ASSET PURCHASE
AGREEMENT
THIS ASSET
PURCHASE AGREEMENT (“ Agreement ”) is made this
____ day of July, 2005, by and between Clickableoil.com, Inc. (the
“ Buyer ”) and Allamuchy Transport, Inc.
(“ Seller ”).
WITNESSETH:
WHEREAS, Seller
is engaged in the business of selling and delivering No. 2 fuel oil
to retail customers and providing services to such customers’
heating systems (" Business "); and
WHEREAS, Buyer
desires to purchase from Seller, and Seller desires to sell to
Buyer, certain of Seller's assets used in the Business upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE,
in consideration of the mutual covenants and agreements contained
herein, the parties agree as follows:
1.1.
Purchase and Sale of
Assets . Subject to the
terms and conditions hereinafter set forth, Seller agrees to sell,
assign, transfer and convey to Buyer, and Buyer agrees to purchase
from Seller, on the Closing Date (as hereafter defined), all of the
right, title and interest of Seller in the following assets related
to the Business (collectively, the “ Assets ”)
free and clear of any liabilities, obligations, adverse claims,
security interests, liens and encumbrances except as explicitly
permitted herein:
(a) Customer Contracts . Those outstanding delivery, sale and service
agreements and purchase orders between Seller and its customers as
described in and attached hereto as Schedule 1.1(a) , if
any. Seller and Buyer shall execute an Assignment and Assumption
Agreement for the Customer Contracts in substantially the same form
and content as Exhibit 1.1(a) .
(b) Customer Information . All customer lists and customer data, and
sales and promotional material and other sales-related material
relating to, or used in connection with the operation of, the
Business, including, without limitation, contact information for
all customers and pricing information (collectively, the “
Customer Information ”);
(c) Name. The exclusive right to use the name Allamuchy
Oil or variations thereof in connection with the operation of the
Business. Seller shall cease use of the name Allamuchy Oil, and
shall not use any similar name except that it may use
“Allamuchy Fuel” or “Allamuchy Transport”
with respect to its diesel fuel business. Seller cancel all
registered fictitious names containing the term Allamuchy
Oil.
(d) Phone Number . All phone and fax numbers of Seller used in
connection with the Business, including the number 866-645-6261.
For a period of two years after Closing, Buyer shall refer to
Seller, by giving the caller a new phone number supplied by Seller,
all calls requesting diesel fuel sales or service received through
one of Seller’s former phone numbers. After two years, Buyer
may continue to refer such calls for diesel, and shall receive the
fees specified in Section 5.5 of this Agreement for such
referrals.
1.2.
No Assumption of
Liabilities . Buyer is
acquiring the Assets hereunder without any assumption of Seller's
debts, obligations, liabilities, accounts payable, or commitments
of Seller, whether accrued now or hereafter, whether fixed or
contingent, or whether known or unknown, except as explicitly
provided in this Section 1.2. Seller will deliver products and
provide services under the Customer Contracts on or after the
Closing Date pursuant to the terms and conditions of the Transport
Agreement to be entered into between the parties at Closing.
Notwithstanding the foregoing, Buyer will respond to all customer
complaints without question as to the time period in which the
complaint arose, provided that Buyer will not assume any liability
due to defective service or delivery caused by Seller or spillage
caused by Seller, and Buyer will not honor any commitments by
Seller to provide service, repair or remedy, except at
Buyer’s customary charges.
1.3.
Excluded Assets . Buyer is not acquiring any assets of
Seller except for those described in this Agreement. Without
limiting the generality of the foregoing sentence, Buyer is not
acquiring the customer information, customer contracts, goodwill
and other assets related solely to the Seller’s diesel fuel
business. In addition, Seller may continue selling No. 2 fuel oil
to the customers listed on Schedule 1.3 hereof, provided such
customers are on the date hereof also customers of Seller’s
diesel oil business and Seller discontinues using the name
Allamuchy Oil with such customers.
2.1.
