ASSET PURCHASE AGREEMENT
SAFEWASTE CORPORATION
AND
SAFEWASTE, INC.
August _____, 1998
ASSET PURCHASE AGREEMENT, dated August ___, 1998 (this "Agreement"),
between SAFEWASTE CORPORATION, a Georgia corporation ("Seller"), and SAFEWASTE,
INC., a Delaware corporation ("Purchaser"). Certain capitalized terms shall have
the meaning set forth in Article I.
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to
purchase from Seller, the Subject Business Assets used in the its Business of
providing on-site medical waste treatment services and other waste treatment and
management services.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Purchaser and Seller hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Acquired Intellectual Property" means all the Intellectual Property of
the Business, including without limitation those items listed in Section 1.01 of
the Disclosure Schedule, including the name "SafeWaste".
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person.
"Assumed Liabilities" means those specific liabilities were identified
and fully described by the Seller not less than five (5) days prior to Closing
and which the Purchaser specifically agreed to assume in writing, and as listed
on Exhibit A. The Purchaser assumes no other liabilities of the Seller.
"Business" means the business customarily and historically conducted by
the Seller.
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"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in the City of
New York.
"Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as a trustee or
executor (in each case, acting in a fiduciary capacity), of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, as trustee or executor (in each
case, acting in a fiduciary capacity), by contract or credit arrangement or
otherwise.
"Disclosure Statement" means the Disclosure Statement dated as of the
date hereof delivered to Purchaser by Seller.
"Encumbrance" means a pledge, lien, security interest, mortgage,
charge, adverse claim of ownership or use, or other encumbrance of any kind.
"Equipment Related Property" means (1) all inventory of spare and
replacement parts relating to the equipment, (2) all plans, manuals, records and
other documents relating to the equipment, and (3) the Intellectual Property, if
any, directly pertaining to the equipment or the customized products such
equipment has been designed or programmed to produce.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means those other assets which the Seller and the
Purchaser agree are Excluded Assets and which are listed on Exhibit B which
includes the accounts receivable other than those included as Joint Venture
Assets.
"GAAP" means United States generally accepted accounting principles in
effect from time to time applied consistently throughout the period involved.
"Governmental Authority" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial or arbitral body, whether federal, state, local or
foreign.
"Governmental Order" means any order, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"Intellectual Property Rights" means (a) patent and patent
applications, (b) trademarks, service marks, logos, trade dress, trade names and
corporate names and registrations and applications for registration thereof, (c)
copyrights, whether registered or unregistered, and registrations and
applications for registration thereof and (d) trade secrets, formulas,
inventions, invention disclosures, know-how, manufacturing and production
processes and techniques, business and marketing plans, customer and supplier
lists, computer software and other proprietary business and intellectual
property rights.
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"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Joint Venture" means that certain joint venture formed by agreement
between Horizon Management Services, Inc., a North Carolina corporation and a
wholly owned subsidiary of Memorial Mission Medical Center, Inc. and SafeWaste
Corporation under agreements described in Section 3.16(a) of the Disclosure
Statement.
"Joint Venture Assets" mean the Seller's interest in the Joint Venture
and in all accounts receivable, promissory notes and other moneys owed to the
Seller by the Joint Venture.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge of the executive officers of Seller after due inquiry of the executive
officers of Seller.
"Lease" means that certain lease agreement dated September 25, 1995 by
and between Seller and Highwoods/Forsyth Limited Partnership pertaining to
certain property in Charlotte, North Carolina more particularly described in
Section 1.01 of the Disclosure Statement (the "Leased Property").
"Losses" of a Person means any and all claims, actions or causes of
action, assessments, losses, damages, deficiencies, liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing) actually suffered or incurred by such Person.
"Material Adverse Effect" means, with respect to any Person, any
change in, or effect on, the business of such Person that is materially adverse
to the business, operations, results of operations or the financial condition
thereof or an amount in excess of $10,000.
"Permitted Encumbrances" means those Encumbrances listed in Section
1.01 of the Disclosure Statement, encumbrances to pay taxes or other
governmental assessments which are not yet due and payable, and other
encumbrances which do not in the aggregate materially detract from the value of
the Subject Business Assets or materially impair the use thereof.
"Person" means an individual, corporation, partnership, joint venture,
person (including, without limitation, a "person" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended), trust, association or
another entity.
"Related Transactions" means those transactions by and among the
Purchaser, the Seller and their Affiliates more fully described on Exhibit C.
"Subject Business Assets" means all of the real and personal property
(tangible and
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intangible) presently owned, leased or licensed by the Seller and used in the
Business, wherever located, including but not limited to the (i) the fixed
assets of the Business which are listed in Section 1.01 of the Disclosure
Statement, including the Equipment Related Property pertaining to such assets,
(ii) the Lease (iii) the Joint Venture Assets, (iv) all of Seller's right to and
interest in those contracts (collectively, the "Contracts") and leases
(collectively, the "Leases")identified in such Section 1.01, and (vi) the
Acquired Intellectual Property Rights, saving and excepting the Excluded Assets.
"Tax" or "Taxes" means all income, gross receipts, sales, use,
employment, franchise, profits, property, transfer or other taxes, fees, stamp
taxes and duties, assessments or charges of any kind whatsoever (whether payable
directly or by withholding), together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority with
respect thereto.
(b) Each of the following terms is defined in the section set forth
opposite such terms below:
Term Section
Agreement Recitals
Authorized Agent 11.10
CERCLA 3.07(g)
Closing 2.03(a)
Closing Date 2.03(a)
Confidentiality Agreement 5.05
Employees 6.01(a)
Environmental Laws 3.08(g)
Environmental Permits 3.08(g)
Financial Statements 3.04
Hazardous Materials 3.08(g)
IRS 3.12(a)
Material Contracts 3.16
Purchaser Recitals
Purchase Price 2.02
RCRA 3.08(g)
Seller Recitals
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ARTICLE II.
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
conditions set forth in this Agreement, Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase from Seller, on the Closing Date, the Subject
Business Assets.
SECTION 2.02. Purchase Price. The purchase price (the "Purchase Price")
for the Subject Business Assets shall be $700,000. The Purchase Price shall be
payable as provided in Section 2.03.
SECTION 2.02 Closing Date. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Subject Business Assets contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
Thursday, August 6, 1998, or on the third Business Day following the
satisfaction or waiver of the conditions to the obligations of the parties set
forth in Article VIII. The Closing will occur at the offices of Buist, Moore,
Xxxxxx & XxXxx, P.A, 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx, or at such
other time or on such other date or at such other place as Seller and Purchaser
may mutually agree upon in writing (the day on which the Closing takes place
being the "Closing Date").
