Exhibit 2.01
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (hereinafter referred to as this
"Agreement") is entered into this 22nd day of December, 2004, by and between
PEAK ASPHALT, L.L.C., a Utah limited liability company (hereinafter "Buyer"),
and CROWN ENERGY CORPORATION, a Utah corporation (hereinafter "CEC"), CROWN
ASPHALT PRODUCTS COMPANY, a Utah corporation (hereinafter "CAPCO"), CROWN
ASPHALT DISTRIBUTION L.L.C., a Utah limited liability company (hereinafter "CAD"
and together with CEC and CAPCO, the "Sellers"), based on the following
premises.
Premises
A. Sellers and Idaho Asphalt Supply, Inc., an Idaho corporation
("IAS"), entered into that certain Memorandum of Understanding dated June 7,
2004 (the "MOU"), pursuant to which such parties agreed to organize Buyer and
cause Buyer to purchase certain assets of Sellers as more fully described
herein. IAS has assigned the MOU to Peak Holding, LLC, an Idaho limited
liability company and affiliate of IAS ("Holding").
B. Buyer has been organized as a Utah limited liability company and
Sellers and [IAS ENTITY] desire to consummate the transactions contemplated by
the MOU.
C. The boards of directors and managers of Sellers and managers of
Buyer have approved the acquisition of certain of the assets of Sellers by Buyer
in exchange for a promissory note of Buyer.
D. Each of the parties to this Agreement desires to make certain
representations, warranties, and agreements in connection with the acquisition
and also to prescribe certain conditions thereto.
Agreement
NOW, THEREFORE, based on the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements hereinafter set forth and the mutual benefit to the parties to be
derived herefrom, it is hereby agreed as follows:
ARTICLE I
THE ACQUISITION
Section 1.01 Acquisition of Assets. Except as set forth in section 1.02
of this Agreement, and on the terms and conditions contained in this Agreement,
Sellers shall assign, transfer, convey, set over, and deliver to Buyer, and
Buyer shall acquire from Sellers, effective as of May 1, 2004 (the "Effective
Date"), the asphalt business (the "Business"), operations, and assets of Sellers
generally set forth on Exhibit "A" attached hereto and incorporated herein by
this reference (the "Purchased Assets"), including, without limitation:
(a) all ownership and leasehold interests in real and tangible
personal property relating to the Business including the equipment and
fixtures used in the Business (other than the facility located in
Fredonia, Arizona, which will be leased to Buyer);
(b) all intangible rights and property relating to the
Business; all of Sellers' rights under leases, contracts, and
agreements to which they are a party or by which they benefit that are
used in the Business;
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(c) all of Sellers' goodwill and going concern value of the
Business, including the rights to any trade names, service marks, or
copyrights;
(d) all of Sellers' interest as a member in Cowboy Asphalt
Terminal, L.L.C.;
(e) All of Seller's rights to the office building and
underlying property at the Xxxxx Cross facility currently used for
Seller's business offices, excluding the two west offices on the second
floor and the two north truck bays that are reserved herefrom for
Seller's exclusive use; and
(f) all other rights, interests, assets, and properties owned
by Sellers and used in connection with the Business and operations
thereof.
Section 1.02 Excluded Assets. Notwithstanding the provisions of section
1.01, the Purchased Assets shall not include the following:
(a) Sellers' rights, claims, or causes of action against third
parties relating to the Purchased Assets (i) that may arise in
connection with the discharge by Sellers of the liabilities not assumed
by Buyer, or (ii) for which damages in respect thereof relate to the
period prior to the Closing Date;
(b) all contracts of insurance to the extent that they cover
assets not acquired by Buyer or not related to the Purchased Assets;
(c) all corporate books and records not relating to the
Purchased Assets, including the minute books and stock transfer books
and the corporate seal of Sellers;
(d) Sellers' employee benefit agreements, plans, or
arrangements;
(e) all cash, accounts receivable, or other current assets of
Sellers;
(f) all assets owned directly by CEC (but not including assets
owned by the subsidiaries of CEC that are related to the Business);
(g) the real property and facilities located in Fredonia,
Arizona;and
(h) the assets described on Exhibit "B" attached hereto and
incorporated herein by this reference.
Section 1.03 Assumed Liabilities. On the Closing Date, but as of the
Effective Date, Buyer shall assume and agree to discharge the following
obligations and liabilities of Sellers with respect to the Purchased Assets in
accordance with their respective terms and subject to the respective conditions
thereof:
(a) all those liabilities and obligations of Sellers expressly
set forth on Exhibit "C" attached hereto and incorporated herein by
reference, including the amounts advanced by IAS to Seller pursuant to
the MOU;
(b) all liabilities and obligations of Sellers to be paid or
performed after the Closing Date under the leases, contracts, and other
agreements relating to the Purchased Assets as set forth on Exhibit "C"
attached hereto; and
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(c) all liabilities of Sellers in respect of any taxes for
which Buyer is liable pursuant to section 4.03 with respect to the
Purchased Assets.
Section 1.04 Excluded Liabilities. Buyer shall not assume or be
obligated to pay, perform or otherwise discharge any liability or obligation of
Sellers, direct or indirect, known or unknown, absolute or contingent, not
expressly assumed by Buyer pursuant to section 1.03.
Section 1.05 Payment by Buyer. In consideration of the rights,
interests, Purchased Assets, and properties transferred to Buyer as set forth in
section 1.01, Buyer shall deliver to Sellers, at the Closing, (a) a promissory
note in the principal amount of Seven Million, Five Hundred Thousand Dollars
($7,500,000), in substantially the form attached hereto as Exhibit "D," (b)
payment in cash or other method acceptable to Sellers for Seller's' inventory as
of April 30, 2004, less amounts that have not been previously advanced therefor
pursuant to the MOU and (c) payment in cash or other method acceptable to
Sellers for accrued but unpaid interest from the Effective Date to the date of
Closing provided for in the promissory note referred to in clause (a) above.
Section 1.06 Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement shall be held on such a date and at such time
prior to January 31, 2005, as the parties may agree (the "Closing Date"). Such
Closing shall take place at such time and location as may be mutually acceptable
to the parties hereto and their respective legal counsel.
Section 1.07 Closing Events.
(a) Subject to fulfillment or waiver of the conditions set
forth in Article VI, at the Closing, Sellers shall execute,
acknowledge, and deliver (or shall cause to be executed, acknowledged,
and delivered) all the following:
(i) a certificate, signed by a duly authorized
officer of CEC and dated as of the Closing Date, warranting
that all corporate action necessary to approve the
transactions contemplated by this Agreement have been taken,
including without limitation the clearing of all comments by
the Securities and Exchange Commission staff regarding the CEC
information statement and the mailing of such statement to
stockholders of CEC, and that all actions and undertakings
required of CEC hereunder have been completed;
(ii) an assignment and assumption agreement
substantially in the form attached hereto as Exhibit "E"
pursuant to which Sellers will assign to Buyer the liabilities
and obligations being assumed by Buyer hereunder;
(iii) a lease of the facility located in Fredonia,
Arizona, substantially in the form attached hereto as Exhibit
"F";
(iv) an assignment substantially in the form attached
hereto as Exhibit "G" of the real and personal property leases
to which Sellers are parties;
(v) an assignment substantially in the form attached
hereto as Exhibit "H" of the asphalt sales contracts of
Sellers;
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(vi) all other deeds, bills of sale, assignments, and
other documents and instruments of conveyance and transfer,
all in form and substance satisfactory to Buyer and its
counsel, necessary to vest marketable title in Buyer to all
the Purchased Assets;
(vii) originals or copies of all of Sellers'
agreements, contracts, and commitments to be assumed by Buyer;
(viii) originals of all copyrights, trademarks, or
registrations included in the Purchased Assets;
(ix) all certificates, opinions, schedules,
agreements, resolutions, or other instruments required by this
Agreement to be so delivered by Sellers at or prior to the
Closing; and
(x) such other items as may be reasonably requested
by Buyer and its legal counsel in order to effectuate or
evidence the transactions contemplated hereby.
(b) Subject to fulfillment or waiver of the conditions set
forth in Article VI, at the Closing, Buyer shall execute, acknowledge,
and deliver (or shall cause to be executed, acknowledged, and
delivered) all the following:
(i) the Promissory Note evidencing the obligation of
Buyer to Sellers for the purchase price of the Purchased
Assets;
(ii) a security agreement substantially in the form
attached hereto as Exhibit "I" securing the payment and
performance by Buyer of the Promissory Note;
(iii) payment in cash or other method acceptable to
Sellers for Seller's' inventory as of April 30, 2004, less
amounts that haves not been previously advanced therefor
pursuant to the MOU;
(iv) payment in cash or other method acceptable to
Sellers for accrued but unpaid interest from the Effective
Date to the date of Closing provided for in the promissory
note referred to in Section 1.05(a) above;
(v) an assignment and assumption agreement
substantially in the form attached hereto as Exhibit "E"
pursuant to which Buyer will assume the liabilities and
obligations being assumed by Buyer hereunder;
(vi) a lease substantially in the form attached
hereto as Exhibit "F" of the facility located in Fredonia,
Arizona;
(vii) an acceptance substantially in the form
attached hereto as Exhibit "G" of the assignment of the real
and personal property leases to which Sellers are parties;
(viii) an acceptance substantially in the form
attached hereto as Exhibit "H" of the assignment of the
asphalt sales contracts of Sellers;
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(ix) such other items as may be reasonably requested
by Sellers and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SELLERS
As an inducement to, and to obtain the reliance of, Buyer, Sellers
represent and warrant as follows:
Section 2.01 Organization. Each of CEC and CAPCO is a corporation and
CAD is a limited liability company validly existing and in good standing under
the laws of the state of Utah and has the power and is duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business in all material respects as it is now being
conducted. There is no jurisdiction in which Sellers are not so qualified in
which the character and location of the assets owned by them or the nature of
the business transacted by them requires qualification, except where failure to
do so would not have a material adverse effect on the business or properties of
Sellers.
Section 2.02 Authorization. The board of directors and shareholders, or
managers and members, as the case may be, of each Seller have authorized the
execution and delivery of this Agreement by Sellers and have approved the
consummation of the transactions contemplated hereby. This Agreement is the
legal, valid, and binding agreement of Sellers enforceable between the parties
in accordance with its terms. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of the Sellers'
articles of incorporation or bylaws, or articles of organization or operating
agreement, as the case may be. Each Seller has taken all action required by law,
its articles of incorporation and bylaws, or its articles of organization and
operating agreement, or otherwise to authorize the execution and delivery of
this Agreement and the consummation of the transactions herein contemplated. No
authorization, approval, consent, order of, registration, declaration, or filing
with any court or governmental body or any other person, other than the
Securities and Exchange Commission, is required in connection with the execution
and delivery by Sellers of this Agreement and the consummation by Sellers of the
transactions contemplated hereby.
Section 2.03 Inventories. The inventories of Sellers (including raw
materials, supplies, work-in-process, finished goods, and other materials), a
description of which shall be included in the Schedule 2.03, are in good,
merchantable, and usable condition
Section 2.04 Real Property. Schedule 2.04 contains a brief description
of each parcel of real property owned by Sellers and used in or relating to the
Business (showing the record title holder, legal description, permanent index
number, location, improvements, the uses being made thereof, and any
indebtedness secured by a mortgage or other encumbrance thereon). Except as set
forth in Schedule 2.04, all of the improvements owned by Sellers are in good
operating condition and repair, suitable for the purposes for which they are
being used, and each has adequate rights of ingress and egress for the operation
of the Business of Sellers. Except as set forth on Schedule 2.04, no such
improvement, or any appurtenance thereto or equipment therein, or the operation
or maintenance thereof, violates any restrictive covenants or any provisions of
any federal, state, or local law, ordinance, or zoning regulation, or encroaches
on any property owned by others.
