing the Pledged
Securities in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A PLEDGE AND SECURITY AGREEMENT DATED AS OF DECEMBER 31, 1999
(THE "AGREEMENT" ) WHICH PLEDGES THESE CERTIFICATES TO AND GRANTS A SECURITY
INTEREST IN THESE CERTIFICATES TO SECURED PARTY DEFINED IN THE AGREEMENT. NO
TRANSFER OF THE CERTIFICATES WILL BE MADE ON THE BOOKS OF METEOR INDUSTRIES,
INC. UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF THE
AGREEMENT. THE CORPORATION WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY
OF THE AGREEMENT WITHIN FIVE (5) DAYS AFTER RECEIPT OF WRITTEN REQUEST
THEREFOR.
4. OBLIGATION SECURED
This Agreement shall secure, in such order of priority as Secured Party
may elect:
(a) payment of the sum of $1,250,000 with interest thereon, extension and
other fees, late charges, prepayment premiums and attorneys' fees, according
to the terms of that Promissory Note dated December 31, 1999, made by Pledgor,
payable to the order of Secured Party, and all extensions, modifications,
renewals or replacements thereof (hereinafter called the "Note") ; and
(b) payment, performance and observance by Pledgor of each covenant,
condition, provision and agreement contained herein and of all monies expended
or advanced by Secured Party pursuant to the terms hereof, or to preserve any
right of Secured Party hereunder, or to protect or preserve the Pledged
Securities or any part thereof.
All of the indebtedness and obligations secured by this Agreement are
hereinafter collectively called the "obligation."
5. REPRESENTATIONS AND WARRANTIES OF PLEDGOR
Pledgor hereby represents and warrants that:
5.1 Pledgor (i) are duly organized, validly existing and in good
standing under the laws of the state in which they are organized; (ii) are
qualified to do business and is in good standing under the laws of each state
in which they are doing business; (iii) has full power and authority to own
their properties and assets and to carry on their business as now conducted;
and (iv) are fully authorized and permitted to execute and deliver this
Agreement. The execution, delivery and performance by Pledgor of this
Agreement and all other documents and instruments relating to the Obligation
2
<PAGE>
will not result in any breach of the terms and conditions of, nor constitute a
default under, any agreement or instrument under which Pledgor is a party or
is obligated. Pledgor are not in default in the performance or observance of
any covenants, conditions or provisions of any such agreement or instrument.
5.2 The address of Pledgor set forth at the beginning of this Agreement
is the chief executive office of Pledgor.
5.3 The Pledged Securities are and shall be duly and validly issued and
pledged in accordance with applicable law, and this Agreement shall not
contravene any law, agreement or commitment binding Pledgor or the company,
and Pledgor shall defend the right, title, lien and security interest of
Secured party in and to the pledged Securities against the claims and demands
of all persons and other entities whatsoever.
5.4 Pledgor has the right, power and authority to convey good and
marketable title to the Pledged Securities; and the Pledged Securities and the
proceeds thereof are and shall be free and clear of all claims, mortgages,
pledges, liens, encumbrances and security interest of every nature whatsoever
other than as imposed hereby, as imposed by the Purchase Agreement, and
pursuant to federal and state securities laws.
6. VOTING
Notwithstanding the terms of this Agreement, Pledgor shall have all
rights to vote the Pledged Securities pursuant to the terms and conditions of
the Articles of Incorporation of Meteor Industries, Inc. so long as an event
of default set forth in section 8 has not occurred whereupon Secured Party
shall have all of the voting rights attached to those Pledged Securities not
previously released pursuant to section 3 hereof.
7. COVENANTS OF PLEDGOR
7.1 Pledgor shall not sell, transfer, assign or otherwise dispose of any
of the Pledged Securities or any interest therein without obtaining the prior
written consent of Secured Party and shall keep the Pledged Securities free of
all security interests or other encumbrances except the lien and security
interests granted herein.
7.2 Pledgor shall pay when due all taxes, assessments, expenses and
other charges which may be levied or assessed against the Pledged Securities.
7.3 Pledgor shall give Secured Party immediate written notice of any
change in Pledgor's name as set forth above and of any change in the location
of Pledgor's chief executive office.
