EX-2.2
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ex2-2.htm
MEMBERSHIP INTEREST PURCHASE AGREEMENT
Vertex Energy 8-K
Exhibit 2.2
MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS
MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is entered into as of January 29th, 2016 by
and between VERTEX REFINING NV, LLC, a Nevada limited-liability company (“Buyer”) and the sole member
of BANGO OIL LLC, a Nevada limited-liability company (the “Company”): FOX ENCORE 05 LLC, a Washington
limited liability company ( “Seller”).
RECITALS
WHEREAS,
Seller owns one hundred percent (100%) of the issued and outstanding Membership Interests (as defined in Article I hereof) of
the Company;
WHEREAS,
Buyer and the Company entered into that certain Lease With Option for Membership Interest Purchase dated April 30, 2015 (the “Lease”),
which included in Section 13 thereof an option (the “Option”) for Buyer to purchase one hundred percent
(100%) of the issued and outstanding Membership Interests of the Company;
WHEREAS,
Buyer has exercised the Option on the date hereof (the “Exercise Date”) in accordance with Section 13
of the Lease; and
WHEREAS,
pursuant to Buyer’s exercise of the Option, Seller desires to sell and transfer to Buyer, and Buyer desires to purchase
from Seller, one hundred percent (100%) of the issued and outstanding Membership Interests of the Company upon the terms and conditions
hereinafter set forth.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
In
addition to other terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below:
“1933
Act” means the Securities Act of 1933, as amended, and the rules promulgated thereunder.
“Affiliate”
means, with respect to any Person, any Person controlling, controlled by or under common control with such Person.
“Bango
Articles” means the articles of organization attached hereto as part of Schedule 3.1.
“Bango
Operating Agreement” means the operating agreement attached hereto as part of Schedule 3.1.
“Business
Day” means any day other than Saturday, Sunday or a day on which banks are authorized or required to close in Reno,
Nevada.
“Company
Charter Documents” means the Bango Articles and Bango Operating Agreement.
“Equity
Interests” means all Membership Interests, securities, equity interests or other ownership interests of or in the
Company or any options, warrants or other rights to acquire, or securities convertible into, any Membership Interests, securities,
equity interests or other ownership interests of or in the Company.
“Intellectual
Property” means all intellectual property rights, including without limitation (i) copyrights, patents, industrial
design rights, trademarks, logos, slogans, corporate names, trade names, rights of priority, and applications and registrations
for any of the foregoing, (ii) inventions, trade secrets, know-how, mask works, software, firmware, specifications, designs, drawings,
processes, data, methodologies, ideas, concepts, inventions, plans, techniques, tools, hardware, works of authorship, and (iii)
other Proprietary Information and technology necessary to the past and present conduct of the Company’s business.
“Knowledge”,
when used with respect to Seller, means the actual knowledge, without any duty of inquiry, of Xxxx X. Xxx and D. Xxxxxx Xxx.
“Material
Adverse Change” means a material adverse change in the assets, financial condition, operating results, customer,
employee or supplier relations, business condition or prospects of the Company or the value of the Membership Interests.
“Material
Adverse Effect” means a material adverse effect on the assets, financial condition, operating results, customer,
employee or supplier relations, business condition or prospects of the Company or the value of the Membership Interests.
“Membership
Interests” means the issued and outstanding membership units or interests of the Company.
“Person”
means any individual, corporation, trust, limited liability company, partnership, organization or other entity.
“Prior
Lessee” means Bango Refining NV, LLC, a Delaware limited liability company.
“State
of Formation” means the State of Nevada.
“Tax”
or “Taxes” means all taxes, charges, fees, levies, or other assessments, including, without limitation,
all net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll,
employment, social security, unemployment, excise, estimated, severance, stamp, occupation, property, or other taxes, customs
duties, fees, assessments, or charges of any kind whatsoever, including, without limitation, all interest and penalties thereon,
and additions to tax or additional amounts imposed by any taxing authority, domestic or foreign, upon the Company or any Tax Affiliate.
“Tax
Affiliate” means any subsidiary, any affiliated, combined or unitary group of which the Company is or was a member.
“Tax
Return” means any return, declaration, report, claim for refund, or information return or statement or other form
relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Vertex
Energy” means Vertex Energy, Inc., a Nevada corporation.
“Vertex
Ohio” means Vertex Refining OH, LLC, an Ohio limited liability company.
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTERESTS
AND CLOSING
2.1
Exercise of Option; Purchase of Membership Interests by Buyer.