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Section 2.05 Real Property Leases. Schedule 2.05 sets forth a list and
brief description of each lease or similar agreement (showing the name of the
lessor, the date of the lease, annual rental, expiration date, renewal and
purchase options, if any, the improvements thereon, the uses being made thereof,
and the location and the legal description of the real property covered by such
lease or other agreement) under which any Seller is lessee of, or holds or
operates, any real property owned by any third person and used in or relating to
the Business. Except as described in Schedule 2.05, Sellers have the right to
quiet enjoyment of all such real property described in such schedule for the
full term of each such lease or similar agreement (and any renewal option
related thereto) relating thereto.
Section 2.06 Personal Property. Schedule 2.06 contains a detailed list
of all machinery, equipment, vehicles, furniture, and other personal property
owned or leased by Sellers and used in or relating to the Business. Except as
set forth on Schedule 2.06, all such personal property is in good operating
condition and repair and is suitable for the purposes for which it is being used
or is proposed to be used. All leases for tangible property are in full force
and effect, have an unexpired term as set forth in the lease agreements, and
there is no outstanding default or event that, with the passage of time or
notice or both, would constitute a default, on behalf of Sellers or any other
party to the lease agreements.
Section 2.07 Title to Property. Sellers have good and marketable title
to all of the Purchased Assets, free and clear of all liens, pledges, charges,
or encumbrances, except as described in the Schedule 2.07. Sellers have full
right, power, and authority to transfer, assign, convey, and deliver the
Purchased Assets and, upon delivery to Buyer on the Closing Date of the
instruments of transfer contemplated by section 1.07, Sellers will thereby
transfer to Buyer good and marketable title to the Purchased Assets, subject to
no encumbrances except as described in the Sellers' schedules.
Section 2.08 Intellectual Property. Schedule 2.08 contains a complete
and accurate list of all of the trade secrets, technology, know-how, trade
names, trademarks, service marks, and other proprietary information owned by or
used in connection with the Business of Sellers, including all domain names,
source and object codes, copyrights, patents, patent applications,
registrations, and applications with respect thereto (collectively the
"Intellectual Property"). Except as set forth in Schedule 2.08, Sellers own the
entire right, title, and interest in and to such Intellectual Property, and such
Intellectual Property is not subject to the payment of royalties or any other
obligation to any other person or entity. Except as set forth in the Schedule
2.08, none of the employees of Sellers owns, directly or indirectly, any right,
title, or interest in or to the Intellectual Property. To the best knowledge of
Sellers, none of the Intellectual Property is subject to any order, decree,
judgment, stipulation, settlement, encumbrance, or attachment. There are no
pending or threatened proceedings, litigation, or other adverse claims of which
Sellers are aware affecting or with respect to the Intellectual Property. The
Intellectual Property does not infringe on the copyright, patent, trade secret,
know-how, or other proprietary right of any other person or entity and comprises
all such rights necessary to permit the operation of the Business of Sellers as
now being conducted.
Section 2.09 Litigation and Proceedings. Except as set forth in the
Schedule 2.09 (which reflects the manner in which each item is treated for
financial reporting purposes), there are no actions, suits, or proceedings
pending or, to the knowledge of Sellers, threatened by or against, or affecting
Sellers or their respective properties, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind; Sellers do not have any knowledge of any default on
their part with respect to any judgment, order, writ, injunction, decree, award,
rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality.
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Section 2.10 Material Contract Defaults. Except as set forth in the
Schedule 2.10, Sellers are not in default in any respect under the terms of any
outstanding contract, agreement, lease, or other commitment that is material to
the business, operations, properties, assets, or condition of Sellers, and there
is no event of default or other event that, with notice or lapse of time or
both, would constitute a default in any material respect under any such
contract, agreement, lease, or other commitment in respect of which Sellers have
not taken adequate steps to prevent such a default from occurring.
Section 2.11 Taxes. All federal, state, local, and foreign tax returns
and tax reports required to be filed by or on behalf of Sellers have been filed
with the appropriate governmental agency and all jurisdictions in which such
reports are required to be filed and all taxes that have become due pursuant to
such tax returns or to any assessment that has become payable have been paid.
Section 2.12 Third-Party Consents. Included in Schedule 2.12 is a
description of each contract, agreement, lease, or other commitment, written or
oral, to which Sellers are a party or to which any of their respective
properties or assets are subject pursuant to which the consent of the other
party is required in order to consummate the transactions herein contemplated,
except when the failure to obtain such consent would not have a material adverse
effect on the Purchase Assets. Sellers shall utilize their best efforts to
obtain from all third parties any consents that may be required in order to
consummate the transactions contemplated by this Agreement.
Section 2.13 No Conflict with Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust, or other material contract, agreement, or instrument to which any Seller
is a party or to which any of Seller's respective properties or operations are
subject.
Section 2.14 Compliance with Laws and Regulations. Sellers have
complied with all applicable statutes and regulations of any federal, state, or
other governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of Sellers or except to the extent
that noncompliance would not result in the incurrence of any material liability
for Sellers.
Section 2.15 Hazardous Substances.
(a) The real property owned or operated by Sellers (the
"Facilities") are and, to the best of Sellers' knowledge, at all times
have been (except as set forth in Schedule 2.15(a)), operated in
compliance with all applicable Environmental Laws; and to the best of
Sellers' knowledge, no condition exists with respect to the Facilities
that would or could reasonably be expected to subject any Seller to any
damages (including without limitation, actual, consequential,
exemplary, and punitive damages), liability (absolute or contingent,
determined or determinable), penalties, injunctive relief, or cleanup
costs under any applicable Environmental Laws, or that require or could
reasonably be expected to require cleanup, removal, remedial action, or
other response by any Seller pursuant to applicable Environmental Laws.
(b) Sellers have not received and, to the best of Sellers'
knowledge, none of Sellers' predecessors in title to the Facilities has
received, any notice from a governmental agency asserting or alleging a
violation of any Environmental Laws as they relate to the Facilities,
except as set forth in Schedule 2.15(b).
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(c) There are no pending or, to the best of Sellers'
knowledge, threatened suits, actions, claims, or proceedings against
any Seller or, to the best of Sellers' knowledge, Sellers' predecessors
in title, arising from or related to, directly or indirectly, any
Environmental Laws as they relate to the Facilities.
(d) Neither Sellers, any part of the Facilities, nor, to the
best of Sellers' knowledge, Sellers' predecessors are subject to any
judgment, decree, order, or citation related to or arising out of any
Environmental Laws, and no Seller has been named or listed as a
potentially responsible party by any governmental or other entity in a
matter arising under or relating, directly or indirectly, to any
Environmental Laws.
(e) Sellers have obtained or caused to be obtained all
permits, licenses, and approvals required under all Environmental Laws
to operate the Facilities.
(f) For purposes of this section 2.15, the following shall
apply:
(i) "Environmental Laws" shall mean any one or more
of the following: (1) the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendment and Reauthorization Act of 1986, 42
U.S.C. Section 9601 et seq., (2) the Resource Conservation and
Recovery Act, as amended by the Hazardous and Solid Waste
Amendment of 1984, 42 U.S.C. Section 6901 et seq., (3) the
Clean Air Act, 42 U.S.C. Section 7401 et seq., (4) the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.,
(5) the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., (6) the Federal Safe Drinking Water Act, 42 U.S.C.
Section 300f to 300j-11, (7) the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Section 1101 et
seq., (8) the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., and (9) all other federal, state,
tribal and local laws (whether common or statutory), rules,
regulations, consent agreements, compliance schedules, and
orders directly and/or indirectly relating to public health
and safety, air pollution, water pollution, wetlands,
waterways, and/or the presence, use, generation, manufacture,
transportation, processing, treatment, handling, discharge,
release, disposal, or recovery of pollutants, contaminants,
chemicals, industrial, toxic or hazardous substances or
materials, and/or underground storage tanks, as each of the
foregoing laws, rules, regulations, and orders may be amended,
supplemented, and/or reauthorized from time to time.
(ii) When a statement is made to the "best
knowledge," such shall mean that no information that would
give Sellers current actual knowledge of the inaccuracy of any
statement has come to the attention of Sellers and/or their
officers and directors; however, no special or independent
investigation has been undertaken to determine the accuracy of
such statement.
Section 2.16 Information. The information concerning Sellers set forth
in this Agreement, the exhibits hereto, and the Sellers' Schedules is complete
and accurate in all material respects and does not contain any untrue statement
of a material fact or omit to state a material fact required to make the
statements made, in light of the circumstances under which they were made, not
misleading.
Section 2.17 Sellers' Schedules. Sellers have delivered to Buyer the
following schedules, which are collectively referred to as the "Sellers'
Schedules" and which consist of separate schedules dated as of the date of
execution of this Agreement and documents, instruments, and data as of such
date, all certified by a duly authorized officer of each Seller as complete,
true, and correct:
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(a) Schedule 2.03 with respect to the inventory of Sellers to
be acquired by Buyer pursuant hereto;
(b) Schedule 2.04 with respect to the real property interests
of Sellers;
(c) Schedule 2.05 with respect to the leasehold interests of
Sellers;
(d) Schedule 2.06 with respect to the personal property of
Sellers;
(e) Schedule 2.07 with respect to the exceptions to title and
encumbrances;
(f) Schedule 2.08 with respect to the intellectual property of
Sellers;
(g) Schedule 2.09 with respect to each action, suit, or
proceeding, pending or threatened, to which any Seller is a party or
affecting Sellers or their properties;
(h) Schedule 2.10 with respect to any contract defaults
required to be disclosed by section 2.10;
(i) Schedule 2.12 with respect to any contract, agreement,
lease, or other commitment to which any Seller is a party or to which
any of its properties or assets are subject that requires the consent
of the other party to the transactions herein contemplated;
(j) Schedule 2.15(a) with respect to exceptions to operations
in compliance with Environmental Laws; and
(k) Schedule 2.15(b) with respect to notice regarding
violations of Environmental Laws.
(l) a schedule setting forth any other information required to
be disclosed in the Sellers' Schedules by sections 2.01 through 2.16 of
this Agreement.
Sellers shall cause the Sellers' Schedules and the other documents, instruments,
and data delivered to Buyer hereunder to be updated after the date hereof and
prior to the Closing Date.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF BUYER
As an inducement to and to obtain the reliance of Sellers, Buyer
represents and warrants as follows.
Section 3.01 Organization. Buyer is a limited liability company validly
existing and in good standing under the laws of the state of Utah and has the
power and is duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted and is contemplated under the
provisions of this Agreement. There is no jurisdiction in which Buyer is not so
qualified in which the character and location of the assets owned by it, or the
nature of the business transacted by it, requires qualification, except where
failure to do so would not have a material adverse effect on the business or
properties of Buyer.
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Section 3.02 Authorization. The manager of Buyer has authorized the
execution and delivery of this Agreement by Buyer and has approved the
consummation of the transactions contemplated hereby. Approval of the other
members of Buyer is not required in connection with the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
This Agreement is the legal, valid, and binding agreement of Buyer enforceable
between the parties in accordance with its terms. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate any
provision of Buyer's articles of organization or operating agreement. Buyer has
taken all action required by law, its articles of organization, its operating
agreement, or otherwise to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. No
authorization, approval, consent, order of, registration, declaration, or filing
with any court or governmental body or any other person is required in
connection with the execution and delivery by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby.
