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Asset Purchase Agreement

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Sectors: Energy
Governing Law: Florida, View Florida State Laws
Effective Date: February 08, 2008
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ASSET PURCHASE AGREEMENT



This ASSET PURCHASE AGREEMENT (the "Agreement") dated this 8th day of February, 2008 (the "Effective Date"), by and between Able Oil Melbourne, Inc., a Florida corporation with its principal place of business located at 99 Dover Avenue, Merritt Island, FL 32952 ("Seller"), Able Energy, Inc., a Delaware corporation with its place of business at 198 Green Pond Road, Rockaway, New Jersey 07866 ("Parent") which owns all of the outstanding stock or other ownership interests in the Seller and all of the Assets of the Seller, and Able Oil of Brevard, Inc., a Florida corporation having an address at 99 Dover Avenue, Merritt island, FL 32952 ("Buyer").



RECITALS:



A. Seller owns and operates certain Assets (as hereinafter defined) used in connection with Seller's supply and delivery of petroleum products to customers (the "Business").



B. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Assets.



C. The Buyer is owned by Sean Harrington, a former employee of Able Oil Melbourne, Inc.



NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, the Parties hereby agree as follows:



ARTICLE 1: INCORPORATION OF RECITALS



1.1 The foregoing recitals are true and correct and are incorporated herein as though fully set forth herein.



ARTICLE 2: PURCHASE AND SALE OF ASSETS



2.1 Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any Liens or encumbrances, all of Seller's right, title and interest in the following assets:



(a) all machinery, equipment, tools, spare parts, furniture, office equipment, computer hardware, supplies, materials, vehicles and other items of tangible personal property of every kind owned or leased by Seller (wherever located and whether or not carried on Seller's books), used in the Business, including the items described in Schedule 2.1(a) ("Tangible Personal Property");


(b) all amounts owed to the Seller by its customers and others, determined in accordance with generally accepted accounting principles ("Accounts Receivable") as set forth on Schedule 2.1(b)(1) and all materials and goods, held for sale as part of the Business and related supplies owned by Seller ("Inventory"), as set forth on Schedule 2.1(b)(2);


(c) any and all intangible assets owned by or used in connection with the Business including, going concern value, goodwill, telephone and telecopy listings ("Intangible Property"); and


(d) Except as otherwise provided, all operating permits, or tank permits, and other permits, licenses, filings and other governmental authorizations, agreements, contracts, and approvals (collectively, the "Transferable Permits");









All of the property and assets to be transferred to Buyer hereunder are herein referred to collectively as the "Assets." All of the Assets shall be transferred subject to normal wear and tear and without warranties of any kind, whether expressed or implied, other than warranties of title, and are sold "AS IS, WHERE IS", WITH ALL FAULTS AND DEFECTS" and "WITH NO REPRESENTATION OR WARRANTY AS TO CONDITION, MERCHANTABILITY, FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE", WHETHER EXPRESS, IMPLIED OR STATUTORY. As used in this Agreement, "Lien" shall mean any conditional sale agreement, charges, defect of title, easement, encroachment, encumbrance, hypothecation, infringement, lien, mortgage, pledge, reservation, restriction, security interest, title retention, or other security arrangement, or any adverse right or interest, charge, or claim of any nature whatsoever of, on, or with respect to any property or property interest, other than liens for taxes not yet due and payable.



Notwithstanding the foregoing, the transfer of the Assets pursuant to this Agreement shall not include the assumption of any Liability related to the Assets unless Buyer expressly assumes that Liability pursuant to Section 2.4. For purposes of this Agreement, "Liability" shall mean any direct or indirect, primary or secondary, liability, indebtedness, obligation, penalty, cost, or expense, claim, deficiency, guaranty, or endorsement of or by any person of any type, whether accrued, absolute or contingent, liquidated or unliquidated, matured or um-natured, or otherwise.



