EXHIBIT 10.54
PURCHASE AND SALE OF ASSETS AGREEMENT
THIS PURCHASE AND SALE OF ASSETS AGREEMENT (the "Agreement") is
executed and delivered as of March 15, 1998, between ENVIRONMENT MANAGEMENT,
INC., a Texas corporation ("Buyer"); TRAPMASTER, INC., a Texas corporation
("Seller"); and XXXX XXXXXX, XXX XXXXXX AND XXXXX XXXXXX, its sole stockholders
("Stockholders").
P R E M I S E S:
WHEREAS, Seller operates a non-hazardous commercial waste
transportation business in the San Antonio, Texas area (the "Business");
WHEREAS, Buyer desires to purchase and acquire certain assets,
properties and contractual rights of Seller used in connection with the Business
and Seller desires to sell such assets, properties and contractual rights to
Buyer, all in accordance with the terms and conditions set forth in this
Agreement;
WHEREAS, Stockholders hold all of the outstanding capital stock of
Seller and Buyer is unwilling to enter into this Agreement without the covenants
and promises of Stockholders herein set forth; and
NOW, THEREFORE, in consideration of Ten Dollars ($10), the mutual
promises and covenants herein contained and other good and valuable
consideration, received to the full satisfaction of each of them, the parties
hereby agree as follows:
A G R E E M E N T:
ARTICLE 1. SALE OF ASSETS
SECTION 1.1 DESCRIPTION OF ASSETS. Upon the terms and subject to the
conditions set forth in this Agreement, Seller does hereby grant, convey, sell,
transfer and assign to Buyer the following assets, properties and contractual
rights of Seller, wherever located, subject to the exclusions hereinafter set
forth:
(a) all equipment used or for use in the operation of the Business,
including, without limitation, the equipment listed on Schedule 1.1(a)
attached hereto and made a part hereof (the "Equipment");
(b) all of the motor vehicles used or for use in the Business, and
all radios, attachments, accessories and materials handling equipment now
located in or on such motor vehicles (the "Rolling Stock"), as the same
are listed and
more completely described by manufacturer, model number and model year on
Schedule 1.1(b), attached hereto and made a part hereof;
(c) a copy of all manual and automated routing and billing
information;
(d) all contractual rights of Seller with Seller's customers
(whether oral or in writing) relating to the conduct of the Business (the
"Customer Accounts"), and all commitments, lists, leases, permits,
licenses, consents, approvals, franchises and other instruments relating
to the Customer Accounts (the "Related Approvals"); a complete and
accurate list of the Customer Accounts and the Related Approvals is set
forth on Schedule 1.1(d), attached hereto and made a part hereof, and true
and complete copies of all Customer Accounts and Related Approvals shall
be delivered to Buyer simultaneously with the execution and delivery of
this Agreement;
(e) all of Seller's inventory of parts, tires and accessories of
every kind, nature and description used or for use in connection with the
Business (the "Inventory");
(f) subject to Section 4.2, all right, title and interest of Seller
in and to all trade secrets, proprietary rights, symbols, trademarks,
service marks, logos and trade names used in the Business;
(g) all permits, licenses, franchises, consents and other approvals
relating to the Business set forth on Schedule 1.1(g), attached hereto and
made a part hereof (the "Permits") (true and complete copies of which
shall be delivered to Buyer simultaneously with the execution and delivery
of this Agreement);
(h) all of Seller's right, title, estate and interest in and to the
Assumed Leases (hereinafter defined);
(i) all of Seller's existing documents, files and other material
related to all current or past customers of the Business;
(j) all of Seller's shop tools, nuts and bolts relating to the
Business; and
(k) all of the goodwill of the Business.
All of the foregoing assets, properties and contractual rights are hereinafter
sometimes collectively called the "Assets."
SECTION 1.2 EXCLUDED ASSETS. The parties agree that
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there shall be excluded from the Assets the following which are not being sold
to Buyer pursuant to this Agreement (the "Excluded Assets"): (a) all cash on
hand and on deposit of Seller, except as set forth in Section 1.5 hereof; (b)
all accounts receivable of Seller ("Accounts Receivable") as of the close of
business on the date of Closing (hereinafter defined); (c) all real property
(whether owned or leased) and all buildings on and fixtures to all real property
of Seller (whether owned or leased); (d) all contracts and contract rights and
obligations of Seller (whether oral or in writing) other than the Customer
Accounts and all commitments, lists, leases, permits, licenses, consents,
approvals, franchises and other instruments not relating to the Customer
Accounts or the Business; (e) all employment contracts to which Seller is a
party or by which Seller is bound; (f) the Terminix Agreement (hereinafter
defined); (g) subject to Section 4.2, all of Seller's right, title and interest
in and to the name "Trapmaster" and the right to use such name (the "Business
Name"); and (h) any items listed on Schedule 1.2 hereof.
SECTION 1.3 NON-ASSIGNMENT OF CERTAIN CUSTOMER ACCOUNTS.
Notwithstanding anything to the contrary in this Agreement, to the extent that
the assignment hereunder of any Customer Account shall require the consent of
any third party, neither this Agreement nor any action taken pursuant to its
provisions shall constitute an assignment or an agreement to assign if such
assignment or attempted assignment would constitute a breach thereof or result
in the loss or diminution thereof; provided, however, that in each such case,
Seller shall use its best efforts to obtain the consent of such other party to
such assignment to Buyer. If such consent is not obtained, Seller shall
cooperate with Buyer in any reasonable arrangement designed to provide for Buyer
the benefits under any such Customer Account, including, without limitation, an
adjustment of the purchase price set forth in Section 2.1 hereof and enforcement
for the account and benefit of Buyer, of any and all rights of Seller against
any other person arising out of the breach or cancellation of any such Customer
Account by such other person, or otherwise. Attached hereto as Schedule 1.3 is a
list of all Customer Accounts requiring consent to their assignment.
