EXHIBIT 2.1
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CLOSING AGREEMENT
FOR
ASSET PURCHASE
BY AND BETWEEN
ATLANTIC OIL COLLECTION SERVICES, INC., a Florida corporation
and
PROBEX FLUIDS RECOVERY, INC., a Delaware corporation
Dated as of March 21, 2003
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EXHIBIT 2.1
CLOSING AGREEMENT FOR ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("AGREEMENT") is entered into as of the
21st day of March 2003 ("EFFECTIVE DATE"), by and between ATLANTIC OIL
COLLECTION SERVICES, INC., a Florida corporation ("BUYER") and PROBEX FLUIDS
RECOVERY, INC., a Delaware corporation ("SELLER").
RECITALS
A. Seller is engaged, in part, in the business (the "BUSINESS") of
operating a used oil, used oil filter and used anti-freeze collection and
storage business and providing related services in the States of Florida,
Louisiana, Georgia, Alabama, Arkansas, Mississippi, Texas, South Carolina,
Missouri, Kansas, Tennessee, Oklahoma and North Carolina (collectively, the
"BUSINESS AREA"), from the Locations (as hereinafter defined) as more
particularly set forth herein.
B. Seller has agreed to sell, and Buyer has agreed to purchase,
substantially all of Seller's properties, assets, and rights used or useful in
the operation of the Business.
FOR AND IN CONSIDERATION of the mutual promises, covenants and
agreements set forth herein, and Ten ($10.00) Dollars and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. RECITALS. The above recitals are true and correct and are
incorporated herein by this reference.
2. SALE OF ASSETS.
2.1 ASSETS ACQUIRED. On the terms and subject to the
conditions of this Agreement, Seller has simultaneously herewith sold, conveyed,
transferred assigned, and delivered to Buyer, and Buyer has purchased from
Seller at the Closing (as defined herein) all of Seller's right, title and
interest in and to (a) the Business, and all goodwill associated therewith, and
(b) all of the assets, properties and rights of Seller constituting the Business
or used therein, of every kind and description, real, personal and mixed,
tangible and intangible, wherever situated (collectively the "ASSETS"), except
for Excluded Assets as defined below, which Assets shall include without
limitation, all goodwill associated with the Business and all of the following
assets, properties and rights of Seller, all of which, to Seller's knowledge,
shall be free and clear of all mortgages, liens, pledges, security interests,
encumbrances and liabilities of any nature, except as otherwise set forth
(individually and collectively, the "ENCUMBRANCES") the Assets being further
described as follows:
2.1.1 all existing customer, supplier, dealer and
other lists in respect to the Business Area, payment invoices and billing
records and all documents and data relating to the accounting and financial
information, including without limitation, names, addresses, and telephone
numbers, and goodwill with respect to all of the foregoing;
2.1.2 to the extent permitted by applicable law, all
rights under any written or oral contract, agreement, license, registration,
other permit, authorization or approval of any nature, or other document,
commitment, arrangement or undertaking, practice or authorization, including,
without limitation, all operating permits and contingency plans
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EXHIBIT 2.1
2.1.3 without limiting the generality of Paragraph
2.1.2, all rights to Seller's so-called "yellow page advertisements" and all
existing telephone numbers, and telephone services agreements, email addresses
and world wide web sites;
2.1.4 all vehicles and other moving stock set forth
in Exhibit "A" and Exhibit "E" both attached hereto and incorporated by
reference;
2.1.5 to the extent assignable, all computer software
and data bases (including any documentation and related object and source codes
in the possession or control of Seller) with respect to the account history, and
collection and payment records of all customers and suppliers, and all
analytical plans and tracking records with respect to all customers and
supplies;
2.1.6 all machinery, equipment, tools, furniture,
furnishings, leasehold improvements, goods and other tangible personal property
located in, on or upon the Locations, including without limitation all such
property set forth in Exhibit "A" attached hereto and incorporated by reference;
2.1.7 to the extent assignable, all of the land,
structures, improvements, and fixtures, and all waterlines, rights of way, uses,
licenses, easements, hereditaments, tenements, and appurtenances belonging or
appertaining thereto;
2.1.8 all prepaid items, unbilled costs and fees, and
all receivables, including without limitation, the accounts receivable set forth
on Exhibit "H" attached hereto (the "Accounts Receivable");
2.1.9 all supplies, including office supplies, and
inventories located in, on or upon the Locations (subject to the provisions of
Subparagraph 3.2);
2.1.10 to the extent assignable, all rights or choses
in action of Seller with respect to the Business arising out of occurrences
before or after the Closing, including without limitation all rights under
express or implied warranties relating to the Assets;
2.1.11 all information, files, records, data, plans,
contracts and recorded knowledge, including, without limitation, customer and
supplier lists, related to the foregoing; and
2.1.12 the name and tradename "Specialty
Environmental Services" and any combination or variance thereof.; 2.1.13 all of
the SES Shares (as defined in Subparagraph 5.21) subject to any required third
party consents.
For purposes of this Agreement, the phrase "to Seller's knowledge"
shall mean to the actual knowledge of officers and employees of Seller who have
devoted significant time and attention to this Agreement.
2.2 EXCLUDED ASSETS. The Assets shall not include the
following excluded assets (the "EXCLUDED ASSETS"), even if the same arise out of
or are related to the Business:
2.2.1 cash on hand or in the bank;
2.2.2 loans and advances other than loans and
advances incurred in the ordinary course of business by Seller to any party,
including, without limitation, to any employees (for the purposes of this
provision, trade payables incurred in the ordinary course of business shall not
constitute advances);
2.2.3 the corporate seals, certificate of
incorporation, minute books, stock books and any other record having to do with
the corporate organization of Seller;
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EXHIBIT 2.1
2.2.4 the tax returns of Seller with respect to the
Business and the rights to any of Seller's claims for any federal, state or
local tax refunds;
2.2.5 The facility formerly operated by Seller in
Lubbock, Texas; and
2.2.6 TCEQ soil remediation financial assurance bonds
and related collateral except that the Buyer has agreed to make reasonable
commercial efforts to have the collateral released and returned to Probex Corp.
