Execution copy #1
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement dated as of January 17, 1997 by and among XXXXXXX
X. XXXX (the "Stockholder"), KERKIM, INC., a New York corporation ("KERKIM," or
the "Seller"), and XXXXXXX WASTE MANAGEMENT OF N.Y., INC., a New York
corporation (the "Buyer"). The Stockholder, the Seller and the Buyer are
sometimes referred to collectively as the "Parties" or individually as a
"Party."
W I T N E S S E T H:
WHEREAS, the Stockholder owns all of the shares of capital stock of the
Seller; and
WHEREAS, the Buyer desires to purchase, and the Seller desires to sell,
substantially all of its assets and business, for the consideration set forth
below and the assumption of the Seller's liabilities set forth below, subject to
the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto do hereby agree as follows:
1. Purchase and Sale of the Assets.
a. Delivery of the Assets. Subject to and upon the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement (the "Closing"), the Seller shall sell, transfer, convey, assign
and deliver to the Buyer, and the Buyer shall purchase from the Seller, all of
the following properties and assets of the Seller:
i. all inventories, including of office supplies, maintenance
supplies, packaging materials, spare parts and similar items (collectively, the
"Inventory") which exist on the Closing Date (as defined below);
ii. all accounts, accounts receivable, notes and notes receivable
existing on the Closing Date which are payable to the Seller, including any
security held by the Seller for the payment thereof (collectively, the "Accounts
Receivable");
iii. all cash, prepaid expenses, deposits, bank accounts and
other similar assets of the Seller existing on the Closing Date, including the
cash represented by such assets;
iv. all rights of the Seller under the contracts, agreements,
leases, licenses and other instruments set forth on Section 2(o) of the
Disclosure Schedule (collectively, the "Contract Rights");
v. all real property of the Seller set forth on Section 2(k) of
the Disclosure Schedule, together with all buildings, fixtures and improvements
located on or attached thereto, including such Seller's right, title and
interest in and to all leases, subleases, franchises, licenses, permits,
easements and rights-of-way which are appurtenant to said real property
(collectively, the "Real Property");
vi. all books, records and accounts, correspondence, production
records, technical, accounting, manufacturing and procedural manuals, customer
lists, employment records, studies, reports or summaries relating to any
environmental conditions or consequences of any operation, present or former, as
well as all studies, reports or summaries relating to any environmental aspect
or the general condition of the Assets, and any confidential information which
has been reduced to writing relating to or arising out of the business of the
Seller;
vii. All rights of the Seller under express or implied warranties
from the suppliers of the Seller;
viii. the motor vehicles and other rolling stock owned by the
Seller on the Closing Date;
ix. all of the machinery, containers, equipment, tools,
production reels and spools, tooling, dies, production fixtures, maintenance
machinery and equipment, furniture, leasehold improvements and construction in
progress owned by the Seller on the Closing Date whether or not reflected as
capital assets in the accounting records of the Seller (collectively, the "Fixed
Assets");
x. all of the Seller's right, title and interest in and to all
intangible property rights, including but not limited to trade secrets,
processes, know-how, trade names, including the name "Kerkim, Inc." and "SDS of
New York" or any derivation thereof and any assumed names under which the Seller
has operated, owned or, where not owned, used by the Seller in its business and
all licenses and other agreements to which the Seller is a party (as licensor or
licensee) or by which the Seller is bound relating to any of the foregoing kinds
of property or rights to any "know-how" or disclosure or use of ideas
(collectively, the "Intangible Property"); and
xi. except as specifically provided in Section 1(b) below, all
other assets, properties, claims, rights and interests of the Seller which exist
on the Closing Date, of every kind and nature and description, whether tangible
or intangible, real, personal or mixed.
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b. Notwithstanding the provisions of Section 1(a) above, the assets to
be transferred to the Buyer under this Agreement shall not include any assets
listed on Schedule 1(b) attached hereto (the "Excluded Assets").
c. The Inventory, Accounts Receivable, Contract Rights, Real Property,
Fixed Assets, Intangible Property and other properties, assets and businesses of
the Seller described in Section 1(a) above, other than the Excluded Assets,
shall be referred to collectively as the "Assets". The Effective Date of this
Agreement is December 31, 1996.
d. Further Assurances. At any time and from time to time after the
Closing, at the Buyer's request and without further consideration, the Seller
promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take such other action, as the
Buyer may reasonably request to more effectively transfer, convey and assign to
the Buyer, and to confirm the Buyer's title to, all of the Assets, to put the
Buyer in actual possession and operating control thereof, to assist the Buyer in
exercising all rights with respect thereto and to carry out the purpose and
intent of this Agreement.
e. Purchase Price. The purchase price for the Assets (the "Purchase
Price") shall be the sum of $3,500,000 plus the aggregate amount of the Assumed
Liabilities (not to exceed $2,945,000 as of December 31, 1996). The Purchase
Price shall be paid as follows:
i. The Buyer shall assume the liabilities of the Seller
pursuant to the Instrument of Assumption described in
paragraph f below; and
ii. An aggregate of $3,500,000 shall be paid in cash at the
Closing in the form of wire transfer or check.
f. Assumption of Liabilities. At the Closing, the Buyer shall execute
and deliver an Instrument of Assumption of Liabilities (the "Instrument of
Assumption") substantially in the form attached hereto as Exhibit B, pursuant to
which it shall assume and agree to perform, pay and discharge the following
liabilities, obligations and commitments of the Seller (the "Assumed
Liabilities") (and the Seller and the Stockholder represent that the Assumed
Liabilities do not exceed $2,945,000 as of December 31, 1996):
i. All trade accounts payable reflected on the balance sheet of
the Seller as of December 31, 1996 previously delivered to the Buyer (the
"Current Balance Sheet");
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ii. All obligations of the Seller continuing after the Closing
under the leases, contracts and employee benefit plans set forth on Schedule
1(f) attached hereto which become due and payable after the Closing Date; and
iii. All other liabilities and obligations of the Seller
specifically set forth in Schedule 1(f) attached hereto.
The Buyer shall not at the Closing assume or agree to perform, pay or discharge,
and the Seller shall remain unconditionally liable for, all liabilities,
obligations and commitments, fixed or contingent, of the Seller other than the
Assumed Liabilities. Without limiting the foregoing, any and all liabilities of
the Seller arising from environmental laws and, except as provided above, in any
way related to events prior to the Closing, shall be the sole responsibility of
the Seller.
g. Closing. The closing of the purchase and sale of the Assets and the
(the "Closing") shall take place at the offices of Xxxx X. Xxxxxx, P.C., 000-000
Xxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, or at such other place as the parties may
mutually agree at 10:00 AM., on January ___, 1997 or as soon as practicable
thereafter (the "Closing Date").
h. Certain Tax Matters. The aggregate amount of the Purchase Price and
the Assumed Liabilities shall be allocated among the Assets as set forth on
Schedule 1(h) attached hereto. Such allocation shall be subject to adjustment to
the extent that the Purchase Price is adjusted pursuant to Section 1(i) hereof
in the manner specified in such subsections.
