ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXXXXXX TECHNOLOGIES, INC.,
AND
UNITED WASTE SERVICES, INC.
Dated as of September 8, 1998
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
this 4th day of September, 1998, by and among UNITED WASTE SERVICE, INC., a
Georgia corporation (the "Seller"), and XXXXXXXX TECHNOLOGIES, INC., a Delaware
corporation ("GMTI") and XXXXXXXX ACQUISITION CORP., a Delaware corporation
("GAC") (hereinafter, GMTI and GAC shall be referred to as the "Purchaser").
Recitals
A. Seller operates a scrap tire collection and processing business (the
"Business") at facilities located in Lawrenceville, Georgia (the "Lawrenceville
Facility") and Batesburg, South Carolina (the "Batesburg Facility").
B. Purchaser desires to purchase and Seller desires to sell certain assets
of the Business.
C. This Agreement sets forth the terms and conditions pursuant to which
such assets of the Business shall be transferred from Seller to Purchaser.
Covenants
In consideration of the mutual representations, warranties and covenants
and subject to the conditions herein contained, the parties hereto, intending to
be legally bound hereby, agree as follows:
ARTICLE I
Purchase and Sale of Assets
1.1 Purchased Assets. Subject to and upon the terms and conditions set
forth herein, the Seller agrees to and will sell, transfer, assign, and deliver
to GAC at the Closing (as hereinafter defined) all of its right, title, and
interest in and to, and GAC agrees to and will purchase, acquire and take
assignment and delivery of, the following assets, properties and business of the
Seller which are described generally below and are specifically listed on
Schedule 1.1, as same shall exist on the Closing Date (as hereinafter defined)
(collectively, the "Purchased Assets"):
1.1.1 certain vehicles, including any contents of those vehicles,
used in the scrap tire collection and processing operations of the
Business which are specifically listed on Schedule 1.1;
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1.1.2 certain machinery, including parts inventory, used in the
processing operations of the Business which are specifically listed on
Schedule 1.1 (hereinafter the vehicles referenced in Section 1.1.1 and the
machinery referenced in Section 1.1.2 shall be referred to herein as the
"Fixed Assets");
1.1.3 the Seller's written customer contracts (the "Written
Contracts") pertaining to the Business which are specifically listed on
Schedule 1.1;
1.1.4 any of Seller's rights to provide services to the Business's
customers (the "Oral Contracts" and, collectively together with the
Written Contracts, the "Contracts") as more particulary described on
Schedule 1.1; and
1.1.5 all computer hardware and other equipment, tools, maintenance
machinery and equipment, furniture and fixtures, leasehold improvements
and construction in progress, whether or not reflected as capital assets
in the accounting records of the Seller used in the Business which are
specifically listed on Schedule 1.1;
1.1.6 all books, records and accounts, correspondence, production
records, technical, manufacturing and procedural manuals, customer and
supplier lists, customer leads, covenants not to compete, studies, reports
or summaries relating to any environmental conditions or consequences of
any operation, present or former, as well as all studies, reports or
summaries relating to any environmental aspect or the general condition of
the Purchased Assets, and any confidential information that has been
reduced to documentary form relating to or arising out of the Business
(the "Records");
1.1.7 to the extent transferable, all requisite licenses, permits
and certificates, including environmental, health and safety permits, from
federal, state and local authorities necessary to conduct the Business and
own and operate the Purchased Assets;
1.2 Excluded Assets. Anything to the contrary in Section 1.1
notwithstanding, the Purchased Assets shall not include the following assets of
the Seller: (i) the assets of the Seller that relate to its operations in
general or its operation of businesses other than the Business; (ii) cash and
cash equivalents and investments, whether short-term or long-term, of the
Seller, whether or not relating to the Business; (iii) receivables of the
Seller; (iv) all operating data and records of the Seller other than the
Records; and (v) any other asset not specifically identified herein as being
transferred to the Purchaser pursuant to this Agreement.
ARTICLE II
Purchase Price; Assumption of Liabilities
2.1 Purchase Price. Subject to and upon the terms and conditions set forth
herein, as consideration for the Purchased Assets, the Purchaser agrees to and
will pay and deliver to the Seller at Closing (in the manner prescribed in
Section 3.2), cash and securities of the Purchaser
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as follows (the cash and securities to be paid and delivered are referred to,
collectively, as the "Purchase Price"):
2.1.1 $850,000; plus
2.1.2 A certificate representing $3,200,000 of the Purchaser's
Series B Convertible Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), having the rights, restrictions, privileges and
preferences set forth in the Stock Designation (as hereinafter defined).
2.2 Assumed Liabilities. The Purchaser agrees to and will at the Closing
assume and agree to pay, discharge and perform when lawfully due the following
obligations and liabilities of the Seller (the "Assumed Liabilities"):
2.2.1 all obligations and liabilities of the Seller with respect to
the Contracts, which obligations and liabilities arise or relate to
periods after the Closing;
2.2.2 all obligations and liabilities relating to the processing and
disposal of all scrap tires and scrap tire processing residual material
located at the Lawrenceville Facility and the Batesburg Facility as of the
Closing Date (such obligations and liabilities being referred to herein as
the "Post-Closing Scrap Tire Disposal Obligations") as further described
on Schedule 2.2.2; provided, however, that Purchaser shall not assume any
obligations or liabilities for the processing and disposal of any
hazardous waste (including any scrap tires or scrap tire processing
residual material that may be contaminated with hazardous waste); and
2.2.3 those other obligations and liabilities of the Seller
specifically listed on Schedule 2.2.3.
