STOCK PURCHASE AGREEMENT
AMONG
TITAN GLOBAL HOLDINGS,
INC.,
CRESCENT FUELS, INC.
AND
JOHNSON ENTERPRISES OF KANSAS,
LLC;
JEFF McREYNOLDS;
KAREN E. REEDER TRUST;
HARRISON F. JOHNSON, JR.;
and
MARTHA M. JOHNSON TRUST
Dated: Effective 12:01 a.m., October
1, 2008
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made effective
as of 12:01 a.m., October 1, 2008 (the “Agreement”),
among Titan Global Holdings, Inc., a corporation existing under the
laws of Utah (the “Purchaser”), Crescent Fuels, Inc.
(the “Company” of “CFI”) and Johnson
Enterprises of Kansas, LLC, Jeff McReynolds, Karen E. Reeder Trust,
Harrison F. Johnson, Jr., and Martha M. Johnson Trust (the
“Seller” and collectively “Sellers”),
shareholders in the Company.
W I T N E S S E T H
:
WHEREAS, the Sellers own an aggregate of 4,756
shares of common stock $1.00] par value, and 1,250 share of
preferred stock (par value $1,000), of the Company (the
“Shares”) which Shares constitute 47.56% of the issued
and outstanding shares of the common stock, and 100% of the
preferred stock, of the Company, the ownership of such shares by
each Seller being as set forth in Exhibit “A”, attached
hereto; and
WHEREAS, the Sellers desire to sell to
Purchaser, and the Purchaser desires to purchase from the Sellers,
the Shares for the purchase price and upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises
and the mutual covenants and agreements hereinafter contained, the
parties hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF
SHARES
1.1 Sale and Purchase of Shares
. Effective as of 12:01 a.m.,
October 1, 2008 (the “Effective Time”) and upon the
terms and subject to the conditions contained herein, on the
closing date of the transactions contemplated herein (the
“Closing Date”), the Sellers shall sell, assign,
transfer, convey and deliver to the Purchaser, and the Purchaser
shall purchase from the Sellers, all Shares of the Company owned by
the Sellers (the “Closing”). The Option Agreement
between Phillip Near and Johnson Enterprises of Kansas, LLC dated
December 31, 2007 for the purchase of shares of Crescent Fuels,
Inc. shall be terminated at Closing without exercise of the
Option.
ARTICLE II
PURCHASE PRICE AND OTHER
CONSIDERATION
2.1 Purchase Price . The purchase price for the common stock shall
be an aggregate of $992,256, consisting of (i) $1.00 in cash per
share ($4,756 in the aggregate), and $10.00 in cash per share for
the preferred shares ($12,500 in the aggregate), plus (ii) 325,000
shares of the common stock of Purchaser, which Purchaser values at
$975,000 ($3.00 per share). In addition, Seller shall be issued
Warrants for the purchase of 600,000 additional shares of
Purchaser’s common stock at a price of $3.00 per share, such
warrants being exercisable at any time on or before September 30,
2013. The Shares and Warrants shall be allocated among Sellers as
they may direct in writing. In addition, Purchaser and Company
shall furnish the additional consideration set forth in Section
2.2, below.
2.2 Additional Consideration . As additional consideration for the Shares,
Purchaser agrees to pay, perform and cause the
following:
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Purchaser shall
acquire and/or cause Greystone Business Credit to acquire from M
& I Marshall & Ilsley Bank (“M&I Bank”) all
of the indebtedness owed by the Company’s subsidiaries,
Crescent Oil Company, Inc. and Crescent Stores, Inc. (save and
except a certain equipment lease due M & I Equipment Finance
which shall remain due and owing and any other indebtedness as
mutually agreed between the Purchaser and M&I). Purchaser may
acquire such indebtedness from M&I Bank after the Closing;
provided the Purchaser has reached an agreement in principle with
M&I to purchase the indebtedness from M&I. and all suits,
claims and causes of action whatsoever in favor of said Bank
arising from, or in any way relating to such indebtedness, shall be
deemed as of closing released and discharged as against Sellers and
as against the officers, directors, stockholders and employees of
the Company and its subsidiaries. If such indebtedness is acquired
by Greystone Business Credit, Purchaser shall cause Greystone to
issue written confirmation of the release and discharge of the
obligations set forth herein. The foregoing notwithstanding,
Purchaser may arrange interim or bridge financing through M&I
Bank, partial or complete, so long as such financing results in
release and discharge as herein provided.
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Purchaser, the
Company, and each subsidiary of the Company, shall be deemed at
Closing to have released and discharged Sellers in their capacity
as directors, officers, and stockholders of the Company and its
subsidiaries as to any and all suits, claims and causes of action
whatsoever arising from or any way relating to Sellers’ prior
service in those offices and capacities. Such release shall extend
to and benefit the trustees of those Sellers which are trusts
(specifically to include Karen E. Reeder, William H. Reeder and Jon
R. Viets).
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The corporate
indemnification policies of the Company and the subsidiaries as set
forth in the Articles of Incorporation and/or Operating Agreements
and Bylaws shall remain in full force and effect with respect to
matters arising or relating to periods of time preceding the
Closing for the benefit of Sellers (and their trustees) in their
former capacity as officers, directors and stockholders.