2. Joint and Several Representations and Warranties of the Stockholder and
the Seller. Each of the Seller and the Stockholder, jointly and severally,
represent and warrant to the Buyer that the statements contained in this Article
II are true and correct, except as set forth in the disclosure schedule attached
hereto (the "Disclosure Schedule").
a. Organization, Qualification and Corporate Power. The Seller is a
corporation duly organized, validly existing and in corporate and tax good
standing under the laws of the State of New York. The Seller is duly qualified
to conduct business and is in corporate and tax good standing under the laws of
each jurisdiction in which the nature of its businesses or the ownership or
leasing of its properties requires such qualification. The Seller has all
requisite corporate power and authority to carry on the businesses in which it
is engaged and to own and use the properties owned and used by it. The Seller
has furnished to the Buyer true and complete copies of its charter and Bylaws,
each as amended and as in effect on the date hereof. The Seller is not in
default under or in violation of any provision of its charter or Bylaws.
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b. Capitalization. The authorized, issued and outstanding shares of
capital stock of the Seller are as set forth in Section 2(b) of the Disclosure
Schedule. Section 2(b) of the Disclosure Schedule sets forth a complete and
accurate list of all beneficial and record stockholders of the Seller,
indicating the number of shares of the Seller held by each stockholder. All of
the issued and outstanding shares of capital stock of the Seller are duly
authorized, validly issued, fully paid, nonassessable and free of all preemptive
rights. There are no outstanding or authorized options, warrants, rights,
agreements or commitments to which the Seller is a party or which are binding
upon the Seller providing for the issuance, disposition or acquisition of any of
its capital stock. There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Seller. There are no
agreements, voting trusts, proxies, or understandings with respect to the
voting, or registration under the Securities Act, of any shares of capital stock
of the Seller. All of the issued and outstanding shares of capital stock of the
Seller were issued in compliance with applicable federal and state securities
laws. The Stockholder has not entered into any agreement to sell, pledge or
otherwise encumber any of his shares of the capital stock of the Seller.
c. Authorization of Transaction. The Seller has all requisite power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement, the
performance by the Seller of this Agreement and the consummation by the Seller
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of the Seller. This Agreement has
been duly and validly executed and delivered by the Stockholder and the Seller
and constitutes a valid and binding obligation of the Stockholder and the
Seller, enforceable against such persons in accordance with its terms.
d. Noncontravention. Neither the execution and delivery of this
Agreement by Stockholder and the Seller, nor the consummation by the Stockholder
and the Seller of the transactions contemplated hereby, will (a) conflict with
or violate any provision of the charter or By-laws of the Seller, (b) require on
the part of the Stockholder or the Seller any filing with, or any permit,
authorization, consent or approval of, any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency (a "Governmental Entity"), (c) conflict with, result in a
breach of, constitute (with or without due notice or lapse of time or both) a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest (as defined below) or other arrangement to which
the Stockholder or the Seller is a party or by which the Stockholder or the
Seller is bound or to which any of their assets is subject, (d) result in the
imposition of any Security Interest upon any assets of the Stockholder or the
Seller or (e) violate any order, writ, injunction,
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decree, statute, rule or regulation applicable to the Stockholder or the Seller,
or any of their properties or assets. For purposes of this Agreement, "Security
Interest" means any mortgage, pledge, security interest, encumbrance, charge, or
other lien (whether arising by contract or by operation of law), other than (i)
mechanic's, materialmen's, and similar liens, (ii) liens arising under worker's
compensation, unemployment insurance, social security, retirement, and similar
legislation, and (iii) liens on goods in transit incurred pursuant to
documentary letters of credit, in each case arising in the ordinary course of
business consistent with past custom and practice (including with respect to
frequency and amount) ("Ordinary Course of Business") of the Seller and not
material to the Seller.
e. Subsidiaries. The Seller does not control directly or indirectly or
have any direct or indirect equity participation in any corporation,
partnership, trust, or other business association.
f. Financial Statements. The Seller has provided to the Buyer (a) the
balance sheets and statements of income, changes in stockholders' equity and
cash flows for each of the Seller's fiscal years ending on or prior to December
31, 1995 (each of which has been reviewed in accordance with standards
established by the American Institute of Certified Public Accountants); and (b)
the unaudited balance sheet and statements of income, changes in stockholders'
equity and cash flows as of and for the year ended December 31, 1996 (the "Most
Recent Fiscal Period End"). Such financial statements (collectively, the
"Financial Statements") have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods covered thereby, fairly present the financial condition,
results of operations and cash flows of the Seller as of the respective dates
thereof and for the periods referred to therein and are consistent with the
books and records of the Seller; provided, however, that the Financial
Statements referred to in clause (b) above are subject to normal recurring
year-end adjustments (which will not be material) and do not include footnotes.
g. Absence of Certain Changes. Since the Most Recent Fiscal Period
End, (a) there has not been any material adverse change in the assets, business,
financial condition or results of operations of the Seller, nor has there
occurred any event or development which could reasonably be foreseen to result
in such a material adverse change in the future, and (b) the Seller has not
taken any actions not in the Ordinary Course of Business.
h. Undisclosed Liabilities. The Seller has no liability (whether known
or unknown, whether absolute or contingent, whether liquidated or unliquidated
and whether due or to become due), except for (a) liabilities shown on the
balance sheet referred to in clause (b) of Section 2(f) (the "Most Recent
Balance Sheet"), (b) liabilities which have arisen since the Most Recent Fiscal
Period End in the Ordinary Course of Business and which are similar in nature
and amount to the
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liabilities which arose during the comparable period of time in the immediately
preceding fiscal period and (c) contractual liabilities incurred in the Ordinary
Course of Business which are not required by GAAP to be reflected on a balance
sheet.
i. Tax Matters.
i. Each of the Stockholder and the Seller has filed all Tax
Returns (as defined below) that he or it was required to file and all such Tax
Returns were correct and complete in all material respects. Each of the
Stockholder and the Seller has paid all Taxes (as defined below) that are shown
to be due on any such Tax Returns. The unpaid Taxes of the Seller for tax
periods through the date of the Most Recent Balance Sheet do not exceed the
accruals and reserves for Taxes set forth on the Most Recent Balance Sheet. The
Seller has no actual or potential liability for any Tax obligation of any
taxpayer (including without limitation the Stockholder or any affiliated group
of corporations or other entities that included the Seller during a prior
period) other than the Seller. All Taxes that the Seller are or were required by
law to withhold or collect have been duly withheld or collected and, to the
extent required, have been paid to the proper Governmental Entity. For purposes
of this Agreement, "Taxes" means all taxes, charges, fees, levies or other
similar assessments or liabilities, including without limitation income, gross
receipts, ad valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, payroll and franchise
taxes imposed by the United States of America or any state, local or foreign
government, or any agency thereof, or other political subdivision of the United
States or any such government, and any interest, fines, penalties, assessments
or additions to tax resulting from, attributable to or incurred in connection
with any tax or any contest or dispute thereof. For purposes of this Agreement,
"Tax Returns" means all reports, returns, declarations, statements or other
information required to be supplied to a taxing authority in connection with
Taxes.
ii. The Seller has delivered to the Buyer correct and complete
copies of all federal income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by any of the Seller since January 1,
1990. The federal income Tax Returns of the Seller have been audited by the
Internal Revenue Service or are closed by the applicable statute of limitations
for all taxable years through December 31, 1992. No examination or audit of any
Tax Returns of the Seller by any Governmental Entity is currently in progress
or, to the knowledge of the Seller or the Stockholder, threatened or
contemplated. The Seller has not waived any statute of limitations with respect
to taxes or agreed to an extension of time with respect to a tax assessment or
deficiency.
iii. The Sellers is not a "consenting corporation" within the
meaning of Section 341(f) of the Code and none of the assets of the Seller are
subject to an election under Section 341(f) of the Code. The Seller has not been
a United
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States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(l)(A)(ii)
of the Code. The Seller is not a party to any Tax allocation or sharing
agreement.
iv. The Seller is not and has never been a member of an
"affiliated group" of corporations (within the meaning of Section 1504 of the
Code). The Seller has not made an election under Treasury Reg. Section
1.1502-20(g). The Seller is not and has never been required to make a basis
reduction pursuant to Treasury Reg. Section 1. 1502-20(b) or Treasury Reg.
