ACQUISITION AGREEMENT
by and between
X.X. XXXXX & CO., INC.,
as Seller,
and
VERIDIUM ENVIRONMENTAL CORPORATION,
as Purchaser.
Dated as of DECEMBER 11, 2002
V.12.11.02
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, dated as of DECEMBER 11, 2002 (the "Effective Date")
is made by and between X.X. Xxxxx & Co., Inc., a corporation duly organized and
validly existing under the laws of the State of Connecticut, with a principal
place of business located at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX ("RMJ Co.")(RMJ
Co. is hereinafter, at times, referred to as the "Seller") and VERIDIUM
ENVIRONMENTAL CORPORATION, a corporation duly organized and validly existing
under the laws of the State of Delaware, with a principal place of business at 0
Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Purchaser"). Purchaser and
Seller are hereinafter, at times, collectively referred to as the "Parties" or
individually, at times, referred to as a "Party", and this Acquisition Agreement
is hereinafter, at times, referred to as the "Agreement".
WHEREAS, RMJ Co., by itself and through its subsidiary, XXXXX ENVIRONMENTAL
SERVICES, LLC ("JES LLC"), or otherwise, is engaged in the business of providing
hazardous and non-hazardous waste collection, treatment and disposal services
through the operation of service centers in Farmington, Connecticut and Lowell,
Massachusetts or otherwise (the "Business") incidental to which it has certain
assets including but not limited to the following:
(a) Certain accounts receivable, inventories, prepaid expenses and other
miscellaneous assets;
(b) Certain equipment and vehicles;
(c) Certain computer equipment and fixtures, furniture and the like;
(d) Certain telephone and facsimile numbers; and,
(e) 70% of the outstanding equity interests in JES LLC, which owns 100% of
the outstanding equity interest in XXXXX ENVIRONMENTAL SERVICES (North
East), INC. ("JES INC.")
(All of the foregoing and other assets contemplated to be sold to Purchaser by
Seller hereunder are hereinafter defined as the "Assets" and shall be as set
forth on Schedule A attached hereto and incorporated herein by this reference
verbatim and at length. Furthermore, all references to "Seller" herein shall
only include the Business as defined above and the Assets utilized in the
Business as set forth on Schedule A. Purchaser expressly acknowledges that RMJ
Co. operates numerous and diverse businesses and the assets to be sold and
purchased hereunder are only those utilized in the Business and as set forth on
Schedule A attached hereto).
WHEREAS, Seller desires to sell, convey, assign and transfer to Purchaser the
Assets as are hereinafter more particularly described on Schedule A and as are
utilized in the Business (the "Acquisition"); and
WHEREAS, Purchaser desires to acquire the same certain Assets of Seller; and
WHEREAS, Seller and Purchaser have reached an understanding with respect to the
sale by Seller and purchase by Purchaser of these certain Assets.
NOW, THEREFORE, in consideration of the above premises, the sums hereinafter
more particularly required to be paid, the mutual covenants, agreements,
warranties and representations herein expressed, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby expressly
acknowledged, the Parties hereto do hereby mutually covenant and agree as
follows:
ARTICLE I
DEFINITIONS
As used herein, the terms below shall have the following meanings:
"Accounts Receivable" has the meaning set forth in Section 2.1(b)(i).
"Acquisition" has the meaning set forth in the Recitals above.
"Affiliate" of a Person means any other Person that, directly or indirectly,
through one (1) or more intermediaries, controls, is controlled by, or is under
common control with the first mentioned Person.
"Agreement" has the meaning set forth in the Preamble.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Balance Sheet" means the balance sheet of the Business and Seller.
"Best Efforts" shall be deemed to not include any obligation on the part of any
person to undertake any liabilities or perform any acts (except liabilities or
performance, other than any best efforts obligations, expressly required to be
undertaken by the terms of this Agreement) which are materially burdensome to
such person; provided, however, that notwithstanding the foregoing, the term
"Best Efforts" shall include an obligation to take such actions which are
normally incident to or reasonably foreseeable in connection with such
obligation or the transactions contemplated hereby.
"Best Knowledge" shall mean the knowledge of a person (or of its executive
officers if a corporation) after having made due investigation and reasonable
inquiry of the senior managerial employees, having responsibility for such
matter or having access to such information.
"Business" has the meaning set forth in the Recitals.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Confidentiality Agreement" means that certain Confidentiality Agreement dated
as of October 15, 2002 , by and between the Sellers and Purchaser.
"Customer" has the meaning set forth in Section 6.7.
"Customer Contracts" has the meaning set forth in Section 2.1(b)(ii)(A).
"Effective Date" shall mean the date set forth in the Preamble.
"Environmental Laws" means laws, rules and regulations relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata) and
the treatment, storage, transportation or disposal of hazardous substances or
wastes as defined in any and all of such applicable laws.
"Escrow Agent" means the escrow agent under the Escrow Agreement to be agreed to
and executed by the Sellers and the Purchaser.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Employees" has the meaning set forth in Section 6.4.
"Excluded Liabilities" means any liabilities and obligations with respect to,
arising out of or relating to, the ownership, possession or use of the Sellers'
Assets and the operation of the Business prior to the Closing Date, including,
without limitation, those (i) with respect to fines imposed by any Governmental
Entity, (ii) with respect to injuries suffered by employees of the Sellers or
any Business Subsidiary, (iii) with respect to tort (other than environmental
clean-up) and common law claims for which post-1986 general liability insurance
containing pollution exclusions normally would provide coverage, or (iv) which
are Taxes (other than Taxes for which the Purchaser is expressly liable pursuant
to the terms of this Agreement) arising out of or relating to any period or any
portion thereof ending on or prior to the Closing Date without regard to when
asserted, commenced or identified.
"Farmington Location" shall refer to the Business location at 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxx.
"Financial Assurance" means a demonstration of the ability of the owner or
operator of a facility to properly perform closure, post-closure, corrective
action, or other environmental activities which demonstration is required by,
and must be satisfied in the manner set forth in (a) the Solid Waste Disposal
Act, as amended, 42 U.S.C. Sec. 6901 et seq. (including without limitation Sec.
6991b); (b) the Toxic Substances Control Act, as amended, 15 U.S.C. Sec 2601 et
seq.; (c) any state, county or municipal Law analogous to, or similar to, the
foregoing; (d) any rules or regulations promulgated pursuant to any of the
foregoing federal, state, county or municipal Laws, including without limitation
regulations set forth in 40 C.F.R. Sections 258, 264, 265, 280 and 761; or (e)
transfer, assumption or other compliance with any and all bonding requirements.
"Financial Assurance Commitment" means a commitment from a responsible insurance
company with respect to Financial Assurance required by Governmental Entities in
order for the Purchaser to own and/or operate the Owned Real Property and the
Real Property subject to Real Property Leases.
"Financing Commitment" means capital commitments reasonably satisfactory to the
Purchaser which are sufficient to (i) pay the Cash Payment, (ii) refinance the
People's Bank working capital line of credit and term debt (as hereinafter
defined) at Closing, (iii) fund the payment of all reasonable costs and expenses
of the transactions described in this Agreement and (iv) provide ongoing funding
to Purchaser for working capital needs and general corporate purposes. Such
capital commitments shall contain normal and customary conditions including
material adverse change but excluding syndication and due diligence.
"Financial Statements" has the meaning set forth in Section 4.5.
"Financing" means the commitment from the Purchaser's qualified funding sources,
including without limitation, the New Jersey Economic Development Authority,
commercial lenders and certain accredited investors.
"GAAP" means United States generally accepted accounting principles as in effect
from time to time, consistently applied.
"Governmental Entity" means any federal, state, provincial, local, county or
municipal government, governmental, judicial, regulatory or administrative
agency, commission, board, bureau or other authority or instrumentality,
domestic or foreign.
"Initial Working Capital Statement" has the meaning set forth in Section 2.7(a).
"Interests" has the meaning set forth in Section 2.1(a).
"Lowell Location" shall refer to 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
"Material Adverse Effect" shall mean any change in, or effect on, Purchaser or
any Subsidiary (including the business thereof) which is, or with reasonable
probability might be, materially adverse to the Business, operations, Assets,
condition (financial or otherwise) or prospects of Purchaser and its
subsidiaries, taken as a whole.
"People's Bank Line of Credit and Term Debt" shall mean that indebtedness of
Seller to People's Bank relating to a working line of credit for the Business
("People's Bank Line of Credit") and certain term debt associated with certain
vehicles (as hereinafter defined) and equipment utilized in the Business
("People's Bank Term Debt") and being conveyed by Seller to Purchase hereunder.
"Permits" has the meaning set forth in Section 3.7(b).
"Person" means an individual, corporation, partnership, association, limited
liability company, trust, joint venture, unincorporated organization, other
entity or group (as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended).
"Purchase Price" has the meaning set forth in Section 2.6.
"Purchaser" has the meaning set forth in the Preamble.
"Schedules", as referred to throughout this Agreement, shall refer to all
schedules mentioned throughout this Agreement as same shall be attached to the
Agreement and signed by the Parties at Closing.
"Seller" has the meaning set forth in the Preamble and is limited to the
hazardous and non-hazardous waste collection, treatment and disposal service
business of Seller.
"Seller's Assets" has the meaning set forth in the Section 2.1 and Schedule A.
"Tangible Personal Property" has the meaning set forth in Section 2.1(b)(iii).
"Target Working Capital" means Zero ($0.00) Dollars.
"Working Capital" has the meaning set forth in Section 2.7(b).
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.0. RECITALS AND DEFINITIONS. The recitals and definitions set forth
above are incorporated herein by this reference as though set forth verbatim and
at length.
Section 2.1 ASSETS TO BE SOLD AND PURCHASED. On the terms and subject to the
conditions set forth in this Agreement, at the Closing Seller shall sell,
assign, transfer, convey and deliver to Purchaser free and clear of any and all
liens, claims, interests and encumbrances of any nature (except as set forth on
Schedule J hereto), and Purchaser shall purchase and accept from Seller those
assets of Seller (the "Seller's Assets") as hereinafter described:
(collectively, the assets set forth in this Section 2.1 and as are set forth on
Schedule A are referred to as "Seller's Assets"):
(a) Seventy (70.00%) Percent of the issued and outstanding equity
interests of JES LLC (the "Interests"), which owns 100% of the issued
and outstanding equity of JES INC.
(b) all legal and beneficial right, title, and interest of Seller in RMJ
Co.'s and JES LLC's assets of every kind and description, whether
tangible or intangible, real, personal or mixed, wherever situated,
owned, held or used by RMJ Co. or JES LLC or in which RMJ Co. or JES
LLC has any right, title or interest that is owned, directly or
indirectly, leased or otherwise held primarily for use in the Business
(as set forth on Schedule A), except for the Excluded Assets, and
specifically including the following:
(i) all accounts receivable arising out of the operation of the
Business existing on the Closing Date including, without
limitation, those listed or described on Schedule B, or arising
in the ordinary course under the Customer Contracts after the
date hereof (the "Accounts Receivable");
(ii) all rights and incidents of interest of Seller to:
(A) all of the waste management services agreements between
Seller, JES LLC and any customer(s) relating to the Business
(the "Customer Contracts") existing on the date hereof or
arising in the ordinary course after the date hereof and
listed or described on Schedule C (which Schedule shall be
provided to Purchaser prior to the Closing Date);
(B) the agreements, contracts and arrangements between Seller,
JES LLC and any vendor(s) or other third party providing
goods or services relating to the Business listed on
Schedule D (which Schedule shall be provided to Purchaser
prior to the Closing Date);
(C) all of the rights of Seller and JES LLC regarding employment
agreements and confidentiality and/or non-competition
agreements with respect to Seller's and/or JES LLC's
employees or former employees;
(iii)all equipment, computers, furniture, furnishings, fixtures,
office supplies, Vehicles (as defined in Schedule A and subject
to the liens disclosed on Schedule J) and all other tangible
personal property currently owned by, or on order to be delivered
to, Seller and JES LLC that are used primarily in the operation
of the Business or are located on, or to be delivered to, any
real property or premises subject to the Real Property Leases
(collectively, the "Tangible Personal Property"), including
without limitation, such of the foregoing as are listed or
described on Schedule A;
(iv) trade names, trademarks, registered copyrights, service marks,
trademark registrations and applications, service xxxx
registrations and applications, copyright registrations and
applications, corporate or other entity names, internet addresses
and other internet related assets used primarily in the operation
of the Business, including without limitation such of the
foregoing as are listed or described on Schedule E (the
"Intellectual Property");
(v) all rights and claims under all warranties, representations and
guarantees made by suppliers, manufacturers and contractors in
connection with Seller's Assets and all rights and claims
relating to Assumed Liabilities except those shown or described
on Schedule F;
(vi) the right to lease the real property which is used in the
operation of the Business at Building A, Xxxxx Street, Farmington
Connecticut for $3,000.00 per month, triple net, on a month to
month basis.