Section 3.03 No Conflict with Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated hereby will not
result in the breach of any term or provision of, or constitute an event of
default under, any material contract, agreement, or instrument to which Buyer is
a party or to which any of its properties or operations are subject.
Section 3.04 Information. The information concerning Buyer set forth in
this Agreement and in the exhibits hereto is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Third-Party Consents. Buyer and Sellers agree to cooperate
with each other in order to obtain required third-party consents to this
Agreement and the transactions herein contemplated.
Section 4.02 Allocation of Purchase Price. The allocation of the
consideration paid among the assets acquired pursuant to this Agreement shall be
as set forth on Exhibit "J" attached hereto. All tax returns and reports filed
by Buyer and Sellers with respect to the transactions contemplated by this
Agreement shall be consistent with such allocation. Buyer and Sellers agree to
share information and cooperate to the extent necessary to permit the
transactions contemplated by this Agreement to be properly, timely, and
consistently reported.
Section 4.03 Sales and Transfer Taxes.
(a) Sellers shall be liable for and shall pay all taxes
(whether assessed or unassessed) applicable to the Purchased Assets
attributable to periods (or portions thereof) ending on or prior to the
Closing Date. Buyer shall be liable for and shall pay all taxes
(whether assessed or unassessed) applicable to the Purchased Assets
attributable to periods (or portions thereof) beginning after the
Closing Date.
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(b) Sellers or Buyer, as the case may be, shall provide
reimbursement for any tax paid by one party all or a portion of which
is the responsibility of the other party in accordance with the terms
of this section 4.03. Within a reasonable time prior to the payment of
any such tax, the party paying the tax shall give notice to the other
party of the tax payable and the portion that is the liability of each
party, although failure to do so will not relieve the other party from
its liability hereunder.
Section 4.04 Action Prior to Closing. From and after the date of this
Agreement until the Closing Date, and except as set forth in the Sellers'
Schedules or as permitted or contemplated by this Agreement, Buyer and Sellers,
respectively, will each:
(a) carry on its business in substantially the same manner as
it has heretofore;
(b) maintain and keep its assets in as good repair and
condition as at present, except for depreciation due to ordinary wear
and tear and damage due to casualty;
(c) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(d) perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(e) use its best efforts to maintain and preserve its business
organization intact, retain its key employees, and maintain its
relationships with its material suppliers and customers; and
(f) fully comply with and perform in all material respects all
obligations and duties imposed upon it by all federal and state laws
and all rules, regulations, and orders imposed by federal or state
governmental authorities.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01 Release. Buyer will use its best efforts to cause Sellers
to be released from all liability related to the liabilities and obligations to
be assumed by Buyer pursuant to this Agreement. Buyer is not required to obtain
such releases and will not be liable to Sellers for failure to obtain the
releases except Buyer will be responsible for payment of such liabilities as
provided for herein.
Section 5.02 Adjustments to Purchase Price. Appropriate adjustments
will be made to the purchase price to account for the revenues, expenses, and
payments on the assumed obligations and other items attributable to the
Purchased Assets for the period from the Effective Date to the Closing Date.
Therefore, the purchase price will be decreased by the amount of revenue
received by Sellers and increased by the expenses and payments on assumed
obligations paid by Sellers during such period. Similar adjustments to the
purchase price will be made at closing to give effect to the sale of the
Purchased Assets as if it had occurred on the Effective Date.
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ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
Section 6.01 Conditions Precedent to the Obligations of the Parties.
The obligations of Buyer and Sellers under the terms of this Agreement are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
(a) All required third-party consents to this Agreement and
the transactions contemplated hereby shall have been received.
(b) There shall not be any action or threatened action before
any court or governmental body to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement or that, in the judgment of
the boards of directors and managers of Buyer or Sellers, made in good
faith and based on the advice of legal counsel, make it inadvisable to
proceed with the transactions contemplated by this Agreement.
(c) Holding shall have executed, acknowledged, and delivered
(i) a certificate, signed by a duly authorized officer of Holding and
dated as of the Closing Date, warranting that all action necessary to
approve the transactions contemplated by the MOU have been taken and
that all actions and undertakings required of Holding thereunder have
been completed; (ii) all certificates, opinions, schedules, agreements,
resolutions, or other instruments required by the MOU or this Agreement
to be so delivered by Holding at or prior to the Closing; and (iii)
such other items as may be reasonably requested by CEC and its legal
counsel in order to effectuate or evidence the transactions
contemplated by this Agreement and/or the MOU.
(d) Buyer shall have been formed as a limited liability
company by filing articles of organization with the Utah Division of
Corporations and Commercial Code, and Holding shall have executed,
acknowledged, and delivered an operating agreement acceptable to
Sellers governing the affairs of Buyer.
(e) The parties hereto shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as they may reasonably request.
Section 6.02 Conditions Precedent to the Obligations of Buyer. The
obligations of Buyer under the terms of this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
(a) The representations and warranties made by Sellers in this
Agreement were true when made and shall be true at the Closing Date
with the same force and effect as if such representations and
warranties were made at and as of the Closing Date.
(b) Sellers shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or
complied with by Sellers prior to or at the Closing.
(c) No litigation, proceeding, investigation, or inquiry is
pending or, to the best knowledge of Sellers, threatened that might
result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or that might result in a
material adverse change in the assets, properties, or business of
Sellers.
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(d) Sellers shall have taken all corporate or other action
necessary to approve the transactions contemplated by this Agreement,
including, without limitation, obtaining the requisite approval of the
shareholders of CEC and the mailing of an information statement to the
shareholders of CEC.
(e) Sellers shall deliver to Buyer a certificate, signed by a
duly authorized officer of Sellers and dated as of the Closing Date,
warranting that the foregoing have been satisfied and that all
documents delivered at Closing are accurate and shall provide
reasonable proof thereof as reasonably required by Buyer.
Section 6.03 Conditions Precedent to the Obligations of Sellers. The
obligations of Sellers under this Agreement are subject to the satisfaction, at
or before the Closing Date, of the following conditions:
(a) The representations and warranties made by Buyer in this
Agreement were true when made and shall be true as of the Closing Date
except for changes permitted by this Agreement or made in the ordinary
course of business.
(b) Buyer shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied
with by Buyer prior to or at the Closing.
(c) No litigation, proceeding, investigation, or inquiry is
pending or, to the best knowledge of Buyer, threatened that might
result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or that might result in any
adverse material change in the assets, properties, or business
operations of Buyer.
(d) Xxx Xxxxxx and Buyer shall have executed an employment
agreement in substantially the form attached hereto as Exhibit "K.
(e) Sellers shall have received a release acceptable to
Sellers duly executed by IAS relating to the loan to Sellers from IAS
assumed by Buyer pursuant to this Agreement.
(f) Buyer shall deliver to Sellers a certificate, signed by a
duly authorized officer of Buyer and dated as of the Closing Date,
warranting that the foregoing have been satisfied and that all
documents delivered at Closing are accurate and shall provide
reasonable proof thereof as reasonably required by Sellers
ARTICLE VII
TERMINATION
Section 7.01 Termination. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated at any time prior to
the Closing Date:
(a) by the mutual consent of the management committee of Buyer
and the boards of directors and managers of Sellers;
(b) by Buyer or Sellers, if the Closing shall not have
occurred on or before February 28, 2005 (or such later date as may be
mutually agreed to by Buyer and Sellers);
-13-
(c) by Buyer in the event of any material breach by Sellers of
any of the agreements, representations, or warranties of Sellers
contained herein and the failure of Sellers to cure such breach within
seven days after receipt of notice from Buyer requesting such breach to
be cured; or
(d) by Sellers in the event of any material breach by Buyer of
any of the agreements, representations, or warranties of Buyer
contained herein and the failure of Buyer to cure such breach within
seven days after receipt of notice from Sellers requesting such breach
to be cured.
Section 7.02 Notice of Termination. Any party desiring to terminate
this Agreement pursuant to section 7.01 shall give notice of such termination to
the other parties to this Agreement.
Section 7.03 Effect of Termination. In the event that this Agreement
shall be terminated pursuant to this Article VII, all further obligations of the
parties under this Agreement (other than section 8.01) shall be terminated
without further liability of any party to the other; provided that, nothing
herein shall relieve any party from liability for its willful breach of this
Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Confidential Nature of Information. Each party agrees that
it will treat in confidence all documents, materials, and other information that
it shall have obtained regarding the other parties during the course of the
negotiations leading to the consummation of the transactions contemplated hereby
(whether obtained before or after the date of this Agreement), the investigation
of the Purchased Assets, and the preparation of this Agreement and other related
documents, and, in the event the transactions contemplated hereby shall not be
consummated, each party will return to the other party all copies of nonpublic
documents and materials that have been furnished in connection therewith. Such
documents, materials, and information shall not be communicated to any third
person (other than to their respective counsel, accountants, financial advisors
or lenders) and shall not be used for any purpose to the detriment of the other
party. No other party shall use any confidential information in any manner
whatsoever except solely for the purpose of evaluating the proposed transaction
hereunder; provided, however, that after the Closing, Buyer may use or disclose
any confidential information included in the Purchased Assets or otherwise
reasonably related to the Business of Sellers or the Purchased Assets. The
obligation of each party to treat such documents, materials, and other
information in confidence shall not apply to any information that (a) is or
becomes available to such party from a source other than the other party, except
from insiders and affiliates of such other party, (b) is or becomes available to
the public other than as a result of disclosure by such party or its agents, (c)
is required to be disclosed under applicable law or judicial process, but only
to the extent it must be disclosed, or (d) such party reasonably deems necessary
to disclose to obtain any of the consents or approvals contemplated hereby.
Section 8.02 No Brokers. Buyer and Sellers agree that no third person
has in any way brought the parties together or been instrumental in the
negotiation, execution, or consummation of this Agreement. Buyer and Sellers
each agree to indemnify the other against any claim by any third person for any
commission, brokerage, finder's fee, or other payment with respect to this
Agreement or the transactions contemplated hereby based upon any alleged
agreement or understanding between such party and such third person, whether
expressed or implied, arising from the actions of such party. The covenants set
forth in this section 8.03 shall survive the Closing Date and the consummation
of the transactions herein contemplated.
-14-
Section 8.03 Governing Law. This Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to other matters of state law, the laws of
the state of Utah.
Section 8.04 Notices. Any notice, demand, request, or other
communication permitted or required under this Agreement shall be in writing and
shall be deemed to have been given as of the date so delivered, if personally
served; as of the date so sent, if transmitted by facsimile and receipt is
confirmed by the facsimile operator of the recipient; as of the date so sent, if
sent by electronic mail and receipt is acknowledged by the recipient; one day
after the date so sent, if delivered by overnight courier service; or three days
after the date so mailed, if mailed by certified mail, return receipt requested,
addressed as follows:
If to Sellers, to: Crown Energy Corporation
Attn: Xxx Xxxxxx
0000 Xxxx 0000 Xxxxx
Xxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
With copies to: Xxxxx X. Xxxxx, Esq.
Xxxxx Xxxxx Xxxxxxx & Xxxxx, LLC
Eighth Floor, Bank One Tower
00 Xxxx Xxxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
If to Buyer, to: Peak Asphalt, L.L.C.
c/o Peak Holding, LLC
Attn: Xxx Xxxxxx
0000 Xxxxx 00 Xxxx
Xxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
With copies to: Xxxxxxx Xxxxx, Esq.
Holden, Kidwell, Xxxx & Xxxxx, P.L.L.C.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
X.X. Xxx 00000
Xxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
or such other addresses and facsimile numbers as shall be furnished in writing
by any party in the manner for giving notices hereunder.
