Exhibit 2.1
ASSET PURCHASE AGREEMENT
by and among
GEOWASTE OF GA, INC.,
AIR-SWEEP-A-LOT, INC.,
XXXX XXXXXXX
and
XXX XXXXXXX
Dated January 10, 1997
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS................................................1
SECTION 1.2 OTHER DEFINED TERMS..........................................4
ARTICLE II
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
SECTION 2.1 PURCHASE AND SALE OF ASSETS..................................5
SECTION 2.2 CONSENTS.....................................................5
SECTION 2.3 AMOUNT OF PURCHASE PRICE.....................................5
SECTION 2.4 PAYMENT OF PURCHASE PRICE....................................5
SECTION 2.5 ASSUMPTION OF LIABILITIES....................................6
SECTION 2.6 CLOSING......................................................6
SECTION 2.7 BULK SALES LAW COMPLIANCE....................................7
SECTION 2.8 ALLOCATION OF PURCHASE PRICE.................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 3.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER..............7
SECTION 3.2 CERTIFICATE OF INCORPORATION; BY-LAWS; MINUTE BOOKS..........7
SECTION 3.3 OWNERSHIP....................................................8
SECTION 3.4 SUBSIDIARIES AND INVESTMENTS.................................8
SECTION 3.5 AUTHORIZATION OF TRANSACTION.................................8
SECTION 3.6 NONCONTRAVENTION.............................................8
SECTION 3.7 FINANCIAL STATEMENTS.........................................9
SECTION 3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS.........................9
SECTION 3.9 UNDISCLOSED LIABILITIES.....................................10
SECTION 3.10 TAXES.......................................................11
SECTION 3.11 BROKERS' FEES...............................................11
SECTION 3.12 LITIGATION..................................................11
SECTION 3.13 LICENSES....................................................11
SECTION 3.14 TITLE TO ASSETS.............................................11
SECTION 3.15 SUFFICIENCY OF ASSETS.......................................12
SECTION 3.16 CONTRACTS AND COMMITMENTS...................................12
SECTION 3.17 LABOR MATTERS...............................................13
SECTION 3.18 PROPRIETARY RIGHTS..........................................14
SECTION 3.19 EMPLOYEE BENEFITS...........................................14
SECTION 3.20 TRANSACTIONS WITH CERTAIN PERSONS...........................14
SECTION 3.21 ENVIRONMENTAL MATTERS.......................................15
SECTION 3.22 OSHA COMPLIANCE.............................................15
SECTION 3.23 CUSTOMERS AND SUPPLIERS.....................................16
SECTION 3.24 BOOKS AND RECORDS...........................................16
SECTION 3.25 DISCLOSURE; ACCURACY OF DOCUMENTS AND INFORMATION...........16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER.............17
SECTION 4.2 AUTHORIZATION OF TRANSACTION................................17
SECTION 4.3 NONCONTRAVENTION............................................17
SECTION 4.4 BROKERS' FEES...............................................18
ARTICLE V
COVENANTS
SECTION 5.1 NOTICES AND CONSENTS........................................18
SECTION 5.2 FURTHER ASSURANCES..........................................18
SECTION 5.3 ENCUMBRANCES................................................18
ARTICLE VI
CONDITIONS TO SELLER'S OBLIGATIONS
SECTION 6.1 AGREEMENTS AND COVENANTS....................................19
SECTION 6.2 REPRESENTATIONS AND WARRANTIES..............................19
SECTION 6.3 CERTIFICATE.................................................19
SECTION 6.4 DELIVERIES..................................................19
ARTICLE VII
CONDITIONS TO BUYER'S OBLIGATIONS
SECTION 7.1 AGREEMENTS AND COVENANTS....................................19
SECTION 7.2 REPRESENTATIONS AND WARRANTIES..............................19
SECTION 7.3 CONSENTS....................................................20
SECTION 7.4 NO ACTION...................................................20
SECTION 7.5 CERTIFICATE.................................................20
SECTION 7.6 OPINION OF COUNSEL..........................................20
SECTION 7.7 MATERIAL ADVERSE CHANGES....................................20
SECTION 7.8 ANNUALIZED GROSS REVENUE.....................................20
SECTION 7.9 DELIVERIES...................................................20
ARTICLE VIII
DELIVERIES OF BUYER ON THE CLOSING DATE
SECTION 8.1 PURCHASE PRICE...............................................21
SECTION8.2 CERTIFICATE...................................................21
SECTION8.3 SECRETARY'S CERTIFICATE.......................................21
ARTICLE IX
DELIVERIES OF SELLER ON THE CLOSING DATE
SECTION 9.1 TITLE TO ACQUIRED ASSETS.....................................21
SECTION 9.2 OPINION OF COUNSEL...........................................21
SECTION 9.3 CERTIFICATE..................................................21
SECTION 9.4 CONSENTS.....................................................21
SECTION 9.5 GOOD STANDING CERTIFICATES...................................22
SECTION 9.6 SECRETARY'S CERTIFICATE......................................22
SECTION 9.7 POSSESSION OF ACQUIRED ASSETS................................22
SECTION 9.8 OTHER DELIVERIES.............................................22
ARTICLE X
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING
SECTION 10.1 BOOKS AND RECORDS..........................................22
SECTION 10.2 SURVIVAL OF REPRESENTATIONS, ETC...........................22
SECTION 10.3 INDEMNIFICATION............................................23
SECTION 10.4 NON-COMPETITION............................................24
SECTION 10.5 DISMISSAL OF GEOWASTE ACTION...............................26
SECTION 10.6 PAYMENT DEFAULT............................................26
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 ASSIGNMENT.................................................26
SECTION 11.2 NOTICES; TRANSFER OF FUNDS.................................26
SECTION 11.3 GOVERNING LAW..............................................27
SECTION 11.4 ENTIRE AGREEMENT; MODIFICATIONS AND WAIVERS................27
SECTION 11.5 COUNTERPARTS/TELECOPIES....................................28
SECTION 11.6 EXPENSES...................................................28
SECTION 11.7 TAXES......................................................28
SECTION 11.8 INVALIDITY.................................................28
SECTION 11.9 TITLES.....................................................28
SECTION 11.10 PUBLICITY.................................................28
SECTION 11.11 CONFIDENTIAL INFORMATION...................................29
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT entered into on January 10, 1997 (this
"Agreement"), by and among GeoWaste of GA, Inc., a Georgia corporation
("Buyer"), Air- Sweep-A-Lot, Inc., a Georgia corporation ("Seller"), and Xxxx
Xxxxxxx and Xxx Xxxxxxx, the sole stockholders of Seller (individually, a
"Stockholder" and, collectively, the "Stockholders").
WHEREAS, subject to the terms and conditions set forth herein, Buyer
desires to purchase from Seller and Seller desires to sell to Buyer, the assets
of or used in the solid waste business of Seller and activities related thereto
as conducted by Seller as of the date hereof, together with all assets and
properties related thereto, operating as a going concern (the "Business").
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINED TERMS. As used herein, the terms below shall have
the following meanings:
"Acquired Assets" shall mean all assets, properties, rights and
business of Seller set forth on Schedule 1.1(a) to this Agreement.
"Action" shall mean any claim, action, suit, proceeding or
investigation, whether at law or in equity or before any court, arbitrator,
arbitration panel or Governmental Entity.
"Affiliate" shall mean, when used with respect to a specified Person,
another Person that, either directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified. As used herein, the term "control" shall mean the power
through the ownership of voting securities, contract or otherwise to direct the
affairs of another Person.
"Assumed Liabilities" shall mean the liabilities of Seller listed on
Schedule 1.1(b).
"Books and Records" shall mean all records pertaining to the assets,
properties, business, operations, accounts, financial condition, contractors,
suppliers or customers of Seller with respect to the Business, regardless of
whether such books and records are maintained for Tax or financial reporting
purposes.
"Buyer Material Adverse Effect" shall mean a material adverse effect
on the business, operations, properties, assets, condition (financial or other)
or results of operations of Buyer and its subsidiaries, taken as a whole.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601, ET SEQ.
