EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
MWS NEW YORK, INC.
"BUYER"
AND
MERCURY REFINING COMPANY, INC.
"SELLER"
AND
00 XXXXXXXX XXX., INC.
AND
XXXXX XXXXX AND XXX XXXXX
"SHAREHOLDERS"
MARCH 11, 1998
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154658-14
EXECUTION COPY, March 11, 1998
TABLE OF CONTENTS
1. PURCHASE AND SALE OF ASSETS.............................................1
1.1 Generally................................................1
1.2 Excluded Assets..........................................3
2. PURCHASE PRICE..........................................................4
2.1 Generally................................................4
2.2 Payment of Purchase Price................................4
3. ASSUMPTION OF LIABILITIES. .............................................4
4. CLOSING.................................................................4
5. LABOR AND EMPLOYMENT MATTERS............................................5
6. LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE TO ASSETS.....................5
7. TITLE EXAMINATION.......................................................6
8. OTHER AGREEMENTS........................................................6
8.1 Shareholder Non-Compete Agreements.......................6
8.2 Seller Operations and Non-Compete Agreement..............7
8.3 Part B Lease Agreement...................................7
8.4 Office SubLease..........................................7
8.5 Memorandum of Lease......................................7
8.6 Internet Domain..........................................7
9. Intentionally Left Blank................................................8
10. REPRESENTATIONS AND WARRANTIES OF THE SELLING PARTIES...................8
10.1 Corporate Organization...................................8
10.2 Qualification to do Business.............................8
10.3 Corporate Power..........................................8
10.4 Conflicting Agreements, Governmental Consents............8
10.5 Restrictive Covenants....................................8
10.6 Corporate Authority......................................9
10.7 Actions, Suits, Proceedings..............................9
10.8 No Material Violations...................................9
10.9 Environmental Matters....................................9
10.10 Employees...............................................11
10.11 Office Lease............................................11
10.12 Title to Personal Property..............................11
10.13 Condition of Assets.....................................11
10.14 Assigned Contracts and Purchase Orders..................12
10.15 Intellectual Property Rights. .........................12
10.16 Permits.................................................12
10.17 Financial Information...................................12
10.18 Codess.1445 Affidavit...................................13
10.19 Taxes...................................................13
10.20 Capital Projects........................................13
10.21 Insurance...............................................13
10.22 Brokers and Finders.....................................13
10.23 Undisclosed Liabilities.................................13
10.24 Product Warranty........................................14
10.25 Mercury Waste...........................................14
10.26 Product Liability.......................................14
10.27 Real Property...........................................14
10.29 Disclosure..............................................15
11. REPRESENTATIONS AND WARRANTIES OF BUYER................................15
11.1 Organization............................................15
11.2 Conflicting Agreements, Governmental Consents...........15
11.3 Actions, Suits, Proceedings.............................16
11.4 Corporate Authority.....................................16
11.5 Brokers and Finders.....................................16
12. CONDITIONS TO OBLIGATION OF BUYER TO CLOSE.............................16
12.1 Representations and Warranties..........................16
12.2 No Adverse Change.......................................16
12.3 Observance and Performance..............................16
12.4 Officer's Certificate...................................16
12.5 Verification of Operating Results.......................17
12.7 Consents of Third Parties...............................17
12.8 Regulatory Approvals....................................17
12.10 Key Employees...........................................18
12.11 Financing...............................................18
12.12 Legal Opinion...........................................18
12.13 Copies of Documents.....................................18
12.14 Codess.1445 Affidavit...................................18
12.15 No Legal Actions........................................18
12.16 Other Agreements........................................18
12.17 Closing Documents.......................................18
12.18 Due Diligence...........................................18
12.19 Title Objections........................................19
12.20 Bulk Sales..............................................19
12.21 Disclosure Schedules....................................19
12.22 Silver Oxide Retorting Test.............................19
13. CONDITIONS TO OBLIGATION OF SELLER TO CLOSE............................19
13.1 Representations and Warranties..........................19
13.2 Observance and Performance..............................19
13.3 Officer's Certificate...................................19
13.4 Regulatory Approvals....................................19
13.5 Legal Opinion...........................................19
13.6 No Legal Actions........................................19
13.7 Bulk Sales..............................................20
14. OTHER COVENANTS........................................................20
14.1 Customer Change Over....................................20
14.3 Collection of Accounts Receivables......................20
14.4 Reporting...............................................20
14.5 Part B Permit...........................................21
14.6 Retorting Equipment.....................................21
14.7 Buyer Non-Compete.......................................21
14.8 Data Files..............................................21
14.9 Use of Name.............................................21
14.10 Customer Referral.......................................22
14.11 Processing Existing Barrels of Mercury Waste............22
15. OPERATION OF BUSINESS PRIOR TO CLOSING.................................22
15.1 Maintenance of Business.................................22
15.2 Capital Structure.......................................22
15.3 Employees...............................................23
15.4 No Disposition of Assets................................23
15.5 No Additional Liens.....................................23
15.6 No Modification of Agreements...........................23
15.7 Maintenance of Tangible Assets..........................23
15.8 Maintenance of Intangible Assets........................23
15.9 No Extraordinary Agreements.............................23
15.10 Maintenance of Insurance................................23
15.11 Ordinary Operations.....................................23
15.12 Inspection Rights.......................................23
16. OPERATION OF BUSINESS AFTER CLOSING....................................23
17. BULK TRANSFER LAW......................................................24
18. TAXES, FEES AND OTHER EXPENSES.........................................24
18.1 Taxes and Fees..........................................24
18.2 Expenses................................................24
19. INDEMNIFICATION BY THE SELLING PARTIES.................................24
19.1 Generally...............................................24
19.2 Deductible..............................................25
19.3 Limitation on Indemnification...........................25
19.4 Procedures..............................................26
19.5 Settlement and Compromise...............................26
19.6 Manner of Indemnification...............................26
19.7 Non-Waiver, Non-Exclusive Remedy........................26
19.8 Shareholder Liability...................................27
20. INDEMNIFICATION BY BUYER...............................................27
20.1 Generally...............................................27
20.2 Deductible..............................................28
20.3 Limitation on Indemnification...........................28
20.4 Procedures..............................................28
20.5 Settlement and Compromise...............................28
20.6 Manner of Indemnification...............................29
20.7 Non-Waiver, Non-Exclusive Remedy........................29
21. TERMINATION OF AGREEMENT...............................................29
21.1 Mutual Consent..........................................29
21.2 Breach of Agreement.....................................29
21.3 Results of Due Diligence................................29
21.4 Government Action.......................................29
22. ASSIGNMENT.............................................................29
23. EXCLUSIVE DEALING......................................................30