SECTION 2.03 Closing Documents. At the Closing, Seller shall execute
and deliver to Purchaser such transfer and other documents as required to
transfer the Subject Business Assets, together with such other instruments of
conveyance, affidavits, declarations, assignments and other supporting
documentation typically delivered in connection with a transaction of this type
and in accordance with local law or custom (collectively the "Closing
Documents") including:
(i) Assignment and Assumption of the Lease, together with
estoppel certificate of the landlord.
(ii) Xxxx of Sale in the form attached as Exhibit D
(iii) Assignment of Title Certificates to vehicles, if any.
(iv) Consents, as defined in Section 3.21, unless waived by the
parties
(v) Assignment of Permits, if any, as defined in Section 3.21,
unless waived by the parties
(vi) Release of all Encumbrances on the Subject Business Assets,
except Assumed Liabilities and Permitted Encumbrances, or
other arrangements satisfactory to Purchaser and Seller
(vii) Estoppel Certificates from the creditors of the Assumed
Liabilities, to the extent required by the Purchaser
(viii) Good Standing Certificates of Seller and Purchaser
(ix) Officer's Certificate of Seller and Purchaser including
authorizing resolution, articles of incorporation with all
amendments, by-laws and incumbency certificates
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(x) Assignment and Assumption of the Assumed Liabilities in the
form attached as Exhibit E.
(xi) Consent and estoppel certificate from the other joint
venturer
(xii) Amendment to Articles of Incorporation of Seller to change
its name to one which does not include "SafeWaste", to be
filed after closing.
(c) At the Closing, Purchaser shall deliver to Seller the Purchase
Price, by wire transfer in immediately available funds, to an account or
accounts designated at least three Business Days prior to the Closing Date by
Seller in a written notice to Purchaser.
SECTION 2.04. Allocation of Purchase Price. The Purchase Price shall be
allocated for tax purposes among each item or class of Subject Business Assets
as set forth in Exhibit F of this Agreement. Seller and Purchaser agree that
they will prepare and file any notice or other filing required pursuant to
Section 1060 of the Internal Revenue Code, and that any notices or filings will
be prepared based upon such tax allocation of the Purchase Price. Purchaser
agrees to send to Seller a completed copy of its Form 8594 (Asset Acquisition
Statement under Section 1060) with respect to this transaction prior to filing
such form with the Internal Revenue Service.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, as of the date of this Agreement
and through the Closing Date as follows:
SECTION 3.01. Incorporation and Authority of Seller. Seller is a
corporation duly incorporated and validly existing under the laws of Georgia.
Seller is duly qualified as a corporation to do business in each jurisdiction
where the character of its properties owned, operated or leased or the nature of
its activities makes such qualification necessary, except for such failures to
be so qualified that would not have a Material Adverse Effect on Seller. Seller
has all necessary corporate power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Seller, the
performance by it of its obligations hereunder and the consummation by it of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of Seller. This Agreement has been duly executed
and delivered by Seller, and (assuming due authorization. execution and delivery
by Purchaser) this Agreement constitutes a legal, valid and binding obligation
of Seller enforceable against it in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
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enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 3.02. No Conflict. Assuming all consents, approvals,
authorizations and other actions described in Section 3.03 and 3.21 have been
obtained, and except as may result from any facts or circumstances relating
solely to Purchaser or as described in Section 3.02 of the Disclosure Statement,
the execution, delivery and performance of this Agreement by Seller does not and
will not (a) violate or conflict with the organizational documents of the
Seller, (b) conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the Seller,
except for such conflicts or violations as would not have a Material Adverse
Effect on the ability of Seller to conduct its business as currently conducted
or have a Material Adverse Effect on the ability of Seller to consummate the
transactions contemplated by this Agreement or (c) result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Encumbrance on any of the Subject Business Assets or properties
of the Seller pursuant to, any note, bond, mortgage, credit agreement,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument relating to such assets or properties to which the Seller is a party
or by which any of such assets or properties is bound or affected, except as
would not have a Material Adverse Effect on the ability of Seller to conduct its
business as currently conducted or have a Material Adverse Effect on the ability
of Seller to consummate the transactions contemplated by this Agreement.
SECTION 3.03. Consents and Approvals. The execution and delivery of
this Agreement by Seller does not, and the performance of this Agreement by
Seller will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent Seller from, or delay Seller in,
performing any of its material obligations under this Agreement and would not
have a Material Adverse Effect on the ability of Seller to conduct its business
as currently conducted and as may be necessary as a result of any facts or
circumstances relating solely to Purchaser.
SECTION 3.04. Financial Statements; Absence of Undisclosed Liabilities.
(a) Attached to Section 3.04 of the Disclosure Statement are true and correct
copies of the balance sheets of the Seller as of the periods ending December 31,
1996 and December 31, 1997 and statements of income for the periods ending
December 31, 1996, and December 31, 1997 (the "Financial Statements"). The
Financial Statements have been prepared in accordance with GAAP except as noted
in Section 3.04 of the Disclosure Statement and fairly present in all material
respects the financial position of the Seller as of the dates thereof and the
results of the operations for the periods then ended.
(b) Seller has delivered to Purchaser true and correct copies of the
summary financial
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reports of the Seller for the months January, 1998 through June, 1998 (the
"Interim Summary Reports"). The Interim Summary Reports, which are unaudited,
fairly present in all material respects the financial position of the Seller as
of the dates thereof and the results of the operations of the Seller for the
period then ended, and include all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the information included
therein, subject to year end adjustments.
(c) Except as set forth in Section 3.04 of the Disclosure Statement,
and except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since December 31, 1997, Seller does not
have any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a balance sheet.
SECTION 3.05. Absence of Certain Changes or Events. Except as set forth
in Section 3.05 of the Disclosure Statement, since December 31, 1997, Seller and
the Joint Venture have conducted the Business only in the ordinary course, and
there has not been with respect to the Subject Business Assets (i) any Material
Adverse Effect, (ii) any damage, destruction or loss, whether or not covered by
insurance, that has or reasonably could be expected to have a Material Adverse
Effect, (iii) any change in accounting methods, principles or practices by
Seller materially affecting its assets, liabilities or business, except insofar
as may have been required by a change in GAAP, (iv) any sale, lease, transfer,
or assignment of any material Subject Business Assets other than in the ordinary
course of business, (v) any material capital expenditures other than in the
ordinary course of business, or (vi) any material capital investment in, or loan
to, any other Person outside the ordinary course of business.
