EXHIBIT 10.45
DECEMBER 6, 2002
SHAREHOLDERS AGREEMENT
AGREEMENT dated as of December 6 , 2002
Among
SARP INDUSTRIES, S.A. and SARP, S.A., corporations organized under the laws of
the Republic of France (collectively "SARPI"),
and
PROBEX CORP., a corporation organized under the laws of the State of Delaware,
USA ("PROBEX")
(each referred to as a "Party" and collectively the "Parties").
PRELIMINARY STATEMENTS
The Parties make and acknowledge the following preliminary statements (terms
defined in Section 1.1 being used as so defined):
1. PROBEX is a company organized under the laws of the State of Delaware,
United States of America and is engaged in the businesses of developing
the Technology and constructing and operating plants for the use of the
Technology.
2. PROBEX has developed a process for cost efficient re-refining of used oil
and possesses experience, technology, patents and patent applications
related thereto.
3. SARP Industries, S.A. and SARP, S.A. have created a French corporation
OSILUB S.A., which has as its principal purposes: the construction and
operating of used oil re-refining facilities commencing in France, and
thereafter in other locations in the world.
4. OSILUB has previously constructed a pilot project consisting of a
pretreatment section, a single stage flash section, a distillation stage
and a finishing section for the purpose of studying used oil recycling.
After examining the various available oil
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re-refining technologies, OSILUB has determined to utilize the PROBEX
Technology and for this purpose to enter into a license agreement with
PROBEX.
5. PROBEX is desirous of becoming a shareholder of OSILUB under the terms
provided for below which are intended to define the relationship between
the shareholders of OSILUB.
6. The Parties will use all reasonable efforts to support OSILUB in the
construction of the First Facility and other Facilities and the conduct
of the OSILUB Business and to channel all opportunities for such business
in Europe (as defined in the Technology License Agreement) to OSILUB, all
in accordance with this Agreement and the other Venture Agreements.
7. The Parties have agreed on the initial Budget, the initial Business Plan
and the initial Capital Investment Program for OSILUB, each of which is
set forth as a schedule to this Agreement.
8. Each Party will make capital contributions and loans in cash to OSILUB as
provided in this Agreement.
9. PROBEX and OSILUB will execute the Technology License Agreement. Where
appropriate capitalized terms used herein, shall have the same meaning as
defined in the Technology License Agreement.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to the singular and the
plural forms of the terms defined):
"Affiliate" means any person, corporation or entity controlling,
controlled by or under common control with another person, corporation or
entity. For purposes of this definition "control" shall mean ownership
directly or indirectly, of 50% or more of the outstanding equity
securities of a Person, or the ability to direct or cause the direction
of the management and policies of another Person whether through a
management agreement or otherwise. Provided that as concerns SARPI, no
Persons above SARP
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Industries S.A. and SARP, S.A. in the chain of control shall be deemed an
Affiliate nor taken into account for purposes of determining control.
"Board" means the Board of Directors of OSILUB.
"Budget" means the initial Budget for OSILUB attached hereto as Schedule
1 and each succeeding Budget for OSILUB approved by the Board.
"Business Day" means any day of the year other than Saturday, Sunday or a
day on which banks in France or the United States of America are
authorized or required to close.
"Business Plan" means the initial Business Plan for OSILUB attached
hereto as Schedule 2 and each succeeding Business Plan for OSILUB
approved by the Board.
"Capital Contributions" means with respect to each Party, the capital
contribution to OSILUB to be made by such Party pursuant to Section 3.2.
"Capital Investment Program" means the initial Capital Investment Program
for OSILUB attached hereto as Schedule 3 and each succeeding Capital
Investment Program for OSILUB approved by the Board.
"Charter" means the "Statuts" of OSILUB a copy of which has been
furnished to PROBEX.
"Commissioning" means the successful completion of a two stage process
consisting of:
- a start-up phase during which the Facility (or the Line as the
case may be) shall operate without interruption over a 72 hour
period at an average output of no less than its Nominal Capacity,
and 24 continuous hours of such 72 hours at an average output
equal to 110% of its Nominal Capacity and:
- an acceptance phase during which the Facility (or the Line, as the
case may be) shall operate without interruption for a period of
thirty (30) days at an average output equal to its Nominal
Capacity, and for a continuous period of 48 hours during such
thirty days at an average output equal to 110% of its Nominal
Capacity. At no time during the thirty day period shall output
fall below 90% of Nominal Capacity. Down time for repairs or parts
changes not exceeding twelve (12) hours in any one instance shall
not be taken into account for this purpose if they do not result
from a defect in the Technology.
"EBITDA" means : Earnings Before Interest, Income Taxes, Depreciation and
Amortization, as defined under generally accepted accounting principles
applicable in France.
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"Facility" means a used oil re-refining plant, which may be composed of
one or more operating lines (each a "Line") built to operate using the
Technology in whole or in part.