24. COVENANT OF FURTHER ASSURANCES.........................................30
25. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............................30
26. PUBLIC ANNOUNCEMENT....................................................30
27. ENTIRE AGREEMENT.......................................................31
28. AMENDMENT AND WAIVER...................................................31
29. CHOICE OF LAW..........................................................31
30. SEVERABILITY...........................................................31
31. COUNTERPARTS...........................................................31
32. FACSIMILE EXECUTION....................................................31
33. INTERPRETATION.........................................................31
34. NEGOTIATIONS...........................................................31
35. NOTICES................................................................31
36. KNOWLEDGE CONVENTION...................................................33
37. INDEPENDENT ENTITIES...................................................33
EXHIBITS
EXHIBIT A ASSUMPTION AGREEMENT
EXHIBIT B XXXXX XXXXX CONFIDENTIALITY AND NON-COMPETE AGREEMENT
EXHIBIT C XXX XXXXX CONFIDENTIALITY AND NON-COMPETE AGREEMENT
EXHIBIT D SELLER OPERATIONS AND NON-COMPETE AGREEMENT
EXHIBIT E PART B LEASE AGREEMENT
EXHIBIT F OFFICE SUBLEASE
EXHIBIT G OPINION OF XXXXXXXX XXXXXXXX & XXXXX
EXHIBIT H OPINION OF XXXXXX XXXXXXX XXXXXX & BRAND, LLP
SCHEDULES
SCHEDULE 1.1(a) EQUIPMENT
SCHEDULE 1.1(c) PURCHASE ORDERS
SCHEDULE 1.1(d) INTELLECTUAL PROPERTY
SCHEDULE 1.1(f) ASSIGNED CONTRACTS
SCHEDULE 1.1(h) LICENSES AND PERMITS
SCHEDULE 1.1(j) INVENTORY
SCHEDULE 1.2(j) NON-ASSUMED CONTRACTS
SCHEDULE 10.1 CAPITAL STOCK
SCHEDULE 10.4(b) GOVERNMENT FILINGS AND APPROVALS
SCHEDULE 10.7 ACTIONS, SUITS, PROCEEDINGS
SCHEDULE 10.8 MATERIAL VIOLATIONS
SCHEDULE 10.9 ENVIRONMENTAL MATTERS
SCHEDULE 10.10 EMPLOYEES OF SELLER
SCHEDULE 10.11 OFFICE LEASE
SCHEDULE 10.15 INTELLECTUAL PROPERTY - EXCEPTIONS
SCHEDULE 10.17 BALANCE SHEET
SCHEDULE 10.21 INSURANCE
SCHEDULE 10.27(d) UNRECORDED DOCUMENTS
SCHEDULE 10.27(e) ENCROACHMENTS
SCHEDULE 10.27(j) REAL PROPERTY LITIGATION
SCHEDULE 12.10 KEY EMPLOYEES
SCHEDULE 12.21 DISCLOSURE SCHEDULES
SCHEDULE 14.6 MERCURY EQUIPMENT
SCHEDULE 14.11 BARRELS
SCHEDULE 15.10 MAINTENANCE OF INSURANCE
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of March 11,
1998, by and among MWS New York, Inc., a Minnesota corporation ("Buyer"),
Mercury Refining Company, Inc., a New York corporation ("Seller"), 00 Xxxxxxxx
Xxx., Inc., a New York corporation ("26 Railroad"), and Xxxxx Xxxxx and Xxx
Xxxxx (collectively, the "Shareholders" and individually, a "Shareholder");
Seller, 26 Railroad and the Shareholders shall collectively be referred to
herein as the "Selling Parties";
RECITALS
WHEREAS, Seller is engaged, among other things, in the business of mercury
retorting, recycling and refining (specifically excluding the Seller's precious
metals business, which includes silver oxide, including silver oxide retorting,
dental amalgam, dental alloys and wastes and other types of materials containing
precious metals (the "Precious Metals Business")) at its facility in Albany, New
York (the "Business"); and
WHEREAS, the Shareholders directly and beneficially own and control all of
the issued and outstanding capital stock of Seller; and
WHEREAS, on the terms and subject to the conditions of this Agreement, the
Selling Parties desire to sell and Buyer desires to (i) purchase certain
specifically delineated assets of Seller utilized in, related to or arising from
the Business and (ii) assume certain specifically delineated liabilities of
Seller relating to or arising from the Business; and
WHEREAS, it is the intention of Seller and Buyer to provide for, among
other things, the following: (i) the modification of Seller's Part B RCRA Permit
to reflect a change in operational control of the on-site storage facility to
permit Buyer to lease from Seller the storage facility and to utilize the
benefits of such permit, (ii) the purchase of Seller's customer lists for the
Business and related goodwill, (iii) the increased ability of Buyer to provide
mercury recycling services and to increase Buyer's market share, (iv) the
continued ownership and control of the Real Property by Seller, (v) the ability
of Seller to continue its Precious Metals Business on the Real Property, and
(vi) the Selling Parties to remain responsible for all existing liability for
implementing necessary corrective action and remediation of its Real Property
and areas adjacent thereto;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants and conditions contained herein, the parties hereby agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Generally. On the terms and subject to the conditions of this
Agreement, Seller agrees to sell, transfer, convey and deliver to Buyer, and
Buyer agrees to purchase from Seller, on and as of the Closing Date (as defined
in Section 4 hereof), Seller's property and assets associated with the Business
(the "Assets") as follows:
(a) The equipment, fork lifts, spare parts, tools,
accessories, furniture and other miscellaneous tangible personal property of
Seller listed on SCHEDULE 1.1(A) hereto (collectively, the "Equipment");
(b) All rights of Seller under any warranty or guarantee by
any manufacturer, supplier or other transferor of the Assets;
(c) All rights of Seller under the contracts and agreements
pursuant to which Seller has agreed to purchase or sell, as the case may be,
non-waste (hazardous, solid or otherwise) and non-precious metals inventory
after the Closing Date including but not limited to purchase orders and general
supplier agreements, (the "Purchase Orders") as listed on SCHEDULE 1.1(C)
hereto;
(d) All interests of Seller in any trade names, trade marks,
certification marks, service names, service marks, master works, designs, logos,
inventions, know-how, technology, patents, industrial designs, copyrights and
applications therefor, domestic and foreign, together with particulars of
registration, if any registration with respect thereto has been effected, and
all other intellectual property, utilized in, related to or arising from the
Business, together with pending applications for any of the foregoing (the
"Intellectual Property"), including without limitation, the Intellectual
Property applicable to the Business identified in SCHEDULE 1.1(D) hereto, but
specifically excluding the trade names and trademarks "Mercury Refining" and
"MERECO" and any intellectual property associated with the Precious Metals
Business;
(e) All Seller's right, title and interest in and to the
proprietary waste management software owned and developed by Seller applicable
to the Business including, all documentation and source code with respect to
such software program;
(f) All rights of Seller under the contracts, guarantees,
leases, commitments, or other agreements (other than the Non-Assumed Contracts
to the extent such lists conflict) listed in SCHEDULE 1.1(F) hereto (the
"Assigned Contracts");
(g) All goodwill and other general intangibles of Seller
related to or arising from the Business in which the Assets are associated
including but not limited to all of Seller's rights in and to local phone
numbers in Albany, New York associated with the Business (but specifically
excluding Seller's toll-free phone number) but specifically excluding the trade
names and trademarks "Mercury Refining" and "MERECO";
(h) Except as otherwise provided for in the Part B Lease
Agreement (as defined in Section 8.3), all rights of Seller under any approvals,
permits (including but not limited to the New York State Department of
Environmental Conservation Permit No. 0-0000-00000/00002 (otherwise known as the
Part B RCRA Storage Permit) (the "Part B Permit") more fully described on
SCHEDULE 1.1(H) hereto), licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and governmental
agencies that relate to the Business as specifically set forth on SCHEDULE
1.1(H) hereto, to the extent assignable, and the Selling Parties shall use their
best efforts to obtain consents to assignments where not clearly assignable;
(i) All sales records, purchase records, customer lists,
supplier lists, advertising and promotional materials, vendor records and
information, production records and other records relating to the Business or
the Assets; all deeds and other instruments, maps, and profiles relating to the
Business; all records regarding the Occupational Safety and Health Act ("OSHA")
and other governmental examinations and clearances relating to the Business or
the Assets; and all personnel
records of any employee that is employed by Buyer following the Closing;
provided, however, that Seller may make and retain copies of any records
transferred to Buyer;
(j) All right, title and interest of Seller in the non-waste
(hazardous, solid or otherwise) and non-precious metals inventory of Seller (the
"Inventory") as listed on SCHEDULE 1.1(J) hereto; and
(k) All rights of Seller under any insurance policies, claims,
deposits, prepayments, refunds, causes of action, choses in action, rights of
recovery, rights of set off and rights of recoupment for Seller related to the
Assets.