SECTION 3.06. Litigation. Except as set forth in Section 3.06 of the
Disclosure Statement, as of the date of this Agreement, there are no claims,
actions, proceedings or investigations pending, or to the Knowledge of Seller,
threatened against Seller, the Joint Venture or any of their assets or
properties, including but not limited to the Subject Business Assets, before any
court, arbitrator or administrative, governmental or regulatory authority or
body that are reasonably likely to have a Material Adverse Effect on Seller.
Except as set forth in Section 3.06 of the Disclosure Statement, the Seller, the
Joint Venture, or any of the Subject Business Assets are not subject to any
order, writ, judgment, injunction, decree, determination or award. Except as
otherwise set forth in Section 3.06 of the Disclosure Statement, each of the
matters listed on Section 3.06 of the Disclosure Statement is covered by
insurance, and the insurer has acknowledged coverage of each such matter without
reservation.
SECTION 3.07. Compliance with Applicable Laws. Except as set forth in
Section 3.07 of the Disclosure Statement, within the preceding three years
neither Seller nor the Joint Venture has violated or failed to comply with any
statute, law, regulation, rule, judgment, decree or order of any Governmental
Authority applicable to its Business, except for violations and failures to
comply that would not, individually or in the aggregate, have a Material Adverse
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Effect on the ability of Seller or the Joint Venture to conduct its Business as
currently conducted, and there is no action pending against Seller or Joint
Venture charging failure to so comply. The conduct of the Business of Seller and
the Joint Venture is in conformity with all federal, state and local
governmental and regulatory requirements applicable to its Business and
operations, except where such nonconformity would not, in the aggregate, have a
Material Adverse Effect on the ability of Seller or the Joint Venture to conduct
its Business as currently conducted. Seller and the Joint Venture have all
permits, licenses, franchises and certificates of occupancy from Governmental
Authorities required to conduct its Business as now being conducted, except for
such permits, licenses, franchises and certificates the absence of which would
not, in the aggregate, have a Material Adverse Effect on the ability of Seller
or the Joint Venture to conduct its business as currently conducted .
SECTION 3.08. Environmental Matters. Except as set forth in Section
3.08 of the Disclosure Statement:
(a) Except as would not have a Material Adverse Effect on the
ability of Seller or the Joint Venture to conduct its business as currently
conducted, each of the Seller and the Joint Venture (i) is in compliance with
all applicable Environmental Laws and (ii) holds all Environmental Permits
necessary for its operations and properties and is in compliance with the terms
and conditions of all such Environmental Permits.
(b) Neither Seller nor Joint Venture has received any written
claim, demand, notice or complaint alleging violation of or liability (including
without limitation any liability for site investigation. cleanup or corrective
action) under any Environmental Laws.
(c) Except as would not have a Material Adverse Effect on the
ability of Seller or Joint Venture to conduct its Business as currently
conducted, to Seller's Knowledge, none of the following exists at the sites of
the Seller's or Joint Venture's operations: (i) asbestos-containing material in
any form or condition; (ii) materials containing polychlorinated biphenyls;
(iii) underground storage tanks or surface impoundments; or (iv) landfills,
surface impoundments or disposal areas.
(d) Except as would not have a Material Adverse Effect on the
ability of Seller or Joint Venture to conduct its Business as currently
conducted, neither Seller or Joint Venture has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or released any
Hazardous Material, or owned or operated any facility or property, so as to give
rise to liabilities for response costs, natural resource damages or attorneys
fees pursuant to CERCLA or other Environmental Laws.
(e) No written notice of a release of a Hazardous Material has
been filed by or on behalf of Seller or Joint Venture and no property or
facility now or previously owned or operated by Seller or Joint Venture is on
the CERCLA National Priorities List (or proposed for
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such listing), the Comprehensive Environmental Response, Compensation, and
Liability Information System list or any similar state or local list.
(f) Neither Seller nor Joint Venture has, either expressly or,
to Seller's Knowledge, by operation of law, assumed or undertaken any liability,
including without limitation any obligation for corrective or remedial action,
of any other Person relating to Environmental Laws.
(g) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Environmental Laws" means any federal, state, local or
foreign statute, law, ordinance, regulation, rule or code. including any
judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment or worker health and safety,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge,
investigation or cleanup of Hazardous Materials, in effect as of the date
hereof.
"Environmental Permits" means any permit, approval,
identification number, license or other authorization required of Seller under
any applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls, (b) any chemical,
material or substance defined or regulated as toxic or hazardous under any
applicable Environmental Law or (c) anything that is a "hazardous substance"
pursuant to CERCLA, anything that is a "solid waste" or "hazardous waste"
pursuant to RCRA or any "pesticide", "pollutant", "contaminant", "toxic
chemical" or "noise".
"RCRA" means the Resource Conservation and Recovery Act, as
amended.
SECTION 3.09. Title and Condition of Properties. (a) Each of Seller and
Joint Venture has good and marketable title to, or valid leasehold interests in,
all the properties and assets used by it or located on its premises that are
material to the conduct of the Business with respect to the Subject Business
Assets, or which are shown on the Financial Statements except for such as are
licensed, as are no longer useful in the conduct of its business or as have been
disposed of in the ordinary course of business and except for defects in title,
easements, restrictive covenants and similar impediments that, in the aggregate,
would not have a Material Adverse Effect on the ability of Seller or the Joint
Venture to conduct its Business as currently conducted and, as to the real
property owned by Seller, would not have a material effect on the value of such
property. All such assets and properties, other than assets and properties in
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which Seller or Joint Venture have leasehold interests, are (or will be as of
Closing) free and clear of all Encumbrances except for (i) liens for taxes not
yet due or being contested in good faith by appropriate procedures, (ii)
mechanics, carriers, workmen's, repairmen's or other like liens arising or
incurred in the ordinary course of business for amounts that are not delinquent
and which are not, individually or in the aggregate, material to Seller's
Business, (iii) liens arising under original purchase price conditional sales
contracts and equipment leases with third parties entered into in the ordinary
course of business, and (iv) the Permitted Encumbrances.
(b) Except as set forth in Section 3.09 of the Disclosure Statement,
the Subject Business Assets are all of the assets which are necessary to operate
the Business as it has customarily been conducted.
(c) To the Seller's Knowledge and in reliance upon, and subject to, the
affidavit attached as Exhibit G, the Subject Business Assets are functional and
usable in the ordinary course of the Business and are in sufficiently good
operating condition to conduct the Business as it has been customarily
conducted.