(a)
Buyer has exercised the Option effective as of the Exercise Date. Seller, on behalf of the Company, acknowledges receipt of notice
of the exercise of the Option. Seller further acknowledges that the exercise of the Option by Buyer was valid and hereby waives,
notwithstanding Section 13.2 of the Lease, any right to assert a breach or violation of the Lease or to otherwise claim that such
exercise of the Option was not valid, as a result of the application of any advance notice provisions in the Lease for exercising
the Option.
(b)
Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller, one hundred percent (100%) of all of the issued and outstanding
Membership Interests of the Company (“Seller’s Membership Interests”) at the Closing (as defined
in Section 2.3 hereof) on the terms and subject to the conditions set forth in this Agreement. The parties acknowledge and agree
that Seller’s Membership Interests shall be deemed to include those certain tracts or parcels of land located in Xxxxxxxxx
County, Nevada, described on Schedule 2.1 attached hereto and incorporated herein by this reference (the “Land”),
together with the fixtures, personal property, structures and other improvements owned by the Company currently erected or located
thereon, including, without limitation, the current used oil re-refining plant, storage tanks, offices, and warehouse, and related
personal property (if any), and together with any rights, privileges, easements, entitlements, permits, appurtenances and technology
and/or intellectual property utilized in the construction, operation, repair, maintenance of the oil re-refining plant and the
Company’s business and belonging or in any way pertaining to the foregoing (collectively, the “Property”).
2.2
Purchase Price. The Buyer and Seller acknowledge and agree that the total purchase price for Seller’s Membership
Interests (the “Purchase Price”) to be paid to Seller in exchange for Seller’s Membership Interests
and performance of this Agreement by the Company and Seller shall be Nine Million Three Thousand Dollars ($9,003,000.00).
2.3
The Closing.
(a)
The closing of the transactions contemplated by this Agreement (the “Closing”) will take place concurrently
with the execution of this Agreement by all parties hereto (the “Closing Date”). The Closing will occur
at, or be coordinated from, the offices of Holland & Xxxx LLP, 5441 Kietzke Lane, Second Floor, Reno, Nevada, or at such other
place and on such other date and time as is mutually agreeable to Buyer and Seller. The Closing will be effective as of the close
of business on the Closing Date.
(b)
The parties agree to consummate the following transactions/make the following deliveries on the Closing Date:
(i)
Seller will assign and transfer to Buyer merchantable title in and to Seller’s Membership Interests, free and clear of all
liens, and shall deliver to Buyer an assignment of membership interest substantially in the form attached hereto as Exhibit
A and incorporated herein by this reference;
(ii)
Any Person (including Seller) that is a manager or managing member of the Company shall deliver a resignation to the Company substantially
in the form attached hereto as Exhibit B and incorporated herein by this reference;
(iii)
The Company and Buyer shall deliver a release of Seller substantially in the form attached hereto as Exhibit C and incorporated
herein by this reference, releasing Seller for (A) any obligations owed to or due the Company through and including the Closing
Date, and (B) any liability associated with the operation of the Company from and after the Closing Date; and
(iv)
Buyer shall deliver to Seller the Purchase Price by delivery to Seller by wire transfer
of immediately available funds, to an account designated by Seller to Buyer prior to Closing, of the sum of Nine Million Three
Thousand Dollars ($9,003,000.00);
(v)
Buyer shall deliver to Seller either a limited liability company resolution confirming that all necessary corporate action was
taken by Buyer in entering into this Agreement and proceeding to Closing or a certificate of Buyer’s managing member confirming
that Buyer was authorized to enter into this Agreement and proceed to Closing;
(vi)
Buyer shall pay to Seller, by wire transfer of immediately available funds, to an account designated by Seller to Buyer prior
to Closing, the following amounts:
(A)
the sum of Twenty-Five Thousand Dollars ($25,000.00), in consideration of Company’s up-front payment to NRC Environmental
Services, Inc. (“NRC”) of all funds necessary to settle NRC’s mechanic’s lien against the
Land;
(B)
the sum of One Hundred Ninety-Seven Thousand Five Hundred Dollars ($197,500.00), which sum represents Buyer’s portion of
the settlement funds Company provided to NRC in order to settle NRC’s mechanic’s lien against the Land;
(C)
the sum of Forty One Thousand Dollars ($41,000), which sum represents payment of various agreed upon Seller transaction expenses
incurred in connection with the transactions contemplated hereby and in connection with certain related matters; and
(D)
the sum of Twenty-Four Thousand Four Hundred Dollars ($24,400.00), which sum represents an unintended shortfall of January 2016
rent under the Lease.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller
makes the following representations and warranties and acknowledges that Buyer has relied thereon in entering into this Agreement.
