FEE ASSUMPTION AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered as of the date set forth below,
by and between W. A. XXXXXX, and individual resident of the sate of South
Carolina ("Xxxxxx"), COMMODITY EXPRESS TRANSPORTATION, INC., a South Carolina
corporation ("Commodity"), POWER2SHIP, INC., a Nevada corporation ("Power2Ship"
or the "Company"), XXXXXXX ASSOCIATES with headquarters offices in Schaumburg,
IL ("Xxxxxxx") and T. V. XXXXX, and individual resident of the State of North
Carolina ("Xxxxx"), together the parties ("Parties").
In consideration of the mutual promises and obligation contained herein the
undersigned Parties agree as follows:
Xxxxxxx and Xxxxxx entered into an agreement dated April 23, 2004 whereby
Xxxxxxx was retained on a non-exclusive basis to sell the assets of Commodity,
and Xxxxxxx, pursuant to said agreement, facilitated an agreement between
Commodity and Power2Ship whereby an indirect wholly-owned subsidiary of
Power2Ship ("P2S Subsidiary") agreed to purchase certain assets of Commodity
pursuant to the terms of a mutual agreement ("Mutual Agreement") and various
other related agreements between Commodity, P2S, P2S Subsidiary and Xxxxxx.
The Mutual Agreement between P2S Subsidiary and Commodity, and the various other
agreements between Commodity, P2S, P2S Subsidiary and Xxxxxx have been
consummated on the date hereof. Accordingly, Xxxxxxx has satisfactorily
fulfilled its obligations under its agreement with Commodity and is entitled to
its specified commission in the amount of $100,000.
Xxxxx is the Managing Director of Xxxxxxx. Xxxxxxx has assigned said commission
to Xxxxx. Xxxxxxx has taken all corporate action necessary, and has obtained all
consents and approvals, for the assignment of said commission to Xxxxx, and the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, constitute the valid and binding obligation of
Xxxxxxx, enforceable against Xxxxxxx to prove such assignment of the commission
by Xxxxxxx to Xxxxx.
Power2Ship hereby assumes from Commodity the obligation to pay Xxxxx the earned
commission of $100,000 and Xxxxx hereby agrees to release Commodity from said
commission obligation upon receipt of payment from Power2Ship.
In order to further facilitate the closing of the proposed transaction, Xxxxx
has further agreed with Power2Ship to accept from Power2Ship, at the sole
discretion of Power2Ship, shares of its common stock ("Shares") and/or cash, or
a combination thereof, with a total value as of the date hereof of $100,000 in
full and complete satisfaction of this commission obligation, provided however,
that any common stock conveyed to Xxxxx hereunder shall be duly authorized and
issued by Power2Ship in accordance with its charter and bylaws and, if not
presently unrestricted and fully registered stock, shall have "piggyback"
registration rights so that such shares shall be included in the shares of
Powe2Ship to be registered in its next public offering pursuant to the federal
securities laws and thereupon be fully registered and transferable. Any shares
of Power2Ship issued to Xxxxx hereunder shall be valued by calculating the
median value between the closing bid and asked price for Power2Ship stock as
traded on the OTCBB on the date hereof.
Xxxxx understands that the shares are being acquired from Power2Ship in a
transaction pursuant to an exemption from the registration requirements under
the Securities Act of 1933, as amended ("Act") and, in connection herewith,
makes the representations contained on the attached Exhibit A hereto.
IN WITNESS WHEREOF, the undersigned parties have executed this agreement as of
March 21, 2005.
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W. A. Xxxxxx
COMMODITY EXPRESS TRANSPORTATION, INC.
By:
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W. A. Xxxxxx, President
POWER2SHIP, INC.
By:
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Xxxxxxx Xxxxx, Chief Executive Officer
XXXXXXX ASSOCIATES
By:
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T. V. Xxxxx, Managing Director
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T. V. Xxxxx (WHO SHALL ALSO SIGN EXHIBIT A HERETO)
EXHIBIT A
In connection with the receipt of the Shares, Xxxxx hereby represents, warrants,
covenants and agrees as set forth below.
1. Purchase Entirely for Own Account. The Shares will be acquired for
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investment for Xxxxx' own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and Xxxxx has no present
intention of selling, granting any participation in, or otherwise distributing
the Shares or any portion thereof. Further, Xxxxx does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to all or any
portion of the Warrant Stock.