Section 8.05 Attorneys' Fees. In the event that any party institutes
any action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the breaching party or parties shall
reimburse the nonbreaching party or parties for all costs, including reasonable
attorneys' fees, incurred in connection therewith and in enforcing or collecting
any judgment rendered therein.
-15-
Section 8.06 Schedules; Knowledge. Whenever in any section of this
Agreement reference is made to information set forth in the Sellers' Schedules,
such reference is to information specifically set forth in such schedules and
clearly marked to identify the section of this Agreement to which the
information relates. Whenever any representation is made to the "knowledge" of
any party, it shall be deemed to be a representation that no officer or director
of such party, after reasonable investigation, has any knowledge of such
matters.
Section 8.07 Entire Agreement. This Agreement, together with the
documents to be delivered pursuant hereto, represent the entire agreement
between the parties relating to the subject matter hereof. There are no other
courses of dealing, understanding, agreements, representations, or warranties,
written or oral, except as set forth herein.
Section 8.08 Survival; Termination. The representations, warranties,
and covenants of the respective parties shall survive the Closing.
Section 8.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 8.10 Amendment or Waiver. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance thereof may be extended by a
written instrument signed by the party or parties for whose benefit the
provision is intended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
PEAK ASPHALT, L.L.C.
By: Peak Holding, LLC, Manager
By /s/ Xxxxx Xxxxx
-----------------------------
President, Manager
CROWN ENERGY CORPORATION
By /s/ Xxx Xxxxxx
---------------------------------
Xxx Xxxxxx, President
CROWN ASPHALT PRODUCTS COMPANY
By /s/ Xxx Xxxxxx
---------------------------------
Xxx Xxxxxx, President
CROWN ASPHALT DISTRIBUTION, L.L.C.
By /s/ Xxx Xxxxxx
---------------------------------
Xxx Xxxxxx, Manager
-16-
Exhibit "A" - Purchased Assets
Exhibit "B" - Excluded Assets
Exhibit "C" - Assumed Liabilities
Exhibit "D" - Form of Promissory Note
Exhibit "E" - Form of Assignment and Assumption Agreement
Exhibit "F" - Form of Lease of Fredonia Facility
Exhibit "G" - Form of Assignment and Acceptance of Real and Personal Property
Exhibit "H" - Form of Assignment and Acceptance of Asphalt Sales Contracts
Exhibit "I" - Form of Security Agreement
Exhibit "J" - Allocation of Purchase Price
Exhibit "K" - Form of Employment Agreement of Xxx Xxxxxx
-17-
Exhibit D
PROMISSORY NOTE
$7,500,000.00 Xxxxx Cross, Utah Effective May 1, 2004
FOR VALUE RECEIVED, the undersigned, PEAK ASPHALT, L.L.C. ("Maker"), a
Utah limited liability company whose mailing address is 0000 Xxxx 0000 Xxxxx,
Xxxxx Xxxxx, Xxxx 00000, hereby promises to pay to the order of CROWN ENERGY
CORPORATION, a Utah corporation, CROWN ASPHALT PRODUCTS COMPANY, a Utah
corporation, and CROWN ASPHALT DISTRIBUTION L.L.C., a Utah limited liability
company (collectively, "Payees"), each of whose mailing address is 0000 Xxxx
0000 Xxxxx, Xxxxx Xxxxx, Xxxx 00000, with its principal office in Xxxxx Cross,
Utah, the aggregate principal sum of SEVEN MILLION FIVE HUNDRED THOUSAND and
NO/100 Dollars ($7,500,000.00), in lawful money of the United States of America
for payment of private debts, together with interest (calculated on the basis of
the actual number of days elapsed but computed as if each year consisted of 365
days) on the unpaid principal balance from time to time outstanding at a rate of
four percent (4.00%) per annum.
1. Payments.
(a) All payments of principal and interest under this Note shall be
made to Crown Energy Corporation for the benefit of all Payees. All payments of
principal and interest shall be applied first to accrued and unpaid interest to
the date of such payment, next to expenses for which Payees are due to be
reimbursed under the terms of this Note, and then to the unpaid principal
balance hereof.
(b) Interest only accrued on the principal amount of this Note shall be
paid on or before the last day of each April, July and October commencing on the
last day of April, 2005.
(c) Payments of principal and interest in amounts which shall be
computed in accordance with paragraphs (d) and (e) below, shall be made annually
on or before the 31st day of January of each year commencing January 2005 and
continuing until all amounts owed hereunder are paid in full or until January
31, 2014, whichever occurs first. Provided, however, notwithstanding anything
herein to the contrary, the unpaid principal amount of this Note and unpaid
accrued interest, if any, outstanding after the January 31, 2014 payment is made
shall be cancelled and Maker shall automatically be relieved of liability for
payment thereof.
(d) For the annual principal and interest payment due on or before
January 31, 2005, and only such principal and interest payment, if the earnings
for calendar year 2004 before interest, taxes, depreciation and amortization
("EBITDA"), less debt service, as defined below ("Adjusted EBITDA"), is less
than zero, then no principal or interest payment will be due and payable on
January 31, 2005 and the principal balance of this Note shall be reduced by
sixty percent (60%) of the amount by which Adjusted EBITDA is less than zero and
increased by the amount of accrued interest on such reduced principal amount
from the date of the Note thru January 31, 2005. For purposes of this Note, the
term "debt service" shall mean the principal and interest payments on Maker's
current debt and interest payments on any line of credit obtained by Maker
including interest payments on the line of credit advanced or guaranteed by
Idaho Asphalt Supply, Inc., but specifically excluding principal and interest on
this Note.
The following example is provided to illustrate the effect of the above
provisions on certain assumed facts and for no other purpose:
Example 1. Assume that the date of the Note is May 1, 2004, that EBITDA
for calendar year 2004 is $200,000, and debt service for the same
period is $525,000, including the line of credit interest. Adjusted
EBITDA would be a negative $325,000, accrued interest from May 1, 2004
thru January 31, 2005 on the reduced principal balance of $7,175,000
($7,500,000 less $325,000) would be $217,019, and the principal balance
of the Note would be (1) increased by the accrued interest amount and
(2) reduced by the negative Adjusted EBITDA amount to $7,392,019.
0000 XXXXXX $ 200,000
Less: 2004 annual debt service (525,000)
-------------
2004 Adjusted EBITDA $ (325,000)
Beginning Principal Balance $ 7,500,000
Plus: Accrued interest 217,019
Less: Adjusted EBITDA deficit - (325,000)
-------------
Adjusted principal balance on 1/31/2005 $ 7,392,019
(e) Beginning January 31, 2006, payments shall be made on the dates set
forth in (c) above in an amount equal to forty percent (40%) of Adjusted EBITDA
as calculated for the prior calendar year then ended less the amount of accrued
interest paid to Payees on this Note during such prior calendar year after the
payment due on January 31 of such prior year. If with respect to any calendar
year, the amount of accrued interest paid to Payees on this Note during such
calendar year after the payment due on January 31 of such prior year is greater
than forty percent (40%) of Adjusted EBITDA, no principal or accrued interest
payment will be required on the last day of January following such year and any
unpaid accrued interest shall be added to the principal balance of the Note, but
there shall not be a reimbursement of any such interest paid in the prior year.
If forty percent (40%) of Adjusted EBITDA less the amount of accrued interest
paid to Payee on this Note during the prior calendar year after the payment due
on January 31 of such prior year is greater than zero but less than the current
accrued interest, then current accrued interest shall be paid to the extent such
amount is greater than zero and the unpaid portion of the current accrued
interest will be added to the principal balance of the Note.
Example 2. Assume the facts from Example 1 and assume that EBITDA for
the calendar year 2005 is $3,200,000, annual debt service is $575,000
and interest payments of $73,920 each were made April, July and
October. The combined principal and accrued interest payment on this
Note due on or before January 31, 2006 would be $828,240 calculated as
follows:
0000 XXXXXX $ 3,200,000
Less: 2005 annual debt service (575,000)
-------------
2005 Adjusted EBITDA $ 2,625,000
40% of Adjusted EBITDA $ 1,050,000
Less 2005 interest paid on the note - (221,760)
-------------
January 31, 2006 combined principal and
accrued interest payment due on the note $ 828,240
Example 3. Assume the same facts as in Example 2, except that EBITDA
for calendar year 2005 is $850,000. No principal and accrued interest
payment would be due on January 31, 2006, because the amount of
interest paid during the prior year exceeds forty percent (40%) of
Adjusted EBITDA. Further, any unpaid accrued interest due as of January
31, 2006 would be added to the principal balance of this Note on
January 31, 2006, as follows:
0000 XXXXXX $ 850,000
Less: 2005 annual debt service (575,000)
-------------
2005 Adjusted EBITDA $ 275,000
40% of Adjusted EBITDA $ 110,000
Less: 2005 interest paid on the Note - 221,760)
-------------
January 31, 2006 payment on the Note $ --
Beginning Note balance $ 7,392,019
Accrued interest + 73,920
-------------
Ending Note balance $ 7,465,939
Example 4. Assume the same facts as in Example 3, except that forty
percent (40%) of Adjusted EBITDA is calculated to be $290,000. The
January 31, 2006 payment would be $68,240 and the loan balance would be
increased by the unpaid portion of the accrued interest, $5,680,
calculated as follows:
40% of Adjusted EBITDA $ 290,000
Less: 2005 interest paid on the note - (221,760)
-------------
January 31, 2006 payment on the note $ 68,240
Beginning Note balance $ 7,392,019
Accrued unpaid interest + 5,680
-------------
Ending Note balance $ 7,397,699
2. Time and Place of Payment. If any payment falls due on a day which
is considered a legal holiday in the state of Utah, Maker shall be entitled to
delay such payment until the next succeeding regular business day, but interest
shall continue to accrue until the payment is in fact made. Each payment or
prepayment hereon must be paid at the office of Payees set forth above, or at
such other place as Payees or other holder hereof may from time to time
designate in writing, in lawful money or in funds which are or will be available
for immediate use by Payees at such office by 2:00 p.m., Salt Lake City time on
the day payment or prepayment is due.
3. Prepayment. Maker reserves the right and privilege of prepaying this
Note in whole or in part at any time, or from time to time, without notice,
premium, charge, or penalty.
4. Security. This Note is secured by collateral described in that
certain Security Agreement of even date herewith by and between Maker and
Payees.
5. Default. An event of default ("Event of Default") shall be deemed to
have occurred upon the happening of any of the following events or conditions:
(a) The failure or refusal of Maker to pay principal of or interest on
this Note when the same becomes due in accordance with the terms hereof and such
failure or refusal continues for ten (10) days after Maker has received written
notice of such failure or refusal to pay.
(b) The failure or refusal of Maker punctually to and properly to
perform, observe, and comply with any covenant or agreement contained herein,
and such failure or refusal continues for a period of thirty (30) days after
Maker has notice thereof.
(c) Maker shall (i) voluntarily seek, consent to or acquiesce in the
benefit or benefits of any Debtor Relief Law (defined hereinafter), or (ii)
become a party to (or be made the subject of) any proceeding provided for by any
Debtor Relief Law, other than as a creditor or claimant, that could suspend or
otherwise adversely affect the Rights (defined hereinafter) of Payees granted
herein (unless, in the event such proceeding is involuntary, the petition
instituting same is dismissed within 60 days of the filing of same). "Debtor
Relief Law" means the Bankruptcy Code of the United States of America and all
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
or similar Laws from time to time in effect affecting the Rights of creditors
generally. "Rights" means rights, remedies, powers, and privileges. "Laws" means
all applicable statutes, laws, ordinances, regulations, orders, writs,
injunctions, or decrees of any state, commonwealth, nation, territory,
possession, county, parish, municipality, or Tribunal. "Tribunal" means any
court or governmental department, commission, board, bureau, agency or
instrumentality of the United States or of any state, commonwealth, nation,
territory, possession, county, parish, or municipality, whether now or hereafter
constituted and/or existing.