For purposes of Section 2.2.2, "hazardous waste" shall be defined as waste
defined as, or of a character or in sufficient quantity to be defined as a
"hazardous waste" by the Resource Conservation and Recovery Act, as amended, the
laws of the State of Georgia or any rules or regulations with respect thereto,
or a "toxic substance" as defined in the Toxic Substance Control Act, as
amended, or any rules or regulations with respect thereto, or any reportable
quantity of a "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
any rules or regulations with respect thereto, including any waste whose
storage, treatment, incineration or disposal requires a special license or
permit from an agency of the federal government or the State of Georgia.
Hazardous Waste also includes any substance that is, after the Effective Date of
this Agreement, deemed hazardous by any judicial or governmental entity, body or
agency having jurisdiction to make that determination.
2.3 No Expansion of Third Party Rights. The assumption by the Purchaser of
the Assumed Liabilities and the transfer thereof by the Seller shall in no way
expand the rights and
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remedies such third party would have had against the Seller had the Purchaser
not assumed such liabilities. Without limiting the generality of the preceding
sentence, the assumption by the Purchaser of the Assumed Liabilities shall not
create any third party beneficiary rights.
2.4 Allocation of the Purchase Price among the Purchased Assets. The
Purchase Price shall be allocated among each item or class of the Purchased
Assets as specifically set forth on or determined pursuant to Schedule 2.4. The
Seller and Purchaser agree that this allocation will be used on Form 8594 and
any other notice or filing required pursuant to Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code").
2.5 Tax Treatment. The Purchaser and the Seller intend for the
transactions contemplated by this Agreement to be treated as a taxable
transactions under the Code pursuant to Section 1001.
2.6 Proration of Certain Items. Personal property taxes relating to the
Purchased Assets, utilities relating solely to the Business and other accrued
but unpaid (as of the Closing Date) expenses which are customarily prorated
shall be prorated as of the Closing Date such that the Seller is responsible for
such expenses accruing prior to the Closing and the Purchaser is responsible for
such expenses accruing from and after the Closing. Such proration shall be made
within 30 days after the Closing based upon actual bills (or, if not available,
based upon good faith estimates) for such prorated expenses.
2.7 Budgets, Projections and Forecasts. The Seller has provided to the
Purchaser certain forward-looking information, including budgets, projections
and forecasts, relative to the Business and Purchased Assets being acquired
pursuant to this Agreement. The Purchaser acknowledges, however, that the Seller
makes no representation or warranty regarding such budgets and forecasts or any
information contained therein, and the Purchaser hereby waives any claim for
damages resulting from any information contained herein.
ARTICLE III
Closing
3.1 Time and Place of the Closing. Subject to and after the fulfillment or
waiver of the conditions set forth in Articles IX and X of this Agreement, the
closing of the sale of the Purchased Assets shall take place at the offices
Xxxxxxxx & Worcester in Boston, MA at 10:00 a.m. eastern time on September 4,
1998, or such other date, time and place as the parties may agree. Throughout
this Agreement, such event is referred to as the "Closing" and such date and
time are referred to as the "Closing Date".
3.2 Procedure at the Closing. At the Closing, the parties agree to take
the following steps which upon their completion and regardless of the order
completed shall be deemed to have occurred simultaneously:
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3.2.1 The Seller shall deliver to the Purchaser evidence, in such
form as is satisfactory to the Purchaser, that each of the conditions to
the obligations of the Purchaser to purchase the Purchased Assets from the
Seller which is set forth in Article VIII of this Agreement has been
satisfied;
3.2.2 The Purchaser shall deliver to the Seller evidence, in such
form as is satisfactory to the Seller, that each of the conditions to the
obligations of the Seller to sell the Purchased Assets to the Purchaser
which is set forth in Article IX of this Agreement has been satisfied;
3.2.3 The Seller shall deliver to the Purchaser, and the Purchaser
shall deliver to the Seller, a fully executed Xxxx of Sale, Assignment and
Assumption Agreement in the form of Exhibit 3.2.3;
3.2.4 The Purchaser and the Seller shall execute and deliver a lease
agreement for the Lawrenceville Facility in the form attached hereto as
Exhibit 3.2.4;
3.2.5 The Seller shall deliver to the Purchaser a certificate of
good standing of the Seller issued by the appropriate officer of the State
of Georgia, together with a certificate from the appropriate officer of
the State of South Carolina evidencing Seller's authorization to conduct
business therein as a foreign corporation, each dated not earlier than 10
days prior to the Closing Date;
3.2.6 The Purchaser shall deliver to the Seller a certificate of
good standing of the Purchaser issued by the appropriate officer of the
State of Delaware, together with certificates from the appropriate
officers of the States of Georgia and South Carolina evidencing
Purchaser's authorization to conduct business therein as a foreign
corporation, each dated not earlier than 10 days prior to the Closing
Date;
3.2.7 The Seller shall deliver to the Purchaser a copy of
resolutions adopted by its board of directors authorizing each of the
transactions contemplated hereby which are to be taken by it, certified as
of the Closing Date by the secretary or an assistant secretary of the
Seller;
3.2.8 The Purchaser shall deliver to the Seller a copy of
resolutions adopted by its board of directors authorizing each of the
transactions contemplated hereby which are to be taken by it, certified as
of the Closing Date by the secretary or an assistant secretary of the
Purchaser;
3.2.9 The Purchaser shall deliver to the Seller a copy of the
Certificate of Stock Designation to the Purchaser's Certificate of
Incorporation, as amended (the "Stock Designation") authorizing it to
issue the Preferred Stock having the rights, restrictions,
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privileges and preferences as set forth on Exhibit 3.2.9, certified by the
appropriate officer of the State of Delaware;
3.2.10 The Purchaser shall deliver to the Seller the Purchase Price
as follows:
(a) $850,000.00 in cash by wire transfer or cashiers or
certified check; and
(b) A certificate representing the Preferred Stock.