"First Facility" means a Facility 100% owned by OSILUB, built in France,
with a minimum capacity to process 120,000 tons per year (its "Nominal
Capacity") of wet feed stock meeting agreed specifications when operated
on a 7,500 hours per year basis; used oil supplied to the Facility to
contain no more than 7% dissolved water as such Facility is more fully
described in the Business Plan. The First Facility will be constructed in
two independent operating Lines of approximately equal capacity, Line 2
to be built after Commissioning of Line 1, if and when decided by the
Board.
"Net Sales" means the total invoiced and collected sale price, of the
Products sold by OSILUB to customers, less any sales or value added
taxes, packing, insurance and transportation costs which are identified
as such on the corresponding invoices.
"Original Issue Price" means all of the money invested in OSILUB by a
Party including but not limited to subscriptions Capital Contributions
and Shareholder Loans (including interest), as more fully described in
Article III.
"OSILUB Business" means the collection, purchase, treatment and
regeneration of used oils and related products; the sale, distribution,
exportation and importation and in general the business of used petroleum
products and their derivatives (excluding solvents) whether done directly
or indirectly, as well as associated services and activities.
"Person" means any individual, corporation, partnership, association,
trust or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Phase 1" means : the period commencing on the date of signature of this
agreement and ending on the date of satisfaction of the Commencement
Conditions.
"Phase 2" means : the period commencing immediately subsequent to the
close of Phase 1 and ending upon the successful completion of
Commissioning of the First Facility.
"Products" mean the base oil and other salable products produced by the
Facility, including , fuel and asphalt flux or modifier.
"Project" means the execution of the Venture Agreements, the construction
and operation of the First Facility, the production of the Product at the
First Facility and the conduct by OSILUB of the OSILUB Business,
including the building of other Facilities in France and other countries.
"Share" means each outstanding share of the capital stock of OSILUB.
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"Shareholder Loan" means, with respect to each Party, the loan to OSILUB
to be made by such Party pursuant to Section 3.2.
"Shareholder Capital and Loan Schedule" means the schedule according to
which the Parties shall make their respective Shareholder Capital
Contributions and Loans to OSILUB, which shall be determined by the Board
of Directors.
"Site" means a parcel of approximately 3 (three) hectares situated in the
zone of ROUEN, having an access to the Seine river comprised of a band of
15 meters wide running from the said parcel to the river, with the
possibility of constructing a quay for the mooring of boats and barges,
or any other appropriate site that OSILUB may determine for the
construction of the First Facility.
"Technology" means a process developed by PROBEX for cost-efficient used
oil re-refining, employing a unique set of operating parameters in
conjunction with certain chemical additives : this process being covered
by certain patents, know-how and other confidential information. This
process, known under the trademark "ProTerra", permits construction and
operation of a plant using conventional process equipment.
"Technology License Agreement" means the technology license agreement
between PROBEX and OSILUB to provide for the exclusive and non exclusive
license of the PROBEX Technology by PROBEX to OSILUB executed
simultaneously herewith.
"Venture Agreement" means each of the following, each of which shall be
in form and substance satisfactory to each Party:
(1) this Agreement,
(2) the Technology License Agreement,
Any references to any Venture Agreement shall mean and include such
Venture Agreement as amended, modified or waived from time to time in
accordance with its terms and the terms of this Agreement.
ARTICLE II
BUSINESS OF OSILUB
2.1. STATUS OF OSILUB.
OSILUB is a "societe anonyme" created under the laws of the Republic of
France, registered at the "Registre de Commerce et des Societes" of
Elbeuf under the number 441 563 764 with a capital of forty thousand
euros (40,000 Euros) and a registered office at 00, xxx xx xx Xxxx, 00000
Saint Xxxxx xxx Elbeuf. An estimated trial balance
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of OSILUB to October 31, 2002 is annexed hereto as Schedule 1. As of
October 31, 2002, SARPI has provided OSILUB with an amount of
EUR 1 012000_, in shareholder loans, supplier credits and other financing
facilities.
2.2. OSILUB BUSINESS
(a) The OSILUB Business as defined herein shall initially concentrate
on the design, construction, commissioning and operation of the
First Facility. The decision to construct Line 2 of the First
Facility will be made by the Board in its sole discretion.
Thereafter, other Facilities may be constructed and operated on
other sites in France or other countries.
(b) The Parties shall cause OSILUB to conduct its operations in
accordance with the Charter in order to implement the Venture
Agreements and the Business Plan as in effect from time to time.
The operations of OSILUB shall be in compliance with the Charter
and all laws applicable thereto. None of the Parties will take any
action not contemplated herein that may adversely affect the
performance by OSILUB of its obligations under the Charter or any
Venture Agreement.
(c) Each Party shall vote its Shares and shall take all other actions
reasonably necessary to ensure that the Charter facilitates and
does not at any time conflict with the provisions of this
Agreement and to ensure that this Agreement is implemented under
the Charter of OSILUB.