Price . The purchase price for the Assets shall be as
follows (collectively, the "Purchase Price"):
(a) Payment at Closing . Buyer shall pay Seller the amount of $156,000
(fixed price) by wire transfer or certified check on the Closing
Date. The fixed price will be reduced by the purchase price of any
No. 2 fuel oil prepaid to Seller but not delivered as of Closing.
In addition, at Closing the fixed price will be reduced by the then
outstanding amount of the credit previously provided to Seller by
Buyer. On the date of this Agreement, such amount was approximately
$24,000. The Buyer and Seller shall mutually agree upon the
outstanding amount at Closing.
(b) Deferred Payment . Buyer shall pay an amount equal to (i) $.30
multiplied by the number of gallons of fuel oil sold to
Seller’s customers in the period beginning one day after the
Closing Date and ending on the first anniversary of the Closing
Date, less (ii) $156,000. This amount shall be paid within fifteen
(15) days after the first anniversary of the Closing Date. Payment
will be accompanied by a statement showing calculation of the
payment certified by the Chief Financial Officer, or equivalent
officer, of Buyer. No payment shall be made if the amount
calculated in clause (i) does not exceed $156,000. In the event
that any undisputed or otherwise definitively proven amount of the
deferred purchase price in excess of $2,500 is not paid within ten
(10) days after demand by Seller, Seller, upon 30 days’
notice to Buyer, in addition to any and all other remedies
available at law or in equity, shall be entitled to use the name
Allamuchy Oil and Buyer shall cease use of the name Allamuchy
Oil.
(c) Assumption and Performance . On
the Closing Date, Buyer shall assume and accept assignment of the
Customer Contracts listed on Schedule 1.1(a) and shall use
its commercially reasonable efforts to timely and diligently
perform all of its duties and obligations thereunder arising after
the Closing Date. The obligations and liabilities assumed by Buyer
under customer contracts shall be subject to the provisions of
Section 1.2.
2.2. The Closing . Subject to fulfillment of the conditions set
forth in Section 6 of this Agreement, the closing of the
transaction contemplated herein (" Closing ") shall be held
at the offices of Buyer on July 18, 2005, or at such other place or
such later date as the parties hereto may mutually establish ("
Closing Date ").
2.3. Transactions at Closing . At the Closing, the following transactions
shall occur, all of which shall be deemed to occur
simultaneously:
(a) Seller shall deliver or
cause to be delivered to Buyer, each in form reasonably
satisfactory to Buyer and its counsel:
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A bill of sale
(“ Bill of Sale ”) conveying and transferring to
Buyer the Assets, in the form attached hereto as Exhibit A
;
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An Assignment
and Assumption of Contracts in the form attached hereto as
Exhibit B ;
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A Certificate
of Good Standing with respect to Seller from the state of
Seller’s incorporation, and in not incorporated in New
Jersey, a Certificate of Good Standing as a foreign corporation in
New Jersey.;
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A copy of the
resolutions of the directors of Seller authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated herein;
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A copy of the
consent of the sole shareholder of Seller authorizing the
execution, delivery and performance of this Agreement and the
transactions contemplated herein;
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Such other
documents as may be reasonably requested by Buyer or Buyer’s
attorney in order to complete the transactions contemplated by this
Agreement; and
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The
Buyer’s standard Transport Agreement, on the terms referenced
in Section 5.4 of this Agreement.
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(b) Buyer shall deliver or cause to be delivered to
Seller each in form reasonably satisfactory to Seller and its
counsel:
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The portion or
the Purchase Price payable at Closing, as set forth in Section
2.1(a) of this Agreement;
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A copy of the
resolutions of the directors of Buyer authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated herein;
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(iv)
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The Assignment
and Assumption of Contracts;
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Such other
documents as may be reasonably requested by Seller or
Seller’s attorney in order to complete the transactions
contemplated by this Agreement; and
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The
Buyer’s standard Transport Agreement, on the terms referenced
in Section 5.4 of this Agreement.
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3.