Section 1.337(d)-2T(b).
j. Assets. The Seller owns or leases all tangible assets necessary for
the conduct of its businesses as presently conducted and as presently proposed
to be conducted. Each such tangible asset is free from material defects, has
been maintained in accordance with normal industry practice, is in good
operating condition and repair (subject to normal wear and tear) and is suitable
for the purposes for which it presently is used. No asset of the Seller
(tangible or intangible) is subject to any Security Interest. A list of the
Fixed Assets is set forth on Section 2(j) of the Disclosure Schedule.
k. Owned Real Property. Section 2(k) of the Disclosure Schedule lists
and describes briefly all real property that the Sellers owns. With respect to
each parcel of such real property:
i. the identified owner has good and clear record and marketable
title to such parcel, insurable by a recognized national title insurance company
at standard rates, free and clear of any Security Interest, easement, covenant
or other restriction, except for recorded easements, covenants and other
restrictions which do not impair the uses, occupancy or value of such parcel in
their current uses (the "Intended Uses");
ii. there are no (i) pending or, to the knowledge of the Seller,
threatened condemnation proceedings relating to such parcel, (ii) pending or, to
the knowledge of the Seller, threatened litigation or administrative actions
relating to such parcel, or (iii) other matters affecting adversely the Intended
Uses, occupancy or value thereof;
iii. the legal description for such parcel contained in the deed
thereof describes such parcel fully and adequately; the buildings and
improvements may be used as of right under applicable zoning and land use laws
for the Intended Uses, and such buildings and improvements are located within
the boundary lines of the described parcels of land, are not in violation of
current setback requirements, zoning laws and ordinances and do not encroach on
any easement which may burden the land; the land does not serve any adjoining
property for any purpose inconsistent with the Intended Uses; and such parcel is
not located within any flood
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plain or subject to any similar type restriction for which any permits or
licenses necessary to the use thereof have not been obtained;
iv. there are no leases, subleases, licenses or agreements,
written or oral, granting to any party or parties (other than the Seller) the
right of use or occupancy of any portion of such parcel;
v. there are no outstanding options or rights of first refusal to
purchase such parcel, or any portion thereof or interest therein;
vi. all facilities located on such parcel are supplied with
utilities and other services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer and storm sewer,
all of which services are adequate for the Intended Uses and in accordance with
all applicable laws, ordinances, rules and regulations and are provided via
public roads or via permanent, irrevocable, appurtenant easements benefiting
such parcel;
vii. such parcel abuts on and has direct vehicular access to a
public road or access to a public road via a permanent, irrevocable, appurtenant
easement benefiting such parcel;
viii. neither the Stockholder nor the Seller have received notice
of, and to the best of the Seller's knowledge, there is no proposed or pending
proceeding to change or redefine the zoning classification of all or any portion
of the parcels;
ix. the improvements constructed on the parcels are in good
condition and proper order, free of roof leaks, insect infestation, and material
construction defects, and all mechanical and utility systems servicing such
improvements are in good condition and proper working order, free of material
defects; and
x. each parcel is an independent unit which does not rely on any
facilities (other than the facilities of public utilities) located on any other
property (i) to fulfill any zoning, building code, or other municipal or
governmental requirement, (ii) for structural support or the furnishing of any
essential building systems or utilities, including, but not limited to electric,
plumbing, mechanical, heating, ventilating, and air conditioning systems, or
(iii) to fulfill the requirements of any lease. No building or other improvement
not included in the parcels relies on any part of the parcels to fulfill any
zoning, building code, or other municipal or governmental requirement or for
structural support or the furnishing of any essential building systems or
utilities. Each of the parcels is assessed by local property assessors as a tax
parcel or parcels separate from all other tax parcels.
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l. Intellectual Property. The Seller owns, or is licensed or otherwise
possesses legally enforceable rights to use, all patents, trademarks, trade
names, service marks, copyrights, and any applications for such patents,
trademarks, trade names, service marks and copyrights, schematics, technology,
know-how, computer software programs or applications and tangible or intangible
proprietary information or material (collectively, "Intellectual Property") that
are used to conduct its business as currently conducted or planned to be
conducted.
m. Inventory. All inventory of the Seller whether or not reflected on
the Most Recent Balance Sheet, consists of a quality and quantity usable and
saleable in the Ordinary Course of Business, except for obsolete items and items
of below-standard quality, all of which have been written-off or written-down
to net realizable value on the Most Recent Balance Sheet. All inventories not
written-off have been priced at the lower of cost or market on a last-in,
first-out basis.
n. Real Property Leases. Section 2(n) of the Disclosure Schedule lists
and describes briefly all real property leased or subleased to the Seller. The
Seller has delivered to the Buyer correct and complete copies of the leases and
subleases (as amended to date) listed in Section 2(n) of the Disclosure
Schedule. With respect to each lease and sublease listed in Section 2(n) of the
Disclosure Schedule:
i. the lease or sublease is legal, valid, binding, enforceable
and in full force and effect;
ii. the lease or sublease will continue to be legal, valid,
binding, enforceable and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect prior to the Closing;
iii. no party to the lease or sublease is in breach or default,
and no event has occurred which, with notice or lapse of time, would constitute
a breach or default or permit termination, modification, or acceleration
thereunder;
iv. there are no disputes, oral agreements or forbearance
programs in effect as to the lease or sublease;
v. the Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered any interest in the leasehold or subleasehold;
vi. all facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation of said
facilities;
vii. to the knowledge of the Seller, the owner of the facility
leased or subleased has good and clear record and marketable title to the parcel
of
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real property, free and clear of any Security Interest, easement, covenant or
other restriction, except for recorded easements, covenants, and other
restrictions which do not impair the Intended Uses, occupancy or value of the
property subject thereto; and
viii. the Seller has obtained non-disturbance agreements from the
holder of each superior Security Interest and ground lease in connection with
each such lease or sublease (each of which is listed in Section 2(n) of the
Disclosure Schedule); and the representations and warranties set forth in
clauses (i) through (iv) of this Section 2(n) with respect to leases and
subleases are true and correct with respect to such nondisturbance agreements.