Any exceptions to such representations and warranties are as set forth in the schedules attached hereto and referred to herein
as Seller’s Disclosure Schedule. Each such representation and warranty is true and correct as of the Closing Date.
3.1
Power and Authority. The Company is a limited-liability company duly formed, validly existing and in good standing under
the laws of the State of Formation. The Company Charter Documents have been provided by Seller to Buyer on or prior to the date
hereof, reflect all amendments made thereto and are true, correct and complete as of the date hereof. True, correct and complete
copies of the Company Charter Documents are attached hereto as Schedule 3.1.
3.2
Binding Agreements. This Agreement has been duly executed and delivered by Seller and constitutes the valid and binding
obligations of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors’ rights generally from time to time in effect and to general equitable
principles.
3.3
No Breach. Except as set forth on Schedule 3.3, the execution, delivery and performance of this Agreement by Seller
and the consummation by Seller of the transactions contemplated hereby does not conflict with, result in any breach of any of
the provisions of, constitute a default under, result in a violation of, result in the creation of a right of termination or acceleration
or any lien, security interest, charge or encumbrance upon any of the Membership Interests or any assets of the Company under
the provisions of the Company Charter Documents or any indenture, mortgage, lease, loan agreement or other agreement or instrument
by which the Company or Seller is bound or affected, or any law, statute, rule or regulation or order, judgment or decree to which
the Company or Seller are subject.
3.4
The Membership Interests.
(a)
The Company Charter Documents set forth the issued and outstanding Membership Interests of the Company and the Membership Interests
owned by Seller. All of the outstanding Membership Interests are validly issued and owned, beneficially and of record, by Seller.
There are no Equity Interests other than the Membership Interests issued, outstanding or otherwise in existence. No Person owns,
has a right to, or has been issued any “phantom stock,” equity or Membership Interest appreciation rights or similar
compensation expressed in or computed on the basis of Membership Interests or the value thereof. No Person has any preemptive
right or right of first refusal to purchase any Equity Interests, except as set forth in the Company Charter Documents.
(b)
All legal and beneficial right, title and interest in Seller’s Membership Interests will be on the Closing Date owned solely
by Seller and on the Closing Date, Seller’s Membership Interests shall be transferred by Seller to Buyer, free and clear
of all liens, claims, pledges, security interests, encumbrances, charges, agreements, voting trusts, proxies or other arrangements,
restrictions or other legal or equitable limitations of any kind, except as set forth in the Company Charter Documents. Seller
has not entered into any agreement, commitment or arrangement to transfer, pledge, mortgage or hypothecate Seller’s Membership
Interest or any interest therein to any Person other than to Buyer. Seller is not a party to any proxy, voting trust, voting agreement
or similar understanding with respect to Seller’s Membership Interests or the election of managers of the Company, except
as set forth in the Company Charter Documents. Seller’s Membership Interests transferred to Buyer by Seller on the Closing
Date shall constitute one hundred percent (100%) of all of the issued and outstanding Membership Interests of the Company.
3.5
Governmental Authorities; Consents. Neither the Company nor Seller is required to submit any notice, report or other filing
with any governmental authority in connection with the execution or delivery by Seller of this Agreement or the consummation of
the transactions contemplated hereby. No consent, approval or authorization of any governmental or regulatory authority or any
other party or Person is required in connection with the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by Seller.
3.6
Subsidiaries. The Company does not own, directly or indirectly, any stock, partnership interest, joint venture interest
or any other security or ownership interest of, or issued by, any other corporation, partnership, limited liability company, organization
or other entity.
3.7
Title to the Land.
(a)
At the Closing, the Company will own the Land free and clear of liens and encumbrances (including free of any interest of the
Prior Lessee as a result of the termination of any lease agreement with the Prior Lessee), except for the items disclosed in that
certain Preliminary Title Report issued by Western Nevada Title Company, dated as of January 21, 2015, and those items created
or caused by Buyer (collectively, the “Permitted Exceptions”).
(b)
To the best of Seller’s knowledge, the Company is not in violation of any applicable zoning ordinance or other law of similar
type or nature, regulation or requirement relating to the operation of the Property, and Seller has not received any notice of
any such violation, or the existence of any condemnation proceeding with respect to the Property, except, in each case, with respect
to violations the potential consequences of which do not or will not have a Material Adverse Effect.
