SERVICES AGREEMENT
AMONG
PENNZOIL-QUAKER STATE COMPANY
PROBEX CORP.
AND
PROBEX FLUIDS RECOVERY, INC.
FOR
SES OPERATIONS
AT
BATON ROUGE, LOUISIANA
PENNZOIL-QUAKER STATE COMPANY - PROBEX FLUIDS RECOVERY, INC.
SERVICES AGREEMENT
Baton Rouge, Louisiana
TABLE OF CONTENTS
ARTICLE PAGE
I DEFINITIONS.................................................... 1
II TERM........................................................... 2
III SERVICES....................................................... 3
IV COST OF SERVICES............................................... 3
V INSURANCE...................................................... 3
VI CLAIMS......................................................... 4
VII FORCE MAJEURE.................................................. 4
VIII TAXES.......................................................... 5
IX ASSIGNMENT..................................................... 5
X NOTICE......................................................... 5
XI GOVERNING LAW.................................................. 6
XII TITLE.......................................................... 7
XIII INDEMNIFICATION ............................................... 7
XIV MODIFICATIONS TO FACILITIES.................................... 12
XV ARBITRATION.................................................... 13
XVI MISCELLANEOUS PROVISIONS....................................... 14
EXHIBITS
EXHIBIT 3.1 GENERAL SERVICES
EXHIBIT 3.1A INCIDENT RESPONSE SERVICES
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This Agreement made this 29th day of September, 2000 ("Effective Date"),
among Pennzoil-Quaker State Company, a Delaware corporation ("PQS"), Probex
Fluids Recovery, Inc., a Delaware corporation ("Probex"), and Probex Corp., a
Delaware corporation ("Parent"). PQS, Probex and Parent are sometimes referred
to herein individually as a "Party" and collectively as the "Parties".
PURPOSE:
The purpose of this Agreement is to set out the terms and conditions
under which PQS will provide certain operating, management and administrative
services support to Probex.
NOW, THEREFORE, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined). Capitalized terms used but not defined in this
Agreement have the respective meanings assigned to them in the Asset Purchase
Agreement.
Section 1.1 "Agreement" means this Services Agreement among PQS,
Probex and Parent, and all Exhibits attached hereto.
Section 1.2 "Asset Purchase Agreement" means the Asset Purchase
Agreement between PQS, Probex and Parent dated as of
September 6, 2000, as amended.
Section 1.3 "Facilities" means those facilities, equipment and other
assets owned or leased by Probex at the at the Location.
Section 1.4 "General Services" means the services PQS agrees to
provide to Probex described on Exhibit 3.1.
Section 1.5 "Incident Response Services" means the services PQS agrees
to provide to Probex described on Exhibit 3.1A.
Section 1.6 "Location" means the Distribution Center location in Baton
Rouge, Louisiana where PQS conducted a part of the
Business prior to Closing and where some of the Assets are
located.
Section 1.7 "Month" means a calendar month.
Section 1.8 "Party" means either PQS, Probex or Parent.
Section 1.9 "Product" means those products received, stored, tested
and/or shipped by Probex at the Location which are comp-
rised of used oil collected for recycle, used oil filters
for disposal and used anti-freeze for recycle.
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Section 1.10 "Regulated Substance" means any substance regulated as of
the Closing Date or during the term of this Services
Agreement under any Environmental Law (as defined in
Section 13.1.1), whether as pollutants, contaminants,
or chemicals, or as industrial, toxic or hazardous
substances or wastes, or otherwise, including, but not
limited to, petroleum and its fractions, used oil, waste
oil, or constituents thereof.
Section 1.11 "Services" means, collectively, the General Services and
the Incident Response Services.
ARTICLE II
TERM
Section 2.1 The initial term of this Agreement shall terminate on
December 31, 2005, and shall automatically renew for successive one (1) year
terms, unless written notice of termination is given by either party at least
six (6) months prior to the end of the initial term or any successive term. In
the event that PQS chooses, in its sole discretion, to sell or shut down the
Location, PQS will give Probex at least six (6) month's written notice of such
closure, and this Agreement shall terminate upon at the end of such six (6)
month notice period. If this Location is sold or transferred by PQS, and the
successor continues to operate in the Location, PQS will reasonably cooperate
with Probex to negotiate the transfer of this Agreement to the successor.
