SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event report) November 7, 1997
Chemfix Technologies, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 0-12258 72-0845259
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3500 N. Causeway Blvd., Suite 1280, Metairie, LA 70002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504) 831-3600
(Former name or former address, if changed since last report.)
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Item 2 - Acquisition and Disposition of Assets
On November 7, 1997, the Registrant entered into an Agreement to
sell all the assets and certain liabilities of its subsidiary,
Atlantic Petroleum Technologies of Louisiana, Inc., to Primary
Systems, LLC. This Agreement for purchase of assets was entered
into pending shareholder approval.
Item 6 - Exhibits
Summary Term Sheet - Atlantic Petroleum Technologies of Louisiana, Inc.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
CHEMFIX TECHNOLOGIES, INC.
By
David L. Donaldson, President
Dated: November 20, 1997
SUMMARY TERM SHEET
ATLANTIC PETROLEUM TECHNOLOGIES OF LOUISIANA, INC.
It is understood between the parties that APTL, Inc., has informed PRIMARY
SYSTEMS, LLC of its interest in selling substantially all of its assets and the
assumption of certain liabilities. In addition, APTL has stated that it is in
need of working capital to fund new and existing projects and has asked PRIMARY
SYSTEMS, LLC to consider a lending arrangement to APTL.
PRIMARY SYSTEMS, LLC is willing to consider the above stated requests
subject to certain terms and conditions. The purpose of this Summary Term Sheet
is to provide a framework of understanding from which a definitive purchase
agreement can be negotiated and drafted. It is not the purpose of this Summary
Term Sheet to cover each and every detail required for agreement by both
parties.
In addition, each provision of the term sheet is subject to completing of
satisfactory due diligence relating to the particular provision before a
contract can be confected among the parties.
Purchaser/Investor:
PRIMARY SYSTEMS, LLC, or its designee
Lending Arrangement:
Based on information and proforma financial statements provided by APTL,
PRIMARY SYSTEMS, LLC, or its designee, is willing to provide APTL a factoring
line of credit based on the purchase of APTL's accounts receivable. This line
of credit will be based on an advance rate of 75% of approved accounts receiv-
able subject to an overall limit of $500,000. A fee in the amount of 2% of each
invoice will be deducted from invoices collected within 30 days. An additional
fee of 1% will be deducted from each invoice collected over 30 days for each 15
day increment. Legal and other fees related to the establishment of this line
of credit will also be deducted from invoices. Once invoices are collected, the
remaining amount after all fees will be remitted to APTL. This agreement will
have a term of 120 calendar days after which time, PRIMARY SYSTEMS, LLC, or its
designee, may at its sole option continue the agreement or terminate it. This
lending arrangement is conditioned upon verification that APTL has or can obtain
a bonding line of credit, that in the sole opinion of PRIMARY SYSTEMS, LLC, is
satisfactory to meet expected project needs for the next 12 months. This
lending arrangement is further conditioned by the specific attached agreement
for purchase of receivables.
Investment - APTL
PRIMARY SYSTEMS, LLC, or its designee, will purchase certain assets and
assume certain liabilities of APTL. The cash portion of the purchase price will
be $100,000. A portion of this amount (50%) will be paid 90 days from closing
and 50% paid upon completion of the first 12 months after purchase. The
remainder of the purchase price will be in the form of a membership warrant.
This membership warrant will be valued at 1.2 times first 12 months EBITDA, less
the cash portion. EBITDA is defined as earnings before interest, taxes,
amortization and depreciation. Once the value of the membership warrant is
fixed, that value shall remain constant and the membership warrant shall not
participate in any appreciation in the value of membership interest of PRIMARY
SYSTEMS, LLC or the equity interest in its designee, whichever is purchaser. The
non-cash purchase price is conditioned on first 12 months operations producing
a minimum of $3.0 million in revenues with an EBITDA of $400,000. Payment of the
membership warrant will be due upon sale or merger of PRIMARY SYSTEMS, LLC (or
its designee). Payment of the membership warrant will be in the form of cash or
in equivalent publicly traded stock (assuming merger of PRIMARY SYSTEMS, LLC
into a publicly traded company) at the option of PRIMARY SYSTEMS, LLC.
Management Incentive - APTL
Existing management of APTL will be offered an incentive to earn ownership
in any new entity which may be created to buy the above mentioned assets. This
entity will be in the form and have ownership determined by PRIMARY SYSTEMS LLC
Existing management of APTL will be able to earn 2% ownership in the new entity
for each $100,000 in EBITDA produced during the first 12 full months of activity
up to a maximum of 16% ownership. In addition, non-compete agreements will be
required in return for this right to earn ownership. Actual earning of owner-
ship percentages is conditioned upon production of a minimum of $3.0 million in
revenues and EBITDA of $400,000 for the first 12 months of activity. Ownership
earned will be eligible to be converted into public company stock in the event
of a merger of the new entity into a public company based on a formula to be
determined.
Use of Proceeds:
The use of funds provided under the lending arrangement is intended to
provide working capital for the operations of APTL; use of these funds for other
purposes must be first approved by PRIMARY SYSTEMS, LLC, or its designee, prior
to any such use and there shall be no payment to Chemfix Technologies, Inc. for
any services presently being provided to APTL as management services which
exceeded such agreements as are now in effect with Chemfix and APTL as of
November 7, 1997.
Exclusive Rights:
PRIMARY SYSTEMS, LLC, or its designee, shall have an exclusive right to
negotiate a definitive purchase agreement during the term of the lending
arrangement and APTL shall not entertain or elicit any offer and/or agreement to
sell all and/or substantially all of APTL's assets or a sale or an exchange of
any stock interest. APTL further shall not engage in any merger and/or
reorganization during this time period.
Closing:
Closing shall occur upon completion of due diligence as it related to each
specific transaction or section of this term sheet and the execution of a
definitive written agreement by all parties.