The Assets will be transferred by Seller to Buyer in accordance with this
Agreement with all required consents of any and all third parties free and clear
of all liens, security interests or encumbrances.
1.2 Excluded Assets. The following property and assets of Seller are
excluded from sale to Buyer (the "Excluded Assets"), however, any asset or
property owned by Seller which is not listed below will not be deemed to have
been included in the definition of Assets unless such asset or property is
specifically referenced in Section 1.1 of this Agreement:
(a) Cash;
(b) All accounts receivable of Seller;
(c) All escrow accounts for the benefit of Seller;
(d) All stock in Seller's subsidiary 26 Railroad;
(e) All hazardous and solid waste, precious metals and
electrical relays inventory of Seller other than the Inventory listed in
SCHEDULE 1.1(J);
(f) All software licenses;
(g) All real property interests of Seller, whether owned or
leased, and all real property interests of any subsidiary of Seller or entity
related to Seller (the "Real Property");
(h) All tangible and intangible (including goodwill) assets of
Seller's Precious Metals Business;
(i) The corporate charter, qualifications to conduct business
as a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers, general
ledgers, tax returns, seals, minute books, stock transfer books and similar
documents of Seller relating to the organization, maintenance and existence of
Seller as a corporation (provided that Buyer shall have access thereto to the
extent reasonably necessary for the operation of the Business and the
preparation of tax returns and financial statements of Buyer following the
Closing Date);
(j) The rights, obligations and liabilities of Seller under
any agreements or documents not specifically set forth on SCHEDULE 1.1(F) (the
"Non-Assumed Contacts"); and
(k) Any of the rights of Seller under this Agreement or any
other agreement between Seller and Buyer entered into on or after the date of
this Agreement in accordance with the terms hereof.
2. PURCHASE PRICE.
2.1 Generally. The total purchase price to be paid to Seller for the
Assets (hereinafter referred to as the "Purchase Price") shall be equal to the
sum of One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to
adjustment as agreed upon by the parties to the extent that any conditions in
Sections 12 and 13 are not met, including but not limited to the satisfactory
completion of the Sales Audit pursuant to Section 12.6. Each party hereto agrees
to report to the Internal Revenue Service such information concerning the
allocation of the Purchase Price as may be required by Section 1060 of the
Internal Revenue Code as set forth below. Within ninety (90) days following
Closing, Buyer shall deliver to Seller Buyer's suggested allocation of the
Purchase Price. Seller shall have five (5) business days in which to notify
Buyer of any objection to such allocation. If the parties cannot agree on an
allocation of the Purchase Price within thirty (30) days of Buyer's receipt of
Seller's objection, the parties shall jointly appoint an independent appraiser
whose determination of the allocation of the Purchase Price shall be final.
2.2 Payment of Purchase Price. At the Closing, Buyer shall pay the
Purchase Price in cash, cashier's check or via wire transfer in immediately
available United States funds.
3. ASSUMPTION OF LIABILITIES. Except as hereinafter specifically provided,
Buyer shall not assume any liabilities or obligations of Seller. The Selling
Parties shall be solely liable for their respective liabilities and obligations
arising from ownership of the Assets, operation of the Business and incidents
and occurrences prior to the Closing Date, whether or not reflected in Seller's
books and records, including but not limited to the responsibility and
liability, if any, for the implementation of corrective action and remediation
of environmental contaminant conditions on, under or adjacent to the Real
Property arising from the Release of contaminants of whatever description,
caused by or resulting from its operations at any time prior to the Closing
(whether or not now known) and for any contaminants which may be Released from
any on-going operations conducted by Seller, its employees, agents,
subsidiaries, lessees (other than contaminants Released by Buyer) or related
entities. Subject to the terms and conditions of this Agreement, on the Closing
Date Buyer shall assume only the following liabilities and obligations of Seller
(collectively, the "Assumed Liabilities"):
(a) Obligations of Seller arising from and after the Closing
Date under Purchase Orders identified in SCHEDULE 1.1(C) hereto; and
(b) Obligations of Seller arising from and after the Closing
Date under the Assigned Contracts identified in SCHEDULE 1.1(F) hereto.
4. CLOSING.
4.1 The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place on or about the 10th day following the date all
conditions to close are met pursuant to Sections 12 and 13 and certified by each
party as set forth below, or such other date as Buyer and Seller may mutually
agree but in no event later than APRIL 15, 1998 (the "Closing Date") at such
place as Buyer and Seller mutually agree. At any time, but not more than twice
each calendar month following the date of this Agreement, each party may request
the other party to provide a written list of the items needed to be completed,
under Section 12 for the Buyer and under Section 13 for the Seller, in order for
such other party's conditions to close to have been fully satisfied, which list
shall include a reference to the appropriate Section(s) of this Agreement and a
detailed explanation of such items remaining unsatisfied. To the extent that no
such conditions to close are outstanding, a party must certify that all
conditions for it to close have been satisfied. A party may waive its own
conditions to close in writing at any time.
4.2 At the Closing (a) Buyer shall (i) pay to Seller the Purchase
Price as specified in Sections 2.2 hereof, (ii) deliver to Seller the various
certificates, instruments and documents referred to in Section 13 hereof and
(iii) deliver to Seller an assumption agreement in the form of EXHIBIT A hereto
to evidence the assumption by Buyer of the Assumed Liabilities, and (b) the
Selling Parties shall (i) deliver to Buyer such bills of sale, assignments,
consents, estoppels, warranties, and other documents of transfer reasonably
required by Buyer to transfer to Buyer the interest of Seller in the Assets;
(ii) an estoppel certificate and consent from the lessor under the Office Lease;
and (iii) deliver to Buyer the various certificates instruments and documents
referred to in Section 12 hereof.
5. LABOR AND EMPLOYMENT MATTERS. Buyer shall not assume any employment
obligations, wage or salary payment obligations, including without limitation
those arising under any pension, profit sharing, deferred compensation,
severance, welfare, sick leave, accrued or earned vacation, wage or other
employee benefit plan, procedure, policy or practice of Seller regardless of
whether such plan, procedure, policy or practice is disclosed in this Agreement.
Seller shall afford Buyer a reasonable opportunity to interview its employees
for prospective employment by Buyer if so requested by Buyer. Seller will
furnish to Buyer such information in its personnel files as Buyer may reasonably
request in connection with determining whether to employ a person presently
employed by Seller. Buyer, at its sole discretion, may offer employment to any
employees of Seller as of the Closing Date; provided, however, that the Selling
Parties shall be responsible for and indemnify and hold Buyer harmless from any
and all costs (including reasonable attorneys' fees and other legal costs,
whether or not suit is filed) claims or obligations arising as a result of any
such employees of Seller rejecting such offer of employment by Buyer. The
purpose of the foregoing provision is to protect Buyer from liability resulting
from claims from such employees, government agencies and third parties and not
to compensate Buyer for the costs or damages of any employees rejecting
employment offers.
6. LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE TO ASSETS. If between the
date of this Agreement and the Closing Date, the Assets are lost, destroyed or
condemned, or suffer any material damage and this Agreement shall not have been
terminated pursuant to Section 21 hereof, if applicable, then, either (a) the
Purchase Price shall be reduced by the excess of (i) the fair market value of
such Assets prior to such loss, destruction, condemnation or damage, over (ii)
the salvage value, if any, of such Assets following such loss, destruction,
condemnation or damage, or (b) no adjustment to the Purchase Price shall be made
and Seller shall, on the Closing Date, assign to Buyer all insurance and/or
condemnation proceeds up to, but not exceeding the Purchase Price, payable to
Seller on account of such loss, destruction, condemnation or damage pursuant to
an assignment in form and substance
satisfactory to Buyer and pay to Buyer the amount of any deductible under any
such insurance. The determination of whether clause (a) or (b) shall apply will
be in the sole control of Buyer.