(d) The real property owned or leased by Seller is listed in Section
3.09 of the Disclosure Statement and is suitable for the uses for which these
properties are currently used. The Leased Property has customary access to the
utilities serving such properties sufficient to allow the conduct of Seller's
Business as currently conducted except for interruptions in utility service
beyond Seller's control.
SECTION 3.10. Trademarks. Etc. Section 1.01 of the Disclosure Statement
contains a complete and accurate list of (i) all trade names, registered and
Material unregistered trademarks owned by Seller or used in connection with the
Subject Business Assets; and (ii) all computer software owned and/or used by
Seller or the Joint Venture in the Business other than commercially available
software with an annual license fee of less than $1,000. Seller has not granted
any licenses to any Person with respect to the Acquired Intellectual Property.
Other than with respect to computer software, no Person has granted any such
licenses to the Seller for the conduct of the Business. Except as set forth in
Section 3.10 of the Disclosure Statement, to Seller's Knowledge, Seller owns
(free and clear of all Encumbrances) or has sufficient unrestricted right to use
the Acquired Intellectual Property Rights in order to allow it to conduct, and
continue to conduct, its Business as currently conducted in all material
respects, and the consummation of the transactions contemplated hereby will not
alter or impair such ability in any material respect. To Seller's Knowledge,
except as set forth in Section 3.10 of the Disclosure Statement, (a) Seller has
not infringed, misappropriated or is otherwise not in conflict with any
intellectual property right of any Person in any material respect, and (b) the
conduct of the Business of Seller as currently conducted or as currently
contemplated to be conducted does not and will not conflict in any material
respect with any license, trademark, trademark right, patent, patent right,
invention, industrial model, service xxxx or copyright of any third Person. No
claims are pending or, to the Knowledge of Seller, threatened by any
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Person contesting or challenging the ownership, validity, enforceability or use
of the Acquired Intellectual Property Rights. To the Knowledge of Seller, there
are no claims pending or currently threatened by any Person against Seller
alleging infringement of any intellectual property rights relating to the
technology used in Seller's manufacturing process with respect to the Business.
Seller has not made a claim of a violation or infringement by others of its
rights to or in connection with the Acquired Intellectual Property Rights.
SECTION 3.11. Insurance. Section 3.11 of the Disclosure Statement sets
forth a complete list of all material insurance policies (including policies
providing property, casualty, liability and workers' compensation coverage and
bond and surety arrangements) with respect to the Business or the Subject
Business Assets or the Joint Venture.
SECTION 3.12. Employee Benefit Matters. (a) Section 3.12 of the
Disclosure Statement, with respect to the Subject Business Assets, sets forth a
true and complete list of each "employee benefit plan" (as defined by Section
3(3) of ERISA), and any other bonus, profit sharing, pension, compensation,
deferred compensation, stock option, stock purchase, fringe benefit, severance,
post-retirement, scholarship, disability, sick leave, vacation, individual
employment, commission, bonus, payroll practice, retention, or other plan,
agreement, policy, trust fund or arrangement (each such plan, agreement, policy,
trust fund or arrangement is referred to herein as an "Employee Benefit Plan",
and collectively, the "Employee Benefit Plans") that is for the benefit of (i)
directors or employees of Seller working in the Business or any other persons
performing services for Seller in the Business, (ii) former directors or
employees of Seller working in the Business or any other persons formerly
performing services for Seller in the Business, and/or (iii) beneficiaries of
anyone described in (i) or (ii) (collectively, "Business Employees") or with
respect to which Seller or any "ERISA Affiliate" (hereby defined to include any
trade or business, whether or not incorporated, other than Seller, which has
employees who are or have been at any date of determination occurring within the
preceding six (6) years, treated pursuant to Section 4001(a)(14) of ERISA and/or
Section 414 of the Internal Revenue Code as employees of a single employer which
includes Seller) has any obligation on behalf of any employee of the Business.
(b) Except as disclosed in Section 3.12 of the Disclosure Statement,
each Employee Benefit Plan is in material compliance with the provisions of
ERISA and the provisions of the Internal Revenue Code applicable to it. The
Seller has made available to the Purchaser a true and complete copy of each Plan
and a true and complete copy of the following documents, to the extent
applicable, prepared in connection with each such Plan: (i) the most recently
received IRS determination letter, (ii) the most recently prepared financial
statement (Form 5500's with attachments), (iii) all governmental rulings
determinations and opinions (and pending requests for governmental rulings,
determinations and opinions). Neither Seller nor any ERISA Affiliate has
maintained or contributed to any plan subject to the minimum funding standards
of Section 302 of ERISA or Section 412 of the Internal Revenue Code and/or any
"multiemployer plan" (as defined by Section 3(37) of ERISA). All Employee
Benefit Plans which are "pension plans"
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as defined in Section 3(2) of ERISA have received favorable determination
letters from the Internal Revenue Service ("IRS") as to their tax-qualified
status and the tax-exempt status of any related trust under Sections 401(a) and
501 of the Internal Revenue Code, respectively, which determinations are
currently in effect.
(c) Other than as may otherwise be provided hereunder (including, but
not by way of limitation, Article VI hereof), Purchaser shall not, as a result
of the transactions contemplated by this Agreement (or any employment by
Purchaser of Business employees): (i) become liable for any contribution, tax,
lien, penalty, cost, interest, claim, loss, action, suit, damage, cost
assessment or other similar type of liability or expense of Seller or any ERISA
Affiliate (including predecessors thereof) with regard to any Employee Benefit
Plan or any Employee Benefit Plan sponsored, maintained or contributed to by an
ERISA Affiliate (including predecessors thereof) (assuming a like definition of
"Employee Benefit Plan" were applicable to ERISA Affiliates as to those same
types of agreements, policies, trusts, funds and arrangements sponsored,
maintained or contributed to by them) (each such plan of an ERISA Affiliate, an
"ERISA Affiliate Employee Benefit Plan"), including, without limitation
withdrawal liability arising under Title IV, Subtitle E, Part 1 of ERISA,
liabilities to the Pension Benefit Guaranty Corporation, or liabilities under
Section 412 of the Internal Revenue Code or Section 302(a)(2) of ERISA, or (ii)
be or become a party to any Employee Benefit Plan or any ERISA Affiliate
Employee Benefit Plan.
(d) Seller, each ERISA Affiliate, each Employee Benefit Plan and each
Employee Benefit Plan "sponsor" or "administrator" (within the meaning of
Section 3(16) of ERISA) has complied in all material respects with the
applicable requirements of Part 6 of Subtitle B of Title I of ERISA and Section
4980B of the Internal Revenue Code.