2.3 LIABILITIES AND OBLIGATIONS ASSUMED. Except as
specifically provided in this Paragraph 2.3, Buyer shall not assume or be
responsible for any liabilities or obligations of the Business or Seller. All
liabilities and obligations of the Seller of whatever kind or nature, known or
unknown, fixed or contingent, accrued or unaccrued shall be, and remain, the
responsibility of Seller except for only those liabilities of Seller, if any,
set forth in this Paragraph 2.3 (the "ASSUMED LIABILITIES"). The Assumed
Liabilities are:
2.3.1 Seller's obligations as lessee or sublessee
under the Leases for the Locations accruing subsequent to the Closing.
2.3.2 Seller's obligations accruing subsequent to the
Closing as lessee with respect to the leases listed on Exhibit "E" and any
leases not listed on Exhibit "E" the aggregate monthly payments for which does
not exceed $5,000 per month (collectively, the "Equipment Leases).
2.3.3 Subject to changes incurred in the ordinary
course of business and the post-closing
Purchase Price adjustments provided for
under Paragraph 3.3, Seller's obligations to
pay or discharge the accounts payable set
forth in Exhibit "J" (the "Accounts
Payable").
2.3.4 Buyer hereby assumes the Assumed Liabilities
as set forth in Subparagraphs 2.3.1, 2.3.2,
and 2.3.3 and agrees to indemnify and hold
Seller harmless from and against all claims,
losses, costs, damages, expenses and
liabilities related thereto.
3. PURCHASE PRICE.
3.1 AMOUNT. In consideration of the sale of the Assets, Buyer
has simultaneously paid, and agreed to pay with respect to the Deferred Balance,
as the case may be, to Seller a purchase price (the "PURCHASE PRICE") for the
Assets of Nine Hundred Thousand and 00/100 ($900,000.00) Dollars subject to
adjustment as set forth in this Paragraph 3 hereof.
3.2 PAYMENT. The Purchase Price has been or shall be paid by
Buyer as follows:
3.2.1 The sum of Eight Hundred Fifty Thousand and
00/100 ($850,000.00) Dollars, which represents the Purchase Price, less the
Deferred Balance (as defined in Section 3.2.2 below), has been paid
simultaneously to Wilmington Trust Company by federal wire transfer to be held
in escrow until Buyer receives (i) a release or releases from Wilmington Trust
Company of any security interests held by Wilmington Trust Company encumbering
the Assets and (ii) certificates of title to all motor vehicles listed on
Exhibit "A" endorsed to Buyer, at which time the funds shall be paid to the
holders of Sellers 7% Senior Secured Convertible Notes due November 28, 2004
(the "Holders")..
3.2.2 The sum of Fifty Thousand and 00/100
($50,000.00) Dollars (the "DEFERRED BALANCE"), which represents the balance of
the Purchase Price, shall be paid by Buyer to Wilmington Trust Company to be
held in escrow for a period of sixty-five (65) days pursuant to Paragraph 3.3,
then to be paid to
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EXHIBIT 2.1
Seller and /or Buyer in accordance with, and less any sums which may be due
Buyer, under Section 3.3 below or under any other provision of this Agreement.
3.3 ADJUSTMENTS FOR DELINQUENT RECEIVABLES. Within sixty-five
(65) days after Closing, Buyer may provide Seller with written notice (the
"DELINQUENCY NOTICE") of those of the Accounts Receivable (as hereinafter
defined) conveyed at Closing which have not been paid in the sixty (60) day
period subsequent to Closing (individually a "DELINQUENT RECEIVABLE" and
collectively the "DELINQUENT RECEIVABLES"). Delinquent Receivables shall include
$325,144 designated as "Bad Debt" on Exhibit "L". Upon receipt by Seller of the
Delinquency Notice, the Purchase Price shall be reduced by the amount, if any,
by which (A) the aggregate amount of the Accounts Payable, exceeds (B) the sum
of (X) the aggregate amount of the "NET ACCOUNTS RECEIVABLE", which is defined
as the difference between the amount of aggregate Accounts Receivable, less the
aggregate amount of Delinquent Receivables, (Y) the aggregate purchase price of
the Excess Oil (as hereinafter defined) and (Z) $177,703. The amount equal to
such (which in any event, shall not exceed $50,000.00) shall be deducted from
the Deferred Balance, with the balance, if any, to be paid to Seller. If B
exceeds A, the Purchase Price will be increased by the difference up to a
maximum of Fifty Thousand Dollars ($50,000). The Deferred Balance, after the
adjustments set forth herein, shall be paid to Seller within said sixty-five
(65) day period. Buyer acknowledges and agrees that it shall, subsequent to
Closing, diligently pursue collection of all the accounts receivable included in
the Assets in a manner, and using methods consistent with, good business
practice; provided, however, that Buyer shall not be obligated to commence any
litigation in connection with such collection efforts. Payments received by
Buyer, subsequent to Closing, on account of Accounts Receivable shall be applied
to the respective invoices referenced in such payments and, with respect to any
such payment which does not reference an invoice or invoices, such payment shall
be applied to the oldest outstanding invoice or invoices of the customer making
such payment.
3.4 AGREEMENT NOT TO COMPETE. In addition, Buyer has
simultaneously paid to Wilmington Trust Company to be held and distributed in
accordance with Subparagraph 3.2.1by federal wire transfer, One Hundred Thousand
and 00/100 ($100,000.00) Dollars as consideration for the Agreement Not To
Compete, as hereinafter defined.