(d) The failure to have discharged within a period of thirty (30) days
after the commencement thereof any attachment, sequestration or similar
proceeding against any of the assets of Maker, or the loss, theft or destruction
of, or occurrence of substantial damage to, a material part of the assets of
Maker, except to the extent adequately covered by insurance.
(e) Maker fails to pay any money judgment against it at least ten (10)
days prior to the date on which any of Maker's assets may be lawfully sold to
satisfy such judgment.
(f) Maker shall default in the payment of any assumed loan, note or
lease agreement beyond any period of grace provided with respect thereto unless
the validity or amount of such obligation shall currently be contested by Maker
in good faith.
(g) Maker shall be unable to secure financing for the working capital
requirements to meets its operating budget in any calendar year during the term
of this Note.
(h) The discovery by Payees that any statement, representation, or
warranty herein or in any writing ever delivered to Payees pursuant to this Note
is false, misleading, or erroneous in any material respect.
If any one or more of the Events of Default specified above shall have
happened, the holder of this Note may, at his option, (i) declare the entire
unpaid balance of principal of and accrued interest on this Note to be
immediately due and payable without notice or demand (which are hereby waived),
(ii) offset against this Note any sum or sums owed by the holder hereof to
Maker, (iii) reduce any claim to judgment, (iv) foreclose all liens and security
interests securing payment thereof or any part thereof and/or (v) proceed to
protect and enforce its rights either by suit in equity and/or by action of law,
or by other appropriate proceedings, whether for the specific performance of any
covenant or agreement contained in this Note, or in aid of the exercise granted
by this Note, of any right, or to enforce any other legal or equitable right or
remedy of the holder of this Note.
6. Cumulative Rights. No delay on the part of the holder of this Note
in the exercise of any power or right or single partial exercise of any such
power or right under this Note, or under any other instrument executed pursuant
hereto shall operate as a waiver thereof. Enforcement by the holder of this Note
of any security for the payment hereof shall not constitute any election by it
of remedies so as to preclude the exercise of any other remedy available to it.
7. Collection Costs. If this Note is placed in the hands of an attorney
for collection, or if it is collected through any legal proceeding at law or in
equity or in bankruptcy, receivership or other court proceedings, Maker agrees
to pay all costs of collection, including but not limited to court costs and
reasonable attorney's fees of the Payees.
8. Waiver. Maker, and each surety, endorser, guarantor, and other party
liable for the payment of any sums of money payable on this Note, jointly and
severally waive presentment and demand for payment, protest, and notice of
protest and nonpayment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, notice of intent to demand, or other notice of default
except as specified herein and agree that their liability on this Note shall not
be affected by any renewal or extension in the time of payment hereof, or in any
indulgences, or by any partial payment, any release or change in any security
for the payment of this Note, before or after maturity, regardless of the number
of such renewals, extensions, indulgences, releases, or changes.
9. Notices. Any notice or demand given hereunder by the holder hereof
shall be deemed to have been given and received (a) when actually received by
Maker, if delivered in person, (b) if mailed, on the earlier of the date
actually received or (whether ever received or not) two (2) business days after
deposit in the U. S. Mail, postage prepaid, addressed to Maker at its address on
the first page, (c) if sent by facsimile, upon confirmation of facsimile
transfer, or (d) if sent by electronic mail, upon confirmation of delivery when
directed to the electronic mail address set forth on the Company's records.
10. Successor and Assigns. All of the covenants, stipulations, promises
and agreements in this Note contained by or on behalf of Maker shall bind its
successors and assigns, whether so expressed or not; provided, however, that
Maker may not, without the prior written consent of Payees, assign any rights,
powers, duties, or obligations under this Note.
11. Headings. The headings of the paragraphs of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.
12. Applicable Law. This Note is being executed and delivered, and is
intended to be performed, in the state of Utah, and the substantive laws of such
state shall govern the validity, construction, enforcement and interpretation of
this Note except insofar as federal laws shall have application.
EXECUTED effective the _______ day of _____________, 2004.
PEAK ASPHALT, L.L.C.
By___________________________________
Name:________________________________
Title:_______________________________
Exhibit I
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is entered into effective
this 1st day of May, 2004, by and between PEAK ASPHALT, LLC, a Utah limited
liability company (the "Debtor"), and CROWN ENERGY CORPORATION, a Utah
corporation, CROWN ASPHALT PRODUCTS COMPANY, a Utah corporation, and CROWN
ASPHALT DISTRIBUTION L.L.L., a Utah limited liability company (collectively, the
"Secured Party").
WHEREAS, the Debtor has executed and delivered to the Secured Party a
Promissory Note dated as of May 1, 2004 (as amended and in effect from time to
time, the "Note"), evidencing the purchase price of certain assets; and
WHEREAS, the Debtor has executed the Asset Purchase and Sale Agreement
dated effective May 1, 2004 (the "Purchase Agreement"); and
WHEREAS, the Debtor has executed the Lease Agreement dated effective
May 1, 2004 (the "Lease Agreement"); and
WHEREAS, it is a condition precedent to the Secured Party's extending
credit to the Debtor under the Note that the Debtor execute and deliver to the
Secured Party a security agreement in substantially the form hereof; and
WHEREAS, the Debtor wishes to grant a security interest in favor of the
Secured Party as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized terms used herein without definitions
shall have the respective meanings provided therefor in the Note.
The term "State," as used herein, means the state of Utah.
All terms defined in the Uniform Commercial Code of the State and used
herein shall have the same definitions herein as specified therein. However, if
a term is defined in Article 9 of the Uniform Commercial Code of the State
differently than in another Article of the Uniform Commercial Code of the State,
the term has the meaning specified in Article 9.
The term "Obligations," as used herein, means (i) all of the
indebtedness, obligations and liabilities of the Debtor to the Secured Party,
individually or collectively, whether direct or indirect, joint or several,
absolute or contingent, due or to become due, now existing or hereafter arising
under or in respect of the Note, any other instruments or agreements executed
and delivered pursuant thereto or in connection therewith or this Agreement, and
(ii) all payments for the Assumed Liabilities provided for in the Purchase
Agreement, and (iii) all payments due pursuant to the terms of the Lease
Agreement.
The term "Event of Default," as used herein, means the failure of the
Debtor to pay or perform any of the Obligations as and when due to be paid or
performed under the terms of the Note.
2. Grant of Security Interest. The Debtor hereby grants to the Secured
Party, to secure the payment and performance in full of all of the Obligations,
a security interest in and so pledges and assigns to the Secured Party the
following properties, assets and rights of the Debtor, wherever located, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof (all of the same being hereinafter called the "Collateral"):
(a) The personal and fixture property of every kind and nature
acquired by the Debtor from the Secured Party pursuant to that certain
Agreement dated May ___, 2004, more particularly set forth on Exhibit A
attached hereto and incorporated herein by this reference, including
without limitation all goods (including equipment and any accessions
thereto).
3. Authorization to File Financing Statements. The Debtor hereby
irrevocably authorizes the Secured Party at any time and from time to time to
file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral as being of an equal or lesser scope or with greater detail, and (b)
provide any other information required by part 5 of Article 9 of the Uniform
Commercial Code of the State, or such other jurisdiction, for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i)
whether the Debtor is an organization, the type of organization and any
organizational identification number issued to the Debtor and, (ii) in the case
of a financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral, a sufficient description of real property to which the
Collateral relates. The Debtor agrees to furnish any such information to the
Secured Party promptly upon the Secured Party's request. The Debtor also
ratifies its authorization for the Secured Party to have filed in any Uniform
Commercial Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the date hereof.
4. Other Actions as to Any and All Collateral. The Debtor further
agrees, at the request and option of the Secured Party, to take any and all
other actions the Secured Party may determine to be necessary or useful for the
attachment, perfection and first priority of, and the ability of the Secured
Party to enforce, the Secured Party's security interest in any and all of the
Collateral, including, without limitation, (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under
the Uniform Commercial Code, to the extent, if any, that the Debtor's signature
thereon is required therefor, (b) causing the Secured Party's name to be noted
as secured party on any certificate of title for a titled good if such notation
is a condition to attachment, perfection or priority of, or ability of the
Secured Party to enforce, the Secured Party's security interest in such
Collateral, (c) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Secured Party to enforce, the Secured Party's security interest in such
Collateral, (d) obtaining governmental and other third party waivers, consents
and approvals in form and substance satisfactory to Secured Party, including,
without limitation, any consent of any licensor, lessor or other person
obligated on Collateral, (e) obtaining waivers from mortgagees and landlords in
form and substance satisfactory to the Secured Party, and (f) taking all actions
under any earlier versions of the Uniform Commercial Code or under any other
law, as reasonably determined by the Secured Party to be applicable in any
relevant Uniform Commercial Code or other jurisdiction, including any foreign
jurisdiction.
5. Relation to Other Security Documents. The provisions of this
Agreement supplement the provisions of any real estate mortgage or deed of trust
granted by the Debtor to the Secured Party which secures the payment or
performance of any of the Obligations. Nothing contained in any such real estate
mortgage or deed of trust shall derogate from any of the rights or remedies of
the Secured Party hereunder.
6. Representations and Warranties Concerning Debtor's Legal Status. The
Debtor has previously delivered to the Secured Party a certificate signed by the
Debtor and entitled "Perfection Certificate" (the "Perfection Certificate"). The
Debtor represents and warrants to the Secured Party as follows: (a) the Debtor's
exact legal name is that indicated on the Perfection Certificate and on the
signature page hereof, (b) the Debtor is an organization of the type, and is
organized in the jurisdiction set forth in the Perfection Certificate, (c) the
Perfection Certificate accurately sets forth the Debtor's organizational
identification number or accurately states that the Debtor has none, (d) the
Perfection Certificate accurately sets forth the Debtor's place of business or,
if more than one, its chief executive office, as well as the Debtor's mailing
address, if different, (e) all other information set forth on the Perfection
Certificate pertaining to the Debtor is accurate and complete, and (f) that
there has been no change in any information provided in the Perfection
Certificate since the date on which it was executed by the Debtor.
7. Covenants Concerning Debtor's Legal Status. The Debtor covenants
with the Secured Party as follows: (a) without providing at least 30 days prior
written notice to the Secured Party, the Debtor will not change its name, its
place of business or, if more than one, chief executive office, or its mailing
address or organizational identification number if it has one, (b) if the Debtor
does not have an organizational identification number and later obtains one, the
Debtor shall forthwith notify the Secured Party of such organizational
identification number, and (c) the Debtor will not change its type of
organization, jurisdiction of organization or other legal structure.
8. Representations and Warranties Concerning Collateral, etc. The
Debtor further represents and warrants to the Secured Party as follows: (a) the
Debtor is the owner of the Collateral, free from any right or claim or any
person or any adverse lien, security interest or other encumbrance, except for
the security interest created by this Agreement and other liens set forth in
Exhibit B attached hereto, (b) none of the Collateral constitutes, or is the
proceeds of, "farm products" as defined in Section 70A-9a-102(34) of the Uniform
Commercial Code of the State, (c) none of the account debtors or other persons
obligated on any of the Collateral is a governmental authority covered by the
Federal Assignment of Claims Act or like federal, state or local statute or rule
in respect of such Collateral, (d) the Debtor holds no commercial tort claim,
and (e) the Debtor has at all times operated its business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances, (f) all other information set forth on the Perfection
Certificate pertaining to the Collateral is accurate and complete, and (g) there
has been no change in any information provided in the Perfection Certificate
since the date on which it was executed by the Debtor.