(d) In the case of any conflict between the terms of this Agreement
and those of any other Venture Agreement, the terms of this
Agreement shall control and all other Venture Agreements shall be
interpreted with reference to and in function of this Agreement.
2.3. INDEPENDENT ORGANIZATION.
The Parties agree that OSILUB shall be operated by its own management as
an independent legal and economic entity in accordance with the laws of
France, the Charter, the other Venture Agreements and the laws of any
other jurisdiction applicable to OSILUB or the conduct of the OSILUB
business.
2.4. VOTING AGREEMENT.
In order to accomplish and give effect to this Agreement, each Party
covenants and agrees to vote, or cause to be voted, the Shares owned by
it in accordance with the terms and provisions of this Agreement. Each
Party also covenants and agrees that it will at all times vote and act
and take all such steps as may be reasonably within its power and use
reasonable commercial efforts to cause OSILUB to act in accordance with
the provisions of this Agreement and the other Venture Agreements.
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2.5 THE FIRST FACILITY
Upon signature of this Agreement, OSILUB will commence basic engineering
work for the First Facility under the time schedule provided for in the
Business Plan, and will use commercially reasonable efforts to seek the
fulfillment of the Commencement Conditions. Upon the occurrence of the
Commencement Conditions, OSILUB shall construct and operate the First
Facility to produce the Product and conduct the other OSILUB Business.
2.6 EXCLUSIVITY
PROBEX hereby grants to OSILUB, and the Technology License Agreement
shall so provide, a license to construct, own and operate Facilities and
to use the Technology on an exclusive basis in Europe ( the
"Exclusivity") and on a non-exclusive basis outside of Europe, to the
exclusion of the United States of America and, until December 31, 2005 to
the exclusion of Japan. Accordingly, within the territory of Europe as
defined in the Technology License Agreement, and during the term of said
agreement, PROBEX shall not directly or indirectly itself invest in,
manage, operate, control, assist, counsel or provide services,
technology, or intellectual property to any Person, that has activities
related to the Technology or grant any license to any Person other than
OSILUB to use the Technology in any manner, including to design, build
and operate any Facility or site in Europe.
ARTICLE III
FINANCING
3.1 INCREASE IN CAPITAL-PAYMENT OF SHAREHOLDER LOANS
Upon signature of this Agreement PROBEX agrees to subscribe to an
increase in capital of 7,500 EUR and SARPI of 2,500E.: payable in
cash, upon the completion of which PROBEX will own 7,500 shares of a
total issued capital of 50,000 shares or 15% of the total issued and
outstanding capital of OSILUB. Simultaneously, therewith PROBEX will pay
to OSILUB the sum of EUR 75 900_ as a shareholder loan which sum
represents 50% of its prorata 15% share of all outstanding shareholder
financing facilities as of October 31, 2002, and will pay the balance of
EUR 75 900 to Osilub by December 31, 2002.
3.2 FINANCING THE PROJECT.
3.2.1 The Parties agree to make all investments in OSILUB necessary to finance
the completion and operation of the First Facility in conformity with the
initial Business Plan, Budget and Capital Investment Program, such
investments to be made (1) by making their respective phase 1 - Capital
Contributions and Shareholder Loans to
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OSILUB in accordance with the amounts indicated in Section 3.2.2 (as
amended by the Board of Directors) and, (2) by making their respective
Phase 2 : Capital Contributions and Shareholder Loans to OSILUB in
accordance with the amounts indicated by Section 3.2.2, and (3) by
participating in prorata capital increases or shareholder loans (or being
diluted) as provided for in Section 3.6. All payments shall be made
promptly when due. Each party shall make its respective Phase 1 and Phase
2 Capital Contributions and Shareholder Loans in the amounts and in
accordance with the timing determined by the Board of Directors.
3.2.2. The initial Business Plan, Budget and Capital Investment Program indicate
that the total expenditure for the conception, development, construction,
commissioning and start-up of the First Facility amounts to approximately
50 million Euros of which 3.5 million Euros are allocated to
pre-agreement development work and Phase 1 and 46.5 million Euros to
Phase 2. Based on this total Budget of 50 million Euros, the budgeted
Capital Contribution and Shareholder Loan obligations of the Parties
amount to a total of 3.5 million Euros for Phase 1 and 9.3 million Euros
for Phase 2. The Phase 2 obligations may be amended by mutual consent as
the planning for the First Facility progresses. It is intended that Phase
2 will be financed by not more than 20% shareholder Capital Contributions
and Shareholder Loans and the balance by project financing described in
Section 3.4(2) below. Each party agrees to grant its corporate guaranty,
prorata to its Share interest in OSILUB, for the project financing at the
time of signature of the financing agreement. In the event PROBEX ceases
to own any shares in OSILUB, SARPI will assume PROBEX's portion of any
project financing indebtedness and any guarantees or other security
interests related thereto.