7.4 Pledgor, at its cost and expense, shall protect and defend the
Secured Party against all claims and demands of other parties against the
Pledged Securities. Pledgor shall pay all claims and charges that in the
reasonable opinion of Secured Party might prejudice, imperil or otherwise
affect the Pledged Securities. Each party hereto shall promptly notify all
other parties hereto of any levy, distraint or other seizure, by legal process
or otherwise, of all or any part of the Pledged Securities and of any
threatened or filed claims or proceedings that might in any way affect or
impair the terms of this Agreement.
7.5 If Pledgor shall fail to pay any taxes, assessments, expenses or
charges to keep all of the Pledged Securities free from other security
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interests, encumbrances or claims, or to perform otherwise as required herein,
Secured Party may advance the monies, necessary to pay the same or to so
perform.
7.6 All rights, powers and remedies granted Secured Party herein, or
otherwise available to Secured Party, are for the sole benefit and protection
of Secured Party, and Secured Party may exercise any such right, power or
remedy at its option and in its sole and absolute discretion without any
obligation to do so. In addition, if, under the terms hereof, Secured Party is
given two or more alternative courses of action, Secured Party may elect any
alternative or combination of alternatives at its option and in its sole and
absolute discretion. All monies advanced by Secured Party under the terms
hereof, all amounts paid, suffered or incurred by Secured Party under the
terms hereof and all amounts paid, suffered or incurred by Secured Party in
exercising any authority granted herein, including reasonable attorneys' fees,
shall be added to the obligation, shall be secured hereby, shall bear interest
at the highest rate payable on the Note until paid, and shall be due and
payable by Pledgor to Secured Party immediately without demand.
7.7 Secured Party and Agent shall use such reasonable care in handling,
preserving and protecting the Pledged Securities in its possession as it uses
in handling similar property for its own account.
7.8 Immediately upon demand by Secured Party, Pledgor shall execute and
deliver to Secured Party such other and additional applications, acceptances,
stock powers, authorizations, irrevocable proxies, dividend and other orders,
chattel paper, instruments or other evidences of payment and such other
documents as Secured Party may reasonably request to secure to Secured party
the rights, powers and authorities intended to be conferred upon Secured Party
by this Agreement. All assignments and endorsements by Pledgor shall be in
such form and substance as may be reasonably satisfactory to Secured Party.
8. EVENTS OF DEFAULT; REMEDIES
8.1 The occurrence of any of the following events or conditions shall
constitute and is hereby defined to be an "Event of Default":
a. Any failure to pay any principal or interest or any other part
of the obligation when the same shall become due and payable and such failure
continues for thirty (30) days after written notice thereof to Pledgor.
b. Any failure or neglect to perform or observe any of the terms,
provisions, or covenants of this Agreement, the Note, or any other document or
instrument executed or delivered to secure the Obligation (other than a
failure or neglect described in one or more of the other provisions of this
paragraph 8.1) and such failure or neglect continues unremedied for a period
of thirty (30) days after written notice thereof to Pledgor.
c. Any warranty, representation or statement contained in this
Agreement, the Note, or any other document or instrument executed or delivered
to secure the Obligation that shall be or shall prove to have been false when
made or furnished.
d. The filing by Pledgor, any endorser of the Note or any
guarantor of the Obligation or against Pledgor or such endorser or guarantor
in which Pledgor or such endorser or guarantor acquiesces or which is not
dismissed within forty-five (45) days after the filing thereof of any
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proceeding under the federal bankruptcy laws now or hereafter existing or any
other similar statute now or hereafter in effect; the entry of an order for
relief under such laws with respect to Pledgor or such endorser or guarantor;
or the appointment of a receiver , trustee, custodian or conservator of all
or any part of the assets of Pledgor or of such endorser or guarantor.
e. The liquidation, termination or dissolution of Pledgor or any
endorser or guarantor.
f. Any levy or execution upon, or judicial seizure of, any
portion of the Pledged Securities.
g. Any attachment or garnishment of, or the existence or filing
of any lien or encumbrance against any portion of the Pledged Securities.
h. The institution of any legal action or proceedings to enforce
a lien or security interest in any portion of the Pledged Securities.
i. The occurrence of any event of default under the Note or any
other document or instrument executed or delivered to secure the Obligation.