(vii)all licenses, permits, authorizations and approvals issued to
Seller and JES LLC by any Governmental Entity primarily relating
to the operation of the Business, including without limitation,
such of the foregoing as are listed or described on Schedule I;
(viii) all surety bonds, collateral bonds, letters of credit, cash
trusts, cash deposits or the proceeds thereof for the Financial
Assurance requirements or performance bond requirements, whether
or not required under applicable Environmental Laws, if
transferrable;
(ix) copies of all books and records of the Business and JES LLC;
(x) all inventories of supplies and spare parts of the Seller and JES
LLC relating to the operation of the Business;
(xi) the following telephone numbers: (000) 000-0000, (000) 000-0000,
(000) 000-0000 (facsimile), (000) 000-0000 and (000) 000-0000
(facsimile) or such other numbers as are used in the Business
(subject to approval by any applicable telecommunication
company);
(xii) all goodwill primarily related to the Business; and
(xiii) to the extent assignable, rights of indemnification from all
non-affiliated third parties for liabilities and obligations
relating to the Business or Seller's Assets.
(c) the seals, minute books, charter documents, stock or equity record
books and such other books and records as pertain to the organization,
existence or capitalization of JES LLC as well as any other records or
materials relating to the Business (or copies thereof where counsel to
Purchaser deems such to be sufficient).
Section 2.2 EXCLUDED ASSETS. Notwithstanding anything contained in this
Agreement to the contrary, the following rights, properties and assets
(collectively, the "Excluded Assets") will, to the extent not included in the
calculation of Working Capital, not be included in the Seller's Assets:
(a) any and all assets of Seller not described in Section 2.1 above;
(b) any interest that may presently be held by Seller in Enviro-Safe
Corporation, J & M Environmental Corp and Green Management Corp.;
(c) any options to purchase common stock in Purchaser, issued pursuant to
the performance based threshold set forth in the Parties' Joint
Venture Agreement dated May, 2000; and,
(d) the current RMJ Co. telephone number, (000) 000-0000.
(e) Any assets of Seller not utilized in the Business or listed on
Schedule A.
Section 2.3 NO ENCUMBRANCES. The sale and transfer of Seller's Assets at the
time of Closing shall be free and clear of all obligations, security interests,
liens, mortgages, and encumbrances, except as above and described in Schedule J
and other schedules attached hereto, or unless expressly assumed in writing by
Purchaser at or prior to Closing.
Section 2.4 ASSUMED LIABILITIES. On the terms and subject to the conditions set
forth in this Agreement, at the Closing Purchaser shall assume from Seller and
thereafter pay, perform or otherwise discharge in accordance with their terms
all of the liabilities and obligations of Seller with respect to, arising out of
or relating to, the ownership, possession or use of the Seller's Assets and the
operation of the Business other than the Excluded Liabilities, including without
limitation liabilities and obligations with respect to, arising out of or
relating to, the ownership, possession or use of Seller's Assets and the
operation of the Business and arising after the Closing Date, as well as
accounts payable, accruals for expected accounts payable, and other accrued
miscellaneous expenses associated with the Business, all as disclosed to
Purchaser and agreed upon well in advance of Closing. Purchaser shall assume
Seller's People's Bank Line of Credit and Term Debt. Purchaser shall also assume
Thirty (30.00%) Percent of the remediation costs associated with environmental
contamination existing (as of the Closing Date) at the Lowell Location (it being
the express agreement of the Parties that Seller shall remain liable for Seventy
(70.00%) Percent of the remediation costs associated with environmental
contamination existing (as of the Closing Date) at the Lowell Location. Seller
also agrees to assume the liability of JES INC. due to the United States
Environmental Protection Agency under CERCLA regarding the Spectron site, which
Seller has disclosed to Purchaser to be approximately $20,368.77 and for which
Seller has agreed to be solely responsible.
Section 2.5 EXCLUDED/NON-ASSUMED LIABILITIES. Notwithstanding anything to the
contrary contained in this Agreement, and except as set forth in Section 2.4
above and as set forth on Schedule J hereto, Purchaser shall not assume or agree
to pay, perform or otherwise discharge or have any liability whatsoever for any
Excluded Liabilities or any other liabilities, obligations or expenses, if any,
of Seller whatsoever other than the Assumed Liabilities. Included in the
foregoing, without limitation of the Excluded Liabilities, are the following:
(a) Purchaser does not assume or agree to pay, satisfy, discharge or
perform, and shall not be deemed by virtue of the execution and
delivery of this Agreement or the conveyance of the Assets hereunder,
or of any instrument, paper or document delivered by it pursuant to
this Agreement, or as a result of the consummation of the transactions
contemplated by this Agreement, to have assumed, or to have agreed to
pay, satisfy, discharge or perform, any liability, obligation or
indebtedness of Seller (whether absolute, accrued, or contingent,
whether filed or asserted prior to or after the Closing Date and
whether arising out of or in any way connected with the Assets or
Business of Seller or otherwise except those set forth on Schedule J
or included in Section 2.4 hereof) all of which, Seller agrees to pay,
satisfy, discharge and perform. Without limitation of the foregoing,
the following liabilities shall not be assumed by Purchaser:
(i) any obligation or liability of Seller to perform this Agreement
or relating to the breach of any representation or warranty made
by Seller hereunder;
(ii) any obligation or liability of Seller for expenses, taxes,
commissions, fees and charges, legal costs and damages incident
to the preparation of this Agreement or the consummation of the
transactions contemplated hereby;
(iii)any obligation or liability of Seller that was incurred by
Seller on or before the Closing Date which, with respect to any
Federal, state or local income, employment, franchise, foreign or
similar taxes relating to Seller's Assets or the Business as
conducted prior to the Closing Date or Seller's liabilities for
payment of vacation, sick day, pension, hospitalization, major
medical, disability and life insurance benefits or other benefits
to its employees (except as otherwise agreed upon in writing
prior to Closing);
(iv) any liability of Seller to its stockholders, members, equity
owners or to its creditors, including with respect to trade
creditors or landlords or lessors or disputes with stockholders,
members, equity owners or any and all other accounts payable or
liabilities (except such specific accounts payable as are
expressly assumed by Purchaser and subject to Section 2.7
hereof);
(v) any liability of Seller with respect to its capital stock,
membership units, or other securities of Seller or any warrants,
options or rights to purchase its capital stock, membership units
or other securities;
(vi) any liability claimed as a result of any service provided by
Seller, or any liability for death, personal injuries (including
libel or slander), property damages or incidental or
consequential damages relating to any act or omission alleged to
have been taken by Seller prior to the Closing Date;
(vii) any liability for claims based solely upon Seller's negligence:
(viii) any liability or obligation under any agreement binding upon
Seller, including, without limitation, any liability or
obligation resulting from any breach or failure of Seller to
perform or any alleged breach or failure to perform prior to the
Closing Date or any liability for non-performance with respect to
any agreement which cannot be timely performed after the Closing
Date;
(ix) any liability or obligation, prior to the Closing Date, under any
collective bargaining agreement with any labor union or liability
for claims thereunder including, without limitation, any
liability for premature withdrawal from any multi-employer plan.
(x) any liability to employees or former employees of Seller or any
of their respective beneficiaries, heirs or assignees, including
(i) any liabilities arising by virtue of any collective
bargaining relationship or agreement or pursuant to the National
Labor Relations Act or any other labor relations law or pursuant
to any employment agreement, (ii) any liabilities for workers'
compensation, and (iii) any liabilities or obligations under any
ERISA Plan Compensation Commitment or any other agreements or
understandings involving employees of Seller;
(xi) any liability to the Pension Benefit Guaranty Corporation or
United States Department of Labor or any similar organization,
whether arising out of the employment by Seller of any employees
or former employees or otherwise;
(xii)any liability under any law ordinance, rule or regulation
including, without limitation, antitrust, civil rights, health,
safety, labor, discrimination and environmental laws, ordinances,
rules and regulations, including, without limitation, any
environmental clean-up liability to the Massachusetts Department
of Environmental Protection relating to the remediation of the
Lowell Location (except as otherwise set forth in Section 2.4
hereinabove);
(xiii) any liability arising out of or based upon any action, suit,
claim, investigation, consent decree, review or proceeding, at
law or in equity or before any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
other instrumentality, that exists now or at the Closing or that
arises after the Closing with respect to matters occurring at or
prior to the Closing;
(xiv)any liability under any compensation commitment of Seller or any
liability in connection with the layoff, termination or other
action or inaction affecting Sellers' employees, including, but
not limited to, claims arising out of or related to Seller's
obligations under the Labor Management Relations Act, as amended,
Title VII of the Civil Rights Act of 1964, as amended, all state
fair employment practice laws, ERISA, COBRA, any collective
bargaining agreement to which any Seller is a party, and any
individual or other collective contracts of employment;
Section 2.6 PURCHASE PRICE; DEPOSIT; PROMISSORY NOTE; ESCROW; DEBT CONVERSION.
(a) PURCHASE PRICE. See Amendment.
(b) DEPOSIT. See Amendment.
(c) PROMISSORY NOTE. See Amendment.
(d) ESCROW ACCOUNT.
(i) The Deposit shall be made payable to Xxxxxx Xxxxxx Xxxx, P.C.
(hereinafter, the "Escrow Agent"). The Escrow Agent shall
immediately present Purchaser's check for the Deposit for
collection and then, pending consummation of the transactions
contemplated under this Agreement, shall hold the Deposit in
escrow in an interest-bearing account. At settlement, the Deposit
shall be paid to Seller. Purchaser shall be entitled to interest
on the Deposit upon Purchaser's delivery to the Escrow Agent of
any documentation required to open an interest-bearing account.
Each reference in this Agreement to the Deposit shall be deemed
to mean the Deposit and the interest thereon. The Escrow Agent
shall also hold the Promissory Note pursuant to the terms set
forth in Section 2.6(c) above and shall release same to Seller
once the adjustments in Section 2.7 have been finalized.
(ii) The Parties hereto agree that the Escrow Agent is acting as a
stakeholder only and for the convenience and at the request of
Seller and Purchaser, and the Escrow Agent shall be responsible
only for the safekeeping and proper allocation of the Deposit, in
accordance with the terms of this Agreement. In taking any action
hereunder, the Escrow Agent shall be entitled to rely upon any
written notice, paper or other document believed by it to be
genuine and signed or presented by the proper person, or upon any
evidence deemed by it to be sufficient, and in no event shall the
Escrow Agent be liable for any act performed or omitted to be
performed by it hereunder in the absence of gross negligence or
willful misconduct.
(iii)The Escrow Agent shall be under no obligation to institute or to
defend any action, suit or legal proceeding in connection
herewith or to take any other action likely to involve it in
expense unless first indemnified to its satisfaction. The Escrow
Agent may consult with counsel in connection with its duties
hereunder and shall be fully protected by any action taken,
suffered or permitted by it in good faith in accordance with the
advice of such counsel. In the event of a controversy between
Seller and Purchaser with respect to any matter or thing relating
to the Deposit or any term or condition of this Agreement, or if
the Escrow Agent should receive or become aware of conflicting
demands for claims with respect to any such matters, the Escrow
Agent shall be entitled to refuse to comply with any such demand
or claim, and in such event the Escrow Agent may continue to
represent Purchaser and is hereby authorized (A) to keep and
retain the Deposit until it shall have received written notice
from Seller and Purchaser, jointly, that the controversy between
Seller and Purchaser has been settled either by agreement or by
final judgment of a court of competent jurisdiction (with no
appeal having been taken or the time for appeal having expired),
or (B) to deliver the Deposit into the applicable court of record
in Passaic County, New Jersey, whereupon the Escrow Agent shall
be relieved of any further duties or obligations under this
Agreement.