SECTION 1.4 SELLER ACCOUNTS RECEIVABLE. (a) Buyer shall have no
liability or obligation whatsoever to Seller in connection with the Accounts
Receivable and Buyer shall not be responsible for collecting the Accounts
Receivable. However, if Buyer receives any payments which are designated by the
customer as being toward such Accounts Receivable, then Buyer shall forward such
payments to Seller as set forth in Section 1.4(b) below. Attached hereto as
Schedule 1.4 is a true and complete list of all Accounts Receivable of Seller as
of February 26, 1998.
(b) All sums representing Accounts Receivable as set
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forth on Schedule 1.4 collected by Buyer from the customers set forth on
Schedule 1.1(d) shall be conclusively presumed to be receipts from the
collection of the oldest Accounts Receivable of such customer unless the
customer specifically indicates otherwise in writing. All such sums
received by Buyer shall be remitted to Seller on a regular basis (but at
least monthly), together with a reasonably detailed list of the sources
thereof. Seller shall be entitled to take such action as may be necessary
in order to collect its unpaid Accounts Receivable; provided, however,
that Seller agrees not to deliver any such Accounts Receivable to a
collection agency or institute any litigation related to any Accounts
Receivable without the prior written consent of Buyer, which consent shall
not be unreasonably withheld.
SECTION 1.5 PRORATION OF CASH ON HAND. The parties shall prorate, as
of the close of business on the date of Closing, all cash on hand or on deposit
with Seller consisting of sums paid to Seller pursuant to the advance billing
practice of Seller or otherwise representing a prepayment to Seller of services
to be rendered after the Closing. Seller shall be entitled to all such sums
allocable to services performed on or before the close of business on the date
of Closing and Buyer shall be entitled to all such sums allocable to services to
be performed thereafter.
ARTICLE 2. PURCHASE PRICE
SECTION 2.1 AGGREGATE PURCHASE PRICE. Subject to Section 2.3 below,
on the Closing Date (hereinafter defined) U S Liquids Inc., a Delaware
corporation ("Parent") shall pay to Seller for the Assets and the restrictive
covenants set forth herein: (A) the sum of $1,041,000 in immediately available
funds; and (B) that total number of shares of the common stock of Parent, $.01
par value, which shall have an aggregate Agreed Value of $1,041,000 calculated
in accordance with Section 2.2 below (the "Parent Stock").
SECTION 2.2 AGREED VALUE OF PARENT STOCK. For purposes of this
Agreement, the "Agreed Value" per share of Parent Stock shall be the average of
the closing prices of a share of the common stock of Parent, $.01 par value per
share, on the American Stock Exchange as reported in THE WALL STREET JOURNAL for
a period of five consecutive trading days. The days used to obtain the average
will be the tenth trading day through the sixth trading day before the date of
Closing.
SECTION 2.3 PAYMENT OF DEBTS OF SELLER. Seller agrees that on the
Closing Date all of the Assets (whether owned or leased) shall be delivered to
Buyer free of all debts, liens and other encumbrances whatsoever (including bank
debt, lease payments and lease end buy-out provisions) except the Assumed
Leases.
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Seller shall be responsible, at its sole cost, for the payment in full of all
such debts, liens and other encumbrances. At Seller's request and direction,
Buyer agrees to cause a portion of the purchase price set forth in Section
2.1(A) above otherwise payable to Seller on the Closing Date to be paid directly
to creditors of Seller. Set forth on Schedule 2.3 is a listing of all debts,
liens and other encumbrances relating to the Assets and their respective payoff
amounts as of the Closing Date.
SECTION 2.4 ASSUMPTION OF LEASES. Buyer agrees to assume the
obligations of Seller under the leases related to three motor vehicles used in
the operation of the Business (the "Assumed Leases") and which are listed as
part of the Rolling Stock, to the extent (and only to the extent) that such
obligations arise and are required to be performed after the Closing Date.
ARTICLE 3. CLOSING
SECTION 3.1 TIME AND PLACE OF CLOSING. Unless the parties otherwise
agree, this transaction shall be closed simultaneously with the execution and
delivery of this Agreement and the other documents and instruments referred to
in this Article 3 (the "Closing") to be effective on March 15, 1998 (the
"Closing Date"). The Closing shall take place at a location mutually acceptable
to Buyer and Seller.
SECTION 3.2 DELIVERIES BY SELLER AND STOCKHOLDERS. At the Closing,
Seller and Stockholders shall deliver to Buyer, all duly executed:
(a) a General Conveyance, Assignment and Xxxx of Sale, in form and
substance satisfactory to Buyer and Seller, conveying, selling,
transferring and assigning to Buyer all of the Assets (the "Xxxx of
Sale");
(b) motor vehicle Certificates of Title and/or registrations to the
Rolling Stock, properly endorsed to Buyer;
(c) a receipt acknowledging payment by Buyer of the purchase price;
(d) a release by Seller and Stockholders for claims against Buyer or
the Assets (not including any claims pursuant to this Agreement);
(e) fully executed consents to the assignment of the Customer
Accounts set forth on Schedule 1.3, if any, in form and substance
satisfactory to Buyer;
(f) the documents evidencing Seller's change of name
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as required by Section 1.6;
(g) a certified copy of the resolutions of the shareholders and
directors of Seller authorizing the execution of this Agreement, the sale
of the Assets to Buyer, and the consummation of the transactions
contemplated herein, along with an incumbency certificate of Seller; and
(h) such other separate instruments of sale, assignment or transfer
reasonably required by Buyer.
SECTION 3.3 DELIVERIES BY BUYER. At the Closing, Buyer shall deliver
to Seller the Purchase Price set forth in Section 2.1(A) and (B).
ARTICLE 4. COVENANTS
SECTION 4.1 USE OF BUSINESS NAME BY BUYER. Seller and Stockholders
covenant not to use the Business Name or any similar names from and after the
close of business on the date of Closing, in connection with sales and service
to customers or potential customers in the Territory.