REPRESENTATIONS AND WARRANTIES OF
SELLER . To induce Buyer
to enter into this Agreement and perform its obligations hereunder,
Seller represents and warrants to Buyer as follows:
3.1. Organization and Standing
. Seller is a corporation duly
organized, validly existing and in good standing under the laws of
the State of New Jersey.
3.2. Authorization of Transaction.
Seller has full power and authority
(including corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. The board
of directors and shareholders of Seller have duly authorized the
execution, delivery, and performance of this Agreement by Seller.
This Agreement, constitutes a valid and legally binding obligation
of Seller, enforceable in accordance with its terms.
3.3.
Title to Assets;
Encumbrances . Seller has
good and marketable title to each and all of the Assets, free and
clear of any liabilities, obligations, adverse claims, security
interests, liens and encumbrances (collectively, " Claims
"), other than Claims set forth on Schedule 3.3 hereof. All of the
Claims set forth on Schedule 3.3 shall be satisfied at Closing or
the claimants shall provide releases or other written assurances
reasonably acceptable to Buyer that neither the Buyer nor the
Assets shall be subject to such claims, in a form and manner
reasonably acceptable to Buyer. Seller will convey to Buyer at the
Closing good and marketable title to all the Assets, free and clear
of Claims of any third party.
3.4.
Customer Contracts
. Seller has no written or oral
agreement with any customer regarding the sale of No. 2 fuel oil or
related service except as set forth on Schedule 3.4. Schedule 3.4
also contains a schedule of any No. 2 fuel oil which has been paid
for by a Customer but has not been delivered and will not be
delivered before Closing. No Material Customers (defined in the
next sentence) have notified Seller within the past 120 days of
their intent to cease to do business with Seller. “Material
Customers” means customers whose No. 2 fuel purchases since
January 1, 2004 represent 10% or more of Seller’ total No. 2
fuel sales during that period, as measured in gallons.
3.5.
Brokers or Finders.
Seller has not incurred any
obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other like payment in
connection with this Agreement.
3.6. No Material Adverse
Changes . Except as disclosed by Seller to Buyer in writing,
since September 30, 2004 as there has been no material adverse
change in Seller’s financial condition or its seasonal fuel
sales.
3.7.
Customer Relations . Seller has not in the past three months
received materially more customer complaints regarding its No. 2
fuel oil business or related services, on a percentage of customers
basis, than its average historical amount of customer
complaints.
3.8.
Representations Regarding Sales. The written sales
information provided by Seller to Buyer attached hereto as Schedule
3.8 is true and correct in all material respects. Since the date of
the information provided on Schedule 3.8, there has been no
material reduction in periodic sales by gallon in comparable
periods.
3.9.
Taxes . Except as set forth on Schedule 3.9, Seller has paid
all taxes which may be imposed on it related to its income,
operations, existence, sales, assets, employees and otherwise which
have become due before the date hereof, including without
limitation all sales and other taxes collected from customers for
the benefit of taxing authorities. Except as set forth on Schedule
3.9, Seller has properly withheld or collected and paid over to the
appropriate authorities all taxes and other charges it is required
to withhold or collect from customers or employees. As to taxes
which are not yet due, Seller agrees to pay such taxes on or before
the due date. Except as set forth on Schedule 3.9, Seller has
timely and properly filed all tax returns of any type during the
previous five years. All matters disclosed on Schedule 3.9 will be
satisfied or remedied, or Buyer shall have been provided reasonably
acceptable releases or other written assurances that neither Buyer
nor the Assets will be subject to any such matters, on or before
Closing.
3.10.
Legal Proceedings
. Except as set forth on Schedule
3.10, there are no (and, during the five years preceding the date
hereof, there have not been any) actions, suits, proceedings,
orders or investigations pending or, to the knowledge of Seller,
threatened against or affecting the Seller, the Assets or the
Business at law or in equity, or before any arbitrator, or before
or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, and there is no reasonable basis known to
Seller for any of the foregoing. Except as set forth on Schedule
3.10, Seller is not subject to or bound by any outstanding orders,
judgments or decrees of any court or governmental entity with
respect to the Business or Assets.
3.11.