2. No Securities Act Registration. Xxxxx understands that the Shares
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have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), by reason of a specific exemption or specific exemptions from
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the registration provisions of the Securities Act which depend upon, among other
things, the bona fide nature of Xxxxx' investment intent as expressed herein.
3. Restricted Securities. Xxxxx acknowledges that, unless the Xxxxx has
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been advised by the Company that a current registration statement is in effect
covering the resale of the Shares, because the Shares have not been registered
under the Securities Act, the Shares must be held by the Xxxxx indefinitely
unless subsequently registered under the Securities Act or an exemption from
such registration is available. Xxxxx is aware of the provision of Rule 144
promulgated under the Securities Act that permits the limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the satisfaction of having held the
Shares for a certain duration of time, the availability of certain current
public information about the Company, the sale being through a "broker's
transaction" (as provided by Rule 144(f)), and the volume of shares sold not
exceeding specified limitations (unless the sale is within the requirements of
Rule 144(k)).
4. Accredited and Sophisticated Investor. Xxxxx: (a) is an accredited
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investor as defined in Rule 501(a) of Regulation D of the Securities and
Exchange Commission; (b)(i) either alone or with Xxxxx'x professional advisor or
advisors, has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of acquiring the Shares, (ii)
either alone by reason of Xxxxx' business or financial experience or together
with Xxxxx' professional advisor or advisors, has the capacity to protect Xxxxx'
interests in connection with acquisition of the Shares; and (c) is able to bear
the economic risk of the investment in the shares, including a complete loss of
the investment.
5. Opportunity to Ask Questions. Xxxxx has had an opportunity to ask
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questions of and receive answers from the Company or its representatives
concerning the terms of Xxxxx' investment in Shares, all such questions have
been answered to the full satisfaction of Xxxxx, and Xxxxx has had the
opportunity to request and obtain any additional information Xxxxx deemed
necessary to verify or supplement the information contained therein. Xxxxx has
reviewed and understands the disclosure provided in the Company's Form 10-KSB
for the year end May 31, 2004 and the Company's Form 10-QSB for the quarters
ended August 30, 2004 and November 30, 2004
6. Investment Risks. Xxxxx recognizes that an investment in the Shares
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involves substantial risks, and is fully aware of and understands all of the
risk factors related to the acquisition of the Shares. Xxxxx has determined
that the acquisition of the Shares is consistent with Xxxxx'x investment
objectives. Xxxxx is able to bear the economic risks of an investment in the
Shares, and at the present time could afford a complete loss of such investment.
7. Limitation on Manner of Offering. The Shares were not offered to
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Xxxxx by any means of general solicitation or general advertising.
8. Tax and Other Matters. Xxxxx is not relying on the Company with
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respect to tax and other economic considerations involved in the acquisition of
the Shares. Xxxxx has carefully considered and has, to the extent Xxxxx
believes such discussion necessary, discussed with Xxxxx' professional, legal,
tax, accounting and financial advisors the suitability of an investment in the
Shares for Xxxxx'x particular tax and financial situation and Xxxxx has
determined that the Shares are a suitable investment for him.
9. Restrictive Legends. Xxxxx understands that the Shares shall bear
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one or more of the following restrictive legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES
LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION
UNDER THE ACT AND SUCH LAWS IS NOT REQUIRED"
(b) Any legend required by applicable state law.
10. Successors. This Exercise Agreement and the representations and
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warranties contained herein shall be binding upon the heirs, executors,
administrators, personal representatives and other successors of Xxxxx and shall
inure to the benefit of and be enforceable by the Company.
11. Address. The address, telephone number and facsimile number set
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forth at the end of this letter are Xxxxx'x true and correct address.
12. Market Stand-Off. Xxxxx agrees that, during the period of duration
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specified by the Company and an underwriter or underwriters of the common stock
or other securities of the Company, following the effective date of a
registration statement of the Company filed under the Securities Act, Xxxxx will
not, to the extent requested by the Company and such underwriter or
underwriters, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of the Company held by Xxxxx at any time during such
period except securities included in such registration, provided that:
(a) all officers and directors of the Company enter into similar
agreements; and
(b) such market stand-off time period shall not exceed one hundred
eighty (180) days.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the securities covered thereby until
the end of such period.
/s/ T.V. Xxxx
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T. V. Xxxx
/s/ T.V. Xxxx
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(Signature)
Address:
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Telephone:
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Social Security Number
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