43180 Business Park Dr., Suite 202, Temecula CA 92590 909.587.9100 PH. 909.587.8866 FAC. SECURITIES PURCHASE AND SALE AGREEMENT
CLX ENERGY, INC.
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909.587.9100 PH. 909.587.8866 FAC.
SECURITIES PURCHASE AND SALE AGREEMENT
This Securities Purchase and Sale Agreement ("Agreement") is entered into this
3rd day of June 2004 by and between CLX Energy, Inc., a Colorado company ("the
Company"), and the persons or entities executing this agreement as buyers
(collectively the "Buyers").
WHEREAS the Company is a fully reporting OTC BB traded public company which owns
certain oil and gas production assets including leases and operating equipment,
in addition to other business assets including accounts receivable, furniture,
office equipment, supplies and cash (collectively the "Assets"), and is indebted
to several parties for various bank lines, trade and other liabilities (the
"Liabilities"), and
WHEREAS the Buyers collectively own or control a total of 1,592,840 shares of
common stock of the Company, representing a total of 60.5% of the total
outstanding common stock, and
WHEREAS the Company desires to sell, and the Buyers desire to purchase the
Assets in their entirety, and
WHEREAS the New Management (as defined in Section 2.7 below) has represented and
warranted to the Buyers that they have significant experience in being able to
carry out this Transaction (as defined in Article I below) and managing public
companies subject to the Investment Company Act.
NOW THEREFORE, the Company and the Buyer herein agree as follows:
ARTICLE 1
THE TRANSACTION
1.1 The Company shall establish a new Colorado limited
liability company, referred to hereinafter as "Newco", into which it shall
transfer all of the business and operating Assets of the Company together with
all of the Liabilities of the Company in exchange for all membership interests.
1.2 Both the Assets and Liabilities to be transferred to Newco are listed in
Exhibit A, attached hereto.
1.3 The Company shall sell 100% of the Newco membership interests to the Buyers
in exchange for 1,433,556 shares of the Company's common stock, which shall be
returned to the Company's authorized but unissued stock.
1.4 The Company shall thereafter declare a new business plan of filing to become
an Investment Company subject to the Investment Company Act of 1940 (the
"Investment Company Act") and raise up to $5 million for that purpose. The
actions described in this Article 1 shall hereinafter be called the
"Transaction."
ARTICLE 2
TERMS AND CONDITIONS OF CLOSING
2.1 The Company shall obtain a fairness opinion covering the
Transactions prior to the Closing (as defined below in Section 3.1) of the
Transaction.
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2.2 If required, the Company shall file a Proxy statement
seeking shareholder approval of the sale and shall obtain such approval prior to
the Closing of the sale and transfer of ownership to Buyers.
2.3 At Closing, Buyers shall provide evidence of ownership of the Company's
common stock as hereinabove described and shall have all documents prepared to
effect the transfer of such shares to the Company.
2.4 Upon the close of the sale of the membership interests to Buyers, the
Company intends to file to become an investment company under the Investment
Company Act. In accordance therewith, the Company intends to issue up to $5
million USD in common stock in the coming twelve months through a combination of
the sale of common stock and stock-for-stock transactions, for the purpose of
making strategic investments into one or more operating companies. The Company
warrants that, owing to the present illiquid nature of the common stock, and the
infinite combination of investments which could be contemplated and executed in
the coming years, it is difficult to estimate the total amount of dilution to
the present common stock shareholders which may be experienced. Further, the
Company warrants that it will use their best efforts to i) create both short and
long-term liquidity in the common stock, ii) enhance shareholder value through
investment solely in companies where the investment is below book value, iii)
provide an opportunity through enhanced liquidity, public relations, and other
programs, for existing common stock shareholders to liquidate their positions at
or reasonably near the current stock price. New management of the company
acknowledges their fiduciary responsibility to the shareholders and warrants
that they will endeavor to uphold that responsibility.
2.5 The Company shall not be obligated to make, and shall be prohibited from
making, any investment into Newco after transferring all of the current
operating business, Assets and Liabilities into Newco.
2.6 The Company shall provide evidence of a financing commitment up to $5
million USD, including an initial bridge loan for up to $250,0000, for the
benefit of the Company and shall have such funding commitment available for
inspection by the Buyers.