"Contract" shall mean any of the agreements, contracts, indentures,
leases, commitments, plans, arrangements, sales orders and purchase orders of
every kind, whether written or oral, described on Schedule 3.16 and any
agreements, contracts, indentures, leases, commitments, plans, arrangements,
sales orders and purchase orders of every kind, whether written or oral, of
Seller not required to be described on Schedule 3.16 solely because of the size
or duration limitations on contracts required to be scheduled by this Agreement.
"Damages" shall mean costs, losses (including, without limitation,
diminution in value), liabilities, damages, lawsuits, deficiencies, claims,
Taxes and expenses (whether or not arising out of third-party claims),
including, without limitation, interest, penalties, reasonable attorneys' fees
and all amounts paid in investigation, defense or settlement of any of the
foregoing.
"Encumbrance" shall mean any lien, pledge, claim, option, charge,
security interest, encumbrance or other right of any third party.
"Environmental Laws" shall mean all local, state, federal and foreign
laws and regulations relating to the protection of the environment, pollution
control and Releases of Hazardous Substances as of the date hereof.
"Excluded Assets" shall mean all assets, properties, rights and
business of Seller other than those assets, properties, rights and business of
Seller set forth on Schedule 1.1(a) to this Agreement.
"GAAP" shall mean United States generally accepted accounting
principles consistently applied.
"Governmental Entity" shall mean any government, governmental entity,
department, commission, board, agency or instrumentality, whether federal, state
or local, and whether domestic or foreign.
"Hazardous Substance" shall mean (i) any substance designated pursuant
to Section 1321(b)(2)(A) of Title 33 of the United States Code, (ii) any
element, compound, mixture, solution or substance designated pursuant to Section
9602 of Title 42 of the United States Code, (iii) any hazardous waste having the
characteristics identified under or listed pursuant to section 3001 of the Solid
Waste Disposal Act, (iv) any toxic pollutant listed under Section 1317(a) of
Title 33 of the United States Code, (v) any hazardous air pollutant listed under
Section 112 of the Clean Air Act, (vi) any imminently hazardous chemical
substance or mixture with respect to which the Administrator of the United
States Environmental Protection Agency has taken action pursuant to Section 2606
of Title 15 of the United States Code and (vii) petroleum and petroleum
products.
"Historical Financial Statements" shall mean the balance sheet of
Seller as of December 31, 1993, 1994 and 1995 and the related statements of
income, retained earnings and cash flows of Seller for the years ended on such
dates, together in each case with the related notes thereon, which financial
statements have been compiled by Xxxxxxx X. Xxxxxxxx, CPA, and the Unaudited
Financial Statements, collectively.
"IRS" shall mean the United States Internal Revenue Service.
"Liabilities" shall mean debts, liabilities, obligations, duties and
responsibilities of any kind and description, whether absolute or contingent,
monetary or non-monetary, direct or indirect, known or unknown or matured or
unmatured, or of any other nature.
"Licenses" shall mean all licenses, permits, certificates and other
governmental authorizations necessary to carry on the Business as presently
conducted or to be conducted, including, without limitation, environmental
permits and authorizations or any other approval from any Governmental Entity
required for the Business; each License is identified on Schedule 3.13.
"Person" shall mean an individual, firm, trust, association,
corporation, partnership, limited liability company, Governmental Entity or
other entity.
"Proprietary Rights" shall mean (i) registrations of trademarks and
other marks, service marks, trade names or other trade rights, (ii) pending
applications for any such registrations, (iii) rights in or to patents and
copyrights and pending applications therefor, and (iv) rights to other
trademarks, service marks and other marks, trade names and other trade rights
and all other trade secrets, designs, plans, specifications, technology,
know-how, methods, designs, concepts and other proprietary rights, whether or
not registered.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any hazardous
substance or pollutant or contaminant) into, upon or under the air, soil,
surface water, groundwater, at any location, including any real property owned,
leased, controlled or used by Seller or any predecessor entity to such person.
"Representative" shall mean any officer, director, principal,
attorney, agent, employee or other representative.
"Seller Material Adverse Effect" shall mean a material adverse effect
on the business, operations, properties, assets, condition (financial or other),
results of operations or prospects of Seller.
"Tax" or "Taxes" shall mean all taxes, charges, levies or other
assessments, including, without limitation, income, gross receipts, excise, real
and personal property, sales, use, transfer, capital gains, transfer gains,
license, payroll, privilege, and franchise taxes, imposed by any Governmental
Entity and shall include any interest, penalties or additions to tax
attributable to any of the foregoing.
"Territory" shall mean the Counties of Lowndes, Brooks, Thomas,
Lanier, Cook, Berrien, Colquitt, Xxxxxxx and Xxxxxx in the State of Georgia and
the Counties of Xxxxxxxx, Madison and Jefferson in the State of Florida.
"Unaudited Financial Statements" shall mean the unaudited balance
sheet of Seller at September 30, 1996 and the related unaudited statements of
income, retained earnings and cash flows of Seller for the nine months ended
September 30, 1996, together with the related notes thereon, which financial
statements have been compiled by Xxxxxxx X. Xxxxxxxx, CPA, and are attached as
Exhibit A hereto.
Section 1.2 OTHER DEFINED TERMS. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
TERM SECTION
Closing 2.6
Closing Date 2.6
ERISA 3.19
GeoWaste Action 10.5
Noncompetition Period 8.4(a)
Note 2.4(b)
Personnel 3.8(b)(i)
Plan 3.19
Purchase Price 2.3
Seller Actions 3.12
Tax Returns 3.10
Unless the context otherwise requires words in the singular include
the plural and words in the plural include the singular.
ARTICLE II
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
Section 2.1 PURCHASE AND SALE OF ASSETS. Based upon and subject to the
terms, agreements, warranties, representations and conditions of this Agreement,
Seller hereby agrees to sell, convey, transfer, assign and deliver to Buyer on
the Closing Date and Buyer hereby agrees to buy and accept on the Closing Date,
the Acquired Assets.
Section 2.2 CONSENTS. To the extent that the assignment of or the
agreement to assign any Contract to Buyer hereunder would constitute a breach of
that Contract unless the consent or waiver of another party thereto has been
obtained, this Agreement shall not constitute any such assignment or agreement
to assign unless and until such consent or waiver is obtained. Seller agrees to
use its commercially reasonable efforts to obtain prior to the Closing Date all
such consents and waivers. If any such consent or waiver is not obtained before
the Closing Date and the Closing is nevertheless consummated, Seller agrees to
continue to use its commercially reasonable efforts to obtain all such consents
as have not been obtained prior to such date and further agrees to cooperate
with Buyer after such date in any reasonable arrangement (such as
subcontracting, sublicensing or subleasing) designed to provide for Buyer, on
terms no less favorable than Seller is entitled to, the benefits under the
applicable Contracts, including, without limitation, enforcement, at the cost
and for the benefit of Buyer, of any and all rights of Seller against any other
party thereto arising out of the breach or cancellation thereof by such party or
otherwise.
Section 2.3 AMOUNT OF PURCHASE PRICE. The total consideration (the
"Purchase Price") to be paid to Seller by Buyer in exchange for the transfer of
the Acquired Assets and the assumption of the Assumed Liabilities shall be
$1,008,968.00.
Section 2.4 PAYMENT OF PURCHASE PRICE. On the Closing Date, Buyer
shall pay the Purchase Price as follows:
(a) $200,000.00 of the Purchase Price by the delivery by Buyer to
Seller of a certified check or wire transfer in such amount;
(b) delivery by Buyer to Seller of a five year promissory note (the
"Note") in the principal amount of $321,823.00 bearing interest at a rate of
8.0% per annum substantially in the form of Exhibit B annexed hereto, payable
semi-annually beginning on the first anniversary of the Closing Date; and
(c) assumption of the Assumed Liabilities, as provided in Section 2.5
below.