3.5 INVENTORY OF USED OIL INCLUDED IN PURCHASE PRICE. At
Closing, the Seller's inventory located in, on or upon any of the Locations,
shall include not less than an aggregate of Four Hundred Thousand (400,000)
gallons of non-hazardous used oil with a so-called "total contaminant level" of
less than ten (10%) percent ("Acceptable Used Oil"), such oil shall be included
within the Assets, and all right, title and interest of Seller in and to such
oil shall be transferred to Buyer without further consideration (the same having
been included in the Purchase Price). If in excess of an aggregate of Four
Hundred Thousand (400,000) gallons of Acceptable Oil is located in, on or upon
the Locations at Closing (such Acceptable Oil in excess of an aggregate of Four
Hundred Thousand (400,000) gallons being the "Excess Oil"), Buyer shall purchase
the Excess Oil at a price of forty-eight cents ($0.48) per each gallon of Excess
Oil payable sixty-five (65) days after Closing, and payable if and to the extent
as set forth in Paragraph 3.3 hereof.
4. CLOSING; CLOSING DATE.
4.1 CLOSING. Delivery of documents, money and other acts
necessary to accomplish the transaction provided for in this Agreement (the
"CLOSING"), has taken place on the Effective Date (the "Closing Date").
4.2 SELLER'S DELIVERIES AT CLOSING. At Closing, Seller has
executed and/or delivered to Buyer the following:
4.2.1 An Assignment and Xxxx of Sale, a Deed and
other good and sufficient instruments of sale, transfer, assignment and
conveyance (collectively, the "TRANSFER DOCUMENTS"), necessary to transfer and
assign to, and vest in, Buyer all of Seller's right, title and interest in and
to the Assets, including without limitation, (i) all Assets owned by Seller,
(ii) leasehold interests in and to all of the Assets leased by Seller as lessee
or sublessee, and (iii) all of Seller's rights under all agreements, contracts,
commitments, leases, bids,
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EXHIBIT 2.1
quotations, proposals, instruments and other documents included in the Assets to
which Seller is a party or by which it has rights on the Closing Date. In
addition, pursuant to Paragraph 14.2, Seller shall provide to Buyer any other
documents necessary to effectuate the transfer to Buyer of the Assets in
accordance with Paragraph 2.1.
4.2.2 The Agreements Not To Compete or Solicit (the
"AGREEMENTS NOT TO COMPETE") referred to in Paragraph 10 below.
4.2.3 To the extent assignable, assignment of all
governmental licenses and permits (federal, state, and local) necessary for the
conduct of the Business as now carried on by the Seller.
4.2.4 Any and all other documents and instruments
which Seller is obligated to deliver pursuant to the provisions of this
Agreement.
4.3 BUYER'S DELIVERIES AT CLOSING. At the Closing, Buyer shall
deliver to the Seller:
4.3.1 The Purchase Price.
4.3.2 The amount set forth in Paragraph 3.4.
4.3.3 Assignments, Transfer Documents and other
documents pursuant to which Buyer undertakes obligations pursuant to this
Agreement.
4.3.4 Any and all other documents and instruments
which Buyer is obligated to deliver pursuant to the provisions of this
Agreement.
4.4 POSSESSION. Possession of the Assets and the Locations
shall be delivered to Buyer on the Closing Date.
5. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER. Seller
represents, warrants, and covenants to Buyer as follows, to survive Closing for
a period of one (1) year:
5.1 STATUS. The Seller is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware.
Such corporation has full corporate power and authority to carry on its business
and to lease property related thereto within the Business Area. Seller has full
right, power and authority to own, or hold under lease, the Assets and to engage
in the business in which it is engaged, and the full right, power and authority
to perform all of its obligations under this Agreement.
5.2 AUTHORIZATION. This Agreement constitutes a valid
obligation legally binding upon Seller in accordance with its terms. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (i) does not and will not violate the charter
documents of Seller, (ii) to Seller's knowledge, does not and will not result in
a breach of or a default under any agreement, license or other obligation of
Seller relating to the operation or ownership of any of the Assets, and (iii)
will not violate any law, rule or regulation of any agency or governmental body
to which Seller or any of the Assets is subject.
5.3 NO ENCUMBRANCES. To Seller's knowledge, the Assets other
than leased Assets are free and clear of all Encumbrances except for those
arising from delinquencies in the payment of obligations but only as and to the
extent set forth in Exhibit "J". With respect to the Equipment Leases listed on
Exhibit "E", the leased Asset, the identity of the lessee, the rental rate and
the unexpired term of the lease are specified in said Exhibit "E". All tangible
Assets, except for vehicles and other moving stock in transit, shall be located
at an appropriate Location.
5.4 LITIGATION. Except for a claim for non-payment of rental
payments to Xxxxxx World attributable a lease for a forklift and a claim against
Seller by Mocar, a used oil collector, there are no legal
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EXHIBIT 2.1
proceedings and no arbitrations, pending or overtly threatened against Seller
relating to the Business or its prospects or affecting any of the Assets (and
Seller knows of any basis or grounds therefor). There are no outstanding
adjudication orders of any agency or tribunal against Seller relating to the
Business or prospects or affecting any of the Assets. To Seller's knowledge,
Seller is not in violation, in any material respects, of any existing rule,
regulation, law or code and has received no notice or claim with respect thereto
that would have a material adverse effect on the Business.
5.5 NO BROKERAGE FEES. There is no broker, salesman or finder
entitled to a commission or fee or like payment arising out of this Agreement or
the transaction contemplated hereby as a result of any acts of Seller or any
party acting by through or under Seller.
5.6 NO DEFAULTS. To Seller's knowledge, except as otherwise
set forth herein, Seller has not received notice of any continuing default, and
is not in breach in any material respects, under any Equipment Lease or any
Lease other than defaults and breaches resulting from delinquencies in the
payment of obligations.
