Exhibit 10.5 Asset and Liability Contribution Agreement
ASSET & LIABILITY CONTRIBUTION AGREEMENT
THIS ASSET & LIABILITY CONTRIBUTION AGREEMENT (the "Agreement"") is entered on
March 31, 2004 by and between Fleetclean Systems, Inc., a Texas corporation
("Parent") and Fleetclean Chemicals, Inc., a Texas corporation ("Subsidiary").
WHEREAS, Parent has been chronically short on working capital and sources of
liquidity and has been funded, in part, by its founder Xxxxxxx X. Xxxxxxxx,
through cash advances and deferred compensation;
WHEREAS, Parent formed Subsidiary on March 29, 2004 as part of an effort to
restructure the Parent's business operations and to address ongoing liquidity
concerns;
WHEREAS, Parent owns One Thousand (1,000) shares of $.01 par value common stock
of Fleetclean Chemicals, Inc., a Texas corporation ("FCI") that represents 100%
of the outstanding capital stock of FCI;
WHEREAS, Parent, subject to the legal and equitable rights of its creditors and
stockholders, desires to convey all existing assets to Subsidiary and to
transfer all existing liabilities, save and except the Retained Liabilities, as
defined herein, subject to the terms and conditions of this Agreement; and
WHEREAS, Subsidiary, subject to the legal and equitable rights of its creditors
and stockholders, desires to receive all assets from the Parent; to assume all
existing liabilities, save and except the Retained Liabilities, as defined
herein, and to indemnify and hold Parent harmless from any and all claims,
subject to the terms and conditions of this Agreement
NOW, THEREFORE, for and in consideration of the mutual promises herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Transfer of Assets.
Parent, subject to the legal and equitable rights of its creditors and
stockholders irrevocably grants, transfers and conveys all right, title and
interest in all real, personal, and intangible property, all assets of any
nature or kind, whether presently known or unknown, to Subsidiary to have and to
hold free and clear of any and all liens, claims, and encumbrances. The transfer
of asset shall include, but shall not be limited to all assets reflected on the
Parent's financial statements for the period ended March 31, 2004, subject to
adjustment based upon generally accepted accounting principles applied on a
consistent basis, and the claims in the legal proceeding styled Fleetclean
Systems, Inc. v. Liquid Transport Corporation, filed on or about January 21,
2004 in the United States District Court for the Eastern District of Texas,
Beaumont Division.
2. Transfer of Liabilities.
Parent, subject to the legal and equitable rights of its creditors and
stockholders irrevocably grants, transfers and conveys all existing liabilities,
known or unknown, mature or contingent, save and except the Retained
Liabilities, as defined below, with full responsibility for the discharge of
same passing to the Subsidiary.
3. Assumption of Liabilities.
Subsidiary irrevocably agrees to assume liability and responsibility, to the
fullest extent possible, whether as a maker, surety, guarantor, or otherwise,
for all of Parent's liabilities, known and unknown, mature or contingent, fixed
or uncertain, save and except the Retained Liabilities, as defined below.
4. Indemnification Agreement.
Subsidiary shall indemnify and hold Parent harmless from any and all liability,
cost, loss or damage which Parent, may suffer or incur as a result of any claim,
demand or judgment against Parent arising out of a claim by any third party
which constitutes any claim, demand or liability for any sum of money or other
damages or that is due to the assertion of a claim by any third party or the
attempt to collect debt by any third party purportedly due from Parent and not
specifically set forth in the audited or unaudited financial statements of
Fleetclean Systems, Inc., or otherwise, prior to June 30, 2004; provided,
however, Subsidiary shall have no liability under this paragraph to the extent
such loss, cost or damage is the direct result of the actions or omissions of
management of Parent on or after the date of this Agreement.
5. Retained Liabilities.
For the purposes of this Agreement, the term "Retained Liabilities" shall mean
the following amounts collectively
(A) $12,000 in accrued compensation payable to Xxxxxxx X. Xxxxxxxx.
(B) $20,253 due and owing to Xxxxxxx X. Xxxxxxxx for money advanced
on behalf of Parent prior to the date of this Agreement.
(C) $237,500 due and owing to 12 holders of Parent's Convertible
Debentures.
(D) $11,761 due and owning to Xxxxxx & Xxxxxxxxx LLP for legal
services.
(E) Outstanding balance due and owing to Weed & Co. LLP, not to
exceed $40,000.
6. Further Assurances.
From time to time after the date of this Agreement, upon the reasonable request
of any party, the party to whom the request is made shall deliver such other and
further documents, instruments, and/or certificates as may be necessary to
enable the requesting party to obtain the rights and benefits contemplated by
this Agreement.
7. Miscellaneous.
A. Authority. The persons executing this Agreement are duly authorized to
do so and each person has taken all action required by law or otherwise to
properly and legally execute this Agreement.
B. Entire Agreement. This Agreement sets forth the entire understanding
between the parties hereto and no other prior written or oral statement or
agreement shall be recognized or enforced.
C. Severability. If a court of competent jurisdiction determines that any
clause or provision of this Agreement is invalid, illegal or unenforceable, the
other clauses and provisions of the Agreement shall remain in full force and
effect and the clauses and provision which are determined to be void, illegal or
unenforceable shall be limited so that they shall remain in effect to the extent
permissible by law.
D. Assignment. None of the parties hereto may assign this Agreement without
the express written consent of the other parties and any approved assignment
shall be binding on and inure to the benefit of such successor or, in the event
of death or incapacity, on assignor's heirs, executors, administrators and
successors.
E. Applicable Law. This Agreement has been negotiated and is being
contracted for in the State of Texas. The parties agree that this Agreement
shall be governed by the laws of the State of Texas, notwithstanding any
conflict-of-law provision to the contrary.
F. Attorney's Fees. If any legal action or other proceeding
(non-exclusively including arbitration) is brought for the enforcement of or to
declare any right or obligation under this Agreement or as a result of a breach,
default or misrepresentation in connection with any of the provisions of this
Agreement, or otherwise because of a dispute among the parties hereto, the
prevailing party will be entitled to recover actual attorney's fees (including
for appeals and collection) and other expenses incurred in such action or
proceeding, in addition to any other relief to which such party may be entitled.
G. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties hereto
and their successors, any rights or remedies under or by reason of this
Agreement, unless this Agreement specifically states such intent.
H. Counterparts. It is understood and agreed that this Agreement may be
executed in any number of identical counterparts, each of which may be deemed an
original for all purposes.
I. Further Assurances. At any time, and from time to time, each party
hereto will execute such additional instruments and take such action as may be
reasonably requested by the other party to carry out the intent and purposes of
this Agreement.
J. 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, this Agreement may be amended by a writing
signed by all parties hereto.
K. Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
L. Facsimile. A facsimile, telecopy or other reproduction of this
instrument may be executed by one or more parties hereto and such executed copy
may be delivered by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen, and such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all parties
agree to execute an original of this instrument as well as any facsimile,
telecopy or other reproduction hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first written above.
PARENT
Fleetclean Systems, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President
SUBSIDIARY
Fleetclean Chemicals, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President