8.2 Upon the occurrence of any Event of Default and at any time while
such Event of Default is continuing, Secured Party shall have the following
rights and remedies and may do one or more of the following:
a. Declare all or any part of the Obligation to be immediately due
and payable, and the same, with all costs and charges, shall be collectible
thereupon by action at law;
b. Transfer the Pledged Securities or any part thereof into its
own name or that of its nominee so that Secured party or its nominee may
appear of record as the sole owner thereof;
c. Exercise any and all rights of conversion, exchange,
subscription, or any other rights, privileges or options pertaining to any of
the Pledged Securities including, but not limited to, the right to exchange,
at its discretion, any or all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other readjustment of
Meteor Industries, Inc. or upon the exercise by Pledgor or Secured Party of
any right, privilege or option pertaining to any of the shares of the Pledged
Securities, and in connection therewith to deposit and deliver such shares of
Pledged Securities with any committee, depository, transfer agent, registrar
or any other agency upon such terms as Secured Party may determine without
liability except to account for the property actually received by it;
d. Receive and retain any dividend or other distribution on
account of the Pledged Securities; and
e. Sell any or all of the Pledged Securities in accordance with
the provisions hereof, but Secured Party shall have no duty to exercise any
of the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay, in so doing Pledgor waives all rights to be
advised or to receive any notices, statements or communications received by
Secured Party or its nominee as the record owner of all or any of the Pledged
Securities. Any cash received and retained by Secured Party as additional
collateral hereunder may be applied to payment in the manner provided in
Subparagraph 8.3(c) below.
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8.3 Secured Party shall have the right, for and in the name, place and
stead of Pledgor, to execute endorsements, assignments or other instruments of
conveyance or transfer with respect to all or any of the Pledged Securities
and any instruments, documents and statements that Pledgor is obligated to
furnish or execute hereunder. Pledgor shall execute and deliver such
additional documents as may be necessary to enable Secured Party to implement
such right.
8.4 Pledgor shall pay all costs and expenses, including without
limitation court costs and reasonable attorneys' fees, reasonably incurred by
Secured Party in enforcing payment and performance of the obligation or in
exercising the rights and remedies of Secured Party hereunder. All such costs
and expenses shall be secured by this Agreement and by all other lien and
security documents securing the Obligation. In the event of any court
proceedings, court costs and attorneys' fees shall be set by the court and not
by jury and shall be included in any judgment obtained by Secured Party.
8.5 In addition to any remedies provided herein for an Event of Default,
Secured Party shall have all the rights and remedies afforded a secured party
under the Uniform Commercial Code and all other legal and equitable remedies
allowed under applicable law. No failure on the part of Secured Party to
exercise any of its rights hereunder arising upon any Event of Default shall
be construed to prejudice its rights upon the occurrence of another or
subsequent Event of Default. No delay on the part of Secured Party in
exercising any such rights shall be construed to preclude it from the exercise
thereof at any time while that Event of Default is continuing. Secured Party
may enforce any one or more rights or remedies hereunder successively or
concurrently. By accepting payment or performance of any of the Obligation
after its due date, Secured Party shall not thereby waive the agreement
contained herein that time is of. the essence, nor shall Secured Party waive
either its right to require prompt payment or performance when due of the
remainder of the Obligation or its right to consider the failure to so pay or
perform an Event of Default.
9. MISCELLANEOUS PROVISIONS
9.1 The acceptance of this Agreement by Secured Party shall not be
considered a waiver of or in any way to affect or impair any other security
that Secured Party may have, acquire simultaneously herewith, or hereafter
acquire for the payment or performance of the Obligation, nor shall the
taking by Secured Party at any time of any such additional security be
construed as a waiver of or, in any way to affect or impair the right and
interest granted herein; Secured Party may resort, for the payment or
performance of the Obligation, to its several securities therefor in such
order and manner as it may determine.