o. Contracts. Section 2(o) of the Disclosure Schedule lists the
following written arrangements (including without limitation written agreements)
to which the Seller is a party:
i. any written arrangement (or group of related written
arrangements) for the lease of personal property from or to third parties
providing for lease payments in excess of $1,000 per annum;
ii. any written arrangement (or group of related written
arrangements) for the purchase or sale of raw materials, commodities, supplies,
products or other personal property or for the furnishing or receipt of services
(i) which calls for performance over a period of more than one year, (ii) which
involves more than the sum of $25,000, or (iii) in which the Seller has granted
exclusive rights relating to any products, services or territory or has agreed
to purchase a minimum quantity of goods or services or has agreed to purchase
goods or services exclusively from a certain party;
iii. any written arrangement establishing a partnership or joint
venture;
iv. any written arrangement (or group of related written
arrangements) under which it has created, incurred, assumed, or guaranteed (or
may create, incur, assume, or guarantee) indebtedness (including capitalized
lease obligations) or under which it has imposed (or may impose) a Security
Interest on any of its assets, tangible or intangible;
v. any written arrangement concerning confidentiality or
noncompetition;
vi. any written arrangement between the Seller and the
Stockholder or any of his relatives or affiliates;
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vii. any written arrangement under which the consequences of a
default or termination could have a material adverse effect on the assets,
business, financial condition, results of operations or future prospects of the
Seller; and
viii. any other written arrangement (or group of related written
arrangements) either involving more than $25,000 or not entered into in the
Ordinary Course of Business.
The Seller has delivered to the Buyer a correct and complete copy of each
written arrangement (as amended to date) listed in Section 2(o) of the
Disclosure Schedule. With respect to each written arrangement so listed: (i) the
written arrangement is legal, valid, binding and enforceable and in full force
and effect; (ii) the written arrangement will continue to be legal, valid,
binding and enforceable and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect prior to the Closing;
and (iii) no party is in breach or default, and no event has occurred which with
notice or lapse of time would constitute a breach or default or permit
termination, modification, or acceleration, under the written arrangement. The
Seller is not a party to any oral contract, agreement or other arrangement
which, if reduced to written form, would be required to be listed in Section
2(o) of the Disclosure Schedule under the terms of this Section 2(o).
p. Accounts Receivable. All accounts receivable of the Seller
reflected on the Most Recent Balance Sheet are valid receivables subject to no
setoffs or counterclaims and are current and collectible to the best of the
Seller's knowledge, net of the applicable reserve for bad debts on the Most
Recent Balance Sheet. All accounts receivable reflected in the financial or
accounting records of the Seller that have arisen since the Most Recent Fiscal
Period End are valid receivables subject to no setoffs or counterclaims and are
collectible, net of a reserve for bad debts in an amount proportionate to the
reserve shown on the Most Recent Balance Sheet.
x. Xxxxxx of Attorney; Bank Accounts. There are no outstanding
powers of attorney executed on behalf of any of the Seller. A list of the bank
accounts of the Seller is set forth on Section 2(q) of the Disclosure Schedule.
r. Insurance. Section 2(r) of the Disclosure Schedule sets forth
the following information with respect to each insurance policy (including fire,
theft, casualty, general liability, workers compensation, business interruption,
environmental, product liability and automobile insurance policies and bond and
surety arrangements) to which the Seller has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past five years:
i. the name of the insurer, the name of the policyholder and the
name of each covered insured;
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ii. the policy number and the period of coverage;
iii. the scope (including an indication of whether the coverage
was on a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
iv. a description of any retroactive premium adjustments or other
loss-sharing arrangements.
(i) Each such insurance policy is enforceable and in full force and effect; (ii)
such policy will continue to be enforceable and in full force and effect
immediately following the Closing in accordance with the terms thereof as in
effect prior to the Closing; (iii) the Seller is not in breach or default
(including with respect to the payment of premiums or the giving of notices)
under such policy, and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or default or permit termination,
modification or acceleration, under such policy; and (iv) the Seller has not
received any notice from the insurer disclaiming coverage or reserving rights
with respect to a particular claim or such policy in general. The Seller has not
incurred any loss, damage, expense or liability covered by any such insurance
policy for which it has not properly asserted a claim under such policy. The
Seller is not covered by insurance in scope and amount customary and reasonable
for the businesses in which it is engaged.
s. Litigation. Section 2(s) of the Disclosure Schedule identifies, and
contains a brief description of, (a) any unsatisfied judgment, order, decree,
stipulation or injunction and (b) any claim, complaint, action, suit,
proceeding, hearing or investigation of or in any Governmental Entity or before
any arbitrator to which the Seller is a party or, to the knowledge of the Seller
is threatened to be made a party. None of the complaints, actions, suits,
proceedings, hearings, and investigations set forth in Section 2(s) of the
Disclosure Schedule could have a material adverse effect on the assets,
business, financial condition, results of operations or future prospects of the
Seller.
t. Employees. Section 2(t) of the Disclosure Schedule contains a list
of all employees of the Seller, along with the position and the annual rate of
compensation of each such person. To the knowledge of the Seller, no key
employee or group of employees has any plans to terminate employment with the
Seller. The Seller is not a party to or bound by any collective bargaining
agreement, and has not experienced any strikes, grievances, claims of unfair
labor practices or other collective bargaining disputes. The Seller has no
knowledge of any organizational effort made or threatened, either currently or
within the past two years, by or on behalf of any labor union with respect to
employees of the Seller.
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u. Employee Benefits.
i. Section 2(u) of the Disclosure Schedule contains a complete
and accurate list of all Employee Benefit Plans (as defined below) maintained,
or contributed to, by the Seller, or any ERISA Affiliate (as defined below). For
purposes of this Agreement, "Employee Benefit Plan" means any "employee pension
benefit plan" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), any "employee welfare benefit plan"
(as defined in Section 3(1) of ERISA), and any other written or oral plan,
agreement or arrangement involving direct or indirect compensation, including
without limitation insurance coverage, severance benefits, disability benefits,
deferred compensation, bonuses, stock options, stock purchase, phantom stock,
stock appreciation or other forms of incentive compensation or post-retirement
compensation. For purposes of this Agreement, "ERISA Affiliate" means any entity
which is a member of (i) a controlled group of corporations (as defined in
Section 414(b) of the Code), (ii) a group of trades or businesses under common
control (as defined in Section 414(c) of the Code), or (iii) an affiliated
service group (as defined under Section 414(m) of the Code or the regulations
under Section 414(o) of the Code), any of which includes the Seller. Complete
and accurate copies of (i) all Employee Benefit Plans which have been reduced to
writing, (ii) written summaries of all unwritten Employee Benefit Plans, (iii)
all related trust agreements, insurance contracts and summary plan descriptions,
and (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R for the last
five plan years for each Employee Benefit Plan, have been delivered to the
Buyer. Each Employee Benefit Plan has been administered in all material respects
in accordance with its terms and the Seller, and the ERISA Affiliates have in
all material respects met their obligations with respect to such Employee
Benefit Plan and has made all required contributions thereto. The Seller and all
Employee Benefit Plans are in compliance in all material respects with the
currently applicable provisions of ERISA and the Code and the regulations
thereunder.
ii. There are no investigations by any Governmental Entity,
termination proceedings or other claims (except claims for benefits payable in
the normal operation of the Employee Benefit Plans and proceedings with respect
to qualified domestic relations orders) suits or proceedings against or
involving any Employee Benefit Plan or asserting any rights or claims to
benefits under any Employee Benefit Plan that could give rise to any material
liability.