Environmental and Permit
Matters . To the
knowledge of Seller, Seller is in compliance in all material
respects with all federal, state, and local statutes, ordinances,
guides having the effect of law, rules and regulations, all court
orders and decrees and arbitration awards, which pertain to
environmental matters or contamination of any type whatsoever
(“Environmental Laws”). A description of any
outstanding notice, citation, inquiry or complaint which Seller has
received of any alleged violation of any Environmental Law or
permit relating to the Business or the Assets known to Seller has
been provided to Buyer in writing. (As used in the preceding
sentence, the term “outstanding” refers to any notice,
citation, inquiry or complaint that pertains to a matter that has
not been corrected or otherwise resolved.) Seller possesses all
permits of any type which are currently required for the operation
of the Business, and to Seller’s knowledge is in compliance
in all material respects with the provisions of all such permits.
Other than spill or leaks occurring in the ordinary course of
business which have been resolved, there has been no generation,
storage, disposal, treatment or transportation of any Hazardous
Materials (as herein defined) by Seller, or to Seller’s
knowledge on behalf of Seller in violation of, or which could give
rise to any liability or obligation of Seller under, any
Environmental Laws.
4.
REPRESENTATIONS AND WARRANTIES OF
BUYER. To induce Seller
to enter into this Agreement and perform its obligations hereunder,
Buyer represents and warrants to Seller as follows:
4.1.
Organization and
Standing . Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation.
4.2. Authorization of Transaction.
Buyer has full power and authority
(including corporate power and authority, if applicable) to execute
and deliver this Agreement and to perform its` obligations
hereunder. The board of directors has, to the extent required, duly
authorized the execution, delivery, and performance of this
Agreement by Buyer. This Agreement, constitutes a valid and legally
binding obligation of Buyer and Seller, enforceable in accordance
with its terms.
4.5.
Brokers or Finders.
Buyer has not incurred any
obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other like payment in
connection with this Agreement.
5.
POST-CLOSING COVENANTS.
(a) For a period commencing on the Closing Date and
concluding on the seventh anniversary of the Closing Date,("
Post-Closing Period "), Seller and Chris Pillitteri agree
that none of Seller nor Chris Pillitteri will, in the Territory (as
defined below), (i) directly or indirectly engage in or have a
financial interest in, as an owner, partner, member, stockholder,
officer, director, manager, employee, agent, contractor, consultant
or otherwise, or provide any services to, any Competing Business,
(ii) solicit, divert or appropriate or attempt to solicit, divert
or appropriate, directly or indirectly, for or on behalf of itself
or any other person, any business relating to the Business from any
person who is at the time of the solicitation, or has at any time
within five (5) years prior to the date of such action been, a
customer or supplier of the Business; or (iii) solicit or attempt
to solicit for hire any person who is an employee of Buyer. “
Competing Business ” means the retail sale of No. 2
fuel oil or any services related thereto. “ Territory
” means the area within a 75 mile radius of the
Seller’s primary office on the date of this Agreement.
Notwithstanding the foregoing, Seller may continue to sell No. 2
fuel oil to the customers listed on Schedule 1.3 hereto, under the
conditions set forth in Section 1.3.
(b) If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section is
invalid or unenforceable, the parties agree that the court making
the determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area, to delete specific
words or phrases, or to replace any invalid or unenforceable term
or provision with a term or provision that is valid and enforceable
and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, and this Agreement shall be
enforceable as so modified.
5.2. Audit Rights. Seller shall have the right to examine the sales
records of Buyer as the same relate to the calculation of the
payment due under paragraph 2.1(b), in order to verify the number
of gallons sold to Seller’s customers. If an audit reveals a
deficiency in an amount paid to Seller, Buyer shall pay such
deficiencies to Seller within ten (10) calendar days notice thereof
(a “ Notice ”). If the aggregate deficiencies in
payment found by such examination exceeds 3% of the reported sales
in excess of 520,000 gallons, Buyer shall also pay to Seller the
amount of the actual reasonable costs and expenses incurred by
Seller (including, without limitation, the cost of independent
accountants) in connection with s
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