Section 2.2 If, after receiving written notice from PQS, pursuant to
Section 2.1, of PQS' intent to: (a) terminate this Agreement or (b) sell or
close the Location, Probex arranges to remain at the Location beyond the term of
this Agreement, it shall give written notice to PQS of its decision to remain at
the Location as soon as practicable, but in any event no later than thirty (30)
days prior to the date of termination, sale, or closure provided in the written
notice given by PQS pursuant to Section 2.1. After providing the written notice
to PQS pursuant to the preceding sentence, Probex may cause to be conducted at
its expense a Phase II environmental assessment and report, including, without
limitation, procedures recognized under American Society of Testing and
Materials Standards, for the purpose of assessing the presence or absence of
Regulated Substances in the soil or groundwater at any real property occupied or
used by Probex in connection with the Business at the Location, which shall be
prepared by a firm selected by Probex with the consent of PQS (which consent
shall not be unreasonably withheld). The environmental report shall be
completed, and Probex shall provide a full and complete copy of the
environmental report to PQS, no later than 30 days prior to the date of
termination, sale, or closure provided in the written notice given by PQS
pursuant to Section 2.1. The environmental assessment and report shall contain
such information as Probex deems necessary or advisable. The information
obtained pursuant to this Section 2.1.1 may include soil and ground water
sampling of any real property occupied or used by Probex in connection with the
Business at the Location. PQS agrees (to the extent reasonable and not
financially burdensome to PQS) to cooperate in the preparation of any such
environmental assessment and report.
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ARTICLE III
SERVICES
Section 3.1 PQS hereby agrees to perform the Services as described in
Exhibits 3.1 and 3.1A at the Location at Probex's reasonable direction.
Section 3.2 PQS's status shall be that of an independent contractor,
and the relationship of PQS and Probex shall not be construed as that of
principal and agent or that of master and servant.
Section 3.3 PQS shall exercise its reasonable judgment to provide the
Services in a professional manner consistent with past practices. In addition,
all actions will be consistent with PQS's policies and procedures relating to
operations, health, safety and security, copies of which have been furnished or
made available to Probex.
Section 3.4 Probex agrees and warrants that whenever any of its
employees are present or working at the Location such employees will fully
comply with all rules, regulations and procedures of PQS. These policies
include, but are not limited to, Abuse of Drugs and/or Alcohol and Harassment.
Section 3.5 PQS agrees to provide Probex with reasonable access to the
Facilities during the term of this Agreement.
ARTICLE IV
COST OF SERVICES
Section 4.1 Probex agrees to pay to PQS an aggregate of $6,200 per
month for the General Services described on Exhibit 3.1. Probex agrees to pay
the actual costs incurred by PQS in performing the Incident Response Services
described on Exhibit 3.1A. In addition, utilities and other specific
identifiable expenses (long distance phone calls, postage, uniforms on PQS
contract, etc.) will be billed per specific invoice. In the event Product
volumes at this Facility increase by more than 20% from the year 2000 levels,
the Parties agree to negotiate in good faith an appropriate adjustment to the
monthly amount of the charge for the Services.
Section 4.2 To the extent Probex requests services in addition to the
Services, Probex will bear the actual costs for the additional services.
Section 4.3 All costs and fees payable by Probex to PQS under this
Agreement will be due on presentment of invoice and payable within 30 days after
receipt of invoice.
ARTICLE V
INSURANCE
The fee specified herein does not include any insurance on the
Facilities, Equipment or the Product covered by this Agreement while such
Products are located on PQS's property. It is understood and agreed that
insurance, if any be desired by Probex, shall be carried by Probex at Probex's
own expense. Each Party agrees to secure a waiver from its insurance carrier of
the insurance carrier's rights of subrogation against the other Party with
respect to matters covered by the indemnification provisions of this Agreement,
except that such waiver shall not apply to a Party's gross negligence or willful
misconduct.
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ARTICLE VI
CLAIMS
In connection with performing the Services, PQS shall have no liability
to Probex for any loss or damage to the Facilities or Equipment or loss of or
defect in quality of the Product except as such loss or defect in quality was
caused by PQS's gross negligence or willful misconduct.
ARTICLE VII
FORCE MAJEURE
Section 7.1 Neither Party shall be liable to the other for failure or
delay in performance hereunder to the extent that the failure or delay is due to
force majeure, which is herein defined to include, but is not limited to, war
(whether declared or undeclared), fire, flood, lightning, earthquake, storm, or
any act of God; strikes, lockouts, or other labor difficulties; civil
disturbances, riot, sabotage, accident; any official order, directive, or
industry-wide request; or suggestion by any governmental authority or
instrumentality thereof which in the reasonable judgment of the Party affected
makes it necessary to cease or reduce performance; any disruption or breakdown
of labor; or any inability to secure materials by reason of or any other
contingency beyond the control of the affected Party which interferes with the
performance hereunder. Notwithstanding the foregoing, economic hardship alone
involving a Party shall not constitute a force majeure event.