9.2 Without notice or demand, without the necessity for any additional
endorsements, without affecting the obligations of Pledgor hereunder or the
personal liability of any person for payment or performance of the Obligation,
and without affecting the rights and interests granted herein, Secured Party,
from time to time may: (i) extend the time for payment of all or any part of
the Obligation, accept a renewal note therefor, reduce the payments thereon,
release any person liable for all or any part thereof, or otherwise change the
terms of all or any part of the Obligation; ( ii) take and hold other security
for the payment or performance of the Obligation and enforce, exchange,
substitute, subordinate, waive or release any such, security; (iii) join in
any extension or subordination agreement; or (iv) release any part of the
Pledged Securities from this Agreement.
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9.3 Pledgor waives and agrees not to assert: (i) any right to require
Secured Party to proceed against any guarantor, to proceed against or exhaust
any other security for the Obligation, to pursue any other remedy available
to Secured Party, or to pursue any remedy in any particular order or manner;
(ii) demand, diligence, presentment for payment, protest and demand, and
notice of extension, dishonor, protest, demand and nonpayment, relating to the
obligation; and (iii) any benefit of and any right to participate in, any
other security now or hereafter held by Secured Party.
9.4 The terms herein shall have the meanings in and be construed under
the Uniform Commercial Code. This Agreement shall be governed by and construed
according to the internal laws of the State of Colorado. Each provision of
this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be void or invalid, the same shall not affect the remainder hereof which shall
be effective as though the void or invalid provision had not been contained
herein.
9.5 No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement
executed by Pledgor and a duly authorized officer of Secured Party.
9.6 This is a continuing agreement, which shall remain in full force
and effect until actual receipt by Secured Party of written notice of its
termination as to future transactions and shall remain in full force and
effect thereafter until all of the Obligation incurred before the receipt of
such notice shall have been paid and performed in full.
9.7 Time is of the essence hereof. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their heirs,
personal representatives, successors and assigns. The term "Secured Party"
shall include not only the original Secured Party hereunder but also any
future owner and holder, including pledgees, of the note or notes evidencing
the Obligation. The provisions hereof shall apply to the parties according to
the context thereof and without regard to the number or gender of words or
expressions used.
9.8 All notices required or permitted to be given hereunder shall be in
writing and may be given in person or by united States mail, by delivery
service or by electronic transmission. Any notice directed to a party to this
Agreement shall become effective upon the earliest of the following: (i)
actual receipt by that party; (ii) delivery to the designated address of that
party, addressed to that party; or (iii) if given by certified or registered
united States mail, three days after deposit with the United States Postal
Service, postage prepaid, addressed to that party at its designated address.
The designated address of a party shall be the address of that party shown in
the Purchase Agreement or from time to time, may specify by notice to the
other parties.
9.9 An executed copy of this Agreement and/or any financing statement
relating hereto shall be sufficient for filing and/or recording as a financing
statement.
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IN WITNESS WHEREOF, these presents are executed as of the date indicated
above.
CAPCO ENERGY, INC.
/signed/ Imran Jatalla
By: ____________________________________
Print Name: Imran Jatalla
Title: Executive Vice President
CAPCO ASSET MANAGEMENT, INC.
/signed/ John R. Aitken
By: ____________________________________
Print Name: John R. Aitken
Title: President
8
PRODUCT SALES AGREEMENT
This Agreement made and entered into this 31st day of December, 1999, by and
between Meteor Stores, Inc., hereinafter known as "Marketer", and Meteor
Marketing, Inc., a Wyoming corporation, hereinafter known as "Distributor".
The Distributor agrees to furnish motor fuels and oils ("Products") and
related items to the Marketer in accordance with State and Federal Government
Regulation pursuant to the commodity schedules attached hereto. It is agreed
the Distributor shall not be liable to the Marketer by reason of Product
shortages
beyond its control.
It is further agreed that the Distributor will sell Products to Marketer at
the prices and terms described in the attached Commodity Schedules.
The Marketer, in consideration of the above agrees to purchase those Products
which are sold by the Distributor exclusively for a period of five (5) years
from the above date.
It is further agreed by both parties that this agreement will automatically
extend on a year to year basis. Either party may give the other a 60 day
prior written notice of intent not to extend. After one year, either party may
terminate this agreement upon thirty (30) days notice if the terms are not
competitive in any or all pricing aspects of this Agreement. Distributor
hereby agrees to supply fuel in a reasonably timely manner and failure to do
so shall be deemed to be a breach of this Agreement. Where there is a
temporary failure to supply product Marketer may purchase fuel from another
authorized supplier and where there is a permanent failure to supply product
this Agreement may be terminated.