9. Covenants Concerning Collateral, etc. The Debtor further covenants
with the Secured Party as follows: (a) the Collateral, to the extent not
delivered to the Secured Party pursuant to Section 4, will be kept at those
locations listed on the Perfection Certificate and the Debtor will not remove
the Collateral from such locations, without providing at least thirty days prior
written notice to the Secured Party, (b) except for the security interest herein
granted and liens described on Exhibit B attached hereto, the Debtor shall be
the owner of the Collateral free from any right or claim of any other person,
lien, security interest or other encumbrance, and the Debtor shall defend the
same against all claims and demands of all persons at any time claiming the same
or any interests therein adverse to the Secured Party, (c) the Debtor shall not
pledge, mortgage or create, or suffer to exist any right of any person in or
claim by any person to the Collateral, or any security interest, lien or
encumbrance in the Collateral in favor of any person, other than the Secured
Party except for (i) liens set forth on Exhibit B attached hereto and (ii) liens
subordinate to the security interest created in this Agreement for the Operating
Line as provided in Section 7.2 of the Operating Agreement of Peak Asphalt, LLC
dated effective May 1, 2004, (d) the Debtor will keep the Collateral in good
order and repair and will not use the same in violation of law or any policy of
insurance thereon, (e) the Debtor will permit the Secured Party, or its
designee, to inspect the Collateral at any reasonable time, wherever located,
(f) the Debtor will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement, (g)
the Debtor will continue to operate, its business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances, and (h) the Debtor will not sell or otherwise dispose,
or offer to sell or otherwise dispose, of the Collateral or any interest therein
except for (i) sales of inventory in the ordinary course of business and (ii) so
long as no Event of Default has occurred and is continuing, sales or other
dispositions of obsolescent items of equipment consistent with past practices.
10. Insurance.
10.1. Maintenance of Insurance. The Debtor will maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as
shall be in accordance with general practices of businesses engaged in
similar activities in similar geographic areas. Such insurance shall be
in such minimum amounts that the Debtor will not be deemed a co-insurer
under applicable insurance laws, regulations and policies and otherwise
shall be in such amounts, contain such terms, be in such forms and be
for such periods as may be reasonably satisfactory to the Secured
Party. In addition, all such insurance shall be payable to the Secured
Party as loss payee. Without limiting the foregoing, the Debtor will
(i) keep all of its physical property insured with casualty or physical
hazard insurance on an "all risks" basis, with broad form flood and
earthquake coverages and electronic data processing coverage, with a
full replacement cost endorsement and an "agreed amount" clause in an
amount equal to 100% of the full replacement cost of such property,
(ii) maintain all such workers' compensation or similar insurance as
may be required by law, and (iii) maintain, in amounts and with
deductibles equal to those generally maintained by businesses engaged
in similar activities in similar geographic areas, general public
liability insurance against claims of bodily injury, death or property
damage occurring, on, in or about the properties of the Debtor;
business interruption insurance; and product liability insurance.
10.2. Insurance Proceeds. The proceeds of any casualty
insurance in respect of any casualty loss of any of the Collateral
shall, subject to the rights, if any, of other parties with an interest
having priority in the property covered thereby, (i) so long as no
Event of Default has occurred and is continuing and to the extent that
the amount of such proceeds is less than $10,000, be disbursed to the
Debtor for direct application by the Debtor solely to the repair or
replacement of the Debtor's property so damaged or destroyed, and (ii)
in all other circumstances, be held by the Secured Party as cash
collateral for the Obligations. The Secured Party may, at its sole
option, disburse from time to time all or any part of such proceeds so
held as cash collateral, upon such terms and conditions as the Secured
Party may reasonably prescribe, for direct application by the Debtor
solely to the repair or replacement of the Debtor's property so damaged
or destroyed, or the Secured Party may apply all or any part of such
proceeds to the Obligations.
10.3. Continuation of Insurance. All policies of insurance
shall provide for at least 30 days prior written cancellation notice to
the Secured Party. In the event of failure by the Debtor to provide and
maintain insurance as herein provided, the Secured Party may, at its
option, provide such insurance and charge the amount thereof to the
Debtor. The Debtor shall furnish the Secured Party with certificates of
insurance and policies evidencing compliance with the foregoing
insurance provision.
11. Collateral Protection Expenses; Preservation of Collateral.
11.1. Expenses Incurred by Secured Party. In the Secured
Party's discretion, if the Debtor fails to do so, the Secured Party may
discharge taxes and other encumbrances at any time levied or placed on
any of the Collateral, maintain any of the Collateral, make repairs
thereto and pay any necessary filing fees or insurance premiums. The
Debtor agrees to reimburse the Secured Party on demand for all
expenditures so made. The Secured Party shall have no obligation to the
Debtor to make any such expenditures, nor shall the making thereof be
construed as the waiver or cure of any Event of Default.
11.2. Secured Party's Obligations and Duties. Anything herein
to the contrary notwithstanding, the Debtor shall remain obligated and
liable under each contract or agreement comprised in the Collateral to
be observed or performed by the Debtor thereunder. The Secured Party
shall not have any obligation or liability under any such contract or
agreement by reason of or arising out of this Agreement or the receipt
by the Secured Party of any payment relating to any of the Collateral,
nor shall the Secured Party be obligated in any manner to perform any
of the obligations of the Debtor under or pursuant to any such contract
or agreement, to make inquiry as to the nature or sufficiency of any
payment received by the Secured Party in respect of the Collateral or
as to the sufficiency of any performance by any party under any such
contract or agreement, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts
which may have been assigned to the Secured Party or to which the
Secured Party may be entitled at any time or times. The Secured Party's
sole duty with respect to the custody, safe keeping and physical
preservation of the Collateral in its possession, under Section
70A-9a-207 of the Uniform Commercial Code of the State or otherwise,
shall be to deal with such Collateral in the same manner as the Secured
Party deals with similar property for its own account.
12. Securities and Deposits. The Secured Party may at any time
following and during the continuance of an Event of Default, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations. Whether or not any Obligations are due, the Secured
Party may, following and during the continuance of an Event of Default, demand,
xxx for, collect, or make any settlement or compromise which it deems desirable
with respect to the Collateral. Regardless of the adequacy of Collateral or any
other security for the Obligations, any deposits or other sums at any time
credited by or due from the Secured Party to the Debtor may at any time be
applied to or set off against any of the Obligations.
13. Notification to Account Debtors and Other Persons Obligated on
Collateral. If an Event of Default shall have occurred and be continuing, the
Debtor shall, at the request and option of the Secured Party, notify account
debtors and other persons obligated on any of the Collateral of the security
interest of the Secured Party in any account, chattel paper, general intangible,
instrument or other Collateral and that payment thereof is to be made directly
to the Secured Party or to any financial institution designated by the Secured
Party as the Secured Party's agent therefor, and the Secured Party may itself,
without notice to or demand upon the Debtor, so notify account debtors and other
persons obligated on Collateral. After the making of such a request or the
giving of any such notification, the Debtor shall hold any proceeds of
collection of accounts, chattel paper, general intangibles, instruments and
other Collateral received by the Debtor as trustee for the Secured Party without
commingling the same with other funds of the Debtor and shall turn the same over
to the Secured Party in the identical form received, together with any necessary
endorsements or assignments. The Secured Party shall apply the proceeds of
collection of accounts, chattel paper, general intangibles, instruments and
other Collateral received by the Secured Party to the Obligations, such proceeds
to be immediately credited after final payment in cash or other immediately
available funds of the items giving rise to them.
14. Power of Attorney.
14.1. Appointment and Powers of Secured Party. The Debtor
hereby irrevocably constitutes and appoints the Secured Party and any
officer or agent thereof, with full power of substitution, as its true
and lawful attorneys-in-fact with full irrevocable power and authority
in the place and stead of the Debtor or in the Secured Party's own
name, for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or useful to accomplish
the purposes of this Agreement and, without limiting the generality of
the foregoing, hereby gives said attorneys the power and right, on
behalf of the Debtor, without notice to or assent by the Debtor, to do
the following:
(a) upon the occurrence and during the continuance of
an Event of Default, generally to sell, transfer, pledge, make
any agreement with respect to or otherwise dispose of or deal
with any of the Collateral in such manner as is consistent
with the Uniform Commercial Code of the State and as fully and
completely as though the Secured Party were the absolute owner
thereof for all purposes, and to do, at the Debtor's expense,
at any time, or from time to time, all acts and things which
the Secured Party deems necessary or useful to protect,
preserve or realize upon the Collateral and the Secured
Party's security interest therein, in order to effect the
intent of this Agreement, all at least as fully and
effectively as the Debtor might do, including, without
limitation, (i) the filing and prosecuting of registration and
transfer applications with the appropriate federal, state,
local or other agencies or authorities with respect to
trademarks, copyrights and patentable inventions and
processes, (ii) upon written notice to the Debtor, the
exercise of voting rights with respect to voting securities,
which rights may be exercised, if the Secured Party so elects,
with a view to causing the liquidation of assets of the issuer
of any such securities, and (iii) the execution, delivery and
recording, in connection with any sale or other disposition of
any Collateral, of the endorsements, assignments or other
instruments of conveyance or transfer with respect to such
Collateral; and
(b) to the extent that the Debtor's authorization
given in Section 3 is not sufficient, to file such financing
statements with respect hereto, with or without the Debtor's
signature, or a photocopy of this Agreement in substitution
for a financing statement, as the Secured Party may deem
appropriate and to execute in the Debtor's name such financing
statements and amendments thereto and continuation statements
which may require the Debtor's signature.
14.2. Ratification by Debtor. To the extent permitted by law,
the Debtor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and is irrevocable.
14.3. No Duty on Secured Party. The powers conferred on the
Secured Party hereunder are solely to protect its interests in the
Collateral and shall not impose any duty upon it to exercise any such
powers. The Secured Party shall be accountable only for the amounts
that it actually receives as a result of the exercise of such powers,
and neither it nor any of its officers, directors, employees or agents
shall be responsible to the Debtor for any act or failure to act,
except for the Secured Party's own gross negligence or willful
misconduct.
15. Rights and Remedies. If an Event of Default shall have occurred and
be continuing, the Secured Party, without any other notice to or demand upon the
Debtor have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Uniform Commercial Code of the State and any additional rights
and remedies which may be provided to a secured party in any jurisdiction in
which Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Secured Party may, so far
as the Debtor can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Secured Party may
in its discretion require the Debtor to assemble all or any part of the
Collateral at such location or locations within the jurisdiction(s) of the
Debtor's principal office(s) or at such other locations as the Secured Party may
reasonably designate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, the Secured Party shall give to the Debtor at least five business days
prior written notice of the time and place of any public sale of Collateral or
of the time after which any private sale or any other intended disposition is to
be made. The Debtor hereby acknowledges that five business days prior written
notice of such sale or sales shall be reasonable notice. In addition, the Debtor
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Secured Party's rights and remedies hereunder,
including, without limitation, its right following an Event of Default to take
immediate possession of the Collateral and to exercise its rights and remedies
with respect thereto.