(iv) The Escrow Agent (or any successor) may at any time during the
term hereof resign its position hereunder by giving written
notice thereof to the Parties hereto. Such resignation shall be
effective upon the appointment of a successor reasonably
acceptable to Purchaser and Seller who shall have agreed to serve
pursuant to the terms hereof. Upon receipt of such resignation,
such other Parties shall use their Best Efforts to insure the
prompt appointment of a successor. Seller and Purchaser hereby
agree to indemnify, defend and hold the Escrow Agent harmless
from and against any loss, cost or expense arising out of or
relating to any action taken or thing done by the Escrow Agent in
connection with this Agreement or any failure by it to take any
action required to be taken by it in connection herewith,
provided, however, that any such action or failure to act shall
have been taken or omitted in good faith, and not as a result of
the Escrow Agent's gross negligence or willful misconduct.
(v) Seller acknowledges and agrees that the Escrow Agent is and has
been counsel to Purchaser in connection with the preparation of
this Agreement. Seller and Purchaser hereby agree that to the
extent that the Escrow Agent's serving as the holder of the
Deposit may create a conflict of interest or an appearance of a
conflict of interest, any such conflict of interest is hereby
waived. Seller also acknowledges and agrees that the Escrow Agent
serving as escrow holder shall in no manner whatsoever disqualify
or be cause for disqualification of the Escrow Agent with respect
to the current or future representation of Purchaser arising out
of or involving any matter or issue relating to the Deposit or
this Agreement; it being understood and agreed that Purchaser
will continue to be represented by the Escrow Agent in connection
with the foregoing matters.
(e) DEBT CONVERSION/DEBT. See Amendment.
Section 2.7 PURCHASE PRICE ADJUSTMENTS. The Parties have agreed that the
Purchase Price hereunder may be adjusted as follows:
(a) Set forth on Schedule K is the "Initial Working Capital
Statement." The Initial Working Capital Statement is unaudited
and has been prepared by the finance and accounting staff of the
Seller for the Business as of October, 2002 according to the
historical accounting policies and procedures of the Business.
The Business's accounts and records comprise the consolidated
financial statements of the Business, which financial statements
are prepared in accordance with GAAP (with the exclusion of
footnotes, summaries and statements of cash flow). The unadjusted
Purchase Price shall be adjusted within Thirty (30) business days
following the Closing as follows:
(i) if the amount of Working Capital of the Business (determined
in accordance with Section 2.7(b)) is less than the Target
Working Capital (Zero ($0) Dollars), the Promissory Note
shall be decreased by an amount equal to such difference
(the "Working Capital Deficiency") and the unadjusted
Purchase Price, as so adjusted, will be the then adjusted
Purchase Price;
(ii) if the amount of Working Capital of the Business (determined
in accordance with this Section 2.7(b)) is greater than the
Target Working Capital, the Promissory Note shall be
increased by an amount equal to such difference (the
"Working Capital Surplus") and the unadjusted Purchase
Price, as so adjusted, will be the then adjusted Purchase
Price; and
(iii)if the amount of Working Capital of the Business (determined
in accordance with this Section 2.7(b)) is equal to the
Target Working Capital, the unadjusted Purchase Price shall
be equal to the adjusted Purchase Price.
Any adjustment and modification to the Purchase Price shall
be made to the Promissory Note pursuant to this Section
2.7(a) and shall be made within Five (5) business days after
the amount of Working Capital of the Business as of the
Closing Date is agreed to by the Seller and Purchaser,
subject to adjustment as set forth in Section 2.7(b) below.
(b) As used herein, the term "Working Capital" shall mean the sum of the
asset accounts (including without limitation cash, accounts
receivable, prepaid expenses and deposits, which shall be transferred
to Purchaser at Closing) utilized in preparing the Initial Working
Capital Statement minus the sum of liability accounts (including
without limitation the trade accounts payable, accrued expenses,
People's Bank Line of Credit, and other applicable liabilities)
utilized in preparing the Initial Working Capital Statement. The term
"Working Capital Statement" shall mean the statement of Working
Capital of the Business to be prepared by Seller as of the Closing
Date in accordance with this Section 2.7(b) and to be delivered to
Purchaser as promptly as practicable, and as same shall be adjusted
for accuracy following the Closing Date, or other claims, liabilities
or expenses attributable to Seller and not disclosed to Purchaser
prior to Closing, within ninety (90) days after the Closing Date,
which statement shall include as a liability, without limitation, all
collected and on-site waste (deferred revenue) and shall utilize
inventories conducted on the Closing Date of waste at the Farmington
Location and Xxxxxx Location. Any costs, damages or expenses,
including, without limitation, attorneys fees and costs and accounting
fees and costs, relating to any breach by Seller of any
representation, warranty, covenant or other obligation of Seller
contained herein shall be an adjustment to be made to the Purchase
Price and reflected as a reduction in the Promissory Note.
Specifically excluded from the foregoing shall be any amounts payable
by Seller for People's Bank Term Debt (relative to Seller's Business
as set forth on Schedule J), Xxxxxxx Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xx.
or Xxxx Xxxxxxxx, and the obligation owed by JES INC to RMJ Co.
defined in Section 2.6(e) hereof. If there shall be an adjustment to
the Purchase Price hereunder, any amount up to One Hundred Fifty
Thousand ($150,000.00) Dollars shall first be adjusted against the
cash portion of the Purchase Price and any amount over and above One
Hundred Fifty Thousand ($150,000.00) Dollars shall be adjusted against
the Promissory Note.
ARTICLE III CLOSING
Section 3.1 CLOSING. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place on _______, 2003 (or such other date
as the Parties shall mutually confirm in writing) at (i) the offices of Xxxxxx
Xxxxxx Xxxx, P.C., 00 Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxxx, Xxx Xxxxxx or,
(ii) if requested by the Purchaser at least two (2) business days prior to
Closing, at Purchaser's place of business or the offices of Purchaser's
principal lender or such other location as is mutually agreed upon by the
Parties (the date of Closing being herein referred to as the "Closing Date").
Section 3.2 DELIVERIES AT CLOSING.
(a) At the Closing, Seller shall deliver and cause to be delivered to
Purchaser:
(i) duly executed instruments or other evidence sufficient to
transfer to Purchaser the Interests;
(ii) duly executed bills of sale, substantially in the form of Exhibit
B attached hereto, transferring Seller's Assets to Purchaser;
(iii)all other conveyance documents reasonably necessary to transfer
to Purchaser Seller's Assets;
(iv) Seller's Assets (as set forth on Schedule A), by making Seller's
Assets available to Purchaser at their locations as of the
Closing Date;
(v) applicable certificates of tax clearance and legal good standing;
and
(vi) any documents or certificates that are necessary to transfer to
Purchaser good, clear and marketable title all of the Assets and
assignments of all Company Contracts and (ii) all opinions,
certificates and other instruments and documents required by the
terms of this Agreement to be delivered by Seller at or prior to
Closing or otherwise required in connection with the Acquisition;
and
(b) At the Closing, Purchaser shall deliver to Seller:
(i) the cash portion of the Purchase Price by wire transfer in
immediately available funds to an account or accounts designated
by Seller;
(ii) the KBF Securities;
(iii) the Promissory Note (to be delivered to the Escrow Agent);
(iv) all other previously undelivered certificates and other documents
required to be delivered by Purchaser to Seller at or prior to
the Closing Date in connection with the Acquisition. ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER Seller represents
and warrants that as of the date hereof and as of the Closing
Date, the following representations shall be true and correct and
in full force and effect:
Section 4.1 ORGANIZATION AND GOOD STANDING. RMJ Co. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Connecticut and has the corporate power and authority to own, lease and operate
the Assets used in the Business and to carry on the Business as now being
conducted. JES INC. is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts and has the
corporate power and authority to own, lease and operate the Assets used in the
Business and to carry on the Business as now being conducted. JES LLC is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Connecticut and has the power and authority to
own, lease and operate the Assets used in the Business and to carry on the
Business as now being conducted. Seller is duly qualified to do business and is
in good standing as a foreign corporation or otherwise in the states and
jurisdictions set forth on Schedule L and in each other jurisdiction where
qualification as a foreign corporation or otherwise is required to conduct the
Business.
Section 4.2 CAPITALIZATION OF SUBSIDIARIES. All of the equity interests of each
subsidiary of Seller being transferred and sold hereunder are owned beneficially
and of record as set forth on Schedule M. There are no existing (i) options,
warrants, calls, subscriptions or other rights, convertible securities,
agreements or commitments of any character obligating a subsidiary or any direct
or indirect subsidiary, if any, to issue, transfer or sell any equity interests
in such subsidiary or such direct or indirect subsidiary, if any, or securities
convertible into or exchangeable for such equity interests, (ii) contractual
obligations of a subsidiary or any direct or indirect subsidiary, if any, to
repurchase, redeem or otherwise acquire any equity interests in such subsidiary
or such direct or indirect subsidiary, if any, or (iii) voting trusts or similar
agreements to which a subsidiary or any direct or indirect subsidiary, if any,
is a party with respect to the voting of equity interests in such subsidiary or
such direct or indirect subsidiary, if any. At the Closing, except as set forth
on Schedule 2.1(a), none of the subsidiaries or any direct or indirect
subsidiary, will hold any equity interest in any other entity.
Section 4.3 AUTHORITY, APPROVALS AND CONSENTS. Except as set forth on Schedule N
hereto, Seller has the corporate power and authority to enter into this
Agreement and to perform their obligations hereunder. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and validly approved by the Board
of Directors of Seller and by their respective stockholders and no other
corporate or other proceedings on the part of Seller are necessary to authorize
and approve this Agreement and the transactions contemplated hereby. Seller
hereby expressly represents that they have fully and properly complied with all
aspects of applicable Connecticut and/or Massachusetts corporate law in entering
into this Agreement and for consummating the transactions contemplated
hereunder. This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms. The execution, delivery and performance of this
Agreement by Seller and the consummation of the transactions contemplated hereby
do not and will not:
(i) contravene any provisions of the Certificate or Articles of
Incorporation or Formation or By-Laws or other organizational
documents of Seller;
(ii) conflict with, result in a breach of any provisions of, constitute a
default under, result in the modification or cancellation of, or give
rise to any right of termination or acceleration in respect of any
Company Agreement (as defined hereinbelow) or, except as set forth on
Schedule N hereto, require any consent or waiver of any party to any
Company Agreement.
(iii)result in the creation of any Security Interest upon, or any person
obtaining any rights to acquire, the Assets;
(iv) violate or conflict with any Legal Requirements (as defined
hereinbelow) applicable to the Business or any of the Assets; or
(v) require any authorization, consent, order, permit, or approval of, or
notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority (except for state
or federal environmental regulatory agency requirements and those set
forth on Schedule N hereto).
Except as set forth or referred to above on Schedule N hereto, no
authorization, consent, order, permit or approval of, or notice to, or
filing, registration or qualification with, any governmental,
administrative or judicial authority is necessary to be obtained or
made by Seller to enable Purchaser to continue to conduct the Business
and use the Assets after the Closing in a manner which is in all
material respects consistent with that in which the Business is
presently conducted and as the Assets are currently utilized.
Furthermore, no authorization, consent, order, permit or approval of,
or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority, creditor or other
party is necessary to be obtained or has not been obtained by Seller
prior to Closing to effectively convey to Purchaser good, clear and
marketable title to the Assets, free of any and all claims of any
party with respect thereto (except as set forth in Section 4.4
hereinbelow). Seller does hereby expressly disclaim any representation
or warranty as such may relate to compliance with state or Federal
securities laws.
Section 4.4 CONSENTS AND APPROVALS. No consent, approval, or authorization of,
or declaration, filing, or registration with, any Governmental Entity will be
required to be made or obtained by Seller in connection with the execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated hereby, except as set forth on Schedule N hereto.
Excluded from the foregoing are any and all state or federal environmental
regulatory agency requirements or filings which shall be Purchaser's sole
responsibility; provided, however, that Seller does hereby agree to provide
reasonable cooperation to assist Purchaser's satisfaction of such requirements.
Section 4.5 FINANCIAL INFORMATION. Schedule O contains an unaudited Balance
Sheet and income statement prepared by the finance and accounting staff of
Seller for the Business as of October 31, 2002, with the representation that
they have been prepared in accordance with GAAP (the "Financial Statements") on
a review (not audited) basis (with exception for footnotes , summaries and
statements of cash flows) . The Financial Statements were prepared by Sellers
and have not been reviewed by an independent certified public accounting firm.