iii. All the Employee Benefit Plans that are intended to be
qualified under Section 401(a) of the Code have received determination letters
from the Internal Revenue Service to the effect that such Employee Benefit Plans
are qualified and the plans and the trusts related thereto are exempt from
federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code, no such determination letter has been revoked and revocation has not been
threatened, and no such Employee Benefit Plan has been amended since the date of
its most recent
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determination letter or application therefor in any respect, and no act or
omission has occurred, that would adversely affect its qualification or
materially increase its cost.
iv. Neither the Seller nor any ERISA Affiliate has ever
maintained an Employee Benefit Plan subject to Section 412 of the Code or Title
IV of ERISA.
v. At no time has the Seller, or any ERISA Affiliate been
obligated to contribute to any "multi-employer plan" (as defined in Section
4001(a)(3) of ERISA).
vi. There are no unfunded obligations under any Employee Benefit
Plan providing benefits after termination of employment to any employee of any
of the Sellers (or to any beneficiary of any such employee), including but not
limited to retiree health coverage and deferred compensation, but excluding
continuation of health coverage required to be continued under Section 4980B of
the Code and insurance conversion privileges under state law.
vii. No act or omission has occurred and no condition exists with
respect to any Employee Benefit Plan maintained by the Seller or any ERISA
Affiliate that would subject the Seller or any ERISA Affiliate to any material
fine, penalty, tax or liability of any kind imposed under ERISA or the Code.
viii. No Employee Benefit Plan is funded by, associated with, or
related to a "voluntary employee's beneficiary association" within the meaning
of Section 501(c)(9) of the Code.
ix. No Employee Benefit Plan, plan documentation or agreement,
summary plan description or other written communication distributed generally to
employees by its terms prohibits the Seller from amending or terminating any
such Employee Benefit Plan.
x. Section 2(u) of the Disclosure Schedule discloses each: (i)
agreement with any director, executive officer or other key employee of the
Seller (A) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of the nature of any of the transactions contemplated by this Agreement, (B)
providing any term of employment or compensation guarantee or (C) providing
severance benefits or other benefits after the termination of employment of such
director, executive officer or key employee; (ii) agreement, plan or arrangement
under which any person may receive payments from the Company that may be subject
to the tax imposed by Section 4999 of the Code or included in the determination
of such person's "parachute payment" under Section 280G of the Code; and (iii)
agreement or plan binding the Company, including without limitation any stock
option plan, stock appreciation right plan,
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restricted stock plan, stock purchase plan, severance benefit plan, or any
Employee Benefit Plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
v. Environmental Matters.
i. The Stockholder and the Seller has complied with all
applicable Environmental Laws (as defined below). There is no pending or, to the
knowledge of the Seller, threatened civil or criminal litigation, written notice
of violation, formal administrative proceeding, or investigation, inquiry or
information request by any Governmental Entity, relating to any Environmental
Law involving the Seller. For purposes of this Agreement, "Environmental Law"
means any federal, state or local law, statute, rule or regulation or the common
law relating to the environment or occupational health and safety, including
without limitation any statute, regulation or order pertaining to (i) treatment,
storage, disposal, generation and transportation of industrial, toxic or
hazardous substances or solid or hazardous waste; (ii) air, water and noise
pollution; (iii) groundwater and soil contamination; (iv) the release or
threatened release into the environment of industrial, toxic or hazardous
substances, or solid or hazardous waste, including without limitation emissions,
discharges, injections, spills, escapes or dumping of pollutants, contaminants
or chemicals; (v) the protection of wild life, marine sanctuaries and wetlands,
including without limitation all endangered and threatened species; (vi) storage
tanks, vessels and containers; (vii) underground and other storage tanks or
vessels, abandoned, disposed or discarded barrels, containers and other closed
receptacles; (viii) health and safety of employees and other persons; and (ix)
manufacture, processing, use, distribution, treatment, storage, disposal,
transportation or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or oil or petroleum products or solid or hazardous
waste. As used above, the terms "release" and "environment" shall have the
meaning set forth in the federal Comprehensive Environmental Compensation,
Liability and Response Act of 1980 ("CERCLA").
ii. There have been no releases of any Materials of Environmental
Concern (as defined below) into the environment at any parcel of real property
or any facility formerly or currently owned, operated or controlled by the
Stockholder or the Seller. With respect to any such releases of Materials of
Environmental Concern, the Stockholder and the Seller have given all required
notices to Governmental Entities (copies of which have been provided to the
Buyer). Neither the Stockholder nor the Seller are aware of any releases of
Materials of Environmental Concern at parcels of real property or facilities
other than those owned, operated or controlled by the Stockholder or the Seller
that could reasonably be expected to have an impact on the real property or
facilities owned, operated or
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controlled by the Stockholder or the Seller. For purposes of this Agreement,
"Materials of Environmental Concern" means any chemicals, pollutants or
contaminants, hazardous substances (as such term is defined under CERCLA), solid
wastes and hazardous wastes (as such terms are defined under the federal
Resources Conservation and Recovery Act), toxic materials, oil or petroleum and
petroleum products, or any other material subject to regulation under any
Environmental Law.
iii. Set forth in Section 2(v) of the Disclosure Schedule is a
list of all environmental reports, investigations and audits relating to
premises currently or previously owned or operated by the Stockholder or the
Seller (whether conducted by or on behalf of the Stockholder or Seller or a
third party, and whether done at the initiative of the Stockholder or the Seller
or directed by a Governmental Entity or other third party) which any of the
Stockholder or the Sellers has possession of or access to. Complete and accurate
copies of each such report, or the results of each such investigation or audit,
have been provided to the Buyer.
iv. Set forth in Section 2(v) of the Disclosure Schedule is a
list of all of the solid and hazardous waste transporters and treatment, storage
and disposal facilities that have been utilized by the Stockholder or the
Seller. The Seller is not aware of any material environmental liability of any
such transporter or facility.
w. Legal Compliance. The Seller, and the conduct and operations
of its business, are in compliance with each law (including rules and
regulations thereunder) of any federal, state, local or foreign government, or
any Governmental Entity, which (a) affects or relates to this Agreement or the
transactions contemplated hereby or (b) is applicable to the Seller or business,
except for any violation of or default under a law referred to in clause (b)
above which reasonably may be expected not to have a material adverse effect on
the assets, business, financial condition, results of operations or future
prospects of the Seller.
x. Permits. Section 2(x) of the Disclosure Schedule sets forth a
list of all permits, licenses, registrations, certificates, orders or approvals
from any Governmental Entity (including without limitation those issued or
required under Environmental Laws and those relating to the occupancy or use of
owned or leased real property) ("Permits") issued to or held by the Seller. Such
listed Permits are the only Permits that are required for the Seller to conduct
its business as presently conducted or as proposed to be conducted, except for
those the absence of which would not have any material adverse effect on the
assets, business, financial condition, results of operations or future prospects
of the Seller. Each such Permit is in full force and effect and, to the best of
the knowledge of the Seller, no suspension or cancellation of such Permit is
threatened and there is no basis for believing that such Permit will not be
renewed upon expiration. Each such Permit will continue in full force and effect
following the Closing.