SECTION 4.2 CONSULTING AND ROYALTY AGREEMENT WITH TERMINIX.
(a) Buyer has received and reviewed a copy of the Consulting and
Royalty Agreement dated May 1, 1996, between Seller and The Terminix
International Company, L.P. (the "Terminix Agreement"). Buyer acknowledges
that the Terminix Agreement grants to Terminix exclusive rights to the
name "Trapmaster" and to the use of the Trapmaster processes and protocols
outside of the geographic area described on Exhibit B attached hereto and
made a part hereof. Buyer, for itself and its officers, employees,
affiliates, successors and assigns, covenants and agrees with Seller and
Stockholders not to use the name, processes or protocols of Trapmaster
outside such geographic area and to indemnify and hold Seller and
Stockholders harmless against any breach of the foregoing covenant.
(b) Seller and Stockholders agree that Buyer is not acquiring any
rights in nor assuming any obligations relating to the Terminix Agreement
except as set forth in clause (a) above. Seller further covenants and
agrees with Buyer that Buyer shall have the exclusive right to use the
Business Name within the geographic area set forth in Exhibit B and that
Seller has not previously granted such rights to any other party.
SECTION 4.3 NO DEFENSE OF BUSINESS NAME. Buyer
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acknowledges that neither Seller nor any Stockholder will have any obligation to
Buyer to defend or protect the name "Trapmaster" against unauthorized use by
third parties. Notwithstanding the foregoing, Seller and Stockholders each agree
not to use the name Trapmaster within the geographic area set forth in Exhibit
B.
SECTION 4.4 ACCESS. Seller and Stockholders agree to provide Buyer
with full access to all of the computer software and programs of Seller
containing customer information as Buyer may consider necessary to assist Buyer
with the transition of the operation of the Business. Access will be provided at
all reasonable times and upon reasonable notice from Buyer.
SECTION 4.5 TRANSITION. Neither Seller nor Stockholders will take
any action that is designed or intended to have the effect of discouraging any
customer or business associate of Seller from maintaining the same business
relationships with Buyer after the Closing that it maintained with Seller before
the Closing. Seller and Stockholders will refer all customer inquiries relating
to the Business to Buyer from and after the Closing. Further, Seller and
Stockholders agree that for a period of 90 days following the date of Closing,
they will, without additional consideration, assist Buyer with the orderly
transition of the operations of the Business from Seller to Buyer. Such
assistance shall include, without limitation, Seller and Stockholders assisting
Buyer to obtain contracts with Seller's current customers, routing transition
activities and development of sufficient information to allow Buyer to compile
accurate customer xxxxxxxx.
SECTION 4.6 SURVIVAL. Each of the covenants set forth in this
Article 4 shall survive the Closing and the transfer of the Assets.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER
AND STOCKHOLDERS
SECTION 5.1 Seller and Stockholders, jointly and severally,
represent and warrant to Buyer that:
(a) AUTHORITY.
(i) Seller is a corporation duly formed, validly existing and
in good standing under the laws of the State of Texas. The execution
and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the compliance by Seller and Stockholders
with the terms of this Agreement do not and will not conflict with
or result in a breach of any terms of, or constitute a default
under, the articles of incorporation or bylaws of Seller, or any
instrument
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or other agreement to which Seller or Stockholders are a party or by
which Seller or Stockholders are bound. This Agreement constitutes a
valid obligation of Seller and Stockholders enforceable against
Seller and Stockholders in accordance with its terms except as
limited by bankruptcy, insolvency, reorganization or other such laws
concerning the rights of creditors.
(ii) Stockholders are each competent, under no duress or legal
restraint, and have all necessary authority to enter into this
Agreement, perform their obligations hereunder and consummate the
transactions contemplated hereby.
(iii) All of the issued and outstanding shares of Seller are
owned of record and beneficially by Stockholders, free and clear of
all liens, security interests and encumbrances whatsoever.
(b) COMPLIANCE WITH LAW. Neither Seller nor any of the Stockholders
is in default under any applicable federal, state or local laws, statutes,
ordinances, permits, licenses, orders, approvals, variances, rules or
regulations or judicial or administrative decisions ("Applicable Laws")
which would have an adverse effect upon the Assets or the Business. Seller
has been granted all licenses, permits, consents, authorizations and
approvals from federal, state and local government regulatory bodies
necessary or desirable to carry on the Business, all of which are
currently in full force and effect. Each of the Assets complies in all
respects with all federal, state and local laws, statutes, ordinances,
permits, licenses, approvals, rules and regulations applicable thereto.
(c) EQUIPMENT. Listed on Schedule 1.1(a) hereto is a complete and
accurate list of all Equipment used or for use in connection with the
Business. Each piece of Equipment is in good working order and repair.
(d) ROLLING STOCK. Listed on Schedule 1.1(b) hereto is a complete
and accurate list of all Rolling Stock. Each motor vehicle, attachment,
accessory and piece of materials handling equipment comprising the Rolling
Stock is in good working order and repair.
(e) CUSTOMER ACCOUNTS. Listed on Schedule 1.1(d) hereto is a
complete and accurate list of the Customer Accounts as of the date hereof.
Except as set forth on Schedule 1.3, all Customer Accounts are (and will
be immediately following the Closing) in full force and effect and are
valid, binding and enforceable against the respective parties thereto in
accordance with their respective
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provisions, and Seller is not in default in, nor has there occurred an
event or condition (including Seller's execution and delivery of or
performance under this Agreement) which with the passage of time or the
giving of notice (or both) would constitute a default, with regard to the
payment or performance of any obligation under any Customer Account; no
claim of such a default has been asserted and there is no reasonable basis
upon which such a claim could validly be made. Neither Seller nor
Stockholders has received any notice that any person intends or desires to
modify, waive, amend, rescind, release, cancel or terminate any Customer
Account. By virtue of the grant, conveyance, sale, transfer and assignment
of the Customer Accounts by Seller to Buyer hereunder, Buyer shall own and
hold all right, title and interest of Seller in and to the Customer
Accounts, without the consent or approval of any other person or entity.