Except as set forth on Schedule O hereto, the Financial Statements are in
accordance with the books and records of the Seller and fairly and accurately
present the financial position, results of operations, stockholder's equity and
cash flows of Seller as of the dates and for the periods indicated, in each case
in conformity with GAAP, consistently applied (with exception for footnotes ,
summaries and statements of cash flows). The statements of income included in
the Financial Statements do not contain any items of special or nonrecurring
income except as expressly specified therein, and the balance sheets included in
the Financial Statements do not reflect any write-up or revaluation increasing
the book value of any Assets. The books and accounts of Seller are complete and
correct and fully and fairly reflect all of the transactions of Seller and are
presently located solely at the offices of Seller and not at any other location.
Section 4.6 TITLE TO PROPERTY/ASSETS. (a) Except as set forth in Schedule P
attached hereto and incorporated herein by this reference verbatim and at
length, the sale of the Assets by Seller pursuant hereto will effectively convey
to Purchaser all of the Assets, including all tangible and intangible assets and
properties of Seller, as specified on Schedule A. Seller has good, clear and
marketable title to all of the Assets and to all other properties reflected on
the Financial Statements or acquired after the date thereof (other than
properties and assets sold or otherwise disposed of after the date thereof in
the ordinary course of business), and each such Asset is held free and clear of
(i) all leases, licenses and other rights to occupy or use such property and
(ii) all Security Interests, rights of way, easements, restrictions, exceptions,
variances, reservations, covenants or other title defects or limitations of any
kind, except (with respect to all such properties) those set forth on Schedule P
hereto, none of which has a Material Adverse Effect on such property or its
present or contemplated use in the Business. (b) All Equipment is in good
operating and working condition for its continued use as it has been used in the
Business.
Section 4.7 ABSENCE OF MATERIAL ADVERSE CHANGE; CONDUCT OF BUSINESS. Since
December 10, 2002, there has been no Material Adverse Effect and there is no
condition, development or contingency of any kind existing or in prospect which,
so far as reasonably can be foreseen at this time, may result in any Material
Adverse Effect to the Business or which would violate Section 6.1 hereof. Since
December 10, 2002: (a) Seller has not sold or transferred any assets that are
material to the Business other than in the ordinary course of business; (b) the
has been no labor dispute, strike, union organizational activity allegation or
other similar occurrence which might reasonably be expected to materially and
adversely affect the Business; and (c) Seller has not taken any actions which
would adversely effect the Financial Statements or any Company Agreements and
has not obtained any information relative to the Financial Statements or any
Company Agreements which has not been disclosed to Purchaser.
Section 4.8 NO UNDISCLOSED LIABILITIES. Except for (a) liabilities and
obligations incurred in the ordinary course after December 10, 2002; (b)
liabilities and obligations disclosed, reflected or provided for in the
Financial Statements; and (c) liabilities and obligations incurred in connection
with the transactions contemplated hereby or otherwise as contemplated by this
Agreement, from December 10, 2002 to the date hereof, Seller has not incurred
any liabilities or obligations that would both be required to be reflected or
provided for in a Balance Sheet prepared in accordance with the policies,
procedures and methods used to prepare the Financial Statements.
Section 4.9 NO VIOLATIONS. Neither the execution, delivery, or performance of
this Agreement by Seller, nor the consummation by Seller of the transactions
contemplated hereby, nor compliance by Seller with any of the provisions hereof
will (a) conflict with or result in any breach of any provisions of the
certificate of incorporation or bylaws of the Seller, (b) result in a violation,
or breach of, or constitute (with or without due notice or lapse of time) a
default (or give rise to any right of termination, cancellation, vesting,
payment, exercise, acceleration, suspension or revocation) under any of the
terms, conditions or provisions of any contract, agreement or arrangement that
is included as an Asset or any material note, bond, mortgage, deed of trust,
security interest, indenture, license, contract, agreement, plan or other
instrument or obligation to which Seller is a party or by which the properties
or Assets related to the Business may be bound or affected or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Seller or the Assets, except in the case of clauses (b) or (c) for violations,
breaches, defaults, terminations, cancellations, accelerations, creations,
impositions, suspensions or revocations that would not be reasonably likely to
have a Material Adverse Effect.
Section 4.10 ABSENCE OF LITIGATION/LEGAL MATTERS. Except as set forth on
Schedule Q attached hereto and incorporated herein by this reference verbatim
and at length (said Schedule Q having been presented to Purchaser and its
counsel in final form well prior to Closing), (i) there is no claim, action,
suit, litigation, investigation, inquiry, review, or proceeding pending against,
or, to the Best Knowledge of Seller, threatened against or affecting, Seller in
regard, including, but not limited to, the Business or the Assets, before or by
any court, arbitrator, panel, agency or other governmental, administrative or
judicial entity in the United States of America or elsewhere, and (ii) Seller is
not subject to any judgment, decree, writ, injunction or order of any
governmental, administrative or judicial authority in the United States of
America or elsewhere. To the Best Knowledge of Seller, the Business is being
conducted in full compliance with all laws, ordinances, codes, rules,
regulations, standards, judgments, decrees, writs, rulings, injunctions, orders
and other requirements of all governmental, administrative or judicial entities
in the United States of America or elsewhere (collectively, "Legal
Requirements") applicable to the Business and the Assets. Seller holds all
licenses, franchises, permits, registrations, certificates, consents, approvals,
rights or authorizations (collectively "Permits") required by all applicable
Legal Requirements, (iii) Seller owns or holds all Permits material to the
conduct of the Business and (iv) no event has occurred and is continuing which
permits, or after notice or lapse of time or both would permit, any modification
or termination of any Permit or violation of any Legal Requirement. Seller (A)
has not received any notice asserting any noncompliance with any Legal
Requirements or Permit, or (B) is not subject to any Legal Requirements or
Permit which if enforced against or complied with by Seller would have a
Material Adverse Effect on the Business. No governmental, administrative or
judicial authority has given notice of any intention to initiate any
investigation, inquiry or review involving Seller or the Business.
Section 4.11 LABOR RELATIONS. Seller has paid or made provision for the payment
of all salaries and accrued wages and has complied in all respects with all
applicable laws, rules and regulations relating to the employment of labor,
including those relating to wages, hours, collective bargaining and the payment
and withholding of taxes, and has withheld and paid to the appropriate
government authority, or is holding for payment not yet due to such authority,
all amounts required by law or agreement to be withhold from the wages or
salaries of its employees, as any of such relates to the Business. If
applicable, Seller has filed all necessary documents and obtained all necessary
approval in connection with claiming Targeted Job Credits under Section 51 of
the Internal Revenue Code of 1986, as amended (the "Code"), and true and
complete copies of all written Company Agreements relating to the participation
by Seller in any targeted job program have heretofore been made available or
delivered to Purchaser. There are no controversies pending or threatened between
Seller and any labor union or other collective bargaining unit representing any
employees of Seller or other employees of Seller. Except as set forth on
Schedule R hereto, (i) no union or other collective bargaining unit has been
certified or recognized by Seller as representing any of their employees and
(ii) during the past ten (1) years, (A) no strike, work stoppage, slowdown or
similar labor disruption has been recommended by any labor union or collective
bargaining unit representing any employees of Seller; (B) nor has the membership
of such union or unit voted on any call for a strike, work stoppage, slowdown or
similar labor disruption; (C) nor has any strike, work stoppage, slowdown or
similar labor disruption occurred with respect to such employees and (D) no
lawsuit, claim or other proceeding or cause of action has occurred between the
Seller and any employee which has not been set forth on Schedule Q hereto.
Section 4.12 EMPLOYMENT. Set forth on Schedule S attached hereto and
incorporated herein by this reference verbatim and at length is a true and
complete list (relating to the Business) of:
(a) each stock purchase, option, stock ownership, deferred compensation,
performance, bonus, incentive, expense reimbursement, vacation pay,
holiday pay, insurance, severance, retirement, excess benefit or other
plan, trust, arrangement or standard policy with respect to the
Seller's employees, whether written or oral, which Seller maintains or
to which Seller is required to make contributions
(b) each other agreement, arrangement, commitment, understanding or
dispute of any kind, whether written or oral, with any current or
former employee or associate of Seller pursuant to which payments may
be required to be made at any time following the date hereof
(including, without limitation, any employment, deferred compensation,
severance, supplemental pension, termination or consulting agreement
or other arrangement);
True and complete copies of all of the written plans, arrangements and
agreements referred to on Schedule S ("Compensation Commitments"), and
all employee or employment policy manuals relating to employees of
Seller have heretofore been delivered to Purchaser together with,
where prepared by or for Seller, any valuation, actuarial or other
financial reports with respect to each Compensation Commitment for the
last five (5) years. An accurate and complete written summary has been
provided to Purchaser with respect to any Compensation Commitment
which is unwritten.
(c) Each Compensation Commitment:
(i) has been operated, since its inception, in accordance with its
terms;
(ii) is not currently under investigation, audit or review by the
Internal Revenue Service and/or the United States Department of
Labor, and, to the Best Knowledge of Seller, no such action is
contemplated or under consideration;
(iii) has no liability for any federal, state, local or foreign taxes;
(iv) has no claims subject to dispute or litigation except as
disclosed on Schedule Q hereof;
(v) has met all material applicable requirements, if any, of the
Code; and
(vi) has operated since its inception in material compliance with the
reporting and disclosure requirements imposed under any Legal
Requirements and the Code.
Section 4.13 TAXES. Seller, and for any period during all or part of which the
tax liability of any other corporation or other entity was determined to be on a
combined or consolidated basis with Seller, such other corporation or other
entity (as such relates to the Business), have timely filed all federal, state,
local and foreign tax returns, information reports and declarations required to
be filed (or have obtained or timely applied for an extension with respect to
such filing(s) and have disclosed same to Purchaser) and have paid, or made
adequate provision for the payment of, all Taxes (as defined below) which are
due pursuant to said returns or pursuant to an assessment(s) received by Seller
or any such other corporation or entity. As used herein, "Taxes" shall mean all
taxes, fees, levies or other assessments including, but not limited to, income,
excise, property, sales, use, franchise, foreign, withholding, Social Security
and unemployment taxes imposed by the United States, any state, county, local or
foreign government or any agency or subdivision thereof or taxing authority
therein, and any interest, penalties or additions to tax relating to such taxes,
charges, fees, levies or other assessments.
Section 4.14 INVENTORIES AND DEFERRED SERVICES. The values at which Seller's
inventories and deferred services to be performed are carried on the Financial
Statements reflect the normal inventory valuation and contract valuation
policies of Seller and such values are in conformity with GAAP, consistently
applied.
Section 4.15 INSURANCE. All of Seller's Assets utilized in the Business which
are of an insurable character are insured by Seller against loss or damage by
fire and other risks to the extent and in the manner customary for companies
engaged in similar businesses or owning similar assets. Set forth on Schedule T
attached hereto and incorporated herein by this reference verbatim and at length
is a list of all policies for such insurance and Seller previously have
furnished to Purchaser true and complete copies of all such policies. All such
policies are in full force and effect and Seller represent that they have not
received any notification of cancellation or claim with respect thereto. ARTICLE
V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser represents and
warrants to the Seller as follows:
Section 5.1 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation duly
organized and in good standing under the laws of the State of Delaware.
Section 5.2 AUTHORITY, APPROVALS AND CONSENTS. Purchaser has the corporate power
and authority to enter into this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
and validly approved by the Board of Directors of Purchaser and no other
corporate or other proceedings on the part of Purchaser are necessary to
authorize and approve this Agreement and the transactions contemplated hereby.
Purchaser hereby expressly represents that they have fully and properly complied
with all aspects of applicable Delaware and Connecticut corporate law in
entering into this Agreement and for consummating the transactions contemplated
hereunder. This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms. ARTICLE VI COVENANTS
Section 6.1 CONDUCT OF BUSINESS BY SELLER PENDING CLOSING. Seller hereby
covenants, represents and warrants to Purchaser that pending completion of the
Closing unless otherwise agreed to in writing by the Purchaser:
(a) Seller shall not engage in any sale, enter into any transaction,
contract or commitment, incur liability or obligation or make any
disbursement not in the ordinary course of business;
(b) Seller shall carry and continue in force through the Closing, all
existing insurance coverages including without limitation to
theft, liability and other insurance as set forth in Schedule T.