7. TITLE EXAMINATION
7.1 Within fifteen (15) days after of this Agreement, the Selling
Parties shall, at their own expense, cause to be prepared and delivered to Buyer
commitments for American Land Title Association ("ALTA") Owner's Policy Form
1970-B Expanded Coverage title insurance policies by a title company reasonably
acceptable to Buyer covering the Leased Real Property (as defined below), in
form reasonably acceptable to Buyer, together with copies of all documents
referred to in the commitments. Said commitments shall include, but shall not be
limited to, endorsements deleting or limiting to the satisfaction of Buyer the
standard exceptions, agreeing to provide affirmative insurance in respect of
zoning matters and insuring the value of the Part B Permit. The aggregate amount
of such commitments shall be $1,250,000 or such other amount as Buyer shall
determine. The cost of such title insurance shall be borne by Seller in an
amount not to exceed $2,000.
7.2 Within fifteen (15) days after the execution of this Agreement,
the Selling Parties shall, at their own expense, furnish Buyer with a current,
accurate survey of the Real Property and the Leased Real Property, in accordance
with the Minimum Standard Detail Requirements for ALTA/ACSM Land Title Survey
and meeting the requirements of the Urban Society, certified to Buyer and to
said title company by a registered land surveyor acceptable to Buyer and to said
title insurance company, and otherwise in the form acceptable to Buyer and to
said title insurance company. The cost of such survey(s) shall be borne by
Seller in an amount not to exceed $2,000.
7.3 Buyer shall examine the commitment and surveys provided pursuant
hereto, and shall be allowed fifteen (15) days after receipt of the last thereof
to notify the Selling Parties of any objections to title to said property
("Title Objections"). If any Title Objections are made, the Selling Parties
shall use their best efforts to cure the Title Objections within fifteen (15)
days (or within such longer period of time as Buyer in its sole discretion
determines to be reasonable) following receipt of notice from Buyer, but the
Selling Parties shall not be obligated to spend more than $10,000 to cure the
Title Objections. Unless Buyer waives its Title Objections, the Closing Date
shall be extended for thirty (30) days or until such earlier date, if any, as
the Title Objections have been cured. In the event the Selling Parties are
unable to cure the Title Objections within such period or it costs more than
$10,000 to cure the Title Objections, then Buyer shall have the right and option
to terminate this Agreement, or to waive its objections, or to allow the Selling
Parties additional time in which to cure the Title Objections, in which case the
Closing Date shall be appropriately further extended.
7.4 The Selling Parties shall cooperate with Buyer both before and
after the Closing in connection with the efforts of Buyer, if any, to cure any
Title Objections raised by Buyer (subject to the financial limitations set forth
in Section 7) which are not cured before the Closing Date, if Buyer elects to
close notwithstanding such objections.
8. OTHER AGREEMENTS.
8.1 Shareholder Non-Compete Agreements. On the terms and subject to
the conditions of this Agreement, on the Closing Date, Buyer and the respective
Shareholder will:
(a) Execute and deliver a Confidentiality and Non-Compete
Agreement between Buyer and Xxxxx Xxxxx to be negotiated and agreed upon by the
parties to such agreement prior to the Closing Date which shall contain the
material terms set forth in EXHIBIT B as well as such other terms agreed upon by
such parties (the "Xxxxx Xxxxx Confidentiality and Non-Compete Agreement"); and
(b) Execute and deliver a Confidentiality and Non-Compete
Agreement between Buyer and Xxx Xxxxx to be negotiated and agreed upon by the
parties to such agreement prior to the Closing Date which shall contain the
material terms set forth in EXHIBIT C as well as such other terms agreed upon by
such parties (the "Xxx Xxxxx Confidentiality and Non-Compete Agreement").
8.2 Seller Operations and Non-Compete Agreement. On the terms and
subject to the conditions of this Agreement, on the Closing Date, Buyer and
Seller will enter into a Operations and Non-Compete Agreement to be negotiated
and agreed upon by the parties to such agreement prior to the Closing Date which
shall contain the material terms set forth in EXHIBIT D as well as such other
terms agreed upon by such parties (the "Seller Operations and Non-Compete
Agreement").
8.3 Part B Lease Agreement. On the terms and subject to the
conditions of this Agreement, on the Closing Date, Seller (and/or Seller's
subsidiary 26 Railroad) and Buyer will enter into the Lease Agreement (the "Part
B Lease Agreement") concerning the property to be leased by Buyer pursuant to
the Part B Lease Agreement (the "Leased Real Property") in the form set forth in
EXHIBIT E, which is hereby incorporated herein, with such changes to the Part B
Lease Agreement reasonably requested by Buyer based upon Buyer's due diligence
concerning or related to title, liens or third party claims or actions with
respect to the Property (as that term is defined in the Part B Lease Agreement).
8.4 Office SubLease. On the terms and subject to the conditions of
this Agreement, on the Closing Date, Seller and Buyer will enter into the Office
SubLease to be negotiated and agreed upon by the parties to such agreement prior
to the Closing Date which shall contain the material terms set forth in EXHIBIT
F as well as such other terms agreed upon by such parties (the "Office
SubLease").
8.5 Memorandum of Lease. On the terms and subject to the conditions
of this Agreement, on the Closing Date, Buyer and Seller will sign and record a
Memorandum of Lease with respect to the Part B Lease to be negotiated and agreed
upon by the parties (the "Memorandum of Lease"). All costs associated with
filing the Memorandum of Lease shall be borne by the Selling Parties.
8.6 Internet Domain. Within twenty (20) days following Closing,
Seller shall modify its current Internet Web site located at the domain
"xxx.xxxxxxxxxxxxxxx.xxx" to provide for an automatic "hyper" link to Buyer's
Internet Web site in such form and with such accompanying text and graphics that
is satisfactory to Buyer in its reasonable opinion. Seller's obligations
contained herein shall extend to future Internet domains and future Internet Web
sites applicable or related to the tradenames or trademarks MERECO or Mercury
Refining.
9. Intentionally Left Blank.
10. REPRESENTATIONS AND WARRANTIES OF THE SELLING PARTIES. Each of the
Selling Parties, jointly and severally, hereby represents and warrants to Buyer
that:
10.1 Corporate Organization. Seller is duly organized, validly
existing and in good standing under the laws of state of New York, with full
corporate power to carry on the Business as it is now and has since its
organization been conducted and to own, lease or operate the Assets. The
authorized capital stock of Seller consists of 10,000 shares of common stock, of
which 485 shares of common stock are issued and outstanding. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, exchange rights or other contracts or commitments that require Seller to
issue, sell or otherwise cause to become outstanding any of its capital stock.
All of the issued and outstanding shares of common stock are owned of record and
beneficially by the Shareholders. True and correct copies of the Articles of
Incorporation and By-Laws of Seller have been provided to Buyer. Except as set
forth on SCHEDULE 10.1, Seller does not own, directly or indirectly, any
outstanding capital stock of any class of any other corporation, nor is Seller a
party to any partnership or joint venture related to the Assets or the Business.
10.2 Qualification to do Business. Seller is qualified to do
business and is in good standing in each jurisdiction in which the nature of the
Business makes such qualification necessary.