3.8
Tax Matters.
(a)
Except for the Permitted Exceptions, there are no Tax liens upon the Land except for liens for current Taxes not yet due and payable.
(b)
The Company has at all times during its existence been, and will be until the Closing Date, taxable as a partnership for federal
and state income tax purposes. Neither the Company nor Seller or any taxing authority has taken a position inconsistent with such
treatment.
3.9
Litigation.
(a)
Except: (i) as related to the actions or omissions of Prior Lessee, including, without limitation, the litigation commenced by
Republic Bank, Inc. (“Republic Bank”), in the Tenth Judicial District Court of Nevada (15-10DC-0502)
and (ii) that certain lawsuit titled Xxxxxx Xxxxxxxxx x. Xxxxx Oil, et al, Case No. CV15-03262, pending in the Second Judicial
District Court for the State of Nevada (the “Xxxxxxxxx Action”) there are no actions, suits, proceedings,
orders or investigations pending or, to the best knowledge of Seller, threatened against the Company (except for Republic Bank’s
threat to refile its current litigation in the Second Judicial District Court of Nevada or the U.S. District of Nevada), at law
or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign. Company has submitted a letter to the Prior Lessee’s insurer requesting such insurer
to provide coverage and defense for the Xxxxxxxxx Action on behalf of Company, and a subsequent letter advising such insurer of
the deadline for filing an answer in the Xxxxxxxxx Action. Company has not received a response from such insurer regarding such
insurer’s position on coverage.
(b)
There are no outstanding orders, judgments, injunctions, fines, penalties, citations, awards or decrees of any court, arbitrator
or governmental or regulatory body involving the Company.
3.10
Affiliate Transactions. Other than pursuant to this Agreement, no Person has any agreement with the Company or any interest
in any property, real, personal or mixed, tangible or intangible used in or pertaining to the business of the Company (other than
ownership of Membership Interests).
3.11
Compliance with Laws; Permits. Seller has no knowledge of any action, pending or threatened, to change the zoning or building
ordinances or any other laws, rules, regulations or ordinances affecting the Property.
3.12
Environmental Matters. The Company is not in violation of any applicable statute, law or regulation relating to the environment
or occupational health and safety. No Hazardous Substances (as defined below) are used or have been used, stored, or disposed
of by the Company (except in the ordinary course of business and in compliance with applicable laws) or, to the best of Seller’s
knowledge, by any other person or entity on any property owned, leased or used by the Company, with the exception of Prior Lessee
under the Prior Lease and Buyer pursuant to the Lease. As used in this Agreement, the term “Hazardous Substances”
shall include: (i) explosives, radioactive materials, hazardous wastes or substances, toxic wastes or substances or any other
similar materials or pollutants which pose a hazard to the Property, or to persons on or about same, cause the Property to be
in violation of any law or local approval, or are defined as or included in the definition of “hazardous substances”,
“hazardous wastes”, “hazardous materials”, or “toxic”, or words of similar import under any
applicable law, including, but not limited to: (A) the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. § 9601, et seq.; (B) the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
§ 1801. et seq.; (C) the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seq.; and (D) regulations
adopted and publications promulgated pursuant to the aforesaid laws, and similar laws of the State of Nevada, including, without
limitation, the Nevada Administrative Code regulations adopted by the Nevada Division of Environmental Protection (collectively,
the “Environmental Laws”); (ii) asbestos in any form which is or could become friable, urea formaldehyde
foam insulation, transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls
in excess of 50 parts per million; and (iii) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority under any Environmental Laws now or hereafter in effect.
3.13
Brokerage. No third party shall be entitled to receive any brokerage commissions, finder’s fees, fees for financial
advisory services or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement
or agreement made by or on behalf of the Company or Seller.
3.14
Material Contracts; License Agreements. Schedule 3.14 lists each contract, agreement, lease, mortgage, note,
and any other obligation or commitment of the Company to the extent monetary obligations under the contract exceeds Twenty-Five
Thousand and No/100 Dollars ($25,000.00), and each license agreement (or agreement of a similar nature) (whether or not such license
or similar agreement includes a monetary obligation in excess of Twenty-Five Thousand and No/100 Dollars ($25,000.00)) that is
material to the operation of the Company’s plant located on the Property.