For any loss occurring between the date of this Agreement and the
Closing Date, the Parties rights and liabilities thereunder shall
be determined as follows:
(i) Casualty Prior to Closing. The risk of any loss, destruction
or other damage, other than ordinary wear and tear, between
the date of execution hereof and the completion of the
Closing, shall be solely that of Seller. If before the
completion of the Closing, any of the Seller's Assets,
including, without limitation, Seller's properties,
inventory, machinery or equipment which is the subject of
this Agreement is damaged by fire, casualty or any other
cause: (A) if the replacement or repair cost is Two Hundred
Thousand ($200,000.00) Dollars or more, Purchaser may
either: (x) terminate this Agreement without liability or
(y) complete the Closing hereunder in which event Purchaser
shall be entitled to a credit to the insurance proceeds
arising with respect to such damage, and (B) if such
replacement or repair cost, as the case may be, is less than
Two Hundred Thousand ($200,000.00) Dollars, Purchaser shall
be obligated to complete the Closing hereunder and shall be
entitled to the insurance proceeds arising with respect to
such damage. If there are excess insurance proceeds or
proceeds paid applicable to expenses of Seller (including
legal fees and costs), said excess or other proceeds shall
be paid to Seller.
(c) Seller shall not amend, modify or terminate any agreement related
to the Business to which they are a party except in the ordinary
course of business;
(d) Seller shall use their Best Efforts to preserve the Business and
maintain all of its equipment and records in good order and
keeping the same available for Purchaser and further to preserve
for Purchaser the goodwill of suppliers, customers and others
having business relationships with Seller; and,
(e) Seller shall give Purchaser prompt notice of all events prior to
Closing which may materially relate to any term of this
Agreement.
Section 6.2 ACCESS AND INFORMATION. Subject to applicable laws and the
reasonable requirements of Seller to protect competitively sensitive
information, Seller shall afford to Purchaser and to Purchaser's financial
advisors, legal counsel, accountants, consultants, financing sources and other
authorized representatives reasonable access during normal business hours
throughout the period from the Effective Date to the Closing Date to the books,
records, properties and personnel of Seller and its subsidiaries relating to the
Business and, during such period, shall furnish reasonably promptly to Purchaser
such information as Purchaser may reasonably request. All such information
disclosed to Purchaser shall remain subject to the Confidentiality Agreement.
Without limitation of the other provisions of this Section 6.2, Seller shall
permit Purchaser or its consultants, in accordance with a mutually acceptable
confidentiality agreement entered into by Purchaser, Seller and, if relevant,
Purchaser's consultant, to copy any data concerning the Business which Purchaser
shall deem appropriate. It is Purchaser's intent that if the Closing shall
occur, Purchaser shall have immediate access to all such data in order to
operate the Business and comply with Purchaser's reporting obligations for the
combined operations of Purchaser and the Business under applicable securities
laws. If the Closing shall not occur, such consultant shall return all of such
data within Ten (10) Days in compliance with such confidentiality agreement.
Section 6.3 ADDITIONAL MATTERS. Subject to the terms and conditions herein
provided, each of the Parties hereto agrees to use all reasonable Best Efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws, rules, regulations
or otherwise to consummate and make effective the transactions contemplated
under this Agreement. Section
6.4 PERMITTED FACILITY. The Parties acknowledge that the Xxxxxx Location is a
RCRA Part B permitted facility (Permit Number 34 B 99, as amended). This
facility may not be transferred directly or indirectly through the acquisition
of Seller's Assets to Purchaser until Purchaser has received certain approvals
in writing from the relevant authorities (See Section 4.4 hereof). Purchaser and
Seller agree to use all reasonable Best Efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper and
advisable, in order to obtain the approval of the transfer of this facility as
contemplated by this Agreement from the relevant authorities. Nothing in this
Agreement shall be construed to release or relieve any entity of any liability
to a Government Entity under any police and regulatory statute as the owner or
operator of property that entity owns or operates after the date of transfer.
However, Seller shall only have liability hereunder for acts or omissions which
occurred prior and up to the Closing Date. Section
6.5 ADDITIONAL FINANCIAL INFORMATION. On or prior to the Closing Date, Purchaser
shall have received from Seller the reviewed Financial Statements as of October
31, 2002, December 31, 2001, December 31, 2000, and December 31, 1999 (Purchaser
does hereby acknowledge that it is not receiving audited financial statements
from Seller). Seller shall provide Purchaser with monthly Financial Statements
and income statements for the Business as prepared in the ordinary course and
consistent with past practice by the finance and accounting staff of the
Business for each month after December 2001 until the Closing for which the
Sellers have closed the accounting books of the Business, which statements shall
be delivered within forty-five (45) days after each such closing. Seller
acknowledges that Purchaser shall be conducting an audit of Seller in
conjunction with Purchaser's due diligence hereunder and agrees that it shall
cooperate fully in such audit.
Section 6.6 COVENANT NOT TO COMPETE; NON-SOLICITATION.
(a) Other than as may be explicitly set forth below, for a period of Five
(5) years after the Closing Date, Seller and Xxxxxxxxxxx X. Xxxxx
("Xxxxx") shall not, directly or indirectly, either individually or in
partnership or in conjunction with any person or persons, firm,
association, syndicate, company, corporation, partnership, LLC, LLP,
joint venture or other entity or enterprise, as a principal, agent,
officer, director, shareholder, member, employee, consultant, employee
or in any manner whatsoever, carry on or be engaged in or connected
with or interested in, advise, or permit any of their names or any
part thereof to be utilized, or be employed by any person or persons,
firm, association, syndicate, company, corporation, partnership, LLC,
LLP, joint venture or other entity or enterprise engaged in or
connected with or interested in a business or venture which competes,
in whole or in part, with the Business or any business substantially
similar to the Business or competitive to the Business, provided that
the Seller's covenants under this Section 6.6 (i) shall not apply to
the beneficial ownership of less than five percent (5%) of any class
of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, and (ii) shall not prohibit Seller
from directly or indirectly continuing to operate its remaining
businesses in the same manner as it has operated its remaining
businesses during the past year provided that such operations are not
competitive to the Business being acquired hereunder by Purchaser.
(b) For a period of Five (5) years after the Closing Date, Seller and
Xxxxx shall not, directly or indirectly, solicit, induce or attempt to
solicit or induce, any Person or entity who at the time of Closing was
a customer or client of the Business (a "Customer"), to terminate his,
her or its relationship with the Purchaser for any purpose, including,
without limitation, the purpose of associating with or becoming a
Customer, whether or not exclusive, of Seller or any entity of which
Seller is or becomes a partner, stockholder, principal, member, agent
or trustee, or otherwise solicit, induce, or attempt to solicit or
induce any such Customer to terminate his, her or its relationship
with Purchaser for any other purpose or no purpose, provided that this
Section 6.6 shall not prohibit the Seller from directly or indirectly
continuing to operate its remaining businesses and providing its
services and products to any customers or clients in the same manner
as it has operated its remaining businesses during the past year
provided that such operations are not competitive to the Business
being acquired hereunder by Purchaser.
(c) For a period of Five (5) years after the Closing Date, Seller and
Xxxxx shall not, directly or indirectly, recruit or otherwise solicit
or induce any person who is an employee of, or otherwise engaged by,
Purchaser to terminate his or her employment or other relationship
with Purchaser. In addition, Seller and Xxxxx agree that it and he
shall not, for a period of Five (5) years, solicit for employment any
person who was or is an employee of Seller who accepts employment with
Purchaser at or following the Closing Date.
(d) The Parties acknowledge and agree that the provisions of this Section
6.6 are a material inducement to the Purchaser to enter into and
perform their respective obligations under this Agreement, and for
which Purchaser shall, at Closing, have fully paid good and valuable
consideration. The Parties further agree that, after the Closing, any
breach by Seller or Xxxxx of one (1) or more of the provisions of this
Section 6.6 will cause damages to Purchaser in an amount that is
likely to be difficult to calculate accurately. Accordingly, the
Parties agree that, in the event of any breach under this Section 6.6,
Purchaser shall be entitled to immediate and permanent injunctive
relief to (i) enforce the provisions of this Section 6.6 in any court
of competent jurisdiction along with costs of suit and reasonable
attorneys' fees. Seller, Xxxxx and Purchaser further agree that, as of
the Closing, Purchaser's rights to enforce the provisions of this
Section 6.6 shall be fully paid for and enforceable without reference
to any right of offset, counterclaim or the like, and Seller's
obligations under this Section 6.6 shall not be deemed part of any
executory contract between the Parties, all such claims being hereby
expressly waived by Seller.
(e) The past, present or future activities of certain employees of Seller,
or otherwise, shall in no way be deemed a violation of the warranties,
covenants, representations or indemnification contained in this
Section 6.6 and this Agreement by Seller or Xxxxx.
Section 6.7 INDEMNIFICATION.
The Parties shall indemnify each other as set forth below:
(i) Seller shall indemnify and hold harmless Purchaser and each of
its affiliates or other related entities from and against any and
all losses, damages, liabilities and claims (including legal fees
and costs) arising out of, based upon or resulting from any
inaccuracy as of the date hereof or as of the Closing Date of any
representation or warranty of Seller which are contained in or
made pursuant to this Agreement or any breach by Seller of any
obligations contained in or made pursuant to this Agreement
including, without limitation, with respect to all liabilities,
commitments and obligations of Seller. This indemnification shall
be limited to an amount not exceeding Five Hundred Thousand
($500,000.00) Dollars except in the case of (1) a material
misstatement of fact, (2) material omission, or (3) material
breach of this Agreement by Seller.
(ii) Purchaser shall indemnify and hold harmless Seller from any and
all losses, damages, liabilities and claims arising out of, based
upon or resulting from any inaccuracy as of the date hereof or as
of the Closing Date of any representation or warranty of
Purchaser which is contained in or made pursuant to this
Agreement or any breach by Purchaser of any of its obligations
contained in or made pursuant to this Agreement.
(iii)As a material inducement to Purchaser entering into and
consummating the transaction contemplated hereunder, Seller does
hereby agree to hold Purchaser completely free and harmless and
indemnify Purchaser from and against any and all claims which
Seller has or may have against any stockholder, member, director,
officer, agent or other Person related to Seller whatsoever.
Purchaser shall have no obligation whatsoever to participate in
any litigation or other action between Seller and any
stockholder, member, director, officer, agent or other Person
related to Seller , and if Purchaser is forced to participate in
any such action, Seller shall be solely responsible for any and
all costs incurred by Purchaser in connection therewith,
including, without limitation, all economic costs incurred by
Purchaser and payment of reasonable attorneys fees and costs.
ARTICLE VII CONDITIONS PRECEDENT Section 7.1 CONDITIONS PRECEDENT
TO OBLIGATIONS OF SELLER. The obligation of Seller to effect the
transactions contemplated by this Agreement shall be subject to
the satisfaction or waiver at or prior to the Closing Date of the
following additional conditions:
(a) Purchaser shall have performed in all material respects its
obligations under this Agreement required to be performed by Purchaser
at or prior to the Closing Date and all corporate or other action
necessary to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
shall have been duly and validly taken by Purchaser and by Purchasers'
Board of Directors. All notices to, and declarations, filings and
registrations with and consents, authorizations, approvals and waivers
from, directors, stockholders, members, governmental, judicial and
regulatory bodies required or necessary to consummate the transactions
contemplated hereby (including without limitation the Commonwealth of
Massachusetts Department of Environmental Protection) and all consents
or waivers which, either individually or in the aggregate, if not made
or obtained, would have a Material Adverse Effect, shall have been
made or obtained prior to Closing;
(b) Each of the representations and warranties of Purchaser contained in
this Agreement shall be true and correct in all material respects as
of the date hereof and (having been deemed to have been made again at
and as of the Closing shall be true and correct in all material
respects as of the Closing. Each of the obligations of Purchaser
required by this Agreement to be performed by it at or prior to the
Closing shall have been duly performed and complied with in all
material respects as of the Closing. At the Closing, Seller shall
receive a certificate, dated the Closing Date and duly executed by the
president of Purchaser, to the effect that the conditions set forth in
the preceding two (2) sentences have been fully satisfied.
(c) Purchaser shall continue and/or acquire public liability insurance and
professional liability insurance (or such insurance(s) as presently
exist for the Business) in limits of at least $5,000,000 naming RMJ
Co., Xxxxx and Xxxxxxx Xxxxx as additional insureds and acquire "tail"
coverage with regard to the professional liability insurance to
provide Seller continuing coverage with regard to any undiscovered but
covered liabilities.