10.3 Corporate Power. Seller has the corporate power to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
10.4 Conflicting Agreements, Governmental Consents. The and delivery
by Seller of this Agreement and all of the other agreements and instruments to
be executed and delivered pursuant hereto (collectively, the "Transaction
Documents"), the consummation of the transactions contemplated hereby, and the
performance or observance by the Seller of any of the terms or conditions hereof
or thereof, will not (with or without notice or lapse of time) (a) conflict
with, or result in a breach or violation of the terms or conditions of, or
constitute a default under, or result in the creation of any lien on any of the
Assets pursuant to, the Articles of Incorporation or By-Laws of Seller, any
award of any arbitrator, or any indenture, contract or agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which Seller or the Assets is subject, or (b) except as
set forth in SCHEDULE 10.4(B), require any filing or registration with, or any
consent or approval of, any federal, state or local governmental agency or
authority, or (c) contravene, conflict with, or result in a violation or breach
of any provision of, or give any person or entity the right to declare a default
or exercise any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any contract or other arrangement to which
Seller is a party or by which Seller is bound or to which any of the Assets is
subject (or result in the imposition of any security interest upon any of such
assets).
10.5 Restrictive Covenants. Seller is not a party to nor at the
Closing will the Assets be bound or affected by any agreement or document
containing any covenant limiting the freedom of Seller to compete in any line of
business or which materially or adversely affects the business practices,
operations or conditions of the Business or the continued operation of the
Business after the Closing on substantially the same basis and on substantially
the same terms and conditions as the Business is presently carried on.
10.6 Corporate Authority. The and delivery of this Agreement and the
other Transaction Documents by Seller and the consummation of the transactions
contemplated hereby or thereby have been duly authorized by all necessary
corporate action. This Agreement and the Transaction Documents are, or when
delivered will be, legally valid and binding obligations of the Selling Parties,
enforceable in accordance with their respective terms.
10.7 Actions, Suits, Proceedings. Except as set forth in SCHEDULE
10.7 hereto, there are no actions, suits or proceedings pending (for purposes of
this paragraph, "pending" does not include any suits filed for which Seller has
not been served) or, to the knowledge of the Selling Parties, threatened against
any of the Selling Parties or any of the Seller's property in any court or
before any federal, state, municipal or other governmental agency or before any
other private or public tribunal or quasi-tribunal which, (a) if decided
adversely to the Selling Parties, would have a materially adverse effect upon
the Business or Assets, (b) seek to restrain or prohibit the transactions
contemplated by this Agreement or obtain any damages in connection therewith, or
(c) in any way call into question the validity of this Agreement or the other
agreements and instruments to be executed and delivered by the Selling Parties;
nor are the Selling Parties in default with respect to any order of any court or
governmental agency entered against them in respect of the Business or Assets.
Except as set forth in SCHEDULE 10.7 hereto, none of the Selling Parties have
received notice, formally or otherwise, of the initiation or threat of any
condemnation proceeding with respect to the Real Property, or offer or sale in
lieu thereof, or any judgments, orders, decrees, stipulations, settlement
agreements, liens or injunctions, relating in any way to the Real Property or
the Assets, which have not been wholly and completely settled, complied with and
discharged.
10.8 No Material Violations. Except as set forth in SCHEDULE 10.8
hereto, none of the Selling Parties are in violation of any applicable law, rule
or regulation relating to the Business that would reasonably be expected to have
a material adverse effect on the Business, and, to the knowledge of the Selling
Parties, there are no requests, claims, notices, investigations, demands,
administrative proceedings, hearings or other governmental claims against any of
the Selling Parties alleging the existence of any such violation.
10.9 Environmental Matters.
(a) As used in this Agreement, the following terms shall have
the following meanings:
(i) "Hazardous Materials" means any dangerous, toxic or hazardous
pollutant, contaminant, chemical, waste, material or substance as defined in or
governed by any federal, state or local law, statute, code, ordinance,
regulation, rule or other requirement relating to such substance or otherwise
relating to the environment or human health or safety, including without
limitation any waste, material, substance, pollutant or contaminant that might
cause any injury to human health or safety or to the environment or might
subject Seller (or Buyer after consummation of this Agreement) to any imposition
of costs or liability under any Environmental Law.
(ii) "Environmental Laws" means all applicable federal, state, local
laws, rules, regulations, codes, ordinances, orders, decrees, directives,
permits, licenses and judgments relating to pollution, contamination or
protection of the environment (including, without limitation, all applicable
federal, state, local laws, rules, regulations, codes, ordinances, orders,
decrees, directives, permits, licenses and judgments relating to Hazardous
Materials in effect as of the date of this Agreement).
(iii) "Release" or "Releasing" means the spilling, leaking,
disposing, discharging, emitting, seeping, depositing, ejecting, leaching,
escaping or any other release or threatened release, however defined, whether
intentional or unintentional, of any Hazardous Material.
(b) There have been Releases of Hazardous Materials at and on
the Real Property during the years Seller has conducted operations at the Real
Property. Seller has retained environmental consultants to investigate the
extent of the contamination and the Selling Parties will be solely responsible
for the implementation of corrective action and remediation arising from the
Release of Hazardous Materials at, adjacent to, under or migrating from the Real
Property arising from past or Seller's on-going activities. Nothing in this
Agreement is intended, in any manner, to relieve Seller, or its predecessors,
assigns, agents, affiliated parties, successors, officers or directors of the
sole responsibility to implement corrective action and remediation of
contamination on or migrating from the Real Property arising from past
activities or on-going activities of Seller.
(c) Except as set forth in SCHEDULE 10.9, in connection with
the conduct of the Business, Seller has not transported or arranged for the
transportation (directly or indirectly) of any Hazardous Materials to any
location which is listed or proposed for listing under CERCLA or any other
similar Environmental Law, or, to the best of each of the Selling Parties'
knowledge after due inquiry and investigation, which is the subject of federal,
state or local enforcement actions or other investigation which would reasonably
be expected to create any material liability for clean-up costs, remedial work,
damages to natural resources or personal injury.
(d) Except as set forth in SCHEDULE 10.9, there have been no
environmental investigation reports, administrative orders, consent orders,
studies, audits, tests, reviews or other analyses conducted in relation to the
Real Property or the Assets and all of such items listed in SCHEDULE 10.9 have
been made available to Buyer prior to the date hereof.
(e) Except as set forth in SCHEDULE 10.9, Seller has obtained
and maintained in full force and effect, all environmental permits, licenses,
certificates of compliance, approvals and other authorizations necessary to
conduct the Business as it is presently being conducted and to own or operate
the Assets and the Real Property (collectively, the "Environmental Permits").
Seller has conducted the Business in material compliance with all terms and
conditions of the Environmental Permits. To the best of each of the Selling
Parties' knowledge after due inquiry and investigation, Seller has filed all
reports and notifications required to be filed under and pursuant to all
applicable Environmental Laws with respect to the Business and the Assets, of
which the failure to file would have a material adverse effect on the Business.
To the knowledge of the Selling Parties, all such Permits are valid and in full
force and effect, no notice of any violations thereof have been received and no
proceeding is pending or threatened to revoke or limit any of them except as
would not have a material adverse effect on the Business.
(f) Except as set forth in SCHEDULE 10.9, no lien has been
attached or filed against Seller (with respect to the Business, the Assets or
the Real Property) in favor of any governmental or private entity for (i) any
liability or imposition of costs under or violation of any applicable
Environmental Law; or (ii) any Release of Hazardous Materials.
(g) Seller, on behalf of itself and its successors and
assigns, hereby forever waives, releases and agrees not to bring any claim,
demand, cause of action or proceeding, including without limitation any cost
recovery action, against Buyer under any Environmental Law in connection with
the Business or the Assets arising prior to the Closing Date or arising (whether
before or after the Closing Date) out of any transaction, occurrence or Release
which occurred prior to the Closing Date or arising out of any Release (whether
before or after the Closing Date) resulting from preClosing Date Releases or
conduct.