3.2.11 The Purchaser and the Seller shall execute and deliver a
cross receipt in the form attached hereto as Exhibit 3.2.11 acknowledging
receipt of the Purchased Assets and the Purchase Price.
3.2.12 The Seller shall execute and deliver a Non-Competition
Agreement in the form attached hereto as Exhibit 3.2.12.
3.2.13 The Purchaser and the Seller shall execute and deliver a
Disposal Agreement in the form attached hereto as Exhibit 3.2.13.
3.2.14 The Purchaser and the Seller shall execute and deliver the
Registration Agreement in the form attached hereto as Exhibit 3.2.14.
3.2.15 The Purchaser and Seller shall execute and deliver to the
Seller a Resale Certificate in the form attached hereto as Exhibit 3.2.15.
ARTICLE IV
Representations and Warranties of Seller
The Seller makes the following representations and warranties, which
representations and warranties shall survive the Closing as provided in Section
11.1:
4.1 Organization, Power and Authority of Seller. The Seller is a corporation
duly organized and validly existing in good standing under the laws of the State
of Georgia and has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. The Seller is legally
qualified to transact business as a foreign corporation, and is in good standing
under the laws of, the State of South Carolina.
4.2 Due Authorization; Binding Obligation; No Conflict. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action of the Seller. This Agreement has been duly executed and
delivered by the Seller and is a valid and binding obligation of the
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Seller, enforceable against the Seller in accordance with its terms. Except as
set forth on Schedule 4.2, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will: (i)
contravene any provision of the Seller's certificate of incorporation or bylaws;
(ii) violate or conflict with any federal or state law, statute, regulation,
decree, injunction, judgement or order which is either applicable to, binding
upon or enforceable against the Seller; (iii) result in any breach of or default
under any material mortgage, contract, agreement or other instrument which is
either binding upon or enforceable against the Seller or the Purchased Assets;
(iv) result in or require the creation or imposition of any lien upon the
Purchased Assets; or (v) violate any legally protected right arising in the
operation of the Seller's business of any person or entity or give to any person
or entity a right or claim against the Purchaser or the Purchased Assets.
4.3 Consents. Except as set forth on Schedule 4.3 no consent, approval or
authorization of any governmental authority is required for the execution,
delivery and performance of this Agreement by the Seller and the consummation by
the Seller of any of the transactions contemplated by this Agreement.
4.4 Financial Statements. The Seller has previously furnished to the
Purchaser a profit and loss statement of the Business for the period ended
December 31, 1997 (the "P&L"). The P&L presents fairly in all material respects
the results of operations of the Business for the period indicated therein and
was prepared in accordance with generally accepted accounting principles,
consistently applied. The books and records of the Seller with respect to the
Business reflect in all material respects all transactions, properties, assets
and liabilities of the Business.
4.5 Litigation. Except as set forth on Schedule 4.5 there is no action,
suit, or other legal or administrative proceeding or governmental investigation
pending, threatened, anticipated or contemplated against the Seller or the
Purchased Assets which could have a material adverse effect on the Business
taken as a whole, or which questions the validity or enforceability of this
Agreement or the transactions contemplated hereby, and there is no basis for any
of the foregoing. The Business has not been permanently or temporarily enjoined
by any order, judgment or decree of any court or any governmental agency,
authority or body from engaging in or continuing any conduct or practice in
connection with the operations, assets, or properties of the Business. To the
best of Seller's knowledge, there is not in existence on the date hereof any
order, judgment or decree of any court, tribunal or agency enjoining or
requiring the Business to take any action of any kind with respect to its
operations, assets or properties.
4.6 Absence of Undisclosed Liabilities. Except as and to the extent (i)
reflected and reserved against in the books and records of the Business, (ii)
set forth on Schedule 4.6 attached hereto or set forth on any other Schedule
attached to this Agreement, (iii) incurred in the ordinary course of business
after the date of the P&L and not material, either individually or in the
aggregate, or (iv) representing ordinary course purchases of inventory, the
Seller does not have any liability affecting the Purchased Assets.
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4.7 Good Title. Except for the Purchased Assets subject to the Lease
Agreements identified on Schedule 2.2.3, the Seller has, and at the Closing will
have, good and marketable title to the Purchased Assets with full power to sell,
transfer and assign the same, free and clear of any lien, and by delivery of the
Xxxx of Sale and Assignment as contemplated by Section 3.2, the Seller will
deliver to the Purchaser good and marketable title to such Purchased Assets free
and clear of any lien, or other than liens for taxes not yet due and payable.