Section 2.5 ASSUMPTION OF LIABILITIES. As additional consideration
hereunder, from and after the Closing Date Buyer shall assume and discharge the
Assumed Liabilities. Except as provided in the preceding sentence, and
notwithstanding anything else to the contrary contained herein, Buyer is not
assuming and shall not be liable for any Liabilities of Seller, including,
without limitation, any Liabilities (i) under Contracts which shall not have
been assigned to Buyer pursuant to this Agreement; (ii) for indebtedness for
borrowed money; (iii) by reason of or arising out of any default or breach by
Seller of any Contract, for any penalty against Seller under any Contract, or
relating to or arising out of any event which with the passage of time or after
giving of notice, or both, would constitute or give rise to such a breach,
default or penalty, whether or not such Contract is being assigned to and
assumed by Buyer pursuant to this Agreement; (iv) the existence of which would
conflict with or constitute a breach of any representation, warranty or
agreement of Seller contained herein; (v) relating to or in any way arising out
of the Excluded Assets; (vi) for Seller's expenses referred to in Section 11.6
hereof; (vii) to any stockholder or Affiliate of Seller or to any present or
former employee, officer or director of Seller, including, without limitation,
any bonuses, any termination or severance pay related to the transfer of
employees to Buyer in connection with the transactions contemplated hereby, and
any post retirement medical benefits or other compensation or benefits; (viii)
relating to the execution, delivery and consummation of this Agreement and the
transactions contemplated hereby, including, without limitation, any and all
Taxes incurred as a result of the sale contemplated by this Agreement; (ix) for
any Taxes accrued or incurred prior to the Closing Date or relating to any
period (or portion of a period) prior thereto; (x) relating to or arising out of
any environmental matter, including, without limitation, any violation of any
Environmental Law or any other law relating to health and safety of the public
or the employees of Seller; (xi) relating to, or arising out of, products
manufactured or services rendered by Seller, or the conduct or operation of the
business of Seller, prior to the Closing Date; and (xii) of Seller arising under
or pursuant to this Agreement; and provided further, that Buyer shall have the
right not to assume any Contract if any party to such Contract is in breach
thereof or default thereunder as of the Closing Date or there has occurred any
event which with the passage of time or after giving of notice, or both, would
become such a breach or default. Buyer shall not assume or be bound by any
Liabilities of Seller, except as expressly assumed by it pursuant to this
Agreement. Seller hereby agrees to indemnify and hold Buyer harmless from and
against any and all Liabilities of Seller not agreed to be assumed by Buyer
pursuant to this Agreement. Nothing contained in this Section 2.5 shall relieve
or release Seller from any obligations under covenants, warranties or agreements
contained in this Agreement.
Section 2.6 CLOSING. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of Xxxx X. Xxxxx,
Esq., on January 10, 1997, or at such other time and place as Buyer and Seller
shall mutually agree (the date on which the Closing occurs being the "Closing
Date").
Section 2.7 BULK SALES LAW COMPLIANCE. Seller agrees to bear any loss,
liability, obligation or cost suffered by the Business or Buyer by reason of any
noncompliance with any provision of any bulk sales law of any State which may
require bulk sales law compliance on account of the provisions herein and the
transactions contemplated hereby and to indemnify and hold Buyer harmless from
and against claims suffered or incurred by the Business or Buyer by reason of or
arising out of (a) the failure of Seller to pay or discharge the same when done
or (b) such noncompliance with any applicable bulk sales law.
Section 2.8 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated to the Acquired Assets in accordance with Schedule 2.8. Each party
hereto agrees to reflect the Acquired Assets upon its books for tax reporting
purposes in accordance with such schedule and to file all tax returns in
accordance with and based upon such schedule.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
SELLER
Seller represents and warrants to Buyer as follows:
Section 3.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. Seller is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. Seller is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction in
which the character of the property owned or leased by it and the nature of the
business conducted by it require such qualification, except where the failure to
be so qualified would not have a Seller Material Adverse Effect. Seller has full
corporate power and authority to carry on its business in which it is engaged
and to own and use the properties and assets owned and used by it.
Section 3.2 CERTIFICATE OF INCORPORATION; BY-LAWS; MINUTE BOOKS.
Seller has heretofore delivered to Buyer true, accurate and complete copies of
its Certificate of Incorporation and By-Laws, as amended to and including the
date hereof. The minute books, stock books and stock transfer records of Seller,
true, accurate and complete copies of which have been made available to Buyer,
contain true, accurate and complete minutes and records of all issuances and
transfers of capital stock of Seller and of all minutes and records of all
meetings, proceedings and other actions of the stockholders, Board of Directors
and/or committees of the Board of Directors of Seller from the date of
incorporation of Seller to and including the date hereof and all such meetings,
proceedings and actions have been duly, legally and properly held or taken.
Section 3.3 OWNERSHIP. All of the issued and outstanding shares of
capital stock of Seller are owned by the Stockholders. There are no outstanding
or authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that could
require Seller to issue, sell, or otherwise cause to become outstanding any of
its capital stock except as set forth on Schedule 3.3. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation or similar
rights with respect to Seller's capital stock. There are no voting trusts or
other agreements or understandings to which Seller is a party with respect to
the voting of its capital stock.
Section 3.4 SUBSIDIARIES AND INVESTMENTS. Seller has no direct or
indirect subsidiaries and has not made any advances to or investments in, and
does not own any securities of or other interests in, any firm, corporation,
association, business organization, enterprise or entity.
Section 3.5 AUTHORIZATION OF TRANSACTION. Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and the related agreements to which it is a party and to perform
its obligations hereunder and thereunder. This Agreement constitutes the legal,
valid and binding obligation of Seller, enforceable against it in accordance
with its terms, except insofar as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally and except as to the
availability of equitable remedies.
Section 3.6 NONCONTRAVENTION. Neither the execution and delivery of
this Agreement or the related agreements, nor the consummation of the
transactions contemplated hereby and thereby, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any Governmental Entity or court to which Seller is
subject or any provision of the charter or by-laws of Seller or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any Person the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which Seller is a party or by which
it is bound to which any of its assets is subject (or result in the imposition
of any Encumbrance upon any of its assets), except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, or failure to give notice would not have a Seller Material Adverse
Effect and except as set forth on Schedule 3.6. Other than as provided on
Schedule 3.6, no consent, approval, authorization, license, order or permit of,
or declaration, filing or registration with, any Governmental Entity, or any
other person or entity, is required to be made or obtained by Seller in
connection with the execution, delivery and performance of this Agreement or any
of the related agreements and the consummation of the transactions contemplated
hereby and thereby.
Section 3.7 FINANCIAL STATEMENTS. Seller has heretofore delivered to
Buyer the Historical Financial Statements. The Historical Financial Statements
in each case are true and complete with respect to each item therein and have
been prepared in accordance with GAAP and fairly present the assets, liabilities
and financial condition, results of operations and cash flows of Seller
indicated thereby as of each date and for the periods covered thereby.