5.7 LEASES. Seller has delivered to Buyer a true and complete
copy of the real property lease or sublease in which Seller is a tenant or
subtenant (the "LEASES") with respect to each of the premises from which Seller
conducts the operations of the Business (each a "LOCATION", and collectively,
the "LOCATIONS"). All of the Locations, including, without limitation, the one
Location which is Owned Real Property (as hereinafter defined) are listed and
described in Exhibit "B" attached hereto. Exhibit "B" also contains a true and
complete list for each Location subject to a Lease of: (i) the name of the
landlord or sublandlord, (ii) a description of the leased premises, (iii) the
commencement and expiration date of the current term, (iv) the security
deposited by or on behalf of the Sellers with the landlord or sublandlord, if
any, and (v) the monthly rental (including base and all additional rents).
5.8 NAMES OF EMPLOYEES AND EMPLOYEE ENTITLEMENTS. Attached
hereto as Exhibit "C" is a schedule which sets forth the names of Seller's
employees and their respective current salaries, bonuses, accrued vacations,
sick pay, and other entitlement information. Except as set forth in Exhibit "C",
no bonuses, additional compensation or other like benefits were paid to any
employees during the period from January 1, 2002, to the date hereof, or are
payable to any such employees in respect of any other periods ending on, prior
or subsequent to the date hereof. Seller does not have any employment contracts,
agreements or arrangements with any of its employees, except as set forth in
Exhibit "C" . There is not existing or threatened any strike or other labor
dispute relating to the Seller or the Business. There are no employees and no
employment contracts, operating agreements, management contracts, listing
agreements, consulting agreements, union contracts, labor agreements, pension
plans, profit sharing plans or employee benefit plans in connection with or
related to the Business, other than the those described in Exhibit "C". Except
as set forth therein, none of the employees engaged in the operation of the
Business is employed pursuant to a written agreement and all such employees may
be terminated at will. Immediately prior to Closing, Seller has terminated the
employment of all of the employees of the Business.
5.9 ADDITIONAL LABOR MATTERS. Seller is not a party to any
collective bargaining agreement, no such agreement determines the terms and
conditions of employment of any employee of Seller, no collective bargaining
agent has been certified as a representative of any of the employees of Seller,
and no representation campaign or election is now in progress with respect to
any of the employees of Seller and no such representation campaign or election
has ever occurred with respect to the employees of Seller or the employees
employed with respect to the Business or at any of the Locations by any prior
owner or agent which operated an business substantially similar to the Business
from any of the Locations.
5.10 ENVIRONMENTAL MATTERS. Except as set forth in Exhibit
"D", Seller has not received any notice of, nor does Seller have knowledge of,
any material violation of any federal, state, or local law governing
environmental matters, including without limitation, discharge of materials into
the environment, noise abatement, and other similar matters in connection with
the Business. Seller does not own, lease or otherwise have any obligations with
respect to or responsibility for any underground fuel storage tanks or
facilities not set
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EXHIBIT 2.1
forth in Exhibit "D". To Seller's knowledge, all real property utilized by
Seller in the conduct of the Business has been maintained in compliance, in all
material respects, with all federal, state, and local environmental protection,
occupational health and safety, and similar laws, ordinance, restrictions,
licenses and regulations (collectively the "Laws") with which the failure to
comply would have a material adverse effect on the Business. All Hazardous
Materials (as hereinafter defined) located at, in, on or under such real
property has been and will continue to be used, stored, handled, treated, and
transported in accordance with all of the Laws which apply to such activities.
The term "Hazardous Materials" means any flammables, explosives, radioactive
materials, hazardous waste, solvents, friable asbestos or any material
containing asbestos, toxic substances or related materials including, without
limitation, any and all substances which are subject to federal, state or local
regulation, remediation or removal as potentially injurious to public health or
safety. The term "Hazardous Material" means any one of the foregoing Hazardous
Materials.
5.11 SLUDGE, USED FILTERS AND OTHER WASTE MATERIALS. At
Closing, there shall not be present in, on or upon the Locations any sludge,
used filters or other waste material in an amount such that the aggregate cost
and expense incurred by Buyer in connection with the removal of all of the same
from all of the Locations shall exceed Twenty Thousand ($20,000.00) Dollars.
5.12 INTENTIONALLY OMITTED.
5.13 LICENSES AND PERMITS. Seller and its employees have all
material governmental licenses and permits (federal, state, and local) necessary
for the conduct of the Business as now carried on by the Seller, and such
licenses are in full force and effect, including, without limitation, those set
forth on Exhibit "F" attached hereto and made a part hereof. No material
violations are or have been recorded in respect of any such licenses or permits
and no proceedings are pending or threatened concerning the revocation or
limitation of any such licenses or permits.
5.14 FINANCIAL STATEMENTS. Attached hereto as Exhibit "G" is a
copy of Probex Corp.'s audited financial statements for the twelve months ending
September 30, 2002, under report dated December 17, 2002 by Ernst & Young LLP
(the "Financials"). To Seller's knowledge, the Financials fairly present the
financial position, assets and liabilities of Probex Corp., on the dates
indicated.
5.15 COMPLIANCE WITH LAWS. Seller has complied in all material
respects, with all laws, rules, regulations and orders applicable to the
operation of the Business.
5.16 PATENTS. There are no patents, either domestic or
foreign, used in whole or in part, in, or necessary or required for, the Buyer
to carry on the Business in the manner that it is being currently operated.
5.17 WARN ACT. The Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Section 2101. et seq. and the regulations applicable
thereto, 20 C.F.R. Section 639 et seq. (collectively the "WARN Act") does not
apply to the transactions contemplated by this Agreement. Seller has no
affiliated companies. Seller employs less than one hundred (100) employees.
Subject to Paragraph 12.1 of this Agreement, Seller shall not, at any time
during the period from the date hereof through the date immediately prior to or
at the time of Closing, effectuate a "plant closing" or "mass layoff", as those
terms are defined in the WARN Act or under any state law affecting in whole or
in part any site of employment, facility, operating unit, or employee of Seller.