The Seller represents that the Purchased Assets do not represent all or
substantially all of the assets of the Seller.
4.8 Compliance with Laws. The Seller is and has been in compliance with all
laws, regulations and orders applicable to the Business and the Purchased
Assets, except where the failure to be in compliance would not have a material
adverse effect on the Business taken as a whole.
4.9 Tax Matters. All Tax Returns required to be filed prior to the date
hereof by the Seller have been timely filed, and all such Tax Returns have been
prepared in compliance with all applicable laws and regulations. All Taxes due
and payable by or with respect to the Seller have been paid and those taxes not
yet due and payable will be accrued on the books and records of the Seller as of
the Closing and cash has been reserved by the Seller for the payment thereof in
full when due and payable (and such taxes will be paid when due and payable).
There are no tax liens (other than for ad-valorem and similar taxes which are
not past due) or taxes on any of the assets of the Business.
4.10 Insurance. The Company is covered valid, outstanding and enforceable
policies of insurance covering the Purchased Assets against risks of the nature
normally insured against by corporations in the same or similar lines of
business and in coverage amounts typically and reasonably carried by such
corporations (the "Insurance Policies"). Such Insurance Policies are in full
force and effect, and all premiums due thereon have been paid and there is no
default under any of the Insurance Policies.
4.11 Licenses and Permits. The Seller has obtained all requisite licenses,
permits and certificates, including environmental, health and safety permits,
from federal, state and local authorities necessary to conduct the Business and
own and operate the Purchased Assets (collectively, the "Permits"), except where
a failure to hold a Permit does not have a material adverse effect on the
Business.
4.12 Scrap Tires. The amount of scrap tires and scrap tire processing
residual material located at the Lawrenceville Facility and the Batesburg
Facility has not materially increased from that amount which existed on June 15,
1998.
4.13 Brokers. The Seller has not paid or become obligated to pay any fee or
commission of any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
4.14 Fixed Assets. Schedule 1.1 attached hereto sets forth a true, correct
and complete list of all Fixed Assets. Except as set forth on Schedule 1.1, all
of the Fixed Assets (i) are in
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good operating condition and repair, normal wear and tear excepted, and (ii)
have been maintained normally and on a consistent basis.
4.15 Books and Records. The general ledgers and books of account of the
Seller and all other books and records of the Seller are in all material
respects complete and correct and have been maintained in accordance with good
business practice and in accordance with all applicable procedures required by
laws and regulations.
4.16 Contracts and Commitments. Each of the Written Contracts of the Seller
is a valid and binding agreement of the Seller, enforceable against the Seller
in accordance with its terms, and the Seller has no knowledge that any Written
Contract is not a valid and binding agreement of the other parties thereto. The
Seller has fulfilled all material obligations required pursuant to the Written
Contracts to have been performed by the Seller on its part prior to the date
hereof. The Seller is not in breach of or default under any Written Contract,
and no event has occurred that with the passage of time or giving of notice or
both would constitute such a default, result in a loss of rights or result in
the creation of any lien, charge or encumbrance, thereunder or pursuant thereto.
To the best knowledge of the Seller, there is no existing breach or default by
any other party to any Written Contract, and no event has occurred that with the
passage of time or giving of notice or both would constitute a default by such
other party, result in a loss of rights or result in the creation of any lien,
charge or encumbrance thereunder or pursuant thereto. The Seller has no Written
Contracts to sell products or perform services that are expected to be performed
at, or to result in, a loss. Except as set forth on Schedule 1.1, the
continuation, validity and effectiveness of each Written Contract will not be
affected by the transfer thereof to Buyer under this Agreement and all such
Written Contracts to be assigned to Buyer pursuant to this Agreement are
assignable to Buyer without a consent.
4.17 Employee Relations. With respect to the Business, the Seller is in
compliance in all material respects with all federal, state and municipal laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in any unfair labor
practice, and there are no arrears in the payment of wages or social security
taxes. None of the employees of the Seller is represented by any labor union;
there is no unfair labor practice complaint against the Seller pending before
the National Labor Relations Board or any state or local agency; there is no
pending labor strike or other material labor trouble affecting the Seller
(including, without limitation, any organizational drive); and there is no
material labor grievance pending against the Seller.
4.18 Regulatory Approvals. All consents, approvals, authorizations and other
requirements prescribed by any law, rule or regulation that must be obtained or
satisfied by the Seller and that are necessary for the execution and delivery by
the Seller of this Agreement and the documents to be executed and delivered by
the Seller in connection herewith are set forth on Schedule 4.18 attached hereto
and have been, or will be prior to the Closing Date, obtained and satisfied,
except where the failure to obtain such consents, approvals or authorizations
will not have a material adverse effect on the Business or the Purchased Assets.
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ARTICLE V
Representations and Warranties of Purchaser
The Purchaser makes the following representations and warranties, which
representations and warranties shall survive the Closing as provided in Section
11.2:
5.1 Organization, Power and Authority of the Purchaser. The Purchaser is a
corporation duly organized and validly existing under the laws of the State of
Delaware, and has all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The Purchaser is legally
qualified to transact business in, and is in good standing under the laws of,
the States of Georgia and South Carolina.