3.15
Insurance Coverage. Schedule 3.15 sets forth a list of all insurance coverage of the Company, in full force
and effect as of the Closing Date, maintained by the Company (indicating the type, name of the insurer, coverage amounts, period
of coverage, premiums and deductibles).
3.16
Employee Matters. To Seller’s knowledge, the Company has complied with all applicable employment and labor Laws,
except where non-compliance would not result in a Material Adverse Effect. Schedule 3.16 sets forth a list of all employees
of the Company as of the Closing Date, together with their rate of annual compensation and job title.
3.17
Intellectual Property. Schedule 3.17 identifies all of the following which are used in the business of the Company
or in which the Company claims any ownership rights: (A) all marks, that have been registered, together with information
regarding all registrations and pending applications to register any such rights; (B) all patents on and pending applications
to patents on any technology or design; and (C) all registrations of and applications to register copyrights.
3.18
Seller’s Financial Condition. Except as reflected in the Balance Sheet dated December 31, 2015, since the execution
of the Lease, Seller has not (i) incurred any new indebtedness for money borrowed; or (ii) sold, exchanged or otherwise disposed
of any of its assets or rights.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer
makes the following representations and warranties and acknowledges that Seller has relied thereon in entering into this Agreement.
Each such representation and warranty is true and correct on the Closing Date.
4.1
Formation and Corporate Power. Buyer is a limited-liability company duly formed, validly existing and in good standing
under the laws of the State of Formation, qualified to do business in Nevada, with the requisite power and authority to enter
into this Agreement and perform its obligations hereunder.
4.2
Execution, Delivery; Valid and Binding Agreement. The execution, delivery and performance of this Agreement by Buyer and
the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite action, and no
other proceedings on the part of Buyer are necessary to authorize the execution, delivery or performance of this Agreement. This
Agreement has been duly executed and delivered by Buyer and constitutes the valid and binding obligation of Buyer, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights generally from
time to time in effect and to general equitable principles.
4.3
No Breach. The execution, delivery and performance of this Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby do not conflict with or result in any breach of any of the provisions of, constitute a default under, result
in a violation of, result in the creation of a right of termination or acceleration or any lien, security interest, charge or
encumbrance upon any assets of Buyer, or require any authorization, consent, approval, exemption or other action by or notice
to any court or other governmental body, under the provisions of the Buyer Charter Documents or, except for the consent of Xxxxxxx
Xxxxx Bank USA, Xxxxxxx Sachs Specialty Lending Holdings, Inc. and Midcap Business Credit LLC under Buyer’s loan and credit
facilities (the “Creditor Consents”), each of which has been obtained as of the Closing, any indenture,
mortgage, lease, loan agreement or other agreement or instrument by which Buyer is bound or affected, or any law, statute, rule
or regulation or order, judgment or decree to which Buyer is subject.
4.4
Governmental Authorities; Consents. Except for the applicable requirements of state securities or “blue sky”
laws and the 1933 Act, if any, Buyer is not required to submit any notice, report or other filing with any governmental authority
in connection with the execution or delivery by it of this Agreement or the consummation of the transactions contemplated hereby,
and, except for the Creditor Consents, each of which has been obtained as of the Closing, no consent, approval or authorization
of any governmental or regulatory authority or any other party or person is required to be obtained by Buyer in connection with
the execution, delivery and performance of this Agreement or the transactions contemplated hereby by Buyer.
4.5
Investment Representations. In connection with its purchase and receipt of Seller’s Membership Interests, Buyer represents
as follows:
(a)
Buyer is aware of the Company’s business affairs and financial condition, and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire Seller’s Membership Interests. Buyer is acquiring
Seller’s Membership Interests for its own account for investment purposes only and not with a view to, or for the resale
in connection with, any “distribution” thereof for purposes of the 1933 Act.
(b)
Buyer understands that Seller’s Membership Interests have not been registered under the 1933 Act or in any state in reliance
upon specific exemptions therefrom, which exemptions depend upon, among other things, the bona fide nature of Buyer’s investment
intent as expressed herein.
(c)
By reason of the business or financial experience of Buyer or Buyer’s professional advisors who are unaffiliated with the
Company or Seller, Buyer has the capacity to protect its own interests in the acquisition of Seller’s Membership Interests.
ARTICLE V
POST-CLOSING COVENANTS
5.1
Preparation and Filing of Tax Returns. Seller shall file or cause to be filed all federal, state and local income Tax Returns
for the Company for all taxable periods ending on or before the Closing Date, and the Company shall close its books for the period
ending on the Closing Date, and Seller shall pay or cause to be paid all Tax liabilities based on taxable income of the Company
for periods ending on or before the Closing Date.