(d) OPINION OF PURCHASERS' COUNSEL. Seller shall have been furnished with
the opinion of Xxxxxx Xxxxxx Xxxx, Esq., Xxxxxx Xxxxxx Xxxx, P.C.,
attorneys at law, counsel for Purchaser, dated the Closing Date, in
form and substance satisfactory to Seller and Seller's counsel, to the
effect set forth Article V (Purchaser's Representations) and Article
VII (Conditions Precedent) hereof. In rendering the foregoing
opinions, such counsel may rely as to factual matters upon
certificates or other documents furnished by officers and directors of
Purchaser and by government officials and upon such other documents
and data as such counsel deems appropriate as a basis for their
opinions. Such counsel may specify the jurisdiction or jurisdictions
in which they are admitted to practice, that they are not admitted to
the Bar in any other jurisdiction or experts in the law of any other
jurisdiction and that such opinions are limited accordingly.
(e) Prior to Closing, Seller shall have received documentation from
certain minority shareholders evidencing their consent to the
transactions contemplated hereunder and waiving any rights under the
operating agreement of JES LLC that would prohibit these transactions.
These documents may be tendered in escrow subject to such conditions
as shall be set forth in said documents or an escrow agreement to be
executed prior to Closing by the relevant parties. Further, general
individual and business releases and resignations as
officers/directors shall be executed by all shareholders of JES and
shall be delivered at or prior to closing as a condition precedent to
the obligation of Seller to consummate the transactions contemplated
hereunder. Section 7.2 CONDITIONS PRECEDENT TO OBLIGATION OF THE
PURCHASER. The obligation of Purchaser to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction or
waiver at or prior to the Closing Date of the following additional
conditions:
(a) Seller shall have performed in all material respects its
obligations under this Agreement required to be performed by
Seller at or prior to the Closing Date and all corporate or other
action necessary to authorize the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly
taken by Seller and by Seller's Boards of Directors or members,
as applicable. All notices to, and declarations, filings and
registrations with and consents, authorizations, approvals and
waivers from, directors, stockholders, members, governmental,
judicial and regulatory bodies required or necessary to
consummate the transactions contemplated hereby and all consents
or waivers which, either individually or in the aggregate, if not
made or obtained, would have a Material Adverse Effect, shall
have been made or obtained prior to Closing;
(b) Each of the representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects
as of the date hereof and (having been deemed to have been made
again at and as of the Closing shall be true and correct in all
material respects as of the Closing. Each of the obligations of
Seller required by this Agreement to be performed by it at or
prior to the Closing shall have been duly performed and complied
with in all material respects as of the Closing. At the Closing,
Purchaser shall receive a certificate, dated the Closing Date and
duly executed by the president of Seller, as applicable, to the
effect that the conditions set forth in the preceding two (2)
sentences have been fully satisfied.
(c) OPINIONS OF SELLER'S COUNSEL. Purchaser shall have been furnished
with the opinion of Xxxxxx X. Xxxxxx, Esq., Scully, Nicksa,
Xxxxxx & Xxxxx, LLP, attorneys at law, counsel for Seller, dated
the Closing Date, in form and substance satisfactory to Purchaser
and Purchasers' counsel, as to the following (i) the good
standing and authority of Seller to carry on the Business and own
the Assets, (ii) that all appropriate corporate or business
entity actions necessary to complete the transactions
contemplated hereunder have been taken, (iii) Seller's proper
execution and delivery of this Agreement, the schedules hereto
and any other documents required or necessary hereunder and the
validity and binding legal effect thereof and of Seller's
obligations hereunder, (iv) Seller's good and marketable title to
the Assets, (v) disclosure of litigation, proceedings or
investigations pending or threatened against Seller or which
Seller's counsel is aware, (vi) that this Agreement does not
violate any other agreement of which Seller's counsel is aware,
and (vii) that the documents conveying title to Seller's interest
in the Assets are valid and legally binding. In rendering the
foregoing opinions, such counsel may rely as to factual matters
upon certificates or other documents furnished by officers and
directors of Purchaser and by government officials and upon such
other documents and data as such counsel deems appropriate as a
basis for their opinions. Such counsel may specify the
jurisdiction or jurisdictions in which they are admitted to
practice, that they are not admitted to the Bar in any other
jurisdiction or experts in the law of any other jurisdiction and
that such opinions are limited accordingly. If such counsel is
not authorized to practice law in the State of Connecticut and
the Commonwealth of Massachusetts, Purchaser may require Seller's
counsel to obtain an opinion from counsel authorized to practice
law in such jurisdiction(s).
(d) Purchaser shall have received the Financing Commitment;
(e) Purchaser shall have closed a transaction or transactions in
which Purchaser receives funds and credit lines, etc., which are
sufficient to (i) pay the cash portion of the Purchase Price,
(ii) pay the People's Bank Line of Credit and Term Debt, (iii)
fund the payment of all reasonable costs and expenses of the
transactions described in this Agreement and (iv) provide ongoing
funding for working capital needs and general corporate purposes;
(f) Purchaser shall have received from Seller the reviewed Financial
Statements as of December 31, 2001, December 31, 2000, and
December 31, 1999, by the date(s) set forth in Section 6.5;
(g) Seller's Assets, as of the Closing Date, shall be free and clear
of all liens, charges and encumbrances (except those expressly
assumed hereunder or set forth on Schedule J hereto). The
instruments of assignment, transfer and xxxx of sale of Seller's
Assets to the Purchaser shall comply in all respects with the
terms of this Agreement, in form and substance satisfactory to
Purchaser and its counsel, and shall be sufficient to vest in
Purchaser all of Seller's right, title and interest in respect to
all of Seller's Assets being sold and/or transferred hereunder;
and,
(h) all necessary approvals and authorizations for this transaction
shall have been obtained from the Massachusetts Department of
Environmental Protection or other agencies having jurisdiction.
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
Section 8.1 TERMINATION EVENTS. This Agreement may be terminated at any time
prior to the Closing Date as follows:
(a) by mutual written agreement of Purchaser and Seller;
(b) by Seller (provided that Seller is not then in material breach of
any representation, warranty, covenant or other agreement
contained herein for which Purchaser shall have previously
notified Seller), if there has been a breach by Purchaser of any
of its representations, warranties, covenants or agreements
contained in this Agreement (including the Conditions Precedent
set forth in Section 7.1 hereof not being met or otherwise
satisfied as of the Closing Date), or any such representation and
warranty shall have become untrue, and such breach or condition
has not been promptly cured within ninety (90) days following
receipt by Purchaser of written notice of such breach;
(c) by Purchaser (provided that Purchaser is not then in material
breach of any representation, warranty, covenant or other
agreement contained herein for which Seller shall have previously
notified Purchaser), if there has been a breach by Seller of any
of its representations, warranties, covenants or agreements
contained in this Agreement, or any such representation and
warranty shall have become untrue, and such breach or condition
has not been promptly cured within ninety (90) days following
receipt by Seller of written notice of such breach;
(d) by Purchaser (provided that Purchaser is not then in material
breach of any representation, warranty, covenant or other
agreement contained herein) at or prior to the Closing Date, if
Purchaser is not satisfied with its due diligence review of the
Business or if the conditions precedent recited in Section 7.2
have not been met.
Section 8.2 EFFECT OF TERMINATION/ABANDONMENT; TERMINATION FEE. In the event of
termination of this Agreement pursuant to this Article VIII, written notice
thereof shall be given as promptly as practicable to the other Party to this
Agreement and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned, without further action by any of the Parties hereto.
If this Agreement is terminated as provided herein (a) there shall be no
liability or obligation on the part of Seller, Purchaser, or their respective
officers, directors and Affiliates, and all obligations of the Parties shall
terminate, except for (i) the obligations of the Parties pursuant the
Confidentiality Agreement, and (ii) that a Party that is in material breach of
its representations, warranties, covenants, or agreements set forth in this
Agreement shall be liable for damages occasioned by such breach, including
without limitation any expenses, including the reasonable fees and expenses of
attorneys, accountants and other agents incurred by the other Party in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that Purchaser shall not be deemed to be in material breach
of this Agreement solely by reason of its inability to satisfy one (1) or more
of the conditions set forth in Section 7.2 if Purchaser is attempting to satisfy
such conditions in good faith. ARTICLE IX GENERAL PROVISIONS
Section 9.1 EXPENSES. Each of the Parties hereto shall pay its own fees and
expenses (including the fees of any attorneys, accountants, or others engaged by
such Party) in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are consummated.
Section 9.2 PARAGRAPH HEADINGS AND LANGUAGE INTERPRETATIONS. The paragraph
headings contained herein are for reference only and shall not be considered
substantive provisions of this Agreement. The use of a singular or plural form
shall include the other form, and the use of a masculine, feminine or neuter
gender shall include the other genders, as applicable.
Section 9.3 NOTICES. All notices or other communications required or permitted
hereunder shall be given in writing and shall be deemed sufficient if delivered
by hand or mailed by registered or certified mail, postage prepaid (return
receipt requested), as follows:
If to Seller: X.X. Xxxxx & Co., Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxx, President
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Scully, Nicksa, Xxxxxx & Xxxxx, LLP
00 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000
and Xxxxxx X. Xxxxxx, Xx., Esq.
Cranmore, XxxxXxxxxx & Xxxxxx
00 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
If to Purchaser: VERIDIUM ENVIRONMENTAL CORPORATION
Xxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxxxxx, President
with a copy to: XXXXXX XXXXXX XXXX, ESQ.
XXXXXX XXXXXX XXXX, P.C.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxx , Xxx Xxxxxx 00000
or such other address(es) as shall be furnished in writing by such Party, and
any such notice or communication shall be effective upon receipt.
Section 9.4 ASSIGNMENTS. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns; provided, however, that neither
this Agreement nor any of the rights, interests, or obligations hereunder may be
assigned by any of the Parties hereto without the prior written consent of the
other Party, except that this Agreement and such rights, interests and
obligations may be assigned by Purchaser to one (1) or more Affiliates.
Purchaser agrees that any such assignment shall not relieve Purchaser of its
obligations hereunder. Section
9.5 ENTIRE AGREEMENT. This Agreement (including the Schedules and any Exhibits
hereto) embodies the entire agreement and understanding of the Parties with
respect to the transactions contemplated hereby and supersedes all prior written
or oral commitments, arrangements, understandings and agreements with respect
thereto. There are no restrictions, agreements, promises, warranties, covenants
or undertakings with respect to the transactions contemplated hereby other than
those expressly sat forth herein.
Section 9.6 MODIFICATIONS, AMENDMENTS AND WAIVERS. At any time prior to the
Closing, to the extent permitted by law, (i) Purchaser and Seller may, by
written agreement, modify, amend or supplement any term or provision of this
Agreement and (ii) any term or provision of this Agreement may be waived in
writing by the Party which is entitled to the benefits thereof.
Section 9.7 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, all of which shall be considered one (1) and the same agreement
and each of which shall be deemed an original. Each Party shall receive a fully
signed copy of this Agreement.
Section 9.8 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New Jersey and the United States of America (regardless of the laws
that might be applicable under principles of conflicts of law or international
law) as to all matters including, but not limited to, matters of validity,
construction, effect and performance.
Section 9.9 ACCOUNTING TERMS. All accounting terms used herein which are not
expressly defined in this Agreement shall have the respective meanings given to
them in accordance with generally accepted accounting principles on the date
hereof.
Section 9.10 SEVERABILITY. If any one (1) or more of provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions of this Agreement shall
not be affected thereby. To the extent permitted by applicable law, each party
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
Section 9.11 SPECIFIC PERFORMANCE. Purchaser and Seller recognize that any
breach of the terms this Agreement may give rise to irreparable harm for which
money damages would not be an adequate remedy, and accordingly agree that any
non-breaching party shall be entitled to enforce the terms of this Agreement by
a decree of specific performance without the necessity of proving the inadequacy
as a remedy of money damages. If specific performance is elected as a remedy
hereunder, the electing Party shall be deemed to have waive any claim for other
damages, except reasonable attorneys fees, costs of suit and expenses related to
the enforcement of specific performance.