In the event this Agreement is canceled by either party, it is agreed that the
Marketer shall have the right to remove all signs, poles, credit card
imprinters, or other equipment that the Distributor has placed or erected on
the Marketer's premises. It is further agreed that the Marketer shall abide
by the suppliers image program as described in Exhibit A attached hereto.
If Marketer changes suppliers or brands on any particular site, Marketer
shall be liable for any and all unamortized improvement loans and program
funds provided by major oil company suppliers related to that site. The
amount of such contingent liability at December 31, 1999, is approximately
$650,000 (a schedule of such contingent liabilities shall be attached
hereto). Marketer shall have the right to change a site from a branded site
to an unbranded site so long as there are no contingent liabilities relating
to that site at the time of conversion.
Marketer recognizes that it is handling hazardous substances and agrees that
in receiving, storing, handling and using Product(s) purchased from
Distributor, Marketer will exercise the strictest care required by law and
that it will comply with any and all applicable federal, state and local laws,
ordinances and regulations pertaining to the storage and use of petroleum
products. Marketer further understands and warrants that it has sole
responsibility for the storage, maintenance and use of all inventories of
Product(s) purchased from Distributor and for corrective action and claims of
third Parties resulting from any failure to comply with the above. Marketer
HEREBY INDEMNIFIES AND HOLD DISTRIBUTOR, ITS SUCCESSORS AND ASSIGNS, HARMLESS
AGAINST ALL LOSSES, CLAIMS, CAUSES OF ACTION TO COMPLY WITH THE PRECEDING
SENTENCES.
<PAGE>
The performance and interpretation of this Agreement shall be governed by New
Mexico law and all applicable federal law. If either party to this Agreement
obtains a judgment against the other for breach of any provision hereof,
damages shall include all reasonable attorneys' fees and costs as well as
interest at 1.5% per month.
Marketer: Distributor:
/signed/ Imran Jatalla /signed/ Paul W. Greaves
By: _____________________________ By: ______________________________
Paul W. Greaves
Title: Executive Vice President Title: President
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COMMODITY SCHEDULE (MOTOR FUELS)
MARKETER: Meteor Stores, Inc. DATE: 12/31/99
DELIVERY POINT: Retail Outlets in New Mexico PRODUCT: Branded Gasoline
And Colorado GRADE: Regular Unleaded
This schedule is attached to and made a part of a Product Sales Agreement
between Marketer and Distributor dated December 31, 1999.
1. Quantity. Marketer's annual requirements are estimated to be 9,000,000
gallons ("Estimated Annual Quantity"), for delivery in approximately equal
monthly quantities. Delivery shall be made to Marketer or its agents upon
reasonable notice to Distributor.
2. Delivery. Where delivery is made to Marketer's business location,
delivery shall be complete upon unloading of transport truck. Marketer shall
allow delivery to take place at night.
3. Title. Title to Products shall pass to Marketer upon delivery of
Products.
4. Risk of Loss. Risk of loss of Product shall pass to Marketer upon
delivery of Products.
5. Inspection. Marketer shall have the right, at its expense, to have an
inspection made at delivery point, provided such inspection shall not delay
shipment. Should Marketer fail to make inspection, it shall accept
Distributor's inspection and measurement.
6. Prices. The price to be paid by Marketer shall be Distributor's
applicable price in effect at the time and place of delivery. Such price
shall be Distributor's delivered cost plus $.005 per gallon for full transport
quantity deliveries . All prices charged by Distributor are subject to the
provisions of applicable law.
7. Leased Equipment. Distributor shall pay for all sign lease costs and
credit card imprinters lease fees.
8. Payment Terms. All billings shall be paid on a load to load basis or
within 10 days of delivery (or 5 days of delivery for Conoco products) of the
Products whichever occurs first, payment shall be made in good and
immediately available funds and subject to a total company credit limit of
$250,000. All credit terms are subject to change, at the sole discretion of
the Distributor, after twenty-four (24) hours notice to Marketer. Financial
statements of Marketer shall be made available to Distributor upon reasonable
request.