(f) TITLE TO THE PERSONAL PROPERTY. Seller has good and marketable
title to all of the Assets constituting personal property, free and clear
of all liens, encumbrances, security interests, equities or restrictions
whatsoever, except the Assumed Leases and, by virtue of the grant,
conveyance, sale, transfer, and assignment of the Assets hereunder, Buyer
shall receive good and marketable title to all of the Assets constituting
personal property, free and clear of all liens, lease payments (including
lease-end buy-out payments), encumbrances, security interests, equities or
restrictions whatsoever, except the Assumed Leases. The Assets include all
of the permits, licenses, franchises, consents and other approvals
necessary or desirable to conduct the Business.
(g) TITLE TO REAL PROPERTY. Seller currently leases property located
at 0000 Xxx Xxxx Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxx (the "Land") and has
never owned, leased or otherwise occupied, had an interest in or operated
any real property other than the Land. Except as set forth on Schedule
5.1(g):
(i) The Land is, and at all times during operation of the
Business has been, fully licensed, permitted and authorized for the
operation of the Business under all Applicable Laws relating to the
protection of the environment, the Land and the conduct of the
Business thereon (including, without limitation, all zoning
restrictions and land use requirements).
(ii) Neither Seller, Stockholder nor the Land now is or ever
has been involved in any litigation or administrative proceeding
seeking to impose fines, penalties or other liabilities or seeking
injunctive relief for violation of any Applicable Laws relating to
the environment.
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(h) LITIGATION. Except as set forth on Schedule 5.1(h) hereof, there
is no claim, litigation, action, suit or proceeding, administrative or
judicial, pending or threatened against Seller or Stockholders, or
involving the Assets or the Business, at law or in equity, before any
federal, state or local court or regulatory agency, or other governmental
authority. Neither Seller nor Stockholders has received any notice of any
of the above and no facts or circumstances exist which would, with the
passage of time or giving of notice (or both), give rise to any of the
above.
(i) EMPLOYEES. Attached as Schedule 5.1(i) hereof is a complete list
of all employees of Seller and their respective rates of compensation
(including a breakdown of the portion thereof attributable to salary,
bonus and other compensation, respectively) as of the date of Closing.
Each employee is an employee at will and there are no collective
bargaining agreements affecting any employee of Seller. Buyer shall not be
obligated to hire any of Seller's employees.
(j) EMPLOYEE RELATIONS AND BENEFIT PLANS. Set forth on Schedule
5.1(j) is an accurate and complete list of all agreements of any kind
between Seller and its employees or group of employees, including, without
limitation, employment agreements, collective bargaining agreements and
benefit plans. Buyer shall not, by the execution and delivery of this
Agreement or otherwise, become obligated to or assume any liabilities or
contractual obligations with respect to any employee of Seller or
otherwise become liable for or obligated in any manner (contractual or
otherwise) to any employee of Seller, including, without limiting the
generality of the foregoing, any liability or obligation pursuant to any
collective bargaining agreement, employment agreement, or pension, profit
sharing or other employee benefit plan (within the meaning of Section 3(3)
of the Employment Retirement Income Security Act of 1974, as amended) or
any other fringe benefit program maintained by Seller or to which Seller
contributes or any liability for the withdrawal or partial withdrawal from
or termination of any such plan or program by Seller.
(k) FINANCIAL STATEMENTS. Seller has delivered to Buyer copies of
Seller's balance sheet as of December 31, 1997 (the "Balance Sheet Date"),
and a statement of income, cash flow and retained earnings for the period
then ended (the "Financial Statements"). The Financial Statements
(including any footnotes thereto) have been prepared in accordance with
generally accepted accounting principles ("GAAP"), applied on a consistent
basis throughout the periods indicated. The Financial Statements
(including all
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footnotes thereto) are true, complete and correct and present fairly the
financial condition and the results of the operations of Seller for the
period indicated thereon. All reserves for contingent risks have been
estimated in accordance with GAAP and are appropriate and sufficient to
cover all costs reasonably expected to be incurred from such risks. The
Financial Statements are consistent with the books and records of Seller
(which books and records are correct and complete).
(l) TAXES. No federal, state, local or other tax returns or reports
filed by Seller (whether filed prior to, on or after the date hereof) with
respect to the Business or the Assets will result in any taxes,
assessments, fees or other governmental charges upon the Assets or Buyer,
whether as a transferee of the Assets or otherwise. All federal, state and
local taxes due and payable with respect to the Business or the Assets
have been paid, including, without limiting the generality of the
foregoing, all federal, state and local income, sales, use, franchise,
excise and property taxes.
(m) HAZARDOUS MATERIALS. Neither Seller nor any of the Stockholders
has ever generated, transported, stored, handled, recycled, reclaimed,
disposed of, or contracted for the disposal of, hazardous materials,
hazardous wastes, hazardous substances, toxic wastes or substances,
infectious or medical waste, radioactive waste or sewage sludges as those
terms are defined by the Resource Conservation and Recovery Act of 1976;
the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("CERCLA"); the Atomic Energy Act of 1954; the Toxic Substances
Control Act; the Occupational Health and Safety Act; any comparable or
similar Texas statute; or the rules and regulations promulgated under any
of the foregoing, as each of the foregoing may have been from time to time
amended (collectively, "Hazardous Materials"). Seller has never owned,
operated, had an interest in, engaged in and/or leased a waste transfer,
recycling, treatment, storage or disposal facility, business or activity
other than the Business. Seller has obtained and maintained all necessary
trip tickets, signed by the applicable waste generators, and other records
demonstrating the nature of the waste transported in connection with the
Business. No employee, contractor or agent of Seller has, in the course
and scope of employment with Seller, been harmed by exposure to Hazardous
Materials. Seller has no direct or contingent liability or obligation for
or in connection with any claimed release, discharge or leak of any
substance onto the Land or into the environment. Further, no portion of
the Land is listed on the CERCLA list or the National Priorities List of
Hazardous Waste Sites or any similar list maintained by the State of
Texas. Attached
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hereto as Schedule 5.1(m) is a complete list of the names and addresses of
all disposal sites at any time now or in the past utilized by Seller, none
of which sites is listed on the CERCLA list or the National Priorities
List of Hazardous Waste Sites or any comparable Texas list. Neither Seller
nor any of the Stockholders is listed as a potentially responsible party
under CERCLA or any comparable or similar Texas statute; neither Seller
nor any of the Stockholders has received any notice of such a listing; and
neither Seller nor Stockholders knows of any facts or circumstances which
could give rise to such a listing.