(e) Neither Seller nor any ERISA Affiliate maintains (i) any employee
benefit plan of the type described in Sections 4063 and 4064 of ERISA or in
Section 413(c) of the Internal Revenue Code (and regulations promulgated
thereunder), or (ii) any plan which provides health, life insurance, accident or
other "welfare-type" benefits to current or future retirees or current or future
former employees, their spouses or dependents, other than in accordance with
Section 4980B of the Internal Revenue Code or applicable state continuation
coverage law.
(f) Other than with respect to the Assumed Liabilities, any bonuses,
severance , separation, termination or similar type of benefits, incentive fees,
or other amounts payable to employees of Seller solely as a result of the
consummation of the transactions contemplated by this Agreement will be paid by
Seller.
(g) The Joint Venture does not have any employees, except as set
forth on Section 6.01 of the Disclosure Statement.
SECTION 3.13. Labor Matters. (a) There are no material controversies
pending
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or, to the Knowledge of Seller, threatened, between Seller and any of its
employees with respect to the Business; (b) Seller is not a party to any
collective bargaining agreement or other labor union contract applicable to
Persons employed by Seller with respect to the Business; (c) during the past
three years, there have been no unfair labor practice complaints filed or
pending against Seller before the National Labor Relations Board; and (d) during
the past three years, there have been no strikes, slowdowns, work stoppages,
lockouts, or, to Seller's Knowledge, threats thereof, by or with respect to any
employees of Seller with respect to the Business.
SECTION 3.14. Transactions with Affiliates. All of the Material
contracts, leases, agreements or arrangements relating to the Business are
listed in Section 3.14 of the Disclosure Statement which are between the Seller
and Affiliates of Isolyser Company, Inc. or between the Joint Venture and
Affiliates of Isolyser Company, Inc. and which impact the results of operations
reflected on the Financial Statements.
SECTION 3.15. INTENTIONALLY OMITTED.
SECTION 3.16. Material Contracts. (a) Section 3.16(a) of the Disclosure
Statement lists the following contracts (collectively, the "Material Contracts")
to which Seller or the Joint Venture is a party or by which its assets may be
bound:
(i) any commitment, contract, agreement, note, loan, evidence
of indebtedness, purchase order or letter of credit and purchase orders issued
in the ordinary course to individual customers or vendors that Seller reasonably
anticipates will, in accordance with its terms, involve aggregate payments by or
to Seller of more than $20,000 within the 12 month period following the date
hereof and that is not cancelable by Seller without liability within 60 days;
(ii) any lease of real or personal property involving any
annual expense in excess of $20,000;
(iii) any contract or agreement containing covenants limiting
in any respect the freedom of Seller to engage in any line of business or
compete with any Person:
(iv) any agreement (or group of related agreements) under
which Seller has created, incurred, assumed or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligations, in excess of $50,000, or
under which it has imposed an Encumbrance on any of its assets (other than any
lien of the type described in the last sentence of Section 3.09(a));
(v) any contract or agreement not entered into in the ordinary
course of Seller's business; and
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(vi) any written employment agreement.
(b) Neither Seller nor the Joint Venture is (and, to the
knowledge of Seller, no other party is) in breach or violation of, or default
under, any of the Material Contracts or Assumed Liabilities (except as would not
result in a Material Adverse Effect). Each Material Contract is a valid
agreement, arrangement or commitment of Seller or the Joint Venture, enforceable
against Seller or the Joint Venture in accordance with its terms except where
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and except where enforceability is subject
to the application of equitable principles or remedies.
SECTION 3.17. Joint Venture Assets. The Seller is current on all
payments due by the Seller to the Joint Venture and the Joint Venture is current
on all payments due by the Joint Venture, except as set forth in Section 3.17 of
the Disclosure Statement. All of the Joint Venture Assets are listed in Section
3.17 of the Disclosure Statement.
SECTION 3.18 Joint Venture Financial Statements; Absence of Undisclosed
Liabilities. (a) Attached to Section 3.18 of the Disclosure Statement are true
and correct copies of the balance sheets applicable to the Joint Venture for the
periods ending December 31, 1996 and December 31, 1997 and statements of income
for the periods ending December 31, 1996, and December 31, 1997 (the "Joint
Venture Financial Statements"). The Joint Venture Financial Statements have been
prepared in accordance with GAAP except as noted in Section 3.04 of the
Disclosure Statement and fairly present in all material respects the financial
position of the Joint Venture as of the dates thereof and the results of the
operations for the periods then ended.
(b) Seller has delivered to Purchaser true and correct copies of the
summary financial reports of the Joint Venture for the months January, 1998
through June 30, 1998 (the "Joint Venture Interim Summary Reports"). The Interim
Summary Reports, which are unaudited, fairly present in all material respects
the financial position of the Joint Venture as of the dates thereof and the
results of the operations of the Seller for the period then ended, and include
all adjustments (consisting of normal recurring adjustments) necessary for a
fair presentation of the information included therein, subject to year end
adjustments.
(c) Except as set forth in Section 3.18 of the Disclosure Statement,
and except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since June 30, 1998, the Joint Venture
does not have any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by GAAP to be set forth on a balance
sheet.
SECTION 3.19. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller.
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SECTION 3.20. Product Warranty. To the Knowledge of Seller, since
December 31, 1997, the products sold or services performed in the conduct of
Seller's business have been in compliance in all material respects with any
warranties made with respect thereto, and, except as set forth in Section 3.20
of the Disclosure Statement, there is not currently pending any customer claim
alleging any breach of warranty with respect to such products or services other
than such claims arising in the ordinary course of business and which in the
aggregate will not involve a loss of greater than $10,000.
SECTION 3.21. Permits and Consents. Section 3.21 of the Disclosure
Statement lists all of the permits, licenses, consents, certificates,
governmental approvals required to conduct the Business (the "Permits") the
absence of which would have a Material Adverse Effect on the Business. The
Seller agrees to assign to Purchaser all Permits, to the extent assignable, as a
part of the Subject Business Assets and the Permits which cannot be transferred
are identified in Section 3.21 of the Disclosure Statement. To the Seller's
Knowledge, the Seller is in full compliance with all Permits and no suspension,
revocation, limitation or cancellation of any of the Permits is threatened or
pending and no cause exists for such, except as would not have a Material
Adverse Effect on the Business. Section 3.21 of the Disclosure Statement sets
forth any third party and governmental consents, approvals, waivers or
authorizations necessary for the valid and enforceable transfer of the Subject
Business Assets and the consummation of this transaction (the "Consents").