Section 3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
on Schedule 3.8, since the date of the Unaudited Financial Statements there has
not been any:
(a) change in Seller's condition (financial or otherwise), assets,
liabilities, working capital, reserves, earnings, business or prospects, except
for changes in the ordinary course of business which changes have not,
individually or in the aggregate, been materially adverse;
(b) sale, assignment or transfer of any of the assets of Seller used
in connection with the Business, which is material singly or in the aggregate,
other than in the ordinary course of business, or discontinuance of any service
provided by the Business;
(c) cancellation of any indebtedness or waiver of any rights of
substantial value to Seller, whether or not in the ordinary course of business,
with respect to the Business;
(d) amendment, cancellation or termination of any Contract, license or
other instrument required to be set forth on Schedules 3.13 or 3.16;
(e) capital expenditure or the execution of any lease or any incurring
of liability therefor, involving payments, in the aggregate, or at an annualized
rate, of $5,000 or more;
(f) failure to pay any obligation of Seller, except where such failure
would not have a Seller Material Adverse Effect;
(g) failure to operate the Business in the ordinary course;
(h) change in accounting methods or practices by Seller affecting its
assets, liabilities or business (whether for accounting or tax purposes);
(i) revaluation by Seller of any of its assets used in connection with
the Business, including without limitation, writing off notes or accounts
receivable, other than in the ordinary course of business consistent with past
practices;
(j) damage, destruction or loss (whether or not covered by insurance)
affecting the Acquired Assets;
(k) mortgage, pledge, grant or creation of any Encumbrance on any
Acquired Asset;
(l) material change in the collection, payment or credit experience,
accounting practices, procedures or methods of Seller with respect to the
Business or in the cash management practices of Seller in the operation of the
Business;
(m) indebtedness incurred by Seller for borrowed money or any
commitment to borrow money entered into by Seller in connection with the
Business, or any loans made or agreed to be made by Seller in connection with
the Business;
(n) there has been no material changes in the amount or scope of
coverage of insurance now carried by Seller in connection with the Business;
(o) liabilities incurred or assumed by Seller in connection with the
Business involving $5,000 or more except in the ordinary course of business and
consistent with past practice, or any increase or change in any assumptions
underlying or methods of calculating any bad debt, contingency or other
reserves, except as set forth on Schedule 3.8;
(p) payment, discharge or satisfaction of any liabilities with respect
to the Business in excess of $5,000, other than the payment, discharge or
satisfaction in the ordinary course of business and consistent with past
practice of liabilities that are reflected or reserved against in the Unaudited
Financial Statements or incurred in the ordinary course of business and
consistent with past practice since the date of the Unaudited Financial
Statements;
(q) agreement or commitment by Seller to do any of the foregoing; or
(r) other event or condition of any character (other than acts of God
or general economic or political conditions) which in any one case or in the
aggregate has materially and adversely affected, or any event or condition
(other than acts of God or general economic or political conditions) which it is
reasonable to expect will, in any one case or in the aggregate, affect the
Acquired Assets or materially and adversely affect in the future, the condition
(financial or otherwise), assets, liabilities, working capital, reserves,
earnings, business or prospects of Seller (including, without limitation,
Seller's relationships with its customers).
Section 3.9 UNDISCLOSED LIABILITIES. Except as set forth on Schedule
3.9, Seller has no material liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any material liability for taxes, except for (i) liabilities set
forth in the Unaudited Financial Statements and (ii) liabilities which have
arisen in the ordinary course of business (none of which results from, arises
out of, relates to, is in the nature of, or was caused by breach of any material
contract, breach of warranty, tort, infringement, or material violation of law).
Section 3.10 TAXES. Except as set forth on Schedule 3.10, Seller has
filed, within the time and in the manner required by law, all returns,
declarations, information, returns and statements required to be filed with any
federal, state or local authority, except for such state and local tax returns
of which the failure to file would not have a Seller Material Adverse Effect
("Tax Returns"). Except as set forth on Schedule 3.10, all Tax Returns were
correct and complete in all material respects. Except as set forth on Schedule
3.10, Seller has paid in full all Taxes (whether or not shown on a Tax Return)
required to be paid by Seller before such payment became delinquent and no
deficiency has been proposed, asserted or assessed. All Taxes which Seller has
been required to collect or withhold have been duly collected or withheld and,
to the extent required, have been duly and timely paid to the proper taxing
authority. Except as set forth on Schedule 3.10, no examination or audit of any
Tax Returns by any Governmental Entity is currently in progress or contemplated.
Seller is not a party to any tax sharing or allocation agreement and, except as
set forth on Schedule 3.10, has no actual or potential liability for any Tax
obligation of any other taxpayer.
Section 3.11 BROKERS' FEES. Except as set forth on Schedule 3.11,
Seller has no liability or obligation to pay any fees or commissions to any
broker, finder or agent with respect to the transactions contemplated by this
Agreement.
Section 3.12 LITIGATION. Except as set forth on Schedule 3.12, there
are no Actions involving material claims by or against Seller, either pending or
threatened, at law or in equity or before any court, arbitrator, arbitration
panel or Governmental Entity (collectively, "Seller Actions"). Seller is not in
default with respect to any judgment, order, writ, injunction or decree of any
court or Governmental Entity, and there are no unsatisfied judgments against
Seller or the business, activities, properties or assets of Seller. There is not
a reasonable likelihood of an adverse determination of any pending Seller
Actions which would, individually or in the aggregate, have a Seller Material
Adverse Effect (other than the GeoWaste Action).
Section 3.13 LICENSES. Except as set forth on Schedule 3.13, since the
date of the Unaudited Financial Statements, Seller has, and is operating in
compliance in all material respects with the terms, provisions and conditions
of, all of its Licenses, which Licenses constitute all necessary Licenses from
Governmental Entities that are material to the conduct of the Business. There is
no proceeding pending or threatened (or any basis therefor) which may cause any
such License that is material to the conduct of the Business as presently
conducted or to be conducted to be revoked, withdrawn, canceled, suspended or
not renewed. Seller is conducting its business in compliance with all laws,
rules and regulations applicable thereto, the violation of which would have a
Seller Material Adverse Effect.
Section 3.14 TITLE TO ASSETS. Seller is the owner of, has good and
marketable title to, valid leasehold interests in, or possessory rights to, all
assets and properties purported to be owned, operated, leased or occupied by it,
or used or useful in the operation of the Business. Except as set forth on
Schedule 3.14, all the Acquired Assets are owned free and clear of all
Encumbrances, except for minor Encumbrances which in the aggregate are not
substantial in amount, do not detract from the value of the property or assets
subject thereto or interfere with the present or anticipated use thereof and
have not arisen other than in the ordinary course of business. Seller has
performed all the obligations required to be performed by it with respect to all
assets leased which are used or useful in the operation of the business by it
through the date hereof, except where the failure to perform would not have a
Seller Material Adverse Effect. Seller enjoys peaceful and undisturbed
possession of all of its facilities which are used or useful in the operation of
the Business. None of such improvements, equipment and other assets is subject
to any commitment or other arrangement for their sale or use by any stockholder
of Seller or any of their Affiliates or third parties. The assets reflected on
the Unaudited Financial Statements or acquired after the date of the Unaudited
Financial Statements are valued on Seller's books at or below Seller actual cost
less an adequate and proper depreciation charge. Seller has not depreciated any
of its assets in a manner inconsistent with applicable IRS guidelines, if any.
Except as set forth on Schedule 3.14, the assets owned or leased by Seller
include the Acquired Assets.
Section 3.15 SUFFICIENCY OF ASSETS. All of Seller's tangible property
used in the Business is in good operating condition and repair (except for
normal wear and tear). Except as set forth on Schedule 3.15, the Acquired Assets
are sufficient for the operation of the Business as heretofore conducted and are
in conformity in all respects with all applicable laws, ordinances, orders,
regulations and other requirements (including applicable environmental, motor
vehicle safety or standards, occupational safety and health laws and
regulations) relating thereto currently in effect.
Section 3.16 CONTRACTS AND COMMITMENTS. Schedule 3.16 sets forth all
Contracts presently in effect to which Seller is a party in connection with the
Business, including, without limitation, any written or oral:
(a) commitment, contract, note, loan, evidence of indebtedness,
purchase order or letter of credit involving any obligation or liability on the
part of Seller with respect to the Business of more than $5,000 (and not more
than $10,000 in the aggregate) and not cancelable (without liability) on not
more than 30 days' notice;
(b) lease of personal property with respect to the Business involving
any annual expense in excess of $5,000 and not cancelable without liability
within 30 days (Schedule 3.16 indicates with respect to each such lease listed
thereon a general description of the leased items, term, annual rent and renewal
options);
(c) material governmental or regulatory licenses or permits required
to conduct the Business as presently conducted;
(d) contracts or agreements containing covenants limiting the freedom
of Seller to engage in any line of business or compete with any person;
(e) employment contracts, including without limitation, contracts to
employ executive officers and other contracts with officers or directors of
Seller;
(f) contracts with customers and suppliers of Seller with respect to
the Business with a gross value to Seller in excess of $2,000 per year (Schedule
3.16 sets forth all such contracts with customers and suppliers currently in
effect and for each such contract includes a notation as to whether (i) such
customer or supplier has renewed such contract for the period following the
period covered thereby and (ii) such contract permits such customer or supplier
to terminate such contract on 60 days' notice or less);
(g) contracts and commitments not otherwise described in this Section
3.16 or listed on Schedule 3.16 (including purchase orders, franchise agreements
and undertakings or commitments to any Governmental Entity) relating to the
Business or otherwise affecting the Business under contracts not in the ordinary
course of business; it being understood that with respect to each category
listed above for which a dollar amount threshold has been established, any item
within such category with a value less than the dollar amount specified shall be
deemed immaterial; and
(h) Seller is not in breach or violation of, or default under, any of
the Contracts or other instruments, obligations, evidences of indebtedness or
commitments described in paragraphs (a)-(g) above, where such breach or
violation or default would have a Seller Material Adverse Effect. Each Contract
or other instrument, obligation, evidence of indebtedness or commitment
described in paragraphs (a)-(g) above is a valid agreement, arrangement or
commitment of Seller, and is, to the best knowledge of Seller, a valid
agreement, arrangement or commitment of each other party thereto, except insofar
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally and except as to the availability of equitable remedies.