5.2
Conflict Waiver; Privilege. Recognizing that Holland & Xxxx LLP has acted as legal counsel to Seller and Company prior
to the Closing Date, and that Holland & Xxxx LLP may act as legal counsel to Seller and its Affiliates after the Closing Date,
each of Buyer and Company hereby waives, on its own behalf and agrees to cause its Affiliates to waive, any conflicts that may
arise in connection with Holland & Xxxx LLP representing Seller and/or its Affiliates after the Closing Date as such representation
may relate to Buyer, Company, or the transactions contemplated herein. In addition, all communications involving attorney-client
communications between Seller or the Company and Holland & Xxxx LLP in the course of the negotiation, documentation, and consummation
of the transactions contemplated hereby, and otherwise between Seller or Company and Holland & Xxxx relating to Company, or
Seller’s status as the owner of Company, prior to the Closing Date, shall be deemed to be attorney-client privileged and
confidences that belong solely to Seller (and not Company). Accordingly, Company shall not, without Seller’s written consent,
have access to any such communications, or to the files of Holland & Xxxx LLP relating to its engagement as legal counsel
for Company or for Seller. Without limiting the generality of the foregoing, upon and after the Closing Date: (i) Seller (and
not Company) shall be the sole holder of the attorney-client privilege with respect to such engagement, and Company shall not
be the holder thereof; (ii) to the extent that files of Holland & Xxxx LLP in respect of such engagement constitute property
of the client, only Seller (and not Company) shall hold such property rights; and (iii) Holland & Xxxx LLP shall have no duty
whatsoever to reveal or disclose any such attorney-client communications or files to Company by reason of any attorney-client
relationship between Holland & Xxxx LLP and Company or otherwise.
5.3
Defense of Xxxxxxxxx Action. Subject to the provisions contained in Article VI below, Seller agrees (in cooperation with
the Company) to direct and coordinate the defense of the Xxxxxxxxx Action and oversee (in cooperation with the Company) in a commercially
reasonable manner the activities and defense of such action by any insurer providing coverage and defense thereof. In connection
with such defense, Seller and Buyer shall cooperate (and Buyer shall cause the Company to cooperate), and they shall cause their
respective representatives to cooperate, with each other in all reasonable respects in connection with the defense of the Xxxxxxxxx
Action. In furtherance thereof, Seller and Buyer agree to (and Buyer shall cause the Company to agree to) make available records
relating to such action and furnish, without expense (other than reimbursement of actual out-of-pocket expenses), such records
and copies of documents and filings delivered or made in connection with the Xxxxxxxxx Action that are reasonably requested by
the other party, provided the parties shall limit such disclosure so as not to expressly waive any attorney-client privilege associated
with any such information or any protection afforded by the “work product doctrine” with respect to any of the matters
disclosed therein. Seller agrees to defend the Xxxxxxxxx Action actively, using commercially reasonable efforts and in good faith
and it will not compromise or settle, or consent to the entry of a judgment with respect to, the Xxxxxxxxx Action without the
prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned).
ARTICLE VI
SURVIVAL; INDEMNIFICATION
6.1
Agreement by Seller to Indemnify. Seller agrees to indemnify, defend and hold Buyer and its affiliates (including the Company
after the Closing), managers, members and agents thereof (collectively, the “Buyer Indemnified Party”)
harmless from and against the aggregate of all expenses, losses, costs, deficiencies, liabilities and damages (including, without
limitation, related counsel and paralegal fees and expenses) (collectively, “Losses”) incurred or suffered
by the Buyer Indemnified Party resulting from or arising out of (i) any breach of a representation or warranty made by Seller
in or pursuant to this Agreement, (ii) any breach of the covenants or agreements made by Seller in this Agreement, and/or (iii)
any litigation, claim, demand, complaint, cause of action, investigation, inquiry, suit, charge, audit, action, hearing, notice
of violation of applicable law or legal, administrative, arbitrative or other proceeding, as it relates to the Xxxxxxxxx Action.
The period of such indemnification in connection with Sections 6.1(i) or (ii) shall be for a period of one (1) year following
the Closing and the period for indemnification and defense under Section 6.1(iii) shall extend until a final judgment is entered
in the Xxxxxxxxx Action and all appeal rights related thereto have lapsed, and any settlement obligations related thereto have
expired. The aggregate amount of liability of Seller under this Section 6.1 shall not exceed $3,000,000.00 (“Seller’s
Indemnity Cap”).