(n) GOVERNMENT NOTICES. Seller has delivered to Buyer, a description
and copies, as of the date of this Agreement, of all notifications, filed
or submitted, or required to be filed or submitted, to governmental
agencies and of all material notifications from such governmental agencies
relating to Seller and the Assets or relating to the discharge or release
of materials into the environment or otherwise relating to the protection
of the public health or the environment.
(o) ABSENCE OF PRICE RENEGOTIATION CONTRACTS. Seller is not now nor
has ever been a party to any governmental contracts subject to price
redetermination or renegotiation.
(p) GROSS REVENUES. The gross revenues generated by the Business for
the 12-month period immediately preceding the month in which the Closing
occurs were $______________.
(q) UNDERGROUND STORAGE TANKS. Except for the Land, Seller has never
owned, leased or operated any real estate having any underground storage
tanks containing petroleum products or wastes or other hazardous
substances regulated by 40 CFR 280 and/or other applicable federal, state
or local laws, rules and regulations and requirements. Set forth on
Schedule 5.1(q) is a list of all above and below ground tanks located on
the Land, each of which are being used and maintained in accordance with
Applicable Laws.
(r) COMPLETENESS OF DISCLOSURE. This Agreement and the Schedules
hereto and all other documents and information furnished to Buyer and its
representatives pursuant hereto do not and will not include any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein not misleading. If Seller or Stockholders
become aware of any fact or circumstance which would change a
representation or warranty of Seller or Stockholders in this Agreement,
the party with such knowledge shall immediately give notice of such fact
or circumstance to Buyer. However, such notification shall not relieve
Seller or Stockholders of their obligations under this Agreement, and at
the sole
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option of Buyer, the truth and accuracy of any and all warranties and
representations of Seller and Stockholders at the date of this Agreement
shall be a precondition to the consummation of this transaction.
SECTION 5.2 SURVIVAL. Each of the representations and warranties set
forth in this Article 5 shall survive the Closing and the transfer of the
Assets.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
SECTION 6.1 Buyer and Parent represent and warrant to Seller and
Stockholders that:
(a) CORPORATE ORGANIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Texas. Parent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) AUTHORIZATION. Buyer and Parent each have all requisite
corporate power and corporate authority to enter into this Agreement,
perform its respective obligations hereunder and consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and
the compliance by Buyer and Parent with the terms of this Agreement do not
and will not conflict with or result in a breach of any terms of, or
constitute a default under, Buyer's Articles of Incorporation or Bylaws or
any other agreement or instrument to which Buyer or Parent is a party or
by which Buyer or Parent is bound. All necessary corporate action has been
taken by Buyer and Parent with respect to the execution and delivery of
this Agreement, and this Agreement constitutes a valid obligation of Buyer
and Parent enforceable in accordance with its terms except as limited by
bankruptcy, insolvency, reorganization or other such laws concerning the
rights of creditors.
(c) PARENT STOCK. The Parent Stock to be delivered to Seller in
connection with this Agreement, when delivered in accordance with the
terms of this Agreement, will constitute valid and legally issued shares,
fully paid and nonassessable and will be registered and free from any
restriction on transfer other than restrictions imposed by the Securities
Act of 1993, as amended, or the regulations promulgated thereunder.
SECTION 6.2 SURVIVAL. Each of the representations and warranties set
forth in this Article 6 shall survive the Closing and the transfer of the
Assets.
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ARTICLE 7. NONCOMPETITION
SECTION 7.1 NONCOMPETITION COVENANTS. Seller and each of the
Stockholders, jointly and severally, agree that for a period of five years
following the date of Closing, none of them shall directly or indirectly,
through a subsidiary or affiliate, without the prior express written consent of
Buyer:
(i) engage, whether as a corporation on its own account, or as an
officer, director, shareholder, owner, partner, joint venturer, investor,
agent, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, in the
business of: siting, developing, constructing, permitting or operating a
facility for the processing, treatment or disposal of non-hazardous liquid
waste (including, without limitation, waste oil, waste water, grease trap
waste, grit trap waste and oil contaminated water); siting, developing,
constructing, permitting or operating a facility for the processing,
treatment and disposal of non-hazardous oilfield waste (including, without
limitation, chlorides, heavy metals, cuttings, contaminated soils,
drilling fluids and pit sludges); and transportation or collection of any
such materials, in each case within a radius of 100 air miles of San
Antonio, Texas (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of Buyer in a managerial capacity for the purpose
or with the intent of enticing such employee away from or out of the
employ of Buyer;
(iii) call upon any person or entity which is, at that time, or
which has been, within one year prior to that time, a customer of Seller
or Buyer, as the case may be, within the Territory for the purpose of:
siting, developing, constructing, permitting or operating a facility for
the processing, treatment or disposal of non-hazardous liquid waste
(including, without limitation, waste oil, waste water, grease trap waste,
grit trap waste and oil contaminated water); siting, developing,
constructing, permitting or operating a facility for the processing,
treatment and disposal of non-hazardous oilfield waste (including, without
limitation, chlorides, heavy metals, cuttings, contaminated soils,
drilling fluids and pit sludges); and transportation or collection of any
such materials, in each case within the Territory;
(iv) call upon any prospective acquisition candidate, on their own
behalf or on behalf of any competitor, which candidate was either called
upon by Seller or Stockholders or
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for which Seller or Stockholders made an acquisition analysis for Seller
or Buyer;
(v) disclose the identity of Buyer's customers, whether in existence
or proposed, to any person, firm, partnership, corporation or business for
any reason or purpose whatsoever; or
(vi) promote or assist, financially or otherwise (including, without
limitation, lending, guaranteeing loans or otherwise providing financial
assurance in any way), any person, firm, partnership, corporation or other
entity whatsoever to do any of the above.
Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit Seller or Stockholders from: (A) acquiring as an investment
not more than one percent of the capital stock of a competing business, whose
stock is traded on a national securities exchange or over-the-counter; (B)
continuing to operate the portion of its drain treatment business that utilizes
on site organic chemicals as the treatment process; or (C) taking such actions
necessary to comply with the terms and conditions of the Terminix Agreement.
SECTION 7.2 INJUNCTIVE RELIEF. Because of the difficulty of
measuring economic losses to Buyer as a result of the breach of the foregoing
covenant, and because of the immediate and irreparable damage that would be
caused to Buyer for which it would have no other adequate remedy, Seller and
Stockholders agree that, in the event of breach by any of them of the foregoing
covenant, the covenant may be enforced by Buyer by, without limitation,
injunctions and restraining orders.
SECTION 7.3 REASONABLENESS OF COVENANTS. It is agreed by the parties
that the foregoing covenants in this Section 7 impose a reasonable restraint on
Seller and Stockholders in light of the activities and business of the Buyer on
the date of the execution of this Agreement and the future plans of the Buyer.
SECTION 7.4 SEVERABILITY OF COVENANTS. The covenants in this Section
7 are severable and separate, and the unenforceability of any specific covenant
shall not affect the provisions of any other covenant. Moreover, in the event
any court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.
SECTION 7.5 INDEPENDENT COVENANTS. All of the covenants in this
Section 7 shall be construed as an agreement independent of any other provision
of this Agreement, and the
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existence of any claim or clause of action of Seller or Stockholders against
Buyer, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Buyer of such covenants. It is specifically agreed
that the duration of the noncompetition covenants stated above shall be computed
by excluding from such computation any time during which Seller or Stockholders
is in violation of any provision of this Section 7 and any time during which
there is pending in any court of competent jurisdiction any action (including
any appeal from any judgment) brought by any person, whether or not a party to
this Agreement, in which action Buyer seeks to enforce the agreements and
covenants of Seller or Stockholders or in which any person contests the validity
of such agreements and covenants or their enforceability or seeks to avoid their
performance or enforcement.
SECTION 7.6 MATERIALITY. Seller and Stockholders hereby agree that
the foregoing noncompetition covenants are a material and substantial part of
this transaction.
ARTICLE 8. NON-ASSUMPTION OF LIABILITIES; INDEMNIFICATION
SECTION 8.1 NON-ASSUMPTION OF LIABILITIES. Except as explicitly set
forth in Section 8.2 below, Buyer shall not, by the execution and performance of
this Agreement or otherwise, assume, become responsible for or incur any
liability or obligation of any nature of Seller or any of the Stockholders
whether legal or equitable, matured or contingent, known or unknown, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, whether arising out of
occurrences prior to, at or after the date of this Agreement, including, without
limiting the generality of the foregoing, any liability or obligation arising
out of or relating to: (a) any occurrence or circumstance (whether known or
unknown) which occurs or exists on or prior to the date of this Agreement and
which constitutes, or which by the lapse of time or giving notice (or both)
would constitute, a breach or default under any lease, contract, or other
instrument or agreement (whether written or oral); (b) any injury to or death of
any person or damage to or destruction of any property, whether based on
negligence, breach of warranty, or any other theory; (c) a violation of the
requirements of any governmental authority or of the rights of any third person,
including, without limitation, any requirements relating to the reporting and
payment of federal, state, local or other income, sales, use, franchise, excise
or property tax liabilities of Seller or Stockholders; (d) the generation,
collection, transportation, storage or disposal by Seller or Stockholders of any
materials, including, without limitation, Hazardous Materials; (e) an agreement
or arrangement between Seller and the employees of Seller or Stockholders or any
labor or collective bargaining unit representing any such employees; (f) the
severance pay obligation of Seller or any employee benefit
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plan (within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended) or any other fringe benefit program maintained
or sponsored by Seller or Stockholders or to which Seller or Stockholders
contributes or any contributions, benefits or liabilities therefor or any
liability for the withdrawal or partial withdrawal from or termination of any
such plan or program by Seller or Stockholders; (g) the debts of Seller or
Stockholders; (h) any litigation against Seller or Stockholders, whether or not
listed on Schedule 5.1(h); (i) any liability, obligation, cost or expense
related to the Excluded Assets; (j) any liability, obligation cost or expense
related to the Land, including, without limitation, the environmental condition
thereof; (k) any liability or obligation in connection with the Terminix
Agreement except as set forth in Section 4.2 hereof; and (l) the liabilities or
obligations of Seller or Stockholders for brokerage or other commissions
relative to this Agreement or the transactions contemplated hereunder. Seller
and Stockholders each agree to indemnify Buyer, its successors and assigns from
and against all of the above liabilities and obligations in accordance with
Section 8.3 below.
SECTION 8.2 ASSUMPTION OF SPECIFIC LIABILITIES. Buyer agrees to
perform all of Seller's contractual obligations related to the Customer Accounts
and Assumed Leases to the extent, and only to the extent, such obligations first
mature and are required to be performed after the close of business on the
Closing Date.
SECTION 8.3 INDEMNIFICATION BY SELLER AND STOCKHOLDERS.