Section 7.2 Performance under this Agreement shall be suspended (except
for the payment of money due or to become due for past performance hereunder)
during the period of such force majeure to the extent made necessary by the
force majeure; provided the settlement of strikes, lockouts, industrial
disputes, or disturbances shall be entirely within the discretion of the Party
so settling to accede to the demands of any opposing party when such course is
inadvisable in the discretion of the Party having the difficulty.
Section 7.3 No curtailment, suspension, or acceptance of performance
pursuant to this Article shall operate to extend the period of or to terminate
this Agreement. Performance under this Agreement shall resume to the extent made
possible by the end or amelioration of the force majeure event.
Section 7.4 As soon as practicable after the occurrence of any event of
the force majeure, the Party claiming force majeure shall notify the other Party
in writing of such event and, to the extent possible, inform the other Party of
the expected duration of the force majeure event and the performance to be
affected by the suspension or curtailment under this Agreement.
Section 7.5 The Party claiming force majeure shall notify the other
Party in writing of the end of the force majeure event and shall provide the
other Party with a schedule for the resumption of performance under this
Agreement.
Section 7.6 In the event of disruption or breakdown of labor, the Party
affected will use reasonable efforts to allocate the available work force so as
to continue performance hereunder.
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ARTICLE VIII
TAXES
Section 8.1 Any and all taxes, fees, or other charge, other than taxes
on income, imposed or assessed on PQS by governmental or regulatory bodies, the
taxable incident of which is the performance of Services hereunder, regardless
of the character or measure of the levy or assessment shall be borne by Probex.
Section 8.2 Notwithstanding any other provision of this Agreement, any
tax or governmental charge (except income taxes) or increase in the same which
becomes effective after the effective date of this Agreement, and which has the
effect of increasing the cost to PQS for providing Services will be added to the
direct expense and be borne by Probex; provided, that Probex agrees to pay only
that portion of such tax or governmental charge that is reasonably allocable to
operation of Probex's business at the location or PQS' performance of the
Services.
ARTICLE IX
ASSIGNMENT
Section 9.1 Except as provided in this Section 9.1, neither Party may
assign this Agreement (including by operation of law) without the prior written
consent of the other Party. PQS may assign this Agreement to any successor in
interest to substantially all of PQS's assets whether by merger, acquisition,
consolidation or otherwise, or to any successor in interest to real property on
which any of the services are being performed under this Agreement. Probex may
assign this Agreement to any successor in interest to substantially all of
Probex's assets whether by merger, acquisition, consolidation or otherwise,
provided that the successor is not a person reasonably deemed by PQS to be a
competitor. Neither Party shall unreasonably withhold its consent to an
assignment of this Agreement.
ARTICLE X
NOTICE
Section 10.1 Any notice, request, instruction, correspondence, or other
document to be given hereunder by either Party to the other (herein collectively
called "Notice") shall be in writing and delivered personally or mailed by
certified mail, postage prepaid and return receipt requested, overnight courier,
or by telegram or facsimile as follows:
If to PQS, addressed to:
By Mail or Courier:
Pennzoil-Quaker State Company
Pennzoil Place
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000 - 2967
Attention: Vice President of Distribution
Facsimile: 713/217-3286
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If to Probex or Parent, addressed to:
By Mail or Courier:
Probex Fluids Recovery, Inc.
One Galleria Tower, Suite 1200
00000 Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Facsimile: 972/466-1556
With a copy only for matters regarding Article XIII and XV to:
Xxxxxxx & Xxxxxx, P.C.
000 X. Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: 214/922-4193
Section 10.2 Notice given by personal delivery or mail shall be
effective upon actual receipt. Notice given by telegram, facsimile, or telex
shall be effective upon actual receipt if received during the recipient's normal
business hours or at the beginning of the recipient's next business day after
receipt if not received during the recipient's normal business hours. Either
Party may change any address to which Notice is to be given to it by giving
notice as provided above of such change of address.
Section 10.3 The foregoing is not intended to preclude normal informal
communication with respect to operational matters.
ARTICLE XI
GOVERNING LAW
All provisions of this Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, excluding any conflicts-of-law
rule or principle that might apply the laws of another jurisdiction.
ARTICLE XII
TITLE
Title and risk of loss to the Product handled hereunder shall always
remain in Probex while at the Facility even though Product is located on PQS's
property.