3.2.3 In the event that total expenditures during Phase 1 exceed the budgeted
amount of 3.5 million Euros without OSILUB having obtained the
appropriate governmental authorizations necessary for the construction of
the First Facility (as described in Section 3.4(3) below), then in this
case, PROBEX shall not be required to advance additional Capital
Contributions or Shareholders Loans until such time as the said
authorizations are received by OSILUB and PROBEX will not be subject to
dilution for failure to advance such funds prior to the obtaining of said
authorizations. However PROBEX shall promptly after receipt by OSILUB of
said authorizations pay its prorata share of any funds advanced by SARPI
over and above the budgeted amount for Phase 1.
3.2.4 OSILUB shall pay interest on the unpaid principal amount of each
Shareholder Loan at a rate equal to the maximum rate deductible for
shareholder loans under French tax law.
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3.3 PHASE 1.
As soon as practical after the signature of this Agreement, OSILUB will
contract with a reputable engineering firm for the basic engineering
services needed for the First Facility and will use commercially
reasonable efforts to seek fulfillment of the Commencement Conditions.
3.4 PHASE 2.
The commencement of construction of the First Facility shall be subject
to the prior or concurrent satisfaction of the following conditions (the
"Commencement Conditions"):
(1) Signature by OSILUB, and the Port Autonome de Rouen or other
lessor or seller of a lease agreement or sale agreement covering
the Site.
(2) Signature by OSILUB and a financial institution of a financing
agreement pursuant to which OSILUB is granted at least US37.2
million Euros of project financing at the interest rate not to
exceed 7% per annum for a minimum term of 15 years.
(3) Granting by the appropriate governmental authorities of all
authorizations necessary for the construction and operation of the
First Facility.
(4) Signature by OSILUB of all agreements necessary for the
construction and start-up of the First Facility on terms
acceptable by OSILUB.
(5) Obtaining by OSILUB of letters of intention for at least 50% of
the Output of Line one of the First Facility.
(6) Establishment of a final Budget for Phase 2 acceptable to both
parties.
(7) Granting of pending Patent Application No. 0013832 in the Republic
of France as shown in Schedule 1.12 of the Technology License
Agreement and granting of Patent Application No. 98943547.4 in EPC
member countries, also as shown in Schedule 1.12 of the Technology
License Agreement.
(8) Confirmation and demonstration by PROBEX that the French used oil
feedstock provided to Probex to process in its pilot plant during
2000 will meet the performance specifications of Schedule 7.2 of
the Technology License Agreement and will produce high quality
group II base oil (except with regard to sulfur content) and will
meet the performance criteria of the Business Plan.
Each party agrees that it will at all times prior to the occurrence of
the Commencement Conditions take all reasonable commercial efforts to
seek the fulfillment of said conditions.
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3.5 SIGNATURE OF AGREEMENTS
Concomitantly with the signature of this Agreement, PROBEX will execute
with OSILUB the Technology License Agreement.
3.6 ADDITIONAL CAPITAL AND LOANS
(a) If the Board decides that OSILUB requires additional financing for
its capital expenditures program or general business activities
above and beyond the funds available to OSILUB through the
Shareholder Capital Contributions and Loans described in Section
3.2.2 as amended, the Board may propose to the Parties that (i)
OSILUB borrow funds from external sources and/or (ii) the Parties
make capital contributions or loans to OSILUB in excess of those
made pursuant to Section 3.2.2, provided however, that with
respect to any such Capital Contribution or Shareholder Loan the
Parties shall have a minimum of 30 days to arrange for and make
payment. Any capital contributions made pursuant to this Section
3.6 shall be made pro rata by the Parties in accordance with their
ownership of Shares in OSILUB.
For the construction of all Facilities, it is the intention of the
Parties to attempt to maximize project financing under reasonable
commercial terms and conditions.
(b) If any Party (the "Defaulting Party") fails to make a Capital
Contribution or Shareholder Loan (the "Defaulted Contribution") at
the time specified by the resolution adopted by the appropriate
Board of Directors or shareholders' meeting of OSILUB, then the
other Party may, at any time elect to advance to OSILUB an amount
equal to all or any portion of the Defaulted Contribution on the
same terms and conditions, provided that if the additional
contribution was supposed to be in the form of a Shareholder Loan,
the said other Party may to convert the principal amount of the
Defaulted Contribution and its own Shareholder Loan into Shares of
OSILUB.
3.7 DIVIDEND POLICY
OSILUB shall declare and pay dividends in respect of its Shares in a
minimum amount equal to thirty three and one third percent (33 1/3%) of
net earnings of the financial year minus prior losses and allocations to
the legal reserve, or other mandatory reserve as these terms are defined
in French law, and minus the amount of principal payable for the
financial year on any outstanding indebtedness..