9. Annual Rebate. If Marketer purchases and pays for at least n/a gallons
of the Products described herein during the twelve month period commencing on
the date hereof, and extends this agreement for a subsequent year.
Distributor shall issue a credit of n/a cent(s) per gallon on such
Products, which credit shall be applied to future purchases. Distri-butor
will provide Marketer with a monthly summary of Products purchased.
10. Records. With regard to branded gasoline products sold by Distributor to
Marketer for sale or resale through branded retail outlets supplied by
Marketer, Distributor and/or its delegate may, at any reasonable time,
examine, copy and audit such records and/or metering devices which it deems
necessary to assure adherence to the requirement that only Distributor's
branded products are being sold through such outlets.
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ACCEPTED: Marketer ACCEPTED: Distributor
/signed/ Imran Jatalla /signed/ Paul W. Greaves
By: _____________________________ By: ______________________________
Paul W. Greaves
Title: Executive Vice President Title: President
Date: 12/31/99 Date: 12/31/99
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COMMODITY SCHEDULE (MOTOR FUELS)
MARKETER: Meteor Stores, Inc. DATE: 12/31/99
DELIVERY POINT: Retail Outlets in New Mexico PRODUCT: Branded Gasoline
And Colorado GRADE: Unleaded Plus
This schedule is attached to and made a part of a Product Sales Agreement
between Marketer and Distributor dated December 31, 1999.
1. Quantity. Marketer's annual requirements are estimated to be 2,000,000
gallons ("Estimated Annual Quantity"), for delivery in approximately equal
monthly quantities. Delivery shall be made to Marketer or its agents upon
reasonable notice to Distributor.
2. Delivery. Where delivery is made to Marketer's business location,
delivery shall be complete upon unloading of transport truck. Marketer shall
allow delivery to take place at night.
3. Title. Title to Products shall pass to Marketer upon delivery of
Products.
4. Risk of Loss. Risk of loss of Product shall pass to Marketer upon delivery
of Products.
5. Inspection. Marketer shall have the right, at its expense, to have an
inspection made at delivery point, provided such inspection shall not delay
shipment. Should Marketer fail to make inspection, it shall accept
Distributor's inspection and measurement.
6. Prices. The price to be paid by Marketer shall be Distributor's
applicable price in effect at the time and place of delivery. Such price
shall be Distributor's delivered cost plus $.005 per gallon for full transport
quantity deliveries. All prices charged by Distributor are subject to the
provisions of applicable law.
7. Leased Equipment. Distributor shall pay for all sign lease costs and
credit card imprinters lease fees.
8. Payment Terms. All billings shall be paid on a load to load basis or
within 10 days of delivery (or 5 days of delivery for Conoco products) of the
Products whichever occurs first, payment shall be made in good and
immediately available funds and subject to a total company credit limit of
$250,000. All credit terms are subject to change, at the sole discretion of
the Distributor, after twenty-four (24) hours notice to Marketer. Financial
statements of Marketer shall be made available to Distributor upon reasonable
request.
9. Annual Rebate. If Marketer purchases and pays for at least n/a gallons
of the Products described herein during the twelve month period commencing on
the date hereof, and extends this agreement for a subsequent year.
Distri-butor shall issue a credit of n/a cent(s) per gallon on such
Products, which credit shall be applied to future purchases. Distributor will
provide Marketer with a monthly summary of Products purchased.
10. Records. With regard to branded gasoline products sold by Distributor to
Marketer for sale or resale through branded retail outlets supplied by
Marketer, Distributor and/or its delegate may, at any reasonable time,
examine, copy and audit such records and/or metering devices which it deems
necessary to assure adherence to the requirement that only Distributor's
branded products are being sold through such outlets.
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<PAGE>
ACCEPTED: Marketer ACCEPTED: Distributor
/signed/ Imran Jatalla /signed/ Paul W. Greaves
By: _____________________________ By: ______________________________
Paul W. Greaves
Title: Executive Vice President Title: President
Date: 12/31/99 Date: 12/31/99
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COMMODITY SCHEDULE (MOTOR FUELS)
MARKETER: Meteor Stores, Inc. DATE: 12/31/99
DELIVERY POINT Retail Outlets in New Mexico PRODUCT: Branded Gasoline
And Colorado GRADE: Unleaded Premium
This schedule is attached to and made a part of a Product Sales Agreement
between Marketer and Distributor dated December 31, 1999.