6.2
Indemnity Holdback. Upon Vertex Ohio’s payment of the principal balance owing by Vertex Ohio under that certain promissory
note in the principal amount of Five Million One Hundred Fifty Thousand Dollars ($5,150,000.00) made payable to Seller by Vertex
Ohio (“Ohio Note”), Seller agrees to set aside an amount of the proceeds of the Ohio Note equal to Seller’s
Indemnity Cap in an escrow account with Fidelity National Financial, Inc., or one of its affiliates (the “Indemnity Holdback”).
The Indemnity Holdback shall be held in escrow until the expiration of the indemnity obligation set forth in Section 6.1(iii),
above, at which point any remaining portion of the Indemnity Holdback shall be released to Seller. Subject to the provisions of
this Agreement, Seller shall cause such escrow agent to pay to a Buyer Indemnified Party any amount of the Indemnity Holdback
determined to be due under this Agreement upon a final and non-appealable judgment, determination, settlement or compromise of
the Xxxxxxxxx Action in connection with a claim for Losses related to the Xxxxxxxxx Action by a Buyer Indemnified Party. Buyer
and Seller agree that any amount of indemnifiable Losses related to the Xxxxxxxxx Action that is not in dispute, or with respect
to which the dispute is fully and finally resolved, shall be paid promptly upon notice of such indemnifiable Losses or upon resolution
of such dispute as described above, as applicable. Buyer and Seller hereby agree to promptly execute escrow instructions acceptable
to Fidelity National Financial, Inc., or one of its affiliates, effectuating the provisions of this Section 6.2 promptly after
the Closing.
6.3
Agreement by Buyer to Indemnify. Buyer agrees to indemnify, defend and hold Seller and its affiliates, managers, members
and agents thereof (collectively, a “Seller Indemnified Party”) harmless from and against the aggregate
of all Losses incurred or suffered by the Seller Indemnified Party resulting from or arising out of (i) any breach of a representation
or warranty made by Buyer in or pursuant to this Agreement, or (ii) any breach of the covenants or agreements made by Buyer in
this Agreement. The period of such indemnification and defense shall be for a period of one (1) year following the Closing. The
aggregate amount of liability of Buyer under this Section 6.3 shall not exceed $3,000,000.00.
6.4
Survival of Representations and Warranties. Each of the representations and warranties made by the parties in this Agreement
or pursuant hereto shall survive through and including the date which is the first (1st) anniversary of the Closing Date. Notwithstanding
any knowledge of facts determined or determinable by any party by investigation, each party shall have the right to fully rely
on the representations, warranties, covenants and agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation, warranty, covenant and agreement of the parties contained
in this Agreement is independent of each other representation, warranty, covenant and agreement. After the Closing, the rights
set forth in this Article VI shall be each party’s sole and exclusive remedies against the other party hereto for misrepresentations
or breaches of covenants contained in this Agreement and any related documents delivered in connection therewith.
ARTICLE VII
MISCELLANEOUS
7.1
Publicity. No public disclosure, announcement or publicity with respect to the transactions contemplated hereby may be
made except with the prior written approval of Buyer and Seller.
7.2
Expenses. Except as provided in Section 2.3(b)(vi)(C), above, Seller and Buyer will pay all of their own expenses (including
attorneys’ and accountants’ fees (and, in the case of Seller, the expenses of the Company up to and including the
Closing Date)) in connection with the negotiation of this Agreement, the performance of their respective obligations hereunder
and the consummation of the transactions contemplated by this Agreement (whether consummated or not).
7.3
Further Assurances. Seller and Buyer agree that, on and after the Closing Date, they shall take all appropriate action
and execute any documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out
any of the provisions hereof.
7.4
Amendment and Waiver. This Agreement may not be amended or waived except in a writing executed by the party against whom
such amendment or waiver is sought to be enforced. No course of dealing between or among any persons having any interest in this
Agreement will be deemed effective to modify or amend any part of this Agreement or any rights or obligations of any person under
or by reason of this Agreement.