3.8 FULFILLMENT OF CONDITIONS
In the event that all the Commencement Conditions are not entirely
fulfilled on or before December 31, 2004 or such other date agreed to in
writing by both Parties or if either or both Parties determine that the
Budget for Phase 2 is unacceptable: either (i)
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this Agreement shall terminate, the Technology License Agreement shall
terminate and the Parties shall promptly thereafter take all necessary
measures to accomplish the dissolution and liquidation of OSILUB or (ii)
if one Party desires to continue the operations of OSILUB, and the other
Party does not, the first Party shall acquire the Shares of the other
Party which shall sell such Shares at their Original Issue Price and the
Technology License Agreement shall continue according to its terms. Each
Party shall be released from any obligation toward the other Party,
except with respect to any obligation for which survival shall have been
expressly provided for in this Agreement or any of its exhibits.
3.9 MANAGEMENT FEE
SARPI and/or companies in its group shall be entitled "collectively" to
invoice to OSILUB a management fee of up to 3.0% of Net Sales.
ARTICLE IV
UNDERTAKINGS OF THE MAJORITY SHAREHOLDERS
From the date of payment by PROBEX of the amounts described in Section
3.1, and for as long as SARPI possesses control of OSILUB and for as long
as PROBEX owns shares of OSILUB, SARPI undertakes to do what ever is
necessary in order that:
4.1 PROBEX BOARD OF DIRECTORS MEMBERSHIP
PROBEX shall be entitled to name one member of the Board of Directors of
OSILUB or the replacement of such member in the event of death,
disability, removal, resignation or otherwise;
4.2 LIMITATION OF OSILUB ACTIVITIES
No amendment shall be made in the purposes and activities of OSILUB which
shall have as their effect to bring those activities outside the scope of
activities stated in Section 1.1 "OSILUB Business".
The Charter shall not be amended in a way that conflicts with or
materially adversely affects the specific rights and protections granted
to PROBEX herein without the consent of the Parties.
4.3 PROFIT DISTORTION
All contracts between OSILUB and SARPI or any other company in the
VIVENDI ENVIRONNEMENT group shall be disclosed in the annual reports and
shall be made
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on arm's-length pricing arrangements. The Management Fee described in
Section 3.9 above shall not be subject to this Section 4.3.
4.4 ASSET PROTECTION
There shall take place no merger or sale of substantially all of the
assets of OSILUB to SARPI, or any company in the VIVENDI ENVIRONNEMENT
group, nor shall OSILUB encumber any of its assets for debts other than
OSILUB debts.
4.5 REPORTING
The member of the Board appointed by PROBEX shall receive all management
reports received by the other directors. In this connection, the Board
shall cause the management of OSILUB to prepare and submit to it on an
annual basis : a budget for the succeeding fiscal year which shall
include proposed capital investments. For purposes of securities law
reporting requirements, OSILUB shall provide PROBEX with the same
documents and information as are provided to SARPI and shall provide to
PROBEX any information required for PROBEX to satisfy its disclosure
obligations under US securities laws provided that PROBEX shall pay any
expense involved in obtaining information that is not readily available.
4.6 OPERATIONS OUTSIDE OF FRANCE
PROBEX shall have the right at the time of organization of the
sub-Licensee to acquire a direct equity position of 20%, or such lesser
percentage as PROBEX in its sole discretion shall elect, of the equity in
each OSILUB Facility outside of France on terms no less favorable than
the terms obtained by OSILUB, provided that this right shall terminate at
such time as PROBEX ceases to be a shareholder of OSILUB.
4.7 SUCCESSORS TO SARPI
Any acquirer of the SARPI Shares shall assume in writing all of SARPI's
obligations under this Agreement.
4.8 PREFERENTIAL SUBSCRIPTION RIGHTS
In the event of an increase in the capital of OSILUB, SARPI undertakes
not to surpress PROBEX's preferential right of subscription.
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ARTICLE V
TRANSFER OF OSILUB SHARES
5.1 TRANSFERS TO AFFILIATES
(a) Any Party (the "Affiliated Party") may sell, assign or otherwise
transfer all (but not less than all) of the Shares held by it to
any of its Affiliates; provided that (i) such Affiliate agrees in
writing to become bound by all of the provisions of this Agreement
applicable to the Affiliated Party, (ii) such Affiliate agrees in
writing to resell, reassign or otherwise retransfer all such
Shares to the Affiliated Party should at any time such Affiliate
cease to be an Affiliate of such Affiliated Party and (iii) the
Affiliated Party unconditionally guarantees in writing to the
other Parties the full and faithful performance by such Affiliate
of all of such Affiliated Party's obligations under this Agreement
and in respect of such Shares.
(b) Subject to the fulfillment of the Conditions provided for in (a)
above, PROBEX designate within 30 days following the execution of
this Agreement a wholly owned French subsidiary, to own the Shares
of PROBEX in OSILUB.
5.2 ENCUMBRANCES
Probex shall not create or permit to exist any security interest, lien,
claim, pledge, option, right of first refusal, agreement, limitation on
the voting rights, charge or other encumbrance of any nature whatsoever
in respect of the Shares of OSILUB, except for currently existing lender
bridge loan liens.