Notwithstanding investigation at any time made by or on behalf of Buyer, Seller
and Stockholders, jointly and severally, agree to defend, indemnify and hold
harmless Buyer, its officers, shareholders, directors, divisions, subdivisions,
affiliates, parent, employees, agents, successors, assigns and the Assets from
and against all losses, claims, actions, causes of action, damages, liabilities,
expenses and other costs of any kind or amount whatsoever (including, without
limitation, reasonable attorneys' fees), whether equitable or legal, matured or
contingent, known or unknown, foreseen or unforeseen, ordinary or extraordinary,
patent or latent, which result, either before or after the date of this
Agreement, from:
(a) inaccuracy in any representation or warranty made by Seller or
Stockholders in this Agreement;
(b) breach of any representation or warranty under this Agreement by
Seller or Stockholders;
(c) failure of Seller or Stockholders duly to perform and observe
any term, provision, covenant, agreement or condition under this
Agreement;
(d) liability of Seller or Stockholders imposed upon
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Buyer (including, without limitation, all liability for the generation,
collection, transportation, storage or disposal of any materials,
including, without limitation, Hazardous Materials, whether or not
disclosed on Schedule 5.1(m) hereof);
(e) misrepresentation in or omission from any Schedule to this
Agreement;
(f) failure of Seller or Stockholders to obtain consent to a
Customer Account requiring such consent (including, without limitation,
reimbursement to Buyer of the value of such nonassigned Customer Account);
(g) liability of Seller or Stockholders imposed upon Buyer as a
result of Seller's failure to comply with the bulk transfer law of Texas;
(h) liability of Seller or Stockholders resulting from one or more
pending or threatened lawsuits whether or not listed on Schedule 5.1(h);
(i) liability of Seller or Stockholders to creditors of Seller or
Stockholders which is imposed on Buyer whether as a result of bankruptcy
proceedings or otherwise and whether as an account payable by Seller or
Stockholders or as a claim of alleged fraudulent conveyance or
preferential payments within the meaning of the United States Bankruptcy
Code or otherwise; and
(j) the existence of creditors of Seller which are not disclosed to
Buyer;
(k) any of the matters described in Section 8.1(a)-(l) hereof; and
(l) any claim by a third party that, if true, would mean that a
condition for indemnification set forth in this Section 8.3 had been
satisfied.
Buyer shall be deemed to have suffered such loss, claim, action, cause of
action, damage, liability, expense or other cost, or to have paid or to have
become obligated to pay any sum on account, of, the matters referred to in
subparagraphs (a) - (l) of this Section 8.3 if the same shall be suffered, paid
or incurred by Buyer or any parent, subsidiary, affiliate, or successor of
Buyer. The amount of the loss, claim, action, cause of action, damage,
liability, expense or other cost deemed to be suffered, paid or incurred by
Buyer shall be an amount equal to the loss, claim, action, cause of action,
damage, liability, expense or other cost suffered, paid or incurred by such
parent, subsidiary, affiliate, or successor.
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SECTION 8.4 PROCEDURE FOR INDEMNIFICATION. Promptly after a party
hereto (hereinafter the "Indemnified Party") has received notice of or has
knowledge of any claim by a person not a party to this Agreement ("Third
Person") or the commencement of any action or proceeding by a Third Person, the
Indemnified Party shall, as a condition precedent to a claim with respect
thereto being made against any party obligated to provide indemnification
pursuant to this Agreement (hereinafter the "Indemnifying Party"), give the
Indemnifying Party written notice of such claim or the commencement of such
action or proceeding (the "Notice"). The Notice shall state the nature and the
basis of such claim and a reasonable estimate of the amount thereof. The
Indemnifying Party, after receipt of the Notice, shall defend and settle, at its
own expense and by its own counsel, each such matter so long as the Indemnifying
Party pursues the same diligently and in good faith and the claim does not
involve injunctive or equitable relief or involve the possibility of criminal
penalties. The Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in the defense thereof and in any settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records or information reasonably requested
by the Indemnifying Party that are in the Indemnified Party's possession or
control. Notwithstanding the foregoing, the Indemnified Party shall have the
right to participate in any matter through counsel of its own choosing at its
own expense, provided that the Indemnifying Party's counsel shall always be lead
counsel and shall determine all litigation and settlement steps, strategy and
the like. After the Indemnifying Party has received the Notice, the Indemnifying
Party shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability, except to the extent such participation is requested by the
Indemnifying Party, in which event the Indemnified Party shall be reimbursed by
the Indemnifying Party for reasonable additional legal expenses, out-of-pocket
and allocable share of employee compensation incurred in connection with such
participation for any employee whose participation is so requested. The
foregoing notwithstanding, if the Indemnifying Party fails diligently to defend
any such matter to which the Indemnified Party is entitled to indemnification
hereunder or if the claim involves injunctive or equitable relief or involves
the possibility of criminal penalties, the Indemnified Party may undertake such
defense through counsel of its choice and at the Indemnifying Party's expense.
In each case where the Indemnifying Party is obligated to pay the costs and
expenses of the Indemnified Party, the Indemnifying Party shall pay the costs
and expenses of the Indemnified Party as such costs and expenses are incurred.
If the Indemnifying Party desires to accept a final and complete settlement of
any such Third Person claim and the Indemnified Party refuses to consent to such
settlement, then the Indemnifying Party's liability under this Section with
respect to
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such Third Person claim shall be limited to the amount so offered in settlement
by said Third Person and the Indemnified Party shall reimburse the Indemnifying
Party for any additional costs of defense which it subsequently incurs with
respect to such claim.