ARTICLE XIII
INDEMNIFICATION
Section 13.1 Special Definitions. As used in this Article 13, the
following terms have the meanings ascribed to them:
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13.1.1 "Environmental Law" and/or "Environmental Laws" shall mean any
and all federal, state, local and foreign laws (including,
without limitation, common law) or rules, regulations, orders,
decrees, or judgments or Environmental Permits relating to (i)
the environment and/or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances, toxic or hazardous
wastes, petroleum and its fractions, used oil, or waste oil into
the environment including ambient air, surface water, ground
water, land, or otherwise, including all such laws relating to
the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants; and all
such laws relating to any Regulated Substance; (ii) noise or
odors, (iii) wetlands protection, and (iv) worker safety and
health.
13.1.2 "Environmental Liability" shall mean any Damages or other
liability of any kind relating to or arising out of (a) noise or
odors; (b) actual or threatened pollution or contamination of the
ecology, air, groundwater, surface water, land, soils or
subsurface strata; (c) solid, gaseous, or liquid waste
generation, handling, treatment, storage, disposal, or
transportation; (d) any release of, or exposure to, any Regulated
Substances or related conditions; (e) the manufacturing,
processing, distribution in commerce, use, or storage of chemical
substances, petroleum or petroleum products, used oil or waste
oil; (f) working conditions and safety or health of employees;
(g) violations of, or requirements under, Environmental Laws; (h)
the off-site transportation, treatment, storage, or disposal from
any of the Assets or Business activities or operation of any
Regulated Substance; (i) Environmental Cleanup; or (j) wetlands
or ecological protection.
13.1.3 "PQS Environmental Claim" shall mean any and all claims,
liabilities, (including, without limitation, contractual
liability and strict liability), demands, rights, obligations,
causes of action, suits, contribution and indemnity actions, and
other proceedings of any kind or character, however denominated,
of or by any Person whether at law or at equity, known or
unknown, potential, asserted or unasserted, accrued or unaccrued,
direct, indirect, contingent, third party, or subrogated, or
derivative of any of the above (including, without limitation,
any claims asserted by, or obligations imposed by, any
Governmental Body with actual or alleged jurisdiction over the
Assets or the Business) that accrues during the term of this
Agreement with respect to the Assets or the operation of the
Business at or from the Location and relating to or arising out
of Environmental Liability, including, without limitation, all
closure or post-closure costs and obligations imposed under
Environmental Laws, or otherwise, on Probex or any other Person
due to such Person's activities at the Location or on account of
an Environmental Permit held by Probex or any other Person at the
Location; provided, however, that "PQS Environmental Claim" shall
not include any claim, liability, demand, right, obligation,
cause of action, suit, contribution or indemnity action, or other
proceeding of any kind or character with respect to which Probex
is obligated to indemnify PQS pursuant to Section 13.2.2(iv), (v)
or (vi) of this Agreement. For purposes of this Agreement, a PQS
Environmental Claim "accrues" when the event or condition giving
7
rise to the PQS Environmental Claim first occurs and not when the
event is first discovered or first becomes subject to correction,
abatement, regulatory enforcement, or response action.
Section 13.2 General Indemnification.
13.2.1 Subject to the terms and conditions of this Article XIII, PQS
shall indemnify, defend, and hold harmless Probex, and any of its
officers and directors, from and against all Damages that may be
asserted against, resulting to, imposed upon, or incurred by any
such Person by reason of, relating to, or resulting from any PQS
Environmental Claim including, without limitation, PQS'
performance of the actions described in Section 14.7.
13.2.2 Subject to the terms and conditions of this Article XIII,
Probex and Parent, jointly and severally, shall indemnify,
defend, and hold harmless PQS, and any of its officers and
directors, from and against all Damages that may be asserted
against, resulting to, imposed upon, or incurred by any such
Person by reason of, relating to, or resulting from: (i) loss of,
damage to, or loss of use of, Facility and Product unless caused
by the gross negligence or willful misconduct of PQS in
performing the Services or unless otherwise caused by PQS while
engaging in activities unrelated to performing the Services; (ii)
loss of, damage to, or loss of use of, equipment, facilities and
properties of PQS caused by Probex or Parent or their employees,
agents or representatives; (iii) personal injury or death of PQS,
Probex or Parent employees, agents or representatives arising in
connection with the Services unless caused by the gross
negligence or willful misconduct of PQS; (iv) the violation of
any of the Environmental Laws by Probex or Parent subsequent to
the Closing in connection with the Assets or the operation of the
Business, including but not limited to violations of any such law
by Probex or Parent with respect to the use of, or activities
conducted on or from the Location, including the use by Probex of
underground storage tanks thereunder, but in cases where such
violations are caused by a release of Regulated Substances, or a
release is itself a violation, only to the extent such Damages
are attributable to an Identifiable Event; (v) an Identifiable
Event; or (vi) Probex's performance of the actions described in
Sections 14.5 and 14.6.