With respect to the vehicles identified on Schedule 2.1(a), at Closing, Seller shall transfer, and Seller must obtain or deliver, certificates of title or registration in the name of Buyer, and must effect any registrations in the name of Buyer with the Florida Department of Motor Vehicles or any other governmental body for such vehicles. The Buyer will cooperate with the Seller to effectuate the transfer of the vehicle registrations.



2.2 Excluded Assets. Seller's income Tax records, corporate minute books and stock records (collectively, the "Excluded Assets") are not part of the sale and purchase contemplated hereunder, are excluded from the Assets, and shall remain the property of Seller after the Closing.



2.3 Allocation of Purchase Price. The Purchase Price shall be allocated in accordance with Schedule 2.3 . After the Closing, the parties shall make consistent use of that allocation for all Tax purposes and in all filings, declarations and reports in respect thereof, including the reports required to be filed under Section 1060 of the Code (e.g., IRS Form 8594). The parties shall report the tax consequences of the transactions contemplated by this Agreement in a manner consistent with the Purchase Price Allocations, as determined pursuant to this Section and shall not take any action or position that is inconsistent therewith.



2.4 Assumption of Liabilities. Subject to the terms and conditions of this Agreement, at the Closing, Buyer shall assume the following assumed liabilities of the Seller (the "Assumed Liabilities"):



(a) As set forth on Schedule 2.4(a) all of Seller's trade accounts payable incurred by the Seller in the ordinary course of the Business as historically reflected on the financial statements of the Seller ("Trade Payables") arising before the Closing that are not paid or otherwise satisfied prior to Closing provided that such Trade Payables (i) arose on or prior to the Closing Date, (ii) arose in the ordinary course of business, (iii) arose in a manner consistent with the past practices of the Seller;



(b) Those obligations and liabilities under the assumed agreements listed on Schedule 2.4(b) arising after the Closing Date.





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The Assumed Liabilities shall not include any agreements, contracts or commitments that are not specifically identified herein as Assumed Liabilities. The Seller shall retain those liabilities listed on Schedule 2.4(c) (the "Retained Liabilities") and except for the Assumed Liabilities of the Seller, the Buyer shall assume no Liabilities of the Seller.



2.5 Security Interest. The Seller shall retain a security interest only on the Accounts Receivable set forth on Schedule 2.5(a) until those specific Trade Payables listed on Schedule 2.4 (a) , have been paid in full, at which time the Buyer is authorized by the Seller to file UCC 3 termination statements.



2.6 Further Documents and Statements. Seller shall execute and deliver, without further consideration, such documents and instruments in addition to those provided for herein as may be reasonably requested by Buyer to transfer to, and vest in Buyer, title to and possession of the Assets, whether at or after the Closing.



2.7 Closing. The Closing (the "Closing") shall take place at the offices of the Seller located at 1140 Avenue of the Americas, Suite 1800, New York, New York at 10:00 a.m. on February 8, 2008 or such other location and date as the parties may mutually agree in writing (the "Closing Date"). At the option of Buyer, the Closing may take place by delivering documents via mail or other delivery service on or prior to the Closing Date.



2.8 Purchase Price and Payment Thereof. The purchase price for the Assets (the "Purchase Price") shall be Three Hundred Fifty Thousand ($375,000.00) Dollars.



ARTICLE 3: REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT



Seller and Parent hereby jointly and severally represent and warrant to Buyer that:



3.1 Organization and Good Standing. They are corporations duly organized and validly existing under the laws of the States of Delaware and Florida, respectively. Seller has not received any notice from any governmental body alleging that the Seller was required to qualify to do business in any jurisdiction, nor has Seller' failure to qualify to do business in any other jurisdiction caused Seller any material adverse consequences.



3.2 Due Authorization, Binding Obligation. Each of Seller and Parent have all requisite power and authority to enter into this Agreement and to perform its obligations hereunder and thereunder, and Seller has authorized the execution, delivery and performance of this Agreement by all necessary corporate action. This Agreement has been duly executed and delivered by the Seller, and is, and upon execution and delivery will be, the valid and legally binding obligation of the Seller, and Parent, enforceable in accordance with their terms.