5.2 Due Authorization; Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser and is a valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will: (i) contravene any provision of the
Purchaser's charter or bylaws; (ii) violate or conflict with any federal or
state law, statute, regulation, decree, injunction, judgement or order which is
either applicable to, binding upon or enforceable against the Purchaser; (iii)
result in any breach of or default under any material mortgage, contract,
agreement or other instrument which is either binding upon or enforceable
against the Purchaser; or (iv) violate any legally protected right arising in
the operation of the Purchaser's business of any person or entity or give to any
person or entity a right or claim against the Seller or the Purchase Price.
5.3 Capitalization. The shares of Preferred Stock to be issued pursuant to
this Agreement are duly authorized, validly issued, fully-paid and
non-assessable and will be free of any liens and encumbrances. The Preferred
Stock has been issued by the Purchaser in compliance with all applicable federal
and state securities laws. The Preferred Stock has the rights, preferences,
privileges and restrictions set forth in the Stock Designation. The Company has,
and shall at all times ensure, that it has reserved a number of shares of Common
Stock sufficient for the conversion of all shares of Preferred Stock outstanding
at any time.
5.4 Consents. No consent, approval or authorization of any governmental
authority is required for the execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of any of the
transactions contemplated by this Agreement.
5.5 Brokers. The Purchaser has not paid or become obligated to pay any fee
or commission or any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
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ARTICLE VI
Additional Covenants of Seller
6.1 Best Efforts. The Seller will use its best efforts to cause to be
satisfied as soon as practicable and prior to the Closing Date all of the
conditions set forth in Article VIII to the obligation of the Purchaser to
purchase the Purchased Assets pursuant to this Agreement.
6.2 Conduct of Business Pending the Closing. From and after the execution
and delivery of this Agreement and until the Closing Date, except as otherwise
provided by the prior written consent of the Purchaser:
6.2.1 The Seller will use its best efforts to operate the Business in
the manner in which the same have heretofore been operated;
6.2.2 The Seller will use its best efforts to maintain the Purchased
Assets in customary repair, order and condition, reasonable wear and use and
damage by unavoidable casualty excepted, and will maintain insurance of such
types and in such amounts upon all of the Purchased Assets as is in effect
on the date of this Agreement.
6.3 Access to the Business and the Records. From and after the execution and
delivery of this Agreement, the Seller will afford to the representatives of the
Purchaser access, during normal business hours and upon reasonable notice, to
the locations at which the business is operated sufficient to enable the
Purchaser to inspect the Purchased Assets, and the Seller will furnish to such
representatives during such period all such information relating to the
foregoing investigation as the Purchaser may reasonably request.
ARTICLE VII
Additional Covenants of the Purchaser
7.1 Best Efforts. The Purchaser will use its best efforts to cause to be
satisfied as soon as practicable and prior to the Closing Date all of the
conditions set forth in Article IX to the obligation of the Seller to sell the
Purchased Assets pursuant to this Agreement.
7.2 Post-Closing Scrap Tire Obligations. From and after the Closing Date,
the Purchaser shall, as soon as reasonably practicable and in accordance with
all applicable laws and regulations, fulfill and satisfy the Post-Closing Scrap
Tire Obligations.
ARTICLE VIII
Conditions to Obligations of the Purchaser
The obligation of the Purchaser to purchase the Purchased Assets shall be
subject to the fulfillment at or prior to the Closing Date of each of the
following conditions:
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8.1 Accuracy of Representations and Warranties; Compliance with Obligations;
Execution and Delivery of Closing Items. The representations and warranties of
the Seller contained in this Article IV shall have been true and correct at and
as of the date hereof, and they shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as though
made at and as of that time. The Seller shall have duly performed and complied
with in all material respects all of the covenants and agreements of the Seller
contained in this Agreement to be performed or complied with at or prior to the
Closing Date. The Seller shall have delivered to the Purchaser a certificate,
dated as of the Closing Date and signed by a senior officer of the Seller,
certifying that such representations and warranties in Article IV are thus true
and correct and that all such covenants and agreements have been thus performed
and complied with. The Seller shall have executed and delivered on or prior to
the Closing Date each of the items required to be executed and delivered by it
pursuant to Section 3.2 of this Agreement.
8.2 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Purchased Assets
to the Purchaser or any other transaction contemplated hereby, or which affects
the right of the Seller to sell or the Purchaser to own, operate or control the
Purchased Assets.
ARTICLE IX
Conditions to Obligations of the Seller
The obligation of the Seller to sell the Purchased Assets shall be subject
to the fulfillment at or prior to the Closing Date of each of the following
conditions:
9.1 Accuracy of Representations and Warranties; Compliance with Obligations;
Execution and Delivery of Closing Items. The representations and warranties of
the Purchaser contained in this Agreement shall have been true and correct at
and as of the date hereof, and they shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as though
made at and as of that time. The Purchaser shall have duly performed and
complied with in all material respects all of the covenants and agreements of
the Purchaser contained in this Agreement to be performed or complied with at or
prior to the Closing Date. The Purchaser shall have delivered to the Seller a
certificate, dated as of the Closing Date and signed by one a senior officer of
the Purchaser, certifying that such representations and warranties are thus true
and correct and that all such covenants and agreements have been thus performed
and complied with. The Purchaser shall have executed and delivered on or prior
to the Closing Date each of the items required to be executed and delivered by
it pursuant to Section 3.2 of this Agreement.
