CONTRIBUTION AND CANCELLATION AGREEMENT
O2DIESEL CORPORATION
(formerly, Dynamic Ventures Inc.)
This Contribution Agreement (the "Agreement") is effective as of June __,
2003, by and between Xxxx Xxxxxxx ("Shareholder"), and O2Diesel Corporation
(formerly, Dynamic Ventures Inc.), a Washington corporation ("Company").
A. Shareholder is the sole director of the Company and the Company's
President, Secretary and Treasurer.
B. Shareholder currently holds 7,820,000 shares of the Company's issued
and outstanding shares of common stock, par value $0.0001 (the "Common
Shares").
C. The Common Shares were issued to Shareholder in consideration for
transferring certain under a Licensing Agreement with
Xxxxxxxxxxxxxxx.xxx to the Company (the "Consideration").
D. The Company has entered into a Letter of Intent to acquire all of the
issued and outstanding share capital of AAE Technologies International
Plc (the "AAE Share Exchange Offer"), pursuant to which the Company
has commenced a share exchange offer under the terms of that certain
share exchange offer document dated June 16, 2003 (the "Recommended
Offer Document").
E. As a condition to closing, one or more shareholders of the Company
will be required to contribute, and the Company will be required to
cancel, a total of 7,720,000 Common Shares immediately prior to
closing of the AAE Share Exchange Offer.
F. The Company and Shareholder have determined that it is in the best
interest of the Company, its shareholders and the Shareholder that the
Company complete the AAE Share Exchange Offer.
G. Shareholder desires to contribute to the Company 7,720,000 Common
Shares as an additional capital contribution to the Company and the
Company desires to accept such contribution under the terms and
conditions set forth below.
H. It is the intention of the Shareholder and the Company that the
contribution by Shareholder of the Common Shares to the Company
qualify as a tax-fee contribution to capital for U.S. federal income
tax purposes.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Contribution. On the terms and subject to the conditions of this
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Agreement, the Shareholder hereby irrevocably agrees to contribute
7,720,000 Common Shares to the Company as an additional capital
contribution to the Company, and the Company hereby agrees to accept
such contribution by the Shareholder. The Shareholder hereby tenders
to the Company certificates No. 1131 (representing 4,500,000 Common
Shares) and No. 1107 (representing 3,220,000 Common Shares) for
contribution under the terms of this Agreement (the "Tendered
Certificates").
2. Closing and Conditions to Closing
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(a) The transaction contemplated in this Agreement shall be subject
to the satisfaction of the following condition (which is for the
exclusive benefit of the Shareholder and may be waived by the
Shareholder) on or before July 7, 2003, unless the AAE Share
Exchange Offer is extended under the terms set forth in the
Recommended Offer Document: the AAE Share Exchange Offer to
acquire all of the issued and outstanding shares in the capital
of AAE Technologies International Plc shall have been declared
unconditional in all respects.
(b) The transaction contemplated in this Agreement shall close (the
"Closing") as soon as practicable upon satisfaction or waiver of
the condition set forth in Section 2(a) of this Agreement (the
"Closing Date"). The Closing shall take place at the offices of
Xxxxxx & Whitney LLP, U.S. Bank Building Centre, 0000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000-0000 XXX, or such other
place as the Company may designate.
(c) No later than two days after the Closing Date, but no later than
the closing date of the AAE Share Exchange Offer, the Company
will cause to be delivered to its transfer agent the Tendered
Certificates and an instruction for cancellation sufficient to
cause the transfer agent to cause the cancellation of the
Tendered Certificates and the 7,720,000 Common Shares represented
thereby.
(d) The Company and the Shareholder hereby agree to execute and
deliver at Closing such other documents as may be necessary or
appropriate to facilitate the transactions contemplated by this
Agreement.
3. Governing Law. This Agreement shall be construed and enforced in
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accordance with the federal laws of the United States and the internal
laws of the State of Washington, without regard to the conflicts of
law rules of such state.
4. Construction. Whenever the singular number is used in this Agreement
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and when required by the context, the same shall include the plural
and vice versa, and the masculine gender shall include the feminine
and neuter genders and vice versa.
5. Headings. The headings in this Agreement are inserted for convenience
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only and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provisions
hereof.
6. Severability. If any provision of this Agreement or the application
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thereof to any Person or circumstance shall be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement and the
application thereof shall not be affected and shall be enforceable to
the fullest extent permitted by law.
7. Heirs, Successors and Assigns. Each of the covenants, terms,
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provisions and agreements contained in this Agreement shall be binding
upon and inure to the benefit of the parties hereto and, to the extent
permitted by this Agreement, their respective heirs, legal
representatives, successors and assigns.
8. Creditors. None of the provisions of this Agreement shall be for the
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benefit of or enforceable by any creditors of the Company.
9. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original and all of which shall constitute
one and the same instrument. Delivery of an executed counterpart of
this Agreement via facsimile shall be effective as delivery of a
manually executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
day first written above.
O2DIESEL CORPORATION
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, President and Director
SHAREHOLDER
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