Section 9.12 CONSENT TO JURISDICTION. Seller and Purchaser hereby submit and
consent to the exclusive jurisdiction of the courts of the State of New Jersey
and the federal courts of the United States of America located in such state in
respect of the interpretation and enforcement of the provisions of this
Agreement, and hereby waive and agree not to assert as a defense in any action,
suit or proceeding for the interpretation or enforcement of this Agreement, that
it is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that this Agreement may not be
enforced in or by said courts or that its property is exempt or immune from
execution, that the suit, action or proceeding is brought in an inconvenient
forum, or that the venue of the suit, action or proceeding is improper. Seller
and Purchaser agree that service of process may be made in any manner permitted
by the laws of the State of New Jersey or the federal laws of the United States
in any such action, suit or proceeding against Seller or Purchaser with respect
to this Agreement, and Seller and Purchaser hereby irrevocably designate and
appoint Xxxxxx X. Xxxxxx, Esq. and Xxxxxx X. Xxxxxx, Xx., Esq. and Xxxxxx Xxxxxx
Xxxx, Esq. as their respective authorized agents upon which process may be
served in any such action, suit or proceeding, it being understood that such
appointment and designation shall become effective without any further action on
the part of Seller or Purchaser. Service of process upon such authorized agent
shall be deemed, in every respect, effective service of process upon Seller or
Purchaser and shall remain effective until Seller or Purchaser shall appoint
another agent for service or process acceptable to the other Party. Seller and
Purchaser agree that final judgment (with all right of appeal having expired or
been waived) against it in any such action, suit or proceeding shall be
conclusive and that the other Party is entitled to enforce such judgment in any
other jurisdiction by suit on the judgment, a certified copy of which shall be
conclusive evidence of the fact and amount of indebtedness arising from such
judgment.
Section 9.13 U.S. CURRENCY. All payments made under this Agreement at any time
shall be made in the lawful currency of the United States of America. Section
9.14 RISK OF LOSS. ------------
(i) The risk of loss or damage to the Assets to be sold to Purchaser
hereunder shall be borne by Seller until title or right to possession
shall have passed to Purchaser on the Closing Date.
(ii) If, prior to the Closing Date, any of the Assets shall be damaged or
destroyed, the Purchase Price shall be adjusted for the value of the
Assets so damages or destroyed and in such case Seller shall be solely
entitled to any insurance proceeds paid or payable thereon.
(iii)If, prior to the Closing Date, any of the Assets shall be damaged or
destroyed or taken in condemnation proceedings or if the Business is
materially affected to an extent which will materially adversely
affect operations similar to those heretofore carried on by Seller,
Purchaser, at its option, may (A) elect to become entitled to any
proceeds of condemnation or insurance with respect to such loss or (B)
cancel this Agreement. If so canceled, this Agreement will be of no
force and effect, and in such event no Party hereto, or any of its
officers, directors, employees, agents, consultants, stockholders or
principals shall have any further liability obligation hereunder with
respect thereto other than as specified herein.
Section 9.15 NO BROKER'S COMMISSIONS. The Parties acknowledge that no broker,
finder or agent was utilized by either Party and that no broker, finder or agent
is entitled to any fee relating to the transaction hereunder.
Section 9.16 TRANSFER DOCUMENTS. Seller agrees that the sale and transfer
hereunder of the Assets shall be made on the Closing Date, as of the Closing
Date, by bills of sale, assignments or other instruments of transfer as shall be
appropriate to vest in Purchaser good, clear and marketable title to the Assets
subject to liabilities expressly assumed by Purchaser pursuant to Section 24.
From and after the Closing Date, upon the request of Purchaser, Seller shall do,
execute, acknowledge and deliver all such further acts, assignments, transfers,
instruments and conveyances as may reasonably be required to convey to and vest
in Purchaser and protect its right, title and interest in and enjoyment of any
of the Assets, and as may be appropriate to otherwise carry out the transactions
contemplated by this Agreement. To the extent that the assignment of any of the
Assets shall require the consent of other parties, this Agreement shall not
constitute an assignment or agreement to assign the same if such action would
constitute a breach of any contract or agreement relating to any of the Assets.
Each of Seller and Purchaser agree to use its Best Efforts to obtain the
consents of other parties to the sale and assignment hereunder to Purchaser. If
any such consent is not obtained, Seller and Purchaser shall cooperate with each
other in a reasonable arrangement designed to provide for Purchaser the benefits
thereof and to permit the performance of remaining unfulfilled obligations
thereunder by Purchaser. Failure of a Party to cooperate shall be actionable to
the extent that said Party is responsible for act or omission complained of by
the other Party.
Section 9.17 ALLOCATION OF PURCHASE PRICE. The Parties shall allocate the
Purchase Price as their respective accountants shall mutually determine and
shall execute and file identical IRS Forms 8594, Asset Acquisition Statement
under Section 1060, of the Internal Revenue Code of 1986, as amended.
Section 9.18 THE PARTIES ACKNOWLEDGE THAT THEY HAVE EACH RECEIVED A COPY OF THIS
AGREEMENT, THAT THEY HAVE READ AND FULLY UNDERSTAND THIS AGREEMENT, AND THAT
THEY HAVE BEEN ADVISED TO SEEK AND HAVE EITHER SOUGHT OR WAIVED INDEPENDENT
LEGAL COUNSEL OF THEIR CHOICE TO AID IN THEIR UNDERSTANDING HEREOF.
Section 9.19 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors, legal
representatives and assigns.
Section 9.20 PARTIES IN INTEREST. Nothing in this Agreement, express or implied,
is intended to confer upon any Person not a Party to this Agreement any rights
or remedies of any nature whatsoever under or by reason of this Agreement.
Section 9.21 FURNISHING INFORMATION; ANNOUNCEMENTS. Sellers shall not issue any
press releases or otherwise make any public statement with respect to the
transactions contemplated hereby without the prior written consent of Purchaser.
Any notification of Sellers' employees of the transactions contemplated hereby
shall be subject to prior approval by Purchaser. Any notices or other
information to be disseminated shall be submitted to Purchaser prior to
distribution or dissemination.
Section 9.22 Force Majeure. Neither Party hereto shall be liable for failure to
perform any obligation under this Agreement if such failure to perform is caused
by the occurrence of any contingency beyond the reasonable control of such
Party, including, without limitation, fire, flood, strike or other industrial
disturbance, failure of transport, accident, war, riot, insurrection, act of God
or order of governmental agency or act of terrorism. Performance shall be
resumed as soon as is possible after cessation of such cause. However, if such
inability to perform continues for more than Ninety (90) days, the other Party
may terminate this Agreement without penalty and without further notice. IN
WITNESS WHEREOF, Sellers and Purchaser have caused this Agreement to be executed
on their behalf by their duly authorized officers or individuals as of the date
first above written.
VERIDIUM ENVIRONMENTAL CORP. X.X. Xxxxx & Co., Inc.
BY:/S/XXXXX X. XXXXXXXX BY:/S/ XXXXXXXXXXX X. XXXXX
--------------------------------- ---------------------------------
NAME: XXXXX X. XXXXXXXX NAME: XXXXXXXXXXX X. XXXXX
TITLE: President TITLE: President
_______________________________________ XXXXXX XXXXXX XXXX, P.C.,
XXXXXXXXXXX X. XXXXX, Individually --------------------------------
AS TO SECTION 6.6 ONLY BY: XXXXXX XXXXXX XXXX, ESQ.,
Escrow Agent
EXHIBIT 10.3
AMENDMENT TO ACQUISITION AGREEMENT
THIS AMENDMENT TO ACQUISITION AGREEMENT is made this 2 day of MAY, 2003, by and
between X.X. Xxxxx & Co., Inc., a corporation duly organized and validly
existing under the laws of the State of Connecticut, with a principal place of
business located at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX ("RMJ Co.") (RMJ Co. is
hereinafter, at times, referred to as the "Seller") and VERIDIUM ENVIRONMENTAL
CORPORATION, a corporation duly organized and validly existing under the laws of
the State of Delaware, with a principal place of business located at 0 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (hereinafter, the "Purchaser"). Purchaser and
Seller are hereinafter, at times, collectively referred to as the "Parties" or
individually, at times, referred to as a "Party", and this First Amendment to
Acquisition Agreement is hereinafter, at times, referred to as the "First
Amendment."
Background:
A. Seller and Purchaser entered into that certain Acquisition Agreement dated
December 11, 2002 (the "Acquisition Agreement").
B. Seller and Purchaser desire
to amend the Acquisition Agreement as hereinafter set forth.
NOW, THEREFORE, for
good and valuable consideration, receipt of which is mutually acknowledged,
Purchaser and Seller agree to amend the Acquisition Agreement as follows:
1. Capitalized terms used in this First Amendment and not defined herein shall
have the meanings ascribed to them in the Acquisition Agreement.
2. Paragraph
2.4 of the Acquisition Agreement is amended to add the following sentence to the
end of that section:
A The amounts payable by Seller to Xxxxxxx Xxxxxx, Xxxxxxx
X. Xxxxxxxx, Xx., Xxxx Xxxxxxxx, Xxxxx Xxxxx, Green Management, Corp. and Xxxxxx
Properties, LLC are liabilities to be assumed by Purchaser hereunder.
3. Paragraph 2.6 of the Acquisition Agreement of Sale is amended to read in full
as follows: A Section 2.6 PURCHASE PRICE; DEPOSIT; PROMISSORY NOTE; ESCROW; DEBT
CONVERSION.
(a) PURCHASE PRICE. In consideration for Seller's Assets, Purchaser shall pay
to Seller at Closing (i) the sum of Two Million Two Hundred Thousand and
00/100 ($2,200,000.00) Dollars, payable as follows: (A) Fifty Thousand and
00/100 ($50,000.00) Dollars to be paid pursuant to Section 2.6 (b) hereof,
said amount to be delivered to Seller at Closing, (B) delivery to the
Escrow Agent of a Promissory Note in the form of Exhibit A-1 attached
hereto and incorporated herein by this reference in the principal amount of
Two Million One Hundred Fifty Thousand and 00/100 ($2,150,000.00) Dollars
(hereinafter "Note I") , and (ii) delivery to the Escrow Agent of a
Promissory Note in the amount of Three Hundred Thousand and 00/100
($300,000.00) Dollars, in the form of Exhibit A-2 attached hereto and
incorporated herein by this reference (hereinafter "Note II")
(collectively, the "Purchase Price"), subject to any further applicable
working capital adjustment(s) to be made in accordance with Section 2.7
hereof.
(b) DEPOSIT. Purchaser has deposited with its counsel the sum of Fifty Thousand
and 00/100 ($50,000.00) Dollars, in corporate funds, said sum to be held by
such counsel as a deposit to be credited to Purchaser against the Purchase
Price, and to be released to Seller at Closing (hereinafter, the
_Deposit"). If the transactions contemplated are not consummated,
Purchaser_s counsel is hereby authorized to return said Deposit to
Purchaser upon demand.
(c) (i) NOTE I. Note I which Purchaser shall execute in favor of Seller at
Closing and which shall be held by the Escrow Agent pursuant to the terms
and conditions set forth in Section 2.6(d) hereof shall provide for an
initial principal balance of Two Million One Hundred Fifty Thousand and
00/100 ($2,150,000.00) Dollars, subject to adjustment as determined in
accordance with Section 2.7. The Promissory Note shall provide for the
accrual of interest at the annual rate of Three (3.00%) Percent on the
outstanding principal balance thereof. A principal payment of Two Hundred
Fifty Thousand and 00/100 ($250,000.00) Dollars shall be due and payable to
Seller thereunder within Ten (10) days following Purchasers_ closing of a
financing transaction with its equipment asset based lender (documents
relative to such financing transaction to be supplied to Seller and its
counsel as soon as possible) and second Two Hundred Fifty Thousand and
00/100 ($250,000.00) Dollars payment shall be due and payable to Seller
thereunder within Sixty (60) days following Purchasers_ closing of its
financing transaction with its equipment asset based lender. Failure of
purchaser to make either of such payments shall constitute an event of
default thereunder and all amounts due under this note shall be fully due
and payable on November 30, 2003. If the full principal balance of Note I
is paid in full on or before November 30, 2003, the interest due under Note
I shall be waived in full (and shall be deemed to have been incorporated
into the principal balance of said note for purposes of avoiding imputed or
unstated interest for federal and state income tax purposes). If Note I is
not paid in full by the due date of November 30, 2003, the interest then
due under Note I shall be incorporated into the principal balance of Note I
as of November 30, 2003 and
Note I shall thereafter bear interest at the default rate of Twelve (12.00%)
Percent per annum. At Seller_s option, Note I may be converted into capital
stock of Purchaser at a Twenty-Five (25.00%) Percent discount to the then
existing current market value of Purchaser_s capital stock. If Seller does not
exercise the conversion rights granted herein, Purchaser shall have the right to
make prepayment(s) on Note I, in whole or in part, without premium or penalty,
in amounts not less than Ten Thousand and 00/100 ($10,000.00) Dollars, with
interest to adjust on the then outstanding principal balance of Note I. Note I
shall be secured by (A) a perfected, unconditional secondary lien position on
Purchaser_s Vulcan Waste, Inc. assets (evidenced by a Loan and Security
Agreement and filed UCC-1 Financing Statements), (B), a pledge of Purchasers'
Xxxxx Environmental Services (NorthEast), Inc. stock, (C) a pledge of
Purchasers' One Hundred (100%) Percent interest in Enviro-Safe Corp., Inc.
stock, and (D) a pledge of Purchasers' membership units in Xxxxx Environmental
Services, LLC. Items (B), (C) and (D) above shall be evidenced by a Pledge and
Security Agreement by and between Seller and Purchaser and the stock and
membership units shall be endorsed over to Seller at Closing to be held by the
Escrow Agent pursuant to the terms of said Pledge and Security Agreement. Seller
shall be receiving a first priority security position relative to the Xxxxx
Environmental Services (NorthEast), Inc. stock and the Xxxxx Environmental
Services, LLC membership units.