SECTION 3.22 Assumed Liabilities. Seller has made available to
Purchaser true and complete copies of all contracts, leases and records relating
to the Assumed Liability in a timely fashion from which the Purchaser has had an
opportunity to verify the terms of the Assumed Liabilities.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 4.01. Incorporation and Authority of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of Purchaser. This Agreement has been duly executed and delivered by
Purchaser, and (assuming due authorization. execution and delivery by Seller)
constitutes a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, subject to the effect of any
applicable
581498.1
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bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to the effect of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.02. No Conflict. Except as may result from any facts or
circumstances relating solely to Seller, the execution, delivery and performance
of this Agreement by Purchaser does not and will not (a) violate or conflict
with the Certificate of Incorporation or By-laws (or other similar applicable
documents) of Purchaser, (b) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Purchaser or (c) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument relating to such assets or properties to which Purchaser or any
of its subsidiaries is a party or by which any of such assets or properties is
bound or affected, except as would not, individually or in the aggregate, have a
Material Adverse Effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
SECTION 4.03. Consents and Approvals. The execution and delivery of
this Agreement by Purchaser does not, and the performance of this Agreement by
Purchaser will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except (a)
where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent Purchaser from, or delay
Purchaser in, performing any of its material obligations under this Agreement
and (b) as may be necessary as a result of any facts or circumstances relating
solely to Seller.
SECTION 4.04. Absence of Litigation. No claim, action, proceeding or
investigation is pending before any court, arbitrator or administrative,
governmental or regulatory authority or body that seeks to delay or prevent the
consummation of the transactions contemplated hereby or that would be reasonably
likely to materially and adversely affect or restrict Purchaser's ability to
consummate the transactions contemplated hereby.
SECTION 4.05. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. (a) Unless
Purchaser
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otherwise agrees in writing (which agreement will not be unreasonably withheld)
and except as otherwise set forth in Section 5.01 of the Disclosure Statement,
between the date of this Agreement and the Closing Date, Seller will, as to the
Subject Business Assets (i) conduct its business only in the ordinary course,
(ii) use reasonable efforts to preserve intact Seller's Business organization
and assets and retain the services of key employees of the Business, subject to
the conduct of its Business in the ordinary course, and (iii) use reasonable
efforts to preserve the current relationships of the Business with its
respective customers, suppliers, licensors, distributors and other Persons with
which the Business has significant business relationships.
(b) Unless Purchaser otherwise agrees in writing (which agreement will
not be unreasonably withheld) and except as otherwise set forth in Section 5.01
of the Disclosure Statement and except for actions in the ordinary course of
business, between the date of this Agreement and the Closing Date, Seller will
not (i) amend or terminate any contract listed in the Disclosure Statement,,
(ii) sell, transfer, replace or lease any of the Subject Business Assets, (iii)
materially increase or write down the value of any Current Assets without a
written explanation of the cause furnished to Purchaser prior to Closing, (iv)
permit the Subject Business Assets to be subject to any new encumbrance, (v)
increase the compensation of the employees, except following normal review
procedures and prior written notice to Purchaser, or (vi) materially alter its
conduct in its relations with suppliers or customers.
SECTION 5.02. Access to Information. Insofar as relevant to the
Business, from the date hereof until the Closing, upon reasonable notice, Seller
shall (i) afford the officers, employees and authorized agents and
representatives of Purchaser access, during normal business hours, to its
offices, properties, books and records and (ii) furnish to the officers,
employees and authorized agents and representatives of Purchaser such additional
financial and operating data and other information regarding its assets,
properties, goodwill and business as Purchaser may from time to time reasonably
request and which is obtainable without unreasonable effort or expense;
provided, however, that such investigation shall not unreasonably interfere with
any of the businesses or operations of Seller.
SECTION 5.03. Books and Records. (a) Each of Seller and Purchaser
agrees that it shall preserve and keep all books and records relating to
business units then owning or operating the Subject Business Assets, as they
relate to the Subject Business Assets as of the Closing Date, for a period of at
least five years from the Closing Date. During such five-year period, Seller,
Purchaser and their respective representatives shall, upon reasonable notice,
have access thereto during normal business hours to examine, inspect and copy
such books and records.
(b) If, in order properly to prepare its financial statements
or documents required to be filed with Governmental Authorities, it is necessary
that any party hereto or any successors be furnished with additional information
relating to Subject Business Assets as of the
581498.1
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Closing Date, and such information is in the possession of another party hereto,
such party agrees to use its reasonable efforts to furnish such information to
such other party, at the cost and expense of the party being furnished such
information.
SECTION 5.04. Governmental Approvals and Consents. (a) Each party
hereto will use its reasonable efforts to obtain all authorizations, consents,
orders and approvals of all Governmental Authorities that may be or become
necessary for the performance of its obligations pursuant to this Agreement and
will cooperate fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. The parties hereto will not take
any action that will have the effect of delaying, impairing or impeding the
receipt of any required approvals.
(b) Without limiting the generality of the parties'
undertakings pursuant to Section 5.04(a), each of the parties hereto shall use
all reasonable efforts to (i) respond to any inquiries by any Governmental
Authority regarding matters with respect to the transactions contemplated by
this Agreement, (ii) avoid the imposition of any order or the taking of any
action that would restrain, alter or enjoin the transactions contemplated by
this Agreement and (iii) in the event any Governmental Order adversely affecting
the ability of the parties to consummate the transactions contemplated by this
Agreement has been issued, to have such Governmental Order vacated or lifted.
SECTION 5.05. Confidentiality Agreement. The terms of the
confidentiality letter dated as of June 18, 1998 (the "Confidentiality
Agreement") between Seller and Purchaser are hereby incorporated herein by
reference and shall continue in full force and effect until the Closing and
shall survive the Closing.
SECTION 5.06 No General Assumption. Except for Permitted Encumbrances
and Assumed Liabilities listed on Exhibit A, Seller shall transfer the Subject
Business Assets to Purchaser free and clear of all encumbrances and without any
assumption of liabilities and obligations and Purchaser shall not assume or
become responsible, by virtue of its purchase of the Subject Business Assets,
for any liabilities or obligations of Seller, including without limitation those
matters disclosed in the Disclosure Statement which are not scheduled as Assumed
Liabilities.
SECTION 5.07 Prorations The expenses and accruals of the Assumed
Liabilities and the Subject Business Assets, such as utilities, real and
personal property taxes and rents, shall be prorated as of the date of Closing,
based upon the best available information with corrections to be made by the
parties when the final statements or required information is available.