5.18 CONFLICT OF INTEREST. The Seller shall not, immediately
prior to or at the time of Closing, have any direct or indirect interest (except
through ownership of less than five percent (5%) of the outstanding securities
of corporations listed on a national securities exchange or registered under
federal securities law) in (a) any entity which does business with Seller or
which is competitive with the Business, or (b) any entity that is, or was during
the last three (3) years a party to, or in any property which is or was, during
the last three (3) years the subject of, any material contract, agreement,
understanding, business arrangement or relationship with Seller.
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EXHIBIT 2.1
5.19 RECEIVABLES. All of the accounts receivable set forth on
Exhibit "H" attached hereto (collectively, the "Accounts Receivable") arose in
the ordinary course of Seller's business consistent with past practices.
5.20 OWNED REAL PROPERTY. Attached hereto as Exhibit "I" is
the legal description of the one Location which is operated upon real property
owned by Seller.
5.21 SES OF TEXAS. SES of Texas, Inc., has issued and
outstanding one thousand (1,000) shares of capital stock of which Seller owns
five hundred (500) common shares (the "SES Shares"), free and clear of
Encumbrances.
5.22 NO MATERIAL MISSTATEMENTS. To Seller's knowledge, all
information provided by Seller to Buyer pursuant to this Agreement is true in
all material respects.
6. INDEMNIFICATION.
6.1 BY SELLER. Subject to Paragraph 6.6, Seller covenants and
agrees that, notwithstanding the Closing, the delivery of the Transfer
Documents, and regardless of any investigation at any time made by or on behalf
of Buyer or of any information Buyer may have in respect thereof, Seller will
indemnify, defend, and hold harmless Buyer from and against any loss, damage,
liability, claim or deficiency (including without limitation, attorneys' fees
through all levels of proceedings and other costs and expenses incident to any
suit, action, investigation or other proceeding) arising out of or resulting
from, and will pay Buyer on demand the full amount of any sum which Buyer may
pay or become obligated to pay on account of, or reimburse Buyer for any loss
suffered on account of (i) any inaccuracy in any representation or the breach of
any warranty made by Seller; (ii) any federal, state, local or other tax of any
nature imposed on Buyer or on all or any portion of the Assets, or both, arising
out of any event or state of facts occurring or existing prior to the Closing;
(iii) any failure of Seller to duly perform or observe any term, provision,
covenant, agreement or condition hereunder on the part of Seller to be performed
or observed; or any claim or liability, including without limitation any
litigation or other action, of any nature arising out of any act performed,
transaction entered into or state of facts suffered to exist by Seller on or
prior to the Closing Date. In addition, Seller will indemnify and hold harmless
Buyer from and against any costs and expenses (including attorneys' fees at all
levels) which Buyer may suffer or sustain in seeking to enforce the
indemnification obligations of Seller.
6.2 BY BUYER. Subject to Paragraph 6.7, Buyer covenants and
agrees that Buyer will indemnify, defend, and hold harmless Seller from and
against any loss, damage, liability, claim or deficiency (including without
limitation, attorneys' fees through all levels of proceedings and other costs
and expenses incident to any suit, action, investigation or other proceeding)
arising out of or resulting from, and will pay Seller on demand the full amount
of any sum which Seller may pay or become obligated to pay on account of, or
reimburse Seller for any loss suffered on account of (i) any inaccuracy in any
representation or the breach of any warranty made by Buyer; (ii) any federal,
state, local or other tax of any nature imposed on Seller arising out of any
event or state of facts occurring subsequent to the Closing; (iii) any failure
of Buyer to duly perform or observe any term, provision, covenant, agreement or
condition hereunder on the part of Buyer to be performed or observed; or (iv)
any claim or liability, including, without limitation, any litigation or other
action, of any nature arising out of any act performed, transaction entered into
or state of facts suffered to exist by Buyer subsequent to the Closing Date. In
addition, Buyer will indemnify and hold harmless Seller from and against any
costs and expenses (including attorneys' fees at all levels) which Seller may
suffer or sustain in seeking to enforce the indemnification obligations of
Buyer.
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EXHIBIT 2.1
6.3 INDEMNIFICATION NOTICE. Whenever any claim for
indemnification shall arise under this Paragraph 6, the party or parties seeking
indemnification (each an "Indemnitee") shall promptly notify the party or
parties obligated to provide such indemnification (each an "Indemnitor") in
writing of the claim (a "Notice of Claim") and, when known, the facts
constituting the basis for such claim. In the event of any such claim for
indemnification hereunder resulting from any legal proceeding by a third party
(an "Action"), the Notice of Claim shall specify, if known, the amount or an
estimate of the amount of the liability arising therefrom. No Indemnitor shall
settle or compromise any claim by a third party without the prior written
consent of the Indemnitee, which consent shall not be unreasonably withheld or
delayed. A claim for indemnification for any matter not involving a third party
claim may be asserted by a Notice of Claim in accordance with the foregoing
procedures.
6.4 CONDUCT OF ACTION. Except as otherwise set forth in this
Paragraph 6 below, the Indemnitor shall have the right and obligation, at its
cost, to (i) conduct the defense of the subject Action and (ii) defend or
counterclaim or institute any action it may deem appropriate. Indemnitee shall
have the right, in Indemnitee's sole discretion and at Indemnitee's cost, to
have co-counsel in such Action. Each Indemnitor agrees to act promptly and
judiciously in connection with any Action in respect of which indemnification
may be required in accordance with this Paragraph 6 and each Indemnitee agrees
to cooperate fully with the Indemnitor and to take all such steps as the
Indemnitor may reasonably require. In the case of an Action which an Indemnitee
considers, in its reasonable judgment, to be capable of materially adversely
affecting the ability of the Indemnitee to continue its operations in the
ordinary course of business or to be capable of having a material adverse effect
on the Assets or any part thereof (a "Restraining Action"), the Indemnitee shall
have the right to assume the conduct of the Restraining Action by giving written
notice to the Indemnitor advising of its decision to assume the conduct of such
Restraining Action. In the event of any such assumption, the reasonable cost of
defending such Restraining Action shall be borne by each Indemnitor. In the
event that an Indemnitee assumes the defense of a Restraining Action, each
Indemnitor agrees to cooperate fully in connection with such Restraining Action;
provided, however, that the Indemnitee shall not have the right to bind the
Indemnitor to any settlement without the prior written consent of the
Indemnitor, which consent shall not be unreasonably withheld. However, any
judgment or other determination rendered in such Restraining Action shall be
binding upon each Indemnitor and shall be subject to the indemnity obligations
of each Indemnitor hereunder.
