Lock-Up/Leak-Out and Registration Rights Agreement between Fuel Corporation of America and Tryant LLC dated August 12, 2005



 

 

Exhibit 10.1

 

LOCK-UP/LEAK-OUT
AND

REGISTRATION
RIGHTS AGREEMENT







THIS
LOCK-UP/LEAK-OUT AGREEMENT (the “Agreement”) is made and entered into as of
August 12, 2005, between Fuel Corporation of America, a Delaware corporation
(the “Company”), and Tryant LLC, a Delaware limited liability company (“Tryant”
or the “Shareholder”).




RECITALS




WHEREAS,
the Company intends to enter into an Agreement and Plan of Merger (the “Merger
Agreement”) between the Company, a wholly-owned Delaware subsidiary of the
Company (“Merger Sub”) and flexSCAN, Inc., a Delaware corporation (“flexSCAN”),
pursuant to which the execution and delivery of this Agreement is a condition
precedent to the closing of the Merger Agreement; and




WHEREAS,
all capitalized terms not defined herein shall have the meanings ascribed to
them in the Merger Agreement; and




WHEREAS,
in order to facilitate the consummation of the transactions contemplated by the
Merger Agreement and to provide for an orderly market for the post-merger common
stock of the Company (the “Reorganized Company Common Stock”), the Company and
Tryant have agreed to enter into this Agreement and to restrict the sale,
assignment, transfer, conveyance, hypothecation or alienation of such
Reorganized Company Common Stock, all on the terms set forth below.




NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:




1.      
  Notwithstanding
anything contained in this Agreement, the Shareholder may transfer his/its
shares of Reorganized Company Common Stock to his/its affiliates, partners in a
partnership, subsidiaries and trusts, or spouses and lineal descendants for
estate planning purposes, provided that the transferee (or the legal
representative of the transferee) executes an agreement to be bound by all of
the terms and conditions of this Agreement in connection with the resale of the
Reorganized Company Common Stock acquired. 




2.       
 If
the Reorganized Company determines to register any Common Stock under the
Securities Act of 1933 (the “Securities Act”) for sale in connection with a
public offering of Common Stock (other than pursuant to an employee benefit plan
or a merger, acquisition or similar transaction), the Reorganized Company will
give written notice thereof to Tryant and its designees and will to the extent
permitted by any party initiating such registration, include in such
registration statement
any of the Reorganized

 







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Company
Common Stock held by Tryant and its designees on the date that the registration
statement is filed, without cost or expense to them, save for their respective
attorneys’ fees and underwriting costs and sales commissions related to the sale
of their respective securities so held; provided, however if the offering is to
be firmly underwritten, and the representative of the underwriters of the
offering refuse in writing to include in the offering all of the shares of the
Reorganized Company Common Stock requested by the Reorganized Company and
others, the shares to be included shall be allocated first to the Reorganized
Company and any shareholders who initiated such registration and then among the
others based on the respective number of shares of the Reorganized Common Stock
held by such persons; and provided further, however, that in the event that a
registration statement is filed by the Reorganized Company and all of the
Reorganized Company Common Stock held by Tryant and its designees is not
included for resale in any such registration statement, then the such shares
that have not been included will no longer be subject to the resale limitations
of this Agreement and this Agreement shall forthwith become void as it applies
to such shares; and additionally, provided, further, however, that if the SEC or
any other regulatory agency or the Reorganized Company determines that the
shares of the Reorganized Company Common Stock held by Tryant and its designees
must be registered with the SEC and sold under an effective registration
statement, then the Reorganized Company agrees that it shall (i) promptly file a
registration statement with the SEC, without cost or expense to Tryant and its
designees save for their respective attorneys’ fees and underwriting costs and
sales commissions related to the sale of their respective securities so held,
covering such shares or (ii) solely based upon the actual knowledge of the then
existing officers and directors of the Reorganized Company and the books and
records of the Company and the Reorganized Company, stipulate to the material
facts of how Tryant acquired such shares from the Company or the Reorganized
Company in any legal proceeding brought by Tryant or its designees to have a
declaratory judgment entered by a court of competent jurisdiction to the effect
that such shares can be sold under Rule 144 of the SEC or Section 4(2) of the
Securities Act.

 

3.        
Except
as otherwise expressly provided herein, and except as the Shareholder may be
otherwise restricted from selling shares of Reorganized Company Common Stock
under applicable United States or state securities laws, rules and regulations,
the Shareholder may only sell Reorganized Company Common Stock subject to the
following conditions for the twelve (12) months commencing on the Closing of the
Merger Agreement (the “Lock-Up/Leak-Out Period”):





	 	
      3.1
	
      The
      Shareholder shall be allowed to sell 1/12th
      of the Shareholder’s shares of Reorganized Company Common Stock per month
      for the twelve (12) months of the Lock-Up/Leak-Out Period.
  








	 	
      3.4
	
      All
      shares shall be sold on a non-cumulative basis, meaning that if no
      Reorganized Company Common Stock was sold during a month while Reorganized
      Company Common Stock was qualified to be sold, those unsold shares could
      not be sold in the next successive month; and like wise, if part of the
      Reorganized 




 







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      Company
      Common Stock that could be sold during any monthly period was sold, the
      Shareholder may not cumulate the unsold portion of that month’s allotment
      to the next month, and so forth. The Shareholder agrees that all sales
      will be made at no less than the best “asked” prices, and no sales will be
      made at the “bid” prices for the Reorganized Company Common Stock. 
      