(ii) NOTE II. Note II which Purchaser shall execute in favor of Seller at
Closing and which shall be held by the Escrow Agent pursuant to the terms
and conditions set forth in Section 2.6(d) hereof shall provide for an
initial principal balance of Three Hundred Thousand and 00/100
($300,000.00) Dollars, subject to adjustment as determined in accordance
with Section 2.7. Note II shall provide for the accrual of interest at the
annual rate of Six (6.00%) Percent on the outstanding principal balance
thereof, said interest to be computed and paid annually on the anniversary
of the Closing Date. The principal balance of Note I shall be paid as
follows: (i) Fifty (50.00%) Percent shall be due and payable on January 1,
2004 and (ii) the remaining Fifty (50.00%) Percent shall be due and payable
on January 1, 2008 (said dates being hereinafter referred to as the _Due
Dates"). At Seller_s option, Note II may be converted into capital stock of
Purchaser on each applicable Due Date at a Twenty-Five (25.00%) Percent
discount to the then existing current market value of Purchaser_s capital
stock. These conversion options shall expire on January 1, 2008. If Seller
does not exercise the conversion rights granted herein, Purchaser shall
have the right to make prepayment(s) on Note II, in whole or in part,
without premium or penalty, in amounts not less than Ten Thousand and
00/100 ($10,000.00) Dollars, with interest to adjust on the then
outstanding principal balance of Note II. The original principal amount of
Note II was contemplated as being Five Hundred Thousand ($500,000.00)
Dollars. The aforesaid payments are to be made at Closing. A default
interest rate of Twelve (12%) Percent per annum shall be applicable under
Note II. The foregoing proposed Two Hundred Thousand ($200,000.00) payment
and the language describing same shall be personal to the parties hereto,
shall not constitute an admission on the part of Seller with regard to the
proposed payment, the amount and/or the division of same nor shall there be
any intention of the parties hereto to create any rights in any other
parties who are not signatories to this Agreement or an amendment thereto,
which rights are hereby expressly disclaimed.
(iii)If Purchaser is in default under Note I or Note II or otherwise as to sums
due Seller under the Acquisition Agreement, then, upon such occurrence of
default, Seller shall have the right to setoff any indebtedness or
obligations it has under the Acquisition Agreement relative to the
indemnification provisions thereof.
(iv) During the period that any amounts are owed by Purchaser to Seller under
Note I and Note II or otherwise under the Acquisition Agreement,
Xxxxxxxxxxx X. Xxxxx shall serve as a director of Purchaser or its parent
company or any successor thereto.
(v) As additional collateral to Seller to secure the obligations of Purchaser
under Note I and Note II or otherwise under the Acquisition Agreement,
Xxxxx X. Xxxxxxxx shall execute an unlimited personal guaranty of such
obligations in favor of Seller.
(d) ESCROW ACCOUNT. (i) Scully, Nicksa, Xxxxxx & Xxxxx, LLP, Attorneys at Law,
shall serve as escrow agent hereunder (hereinafter, the _Escrow Agent").
The Escrow Agent shall hold the Promissory Notes pursuant to the terms set
forth in Section 2.6(c) above and shall release same to Seller once the
adjustments in Section 2.7 have been finalized.
(ii) The Parties hereto agree that the Escrow Agent is acting as a
stakeholder only and for the convenience and at the request of Seller
and Purchaser, and the Escrow Agent shall be responsible only for the
safekeeping of the Promissory Notes, in accordance with the terms of
this Agreement. In taking any action hereunder, the Escrow Agent shall
be entitled to rely upon any written notice, paper or other document
believed by it to be genuine and signed or presented by the proper
person, or upon any evidence deemed by it to be sufficient, and in no
event shall the Escrow Agent be liable for any act performed or
omitted to be performed by it hereunder in the absence of gross
negligence or willful misconduct.
(iii)The Escrow Agent shall be under no obligation to institute or to
defend any action, suit or legal proceeding in connection herewith or
to take any other action likely to involve it in expense unless first
indemnified to its satisfaction. The Escrow Agent may consult with
counsel in connection with its duties hereunder and shall be fully
protected by any action taken, suffered or permitted by it in good
faith in accordance with the advice of such counsel. In the event of a
controversy between Seller and Purchaser with respect to any matter or
thing relating to any term or condition of this Agreement, or if the
Escrow Agent should receive or become aware of conflicting demands for
claims with respect to any such matters, the Escrow Agent shall be
entitled to refuse to comply with any such demand or claim, and in
such event the Escrow Agent may continue to represent Seller and is
hereby authorized (A) to keep and retain the Promissory Notes until it
shall have received written notice from Seller and Purchaser, jointly,
that the controversy between Seller and Purchaser has been settled
either by agreement or by final judgment of a court of competent
jurisdiction (with no appeal having been taken or the time for appeal
having expired), or (B) to deliver the Promissory Notes into the
applicable court of record in Passaic County, New Jersey, whereupon
the Escrow Agent shall be relieved of any further duties or
obligations under this Agreement.
(iv) The Escrow Agent (or any successor) may at any time during the term
hereof resign its position hereunder by giving written notice thereof
to the Parties hereto. Such resignation shall be effective upon the
appointment of a successor reasonably acceptable to Purchaser and
Seller who shall have agreed to serve pursuant to the terms hereof.
Upon receipt of such resignation, such other Parties shall use their
Best Efforts to insure the prompt appointment of a successor. Seller
and Purchaser hereby agree to indemnify, defend and hold the Escrow
Agent harmless from and against any loss, cost or expense arising out
of or relating to any action taken or thing done by the Escrow Agent
in connection with this Agreement or any failure by it to take any
action required to be taken by it in connection herewith, provided,
however, that any such action or failure to act shall have been taken
or omitted in good faith, and not as a result of the Escrow Agent's
gross negligence or willful misconduct.
(v) Purchaser acknowledges and agrees that the Escrow Agent is and has
been counsel to Seller in connection with the preparation of this
Agreement. Seller and Purchaser hereby agree that to the extent that
the Escrow Agent's serving hereunder may create a conflict of interest
or an appearance of a conflict of interest, any such conflict of
interest is hereby waived. Purchaser also acknowledges and agrees that
the Escrow Agent serving as escrow holder shall in no manner
whatsoever disqualify or be cause for disqualification of the Escrow
Agent with respect to the current or future representation of Seller
arising out of or involving any matter or issue relating to the
Promissory Notes or this Agreement; it being understood and agreed
that Seller will continue to be represented by the Escrow Agent in
connection with the foregoing matters.
(e) DEBT CONVERSION/DEBT. The Parties acknowledge that the transaction
contemplated hereunder includes Purchaser_s obligation to repay a debt owed
to RMJ Co. from JES INC. in the approximate amount of TWO HUNDRED EIGHTY
THOUSAND and 00/100 ($280,000.00) Dollars (the _Debt"). The Parties have
agreed that in the sole discretion of Purchaser, to be exercised prior to
or at Closing, Purchaser shall satisfy this debt, in whole or in part, by
converting such debt (or portions thereof) into capital stock of Purchaser
(_KBF Securities") at a price-protected value of Ten ($0.10) Cents per
share of Purchaser_s capital stock. The exact amount of the Debt shall be
determined and confirmed immediately prior to Closing. In addition, as
aforesaid, Purchaser agrees to assume Seller_s indebtedness related to the
Vehicles and the People_s Bank Line of Credit and Term Debt, to be
determined and confirmed immediately prior to Closing.
3. Paragraph 3.1 of the Acquisition Agreement is amended to provide that
closing shall be held on or about APRIL 30, 2003 (the _Closing Date").
4. The Indemnification contained in Paragraph 6.7(a) of the Acquisition
Agreement is hereby reduced from Five Hundred Thousand ($500,000.00)
Dollars to One Hundred Fifty Thousand ($150,000.00) Dollars.
5. Preparation and Negotiation of the Acquisition Agreement and this First
Amendment. Each Party hereto has participated equally in the preparation
and negotiation of the Acquisition Agreement and this First Amendment, and
each Party hereto hereby unconditionally and irrevocably waives to the
fullest extent permitted by law any rule of interpretation or construction
requiring that the Acquisition Agreement and this First Amendment be
interpreted or construed against the drafting party.
6. Section 2.7(b) of the Acquisition Agreement is hereby modified to read in
full as follows:
"As used herein, the term "Working Capital" shall mean the sum of the asset
accounts (including without limitation cash, accounts receivable, prepaid
expenses and deposits, which shall be transferred to Purchaser at Closing)
utilized in preparing the Initial Working Capital Statement minus the sum of
liability accounts (including without limitation the trade accounts payable,
accrued expenses, People's Bank Line of Credit, and other applicable
liabilities) utilized in preparing the Initial Working Capital Statement. The
"Working Capital" excess (deficiency) will be increased (decreased) by the
payments made by Xxxxx Environmental Services (North East), Inc., to Xxxxxx
Properties, LLC, (Xxxxxxx X. Xxxxxxxx, Xx. and Xxxx Xxxxxxxx) for $100,000 and
all payments made to Xxxxxxx Xxxxxx since December 31, 2002. The term "Working
Capital Statement" shall mean the statement of Working Capital of the Business
to be prepared by Seller as of the Closing Date in accordance with this Section
2.7(b) and to be delivered to Purchaser as promptly as practicable, and as same
shall be adjusted for accuracy following the Closing Date, or other claims,
liabilities or expenses attributable to Seller and not disclosed to Purchaser
prior to Closing, within ninety (90) days after the Closing Date, which
statement shall include as a liability, without limitation, all collected and
on-site waste (deferred revenue) and shall utilize inventories conducted on the
Closing Date of waste at the Farmington Location and Xxxxxx Location. Any costs,
damages or expenses, including, without limitation, attorneys fees and costs and
accounting fees and costs, relating to any breach by Seller of any
representation, warranty, covenant or other obligation of Seller contained
herein shall be an adjustment to be made to the Purchase Price and reflected as
a reduction in the Promissory Note. Specifically excluded from the foregoing
shall be any amounts payable by Seller for People's Bank Term Debt (relative to
Seller's Business as set forth on Schedule J), Xxxxxxx Xxxxxx, Xxxxxxx X.
Xxxxxxxx, Xx., Xxxx Xxxxxxxx, Xxxxx Xxxxx, Green Management Corp and Xxxxxx
Properties, LLC, and the obligation owed by JES INC to RMJ Co. defined in
Section 2.6(e) hereof. If there shall be an adjustment to the Purchase Price
hereunder, any amount up to One Hundred Fifty Thousand ($150,000.00) Dollars
shall first be adjusted against the cash portion of the Purchase Price and any
amount over and above One Hundred Fifty Thousand ($150,000.00) Dollars shall be
adjusted against the Promissory Note." 7. Except as amended by this First
Amendment, the Acquisition Agreement remains unmodified and in full force and
effect. 8. The Parties acknowledge that Veridium Environmental Corporation
(f/k/a Veridium Corporation) was legally formed subsequent to the date of the
Acquisition Agreement. The Parties do hereby waive any and all claims relative
hereto, including but not limited to includability or unenforceability. The
Parties acknowledge that the Acquisition Agreement is a valid, legally binding
contract between the Parties. IN WITNESS WHEREOF, the parties hereto have
executed this First Amendment as of the day and year first above written.
VERIDIUM ENVIRONMENTAL X.X. Xxxxx & Co., Inc.
CORPORATION
BY:/s/ XXXXX X. XXXXXXXX BY:/s/ XXXXXXXXXXX X. XXXXX
------------------------- -----------------------------
NAME: XXXXX X. XXXXXXXX NAME: XXXXXXXXXXX X. XXXXX
TITLE: President TITLE: President