6.5 PAYMENT AND LIMITATIONS. Within ten (10) days after an
Indemnitee and Indemnitor reach agreement as to the amount of any
indemnification obligation of the Indemnitor, or any such indemnification
obligation is determined in an Action or Restraining Action (in either case the
"Indemnification Amount"), the Indemnitor shall pay the Indemnification Amount,
by wire transfer or cashier's check, to the Indemnitee. In the event that there
is more than one Indemnitor, the Indemnitors shall be jointly and severally
liable for the Indemnification Amount. In the event that any Indemnitor and the
Indemnitee are unable to reach agreement as to the Indemnification Amount, if
such agreement is required, then either party may submit such dispute to any
court of competent jurisdiction for resolution. Should an Indemnitor fail to pay
an Indemnification Amount within said ten (10) day period, then the Indemnitee
may exercise any and all rights and remedies, at law or in equity, with respect
to the collection thereof.
6.6 LIMITATIONS OF AMOUNT - SELLER. Seller will have no
liability for indemnification under this Paragraph 6 unless and until the
aggregate amount of all claims for indemnity against the Seller under this
Paragraph 6 exceeds $5,000 (the "Seller's Basket Amount"), at which xxxx Xxxxxx
shall be liable for any and all indemnity claims hereunder and not only those in
excess of the Seller's Basket Amount, but in no event shall Seller's liability
for such indemnity claims exceed any balance of the Deferred Balance remaining
after the Purchase Price adjustments pursuant to Paragraph 3.3, but in no event
shall Seller's monetary damages exceed $50,000.00.
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EXHIBIT 2.1
6.7 LIMITATIONS ON AMOUNT - BUYER. Buyer will have no
liability for indemnification under this Paragraph 6 unless and until the
aggregate amount of all claims for indemnity against the Buyer under this
Paragraph 6 exceeds $5,000 (the "Buyer's Basket Amount"), at which time Buyer
shall be liable for any and all indemnity claims in excess of the Buyer's Basket
Amount but in no event shall monetary damages exceed $50,000.
7. CONFIRMATIONS OF CERTAIN MATTERS WITH RESPECT TO DUE DILIGENCE.
7.1 DUE DILIGENCE. Seller and Buyer both acknowledge and agree
that Seller has permitted Buyer to meet with Seller's employees, customers and
suppliers and Buyer has met with certain of them.
8. INTENTIONALLY DELETED.
9. POST CLOSING OBLIGATIONS OF SELLER AND BUYER
9.1 TAXES. Seller shall be responsible for, and shall timely
pay (i) any and all taxes, assessments, fees and other costs imposed on Seller
as a result of or relating to this Agreement or to the transactions contemplated
hereby, and (ii) any and all sales and use taxes resulting from this Agreement
or the transactions contemplated hereby. Except as set forth on Exhibit "J" as
an Assumed Liability, Buyer shall not be responsible for the payment of any
taxes associated with the operation of the Business, or the Assets or Seller
prior to the Closing, and Seller shall pay all the same in full prior to
delinquency.
9.2 ACCESS TO RECORDS BY SELLER AFTER CLOSING. After Closing,
upon reasonable notice to Buyer, Seller shall have reasonable access after the
close of business for purpose of obtaining collection of accounts receivable of
Seller or for the purpose of reasonably responding to any request by the
applicable governmental authorities, or to defend any claim or demand by any
third party. If such records are extensive, Buyer shall have the right to have
any such records photocopied by a copier service at Seller's cost.
9.3 ADJUSTMENTS AND PRORATIONS. The parties agree that they
shall reasonably cooperate and pay and refund, as the case may be, such sums as
shall be necessary to prorate and equitably allocate the expenses and pre-paid
expenses attributable to the Business as of the Closing Date which are not
included in the Closing Statement.
9.4 FORWARDING OF EMAILS TO BUYER. Seller shall establish and
maintain, at Seller's sole cost and expense, for a one(1) year period after
Closing, a mechanism reasonably acceptable to Buyer which shall automatically
and immediately transfer to Buyer any and all emails and all other electronic
communications to the email or other electronic addresses of the former
employees of Seller.
10. AGREEMENT NOT TO COMPETE. At Closing, Seller shall, and shall cause
Probex Corp., a Delaware corporation ("Probex Corp.") to, execute and deliver to
Buyer an Agreement Not to Compete, substantially in the form attached hereto as
Exhibit "K".
10
EXHIBIT 2.1
11. DEFAULT.
11.1 In the event of a default under this Agreement by Seller,
then Buyer shall be entitled to any and all remedies available therefor at law
or in equity; provided, however, that Buyer shall not be entitled to rescission
of this Agreement and Buyer's monetary damages shall be limited to the balance,
if any, of the Deferred Balance remaining after the Purchase Price adjustments
pursuant to Paragraph 3.3 but in no event more than $50,000.
11.2 In the event of a default under this Agreement by Buyer,
then Seller shall be entitled to any and all remedies available therefor at law
or in equity; provided, however, that Seller shall not be entitled to rescission
of this Agreement and Seller's monetary damages shall in no event exceed
$50,000.
11.3 Neither party shall be entitled to exercise any remedy
for a default by the other party, except failure to timely close, until (i) such
party has delivered to the other notice of the default and (ii) a period of ten
(10) business days from and after delivery of such notice has expired with the
other party having failed to cure the default.
11.4 No delay or omission in the exercise of any right or
remedy accruing to one party upon any breach by the other party under this
Agreement shall impair such right or remedy to be construed as a waiver of any
such breach theretofore or thereafter occurring.