5.3 RIGHT OF FIRST REFUSAL BY PROBEX
(a) If PROBEX (hereinafter the "Selling Party") desires to sell,
assign or otherwise transfer all (but not less than all) of its
Shares to any Person who is not an Affiliate of PROBEX, the
Selling Party shall after having obtained the approval of the
Board pursuant to Article 11 (III) of the Charter, first offer to
sell such Shares to SARPI (hereinafter the "Other Party"). The
Selling Party shall deliver a notice (the "Sale Notice") to the
Other Party of its intention to sell, assign or otherwise transfer
such Shares, identifying the proposed purchaser, assignee or other
transferee and indicating the per Share cash price, and other
proposed terms and conditions.
(b) For a period of thirty (30) days following delivery of the Sale
Notice, the Other Party shall have the option to purchase all such
Shares owned by the Selling Party by delivering a notice stating
that it has elected to purchase such Shares on the same per share
price and other proposed terms and conditions as stipulated in the
Sale Notice. The failure by the Other Party to deliver such notice
within the
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thirty (30) days period shall be deemed to be notice of its
intention not to purchase such Shares.
(c) If the other Party does not exercise its option, then the Selling
Party shall be free to sell, assign or otherwise transfer its
Shares to the purchaser, assignee or other transferee identified
in the Sale Notice at the price and on the terms and conditions
therein specified for a period of thirty (30) days; provided that
such purchaser, assignee or other transferee shall agree in
writing to become bound by all of the provisions of this Agreement
applicable to the Selling Party. If the transfer to such
purchaser, assignee or other transferee is not effected within
such time period, then the Selling Party must again follow the
procedures set forth in this Section 5.3 in order to sell, assign
or otherwise transfer such Shares.
(d) The sale of such Shares by the Selling Party to the Other Party
shall take place within thirty (30) days after the date the option
(or Exercise or Put notice provided pursuant to Sections 5.5 and
5.6 hereof) is exercised at the offices of OSILUB at 10:00 A.M.
Paris time, or at such other place and time as agreed to by the
Party which is party to the purchase and sale of such Shares.
5.4 CO-SALE
In the event that SARPI decides to sell Shares to any Person who is not a
member of the Vivendi Environnement Group, and as a result of the
completion of said sale SARPI together with all other Persons of the
Vivendi Environnement Group would own less than a majority of the then
outstanding issued share capital of OSILUB, then SARPI shall deliver a
notice (the "Co-Sale Notice") to PROBEX of its intention to sell, assign
or otherwise transfer such shares, indicating the per share cash price,
and other proposed terms and conditions and :
(a) PROBEX shall have the right to require SARPI to arrange for the
sale to the proposed purchaser of all of the Shares owned by
PROBEX, and
(b) SARPI shall have the right to require PROBEX to sell all of the
Shares owned by PROBEX to the proposed purchaser
On the same date, for the same consideration and on terms and
conditions at least as favorable to PROBEX as those set out in the
Sale Notice.
(c) Each of SARPI and PROBEX shall exercise the rights under this
Section by written notice to the other Party within 10 Business
Days after the delivery of the Co-Sale Notice.
(d) Within ten (10) Business Days after receiving the Co-Sale Notice
PROBEX may object to the sale of its Shares, but only on the basis
that the proposed per share cash price and other terms and
conditions are unreasonably below fair market value. PROBEX shall
thereafter not be required to sell its Shares unless SARPI
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furnishes to PROBEX a certificate from a reputable financial
analyst appointed by mutual agreement of the Parties, certifying
that the proposed price and other terms and conditions are not
less than 80% of fair market value of the PROBEX Shares. Should
the Parties be unable to mutually agree on the appointment of a
financial analyst, the appointment shall be made by the President
of the Tribunal de Commerce de Paris at the request of the most
diligent party.
5.5 CHANGE OF CONTROL OF PROBEX
5.5.1 For purposes of this Agreement a change of control of PROBEX shall mean
that any Person, other than a financial institution (bank, pension fund,
or venture capital fund) unrelated to a competitor of OSILUB and/or
Vivendi Environnement, shall acquire more than fifty (50%) percent of the
equity securities of PROBEX, or shall in fact name a majority of the
members of the Board of Directors of PROBEX, or shall consolidate the
accounts of PROBEX with the accounts of said person.
5.5.2 In the event of a change of control of PROBEX, SARPI shall have the right
and option (the "Call") to purchase all of the Shares owned by PROBEX at
the Exit Price defined below and PROBEX shall have the obligation to sell
such Shares at that price during a period of 90 days commencing on the
date of being notified by PROBEX of the change of control of PROBEX, and
if SARPI is not so notified, at any time after learning of the change of
control of PROBEX. SARPI shall exercise its Call by delivery of a written
notice (the "Exercise Notice") to PROBEX.