Section 3.17 LABOR MATTERS. Seller is not a party to any collective
bargaining agreement with respect to its employees with any labor organization,
group or association. Seller has not experienced any attempt by organized labor
or its representatives to make it conform to demands of organized labor relating
to its employees or to enter into a binding agreement with organized labor that
would cover the employees. Seller is (i) in compliance with all applicable laws,
regulations and administrative orders, including, without limitation, laws
relating to employment of labor of any country, state, or municipality, or any
subdivision thereof, in which Seller conducts business and (ii) is not engaged
in any unfair labor practice except where such failure of compliance or practice
would not have a Seller Material Adverse Effect. There is no unfair labor
practice charge or complaint against Seller pending before the National Labor
Relations Board or any other Governmental Entity arising out of such entity's
activities, and Seller has no knowledge of any facts or information which would
give rise thereto; there is no labor strike or labor disturbance pending against
Seller nor is any grievance currently being asserted; and Seller has not
experienced a work stoppage or other labor difficulty.
Section 3.18 PROPRIETARY RIGHTS. Seller has no Proprietary Rights used
in connection with the Business other than the trade names and customer lists
listed on Schedule 3.18. Except as set forth on Schedule 3.18, (i) Seller has no
licenses granted by or to it or any other agreements to which it is a party
relating, in whole or in part, to any Proprietary Rights; (ii) Seller does not
employ any Proprietary Rights which infringe or otherwise violate the rights of
any third party; (iii) there are no proceedings instituted against or notices
received by Seller that are presently outstanding alleging that Seller's use of
any Proprietary Rights infringes or otherwise violates any rights of a third
party; (iv) no claim has been asserted or threatened by any person with respect
to the ownership, validity, license or use of, or any infringement resulting
from, any Proprietary Rights or the production, provision or sale of any
services or products by Seller and there is no basis for any such claim; (v)
Seller has the right to produce, provide and sell the services and products
produced, provided and sold by it and to conduct its business as heretofore
conducted, and the consummation of the transactions contemplated hereby will not
alter or impair any such rights; and (vi) no officer, director, employee or
Affiliate of Seller owns or has any interest in any Proprietary Rights or any
trade secret, invention or process, if any, used by Seller in connection with
the Business.
Section 3.19 EMPLOYEE BENEFITS. Except for those plans set forth on
Schedule 3.19 hereto (the "Plans"), Seller does not maintain or contribute to
any "employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any stock
purchase plan, stock option plan, fringe benefit plan, bonus plan or any other
deferred compensation agreement, plan or funding arrangement, whether or not
such plan has been terminated and whether or not such plan is of a legally
binding nature or in the form of an informal understanding. With respect to the
Plans, the applicable requirements of ERISA and the Code (including, without
limitation, the group health plan continuation coverage requirements of Section
4980B of the Code and Part 6 of Title I of ERISA) have been fulfilled in all
material respects and no event has occurred nor does any condition exist which
could result in a direct or indirect liability to Buyer. Neither Seller nor any
member of a "controlled group" (as defined in Section 4971(e)(2)(B) of the Code)
of which Seller is a member, has ever maintained or contributed to any plan (i)
subject to Section 412 of the code and Section 302 or Title IV of ERISA
(including, without limitation, any "multiemployer plan" as defined in Section
3(37) of ERISA) or (ii) which provids post-employment health or welfare benefits
(other than benefits required to be provided pursuant to Section 4980B of the
Code and Part 6 of Title I of ERISA).
Section 3.20 TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed on
Schedule 3.20, Seller is not indebted for money borrowed, either directly or
indirectly, from any of its officers, directors or any Affiliate, in any amount
whatsoever; nor are any of its officers, directors, or Affiliates indebted for
money borrowed from Seller; nor are there any transactions of a continuing
nature between Seller and any of its officers, directors or Affiliates (other
than by or through the regular employment thereof by Seller) not subject to
cancellation which will continue beyond the Closing Date, including, without
limitation, use of Seller's assets for personal benefit with or without adequate
compensation.
Section 3.21 ENVIRONMENTAL MATTERS.
(a) Except as set forth on Schedule 3.21, Seller possesses and is in
compliance in all material respects, with all permits, licenses and governmental
authorizations and has filed all notices that are required for the conduct of
its business as conducted on the date hereof under all Environmental Laws, and
Company is in compliance in all material respects with all other applicable
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables of all Environmental Laws which are
contained in any code, plan, order, decree, judgment, notice, permit or demand
letter issued, entered, promulgated or approved thereunder.
(b) Except as set forth on Schedule 3.21, there are no facts or
circumstances which could form the basis for the assertion of any claim against
Seller under any Environmental Law including, without limitation, CERCLA or any
similar state or local statute or ordinance with respect to any on-site or
off-site location.
(c) Seller has not entered into and is not currently bound by any
consent decree or order under, and is not subject to any judgment, decree or
judicial or administrative order relating to compliance with, or the clean up of
Hazardous Substances under, any applicable Environmental Laws. Except as set
forth on Schedule 3.21, Seller has not been alleged to be in violation of, or
subject to any administrative or judicial proceeding pursuant to, applicable
Environmental Laws, either now or at any time since Seller's incorporation.
(d) Seller is not subject to any material claim, obligation,
liability, loss, damage or expense of whatever kind or nature, contingent or
otherwise, incurred or imposed pursuant to or based upon any provision of any
Environmental Law and arising out of any act or omission of Seller or its
Representatives or arising out of the ownership, use, control or operation by
Seller of any plant, facility, site, area of property (including, without
limitation, any plant, facility, site, area or property currently or previously
owned or leased by Seller) at which a Release of a Hazardous Substance has
occurred.
(e) Seller has heretofore provided Buyer with true, correct and
complete copies of, or access to all files of Seller relating to environmental
matters.
Section 3.22 OSHA COMPLIANCE. Seller has made available to Buyer all
reports and filings made or filed by Seller pursuant to the Occupational Safety
and Health Act and related to the Business. Except as set forth on Schedule
3.22, Seller has not violated in any material respect or failed to comply in any
material respect with, or been subject of any written allegation by the
Occupational Safety and Health Administration or violated or failed to comply
with the Occupational Safety and Health Act or rules or regulations promulgated
pursuant thereto.
Section 3.23 CUSTOMERS AND SUPPLIERS. Except as set forth on Schedule
3.23, since the date of the Unaudited Financial Statements, there has been no
material adverse change in the business relationship of Seller with any customer
or supplier of the Business. Except as set forth on Schedule 3.23, Seller has
not received any written or oral notice from any existing customer of the
Business that such customer (i) intends to file a petition for relief under any
provision of title 11 of the United States Code (the United States Bankruptcy
Code) or any similar federal or state law for the relief of debtors or make an
assignment for the benefit of its creditors, (ii) intends to terminate its
business relationship with Seller or (iii) requests that Seller xxxxx xxxxx
concessions, rebates or reductions on products or services provided by Seller.