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The Company has
disclosed to Purchaser the existence of certain related party
transactions or relationships, including certain loans and payables
due Sellers, purchases, sales and leases of real estate and other
property between Sellers and the Company or its subsidiaries, and
compensation and benefits paid. Purchaser, the Company and each
subsidiary of the Company shall be deemed at Closing to have
released and discharged Sellers (and their trustees) from any and
all suits, claims and causes of action relating to any and all such
loans, payables, purchases, sales, leases, compensation and
benefits, including any claims based upon conflict of interest or
voidable contract based upon fiduciary relationship. The continuing
obligations of Purchaser, the Company and its subsidiaries with
respect to such related party transactions shall be as set forth in
Section 2.3 with respect to loans and payables and in Section 2.4
with respect to sales, purchases and leases of real estate and
other property.
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2.3.
Shareholder Loans
. Existing shareholder loans shall
be paid as follows:
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The Company
shall within 30 days of Closing pay, or make acceptable
arrangements to pay, shareholder loans due Karen Reeder Trust
($36,443.96), Harrison F. Johnson, Jr. ($36,443.96) and Martha M.
Johnson Trust ($72,887.92).
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The
Company’s subsidiary Crescent Oil Company, Inc. shall pay
Johnson Enterprises of Kansas, LLC the unpaid balance of promissory
note ($48,623.62) in monthly installments of principal and interest
in the amount of $3,626.98 each until paid in full.
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Notes payable
due Johnson Enterprises of Kansas, LLC from Crescent Holdings, Inc.
in the amount of $150,000 and from Crescent Fuels, Inc. in the
amount of $484,000 shall be consolidated and shall be paid as
follows: $634,000 convertible debenture, interest at 7.5% per
annum, principal of $17,500 paid quarterly together with all
accrued interest, principal being convertible at election of the
holder into Purchaser’s common shares at the rate of $3.00
principal amount per common share. Payment of the consolidated
notes shall be subordinate to indebtedness of the Company due
Greystone Business Credit to be reflected by separate Subordination
Agreement.
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Customer
deposit of $80,000 due from Crescent Oil Company, Inc. to Martha M.
Johnson Trust has been satisfied and is hereby released and
discharged.
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2.4
Related Party Leases
. Real estate and equipment leases
between the Company and its subsidiaries and Sellers and their
affiliates shall be paid and performed as follows:
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Real Estate
lease between ACKS Realty and Crescent Oil Company pertaining to
the Iola, KS Jump Start #1, now exchanged for the leasehold estate
at 216 E. 23 rd , Ottawa, Kansas, shall be settled as
follows: (i) Payment to ACKS Realty in the amount of $11,923.05 by
credit against account receivable due Crescent Holdings, Inc.; (ii)
Crescent Oil Company, Inc. shall make remaining payments of $1,350
per month for 50 months; and (iii) ACKS Realty shall convey the
Iola, KS Jump Start #1 real estate to Pete’s of Erie, Inc. in
full exchange for the leasehold estate at 216 E. 23 rd ,
Ottawa, Kansas. Upon payment of all sums due ACKS Realty, it shall
have no further right or interest in either the Iola or Ottawa
properties.
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Real estate and
equipment leases from K&BR Enterprises, LLC to Crescent Oil
Company, Inc. pertaining to properties in Peculiar, MO, Harrison,
AR, and Newton, KS, shall continue in force in accordance with the
terms thereof. On or before 9/30/11 the Company shall purchase, or
cause to be purchased, each of such properties at K&BR’s
cost (Peculiar - $525,000 plus balance on equipment lease; Harrison
- $800,000; and, Newton - $800,000) with the purchases structured
to permit K&BR to conduct Section 1031 exchanges for properties
identified by K&BR.
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Real estate
lease from Johnson Enterprises to Crescent Oil Company, Inc.
pertaining to 112 N. 10 th , Independence, Kansas, shall
continue in force in accordance with its terms. On or before
9/30/11 the Company shall purchase, or cause to be purchased, the
subject property at Johnson Enterprises’ cost of $155,000.
Provided the Company fulfills its obligations hereunder, Johnson
Enterprises will not permit the property to be utilized for
convenience store or motor fuel sales.
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2.5
Health Insurance Plan
. Karen E. Reeder, William H.
Reeder, Harrison F. Johnson, Jr., Marilyn Johnson, Philip Johnson
and Carolyn Johnson participate in the Company sponsored health
insurance plan, and shall be permitted to do so up through 9/30/09,
premium costs to be reimbursed to the Company by the plan
participants monthly.
ARTICLE III
CLOSING AND TERMINATION
3.1 Closing Date . Subject to the satisfaction of the
conditions set forth in Sections 7.1 and 7.2 hereof (or the waiver
thereof by the party entitled to waive that condition), the Closing
of the sale and purchase of the Shares provided for in Section 1.1
hereof (the "Closing") shall take place at 116 W. Myrtle,
Independence, Kansas (or at such other place as the parties may
designate in writing) on such date as the Seller and the Purchaser
may designate.
3.2 Termination of Agreement . This Agreement may be terminated prior to
the Closing as follows:
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At the election
of the Seller or the Purchaser on or after October 31, 2008, if the
Closing shall not have occurred by the close of business on such
date, provided that the terminating party is not in default of any
of its obligations hereunder;
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(b) by mutual written consent of the Seller and the
Purchaser; or
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by the Seller
or the Purchaser if there shall be in effect a final nonappealable
order of a governmental body of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the
tra
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