12. COVENANTS AND AGREEMENTS OF SELLER.
12.1 TERMINATION OF EMPLOYEES; RYDER DEPOSIT. Immediately
prior to the Closing, Seller has terminated the employment of all employees of
the Business. Buyer acknowledges and agrees that it is, and shall be,
responsible for payment of all amounts, salaries, commissions and other
compensation that have accrued prior to Closing as and to the extent identified
in Exhibit "L".
12.2 RYDER DEPOSIT. Contemporaneously with this Closing,
Seller has assigned to Buyer all of Seller's right, title and interest in and to
that certain deposit (the "Ryder Deposit") held by Ryder Truck Rental, Inc. or
affiliates (collectively, "Ryder").
12.3 PQS XXXX OF SALE. Contemporaneously herewith, Seller has
assigned to Buyer all of its right, title and interest in and to that
indebtedness arising out of that certain Xxxx of Sale, dated as of March 21,
2003, by and among Pennzoil Quaker State Company ("PQS"), Probex Corp., and
Seller, pursuant to which PQS is obligated to pay Seller the sum of $32,900.00,
as consideration for the sale of certain personal property described in such
Xxxx of Sale.
12.4 LICENSE TO USE SELLER'S NAME. Seller hereby grants to
Buyer a six (6)-month nonexclusive license to use the name "Probex Fluids
Recovery."
12.5 Indemnity for Transfer of SES Stock. In the event that a
party from whom a consent or approval is required for the transfer of the SES
Shares from Seller to Buyer sues, or otherwise makes a claim against, Seller in
connection with Seller's transfer to Buyer of the SES Shares, Buyer shall
indemnify and hold Seller harmless from and against any loss, cost, claim,
damage or expense arising therefrom, and such indemnity shall not be limited by
any other provision of this Agreement.
11
EXHIBIT 2.1
12.6 LOCKBOX. Buyer shall promptly remit to Seller, or its
assignee, via wire transfer any and all funds that are deposited in Seller's
lockbox (which is the subject of a letter in the form of Exhibit "M" attached
hereto).
12.7 ENVIRONMENTAL INSURANCE. Seller shall maintain in effect
its current policy of insurance covering damages, claims and losses attributable
to environmental matters until the earlier of (i) April 30, 2003, or (ii)
Buyer's obtaining its own policy of insurance covering such matters.
13. EXPENSES. Each party hereto shall bear its own expenses (including
all attorneys' and accountants' fees) incurred in connection with the
negotiation, preparation, consummation and performance of this Agreement, and
the documents to be delivered pursuant hereto and the transactions contemplated
hereby and thereby. In the event of a termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
14. NATURE OF STATEMENTS AND SURVIVAL OF REPRESENTATIONS, WARRANTIES,
AND AGREEMENTS.
14.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
statements of fact contained in any written statement, certificate, schedule,
exhibit or other document delivered by or on behalf of the parties pursuant to
this Agreement, shall be deemed representations and warranties made hereunder.
All covenants, representations, warranties, indemnities and agreements made by
the parties hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing, for a period of one (1) year.
14.2 FURTHER ASSURANCES OF SELLER. Seller covenants that at
the Closing and from time to time after the Closing, it will, upon the
reasonable request of Buyer, execute, acknowledge and deliver or cause to be
done, executed, acknowledged and delivered, all such assignments, conveyances,
documents, and instruments as may be reasonably required by Buyer, in order to
more effectively sell, convey, transfer, assign, and deliver to Buyer any of the
Assets or to carry out the intention and purpose of this Agreement and the
transactions contemplated hereby and to evidence the ownership by Buyer of the
Assets after the Closing. If requested by Buyer, the Seller further agrees to
prosecute or otherwise enforce in his own name for the benefit of the Buyer, and
at the Buyer's expense, any claims, rights, or benefits that are transferred to
Buyer by this Agreement which require prosecution in the Seller's name.
15. MISCELLANEOUS.
15.1 NOTICES. Any and all notices, demands or other
communications required or desired to be given hereunder by any party shall be
in writing and shall be deemed duly given when (a) delivered by hand (with
written confirmation of receipt), or (b) when received by addressee, if given by
a nationally recognized overnight delivery service (receipt tracked or otherwise
acknowledged). Any such notice, demand or other communication shall be deemed
made on the date received at the following respective addresses and telecopier
numbers:
If to Seller: 00000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxx
12
EXHIBIT 2.1
With a copy to: XxXxxxxxx & Xxxxx, X.X.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Plaza of the Americas, L.B. 175
Dallas, Texas 75201-2890
Attn: Xxxxxxx X. Xxxxxx, Esq.
If to Buyer: 0000 X. X. 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, President
With a copy to: Katz, Barron, Squitero & Xxxxx, P.A.
0000 Xxxxx Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Any party hereto may change its address for the purpose of receiving notices,
demands and other communications as herein provided by a written notice given in
the manner provided hereby to the other party or parties hereto.
15.2 MODIFICATIONS OR AMENDMENTS. No amendment, change or
modification of this Agreement shall be valid unless in writing and signed by
the party or parties to be charged.
15.3 WAIVER. No reliance upon or waiver of one or more
provisions of this Agreement shall constitute a waiver of any other provision
hereof. Neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege.
15.4 SUCCESSORS AND ASSIGNS. All of the terms and provisions
contained in this Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective successors and assigns. Nothing
expressed or referred to in this Agreement will be construed to give any person,
other than the parties hereto and their respective successors and assigns, any
legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement.
15.5 APPLICABLE LAW AND SEVERABILITY. This Agreement shall, in
all respects, be governed by the laws of the State of Florida, without regard to
conflicts of laws principles.