Section 3.24 BOOKS AND RECORDS. Except as set forth on Schedule 3.24,
Seller's Books and Records have been fully, properly and accurately maintained
in all material respects, and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein, and they accurately
present the financial position of Seller in all respects. None of the records,
systems, controls, data or information of Seller are recorded, stored,
maintained, operated or otherwise wholly or partly dependent on or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of Seller or
accountants retained by Seller. Except as set forth on Schedule 3.24, Seller's
Books and Records fairly and accurately reflect the transactions and
dispositions of assets of Seller, and Seller's system of internal accounting
controls is sufficient to assure that: (i) transactions are executed in
accordance with management's authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with the management's authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Except as disclosed on Schedule 3.24, Seller is not obligated, whether by
operation of law or pursuant to any contract, to segregate any funds for
security and similar deposits received from its lessees and borrowers.
Section 3.25 DISCLOSURE; ACCURACY OF DOCUMENTS AND INFORMATION. Seller
does not know of any facts or circumstances not disclosed to Buyer which
indicate that the Acquired Assets or the future operations, profits or business
of the Business may be adversely affected or which otherwise should be disclosed
to Buyer in order to make any of the representations or warranties made herein
on the part of the Seller not misleading. No representation or warranty by
Seller contained in this Agreement, and no statement contained in any Schedule,
Exhibit, certificate or other instrument furnished to Buyer under or in
connection with this Agreement, contains any untrue statement of any material
fact, or omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 4.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. Buyer is
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. Buyer is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where such qualification
is required, except where the lack of such qualification would not have a Buyer
Material Adverse Effect. Buyer has full corporate power and authority to carry
on the businesses in which it is engaged and to own and use the properties owned
and used by it.
Section 4.2 AUTHORIZATION OF TRANSACTION. Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and the related agreements to which it is a party and to perform
its obligations hereunder and thereunder. This Agreement constitutes the legal,
valid and binding obligation of Buyer, enforceable against it in accordance with
its terms, except insofar as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors' rights generally and except as to the availability of
equitable remedies.
Section 4.3 NONCONTRAVENTION. Neither the execution and delivery of
this Agreement or the related agreements, nor the consummation of the
transactions contemplated hereby and thereby, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any Governmental Entity or court to which Buyer is
subject or any provision of the Certificate of Incorporation or By-laws of Buyer
or (ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any Person the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which Buyer is a party or by which
it is bound to which any of its assets is subject (or result in the imposition
of any Encumbrance upon any of its assets), except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, or failure to give notice would not have a Buyer Material Adverse
Effect and except as disclosed on Schedule 4.3. Other than as provided on
Schedule 4.3, Buyer does not need to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any Governmental Entity in
order for the Parties to consummate the transactions contemplated by this
Agreement and the related agreements.
Section 4.4 BROKERS' FEES. Except as set forth on Schedule 4.4, Buyer
does not have any liability or obligation to pay any fees or commissions to any
broker, finder or agent with respect to the transactions contemplated by this
Agreement.
ARTICLE V
COVENANTS
Seller, on the one hand, and Buyer, on the other hand, covenant with
each other as follows:
Section 5.1 NOTICES AND CONSENTS. As soon as practicable, Seller and
Buyer will commence all reasonable action required hereunder to obtain all
applicable Licenses, permits, other governmental authorizations, consents,
approvals and agreements of, and to give all notices and make all filings with,
any third parties as may be necessary in connection with this Agreement and to
consummate the transactions contemplated hereby. In addition, subject to the
terms and conditions herein provided, each of the parties hereto covenants and
agrees to use its commercially reasonable efforts to take or cause to be taken
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated hereby.
Section 5.2 FURTHER ASSURANCES. Both before and after the Closing
Date, Seller and Buyer will cooperate in good faith with each other and will
take all appropriate action and execute any documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the transactions contemplated hereunder.
Section 5.3 ENCUMBRANCES. Buyer shall maintain the Acquired Assets
free and clear of all Encumbrances except for Encumbrances existing as of the
Closing Date.
ARTICLE VI
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions provided for
hereby are subject, in the discretion of Seller, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions:
Section 6.1 AGREEMENTS AND COVENANTS. On or before the Closing Date,
Buyer shall have complied with and duly performed all agreements and conditions
on its part to be complied with and performed pursuant to or in connection with
this Agreement on or before the Closing Date.
Section 6.2 REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Buyer contained in this Agreement shall be true and correct at and
as of the Closing Date.
Section 6.3 CERTIFICATE. Seller shall have received a certificate
dated the Closing Date and executed by Buyer to the effect that the conditions
expressed in Sections 6.1 and 6.2 have been fulfilled.
Section 6.4 DELIVERIES. Seller shall have received the deliveries to
be made by Buyer pursuant to Article VIII.
ARTICLE VII
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate the transactions provided for
hereby are subject, in the discretion of Buyer, to the satisfaction, on or prior
to the Closing Date, of each of the following conditions:
Section 7.1 AGREEMENTS AND COVENANTS. On or before the Closing Date,
Seller shall have complied with and duly performed all agreements and conditions
on its part to be complied with and performed pursuant to or in connection with
this Agreement on or before the Closing Date.
Section 7.2 REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Seller contained in this Agreement shall be true and correct at
and as of the Closing Date.
Section 7.3 CONSENTS. All consents, approvals and waivers from
Governmental Entities and other parties necessary to consummate the transactions
contemplated hereby or to permit Buyer to own and operate the Business after the
Closing Date shall have been obtained. Notwithstanding the foregoing, receipt of
the consent of any third party shall not be a condition to Buyer's obligation to
close if the lack of such consent or consents shall not have a Seller Material
Adverse Effect. After the Closing, Seller will continue to use its best efforts
to obtain any such consents or approvals.
Section 7.4 NO ACTION. Other than the GeoWaste Action, no Action shall
have been instituted or threatened which questions the validity or legality of
the transactions contemplated hereby and which could reasonably be expected
materially to affect the right or ability of Buyer to own and operate the
Business after the Closing or materially damage Buyer or Seller if the
transactions contemplated hereunder are consummated.
Section 7.5 CERTIFICATE. Buyer shall have received a certificate dated
the Closing Date and executed by Buyer to the effect that the conditions
expressed in Sections 7.1, 7.2 and 7.4 have been fulfilled.
Section 7.6 OPINION OF COUNSEL. Xxxx X. Xxxxx, Esq. shall have
delivered to Buyer an opinion, dated as of the Closing Date, to the effect and
substantially in the form of Exhibit C hereto.
Section 7.7 MATERIAL ADVERSE CHANGES. Except as set forth on Schedule
7.7 or as expressly permitted in this Agreement, since the date of the Unaudited
Financial Statements, there shall not have been any material adverse change in
the condition (financial or otherwise), assets, liabilities, business or
prospects of Seller. For the purposes of this Section 7.7, a "material adverse
change" shall include, without limitation, any development or discovery of any
contingent or other liability not on Schedule 7.7, which might materially
adversely affect the business, assets, liabilities or operations of Seller.
Section 7.8 ANNUALIZED GROSS REVENUE. Annualized gross revenue of
Seller at Closing shall be not less than $1,000,000 as determined by Buyer in
its reasonable judgment.
Section 7.9 DELIVERIES. Buyer shall have received the deliveries to be
made by Seller pursuant to Article IX.
ARTICLE VIII
DELIVERIES OF BUYER ON THE CLOSING DATE
Buyer agrees on the Closing Date to deliver to Seller the following:
Section 8.1 PURCHASE PRICE . The Purchase Price to be delivered
pursuant to Section 2.3 hereof.
Section 8.2 CERTIFICATE. The certificate of Buyer referred to in
Section 6.3 hereof.