7.5
Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of
this Agreement will be in writing and will be deemed to have been given when personally delivered or mailed by first class certified
mail, return receipt requested, or sent by nationally recognized courier service such as Federal Express. Notices, demands and
communications to Buyer and Seller will, unless another address is specified in writing, be sent to the address indicated below:
| If to Seller: | | Fox Encore 05 LLC |
| | | c/o ACF Property Management, Inc. |
| | | 00000 Xxxxxxx Xxxx. |
| | | Xxxxxx Xxxx, Xxxxxxxxxx 00000 |
| | | Attn: Xxxx X. Xxx |
| | | |
| with a required copy, which shall not constitute notice to Seller, to: |
| | | |
| | | Holland & Xxxx LLP |
| | | 0000 Xxxxxxx Xxxx, Xxxxxx Xxxxx |
| | | Xxxx, Xxxxxx 00000 |
| | | Attn: Xxxxx X. Xxxxxxx |
| If, to Buyer: | | Vertex Refining NV, LLC |
| | | 0000 Xxxxxx Xxxxxx, Xxxxx 000 |
| | | Xxxxxxx, XX 00000 |
| | | Attn: Xxxxxxxx X. Xxxxxx, Chief Executive Officer |
| | | |
| with a required copy, which shall not constitute notice to Buyer, to: |
| | | |
| | | Xxxxxxxx Xxxxxxx Van Deuren s.c. |
| | | 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 |
| | | Xxxxxxxxx, XX 00000 |
| | | Attn: Xxxxxxx X. Xxxxxxx |
7.6
Assignment. This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, except that neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned by Seller or by Buyer without the prior written consent of the other party hereto.
7.7
Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable
law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
7.8
Counterparts and Delivery of Signatures. This Agreement may be executed in one or more counterparts, any one of which need
not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same instrument.
A facsimile or electronic copy of this Agreement or its signature page shall be accepted as an original.
7.9
Governing Law; Venue. The internal law, without regard to conflicts of laws principles, of the State of Nevada will govern
all questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations
imposed by this Agreement. The parties hereto hereby consent and agree to the exclusive jurisdiction of the state courts of the
State of Nevada sitting in Washoe County, Nevada and the federal courts sitting in Reno, Nevada for any actions, suits or proceedings
arising out of or relating to this Agreement and the matters contemplated hereby (and the parties agree not to commence any action,
suit or proceeding relating thereto except in such courts).
7.10
Attorneys’ Fees and Costs. If any action or proceeding is brought for the enforcement or interpretation of this Agreement
or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement, the successful or prevailing
party shall be entitled to recover reasonable attorneys’ fees and all other costs and expenses incurred in such action or
proceeding, in addition to any other relief to which it may be entitled.
7.11
Entire Agreement. This Agreement (including the exhibits and schedules hereto), contain the complete agreement between
the parties and supersede any prior understandings, agreements or representations by or between the parties, written or oral,
which may have related to the subject matter hereof in any way.
[Signature page follows.]
The parties have executed
this Agreement as of the date set forth above.
Buyer: | |
| | |
VERTEX REFINING NV, LLC, | |
a Nevada limited liability company | |
| | |
By: | Vertex Energy Operating, LLC | |
| Its: | Sole Member | |
| By: | /s/ Xxxxxxxx X. Xxxxxx | |
| | Xxxxxxxx X. Xxxxxx, President and Chief Executive Officer |
Seller: | |
| | |
FOX ENCORE 05 LLC, | |
a Washington limited liability company | |
| | |
By: | ACF Property Management, I nc., | |
| a California corporation | |
| Its: | Managing Member | |
| By: | /s/ Xxxx X. Xxx | |
| | Xxxx X. Xxx |
| Its: | President |
Schedule 2.1
Description of Land
The property located at the address
commonly known as 00000 Xxxxx Xxxx, Xxxxxx, XX 00000 and having a legal description as follows:
Parcels 1 and 2 as shown on the
Parcel Map for Best Energy, LLC, filed in the office of the Xxxxxxxxx County Recorder on December 2, 2005, as File No. 377120,
Official Records of Xxxxxxxxx County, Nevada.
Excepting therefrom all right, title,
interest and estate in and to all mineral and metals of every kind and nature existing one hundred feet (100’) beneath the
surface of, or within the property, including the right of access to and from the subsurface thereof as may be reasonably necessary
for processing, mining, drilling, extracting, processing, utilizing, removing, selling and transporting the same and any of their
by-products, by all-means and methods, provided, however, that no mining operations shall be conducted on the surface of the property
or at any point within one hundred (100’) feet below the surface. The foregoing does not include sand, gravel, aggregates,
decorative or building stone or materials, as reserved by Newmont Mining Corporation, a Delaware corporation in deed recorded September
27, 2002, as Document No. 346403.