15.6 ATTORNEYS' FEES AND COSTS. In the event any action is
instituted by a party hereto to enforce any of the terms or provisions hereof,
the prevailing party or parties in such action or arbitration shall be entitled
to reimbursement from the non-prevailing party or parties for reasonable fees,
costs and expenses, including attorneys' fees at all levels of litigation
(including without limitation, all appeals) and in anticipation of litigation,
and in all bankruptcy proceedings. This provision shall survive the closing or
termination of this Agreement, as the case may be.
13
EXHIBIT 2.1
15.7 ENTIRE AGREEMENT. This Agreement, together with any
related documents referred to in this Agreement, constitutes the entire
understanding and agreement of the parties with respect to the subject matter of
this Agreement, and any and all prior agreements, understandings or
representations are hereby terminated and canceled in their entirety.
15.8 PARAGRAPH AND SUBPARAGRAPH HEADINGS; CONSTRUCTION. The
headings of Paragraphs, and Subparagraphs in this Agreement are for convenience
of reference only, and in no way define or limit the scope or intent of this
Agreement or of any provision hereof.
15.9 CONSTRUCTION. This Agreement shall not be construed more
strictly against one party than against the other merely by virtue of the fact
that it may have been prepared by counsel for one of the parties, it being
recognized that all parties have contributed substantially and materially to the
preparation of this Agreement. Words used herein in the singular or plural shall
include the plural or singular and words used herein in the masculine, feminine
or neuter gender shall include the other genders, all where the context of this
Agreement requires. Unless this Agreement expressly or necessarily requires
otherwise (i) any time period measured in "days" means consecutive calendar
days, except that the expiration of any time period measured in days that
expires on a Saturday, Sunday or legal holiday automatically will be extended to
the next day so that it is not a Saturday, Sunday or legal holiday; (ii) any
action is at the sole expense of the party required to take it; (iii) the scope
of any indemnity includes any costs and expenses, including reasonable
attorneys' fees through all levels of proceedings incurred in defending any
indemnified claim, or in enforcing the indemnity, or both.
15.10 PRESS RELEASES. Before either party shall release any
information concerning this Agreement or the transactions contemplated by this
Agreement which is intended for or may result in public dissemination thereof,
they shall cooperate with the other party, shall furnish drafts of all documents
or proposed oral statements to the other party for comments, and shall not
release any such information without the written consent of the other party.
Nothing contained herein shall prevent either Seller or Buyer from furnishing
any information to any governmental authority if required to do so by law or as
otherwise required by any applicable law, statute, regulation, rule, court
decision, decree, determination or other requirement for compliance with any of
the foregoing.
15.11 FORCE MAJEURE. Each party shall be excused for the
period of any delay in the performance of any obligations hereunder when
prevented from so doing by cause or causes beyond such party's control, which
shall include, without limitation, all labor disputes, civil commotion, war,
warlike operations, terrorism, invasion, rebellion, hostilities, military or
usurped power, sabotage, governmental regulations or controls, fire or other
casualty, or through acts of God. Each party agrees to use commercially
reasonable efforts to mitigate any cause beyond its control.
15.12 COUNTERPARTS. This Agreement and any subsequent
amendments hereto may be executed in any number of counterparts, and/or by
telecopy, each of which counterpart (original or telecopy) shall be deemed to be
an original and all such counterparts taken together shall be deemed to
constitute one and the same instrument. Signatures, initials, documents
referenced in this Agreement, counterparts and written modifications
communicated electronically or on paper will be acceptable for all purposes,
including delivery, and will be binding.
15.13 WAIVER OF TRIAL BY JURY. Each party to this Agreement
hereby knowingly, voluntarily, and intentionally waives any right that such
party may have to a trial by jury with respect to any litigation based
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EXHIBIT 2.1
on this Agreement or arising out of, under, or in connection with, any document,
instrument or agreement to be executed in connection with this Agreement or to
be delivered pursuant hereto, or arising from any course of conduct, course of
dealing, statements (verbal or written), or actions of any party hereto. The
foregoing waiver is a material inducement to each party to enter into this
Agreement and to consummate the transactions contemplated hereby. The provisions
of this Subparagraph 15.13 shall supersede and control any provision in this
Agreement or in any document to be delivered in connection herewith, which is
alleged to be to the contrary.
15.14 WILMINGTON TRUST CONSENTS. Both parties recognize that
the Assets are upon Closing subject to a security interest held by Wilmington
Trust Company for the benefit of the Holders. The parties have closed this
transaction based on certain waivers and consents from Wilmington Trust Company.
In the event that Wilmington Trust Company does not promptly (i) release all UCC
financing statements encumbering the Assets and (ii) deliver certificates of
title to all motor vehicles listed on Exhibit "A", either party may, upon
written notice to the other party, rescind this Agreement and the parties shall
be restored, as much as possible, to the status quo ante.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
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EXHIBIT 2.1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the 21st day of March 2003, to be effective as of the 21st
day of March, 2003.
BUYER
ATLANTIC OIL COLLECTION SERVICES, INC.,
a Florida corporation
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx, President
SELLER
PROBEX FLUIDS RECOVERY, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Its: President & CEO
-----------------------------------
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EXHIBIT 2.1
SCHEDULE OF EXHIBITS
EXHIBIT "A" ASSETS
EXHIBIT "B" REAL PROPERTY LEASES
EXHIBIT "C" SCHEDULE OF EMPLOYEES AND
ENTITLEMENTS
EXHIBIT "D" ENVIRONMENTAL MATTERS
EXHIBIT "E" EQUIPMENT LEASES
EXHIBIT "F" LICENSES AND PERMITS
EXHIBIT "G" FINANCIALS
EXHIBIT "H" RECEIVABLES
EXHIBIT "I" LEGAL DESCRIPTION OF OWNED
REAL PROPERTY
EXHIBIT "J" ACCOUNTS PAYABLE
EXHIBIT "K" AGREEMENT NOT TO COMPETE OR
SOLICIT
EXHIBIT "L" PFR ACCOUNTS PAYABLE AND
ACCOUNTS RECEIVABLE TOTALS
EXHIBIT "M" LOCK BOX LETTER
17