1. Quantity. Marketer's annual requirements are estimated to be 1,500,000
gallons ("Estimated Annual Quantity"), for delivery in approximately equal
monthly quantities. Delivery shall be made to Marketer or its agents upon
reasonable notice to Distributor.
2. Delivery. Where delivery is made to Marketer's business location,
delivery shall be complete upon unloading of transport truck. Marketer shall
allow delivery to take place at night.
3. Title. Title to Products shall pass to Marketer upon delivery of
Products.
4. Risk of Loss. Risk of loss of Product shall pass to Marketer upon
delivery of Products.
5. Inspection. Marketer shall have the right, at its expense, to have an
inspection made at delivery point, provided such inspection shall not delay
shipment. Should Marketer fail to make inspection, it shall accept
Distributor's inspection and measurement.
6. Prices. The price to be paid by Marketer shall be Distributor's
applicable price in effect at the time and place of delivery. Such price
shall be Distributor's delivered cost plus $.005 per gallon for full transport
quantity deliveries. All prices charged by Distributor are subject to the
provisions of applicable law.
7. Leased Equipment. Distributor shall pay for all sign lease costs and
credit card imprinters lease fees.
8. Payment Terms. All billings shall be paid on a load to load basis or
within 10 days of delivery(or 5 days of deliver for Conoco products) of the
Products whichever occurs first, payment shall be made in good and
immediately available funds and subject to a total company credit limit of
$250,000. All credit terms are subject to change, at the sole discretion of
the Distributor, after twenty-four (24) hours notice to Marketer. Financial
statements of Marketer shall be made available to Distributor upon reasonable
request.
9. Annual Rebate. If Marketer purchases and pays for at least n/a gallons
of the Products described herein during the twelve month period commencing on
the date hereof, and extends this agreement for a subsequent year.
Distributor shall issue a credit of n/a cent(s) per gallon on such
Products, which credit shall be applied to future purchases. Distributor will
provide Marketer with a monthly summary of Products purchased.
10. Records. With regard to branded gasoline products sold by Distributor to
Marketer for sale or resale through branded retail outlets supplied by
Marketer, Distributor and/or its delegate may, at any reasonable time,
examine, copy and audit such records and/or metering devices which it deems
necessary to assure adherence to the requirement that only Distributor's
branded products are being sold through such outlets.
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<PAGE>
ACCEPTED: Marketer ACCEPTED: Distributor
/signed/ Imran Jatalla /signed/ Paul W. Greaves
By: _____________________________ By: ______________________________
Paul W. Greaves
Title: Executive Vice President Title: President
8
<PAGE>
COMMODITY SCHEDULE (MOTOR FUELS)
MARKETER: Meteor Stores, Inc. DATE: 12/31/99
DELIVERY POINT: Retail Outlets in New Mexico PRODUCT: Branded Gasoline
And Colorado GRADE: Diesel
This schedule is attached to and made a part of a Product Sales Agreement
between Marketer and Distributor dated December 31, 1999.
1. Quantity. Marketer's annual requirements are estimated to be 500,000
gallons ("Estimated Annual Quantity"), for delivery in approximately equal
monthly quantities. Delivery shall be made to Marketer or its agents upon
reasonable notice to Distributor.
2. Delivery. Where delivery is made to Marketer's business location,
delivery shall be complete upon unloading of transport truck. Marketer shall
allow delivery to take place at night.
3. Title. Title to Products shall pass to Marketer upon delivery of
Products.
4. Risk of Loss. Risk of loss of Product shall pass to Marketer upon delivery
of Products.
5. Inspection. Marketer shall have the right, at its expense, to have an
inspection made at delivery point, provided such inspection shall not delay
shipment. Should Marketer fail to make inspection, it shall accept
Distributor's inspection and measurement.
6. Prices. The price to be paid by Marketer shall be Distributor's
applicable price in effect at the time and place of delivery. Such price
shall be Distributor's delivered cost plus $.005 per gallon for full transport
quantity deliveries. All prices charged by Distributor are subject to the
provisions of applicable law.