ARTICLE 9. GENERAL
SECTION 9.1 FURTHER ASSURANCE. From time to time after the Closing,
Seller and Stockholders will, without further consideration, execute and deliver
such other instruments of conveyance and transfer, and take such other action as
Buyer reasonably may request to more effectively convey and transfer to and vest
in Buyer and to put Buyer in possession of the Assets to be transferred
hereunder, and in the case of contracts and rights, if any, which cannot be
transferred effectively without the consents of third parties, to endeavor to
obtain such consents promptly, and if any be unobtainable, to use their best
efforts to provide Buyer with the benefits thereof in some other manner. Seller
and Stockholders will cooperate and use their best efforts to have the present
officers, directors and employees of Seller cooperate with Buyer on and after
the Closing in furnishing information, evidence, testimony and other assistance
in connection with any actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to the Closing.
SECTION 9.2 JOINT AND SEVERAL OBLIGATIONS. All representations,
warranties and agreements of Seller or Stockholders under this Agreement, the
Schedules and the transactions contemplated hereby shall be joint and several.
SECTION 9.3 WAIVER. Except as otherwise provided herein, no delay of
or omission in the exercise of any right, power or remedy accruing to any party
as a result of any breach or default by any other party under this Agreement
shall impair any such right, power or remedy, nor shall it be construed as a
waiver of or acquiescence in any such breach or default, or of or in any similar
breach or default occurring later; not shall any waiver of any single breach or
default be deemed a waiver of any other breach of default occurring before or
after that waiver.
SECTION 9.4 TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
SECTION 9.5 NOTICE. All notices or communications required or
permitted under this Agreement shall be given in writing and served either by
personal delivery, overnight courier or by deposit in the United States mail and
sent by first class registered or certified mail, return receipt requested,
postage prepaid:
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If to Seller or Stockholders:
0000 Xxx Xxxx Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
with a copy to:
Xxxxxx Xxxxxx, Esq.
Davidson & Xxxxxx
0000 X. XX00
Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
If to Buyer:
U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
ATTN: W. Xxxxxxx Xxx
with a copy to:
U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
ATTN: Xxxxx Xxxxxx
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 X. 0xx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier, subject to signature verification, and
three days after deposit in the U.S. mail as provided above, or when actually
received, if earlier. Either party may change the address for notices or
communications to be given to it by written notice to the other party given as
provided in this Section.
SECTION 9.6 ENTIRE AGREEMENT. This Agreement, the Schedules hereto
and the other agreements referred to herein constitute the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersede all prior and contemporaneous agreements and understandings, oral or
written, relative to said subject matter.
SECTION 9.7 BINDING EFFECT; ASSIGNMENT. This Agreement and the
various rights and obligations arising hereunder
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shall inure to the benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, legal representatives, successors
and permitted assigns. Seller shall have no right to assign this Agreement or
any of their respective rights hereunder. Buyer may assign this Agreement
without consent by Seller; provided, however, that the assignee under such
assignment shall agree to assume the obligations of the assignor under this
Agreement. It is further understood and agreed that Buyer may be merged or
consolidated with another entity and that any such entity shall automatically
succeed to the rights, powers and duties of Buyer hereunder.
SECTION 9.8 EXPENSES OF TRANSACTION. Seller shall pay all costs and
expenses incurred by Seller or Stockholders in connection with this Agreement
and the transactions contemplated hereby and thereby, including, without
limitation, the fees and expenses of Seller's attorneys and accountants and will
make all necessary arrangements so that the Assets will not be charged with or
diminished by any such cost or expense. Buyer shall pay all costs and expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby and thereby, including without limitation, the fees and
expenses of its attorneys and accountants.
SECTION 9.9 BROKER'S COMMISSION. Seller and Stockholders represent
and warrant to Buyer and Buyer represents and warrants to Seller and
Stockholders that the warranting party has had no dealing with any dealer,
broker or agent so as to entitle such dealer, broker or agent to a commission or
fee in connection with the sale of the Assets to Buyer. If for any reason any
commission or fee shall become due, the party dealing with such dealer, broker
or agent shall pay such commission or fee and agrees to indemnify and save the
other party harmless from all claims for such commission or fee and from all
attorneys' fees, litigation costs and other expense relating to such claim.
SECTION 9.10 MODIFICATION; REMEDIES CUMULATIVE. This Agreement may
not be changed, amended, terminated, augmented, rescinded or otherwise altered,
in whole or in part, except by a writing executed by all of the parties hereto.
No right, remedy or election given by any term of this Agreement shall be deemed
exclusive but each shall be cumulative with all other rights, remedies and
elections available at law or in equity.
SECTION 9.11 SEVERABILITY. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as to most
nearly retain the intent of the parties. If such modification is not possible,
such provision shall be severed from this Agreement. In either case the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or
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impaired thereby.
SECTION 9.12 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the internal laws of the State of
Texas, without giving effect to any choice or conflict of law provision or rule
(whether of the State of Texas or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
BUYER:
ENVIRONMENT MANAGEMENT, INC.
By:___________________________
Its:__________________________
SELLER:
TRAPMASTER, INC.
(EIN: 00-0000000)
By:___________________________
Its:__________________________
STOCKHOLDERS:
______________________________
Xxxx Xxxxxx
(SSN: ###-##-####)
______________________________
Xxx Xxxxxx
(SSN: ###-##-####)
______________________________
Xxxxx Xxxxxx
(SSN: ###-##-####)
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LIST OF SCHEDULES
Exhibit A -- Legal Description of Land
Exhibit B -- Business Name Territory
Schedule 1.1(a) -- Equipment
Schedule 1.1(b) -- Rolling Stock
Schedule 1.1(d) -- Customer Accounts and Related Approvals
Schedule 1.1(g) -- Permits
Schedule 1.2 -- Excluded Assets
Schedule 1.3 -- Customer Accounts Requiring Consent to Assignment
Schedule 1.4 -- Accounts Receivable
Schedule 2.3 -- Debt Payoff Amounts
Schedule 5.1(g) -- Real Property Disclosure
Schedule 5.1(h) -- Litigation
Schedule 5.1(i) -- Employees
Schedule 5.1(j) -- Employee Agreements
Schedule 5.1(m) -- List of Disposal Sites
Schedule 5.1(q) -- Storage Tanks
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