16. Standards for Exercising Rights and Remedies. To the extent that
applicable law imposes duties on the Secured Party to exercise remedies in a
commercially reasonable manner, the Debtor acknowledges and agrees that it is
not commercially unreasonable for the Secured Party (a) to fail to incur
expenses reasonably deemed significant by the Secured Party to prepare
Collateral for disposition or otherwise to fail to complete raw material or work
in process into finished goods or other finished products for disposition, (b)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove liens or encumbrances on or any adverse claims against
Collateral, (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (e) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature, (f) to contact other persons, whether
or not in the same business as the Debtor, for expressions of interest in
acquiring all or any portion of the Collateral, (g) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature, (h) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (i) to dispose of assets in
wholesale rather than retail markets, (j) to disclaim disposition warranties,
(k) to purchase insurance or credit enhancements to insure the Secured Party
against risks of loss, collection or disposition of Collateral or to provide to
the Secured Party a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Secured Party, to
obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Secured Party in the collection or disposition of
any of the Collateral. The Debtor acknowledges that the purpose of this Section
16 is to provide non-exhaustive indications of what actions or omissions by the
Secured Party would fulfill the Secured Party's duties under the Uniform
Commercial Code or other law of the State or any other relevant jurisdiction in
the Secured Party's exercise of remedies against the Collateral and that other
actions or omissions by the Secured Party shall not be deemed to fail to fulfill
such duties solely on account of not being indicated in this Section 16. Without
limitation upon the foregoing, nothing contained in this Section 16 shall be
construed to grant any rights to the Debtor or to impose any duties on the
Secured Party that would not have been granted or imposed by this Agreement or
by applicable law in the absence of this Section 16.
17. No Waiver by Secured Party, etc. The Secured Party shall not be
deemed to have waived any of its rights or remedies in respect of the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Secured Party. No delay or omission on the part of the Secured Party in
exercising any right or remedy shall operate as a waiver of such right or remedy
or any other right or remedy. A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.
All rights and remedies of the Secured Party with respect to the Obligations or
the Collateral, whether evidenced hereby or by any other instrument or papers,
shall be cumulative and may be exercised singularly, alternatively, successively
or concurrently at such time or at such times as the Secured Party deems
expedient.
18. Suretyship Waivers by Debtor. The Debtor waives demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to
both the Obligations and the Collateral, the Debtor assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Secured Party may deem advisable. The Secured Party
shall have no duty as to the collection or protection of the Collateral or any
income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 11.2. The Debtor further waives any and all other
suretyship defenses.
19. Marshalling. The Secured Party shall not be required to marshal any
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising. To the extent that it lawfully may, the Debtor hereby agrees that it
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Secured Party's rights and
remedies under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Debtor hereby
irrevocably waives the benefits of all such laws.
20. Proceeds of Dispositions; Expenses. The Debtor shall pay to the
Secured Party on demand any and all expenses, including reasonable attorneys'
fees and disbursements, incurred or paid by the Secured Party in protecting,
preserving or enforcing the Secured Party's rights and remedies under or in
respect of any of the Obligations or any of the Collateral. After deducting all
of said expenses, the residue of any proceeds of collection or sale or other
disposition of the Collateral shall, to the extent actually received in cash, be
applied to the payment of the Obligations in such order or preference as the
Secured Party may determine, proper allowance and provision being made for any
Obligations not then due. Upon the final payment and satisfaction in full of all
of the Obligations and after making any payments required by Sections
70A-9a-608(1)(c) or 70A-9a-615(3) of the Uniform Commercial Code of the State,
any excess shall be returned to the Debtor. In the absence of final payment and
satisfaction in full of all of the Obligations, the Debtor shall remain liable
for any deficiency.
21. Overdue Amounts. Until paid, all amounts due and payable by the
Debtor hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Note.
22. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED
TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF UTAH. The Debtor agrees that any
action or claim arising out of, or any dispute in connection with, this
Agreement, any rights, remedies, obligations, or duties hereunder, or the
performance or enforcement hereof or thereof, may be brought in the courts of
the State or any federal court sitting therein and consents to the non-exclusive
jurisdiction of such court and to service of process in any such suit being made
upon the Debtor by mail at the address specified in the Note. The Debtor hereby
waives any objection that it may now or hereafter have to the venue of any such
suit or any such court or that such suit is brought in an inconvenient court.
23. Waiver of Jury Trial. THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER, OR
THE PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF. Except as prohibited by law,
the Debtor waives any right which it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Debtor (i) certifies that neither the Secured Party nor any
representative, agent or attorney of the Secured Party has represented,
expressly or otherwise, that the Secured Party would not, in the event of
litigation, seek to enforce the foregoing waivers or other waivers contained in
this Agreement, and (ii) acknowledges that, in entering into the Note, the
Secured Party is relying upon, among other things, the waivers and
certifications contained in this Section 23.
24. Miscellaneous. The headings of each section of this Agreement are
for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Debtor and its respective successors and assigns, and shall inure to the benefit
of the Secured Party and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Debtor acknowledges receipt
of a copy of this Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the Debtor has
caused this Agreement to be duly executed as of the date first above written.
PEAK ASPHALT, L.L.C.
By:_______________________________
Title:____________________________
Accepted:
CROWN ENERGY CORPORATION
By:_________________________________________
Title:______________________________________
CROWN ASPHALT PRODUCTS COMPANY
By:_________________________________________
Title:______________________________________
CROWN ASPHALT DISTRIBUTION L.L.C.
By:_________________________________________
Title:______________________________________
CERTIFICATE OF ACKNOWLEDGMENT
STATE OF UTAH )
)ss.
COUNTY OF XXXXX )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this ___ day of _______, 2004, personally appeared
________________ to me known personally, and who, being by me duly sworn,
deposes and says that he is the _________________ of PEAK ASPHALT, L.L.C., and
that said instrument was signed and sealed on behalf of said limited liability
company by authority of its Management Committee, and said person acknowledged
said instrument to be the free act and deed of said limited liability company.
________________________
Notary Public
PERFECTION CERTIFICATE
(UCC Financing Statements)
The undersigned, the ______________ and _________________ of PEAK
ASPHALT, L.L.C., a Utah limited liability company (the "Debtor"), hereby
certifies, with reference to a certain Promissory Note dated as of ____________,
2004 (terms defined in such Security Agreement having the same meanings herein
as specified therein), between the Debtor and CROWN ENERGY CORPORATION, a Utah
corporation, CROWN ASPHALTS PRODUCTS COMPANY, a Utah corporation, and CROWN
ASPHALT DISTRIBUTION L.L.C., a Utah limited liability company (collectively, the
" Secured Party"), to the Secured Party as follows:
1. Name. The exact legal name of the Debtor as that name appears in its
Articles of Organization is as follows:
PEAK ASPHALT, L.L.C.
2. Other Identifying Factors.
(a) The following is a mailing address for the Debtor:
0000 Xxxx 0000 Xxxxx
Xxxxx Xxxxx, Xxxx 00000
(b) If different from its indicated mailing address, the
Debtor's place of business or, if more than one, its chief executive office is
located at the following address: N/A
(c) The following is the type of organization of the Debtor:
limited liability company
(d) The following is the jurisdiction of the Debtor's
organization:
Utah
(e) The following is the Debtor's state issued organizational
identification number:
-------------------
3. Other Names, etc.
(a) The following is a list of all other names (including
trade names or similar appellations) used by the Debtor, or any other business
or organization to which the Debtor became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise, now or at any time during the past five years: N/A
(b) Attached hereto as Schedule 3 is the information required
in Section 2 for any other business or organization to which the Debtor became
the successor by merger, consolidation, acquisition of assets, change in form,
nature or jurisdiction of organization or otherwise, now or at any time during
the past five years: N/A
4. Other Current Locations.
(a) The following are all other locations in the United States
of America in which the Debtor maintains any books or records relating to any of
the Collateral consisting of accounts, instruments, chattel paper, general
intangibles or mobile goods:
Address City County State
------- ---- ------ -----
0000 X. Xxxxx Xxxxxx Xxxx Xxxx Xxxx Xxxx Xxxx Xxxx
0000 Xxxxx Xxxxxxx 00-X Xxxxxxxx Coconino Arizona
0000 Xxxx Xxxxxxxx Xxxxxx Xxxxxxx Carbon Wyoming
0000 Xxxxxxxxx Xxxx Xxxxx Xxxxxx Xxxx Xxxxxxxx
(b) The following are all other places of business of the
Debtor in the United States of America:
same as above
(c) The following are all other locations in the United States
of America where any of the Collateral consisting of inventory or equipment is
located:
same as above
(d) The following are the names and addresses of all persons
or entities other than the Debtor, such as lessees, consignees, warehousemen or
purchasers of chattel paper, which have possession or are intended to have
possession of any of the Collateral consisting of instruments, chattel paper,
inventory or equipment: N/A
5. Prior Locations.
(a) Set forth below is the information required by Section 4
(a) or (b) with respect to each location or place of business previously
maintained by the Debtor at any time during the past five years in a state in
which the Debtor has previously maintained a location or place of business at
any time during the past four months: N/A
(b) Set forth below is the information required by Section
4(c) or (d) with respect to each other location at which, or other person or
entity with which, any of the Collateral consisting of inventory or equipment
has been previously held at any time during the past twelve months: N/A
6. Fixtures. Attached hereto as Schedule 6 is the information required
by UCC Section 70A-9a-502(2) of each state in which any of the Collateral
consisting of fixtures are or are to be located and the name and address of each
real estate recording office where a mortgage on the real estate on which such
fixtures are or are to be located would be recorded.
7. Unusual Transactions. Except for those purchases, acquisitions and
other transactions described on Schedule 3 or on Schedule 7 attached hereto, all
of the Collateral has been originated by the Debtor in the ordinary course of
the Debtor's business or consists of goods which have been acquired by the
Debtor in the ordinary course from a person in the business of selling goods of
that kind.
8. File Search Reports. Attached hereto as Schedule 8(A) is a true copy
of a file search report from the Uniform Commercial Code filing officer (or, if
such officer does not issue such reports, from an experienced Uniform Commercial
Code search organization acceptable to the Secured Party) (i) in each
jurisdiction identified in Section 2(d) or in Section 4 or 5 with respect to
each name set forth in Section 1 or 3, (ii) from each filing officer in each
real estate recording office identified on Schedule 6 with respect to real
estate on which Collateral consisting of fixtures are or are to be located and
(iii) in each jurisdiction in which any of the transactions described in
Schedule 3 or 7 took place with respect to the legal name of the person from
which the Debtor purchased or otherwise acquired any of the Collateral. Attached
hereto as Schedule 8(B) is a true copy of each financing statement or other
filing identified in such file search reports.
9. UCC Filings. A duly authorized financing statement, in a form
acceptable to the Secured Party and containing the indication of the Collateral
set forth on Schedule 9(A) has been duly filed in the central Uniform Commercial
Code filing office in the jurisdiction identified in Section 2(d) and in each
real estate recording office referred to on Schedule 6 hereto. Attached hereto
as Schedule 9(B) is a true copy of each such filing duly acknowledged or
otherwise identified by the filing office.
10. Termination Statements. A duly signed or otherwise authorized
termination statement in form acceptable to the Secured Party has been duly
filed in each applicable jurisdiction identified in Section 2(d), 3, 4 and 5 or
on Schedule 3 or 7 hereto or, in the case of Schedule 3 or 7, a release
acceptable to the Secured Party from the secured party of the person from which
the Debtor purchased or otherwise acquired the Collateral identified on Schedule
3 or 7, has been delivered to the Secured Party. Attached hereto as Schedule 10
is a true copy of each such filing duly acknowledged or otherwise identified by
the filing office and of each such release.
11. Schedule of Filing. Attached hereto as Schedule 11 is a schedule
setting forth filing information with respect to the filings described in
Sections 9 and 10.
12. Filing Fees. All filing fees and taxes payable in connection with
the filings described in Sections 9 and 10 have been paid.
IN WITNESS WHEREOF, we have hereunto signed this Certificate on
____________, 2004.
PEAK ASPHALT, L.L.C.