3.3 Parent and Subsidiaries. Parent owns all the issued and outstanding shares or ownership interests of the Seller. Parent has good, valid and marketable title to the shares or ownership interests of the Seller and is the sole record or beneficial owner of all issued and outstanding shares or ownership interests of the Seller, free and clear of any and all Liens. There are no outstanding rights of any character relating to the shares or ownership interests of the Seller and no securities convertible into or exchangeable for any of such shares or ownership interests.



3.4 Governmental Approval. The execution, delivery and performance of this Agreement by the Seller and the consummation of the transactions provided for herein are not subject to the jurisdiction of, or require the approval, authorization or consent of any governmental body.





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3.5 No Approvals or Notices Required; No Conflict with Other Instruments. The execution, delivery and performance of this Agreement by the Seller, and the consummation of the transactions contemplated hereby will not conflict with, nor will it (a) violate or require any consent or approval, filing or notice pursuant to any other agreement, guarantee, contract or instrument by which the Seller or Parent or any of the Assets are bound; or (b) result in the creation of any Lien, charge or encumbrance upon any of the Assets.



3.6 Title. Seller has good, valid and marketable title to, and ownership of, all of the Assets, free and clear of all Liens; and has the right to convey the Assets to Buyer free and clear of all Liens; and will defend the title to the Assets in Buyer against the claims of all persons. Seller has and shall convey to Buyer good and marketable title to all of the Assets.



3.7 Licenses and Permits. To the best of Seller's Knowledge, Seller has all necessary licenses, permits, consents and approvals (collectively "Permits") from all appropriate governmental bodies required for the operation of the Business, and there has occurred no default under any such Permits that has any continuing effect, and there is no current default under any such Permits. To the best of Seller and Parent's Knowledge, they have not received any notification or communication from any governmental body (i) asserting that Seller is not in compliance with any of the laws, regulations or orders which such governmental body enforces, or (ii) revoking or threatening to revoke any Permits. For purposes of this Agreement, "Knowledge" means with respect to an individual: (i) that the individual is actually aware of such fact or other matter; (ii) the Parent or Seller will be deemed to have "Knowledge" of a particular fact or other matter if any individual who is serving or who has at any time served, as a manager, director, or officer of the Parent or Seller (or in any similar capacity) however, specifically excluding Sean Harrington, has or at any time had Knowledge of such fact or other matter. Notwithstanding anything contained herein, the Seller agrees to allow the Buyer to use the Fuel License # 59003 attached to Federal ID # 59-329-7744 (the "Fuel License"), until the Buyer has received a new fuel license from the State of Florida, which is currently being processed.



3.9 Real Property. The Seller currently occupies the facilities located on the Real Property (the "Real Property" or "Premises"). To the best of Seller's Knowledge, there is no written lease agreement between the Seller and the record owner of the Real Property. The Seller occupies the Premises based upon a verbal lease in which the Seller is a month to month tenant (the "Lease").



3.10 Environmental Matters. To the best of Seller's Knowledge, the Seller's use, maintenance and operation of the Business has been, and is in compliance in all material respects with all applicable United States federal, state, county or local statutes, laws, regulations, rules, ordinances, codes, licenses and permits of any governmental body relating to environmental matters and all other applicable Environmental Laws. Seller has not received any written notice, report or other information regarding any actual or alleged violation of any Environmental Laws (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or corrective obligations, relating to such Seller or its facilities arising under Environmental Laws. For purposes of this Agreement, " Environmental Laws " shall mean all United States federal, state, local, statutes, regulations, ordinances, all judicial and administrative orders and determinations, and all common laws concerning public health and safety, and pollution or protection of the environment, including without limitation all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation, each as amended and in effect as of the Closing Date.





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3.11 Accounts Receivable. To the best of Seller's Knowledge, all Accounts Receivable arose only in the ordinary course of business, are not subject to any discounts, allowances or set-offs, and are collectible in the ordinary course of business in the amounts recorded in the books and records of the Seller.



3.12 Tax Returns and Payments. The Seller has duly and time
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