9.2 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Purchased Assets
to the Purchaser or any other transaction
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contemplated hereby, or which affects the right of the Seller to sell or the
Purchaser to own, operate or control the Purchased Assets.
ARTICLE X
Certain Actions After the Closing
10.1 Delivery of Property Received by the Seller After Closing. The Seller
agrees that it will transfer or deliver to the Purchaser, promptly after the
receipt thereof, any cash or other property which the Seller receives after the
Closing Date in respect of any claims, contracts, licenses, leases, commitments,
sales orders, purchase orders or any other items transferred or intended to be
transferred to the Purchaser as part of the Purchased Assets under this
Agreement.
10.2 Execution of Further Documents. From and after the Closing, upon the
reasonable request of any party hereto, the other party shall execute,
acknowledge and deliver all such further acts, deeds, bills of sale,
assignments, transfers and assurances as may be required or otherwise
appropriate to carry out the transactions contemplated by this Agreement.
10.3 Restrictions on Sales of Purchaser's Securities. Subject always to the
rights granted to the Seller in the Registration Agreement, the Seller hereby
agrees, for the period commencing as of the Closing Date and continuing until
thirty (30) months following the Closing Date, that it shall not sell, pledge,
transfer to an unaffiliated third party, or otherwise dispose of or grant any
option or purchase right with respect to, any securities (including shares of
Common Stock issuable upon conversion of the Preferred Stock), or engage in any
short sale, hedging transaction or other derivative security transaction
involving the Preferred Stock or any Common Stock held by the Seller as a result
of the conversion of the Preferred Stock.
10.4 Sharing of Data. The Purchaser shall have the right for a period of
seven years following the Closing Date to have reasonable access to those books,
records and accounts, including financial and tax information, correspondence,
production records, employment records and other records that are retained by
the Seller pursuant to the terms of this Agreement to the extent that any of the
foregoing relates to the Business and is needed by the Purchaser in order to
comply with its obligations under applicable securities, tax, environmental,
employment or other laws and regulations. The Seller shall have the right for a
period of seven years following the Closing Date to have reasonable access to
such books, records and accounts, including financial and tax information,
correspondence, production records, employment records and other similar
information as are transferred to the Purchaser pursuant to the terms of this
Agreement for the limited purposes of concluding its involvement in the Business
prior to the Closing Date and for complying with its obligations under
applicable securities, tax, environmental, employment or other laws and
regulations. The Seller and the Purchaser each agree that if at the end of such
seven year period either party hereto is involved in a dispute (of which the
other party hereto has been notified) with regard to records held by the party
not engaged in the dispute, the party not engaged in the dispute shall not
destroy such records during the pendency of such dispute.
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10.5 Cooperation in Litigation. Each party hereto will fully cooperate with
the other in the defense or prosecution of any litigation or proceeding which
may be instituted hereafter against or by such party relating to or arising out
of the conduct of the Business prior to or after the Closing Date (other than
litigation arising out the transactions contemplated by this Agreement). The
party requesting such cooperation shall pay the out-of-pocket expenses
(including reasonable legal fees and disbursements) of the party providing such
cooperation and of its officers, directors, employees and agents reasonably
incurred in connection with providing such cooperation, but shall not be
responsible to reimburse the party providing such cooperation for such party's
time spent in such cooperation or the salaries or costs of fringe benefits or
similar expenses paid by the party providing such cooperation to its officers,
directors, employees and agents while assisting in the defense or prosecution of
any such litigation or proceeding.
10.6 [OMITTED]
10.7 Employees. Effective as of the Closing, the Seller shall terminate the
employment of each of the employees of the Business and the Purchaser shall
offer employment to each such employee, except for those employees listed on
Schedule 10.7. The Seller hereby consents to the hiring of such employees by the
Purchaser and waives, with respect to the employment by the Purchaser of such
employees, any claims or rights the Seller may have against the Buyer or any
such employee under any non-competition, confidentiality or employment
agreement.
ARTICLE XI
Indemnification
11.1 Agreement by the Seller to Indemnify. Subject to the other provisions
of this Article XI (including this Section 11.1), the Seller agrees that it will
indemnify and hold harmless the Purchaser in respect of the aggregate of all
Damages (as defined below). For purposes of this Agreement, "Damages" means,
without duplication, the aggregate of all expenses, losses, costs, deficiencies,
liabilities and damages (including reasonable related counsel fees and expenses)
incurred or suffered by the Purchaser to the extent (i) resulting from any
breach of a representation or warranty of the Seller in Article IV or (ii)
resulting from any default in the performance of any of the covenants or
agreements of the Seller in this Agreement.
11.1.1 Each of the representations and warranties of the Seller in
Article IV shall survive for a period of twelve (12) months after the
Closing Date, and thereafter all such representations and warranties shall
expire. No claim for the recovery of Damages may be asserted by the
Purchaser against the Seller or its successors in interest after such
representations and warranties shall thus expire; provided, however, that
bona fide claims first asserted in writing within the applicable period
shall not thereafter be barred.
11.1.2 Notwithstanding any other provision herein to the contrary,
the Seller shall not be liable to the Purchaser (a) for any Damages until
all Damages incurred by the Purchaser under Section 11.1 exceed an aggregate
of $120,000.00 (the "Indemnification Threshold"), in which case the Seller
shall be liable only for Damages exceeding the Indemnification Threshold, or
(b) for any Damages in excess of the Actual Purchase Price.