Section 13.3 Conditions of Indemnification. The obligations of PQS,
Probex or Parent, as the case may be (the "indemnifying Party") to other Persons
(the "Party to be indemnified") with respect to any claim or demand for
indemnification shall be subject to the following terms and conditions:
13.3.1 The Party to be indemnified shall promptly give notice to the
indemnifying Party of any claim, whether between the Parties or
brought by a third party, specifying both the basis for and the
amount of such claim, to the extent specified or otherwise known.
If the claim or demand for indemnification relates to a claim,
action, suit, or proceeding asserted or filed by a Third Party
against the Party to be indemnified (a "Third-Party Claim"), then
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such notice shall be given by the Party to be indemnified within
twenty (20) days of receipt thereof (or such earlier time as
might be required to avoid prejudicing the indemnifying Party's
position). The failure of the Party to be indemnified to give
such notice shall not relieve the indemnifying Party of its
obligations hereunder, except to the extent the indemnifying
Party is actually prejudiced thereby.
13.3.2 Following receipt of notice from the Party to be indemnified of
a claim or demand for indemnification, the indemnifying Party
shall have twenty (20) days to make such investigation of the
claim or demand as the indemnifying Party deems necessary or
desirable. For the purposes of such investigation, the Party to
be indemnified agrees to make available to the indemnifying Party
(or its authorized representatives) the information relied upon
by the Party to be indemnified to substantiate the claim or
demand. If the Party to be indemnified and the indemnifying Party
agree at or before the expiration of such twenty (20) day period
(or any mutually agreed upon extension thereof) to the validity
and amount of such claim or demand, then the indemnifying Party
shall immediately pay to the Party to be indemnified the full
amount of the claim or demand to the extent that such Party to be
indemnified is entitled to indemnification pursuant to this
Section 13.3. If the Party to be indemnified and the indemnifying
Party do not agree within such period (or any mutually agreed
upon extension thereof), then the Party to be indemnified may
pursue or exercise any remedies or rights available to it.
13.3.3 After receipt of notice of commencement of any Third-Party
Claim evidenced by service of process or other legal pleading, or
with reasonable promptness after any other assertion in writing
of any Third-Party Claim, the Party to be indemnified shall give
the indemnifying Party written notice thereof together with a
copy of such claim, process, or other legal pleading within the
period set forth in the second sentence of Section 13.3.1. The
failure of a Party to be indemnified to give the indemnifying
Party such notice shall not relieve the indemnifying Party of its
obligations under Section 13.3 except to the extent the
indemnifying Party is actually prejudiced thereby. The
indemnifying Party shall have the right to undertake the defense,
compromise, or settlement of the Third-Party Claim, by
representatives of its own choosing and at its own expense so
long as the indemnifying Party agrees to assume and conduct, and
diligently conducts, such defense (or, if applicable, compromise
or settlement). In such event the Party to be indemnified may
participate in the defense, compromise, or settlement with
counsel of its own choice and at its own expense.
13.3.4 If the indemnifying Party, by the thirtieth (30th) day after
receipt of notice of any such claim (or, if earlier, by the tenth
(10th) day preceding the day on which an answer or other pleading
must be served in order to prevent judgment by default in favor
9
of the plaintiff), does not elect to defend such Third-Party
Claim, then the Party to be indemnified shall have the right
(upon further notice to the indemnifying Party) to retain counsel
and undertake the defense, compromise, or settlement of such
Third-Party Claim on behalf of, and for the account and risk of,
the indemnifying Party and at the indemnifying Party's expense,
subject to the right of the indemnifying Party to participate,
with its own counsel and at its own expense, in the defense,
settlement or compromise. If the Party to be indemnified and the
indemnifying Party agree at or before the expiration of the
period set forth in this Section 13.3.4 (or any mutually agreed
upon extension thereof) to the validity and amount of such
Third-Party Claim, then the indemnifying Party shall immediately
pay to the Party to be indemnified the amount so agreed.
