Exhibit 99.1
TERMINATION AGREEMENT
THIS TERMINATION
AGREEMENT (“Agreement”) is effective as of May ___2005,
being the date of execution by all parties hereto, by and among
XRG, INC., a Delaware corporation (“XRG”), HIGHWAY
TRANSPORT, INC., an Alabama corporation (“HTI”), EDDIE
R. BROWN, an individual residing in Escambia County, Alabama
(“Mr. Brown”), and J. MILTON ADAMS, an individual
residing in Escambia County, Alabama
(“Mr. Adams”).
WHEREAS, XRG, HTI,
Mr. Brown and Mr. Adams entered into an Asset Acquisition
Agreement dated as of March 31, 2004 pertaining to the
acquisition by XRG of certain transportation equipment and other
assets used by HTI (the “Purchase Agreement”);
and
WHEREAS, pursuant
to the Purchase Agreement, XRG and HTI entered into a Bill of Sale,
Assignment of Contracts and Assumption Agreement dated as of
April 2, 2004 (the “Bill of Sale”); and
WHEREAS, certain
disputes have arisen between the parties and the parties desire to
settle all current disputes, void all previous contracts and enter
into new agreements and clarify the rights and obligations of the
parties from and after the date of this Agreement; and
WHEREAS, XRG and
HTI desire to enter into a Terminal Agreement (the “Terminal
Agreement”).
NOW, THEREFORE, in
consideration of the promises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1.
Termination of Purchase Agreement and Other Agreements .
From and after the date of this Agreement, being the date upon
which all parties have executed the contract, the obligations,
rights and duties of the parties shall be as set forth in this
Agreement. Upon execution of this Agreement by all parties and
satisfaction of the conditions set forth in Section 2 hereof,
all other previously written or oral agreements and understandings
among the parties are hereby terminated, including, but not limited
to, the following:
a.
the Purchase Agreement;
b.
the Bill of Sale;
c.
the Commercial Sub-Lease Agreement dated April 1, 2004 by and
between HTI, as landlord, and XRG Logistics, Inc.
(“Logistics”), as tenant;
d.
the Employment Agreement dated April 1, 2004 by and between
Logistics, as employer, and Mr. Brown, as executive;
e.
the Employment Agreement dated April 1, 2004 by and between
Logistics, as employer, and Mr. Adams, as executive; and
f.
any trailer or equipment leases with BELCO or HTI.
2.
Conditions Precedent . This Agreement shall not become
effective until such time as Logistics and HTI have entered into
the Terminal Agreement in the form attached hereto as Exhibit A.
The date upon which this condition has been satisfied is the
“Effective Date”.
3.
Certain Agreements of the Parties .
a.
Within one (1) business day of the execution of this Agreement
by all parties, XRG agrees to forward via wire transfer, to an
account designated by HTI, the sum of $170,000. HTI agrees to
utilize the proceeds of this $170,000 initial funding to bring debt
service current on all obligations due to United Bank, on terms
satisfactory to United Bank on which XRG is an obligor or guarantor
and to satisfy other trade and accounts payable of HTI. HTI agrees
that all proceeds from this $170,000 will be used to satisfy bona
fide obligations of HTI.
b.
Beginning on the 10th day of the month after the condition set
forth in Section 2 has been satisfied, but in no event later
than June 10, 2005, and on the same day of each month
thereafter for 41 months XRG shall pay HTI $6,000. Beginning
on the same day of the 42nd month after the conditions set forth in
Section 2 have been satisfied, and on the same day of each
month thereafter for 19 months XRG shall pay HTI $16,000 (the
“Settlement Payment”). The parties agree that the
Settlement Payment will be directed to United Bank to satisfy
obligations of XRG and HTI to United Bank. In no event will
XRG’s liability to United Bank exceed the amount of the
Settlement Payment and HTI, Mr. Brown and Mr. Adams agree
to indemnify and hold harmless XRG from any amounts assessed or
imposed upon XRG by United Bank in excess of the Settlement
Payment.
c.
It is the intent and desire of the parties to restructure a certain
promissory note due to United Bank in the original principal amount
of $778,103.58 such that XRG is the primary obligor on 4/7’s
and HTI, Mr. Brown and Mr. Adams are the obligors on the
other 3/7’s of the amount due under this note (the
“United Note”). The parties will cooperate with each
other in attempting to restructure and separate the United Note
into two separate promissory notes. Until such time as the United
Note is restructured, XRG agrees to make timely Settlement
Payments, which will be used by HTI to make debt service payments
on the United Note.
2
d.
Subject to paragraph c., below, Mr. Brown and Mr. Adams
shall be entitled to retain the shares of XRG common stock issued
to them pursuant to the Purchase Agreement. In addition, XRG shall
cause the issuance in total of 75,000 shares of its Common Stock to
HTI, Mr. Brown or Mr. Adams as directed by the
parties.
e.
HTI agrees to faithfully fulfill its obligations under the Terminal
Agreement and Mr. Brown and Mr. Adams agree to use their
best efforts to cause HTI to fulfill its obligations thereunder. In
the event that (i) HTI ceases operations, (ii) sells
substantially all its assets or stock, (iii) terminates the
Terminal Agreement, or (iv) defaults in performing its
obligations under the Terminal Agreement or this Agreement, XRG
shall thereafter have no further obligation to make the payments
described in paragraph b. of this Section 3. If any of the
events listed in clauses (i) through (iii) of this
Section 3 c. occurs within six (6) months after the
Effective Date of this Agreement, all shares of XRG common stock
issued to Mr. Brown and Mr. Adams pursuant to the
Purchase Agreement and under this Agreement shall be immediately
cancelled.
f.
HTI, Mr. Brown and Mr. Adams, on a joint and several
basis, shall indemnify and hold XRG harmless from any accounts
payable, liabilities, claims, assessments or costs that are imposed
upon or paid by XRG in connection with the operations and business
of HTI. It is the understanding of the pa
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