10.10 Employees. SCHEDULE 10.10 hereto lists all employees of Seller
as of the date hereof engaged in operation of the Business and in the case of
each such employee sets forth the position, level of compensation, earned and
accrued vacation, date of employment, and years of employment recognized for
determining eligibility for participation in, and vesting and credited service
under any employee plans.
10.11 Office Lease. (a) Seller is a party to a certain Lease
Agreement (the "Office Lease") between Seller and Central Associates, a New York
general partnership, dated March 20, 1996. Seller has good and marketable title
to the leasehold interest under the Office Lease, which is free and clear of all
liens and encumbrances or charges of any kind or character; there is no default
under the Office Lease on the part of Seller and/or on the part of the lessor
under the Office Lease. There is no act, event or happening or contingency
which, with the passage of time or giving of notice or both would be a default
by lessor or Seller under the Office Lease, and the Office Lease is in full
force and effect and all obligations and conditions thereof to be performed by
lessor and Seller thereunder and necessary to the enforceability of the Office
Lease have been satisfied. Except as described on SCHEDULE 10.11 hereto, the
Office Lease has not been amended, modified, supplemented or superseded, either
in writing or orally.
(c) Seller is not in violation of any applicable law
regulating the uses that may be made of the premises leased pursuant to the
Office Lease or other law, regulation or requirement relating to the operation
of such leased premises, and Seller has not received any written notice of any
such violation, or of the existence of any condemnation proceeding with respect
to any of such leased premises.
(d) Seller has no knowledge of improvements made or
contemplated to be made by any public or private authority, the costs of which
are to be assessed as special taxes or charges under the Office Lease, and to
the Selling Parties's knowledge, there are no present assessments payable by
Seller as lessee under the Office Lease.
10.12 Title to Personal Property. Seller has good title to all
personal property included in the Assets, free and clear of all mortgages,
liens, pledges, charges and encumbrances.
10.13 Condition of Assets. All of the tangible Assets are free from
defects, have been maintained in accordance with normal industry practice, and
are in good operating condition and repair (subject to normal wear and tear).
None of the Assets will, at the Closing, be subject to any lien, claim or
encumbrance by or in favor of the New York State Energy Research and Development
Authority ("NYSERDA") pursuant to the Agreement between Seller and NYSERDA dated
October 18, 1991 or any other agreement between such parties. Upon request by
Buyer, Seller will provide Buyer
with a list of the maintenance logs for the Assets, if any, and a list of those
Assets subject to deferred maintenance, which lists provide, to the best
knowledge of the Selling Parties, an accurate description of maintenance
performed and to be performed with respect to the Assets.
10.14 Assigned Contracts and Purchase Orders. Seller and, to the
knowledge of the Selling Parties, each other party thereto, has substantially
performed all obligations required to be performed under the Assigned Contracts
and the Purchase Orders to date, and are not in default in any material respect
under any Assigned Contract or Purchase Order. The Assigned Contracts and the
Purchase Orders are each in full force and effect and are assignable to Buyer
without the consent of third parties, and Seller has not waived or assigned to
any other person any of its rights thereunder.
10.15 Intellectual Property Rights. SCHEDULE 1.1(D) hereto lists and
describes correctly all Intellectual Property included in the Assets, all of
which are solely registered in the name of Seller, of which Seller has all
right, title and interest, and have not been licensed or otherwise been made
available by Seller for use by others except as set forth on SCHEDULE 10.15
hereto. All such registered intellectual property rights are in full force and
effect and will not expire or require renewal until the date (if any) set forth
in SCHEDULE 1.1(D). Except those related to the Precious Metals Business, Seller
does not own or have any interest in or to any other copyrights, patents,
trademarks, service marks, trade names, master works, logos, trade secrets,
designs, and other intellectual property (or applications therefor)and does not
license from others the right to use any industrial or intellectual property
rights. Except as set forth on SCHEDULE 10.15, Seller owns or possesses, is
licensed under, or otherwise has lawful access to, all copyrights, patents,
trademarks, service marks, trade names, master works, logos, trade secrets,
designs, and other intellectual property (or applications therefor) necessary
for the lawful conduct of the Business as now conducted, without any
infringement of or conflict with the industrial or intellectual property rights
of others. To the best knowledge of the Selling Parties there has been no
unauthorized use or disclosure or misappropriation of any of its intellectual
properties, and Seller has taken reasonable steps to protect against the
unauthorized use or disclosure of its intellectual property. Except as disclosed
in SCHEDULE 1.1(D), none of the Selling Parties has reason to believe that (i)
any of the Intellectual Property listed in SCHEDULE 1.1(D) is invalid or
unenforceable (whether due to the existence of prior art, inequitable conduct
such as patent fraud or misuse, prior use or creation, or otherwise), (ii) any
payments to governmental agencies required to maintain the effectiveness of any
of such registered Intellectual Property have not been timely paid, or (iii) any
of such pending applications will be denied or will be materially restricted or
conditioned or any prior art exists which would cause such denial, restriction
or condition.
10.16 Permits. Seller has all permits required by law or otherwise
necessary for the proper and legal operation of the Assets and the Business. All
permits granted to Seller are in full force and effect and to the knowledge of
the Selling Parties, no action to terminate any such permit is pending or has
been threatened by any governmental agency or other party. The consummation of
the transactions contemplated by this Agreement will not violate the provisions
of, or require Buyer to reapply for, any such permit.
10.17 Financial Information. Attached hereto as SCHEDULE 10.17 is an
internally prepared balance sheet (the "Balance Sheet") of the Business as of
December 31, 1997 (the "Balance Sheet Date") and profit and loss statement of
the Business for the period then ended. Such financial statements fairly present
in all material respects the financial condition of the Business at such date
and the results of operations for the period then ended and have been prepared,
in general, in accordance
with generally accepted accounting principles, consistently applied. Since the
Balance Sheet Date, there has not been:
(a) any material adverse change in the financial condition of
the Business, the Assets or the liabilities of Seller;
(b) any damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting the Business or the Assets;
(c) any sale or transfer of any of the Assets used in or
useful to the Business, except in the ordinary course of business; or
(d) any transaction affecting the Business or the Assets
entered into by Seller, other than in the ordinary course of business, except
this Agreement.
10.18 Code ss. 1445 Affidavit. Seller is not a "foreign person" as
defined in the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations promulgated thereunder.
10.19 Taxes. Seller has paid all federal, state and local income,
profits, franchise, sales, use, property, excise, payroll, and other taxes and
assessments (including interest and penalties) relating to the Business, in each
case to the extent that such have become due and are not being contested in good
faith. No claims for additional taxes have been asserted against Seller and no
audits are pending with respect to any tax liabilities of Seller.
10.20 Capital Projects. No construction or other capital projects
are in progress, have been contracted for or, to the knowledge of the Selling
Parties, are required by applicable law or regulation in connection with the
operation of the Business. All completed construction and other capital projects
are reflected in the Balance Sheet.
10.21 Insurance. Seller maintains property and casualty insurance on
a replacement costs basis on all tangible Assets and product liability insurance
with respect to the Business as described generally on SCHEDULE 10.21. All
policies providing such insurance are in full force and effect and Seller has
not received any notice of impending cancellation or nonrenewal thereof.
10.22 Brokers and Finders. Seller has not retained or engaged any
broker, finder or other financial intermediary in connection with the
transactions contemplated by this Agreement.
10.23 Undisclosed Liabilities. Seller has no liability or obligation
(and the Selling Parties do not have knowledge of any basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against Seller giving rise to any liability), except for (i)
liabilities set forth on the face of the Balance Sheet (or expressly set forth
in the notes thereto), (ii) liabilities that have arisen after the Balance Sheet
Date 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 any breach of contract,
breach of warranty, tort, infringement, or violation of law), (iii) liabilities
that have arisen in the ordinary course of business and that are reasonably
expected to be fully covered by Seller's insurance, and (iv)
liabilities resulting from future claims arising from the release of
contamination from the Seller's Real Property associated with operations of
Seller on the Real Property.