13.3.5 If there is a conflict of interests which renders it
inappropriate for the same counsel to represent both the
indemnifying Party and the Party to be indemnified in defending,
compromising, or settling a Third-Party Claim, the indemnifying
Party shall be responsible for paying for separate counsel for
the Party to be indemnified. In such event, however, if there is
more than one Party to be indemnified, the indemnifying Party
shall not be responsible for paying for more than one separate
counsel (which may be a firm of attorneys) to represent the
Parties to be indemnified, regardless of the number of Parties to
be indemnified.
13.3.6 The indemnifying Party may compromise, settle, or resolve any
Third-Party Claim without the consent of the Party to be
indemnified if such compromise, settlement, or resolution
involves only the payment of money by the indemnifying Party
(whether on its own behalf or on behalf of the Party to be
indemnified) and the claimant provides to the Party to be
indemnified a release from all Liability in respect of such
claim. Otherwise, the indemnifying Party may not compromise,
settle, or resolve the claim without the prior written consent of
the Party to be indemnified, which consent may not be
unreasonably withheld.
13.3.7 The Party to be indemnified and the indemnifying Party must
cooperate with all reasonable requests of the other in the
defense of any Third-Party Claim.
13.3.8 Notwithstanding anything to the contrary in this Section 13.3,
with respect to an obligation of PQS to indemnify Probex pursuant
to Section 13.2.1 above with respect to a PQS Environmental Claim
that requires any Remediation, PQS may elect to implement and
complete such Remediation. If PQS elects to conduct the
Remediation:
(i) PQS, in good faith, will coordinate the schedule of the
Remediation with Probex so that disruptions of Probex's
operations will be minimized;
(ii) PQS will obtain the prior written approval of Probex, which
approval will not be unreasonably withheld, for any consultant or
contractor retained by PQS to investigate, design or implement
the Remediation;
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(iii)PQS will conduct the Remediation in compliance with all
applicable federal, state and local laws and regulations and as
directed by the appropriate Governmental Body; and
(iv) PQS will not agree to or select any Remediation that imposes any
material obligation on Probex, including, without limitation, the
obligation to sign manifests or obtain permits, without the prior
written consent of the Probex, which consent shall not be
reasonably withheld.
(v) During the period in which PQS is conducting a Remediation
pursuant to this Section 13.3.8, Probex shall provide PQS and its
consultants and contractors reasonable access to the affected
property for the purpose of conducting activities related to the
Remediation, including where necessary the use of heavy
equipment. Any such access shall be subject to reasonable
restrictions imposed by Probex, including, without limitation,
restrictions related to worker safety. PQS shall expeditiously
remove from the property all drill cuttings, soil, debris or
liquids generated from or in connection with the Remediation and
shall restore the property and any existing structures or
equipment removed or damaged in the course of the Remediation to
a condition substantially the same as the condition that existed
immediately prior to the Remediation. PQS or their consultants
and contractors shall provide Probex at least five (5) business
days' notice of the activities to be conducted on the property,
which notice may be in the form of a schedule of activities.
(vi) PQS and Probex agree that any Remediation shall meet all
requirements of the Governmental Body or Bodies directing the
Remediation and shall not materially impede or increase the cost
of Probex's business operations on the affected property. Probex
acknowledges that the Remediation may be a "risk-based"
Remediation pursuant to, and consistent with applicable federal,
state and local laws and regulations, which may require the
establishment of certain restrictions or conditions affecting the
property on which the Remediation is being conducted. Probex
agrees not to object to any such --- "risk-based" Remediation
unless Probex's agreement will, in the good faith judgment of
Probex, expose Probex to liability to third parties.
(vii)PQS shall not take any action or make any communication which
has a material effect on the resolution or outcome of any
Environmental Claim which could lead to the filing of an
Environmental Claim against Probex, without providing at least
five (5) business days advance notice (unless otherwise required
by law) to Probex. Any material breach of this obligation shall
relieve Probex or Parent of Liabilities under this Agreement with
respect to the applicable Environmental Claim to the extent
Probex or Parent has been prejudiced by the lack of timely and
11
adequate notice. This notification requirement shall not apply to
communications which are part of or relate to a judicial or
administrative proceeding in which the Parties are litigating
claims against each other.
Section 13.4 Express Negligence Acknowledgement. THE INDEMNIFICATION
PROVISIONS CONTAINED HEREIN ARE INTENDED TO, AND SHALL HAVE THE EFFECT OF,
INDEMNIFYING A PERSON AGAINST THE RESULTS OF ITS OWN NEGLIGENCE OTHER THAN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. Nevertheless, no Person to be indemnified
shall be relieved of responsibility for any negligence in responding, once the
claim or demand for indemnification arises, to any matter that is the basis or
subject of any claim or demand for indemnification by such Person under this
Article XIII.