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y. Certain Business Relationships With Affiliates. Except as set
forth in Section 2(y) of the Disclosure Schedule, no affiliate of the Seller (a)
owns any property or right, tangible or intangible, which is used in the
business of the Seller, (b) has any claim or cause of action against the Seller,
or (c) owes any money to the Seller. Section 2(y) of the Disclosure Schedule
describes any transactions or relationships between the Seller and any affiliate
thereof.
z. Brokers' Fees. The Seller has no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
aa. Books and Records. The minute books and other similar records of
the Seller contain true and complete records of all actions taken at any
meetings of the Seller's stockholders, Board of Directors or any committee
thereof and of all written consents executed in lieu of the holding of any such
meeting. The books and records of the Seller accurately reflect in all material
respects the assets, liabilities, business, financial condition and results of
operations of the Seller and have been maintained in accordance with good
business and bookkeeping practices.
bb. Customers and Suppliers. No unfilled customer order or commitment
obligating the Seller to deliver products or perform services will result in a
loss to the Seller upon completion of performance. No purchase order or
commitment of the Seller is in excess of normal requirements, nor are prices
provided therein in excess of current market prices for the products or services
to be provided thereunder.
cc. Disclosure. No representation or warranty by the Stockholder or
the Seller contained in this Agreement, and no statement contained in the
Disclosure Schedule or any other document, certificate or other instrument
delivered to or to be delivered by or on behalf of the Stockholders or the
Seller pursuant to this Agreement, and no other statement made by the
Stockholder or the Seller or any of their representatives in connection with
this Agreement, contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading. The Stockholder and the Seller have
disclosed to the Buyer all material information relating to the Assets and the
business of the Seller or the transactions contemplated by this Agreement.
3. Representations and Warranties of the Buyer. The Buyer represents and
warranties to the Stockholder and the Seller as follows:
a. Organization. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
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b. Authorization of Transaction. The Buyer has all requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement by the
Buyer and the performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby by the Buyer have been duly and
validly authorized by all necessary corporate action on the part of the Buyer.
This Agreement has been duly and validly executed and delivered by the Buyer and
constitutes a valid and binding obligation of the Buyer enforceable against it
in accordance with its terms.
c. Noncontravention. Neither the execution and delivery of this
Agreement by the Buyer, nor the consummation by the Buyer of the transactions
contemplated hereby or thereby, will (a) conflict with or violate any provision
of the charter or Bylaws of the Buyer, (b) require on the part of the Buyer any
filing with, or permit, authorization, consent or approval of, any Governmental
Entity, (c) conflict with, result in breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of,
create in any party any right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, Security Interest or other
arrangement to which the Buyer is a party or by which it is bound or to which
its assets are subject, or (d) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Buyer or any of its properties or
assets.
d. Brokers' Fees. The Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
4. Covenants.
a. Best Efforts. Each of the Parties shall use its best efforts, to
the extent commercially reasonable, to take all actions and to do all things
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement.
b. Notices and Consents. The Stockholder and the Seller shall use
their best efforts to obtain, at the Seller's expense, all such waivers,
permits, consents, approvals or other authorizations from third parties and
Governmental Entities, and to effect all such registrations, filings and notices
with or to third parties and Governmental Entities, as may be required by or
with respect to the Seller in connection with the transactions contemplated by
this Agreement (including without limitation those listed in Section 2(d) or
Section 2(x) of the Disclosure Schedule).
c. Operation of Business. Except as contemplated by this Agreement,
during the period from the date of this Agreement to the Closing Date,
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the Seller shall conduct its operations only in the Ordinary Course of Business
and in compliance with all applicable laws and regulations and, to the extent
consistent therewith, use all reasonable efforts to preserve intact its current
business organization, keep its physical assets in good working condition, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing business shall not be impaired in
any material respect.
d. Full Access. The Stockholder and the Seller shall permit
representatives of the Buyer to have full access (at all reasonable times, and
in a manner so as not to interfere with the normal business operations of the
Seller) to all premises, properties, financial and accounting records,
contracts, other records and documents, and personnel, of or pertaining to the
Seller. The Buyer (a) shall treat and hold as confidential any Confidential
Information (as defined below), (b) shall not use any of the Confidential
Information except in connection with this Agreement, and (c) if this Agreement
is terminated for any reason whatsoever, shall return to the Seller all tangible
embodiments (and all copies) thereof which are in its possession. For purposes
of this Agreement, "Confidential Information" means any confidential or
proprietary information of the Seller that is furnished in writing to the Buyer
by the Seller in connection with this Agreement and is labelled confidential or
proprietary; provided, however, that it shall not include any information (i)
which, at the time of disclosure, is available publicly, (ii) which, after
disclosure, becomes available publicly through no fault of the Buyer, or (iii)
which the Buyer knew or to which the Buyer had access prior to disclosure.
e. Notice of Breaches. The Stockholder and the Seller shall promptly
deliver to the Buyer written notice of any event or development that would (a)
render any statement, representation or warranty of the Stockholder or the
Seller in this Agreement (including the Disclosure Schedule) inaccurate or
incomplete in any material respect, or (b) constitute or result in a breach by
the Stockholder or the Seller of, or a failure by the Stockholder or the Seller
to comply with, any agreement or covenant in this Agreement applicable to such
party. The Buyer shall promptly deliver to the Stockholder and the Seller
written notice of any event or development that would (i) render any statement,
representation or warranty of the Buyer in this Agreement inaccurate or
incomplete in any material respect, or (ii) constitute or result in a breach by
the Buyer of, or a failure by the Buyer to comply with, any agreement or
covenant in this Agreement applicable to the Buyer. No such disclosure shall be
deemed to avoid or cure any such misrepresentation or breach.
f. Exclusivity. The Stockholder and the Seller shall not, and the
Seller shall use its best efforts to cause each of its officers, directors,
employees, representatives and agents not to, directly or indirectly, (a)
encourage, solicit, initiate, engage or participate in discussions or
negotiations with any person or entity (other than the Buyer) concerning any
merger, consolidation, sale of material assets, tender
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offer, recapitalization, purchase of shares, proxy solicitation or other
business combination involving the Seller, or any division of the Seller or (b)
provide any non-public information concerning the business, properties or assets
of the Seller to any person or entity (other than the Buyer). The Seller shall
immediately notify the Buyer of, and shall disclose to the Buyer all details of,
any inquiries, discussions or negotiations of the nature described in the first
sentence of this Section 4(f).