5.5.3 The Exit Price per share shall be calculated as follows:
(i) The average of the EBITDA as set forth in the audited financial
statements of OSILUB for each of the two full fiscal years
preceding the date of sale shall be determined and shall be
multiplied by five less any financial or shareholder indebtedness
and divided by the total number of shares outstanding at such time
(ii) If the Exit Price is calculated prior to the end of the fiscal
year in which occurs the second anniversary of Commissioning of
the second Line(or Line 1 if construction of Line 2 is not
commenced within one year after the Commissioning of Line 1), the
Exit Price shall be the Original Issue Price of such Shares.
5.5.4 In the event that, prior to December 31, 2004, a change of control of
PROBEX occurs due to the financing for the construction of its
Wellsville, Ohio Facility, the Call shall not apply, provided that the
controlling party is a financial institution or private investor
unrelated to a competitor of OSILUB and/or VIVENDI ENVIRONNEMENT. Any
subsequent change of control of PROBEX shall be subject to the terms of
this section 5.5.
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5.6 PROBEX PUT
Commencing at the end of the fiscal year in which occurs the second
anniversary of Commissioning of the first Line of the First Facility and
at any time thereafter until December 31, 2012:
PROBEX shall have the right and option, but not the obligation, to sell
("the Put") to SARPI all of the Shares owned by PROBEX and SARPI will
have the obligation to purchase such Shares,
By delivering a written notice ("the Exercise Notice") to SARPI. The
price for the Shares shall be the Exit Price as determined in Section
5.5.3 (i) which shall be payable in cash at the Closing.
5.7 CLOSING
The Closing for sales made pursuant to Sections 5.5 and 5.6 shall take
place as provided in section 5.3(d).
5.8 SARPI SALE OF SHARES
SARPI agrees that in the event that it intends to offer its Shares for
sale, that SARPI will so inform PROBEX. PROBEX may make an offer to
acquire the SARPI Shares, however PROBEX shall have no priority, first
refusal or similar rights.
ARTICLE VI
TERMINATION
6.1 TERMINATION OF AGREEMENT
This Agreement shall terminate on the earlier to occur of:
(i) a written agreement of the parties to that effect;
(ii) the dissolution, insolvency or bankruptcy, of OSILUB under the
laws of the Republic of France;
(iii) all of the Shares are transferred by the Parties in conformity
with this Agreement.
(iv) all of one of the Party's Shares are transferred by one of the
parties to the other party in conformity with this Agreement.
6.2 DISTRIBUTION OF ASSETS
In the event of dissolution and liquidation of OSILUB, the assets shall
first be distributed to creditors of OSILUB not a party to this Agreement
prorata to their
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claims, second to the Parties who are creditors of OSILUB prorata to
their claims, and third to the Parties prorata to their Share interests.
6.3 INDEPENDENCE OF TECHNOLOGY LICENSE
The termination of this Agreement shall have no effect on the validity of
the Technology License.
ARTICLE VII
MISCELLANEOUS
7.1. CONFIDENTIAL INFORMATION
(a) Each Party shall hold, and shall cause its Affiliates and
subsidiaries and their respective officers, directors, employees,
agents, auditors and financial and legal advisors (together, the
"Representatives") to hold, in strict confidence any and all
information obtained from or relating to OSILUB and any other
Party (or Affiliate thereof) in connection with its or their
activities under (or its or their being party to) this Agreement
(the "Confidential Information"). Such Party shall not use, and
shall cause its Representatives not to use, such Confidential
Information otherwise than in connection with the business and
affairs of OSILUB, and shall not disclose, and shall cause its
Representatives not to disclose, such Confidential Information to
any other person or entity, except:
(1) to the extent it was known when received by such Party and was not
received by such Party directly or indirectly from any other Party
or its Representatives or OSILUB;
(2) as it is or as it becomes public information or otherwise
available to the public through no act or fault of any Party or
OSILUB;
(3) to the extent it is received by such Party from a third party who,
to such Party's best knowledge, did not receive such Confidential
Information directly or indirectly from any other Party or OSILUB;
(4) to the extent such duty as to confidentiality and non-use is
waived in writing by all the Parties;
(5) as may be required by court order, law or a governmental
authority; or
(6) to such Party's auditors, consultants and financial and legal
advisors, who shall be advised of the confidential nature of the
Confidential Information.
(b) The provisions of this Section 7.1 shall survive termination of
this Agreement for a period of five years. In the event of such
termination, each Party shall return,
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and shall use its best efforts to cause its Representatives to
return, to the other Parties or OSILUB all documents received from
the other Parties or their Representatives or from OSILUB (and all
reproductions made of such documents) that include Confidential
Information not within the exceptions contained in Section
7.01(a).