7. Leased Equipment. Distributor shall pay for all sign lease costs and
credit card imprinters lease fees.
8. Payment Terms. All billings shall be paid on a load to load basis or
within 10 days of delivery (or 5 days of delivery for Conoco products) of the
Products whichever occurs first, payment shall be made in good and
immediately available funds and subject to a total company credit limit of
$250,000. All credit terms are subject to change, at the sole discretion of
the Distributor, after twenty-four (24) hours notice to Marketer. Financial
statements of Marketer shall be made available to Distributor upon reasonable
request.
9. Annual Rebate. If Marketer purchases and pays for at least n/a gallons
of the Products described herein during the twelve month period commencing on
the date hereof, and extends this agreement for a subsequent year.
Distributor shall issue a credit of n/a cent(s) per gallon on such
Products, which credit shall be applied to future purchases. Distributor will
provide Marketer with a monthly summary of Products purchased.
10. Records. With regard to branded gasoline products sold by Distributor to
Marketer for sale or resale through branded retail outlets supplied by
Marketer, Distributor and/or its delegate may, at any reasonable time,
examine, copy and audit such records and/or metering devices which it deems
necessary to assure adherence to the requirement that only Distributor's
branded products are being sold through such outlets.
9
<PAGE>
ACCEPTED: Marketer ACCEPTED: Distributor
/signed/ Imran Jatalla /signed/ Paul W. Greaves
By: _____________________________ By: ______________________________
Paul W. Greaves
Title: Executive Vice President Title: President
10
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COMMODITY SCHEDULE
LUBRICATING OILS AND GREASES SPECIAL PROVISIONS
MARKETER: Meteor Stores Inc. DATE: December 31, 1999
This schedule is attached to and made a part of a Product Sales Agreement
between Marketer and Distributor dated December 31, 1999.
1. Products. Lubricating Oils and Greases as listed in space below:
All Meteor Marketing, Inc. products
2. Quantity. Marketer's annual requirements estimated to be 1,000 gallons
for delivery in approximately equal monthly quantities upon reasonable notice
to Distributor.
3. Prices. Distributor's established prices in effect on date of delivery.
4. Title. Title to Products shall pass to Marketer upon delivery of
Products.
5. Risk of Loss. Risk of loss of Product shall pass to Marketer upon
delivery of Products.
6. Inspection. Marketer shall have the right, at its expense, to have an
inspection made at delivery point, provided such inspection shall not delay
shipment. Should Marketer fail to make inspection, it shall accept
Distributor's inspection and measurement.
7. Payment Terms. All billings shall be paid within 10 days of delivery of
the Products in good and immediately available funds and subject to a total
company credit limit of $250,000. All credit terms are subject to change, at
the sole discretion of the Distributor, after twenty-four (24) hours notice to
Marketer. Financial statements of Marketer shall be made available to
Distributor upon reasonable request.
ACCEPTED: Marketer ACCEPTED: Distributor
/signed/ Imran Jatalla /signed/ Paul W. Greaves
By: _____________________________ By: ______________________________
Paul W. Greaves
Title: Executive Vice President Title: President
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COMMODITY SCHEDULE (MOTOR FUELS)
Distributor's applicable price and terms
Fuel Prices will be rack plus common carrier freight plus one half cent per
gallon.
Payment for Conoco products will be net five days or load to load which ever
comes first.
Payment will be by EFT from Marketers bank account.
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SUPPLIERS IMAGE PROGRAM
The Distributor's branded suppliers have certain image and upgrade standards
that Marketer must abide by. Some branded suppliers have image enhancement
programs that must be complied with. Some branded suppliers have various
programs to fund certain image enhancements. Distributor will supply marketer
with copies of branded supplier standards and programs. If Marketer uses any
of these programs Marketer will be liable to purchase the branded fuels to
meet the program requirements.
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DISTRIBUTORS FLEET FUELING PROGRAM
In the event that Distributor enters into any fleet fueling programs Marketer
agrees to participate in the Distributors program at all locations which
Distributor selects. Terms of the program will be determined but will in
general allow Distributor or program customers to fuel at Marketers sites.
Marketer will be paid a per gallon rate which maybe less than the prices
normally charged by Marketer.
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