Section 8.3 SECRETARY'S CERTIFICATE. A certificate of the Secretary or
an Assistant Secretary of Buyer setting forth a copy of the resolutions adopted
by the Board of Directors of Buyer authorizing and approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
ARTICLE IX
DELIVERIES OF SELLER ON THE CLOSING DATE
Seller agrees on the Closing Date to deliver to Buyer the following:
Section 9.1 TITLE TO ACQUIRED ASSETS . All conveyances, covenants,
warranties, assignments, bills of sale, confirmations, powers of attorney,
approvals, consents and any and all further instruments as may be necessary,
expedient or proper in order to complete any and all conveyances, transfers and
assignments provided for herein and to convey to Buyer such title to the
Acquired Assets as Seller is obligated hereunder to convey.
Section 9.2 OPINION OF COUNSEL. The opinion of counsel for Seller
described in Section 7.6 hereof.
Section 9.3 CERTIFICATE. The certificate of Seller referred to in
Section 7.5 hereof.
Section 9.4 CONSENTS. The consents referred to in Section 7.3 hereof.
Section 9.5 GOOD STANDING CERTIFICATES. Good standing and tax
certificates (or analogous documents), dated no more than ten days prior to the
Closing Date, from the appropriate authorities in Seller's jurisdiction of
incorporation and in each jurisdiction in which Seller is qualified to do
business in connection with the Business, showing Seller to be in good standing
and to have paid all Taxes due in the applicable jurisdiction.
Section 9.6 SECRETARY'S CERTIFICATE. A certificate of the Secretary or
an Assistant Secretary of Seller setting forth a copy of the resolutions adopted
by the Board of Directors of Seller authorizing and approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
Section 9.7 POSSESSION OF ACQUIRED ASSETS. Possession of the Acquired
Assets, including all books, records, Contracts and other documents relating to
the Acquired Assets.
Section 9.8. OTHER DELIVERIES. Such other documents or instruments as
Buyer or its counsel may reasonably request, including, but not limited to,
noncompetition agreements from the principal stockholders of Seller.
ARTICLE X
ACTIONS BY SELLER AND BUYER
AFTER THE CLOSING
Section 10.1 BOOKS AND RECORDS. Each party agrees that it will
cooperate with and make available to the other party, during normal business
hours, all Books and Records, information and employees (without substantial
disruption of employment) retained and remaining in existence after the Closing
Date which are necessary or useful in connection with any Tax inquiry, audit,
investigation or dispute, any litigation or investigation or any other matter
requiring any such Books and Records, information or employees for any
reasonable business purpose. The party requesting any such Books and Records,
information or employees shall bear all of the out-of-pocket costs and expenses
(including, without limitation, attorneys' fees, but excluding reimbursement for
salaries and employee benefits) reasonably incurred in connection with providing
such Books and Records, information or employees.
Section 10.2 SURVIVAL OF REPRESENTATIONS, ETC. All representations and
warranties contained herein or in any certification or instrument delivered
pursuant to this Agreement or pursuant to any agreement or transaction
contemplated hereby shall survive the execution and delivery hereof and thereof,
the consummation of the transactions contemplated hereby and any investigation
or audit made by any party hereto. All statements contained on any Schedule or
in any certificate delivered at the Closing pursuant to the transactions
contemplated hereby shall be deemed to be representations and warranties of the
applicable party hereto contained herein.
Section 10.3 INDEMNIFICATION.
(a) Each of Seller and the Stockholders, jointly and severally, agrees
to indemnify, save and hold harmless Buyer, its stockholders, its
Representatives and its Affiliates from and against any and all Damages incurred
in connection with or arising out of or resulting from (i) any breach of any
covenant or warranty, or the inaccuracy of any representation, made by Seller in
or pursuant to this Agreement; (ii) any failure by Seller to perform any of its
agreements or covenants under this Agreement or under any of the documents or
instruments delivered by Seller pursuant to this Agreement; (iii) any Action
brought by any Governmental Entity or other person arising out of, or in any way
related to, any of the matters referred to this sentence and (iv) all Taxes
imposed on Seller relating to taxable periods ending on or prior to the Closing
Date or periods to and including the Closing Date to the extent attributable to
the income, assets or operations of Seller prior to the Closing Date. Seller and
each Stockholder acknowledge that Buyer has entered into this Agreement in
reliance upon, among other things, the indemnification provisions contained in
this Section 10.3(a), and Seller and each Stockholder agree that such provisions
constitute reasonable and necessary protection for Buyer in the context of the
transactions provided for herein. The term "Damages" as used in this Section
10.3(a) is not limited to matters asserted by third parties but includes Damages
incurred or sustained by Buyer, its stockholders, its Representatives or its
Affiliates in the absence of third party claims.
(b) Buyer shall indemnify and save and hold harmless Seller, its
stockholders, its Affiliates and its Representatives from and against any and
all Damages incurred in connection with or arising out of or resulting from (i)
any breach of any covenant or warranty, or the inaccuracy of any representation,
made by Buyer in or pursuant to this Agreement; (ii) any failure by Buyer to
perform any of its agreements and covenants under this Agreement or under any of
the documents or instruments delivered by Buyer pursuant to this Agreement;
(iii) any Action brought by any Governmental Entity or other person arising out
of, or in any way related to, any of the matters referred to in this Section
10.3(b); and (iv) all Taxes imposed on Seller relating to taxable periods ending
after the Closing Date.
(c) If a claim for Damages is to be made by a party entitled to
indemnification hereunder against the indemnifying party, the party entitled to
such indemnification shall give written notice to the indemnifying party as soon
as practicable after the party entitled to indemnification becomes aware of any
fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 10.3. If any lawsuit or
enforcement action is filed against any party entitled to the benefit of
indemnity hereunder, written notice thereof shall be given to the indemnifying
party as promptly as practicable (and in any event within 15 days after the
service of the citation or summons); PROVIDED, that the failure of any
indemnified party to give timely notice shall not affect rights to
indemnification hereunder except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, if the
indemnifying party shall acknowledge in writing to the indemnified party that
the indemnifying party shall be obligated under the terms of its indemnity
hereunder in connection with such lawsuit or action, then, subject to Section
10.3(d) and 10.3(e), the indemnifying party shall be entitled, if it so elects,
to take control of the defense and investigation of such lawsuit or action and
to employ and engage attorneys of its own choice to handle and defend the same,
at the indemnifying party's cost, risk and expense provided that the
indemnifying party and its counsel shall proceed with diligence and in good
faith with respect thereto. Subject to Section 10.3(d) and 10.3(e), the
indemnified party shall cooperate in all reasonable respects with the
indemnifying party and such attorneys in the investigation, trial and defense of
such lawsuit or action and any appeal arising therefrom; PROVIDED, HOWEVER, that
the indemnified party may, at its own cost, participate in the investigation,
trial and defense of such lawsuit or action and any appeal arising therefrom. No
indemnifying party shall be permitted to settle any such lawsuit or action
without the prior written consent of the indemnified party, which consent shall
not be unreasonably withheld.
(d) In the event that any lawsuit, action or other proceeding, is
filed against an party with respect to which such party is entitled to
indemnification under this Section 10.3, if the indemnified party, based upon
the written opinion of counsel, determines that a conflict of interest exists
between the indemnified party, on the one hand, and the indemnifying party, on
the other hand, then notwithstanding the provisions of Section 10.3(c), (i) the
indemnifying party shall not be entitled to elect to take control of the defense
and investigation of such lawsuit, action or proceeding unless the indemnified
party so requests, and (ii) the indemnifying party shall remain obligated to
indemnify the indemnified party in respect of such lawsuit, action or proceeding
as provided in Section 10.3(a); PROVIDED, HOWEVER, that the indemnifying party
may, at its own cost, participate in the investigation, trial and defense of
such lawsuit or action and any appeal arising therefrom. No indemnified party
shall be permitted to settle any such lawsuit or action without the prior
written consent of the indemnifying party, which consent shall not be
unreasonably withheld.
(e) Pursuant to the provisions of this Section 10.3, each of Buyer, on
the one hand, and Seller, on the other hand, shall indemnify, hold harmless and
defend the other party from the payment of any and all broker's and finder's
expenses, commissions, fees or other forms of compensation which may be due or
payable from or by the indemnifying party, or may have been earned by any third
party acting on behalf of the indemnifying party in connection with the
negotiation and execution hereof and the consummation of the transactions
contemplated hereby.