10.24 Product Warranty. To the best of each of the Selling Parties'
knowledge after due inquiry and investigation, Seller has no liability or
obligation for replacement of any products manufactured, sold, or delivered or
services performed by Seller or other damages in connection therewith.
10.25 Mercury Waste. Except as set forth in SCHEDULE 10.25 which
contains a list of the retorted waste waiting to be disposed of by Seller (which
Schedule will be updated on the Closing Date), there is no Seller generated
mercury or other waste, whether or not retorted, whether or not regulated,
located at or on the property to be leased pursuant to the Part B Lease
Agreement. Any barrels of third-party unbilled, revenue generating mercury waste
will be processed pursuant to Section 14.11.
10.26 Product Liability. Seller has no liability (and the Selling
Parties have no knowledge of any basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
Seller giving rise to any liability) arising out of any injury to individuals or
property as a result of the ownership, possession, or use of any product
manufactured, sold, or delivered by Seller, other than liabilities that both
individually and in the aggregate are not material to the Business and that are
reasonably expected to be fully covered by Seller's insurance.
10.27 Real Property.
(a) Seller and/or 26 Railroad has good and marketable title to
the Real Property which upon Closing will be free and clear of all liens and
encumbrances or charges of any kind or character other than as currently
required by New York Department of Environmental Conservation as set forth in
the corrective action modules associated with the Part B Permit;
(b) There has been no labor or materials furnished to the Real
Property or for which payment has not been paid;
(c) There are no unrecorded mortgages, contracts, purchase
agreements, options, leases, easements or other agreements or interest relating
to the Real Property;
(d) Except as set forth on SCHEDULE 10.27(D), there are no
persons in possession of any portion of the Real Property other than pursuant to
a recorded document, or a lease which has been disclosed to Buyer and which will
be terminated at or prior to Closing;
(e) Except as set forth on SCHEDULE 10.27(E), there are no
encroachments or boundary line questions affecting the Real Property;
(f) There are no contracts, leases, licenses, permits and
certificates related to the Real Property, other than those copies of which have
been made available to Buyer pursuant to the provisions of this Agreement;
(g) The Real Property and the Leased Real Property each have
legal access to a public right of way;
(h) Seller has not received notice of any new public
improvement project(s), the cost of which a governmental entity may assess
against the Real Property;
(i) The Real Property and the improvements thereof, if any,
and their current use, are not in violation of any statute, law, ordinance or
regulation other than Environmental Law violations reported to Buyer in writing;
(j) Except as set forth on SCHEDULE 10.27(J) hereto, there is
no action, litigation, governmental investigation, condemnation or
administrative proceeding of any kind pending (for purposes of this paragraph,
"pending" does not include any suits filed for which Seller has not been served)
or, to each of the Selling Parties' knowledge, threatened, against Seller or
involving any portion of the Real Property;
(k) Seller is not in default in the performance of any of
Seller's obligations under any easement agreement, covenant, condition,
restriction or other instrument relating to the Real Property;
(l) The improvements located on the Real Property and all
mechanical, electrical, heating, air conditioning, drainage, sewer, water and
plumbing systems located on the Real Property are in good condition and repair,
ordinary wear and tear excepted; and
(m) To the best of Seller's knowledge, there are no xxxxx
located on the Real Property which: are constructed or maintained in such a
manner that their continued use or existence endangers ground water quality or
is a safety or health hazard; are inoperable or not in use; or which must be
sealed under state or federal law.
10.28 Part B Permit. The Part B Permit is in full force and effect
and, to the knowledge of the Selling Parties, no events have occurred which
could jeopardize the continuance of the Part B Permit throughout the term of the
Part B Lease Agreement. Seller has complied with all conditions imposed by the
Part B Permit.
10.29 Disclosure. The representations and warranties contained in
this Section 10 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 10 not misleading.
11. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to Seller as follows:
11.1 Organization. Buyer is a corporation duly incorporated and
existing and in good standing under the laws of the State of Minnesota and has
the corporate power to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
11.2 Conflicting Agreements, Governmental Consents. The and delivery
by Buyer of this Agreement, the Transaction Documents, the consummation of the
transactions
contemplated hereby or thereby, and the performance or observance by Buyer of
any of the terms or conditions hereof or thereof, will not (a) conflict with, or
result in a breach or violation of the terms or conditions of, or constitute a
default under, the Articles of Incorporation or By-Laws of Buyer, any award of
any arbitrator, or any indenture, contract or agreement (including any agreement
with stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which Buyer is subject, or (b) require any filing or registration
with, or any consent or approval of, any federal, state or local governmental
agency or authority.
11.3 Actions, Suits, Proceedings. There are no actions, suits or
proceedings pending or, to the knowledge of Buyer, threatened against Buyer or
any of Buyer's property in any court or before any federal, state, municipal or
other governmental agency or before any other private or public tribunal or
quasi-tribunal which, (a) seek to restrain or prohibit the transactions
contemplated by this Agreement or obtain any damages in connection therewith, or
(b) in any way call into question the validity of this Agreement or the other
agreements and instruments to be executed and delivered by Buyer.
11.4 Corporate Authority. The execution and delivery of this
Agreement, and the Transaction Documents, and the consummation of transactions
contemplated hereby or thereby have been, or will be as of Closing, duly
authorized by all necessary corporate action and will not violate or conflict
with any agreement or order by which Buyer is bound. This Agreement and the
Transaction Documents are, or when delivered will be, legally, valid and binding
obligations of Buyer, enforceable in accordance with their respective terms.
11.5 Brokers and Finders. Buyer has not retained any broker, finder
or other financial intermediary in connection with the transactions contemplated
by this Agreement.
12. CONDITIONS TO OBLIGATION OF BUYER TO CLOSE. The obligation of Buyer to
effect the closing of the transactions contemplated by this Agreement is subject
to the satisfaction prior to or at the Closing of the following conditions:
12.1 Representations and Warranties. All of the representations and
warranties of the Selling Parties contained in this Agreement shall be true and
correct on the Closing Date, as if made on the Closing Date.
12.2 No Adverse Change. There shall have occurred no material
adverse change in the Assets, the Business or the Real Property or the financial
condition or results of operations of the Business since the Balance Sheet Date.
12.3 Observance and Performance. The Selling Parties shall have
observed and performed in all material respects all covenants and agreements
required by this Agreement to be observed or performed by the Selling Parties on
or prior to the Closing Date.
12.4 Officer's Certificate. Seller shall have delivered to Buyer a
certificate of the President or Chief Executive Officer of Seller, dated the
Closing Date, to the effects set forth in Sections 12.1, 12.2 and 12.3 above.
12.5 Verification of Operating Results. Buyer shall have been
afforded the opportunity to review Seller's unaudited financial statements for
the year 1997 and the year 1998 for the periods through the Closing Date,
together with such supporting schedules and other supporting documents that
Buyer reasonably requests related to the Business and such financial statements
in order for Buyer to determine in its sole discretion that the results of
operations of the Business are consistent in all material respects with (i) the
results of operations for such periods heretofore disclosed by the Selling
Parties to Buyer and (ii) the results of operations that the Selling Parties
have represented to Buyer as expected for such additional periods through
Closing.