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11.1.3 Except as otherwise expressly provided in Section 12.3, the
rights and remedies provided in this Section 11.1 shall be the sole and
exclusive rights and remedies of the Purchaser in connection with any breach
of a representation or warranty of the Seller in Article IV or any default
in the performance of any of the covenants or agreements of the Seller in
this Agreement.
11.2 Agreement by the Purchaser to Indemnify. The Purchaser shall indemnify
and hold harmless the Seller in respect of all Losses (as defined below). For
purposes of this Agreement, "Losses" means, without duplication, the aggregate
of all expenses, losses, costs, deficiencies, liabilities and damages (including
reasonable related counsel and paralegal fees and expenses) incurred or suffered
by the Seller to the extent (i) resulting from any breach of a representation or
warranty of the Purchaser in Article V or elsewhere herein, (ii) resulting from
any default in the performance of any of the covenants or agreements of the
Purchaser in this Agreement, including all obligations of the Purchaser in
respect to Assumed Liabilities, (iii) resulting any claims relating to the
Assumed Liabilities or (iv) resulting from the failure of the Parties to comply
with any applicable Bulk Transfer Provisions (as hereinafter defined).
11.2.1 Each of the representations and warranties of the Purchaser in
Article V (other than the representations and warranties of the Purchaser
made in Section 5.3 of the Agreement) shall survive for a period of twelve
(12) months after the Closing Date and thereafter all such representations
and warranties shall expire. The representations and warranties of the
Purchaser made in Section 5.3 of this Agreement shall survive until the
Preferred Stock has been converted. The covenant of the Purchaser found in
Section 7.2 shall survive until the obligations specified therein have been
fully performed and satisfied by Purchaser. No claim for recovery of Losses
may be asserted by the Seller against the Purchaser or its successors in
interest after such representations and warranties or covenants shall thus
expire; provided, however, that bona fide claims first asserted in writing
within the applicable period shall not thereafter be barred.
11.2.2 Notwithstanding any other provision herein to the contrary,
the Purchaser shall not be liable to the Seller (a) for any Damages until
all Damages incurred by the Seller under Section 11.2 exceed an aggregate of
$120,000.00 (the "Indemnification Threshold"), in which case the Purchaser
shall be liable only for Damages exceeding the Indemnification Threshold, or
(b) for any Damages in excess of the Actual Purchase Price.
11.2.3 Except as otherwise expressly provided in Section 12.3, the
rights and remedies provided in this Section 11.2 shall be the sole and
exclusive rights and remedies of the Seller in connection with any breach of
a representation or warranty of the Purchaser in Article V or any default in
the performance of any of the covenants or agreements of the Purchaser in
this Agreement.
11.3 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder the party seeking indemnification (the "Indemnified
Party"), shall promptly notify the party from whom indemnification is sought
(the "Indemnifying Party") of the claim and, when known, the facts constituting
the basis for such claim. In the event of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal proceedings by
a
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third party, the notice to the Indemnifying Party shall specify, if known, the
amount or an estimate of the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim by a third party for
which it is entitled to indemnification hereunder without the prior written
consent of the Indemnifying Party, which shall not be unreasonably withheld,
unless suit shall have been instituted against it and the Indemnifying Party
shall not have taken control of such suit after notification thereof as provided
in Section 10.4 of this Agreement.
11.3.1 In connection with any claim giving rise to indemnity
hereunder resulting from or arising out of any claim or legal proceeding by
a Person who is not a party to this Agreement and where money damages are
the sole and exclusive remedy, the Indemnifying Party at its sole cost and
expense may, upon written notice to the Indemnified Party, assume the
defense of any such claim or legal proceeding if it acknowledges to the
Indemnified Party in writing its obligations to indemnify the Indemnified
Party with respect to all elements of such claim. The Indemnified Party
shall be entitled to participate in (but not control) the defense of any
such action, with its own counsel and at its own expense. If the
Indemnifying Party does not assume the defense of any such claim or
litigation resulting therefrom within 30 days after receiving notification
of such claim, (i) the Indemnified Party may defend against such claim or
litigation, in such manner as it may deem appropriate, including, but not
limited to, settling such claim or litigation, after giving notice of the
same to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate, and (ii) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with its
counsel and at its own expense. If the Indemnifying Party thereafter seeks
to question the manner in which the Indemnified Party defended such third
party claim or the amount or nature of any such settlement, the Indemnifying
Party shall have the burden to prove by a preponderance of the evidence that
the Indemnified Party did not defend or settle such third party claim in a
reasonably prudent manner.
11.3.2 The Seller hereby acknowledges and agrees that any claim for
indemnification by the Purchaser under this Section 11 or under any other
provision of this Agreement, may, at the Purchaser's sole option, be set off
against the Purchaser's obligation to issue shares of Common Stock upon
conversion of the Preferred Stock. All indemnification by the Purchaser, on
the one hand, or the Seller, on the other hand, hereunder (to the extent not
satisfied in the manner specified in the preceding sentence) shall be
effected by payment of cash or delivery of a cashier's or certified check in
the amount of the indemnification liability.
ARTICLE XII
Miscellaneous
12.1 Transaction Expenses. Each party shall pay its own legal, accounting
and other transaction expenses in connection with the transactions contemplated
hereby.