(f) No Representative of Buyer shall be personally liable for any
Damages under the provisions contained in this Section 10.3.
Section 10.4 NON-COMPETITION.
(a) Seller and each Stockholder agrees that, for a period of five
years after the Closing Date (the "Noncompetition Period"), none of Seller, any
Affiliate of Seller or either Stockholder will, directly or indirectly, in the
Territory, (i) engage in any business the same as or similar to, or engage in
competition with, the Business, (ii) render services to or have any interest, as
a shareholder, owner, agent, consultant, lender or guarantor or any other
interest, in any other Person (other than Seller) engaged in the manufacture or
sale of products, or the rendering of services, which are currently being
manufactured or sold or rendered by the Business, or similar products or
services, or (iii) engage in competition with, or manufacture or sell, such
products or services as are referred to in clause (ii) of this Section 10.4(a).
(b) For purposes of this Section 10.4, ownership of 1% or less of any
class of outstanding securities of a company the securities of which are listed
on a national securities exchange shall not be deemed to constitute ownership or
participation in the ownership of the business of such company.
(c) None of Seller, any Affiliate of Seller or either Stockholder, for
a period of five years from and after the Closing Date, shall, directly or
indirectly, (i) hire, offer to hire, entice away, retain, employ or solicit or
attempt to solicit (either for itself or as agent for another) for employment or
induce, persuade or encourage any person to leave Buyer's employ who, prior to
the Closing Date was, or during such five year period will be, employed or
retained by Buyer as a consultant, agent, employee or otherwise or (ii) divert
or attempt to divert from Buyer any business whatsoever by influencing or
attempting to influence any customer, supplier, licensee, licensor, franchisee
or other business relation of Buyer.
(d) Seller and each Stockholder acknowledge and agree that any breach
of this Section 10.4 is likely to result in irreparable injury to Buyer, that
monetary damages will be an inadequate remedy of such breach and that,
accordingly, in addition to any other remedy that Buyer may have, Buyer shall be
entitled to enforce the specific performance of this Section 10.4 and to seek
both permanent and temporary relief in the event of any breach hereof. In
addition, in the event of an alleged breach or violation by Seller or either
Stockholder of this Section 10.4, the Noncompetition Period shall be tolled
until such breach or violation has been duly cured.
(e) The parties acknowledge that the time, scope, geographic area and
other provisions of this Section 10.4 have been specifically negotiated by
sophisticated commercial parties and agree that all such provisions are
reasonable under the circumstances of the transactions contemplated by this
Agreement. If any portion of this Section 10.4 shall be determined to be invalid
and unenforceable as written, each such portion shall be enforced to the extent
reasonable under the circumstances and such determination shall not affect the
validity or enforceability of the balance hereof, and such balance shall remain
in full force and effect. It is understood that Seller and the Stockholders are
entering into this non-competition agreement in order to induce Buyer to enter
into this Agreement.
(f) The parties acknowledge that the Business is currently conducted
throughout the Territory. In view of the statements made in the preceding
sentence, the parties agree that the Territory is reasonable in scope.
Section 10.5 DISMISSAL OF GEOWASTE ACTION. Buyer shall use reasonable
efforts to have the action entitled CITY OF NASHVILLE, GEORGIA AND GEOWASTE OF
GA, INC. V. AIR-SWEEP-A- LOT, INC., Docket No. 96-CV540 (the "GeoWaste Action")
dismissed by the Superior Court of Lowndes, Georgia with prejudice within two
weeks of the Closing Date.
Section 10.6 PAYMENT DEFAULT. Buyer agrees that in the event of a
failure by Buyer to make an uncontested payment under the Note, Buyer shall
provide Seller with information as to the location of the Acquired Assets and
shall reasonably assist in the orderly transfer of the Acquired Assets to
Seller.
ARTICLE XI
MISCELLANEOUS
Section 11.1 ASSIGNMENT. Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by any party. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. No other person shall have
any right, benefit or obligation hereunder.
Section 11.2 NOTICES; TRANSFER OF FUNDS. Unless otherwise provided
herein, any notice, request, instruction or other document or communication to
be given hereunder by any party to any other party shall be in writing and shall
be deemed to have been given (a) if mailed, at the time when mailed in any
general or branch office of the United States Postal Service, enclosed in a
registered or certified postage-paid envelope, (b) if sent by facsimile
transmission, when so sent and receipt acknowledged by an appropriate telephone
or facsimile receipt or (c) if sent by other means, when actually received by
the party to which such notice has been directed, in each case at the respective
addresses or numbers set forth below or such other address or number as such
party may have fixed by notice:
If to Seller or either Stockholder, addressed to:
Air-Sweep-A-Lot, Inc.
0000 Xxxx Xxxx X
Xxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxx X. Xxxxx, Esq.
0000 Xxxxx Xxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
If to Buyer, addressed to:
GeoWaste of GA, Inc.
c/o GeoWaste Incorporated
00 Xxxxxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxx X. MacF. Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Stroock & Stroock & Xxxxx
Seven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Section 11.3 GOVERNING LAW. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Georgia (without reference to the choice of law provisions of
Georgia law) except with respect to matters of law concerning the internal
corporate or partnership affairs of Buyer and as to those matters the law of the
jurisdiction under which Buyer derives its powers shall govern.
Section 11.4 ENTIRE AGREEMENT; MODIFICATIONS AND WAIVERS. This
Agreement, together with all exhibits and schedules hereto, constitutes the
entire agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. No supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided. No delay by any party hereto in exercising its
rights hereunder shall constitute a waiver thereof. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.
Section 11.5 COUNTERPARTS/TELECOPIES. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Facsimile and
telecopy versions of signed documents shall be deemed to be original documents
for purpose of the Closing.
Section 11.6 EXPENSES. Except as otherwise specified herein, each
party hereto shall pay its own legal, accounting, out-of-pocket and other
expenses incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect.
Section 11.7 TAXES. Any Taxes in the nature of a sales or transfer tax
payable on the sale or transfer of all or any portion of the Acquired Assets or
the consummation of any other transaction contemplated hereby shall be paid by
Seller.
Section 11.8 INVALIDITY. In the event that any one or more of the
provisions contained in this Agreement, or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
Section 11.9 TITLES. The titles, captions or headings of the Articles
and Sections herein are for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
Section 11.10 PUBLICITY. No party shall issue any press release or
make any public statement regarding the transactions contemplated hereby,
without the prior approval of the other parties, except that if, after
discussion between the parties or their counsel, in the opinion of any party's
counsel, such party is required under any applicable law or regulation to make a
public statement or announcement, such party shall be permitted to issue the
legally required statement or announcement.
Section 11.11 CONFIDENTIAL INFORMATION. In connection with the
negotiation of this Agreement and the preparation for the consummation of the
transactions contemplated hereby, each party acknowledges that it has had and
will have access to confidential information relating to the other party. Each
party shall treat such information as confidential, preserve the confidentiality
thereof and not duplicate or use such information, except that the foregoing
shall not apply to any information (i) which is requested pursuant to a court
order or judicial proceeding or is provided in connection with any accounting
dispute resolution hereunder, (ii) which is or becomes known generally within
the relevant industry (except as a result of a breach hereof by the party hereto
intending to disclose such information), (iii) which a party determines, based
on advice of counsel, should be disclosed pursuant to applicable federal or
state laws or regulations, including securities laws and related disclosure
requirements, or (iv) disclosed to advisors, consultants and Affiliates in
connection with the transactions contemplated hereby. If there is a Closing
under this Agreement, then Buyer shall thereafter have no obligation to keep
confidential any information which has been furnished to Buyer concerning
Seller.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
AIR-SWEEP-A-LOT, INC.
By: /s/ XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: President
/s/ XXXX XXXXXXX
Xxxx Xxxxxxx
/s/ XXX XXXXXXX
Xxx Xxxxxxx
GEOWASTE OF GA, INC.
By: /s/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: Vice President