Section 13.5 No Special Damages. Neither party shall be liable to the
other under any circumstances for PUNITIVE, special, consequential or indirect
damages regardless of whether it has been advised of the possibility of such
damages.
ARTICLE XIV
MODIFICATIONS TO FACILITIES
Section 14.1 If improvements, alterations, or additions to the
Facilities are required to meet the needs of Probex's business during the Term
of this Agreement, Probex and PQS shall negotiate in good faith in an attempt to
agree to make such alterations, additions, and modifications in a safe,
expeditious, and cost efficient manner and in accordance with all local, state
and federal requirements. The expense of such alterations, additions, and
modifications shall be borne by Probex, using funds provided by Probex.
Section 14.2 If as a result of governmental rules, regulations, or
orders it becomes necessary to make improvements, alterations, or additions to
the Facilities during the Term of this Agreement in order for the Facilities to
continue to function in support of Probex's business, PQS shall cooperate with
Probex to make such alterations, additions, and modifications. To the extent
such alterations, additions, or modifications are to the sole benefit of Probex,
the expense of such alterations, additions, or modifications shall be borne by
Probex. If the required alterations, additions, or modifications are of benefit
to both Parties, then the expenses shall be borne proportionately by the Parties
to the use.
Section 14.3 If the cost to PQS of providing the Services to support
Probex's business should increase or decrease as a result of Section 14.1 or
14.2, PQS shall have the right, at PQS's sole discretion, to increase the fee
referred to in Article IV by the amount of the increase and the obligation to
decrease the fee by the amount of the actual decrease. The increase in fee will
be limited to actual costs incurred by PQS.
Section 14.4 Notwithstanding anything to the contrary contained in
Sections 14.1, 14.2 and 14.3 of this Agreement, Probex shall have no obligations
to pay or reimburse PQS for any alteration, addition, or modification referenced
in Sections 14.1, 14.2 and 14.3 to the extent such alteration, addition or
modification is covered by PQS' indemnity to Probex under Section 9.2(a) of the
Asset Purchase Agreement or Section 13.2.1 of this Agreement.
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Section 14.5 Upon permanent removal of any of the Facilities from
service by or on behalf of Probex, or the vacation of the Location by Probex,
Probex will be solely responsible for (i) removal of tanks, piping, containment
walls, concrete, pumps, and pump sheds, (ii) loading of tanks and related
equipment on trucks, (iii) salvage of reusable parts, and (iv) removal of
related construction debris, and all costs and expenses related to these
responsibilities.
Section 14.6 At any time after the third anniversary of the date of
this Agreement, or if Probex chooses to vacate the Location prior to such third
anniversary due to reasons other than a PQS decision to sell or shut down the
Location, Probex will be solely responsible for removing Regulated Substances
from the interior of tanks and related pipelines and other Facilities, and the
subsequent transportation and disposal of such Regulated Substances, and all
costs and expenses related to these responsibilities.
Section 14.7 If at any time before the third anniversary of the date of
this Agreement, Probex vacates the Location due to a PQS decision to sell or
shut down the Location, PQS will be solely responsible for removing Regulated
Substances from the interior of tanks and related pipelines and other
Facilities, and the subsequent transportation and disposal of such Regulated
Substances, and all costs and expenses related to these responsibilities.
ARTICLE XV
ARBITRATION
Section 15.1 Negotiation. If any dispute relating to this Agreement
arises between the Parties, the Parties will first enter into good faith
negotiations to resolve the dispute in a commercially reasonable manner. The
negotiations will be held by representatives of each Party who have the
authority to settle any claims arising out of the dispute.
Section 15.2 Arbitration. If a dispute cannot be resolved through good
faith negotiations, the dispute will be submitted for resolution by a panel of
three arbitrators in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The arbitrators will apply the laws of the
State of Texas to resolve the dispute. The arbitration will take place in
Houston, Texas, no later than one hundred twenty (120) days after a request for
arbitration is filed by a Party with the American Arbitration Association.
Judgement upon an arbitration award shall be final and may be entered in any
court having jurisdiction over the Party against which enforcement thereof is
sought. All fees and expenses of the arbitration shall be borne by the parties
equally. However, each party shall bear the expense of its own counsel, experts,
witnesses and preparation of proofs. This arbitration provision will survive the
termination of this Agreement and the dissolution of the Parties.