2.7 Upon execution of this Agreement, the Company with the assistance of the
Buyers shall effect a change in the management and board of directors of the
Company such that only ▇▇ ▇▇▇▇▇▇▇▇▇ shall remain as a director of the Company
(the "New Management"). ▇▇. ▇▇▇▇▇▇▇▇▇ shall be appointed the president of Newco.
▇▇. ▇▇▇▇▇▇▇▇▇ will resign all posts with the Company on or after the Closing.
2.8 Buyers shall present evidence at closing that all Liabilities have been
transferred to Newco and shall indemnify the Company against any liability for
such obligations and shall use their best efforts to have all credit facilities
assigned from the Company into the name of Newco without recourse to the
Company.
2.9 The Company shall present evidence at Closing that both Board of Directors
and Shareholder approval of the sale have been obtained.
ARTICLE 3
MISCELLANEOUS
3.1 CLOSING. "Closing" shall occur within 15 days of the receipt
of shareholder's approval at a shareholder meeting held to approve the sale as
described in Section 2.2. above and/or the satisfaction or waiver of all other
conditions established in Article 2 above.
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3.2 ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS. This
Agreement (including any exhibits and Schedules hereto) constitute the entire
Agreement, and supersede all other prior agreements, understandings,
representations, and warranties, both written and oral, among the parties, with
respect to the subject matter hereof.
3.3 COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same Agreement.
3.4 MODIFICATION OR AMENDMENT. Subject to the provisions of applicable Law, at
any time prior to the Closing, the parties hereto may modify or amend this
Agreement, by written agreement executed and delivered by duly authorized
officers of the respective parties.
3.5 SEVERABILITY. The provisions of this Agreement shall be deemed severable,
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall be
substituted therefore in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
so long as the economics or legal substance of the Transactions contemplated
hereby are not affected in any manner adverse in any material respect to any
party, and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
3.6 EXPENSES. Except as set forth herein, each party to this Agreement shall be
responsible for all of their own fees and expenses related to this Transaction.
The Company and the new management of the Company shall pay for all expenses
related to the fairness opinion described in Section 2.1 of this Agreement and
all attorneys, accounting and other fees associated with the filing of the proxy
required for shareholder approval of the Transaction. The Buyers shall be
responsible for the payment of all of the fees and expenses of their attorneys
and for the expenses of filing Articles of Organization and the organization of
Newco.
3.7 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and the
Transactions contemplated herein may be abandoned at any time prior to the
Effective Time, whether before or after the approvals by stockholders of the
Company and Buyers, by mutual written consent of the Company and Buyers by
action of their respective Boards of Directors.
3.8 ASSIGNMENT. This Agreement shall not be assignable by either party without
the written consent of the other.
3.9 NOTICES. All notices or other communications under this Agreement shall be
in writing and shall be deemed duly given, effective (i) three business days
later, if sent by registered or certified mail, return receipt requested,
postage prepaid, (ii) when sent, if sent by telecopier or fax, provided that the
telecopy or fax is promptly confirmed by telephone confirmation thereof, (iii)
when served, if delivered personally to the intended recipient, and (iv) one
business day later, if sent by overnight delivery via a national courier
service, and in each case, addressed to the intended recipient at the address
set forth in the preamble hereof. Any party may change the address to which
notices or other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth:
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IF TO THE COMPANY
CLX Energy, Inc.
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Attn: ▇▇▇▇▇ Traveller
Fax: (▇▇▇)▇▇▇-▇▇▇▇
IF TO BUYERS
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Fax: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to:
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▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
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3.10 JURISDICTION AND VENUE. This Agreement shall be
interpreted pursuant to the laws of the state of Colorado and any dispute
relating to the Transactions contemplated herein shall be brought in the state
or federal courts in the City and County of Denver, Colorado. If the parties
shall agree to alternative dispute resolution, such action shall be located in
the City and County of Denver, Colorado.
3.11 COUNTERPARTS. This Agreement may be executed in one or more counterparts
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same Agreement. Facsimile signatures shall be considered
original, legal and binding signatures.
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IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered by the duly authorized officers of the parties hereto as
of the date first written above.
CLX ENERGY, INC.
By: /s/ ▇▇▇▇▇ Traveller
▇▇▇▇▇ ▇. Traveller, Chief Executive Officer
BUYERS
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| By: /s/ Gee Family Trust | By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
| ▇▇▇ Family Trust | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
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| By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | By: /s/ BKM Family Trust |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | BKM Family Trust |
| By: /s/ C&C ▇▇▇▇▇▇ | |
| C&C ▇▇▇▇▇▇ |
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