5. Conditions to Consummation of Asset Purchase.
a. Conditions to Each Party's Obligations. The respective obligations
of the Seller and the Buyer to consummate the transactions contemplated by this
Agreement to occur at the Closing are subject to the condition that no action,
suit or proceeding shall be pending or threatened by or before any Governmental
Entity wherein an unfavorable judgment, order, decree, stipulation or injunction
would (i) prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation or (iii) affect adversely the right of the
Buyer to own, operate or control the Assets following the Closing, and no such
judgment, order, decree, stipulation or injunction shall be in effect.
b. Conditions to Obligations of the Buyer. The obligation of the Buyer
to consummate the transactions contemplated by this Agreement to occur at the
Closing is subject to the satisfaction of the following additional conditions:
i. the Seller shall have obtained all of the waivers, permits,
consents, approvals or other authorizations, and effected all of the
registrations, filings and notices, referred to in Section 4(b);
ii. the representations and warranties of the Stockholder and the
Seller set forth in Section 2 shall be true and correct when made on the date
hereof and shall be true and correct as of the Closing as if made as of such
Closing, except for representations and warranties made as of a specific date,
which shall be true and correct as of such date;
iii. the Seller shall have performed or complied with their
agreements and covenants required to be performed or complied with under this
Agreement as of or prior to the Closing;
iv. the Seller shall have delivered to the Buyer a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that the conditions specified in Section 5(a) and clauses (i) through
(iii) of this Section 5(b) are satisfied in all respects;
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v. the Buyer shall have received from counsel to the Seller an
opinion with respect to the matters set forth in Exhibit C attached hereto,
addressed to the Buyer and dated as of the Closing Date;
vi. all actions to be taken by the Seller in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
the Buyer;
vii. the Buyer shall have received at or prior to the Closing
such documents, instruments or certificates as the Buyer may reasonably request
including, without limitation:
a. a xxxx of sale substantially in the form of Exhibit E;
b. such instruments of conveyance, assignment and transfer,
in form and substance satisfactory to the Buyer, as shall be appropriate to
convey, transfer and assign to, and to vest in, the Buyer, good, clear, record
and marketable title to the Assets other than the Real Property (including all
necessary bills of sale and certificates of title for motor vehicles owned by
the Seller);
c. such warranty deeds and instruments of conveyance,
assignment and transfer, in form and substance satisfactory to the Buyer, as
shall be appropriate to convey, transfer and assign to, and to vest in, the
Buyer, good, clear, record, marketable and insurable title to the Real Property;
d. all literature and other documentation relating to the
Seller's business, all in form and substance satisfactory to the Buyer;
e. such contracts, files and other data and documents
pertaining to the Assets or the Seller's business as the Buyer may reasonably
request;
f. [intentionally deleted]
g. such certificates of the Seller's officers and such other
documents evidencing satisfaction of the conditions specified in Section 5(b) as
the Buyer shall reasonably request;
h. certificates of the Secretary of State of the State of
New York as to the legal existence and good standing (including tax) of the
Seller in their respective states of incorporation;
i. certificates of the Secretary of the Seller attesting to
the incumbency of the Seller's officers, the authenticity of the resolutions
authorizing
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the transactions contemplated by the Agreement, and the authenticity and
continuing
validity of the charter documents delivered pursuant to Section 2;
j. estoppel certificates from each lessor from whom the
Seller leases real or personal property consenting to the assumption of such
lease by the Buyer and representing that there are no outstanding claims against
the Seller under any such lease;
k. estoppel certificates from each tenant to whom the Seller
leases real property consenting to the assumption of such lease by the Buyer and
representing that there are no outstanding claims against the Seller under any
such lease;
l. a cross receipt executed by the Buyer and the Seller;
m. such other documents, instruments or certificates as the
Buyer may reasonably request.
c. Conditions to Obligations of the Seller. The obligation of the
Seller to consummate the transactions contemplated by this Agreement to occur at
the Closing is subject to the satisfaction of the following additional
conditions:
i. the representations and warranties of the Buyer set forth in
Section 3 shall be true and correct when made on the date hereof and shall be
true and correct as of the respective Effective Time as if made as of the
respective Effective Time, except for representations and warranties made as of
a specific date, which shall be true and correct as of such date;
ii. the Buyer shall have performed or complied with its
agreements and covenants required to be performed or complied with under this
Agreement as of or prior to the respective Effective Time;
iii. the Buyer shall have delivered to the Seller a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clauses (i) and (ii) of this
Section 5(c) is satisfied in all respects;
iv. the Seller shall have received from New York counsel to the
Buyer an opinion with respect to the matters set forth in Exhibit D attached
hereto, addressed to the Seller and dated as of the Closing Date;
v. all actions to be taken by the Buyer in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions,
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instruments and other documents required to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to the Seller; and
vii. The Seller shall have received at or prior to the Closing
such documents, instruments or certificates as the Seller may reasonably request
including, without limitation:
a. such certificates of the Buyer's officers and such other
documents evidencing satisfaction of the conditions specified in this Section
5(c) as the Seller shall reasonably request;
b. a certificate of the Secretary of State of the State of
New York as to the legal existence and good standing of the Buyer in New York;
c. a certificate of the Secretary of the Buyer attesting to
the incumbency of the Buyer's officers, the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement, and the
authenticity and continuing validity of the charter documents and by-laws;
d. payment of the cash portion of the Purchase Price;
e. the Instrument of Assumption executed by the Buyer and
accepted by the Seller; and
h. a cross receipt executed by the Buyer and the Seller.
6. Indemnification.
a. Indemnification. The Stockholder and the Seller, jointly and
severally, shall indemnify the Buyer and its officers, directors, stockholders
and affiliates (and the officers, directors and stockholders of its affiliates)
(the "Indemnified Parties") and hold the Indemnified Parties harmless against,
any and all debts, obligations and other liabilities (whether absolute, accrued,
contingent, fixed or otherwise, or whether known or unknown, or due or to become
due or otherwise), monetary damages, fines, fees, penalties, interest
obligations, deficiencies, losses and expenses (including without limitation
amounts paid in settlement, interest, court costs, costs of investigators, fees
and expenses of attorneys, accountants, financial advisors and other experts,
and other expenses of litigation) incurred or suffered by the Indemnified
Parties ("Damages"):
i. resulting from, relating to or constituting any
misrepresentation, breach of warranty or failure to perform any covenant or
agreement of the Stockholder or the Seller contained in this Agreement or in any
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document delivered by the Stockholder or the Seller pursuant to this Agreement
or in connection with the transactions contemplated by this Agreement;
ii. resulting from any claims against, or liabilities or
obligations of, the Seller or against the Assets not specifically assumed by the
Buyer pursuant to this Agreement;
iii. resulting from any tax liabilities or obligations of the
Seller;
iv. resulting from any violation by the Seller of, or any failure
by the Seller to comply with any law, ruling, order, decree, regulation or
zoning, environmental or permit requirement applicable to the Seller to its
business or properties, whether or not any such failure or violation has been
disclosed to the Buyer, including any costs incurred by the Buyer (A) in order
to bring the Assets into compliance with environmental laws as a result of
noncompliance with such laws on or before the Closing Date or (B) in connection
with the transfer of the Asset;
v. resulting from the failure of the Buyer or the Seller to
obtain the protections afforded by compliance with the notification and other
requirements of the bulk sales laws in force in the jurisdictions in which such
laws may be applicable to the Seller or the transactions contemplated by this
Agreement;
vi. resulting from any claims against, or liabilities or
obligations of, the Seller with respect to obligations under Employee Plans not
specifically assumed by the Buyer pursuant to this Agreement;
vii. resulting from any claims against the Seller or the Assets
by or on behalf of Allied Waste Industries, Inc.; and
viii. resulting from any claims against the Seller, the
Stockholder, or the Assets by or on behalf of Xxxxxx Xxxxxxx.
b. Method of Asserting Claims.