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12.2 Amendment and Modification. The parties hereto may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing.
12.3 Termination.
12.3.1 Anything to the contrary herein notwithstanding, this Agreement may
be terminated and the transaction contemplated hereby may be abandoned:
(a) by the mutual written consent of all of the parties hereto at any
time prior to the Closing Date;
(b) by any party in the event of the material breach by any other
party of any provision of this Agreement which breach is not remedied by
the breaching party within 20 days after receipt of notice thereof from the
terminating party.
If this Agreement is terminated pursuant to clauses (a) of this paragraph
12.3.1, no party shall have any liability for any costs, expenses, loss of
anticipated profit or any further obligation for breach of warranty or otherwise
to any other party to this Agreement. Any termination of this Agreement pursuant
to clauses (b), of this paragraph 12.3.1 shall be without prejudice to any other
rights or remedies, if any, of the respective parties.
12.3.2 This Agreement may be terminated by any party hereto upon
written notice to the other party hereto, without liability for any costs,
expenses, loss of anticipated profit or any further obligation for breach or
warranty or otherwise to any party to this Agreement, if the Closing does
not occur on or prior to August __, 1998 unless such date is extended by the
written consent of Purchaser and Seller; provided, however, that the right
to terminate this Agreement shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the
cause of, or resulted in, the failure of the Closing to occur prior to such
date.
12.4 Entire Agreement. This Agreement, including the exhibits and schedules,
contains the entire agreement of the parties hereto with respect to the purchase
of the Purchased Assets and the other transactions contemplated hereby, and
supersedes all prior understandings and agreements (oral and written) of the
parties with respect to the subject matter hereof. The parties expressly
represent and warrant that in entering into this Agreement they are not relying
on any prior representations made by any other party concerning the terms,
conditions or effects of this Agreement which terms, conditions and effects are
not expressly set forth herein. Any reference herein to this Agreement shall be
deemed to include the schedules and exhibits.
12.5 Interpretation. The descriptive headings in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be to an article, section, paragraph, clause, schedule or exhibit to this
Agreement unless otherwise indicated. Whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". Time shall be of the essence in this
Agreement.
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12.6 Execution in Counterpart. This Agreement may be executed in any number
of counterpart, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same agreement.
12.7 Notices. Any notice, consent, approval, request, other communications
or information to be given or made hereunder to any of the parties by any other
party shall be in writing and (a) delivered personally, (b) sent by express
delivery service or certified mail, postage prepaid, or (c) sent by facsimile as
follows:
If to the Seller, addressed to:
Republic Services, Inc.
000 X.X. 0xx Xxxxxx
Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
If to the Purchaser, addressed to:
XxxxxXxx Technologies, Inc.
0 Xxxxxxx Xxxx
Xxxxxxxx X.
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: President
Fax: (000) 000-0000
Any party may change the address to which notices hereunder are to be sent
to it by giving written notice of such change of address in the manner herein
provided for giving notice. Any notice delivered personally shall be deemed to
have been given on the date it is so delivered, and any notice delivered by
express delivery service or certified mail shall be deemed to have been given on
the date it is received, and any notice given by facsimile transmission shall be
deemed to have been give on the date sent (so long as sender receives
confirmation of transmission and a hard copy of such notice is sent by U.S.
mail).
12.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed therein.
12.9 Confidentiality; Publicity. Except as may be required by law or as
otherwise permitted herein, no party hereto or their respective affiliates,
employees, agents and representatives shall disclose to any third party the
subject matter or terms of this Agreement without prior consent of the other
party hereto. No press release or other public announcement related to this
Agreement or the transactions contemplated hereby will be issued by any party
hereto without the prior approval of the other party, except that any party may
make such public
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disclosure which it believes in good faith to be required by law or by the terms
of any listing agreement with a securities exchange (in which case such party
will consult with the other party prior to making such disclosure).
12.10 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 an acceptable manner to the end that the
transaction contemplated hereby are fulfilled to the greatest extent possible.
12.11 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior consent of the other party.
12.12 Binding Effect; No Third Party Beneficiaries. This Agreement shall
inure to the benefit of, be binding upon and be enforceable by and against the
Seller and the Purchaser and their respective successors and permitted assigns,
and nothing herein expressed or implied shall be construed to give any other
person or entity any legal or equitable rights hereunder.
12.13 Bulk Transfer. The Purchaser and the Seller hereby waive compliance
with any applicable state's Uniform Commercial Code - Bulk Transfer provisions
("Bulk Transfer Provisions") which may be applicable to the transactions
contemplated hereby.
12.14 Investment Representations. Each party hereto expressly represents and
warrants to all other parties hereto that (a) before executing this Agreement,
said party has fully informed itself or himself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its or his own judgment in executing this Agreement; (c) said
party has had the opportunity to seek and has obtained the advice of counsel
before executing this Agreement; (d) said party has acted voluntarily and of its
or his own free will in executing this Agreement; (e) said party is not acting
under duress, whether economic or physical, in executing this Agreement; and (f)
this Agreement is the result of arm's length negotiations conducted by and among
the parties and their counsel.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
UNITED WASTE SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
------------------------
Title: Assistant Secretary
------------------------
XXXXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
------------------------
Title: Acting CFO
------------------------
XXXXXXXX ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
------------------------
Title: Treasurer
------------------------
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