SECTION 5.08 Post-Closing Consents. In the event that the Purchaser
should consent to close without any Consent listed in Section 3.21 of the
Disclosure Statement, the
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Seller agrees to use reasonable due diligence to obtain such Consent(s) after
the closing, provided that the Seller shall have no obligation to make any
payments to the party whose consent is required. The Seller and the Purchaser
will cooperate and assist each other in obtaining such Consents after closing.
SECTION 5.09. Further Instruments. Each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions hereof and
give effect to the transactions contemplated hereby.
ARTICLE VI.
EMPLOYEE MATTERS
SECTION 6.01. Employees. (a) A roster of all current employees of the
Business is set forth in Section 6.01 of the Disclosure Statement, together with
the "Employee Information", as hereinafter defined with respect to each
employee. "Employee Information" shall mean the name, date of hire, job title,
form of employment (written agreement, at-will, etc), full or part time (less
than 20 hours per week), pay rate of salary, vacation day entitlements/accruals
as of Closing Date (based on employee's employment with Seller) and shall
include a list of employees on (i) medical, family or other leave (whether
contractual or statutory), short term disability as defined in short term
disability policy covering Business and long-term disability as defined
long-term disability policy covering Business. Purchaser shall be permitted (but
shall not be under any obligation) to make offers of employment to all such
employees, and, in addition thereto, to such other non-direct employees as may
be agreed upon in writing and in advance with Seller. Promptly and in any event
within 30 days following the Closing, Purchaser shall notify Seller of any such
employees who do not become employees of Purchaser or its Affiliates following
the Closing. All such employees who become employees of Purchaser or its
Affiliates are herein called the "Employees". The vacation and sick day accruals
and entitlements of the Employees which may be due upon the termination of
employment by the Seller shall not be Assumed Liabilities of the Purchaser.
(b) To the extent that service is relevant for purposes of
eligibility, vesting or benefit accrual under any employee benefit plan, program
or arrangement established or maintained by Purchaser for the benefit of the
Employees, such plan, program or arrangement shall credit such Employees for
service on or prior to the Closing with Seller or any of its Affiliates. All
such Employees shall be allowed to participate from and after Closing in the
medical and dental benefit plans of Purchaser or its Affiliates as employees of
Purchaser or its Affiliates. If the Closing falls within an annual period of
coverage under any group health plan of Purchaser or its Affiliates which
becomes the employer with respect to the Employees, such Employees shall be
given credit for covered expenses paid by that Employee under comparable
employee benefit plans of Seller during the applicable coverage period to the
Closing Date
581498.1
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towards satisfaction of any annual deductible limitation and out-of-pocket
maximum that may apply under that group health plan.
SECTION 6.02. Survival. The covenants and agreements of the parties
hereto contained in this Article VI shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth herein.
ARTICLE VII.
TAX MATTERS
SECTION 7.01. Tax Indemnities. (a) From and after the Closing Date,
Seller agrees to indemnify Purchaser, against all Taxes (i) imposed on Seller or
any member of an affiliated group with which Seller files a consolidated or
combined income tax return with respect to any taxable period for which Seller
or any member of an affiliated group with Seller files (or is required by law to
file) an income tax return, and (ii) imposed on Seller with respect to any
taxable period or portion thereof that ends on or as of the Closing Date with
respect to the Subject Business Assets.
(b) From and after the Closing Date, Purchaser shall indemnify
Seller and its Affiliates against all taxes imposed on or with respect to the
Subject Business Assets with respect to any taxable period or portion thereof
beginning after the Closing Date.
(c) Payment by the indemnitor of any amount due under this Section
7.01 shall be made within ten days following written notice by the indemnitee
that payment of such amounts to the appropriate tax authority is due, provided
that the indemnitor shall not be required to make any payment (i) earlier than
two days before it is due to the appropriate tax authority or (ii) of any Taxes
which the indemnitor has by all appropriate proceedings elected to contest and
is contesting diligently and in good faith. In the case of a Tax that is so
contested, payment of the Tax to the appropriate tax authority will not be
considered to be due earlier than the date a final determination to such effect
is made by the appropriate taxing authority or a court.
(d) For purposes of this Agreement, in the case of any Tax
that is imposed on a periodic basis and is payable for a period that begins
before the Closing Date and ends after the Closing Date, the portion of such
Taxes payable for the period ending on the Closing Date shall be (i) in the case
of any Tax other than a Tax based upon or measured by income, the amount of such
Tax for the entire period multiplied by a fraction, the numerator of which is
the number of days in the period ending on the Closing Date and the denominator
of which is the number of days in the entire period and (ii) in the case of any
Tax based upon or measured by income, the amount which would be payable if the
taxable year ended on the Closing Date. Any
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credit shall be prorated in the same manner as the Tax to which such credit
relates would be prorated, as described in the preceding sentence. In the case
of any Tax based upon or measured by capital (including net worth or long-term
debt) or intangibles, any amount thereof required to be allocated under this
Section 7.01(d) shall be computed by reference to the level of such items on the
Closing Date.
SECTION 7.02. Refunds and Tax Benefits. Purchaser shall promptly pay to
Seller any refund or credit (including any interest paid or credited with
respect thereto) received by Purchaser (i) imposed on the Subject Business
Assets relating to taxable periods or portions thereof ending on or before the
Closing Date or (ii) attributable to an amount paid by Seller under Section 7.01
hereof.
SECTION 7.03. Conveyance Taxes. All sales, transfer, stamp, real
property transfer and similar Taxes incurred as a result of the sale of the
Subject Business Assets contemplated hereby shall be split equally between the
Seller and the Purchaser.
SECTION 7.04 Survival. The covenants and agreements of the parties
hereto contained in this Article VII shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth in this Article.
SECTION 7.04. Miscellaneous. The parties agree to treat all payments
made under Article IX or this Article VII as adjustments to the purchase price
for Tax purposes.
ARTICLE VIII.
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of All Parties. The obligations
of each party hereto to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Governmental Order which is in
effect and has the effect of making the transactions contemplated by this
Agreement illegal or otherwise restraining or prohibiting consummation of such
transactions; provided however, that each party hereto shall have complied with
its obligations under Section 5.04.