i. If a third party asserts that an Indemnified Party is liable
to such third party for a monetary or other obligation which may constitute or
result in Damages for which the Indemnified Party may be entitled to
indemnification pursuant to this Section 6, and the Indemnified Party reasonably
determines that it has a valid business reason to fulfill such obligation, then
(i) the Indemnified Party shall be entitled to satisfy such obligation, without
prior notice to or consent from the Seller, (ii) the Indemnified Party may make
a claim for indemnification pursuant to this Section 6, and (iii) the
Indemnified Party shall be reimbursed for any such Damages for which it is
entitled to indemnification pursuant to this Section 6 (subject
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to the right of the Seller to dispute the Indemnified Parties entitlement to
indemnification under the terms of this Section 6).
ii. The Buyer shall give prompt written notification to the
Seller of the commencement of any action, suit or proceeding relating to a third
party claim for which indemnification pursuant to this Section 6 may be sought;
provided, however, that no delay on the part of the Buyer in notifying the
Seller shall relieve the Seller of any liability or obligation hereunder except
to the extent of any damage or liability caused by or arising out of such
failure. Within 20 days after delivery of such notification, the Seller may,
upon written notice thereof to the Buyer, assume control of the defense of such
action, suit or proceeding with counsel reasonably satisfactory to the Buyer,
provided the Seller acknowledges in writing to the Buyer that any damages,
fines, costs or other liabilities that may be assessed against the Indemnified
Parties in connection with such action, suit or proceeding constitute Damages
for which the Indemnified Parties shall be entitled to indemnification pursuant
to this Section 6. If the Seller does not so assume control of such defense, the
Buyer shall control such defense. The party not controlling such defense may
participate therein at its own expense; provided that if the Seller assumes
control of such defense and the Buyer reasonably concludes that the indemnifying
parties and the Indemnified Parties have conflicting interests or different
defenses available with respect to such action, suit or proceeding, the
reasonable fees and expenses of counsel to the Indemnified Parties shall be
considered "Damages" for purposes of this Agreement. The party controlling such
defense shall keep the other party advised of the status of such action, suit or
proceeding and the defense thereof and shall consider in good faith
recommendations made by the other party with respect thereto. The Buyer shall
not agree to any settlement of such action, suit or proceeding without the prior
written consent of the Seller, which shall not be unreasonably withheld. The
Seller shall not agree to any settlement of such action, suit or proceeding
without the prior written consent of the Buyer, which shall not be unreasonably
withheld.
c. Survival. The representations and warranties of the
Stockholder and the Sellers set forth in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby and
continue until the fifth anniversary of the Closing Date and shall not be
affected by any examination made for or on behalf of the Buyer or the knowledge
of any of the Buyer's officers, directors, stockholders, employees or agents. If
a notice is given before the expiration of such periods, then (notwithstanding
the expiration of such time period) the representation or warranty applicable to
such claim shall survive until, but only for purposes of, the resolution of such
claim.
d. Limitations. Except with respect to claims based on fraud, the
rights of the Buyer under this Section 6 shall be the exclusive remedy of the
Buyer with respect to claims resulting from or relating to any
misrepresentation, breach of
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warranty or failure to perform any covenant or agreement of the Stockholder or
the Sellers contained in this Agreement (provided that nothing contained in this
Agreement shall limit or restrict any right or remedy the Buyer may have under
any Environmental Law).
7. Termination.
a. Termination of Agreement. This Agreement may be terminated prior to
the Closing Date as provided below:
i. the Stockholder, the Sellers and the Buyer may terminate this
Agreement by mutual written consent;
ii. the Buyer may terminate this Agreement by giving written
notice to the Seller in the event the Stockholder or the Seller is in breach,
and the Stockholder and the Seller may terminate this Agreement by giving
written notice to the Buyer in the event the Buyer is in breach, of any material
representation, warranty or covenant contained in this Agreement, and such
breach is not remedied within 10 days of delivery of written notice thereof;
iii. the Buyer may terminate this Agreement by giving written
notice to the Seller if the Closing shall not have occurred on or before the
60th day following the date of this Agreement by reason of the failure of any
condition precedent under Section 5(a) or 5(b) hereof (unless the failure
results primarily from a breach by the Buyer of any representation, warranty or
covenant contained in this Agreement);
iv. the Stockholder and the Seller may terminate this Agreement
by giving written notice to the Buyer if the Closing shall not have occurred on
or before the 60th day following the date of this Agreement by reason of the
failure of any condition precedent under Section 5(a) or 5(c) hereof (unless the
failure results primarily from a breach by the Stockholder or any Seller of any
representation, warranty or covenant contained in this Agreement).
b. Effect of Termination. If any Party terminates this Agreement
pursuant to Section 7(a), all obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party for breaches of this Agreement); provided, however, that
the confidentiality provisions contained in Section 4(d) shall survive any such
termination.
8. Miscellaneous.
a. Press Releases and Announcements. No Party shall issue any press
release or public disclosure relating to the subject matter of this Agreement
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without the prior written approval of the other Parties; provided, however, that
any Party may make any public disclosure it believes in good faith is required
by law or regulation (in which case the disclosing Party shall advise the other
Parties and provide them with a copy of the proposed disclosure prior to making
the disclosure).
b. No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
c. Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, with respect to the subject matter hereof.
d. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties; provided, however, that the Buyer may assign its rights
and obligations hereunder to CWS or any affiliate thereof.
e. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
f. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
g. Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly delivered three
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:
If to the Seller or to the Stockholder: Copy to:
--------------------------------------- --------
c/o Xxxxxxx X. Xxxx Xxxx X. Xxxxxx, P.C.
0000 X.X. 000xx Xxxx Xxxxxx Professional Building Annex
Xxxxx, XX 00000 000-000 Xxxx Xxxxxx
Xxxxxx, XX 00000
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If to the Buyer: Copy to:
---------------- --------
Xxxxxxx Waste Management of Xxxxxxx X. Xxxxx, Esq.
N.Y., Inc. Xxxx and Xxxx
Xxx 000 00 Xxxxx Xxxxxx
00 Xxxxxx Xxxx Xxxx Xxxxxx, XX 00000
Xxxxxxx, XX 00000
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
h. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
New York.
i. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
j. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof 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 of the term or provision, 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 after the expiration of the time within
which the judgment may be appealed.
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k. Expenses. Each of the Parties shall bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
l. Specific Performance. Each of the Parties acknowledges and agrees
that one or more of the other Parties would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions of
Section 8(m)), in addition to any other remedy to which it may be entitled, at
law or in equity.
m. Submission to Jurisdiction. Each of the Parties (a) submits to the
jurisdiction of any state or federal court sitting in the State of Vermont in
any action or proceeding arising out of or relating to this Agreement, (b)
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court, and (c) agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety or other
security that might be required of any other Party with respect thereto. Any
Party may make service on another Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 8(g). Nothing in this Section 8(m), however,
shall affect the right of any Party to serve legal process in any other manner
permitted by law.
n. Construction. The language used in this Agreement shall be deemed
to be the language chosen by the Parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any Party. Any
reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise.
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o. Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
XXXXXXX WASTE MANAGEMENT
OF N.Y., INC.
By:
----------------------------------
Title:
------------------------------
KERKIM, INC.
By:
----------------------------------
Title:
------------------------------
--------------------------------------
XXXXXXX X. XXXX
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