By ____________________________
Name:__________________________
Title: ________________________
Exhibit J
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of November
____, 2004, by and between PEAK ASPHALT, L.L.C., a Utah limited liability
company (the "Company") and XXX XXXXXX (the "Executive").
RECITALS
WHEREAS, the parties are entering into this Agreement in order to set
forth the terms and conditions under which the Executive shall be employed by
the Company; and
WHEREAS, the Executive has significant knowledge and experience in the
Company's business and intimate knowledge of its customers, processes, trade
secrets and/or other business information and the Company needs to protect its
commercial good will and other assets.
NOW THEREFORE, in consideration of the foregoing, the agreements set
forth below, the parties' desire to preserve the value inherent in the Company
for their mutual benefit, and for other valuable consideration (the receipt of
which the Executive hereby acknowledges), the Executive, intending to be legally
bound hereby, agrees with the Company as follows:
1. Employment. The Company hereby agrees to employ the Executive and the
Executive hereby accepts employment on the terms and conditions set forth
herein. The Executive's employment with the Company shall commence on the date
hereof.
2. Term; Employment at Will. Subject to the Executive's right to resign at any
time for any or no reason, and subject to the Company's right to terminate for
cause set forth in Section 3 herein, the Company shall continuously employ the
Executive at all times during which any amount is payable by the Company under
that certain Promissory Note dated the date hereof in the aggregate principal
amount of $7,500,000 by and among the Company and Crown Energy Corporation,
Crown Asphalt Products Company and Crown Asphalt Distribution LLC. Thereafter,
the Executive will be deemed to be an employee at will and the Company may
terminate the Executive's employment at any time and for any or for no reason.
3. Termination for Cause. Company may at any time terminate Executive's
employment with "Cause" due to any of the following:
3.1 The failure by Executive to perform, or the gross
negligence of Employee in the performance of the duties reasonably assigned to
Executive from time to time by Company's Management Committee.
3.2 The commission by Executive of an act of dishonesty or
misconduct which is or could be injurious to Company.
3.3 A plea of guilty or no contest by Executive or a
conviction of Executive in connection with fraud or any crime that constitutes a
felony in the jurisdiction involved.
3.4 The Executive becomes permanently disabled as defined in
Section 7 herein.
4. Position. During the Executive's employment with Company, the Executive shall
serve as Secretary of the Company. The Executive shall perform those duties
generally required of persons in the position of Secretary, as well as such
other duties, not inconsistent with this Agreement, as the Company's Management
Committee may from time to time direct. The Executive shall report and be
responsible to the Management Committee.
5. Scope of Services. The Executive agrees to devote the skills necessary to the
performance of the Executive's duties hereunder. The Executive shall not be
required to devote full-time to Company business but shall be required to devote
such time to the Company as shall be required from time to time by the Company's
Management Committee. The Executive may, at any time and from time to time,
engage in and possess an interest in other business ventures of any and every
type and description, independently or with others.
6. Salary, Compensation and Benefits.
6.1 Base Salary. During the Executive's employment, the
Company agrees to pay, and the Executive agrees to accept, as the Executive's
salary for all services to be rendered by the Executive hereunder, a salary at
an annual rate of $___________ ("Base Salary"), payable at the same time that
the Company pays its employees generally. The Base Salary is subject to annual
increases in the sole discretion of the Management Committee.
6.2 Performance Bonus. For each calendar year (beginning with
the year [____]) during which the Executive is employed by the Company, the
Executive will be eligible (but not entitled) to receive, in the sole discretion
of the Management Committee, a performance bonus for that calendar year (the
"Performance Bonus"), any such Performance Bonus to be paid on or before such
date or dates as may from time to time be established by the Management
Committee. In addition, the Executive shall also be entitled to participate in
any bonus program made available by the Company to executive and management
level employees.
6.3 Incentives, Savings and Retirement Plans. The Executive
shall also be entitled to participate in all incentive, savings, and retirement
plans, policies and programs made available by the Company to executive and
management level employees generally ("Plans").
6.4 Fringe Benefits. During the Executive's employment with
the Company, the Executive shall be entitled to the benefits of such paid
vacation benefits, group medical, travel and accident, short and long-term
disability and term life insurance, if any, as the Company shall make generally
available from time to time to executive-level employees.
6.5 Reimbursement. The Company shall reimburse the Executive
(or, in the Company's sole discretion, shall pay directly), upon presentation of
vouchers and other supporting documentation as the Company may reasonably
require, for reasonable out-of-pocket expenses incurred by the Executive
relating to the business or affairs of the Company or the performance of the
Executive's duties hereunder, including, without limitation, reasonable expenses
with respect to entertainment, travel and similar items, provided that the
incurring of such expenses shall have been approved in accordance with the
Company's regular reimbursement procedures and practices in effect from time to
time.
6.6 Withholding. The Company may withhold from the Executive's
compensation all applicable amounts required by law.
7. Payments Upon Termination of Employment. In the event the Executive's
employment with the Company terminates for any reason (including death or
permanent disability) (the "Termination Date"), the Company shall pay to the
Executive (i) any Base Salary including accrued vacation pay, expense
reimbursements, compensation and benefits under any Plan, and any and all
benefits and other similar amounts, accrued but unpaid as of the Termination
Date, and (ii) the awarded but unpaid portion, if any, of the Performance Bonus
for any prior or current year. For purposes hereof, the Executive shall be
deemed to have a permanent disability either (i) if the Executive is deemed
disabled for purposes of any group or individual disability policy paid for by
the Company and at the time in effect, or (ii) if, in the good faith judgment of
the Management Committee, the Executive is substantially unable to perform the
Executive's duties under this Agreement for more than ninety (90) days, whether
or not consecutive, in any twelve (12) month period, by reason of a physical or
mental illness or injury.
8. Waivers and Amendments. The respective rights and obligations of the Company
and the Executive under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely) or amended only with the written
consent of a duly authorized representative of the Company and the Executive.
9. Successors and Assigns. The provisions hereof shall inure to the benefit of,
and be binding upon, the Company's successors and assigns.
10. Entire Agreement. This Agreement and the Related Agreements constitute the
full and entire understanding and agreement of the parties with regard to the
subjects hereof and supersede in their entirety all other or prior agreements,
whether oral or written, with respect thereto.
11. Notices. All demands, notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing and shall be
personally delivered or sent by facsimile machine (with a confirmation copy sent
by one of the other methods authorized in this Section), reputable commercial
overnight delivery service (including Federal Express and U.S. Postal Service
overnight delivery service) or, deposited with the U.S. Postal Service mailed
first class, registered or certified mail, postage prepaid, as set forth below:
If to the Company, addressed to:
Peak Asphalt, L.L.C.
0000 Xxxx 0000 Xxxxx
Xxxxx Xxxxx, Xxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxx
0000 Xxxxx 00 Xxxx
Xxxxx Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
If to the Executive, to the address set forth on the signature page of
this Agreement or at the current address listed in the Company's records.
Notices shall be deemed given upon the earlier to occur of (i) receipt
by the party to whom such notice is directed; (ii) if sent by facsimile machine,
on the day (other than a Saturday, Sunday or legal holiday in the jurisdiction
to which such notice is directed) such notice is sent if sent (as evidenced by
the facsimile confirmed receipt) prior to 5:00 p.m. Eastern Time and, if sent
after 5:00 p.m. Eastern Time, on the day (other than a Saturday, Sunday or legal
holiday in the jurisdiction to which such notice is directed) after which such
notice is sent; (iii) on the first business day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
the day the same is deposited with the commercial courier if sent by commercial
overnight delivery service; or (iv) the fifth day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
deposit thereof with the U.S. Postal Service as aforesaid. Each party, by notice
duly given in accordance therewith, may specify a different address for the
giving of any notice hereunder.
12. Governing Law. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Utah (without giving effect to any
conflicts or choice of laws provisions thereof that would cause the application
of the domestic substantive laws of any other jurisdiction).
13. Consent to Jurisdiction
13.1 Each of the parties hereto hereby consents to the
jurisdiction of all state and federal courts located in Salt Lake City, Utah, as
well as to the jurisdiction of all courts to which an appeal may be taken from
such courts, for the purpose of any suit, action or other proceeding arising out
of, or in connection with, this agreement or any of the transactions
contemplated hereby, including, without limitation, any proceeding relating to
ancillary measures in aid of arbitration, provisional remedies and interim
relief, or any proceeding to enforce any arbitral decision or award. Each party
hereby expressly waives any and all rights to bring any suit, action or other
proceeding in or before any court or tribunal other than the courts described
above and covenants that it shall not seek in any manner to resolve any dispute
other than as set forth in this section or as provided in the nondisclosure and
developments agreement, or to challenge or set aside any decision, award or
judgment obtained in accordance with the provisions hereof.
13.2 Each of the parties hereto hereby expressly waives any
and all objections it may have to venue, including, without limitation, the
inconvenience of such forum, in any of such courts. In addition, each of the
parties consents to the service of process by personal service or any manner in
which notices may be delivered hereunder in accordance with Section 15 of this
Agreement.
14. Equitable Remedies. The parties hereto agree that irreparable harm would
occur in the event that any of the agreements and provisions of this Agreement
were not performed fully by the parties hereto in accordance with their specific
terms or conditions or were otherwise breached, and that money damages are an
inadequate remedy for breach of this Agreement because of the difficulty of
ascertaining and quantifying the amount of damage that will be suffered by the
parties hereto in the event that this Agreement is not performed in accordance
with its terms or conditions or is otherwise breached. It is accordingly hereby
agreed that the parties hereto shall be entitled to an injunction or injunctions
or other equitable relief to restrain, enjoin and prevent breaches of this
Agreement by the other parties and to enforce specifically such terms and
provisions of this Agreement, such remedy being in addition to and not in lieu
of, any other rights and remedies to which the other parties are entitled to at
law or in equity. The Company and the Executive agree that the covenants set
forth in this Agreement shall be enforced to the fullest extent permitted by
law. Accordingly if, in any judicial proceedings, a court shall determine that
such covenant is unenforceable for any reason, including, without limitation,
because it covers too extensive a geographical area or survives too long a
period of time, then the parties intend that such covenant shall be deemed to
cover only such maximum geographical area and maximum period of time, if
applicable, and/or shall otherwise be deemed to be limited in such manner, as
will permit enforceability by such court. In the event that any one or more of
such covenants shall, either by itself or together with other covenants be
adjudged to go beyond what is reasonable in all the circumstances for the
protection of the interests of the Company and its shareholders, but would be
adjudged reasonable if any particular covenant or covenants or parts thereof
were deleted, restricted, or limited in a particular manner, then the said
covenants shall apply with such deletions, restrictions, or limitations, as the
case may be. The Company and the Executive further agree that the covenants set
forth in this Agreement are reasonable in all circumstances for the protection
of the legitimate interests of the Company and its members.
15. Severability; Titles and Subtitles; Gender; Singular and Plural;
Counterparts; Facsimile.
15.1 In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
15.2 The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
15.3 The use of any gender in this Agreement shall be deemed
to include the other genders, and the use of the singular in this Agreement
shall be deemed to include the plural (and vice versa), wherever appropriate.
15.4 This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
constitute one instrument.
15.5 Counterparts of this Agreement (or applicable signature
pages hereof) that are manually signed and delivered by facsimile transmission
shall be deemed to constitute signed original counterparts hereof and shall bind
the parties signing and delivering in such manner.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above specified.
COMPANY:
PEAK ASPHALT, L.L.C.
By __________________________________
Name:________________________________
Title:_______________________________
EXECUTIVE:
_____________________________________
Xxx Xxxxxx
Address:
0000 Xxxxxx'x Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