7.2 PUBLICITY
No public statements shall be issued by any Party relating to OSILUB, the
Technology License Agreement or the economic terms of the transactions
contemplated hereby without prior authorization of the Other Party;
provided that nothing herein shall prevent a Party from supplying such
information or making such statements relating to OSILUB or such
transactions as may be required by any governmental or stock market
authority or as such Party may consider necessary in order to satisfy its
legal obligations, but such Party shall furnish prior written notice
thereof to the other Party and shall make such changes as may reasonably
be requested by the other Party.
7.3 NOTICES
(a) Addresses. All notices and other communications to a Party under
this Agreement and the other Venture Agreements shall be in
writing (including telegraphic, telecopy, telex or cable
communications) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to the address and to the attention of the
Party's representative stated below and shall be deemed to have
been given and delivered to any Party on the date of the
addressee's receipt thereof:
(1) if to SARPI, to:
SARP Industries, S.A.
Zone Portuaire
000, xxxxx xx Xxxxx
00000 Xxxxx
Xxxxxx
Attn: 33 1 34 97 25 33
Facsimile: 33 1 34 97 25 32
(2) if to PROBEX, to:
Probex Corp.
00000 Xxxxxx Xxxx. Xxxxx
Xxxxxxx, Xxxxx 00000 X.X.X.
Attn: 00 1 97 27 88 47 72 Facsimile: 00 1 92 29 80 85 45
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The addresses and facsimile numbers for notifications given pursuant to
this Agreement may be changed by means of a written notice given to the
other Parties prior to the effective date of such change.
(b) Effectiveness. Any notice or communication delivered pursuant to
Section 9.3(a) shall be deemed to have been given on receipt.
7.4 EXPENSES
(a) All costs, legal fees and other expenses incurred by each Party in
connection with the preparation, execution, delivery,
administration and enforcement of this Agreement and each other
Venture Agreement shall be for the account of and paid by such
Party.
(b) All costs, legal fees, registration fees and other expenses
incurred in the formation, dissolution or liquidation of OSILUB
shall be for the account of and paid by OSILUB.
7.5 ASSIGNMENT: CONTINUING OBLIGATIONS
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and assigns; provided that no
Party shall assign this Agreement or any interest herein except to an
assignee permitted by this Agreement.
7.6 NO RIGHTS GIVEN TO THIRD PARTIES
Nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any Person (other than the Parties) any rights or
remedies under or by reason of this Agreement.
7.7 AMENDMENTS: WAIVERS
This Agreement may be amended or modified, and compliance with the terms
of this Agreement may be waived, only by means of a written instrument
signed by or on behalf of all Parties hereto. No waiver by any Party of
any breach of this Agreement shall be construed as a waiver of any other
breach of this Agreement.
7.8 SEVERABILITY
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to
the extent of such prohibition or unenforceability, without invalidating
the remaining provisions hereof or affecting the validity or
enforceability of any provision hereof in any other jurisdiction.
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7.9 HEADINGS
The headings contained in this Agreement are for the convenience of
reference only and shall not affect the meaning or interpretation of this
Agreement.
7.10 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
substantive laws of France applicable to contracts executed and to be
performed within France and without regard to the conflicts-of-laws rules
of France.
7.11 JURISDICTION
Any dispute, claim, controversy or litigation which may arise from the
present agreement will be submitted to the exclusive jurisdiction of the
Commercial Court (Tribunal de Commerce) or other competent court of
Paris, France, including matters of guaranty or warranty and claim made
by interpleader or third party complaint.
7.12 ATTORNEY'S FEES; COSTS OF LITIGATION
If any legal action or any other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it
or they may be entitled.
7.13 EXECUTION IN COUNTERPARTS
Each text of this Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this Agreement
by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
7.14 ENTIRE AGREEMENT
This Agreement and the Technology License Agreement constitutes the
entire agreement between the parties with respect to the subject matter
hereof and supersedes and annuls all previous communications, agreements
or understandings between them with respect to the subject matter hereof.
The entire agreement includes the Technology License Agreement and any
previously executed Confidentiality Agreements, provided that PROBEX
hereby agrees that all such Confidentiality Agreements shall be governed
by French law so long as all third parties to such Agreements likewise
consent in writing to be bound by French law, and, in such case, shall be
subject to the exclusive jurisdiction of the competent courts of Paris,
France.
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In the event that any third party to the Confidentiality Agreements
refuses to consent in writing to be so bound, then the Confidentiality
Agreements as applicable to said on consenting third party shall continue
to be governed by the Laws of the State of Texas and shall be subject to
the jurisdiction of the courts provided for therein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
SARP INDUSTRIES, X.X. XXXX, S.A.
By: By:
----------------------------- -----------------------------
Name : Name :
Title : Title :
PROBEX CORP.
By:
-----------------------------
Name :
Title :
Schedule 1 : Initial Budget - Phase 1 - Initial Trial Balance as of
October 30,2002
Schedule 2 : Initial Business Plan
Schedule 3 : Initial Capital Investment Program - Phase 1 and 2
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