Section 15.3 Alternative Arbitration. As an alternative to the
arbitration procedure set forth in paragraph 15.2 above, the Parties may (but
will not be required to) agree to an expedited dispute resolution process which
will be completed no later than thirty (30) days after the date the Parties
agree in writing to pursue this expedited process. Under the expedited process,
the dispute will be submitted to a panel consisting of one executive level
manager from each Party who has the authority to settle any claims arising out
of the dispute. These managers will attempt to resolve the dispute within seven
(7) business days after the date the Parties agree to pursue the expedited
process. If the managers are unable to resolve the dispute with this time
period, such dispute will be submitted to a single arbitrator from a
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pre-approved list of qualified, independent arbitrators. The arbitrator will
conduct the remainder of the expedited process in Houston, Texas, and will apply
the laws of the State of Texas and the Commercial Arbitration Rules of the
American Arbitration Association to resolve the dispute. The decision of the
arbitrator will be final and may be entered into any court having jurisdiction
over the Party against which enforcement thereof is sought. All fees and
expenses of the arbitration shall be borne by the parties equally. However, each
party shall bear the expense of its own counsel, experts, witnesses and
preparation of proofs.
Section 15.4 Performance Pending Arbitration. The Parties agree that
their respective obligations under this Agreement, including, without
limitation, PQS' obligation to provide the Services and to perform its other
obligations hereunder, and Probex's obligation to pay for the Services and
perform its other obligations hereunder, shall not be excused by the existence
of any dispute that the Parties are, in good faith, endeavoring to resolve
pursuant to, and in accordance with, the provisions of this Article XV.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 The section headings contained in this Agreement are for
the convenience of the Parties only and shall not be interpreted as part of this
Agreement.
Section 16.2 This Agreement shall not be modified except by written
instrument executed by duly authorized representatives of the respective
Parties.
Section 16.3 Waiver by one Party of the other's breach of any provision
of this Agreement shall not be deemed a waiver of any subsequent or continuing
breach of such provision or of the breach of any other provision or provisions
hereof.
Section 16.4 In the event of a conflict between the terms of this
Agreement and any Exhibit attached hereto, the terms of the Agreement shall be
controlling.
Section 16.5 Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 16.6 This Agreement may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original.
Section 16.7 This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the respective Parties hereto.
Section 16.8 The provisions of Articles I, V, VI, X, XI, XII, XIII, XV
and XVI, and Sections 14.5 and 14.6, will remain in full force and effect and
survive after the term of this Agreement or any termination of this Agreement.
Also, any amounts owed by a Party to the other Party on termination will
continue to be obligations of the owing Party and nothing in this Agreement
shall relieve either Party from liability to the other Party for any breach of
this Agreement, and each Party will be entitled to any remedies in this
Agreement, at law or in equity, or otherwise for any such breach.
14
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the day and year first above written.
PENNZOIL-QUAKER STATE COMPANY
By:___________________________________________
Printed Name:_________________________________
Title:________________________________________
PROBEX FLUIDS RECOVERY, INC.
By:___________________________________________
Printed Name:_________________________________
Title:________________________________________
PROBEX CORP.
By:___________________________________________
Printed Name:_________________________________
Title:________________________________________
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EXHIBIT 3.1
GENERAL SERVICES
AT THE location
Tank Farm Access / Space
Warehouse Access / Space
Administrative Support
o Order Entry
o Ticket and Manifest Preparation
o Record Keeping
o Sample Mailing and Log
o Drum Ordering
o Outbound Transportation Coordination
Management Support
o Driver Coordination
o Asset Oversight (Truck tags, tank maintenance, etc.)
o Problem Resolution Coordination
Bulk Support
o Tank Management (day tanks to outbound tanks)
o Sample Taking
o Outbound Loading
Warehouse Support
o Empty drum unloading
o Outbound drum loading
o Daily pick-up put away
o Empty drum staging loading for route trucks
EXHIBIT 3.1A
INCIDENT RESPONSE SERVICES
Incident Response $(Xxxx per specific invoice)
o PQS will implement the appropriate portions of the facility's Spill
Prevention Control and Countermeasure Plan and/or Facility Response Plan
with respect to an incident requiring a response pursuant to such plans
upon: (i) receipt of timely notification of the incident by Probex or any
other person, or (ii) discovery of the incident by an employee of PQS. The
response may include the use of a third party response contractor engaged
by PQS. As soon as practicable, PQS will notify Probex whether it believes
the incident constitutes an Identifiable Event as defined at Section 1.1 of
the Asset Purchase Agreement. Probex will reimburse PQS, within 30 days of
receipt of an invoice, for all costs associated with response to an
Identifiable Event.