SECTION 8.02. Conditions to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver, at or prior to the Closing, of each of the
following conditions:
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(a) Representations and Warranties; Covenants. (i) 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 as of the
Closing, with the same force and effect as if made as of the Closing, other than
such representations and warranties as are made as of another date, which shall
be true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Purchaser on or before the
Closing shall have been complied with in all material respects and (iii) Seller
shall have received a certificate of Purchaser to such effect signed by a duly
authorized officer thereof;
(b) Resolutions. Seller shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of Purchaser
(or equivalent officer), of the resolutions, duly and validly adopted by the
Board of Directors of Purchaser evidencing its authorization of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(c) Incumbency Certificate. Seller shall have received a
certificate of the Secretary or an Assistant Secretary (or equivalent officer)
of Purchaser certifying the names and signatures of the officers of Purchaser
authorized to sign this Agreement and the other documents to be delivered
hereunder;
(d) Closing Documents The Closing Documents to be delivered or
executed by the Purchaser are in form and substance reasonably satisfactory to
the Seller and its counsel.
(e) Related Transactions. The Related Transactions have taken
place as more fully described on the attached Exhibit C;
(f) Further Action. All actions to be taken by Purchaser in
connection with the consummation of the transactions contemplated hereby, and
all certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Seller.
SECTION 8.03. Conditions to Obligations of Purchaser. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver, at or prior to the Closing, of each of
the following conditions:
(a) Representations and Warranties; Covenants. (i) 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 as of the
Closing, with the same force and effect as if made as of the Closing, other than
such representations and warranties as are made as of another date, which shall
be true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Seller on or before the
Closing shall have been complied with in all material respects and (iii)
Purchaser shall have received a certificate of Seller to such
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effect signed by a duly authorized officer thereof;
(b) Resolutions. Purchaser shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary (or
equivalent officer) of Seller, of the resolutions duly and validly adopted by
the Board of Directors of Seller evidencing its authorization of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(c) Incumbency Certificate. Purchaser shall have received a
certificate of the Secretary or an Assistant Secretary (or equivalent officer)
of Seller certifying the names and signatures of the officers authorized to sign
this Agreement and the other documents to be delivered hereunder;
(d) Required Third Party Actions. The Persons identified in
Section 8.03 of the Disclosure Statement have consented to this transaction and
the Related Transactions, if applicable, and Purchaser has received assurances
satisfactory to the Purchaser that such Person will release its liens on the
Subject Business Assets or will deliver any required Consent or Permit.
(e) FIRPTA. Seller shall have provided Purchaser with a
certificate pursuant to Treasury Regulations Sections 1.1445-2(c)(3) and
1.897-2(h) that the Subject Business Assets are not a United States real
property interest within the meaning of Section 897 of the Internal Revenue
Code;
(f) Closing Documents The Closing Documents to be delivered or
executed by the Seller are in form and substance reasonably satisfactory to the
Purchaser and its counsel.
(g) Related Transactions. The Related Transactions more fully
described on Exhibit C have taken place.
(h) Key Employees. Purchaser (or any designee of Purchaser)
and the "Key Employees", as hereinafter defined have entered into mutually
satisfactory employment agreements. "Key Employees" shall mean Xxxxxxxx X.
XxXxxx, XX, E. Xxxxx Xxxxx and Xxxxxxx X. Xxxxx, III; and
(i) Further Action. All actions to be taken by Seller (and any
of its applicable subsidiaries) in connection with the consummation of the
transactions contemplated hereby, all certificates, opinions, instruments, and
other documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Purchaser.
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ARTICLE IX.
INDEMNIFICATION
SECTION 9.01. Survival. Subject to the limitations and other provisions
of this Agreement, the representations, warranties, covenants and agreements of
the parties contained herein shall survive the Closing and shall remain in full
force and effect, regardless of any investigation made by or on behalf of Seller
or Purchaser, until 18 months following the Closing Date; provided however, that
the representations and warranties set forth in Section 3.01 and 4.01
(Incorporation and Authority) shall survive indefinitely and all representations
and warranties contained in this Agreement relating to Assumed Liabilities shall
survive the term of such Assumed Liabilities.
SECTION 9.02 Indemnification Agreement. The indemnification agreement
by and among Isolyser Company, Inc., SafeWaste Corporation and White Knight
Healthcare, Inc. , as sellers and Thantex Specialties, Inc., White Knight
Industrial, Inc., SafeWaste, Inc. and Thantex Holdings, Inc., as purchasers of
even date shall control all matters relating to indemnification by either the
Seller or the Purchaser with respect to this Agreement.
ARTICLE X.
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser; or
(b) by either Seller or Purchaser, if the Closing shall not
have occurred prior to August 30, 1998; provided, however, that the right to
terminate this Agreement under this Section 10.01(b) shall not be available to a
party whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, the failure of the Closing to
occur prior to such date.
Time shall be of the essence in this Agreement.
SECTION 10.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto (a)
except as set forth in Section 5.05 and Section 11.01 hereof and (b) nothing
herein shall relieve any party hereto from liability for any willful breach
hereof.
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SECTION 10.03. Waiver. At any time prior to the Closing, each of the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise expressly provided herein,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
SECTION 11.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in Person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
11.02):
(a) if to Seller:
Isolyser Company, Inc.
000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Chief Financial Officer
Telecopier: (000)000-0000
with a copy to:
Arnall Golden & Xxxxxxx, LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxx, Esq.
Telecopier: (000)000-0000
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(b) if to Purchaser:
SafeWaste, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx and Xxxxx X. Xxxx
Telecopier: (000) 0000000
with a copy to:
Buist, Moore, Xxxxxx & XxXxx, PA
0 Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telecopier (000) 000-0000
SECTION 11.03. Press Release and Public Announcements. Unless otherwise
required by applicable law or stock exchange requirements, no party to this
Agreement shall issue any press releases or make any public announcements in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without prior written notification to and
consent of the other party, and the parties will cooperate as to the timing and
contents of any announcement. With respect to announcements and releases
required by applicable law or stock exchange requirements, the Seller shall
afford the Purchaser prior notice and the opportunity to comment prior to
release.
SECTION 11.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
SECTION 11.06. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements
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and undertakings, both written and oral, between Seller and Purchaser with
respect to the subject matter hereof and except as otherwise expressly provided
herein. The exhibits referred to in and attached to this Agreement form a part
of this Agreement and by reference are incorporated herein.
SECTION 11.07. Assignment. Without the prior written consent of the
other party hereto, neither party hereto may assign its rights or delegate its
obligations hereunder; provided however the Purchaser may assign its rights to
an Affiliate if the Purchaser remains responsible for the performance of all of
its obligations hereunder.
SECTION 11.09. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Seller and Purchaser.
SECTION 11.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
SECTION 11.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Seller and Purchaser have caused this SafeWaste
Asset Agreement to be executed as of the date first written above by their
respective officers hereunto duly authorized.
SAFEWASTE CORPORATION
By:___________________________________
Its:__________________________________
SAFEWASTE, INC.
By:___________________________________
Its:__________________________________
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