 


	 	
      3.5
	
      Except
      as otherwise provided herein, all Reorganized Company Common Stock shall
      be sold in “broker’s transactions” and the Shareholder will comply with
      the “manner of sale” requirements as those terms are defined in Rule 144
      of the Securities and Exchange Commission during the Lock-Up/Leak-Out
      Period.








	 	
      3.6
	
      An
      appropriate legend describing this Agreement shall be imprinted on each
      stock certificate representing Reorganized Company Common Stock covered
      hereby, and the transfer records of the Company’s transfer agent shall
      reflect such appropriate restrictions.








	 	 	
      3.7
	
      The
      Shareholder agrees that he/it will not engage in any short selling of the
      Reorganized Company Common Stock during the Lock-Up/Leak-Out
      Period.




 

4.        
Notwithstanding
anything to the contrary set forth herein, the Company may, in its sole
discretion, at any time and from time to time, waive any of the conditions or
restrictions contained herein to increase the liquidity of the Reorganized
Company Common Stock or if such waiver would otherwise be in the best interests
of the development of the trading market for the Reorganized Company Common
Stock. 




5.        
In
the event of: (a) a completed tender offer to purchase all or substantially all
of the Reorganized Company’s issued and outstanding securities; or (b) a merger,
consolidation or other reorganization of the Reorganized Company with or into an
unaffiliated entity that results in a subsequent change in control of the
Reorganized Company other than the Merger; or (c) a sale of control of the
Reorganized Company its current directors, executive officers and controlling
stockholders, then this Agreement shall terminate as of the closing of such
event and the Reorganized Company Common Stock restricted pursuant hereto shall
be released from such restrictions.




6.        
Except
as otherwise provided in this Agreement or any other agreements between the
parties, the Shareholder shall be entitled to his/its respective beneficial
rights of ownership of the Reorganized Company Common Stock, including the right
to vote the Reorganized Company Common Stock for any and all
purposes.




7.        
The
number of shares of Reorganized Company Common Stock included in any monthly
allotment that can be sold by the Shareholder and the per share price
restrictions covered by this Agreement shall be appropriately adjusted should
the 

 







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Reorganized
Company declare a dividend or distribution, undergo a forward split or a reverse
split or otherwise reclassify its shares of Reorganized Company Common
Stock.




8.        
This
Agreement may be executed in any number of counterparts with the same force and
effect as if all parties had executed the same document.




9.        
All
notices, instructions or other communications required or permitted to be given
pursuant to this Agreement shall be given in writing and delivered by certified
mail, return receipt requested, overnight delivery or hand-delivered to all
parties to this Agreement, to the Company at 1608 West 2225 South, Woods Cross,
Utah 84087; and to the Shareholder, at the address below. All notices shall be
deemed to be given on the same day if delivered by hand or on the following
business day if sent by overnight delivery or the second business day following
the date of mailing.

 

10.        The
resale restrictions on the Reorganized Company Common Stock set forth in this
Agreement shall be in addition to all other restrictions on transfer imposed by
applicable United States and state securities laws, rules and
regulations.




11.       
If
the Company or the Shareholder fail to fully adhere to the terms and conditions
of this Agreement, such party shall be liable to the other party for any damages
suffered by reason of any such breach of the terms and conditions hereof. The
Shareholder agrees that in the event of a breach of any of the terms and
conditions of this Agreement by the Shareholder, that in addition to all other
remedies that may be available in law or in equity to the Company, a preliminary
and permanent injunction, without bond or surety, and an order of a court
requiring the Shareholder to cease and desist from violating the terms and
conditions of this Agreement and specifically requiring the Shareholder to
perform his/its obligations hereunder is fair and reasonable by reason of the
inability of the parties to this Agreement to presently determine the type,
extent or amount of damages that the Company may suffer as a result of any
breach or continuation thereof. 




12.       
This
Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof, and may not be amended except by a written
instrument executed by the parties hereto.




13.       
This
Agreement shall be governed by and construed in accordance with the laws of the
State of California applicable to contracts entered into and to be performed
wholly within said State; and the Company and the Shareholder agree that any
action based upon this Agreement may be brought in the United States and state
courts of California only, and each submits himself/itself to the jurisdiction
of such courts for all purposes hereunder.




14.       
In
the event of default hereunder, the non-defaulting parties shall be entitled to
recover reasonable attorney’s fees incurred in the enforcement of this
Agreement.

 







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IN
WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement
as of the day and year first above written.

 


	 	 	 	 
	 	 	FUEL
      CORPORATION OF AMERICA
	 	 
 	 
 	 
 
	Date:  	 8/12/2005                                           
      .	By  	 /s/ Jeffrey Jenson
	 	
      

    	
      

    
	 	 	Jeff
      D. Jenson, President



 


	 	 	 	 
	 	 	SHAREHOLDER:
	 	 	 
	 	 	
      TRYANT
      LLC

      1608
      West 2225 South

      Woods
      Cross, Utah 84087

	 	 
 	 
 	 
 
	Date: 
      	 8/12/2005                                                
      .	By   	 /s/ Jeffrey Jenson
	 	
      

    	
      

    
	 	 	 



 

 

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