12.6 Customer Sales Audits. Buyer shall have had the opportunity
between the date of this Agreement and the Closing Date to review Seller's
records relating to customer sales, including but not limited to customer
billing records, sales documents and sales, waste manifest and processing
records, and Buyer shall not have discovered any fact or condition in the
performance of its review of such records which Buyer reasonably believes
materially affects the amount, composition, quality or prospects of the Seller's
sales history or the Assets, including as to whether "sales" differ materially
from amounts recorded in the Seller's financial statements. For purposes of this
section and section 21.3, "sales" in a given year shall include only revenues
resulting from the processing of customer waste applicable to the Business which
waste is actually received by Seller in that year. Buyer shall not contact any
of Seller's customers for any reason whatsoever until after the Closing Date,
except for those customers of Seller which Buyer has already contacted;
provided, however, Seller shall make available to Buyer, as soon as possible
after the date of this Agreement, Seller's records relating to customer sales
applicable to the Business, including but not limited to customer billing
records, accounts receivable listings, sales documents and sales, waste manifest
and processing records for the two year period ended December 31, 1997. Seller
shall also allow Buyer to conduct, at Buyer's expense (not including the cost of
Seller's employees who assist Buyer), independent third-party confirmation, by
using Buyer's independent accountants, of Seller's December 31, 1997 accounts
receivable balances and 1997 sales activity as well as the same for 1998 for the
period up through Closing. The accounts receivable balances and sales
transactions selected for confirmation will be determined by Buyer and Buyer's
independent accountants. Seller will facilitate this process by signing the
confirmation requests and making any necessary customer communications to
accelerate the confirmation and reconciliation process.
12.7 Consents of Third Parties. Buyer shall have received duly
executed copies of any consents necessary to permit the assignment of the
Assets, the Purchase Orders and the Assigned Contracts without breach thereof.
12.8 Regulatory Approvals. Buyer shall have received all
authorizations, consents and approvals of governments and governmental agencies
required, in Buyer's sole opinion, in connection with the purchase and sale
contemplated by this Agreement. Buyer shall have received all documents and
agreements Buyer deems necessary or appropriate, in its sole opinion, to ensure
that Buyer is not liable and will not be liable in the future in connection with
any Hazardous Material or Environmental Laws with respect to the Assets, the
Real Property owned by Seller or any actions or omissions of any of the Selling
Parties.
12.9 Part B Permit. Buyer shall have received documents satisfactory
to Buyer, in its sole opinion, that the Part B Permit will be modified to assign
to Buyer operational control of the Part B storage facility ("Storage
Facility"), as of the Closing Date. Such modification, or any
attachments to the Part B Permit in the nature of an agreement with the State of
New York, must also provide that Buyer is neither responsible (monetarily or
otherwise) for nor shall Buyer be deemed liable for the implementation of
corrective action measures for conditions which exist at the Real Property as of
the Closing Date or that might arise or result from a Release or actions or
omissions of Seller, its officers, directors, employees or affiliated entities,
prior to or after the Closing Date.
12.10 Key Employees. If offered employment by Buyer on substantially
the same terms and conditions as their present employment by Seller, each of the
employees listed in SCHEDULE 12.10 hereto shall have accepted such offers of
employment.
12.11 Financing. Buyer shall have received financing of the Purchase
Price pursuant to terms acceptable to Buyer; provided, however, that the
condition shall be deemed waived if not invoked by March 31, 1998.
12.12 Legal Opinion. Buyer shall have received an opinion, dated the
Closing Date, in the form attached hereto as EXHIBIT G, from Xxxxxxxx Xxxxxxxx &
Xxxxx, counsel to the Selling Parties.
12.13 Copies of Documents. Buyer shall have received accurate and
complete copies of all documents and instruments listed in any of the exhibits
or schedules to this Agreement (and of any amendments, waivers or similar
supplementary materials related thereto).
12.14 Code ss. 1445 Affidavit. Seller shall have delivered to Buyer
an affidavit of exemption from withholding pursuant to Section 1445 of the Code
in form and substance reasonably satisfactory to Buyer.
12.15 No Legal Actions. No court or governmental authority of
competent jurisdiction shall have issued an order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement, and no person, firm, corporation or governmental agency shall have
instituted an action or proceeding which shall not have been previously
dismissed seeking to restrain, enjoin or prohibit the consummation of the
transactions contemplated by this Agreement.
12.16 Other Agreements. Buyer shall have received signed copies of
the Agreements in form acceptable to Buyer required by Section 8 hereof and any
other agreements reasonably requested by Buyer.
12.17 Closing Documents. Buyer shall have received all necessary
bills of sale, assignment documents, an estoppel certificate from the lessor
under the Office Lease (in form satisfactory to Buyer), and the Office Lease
lessor's consent to of the Office SubLease, a non-disturbance agreement from any
lender of record, assignments and other documents of transfer reasonably
required to transfer to Buyer the interests of Seller in the Assets consistent
with the terms of this Agreement.
12.18 Due Diligence. Buyer shall not have discovered on or prior to
the Closing Date, any fact or condition in the performance of its due diligence
which Buyer believes materially effects the amount, composition, quality or
prospects of the Assets.
12.19 Title Objections. All Title Objections shall have been cured
as requested by Buyer (as determined in its sole discretion) in accordance with
Section 7.
12.20 Bulk Sales. In the reasonable opinion of Buyer, Seller shall
have complied with all requirements applicable to Seller under any applicable
bulk sales laws and regulations in such time and in such manner to enable Buyer
to comply with the requirements of any such bulk sales laws (including but not
limited to notifying creditors of Seller in the time frames set forth in any
such bulk sales laws) to Buyer's reasonable satisfaction prior to the Closing
Date, and there shall be no claims outstanding nor any potential claim under
such laws, against Seller, Buyer, the Assets, the Real Property or the Business.
12.21 Disclosure Schedules. To the extent the Parties execute this
Agreement without completing one or more of the Schedules to be attached hereto,
which uncompleted Schedules shall be enumerated on SCHEDULE 12.21 hereto, Buyer
shall have the opportunity to review and approve, in its sole discretion, such
Schedules which shall be attached prior to or on Closing Date.
12.22 Silver Oxide Retorting Test. Buyer shall be satisfied in its
sole opinion with the Test (as defined in Exhibit D) including but not limited
to the results, methods and costs required to retort the silver oxide cells
provided to Buyer by Seller in connection with the Test.
13. CONDITIONS TO OBLIGATION OF SELLER TO CLOSE. The obligation of Seller
to effect the transactions contemplated by this Agreement is subject to the
satisfaction prior to or at the Closing of the following conditions:
13.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects on the Closing Date, as if made on the Closing Date.
13.2 Observance and Performance. Buyer shall have observed and
performed in all material respects all covenants and agreements required by this
Agreement to be observed or performed by Buyer on or prior to or at the Closing
Date.
13.3 Officer's Certificate. Buyer shall have delivered to Seller a
certificate of the President or Chief Executive Officer of Buyer, dated the
Closing Date, to the effects set forth in Sections 13.1 and 13.2 above.
13.4 Regulatory Approvals. Buyer shall have received all
authorizations, consents and approvals of governments and governmental agencies
required in connection with the purchase and sale contemplated by this
Agreement.
13.5 Legal Opinion. Seller shall have received an opinion, dated the
Closing Date, in the form attached hereto as EXHIBIT H, from Xxxxxx Xxxxxxx
Xxxxxx & Brand, LLP, counsel to Buyer.
13.6 No Legal Actions. No court or governmental authority of
competent jurisdiction shall have issued an order restraining, enjoining or
otherwise prohibiting the consummation
of the transactions contemplated by this Agreement, and no person, firm,
corporation or governmental agency shall have instituted an action or proceeding
which shall not have been previously dismissed seeking to restrain, enjoin or
prohibit the consummation of the transactions contemplated by this Agreement.
13.7 Bulk Sales. Buyer shall have reasonably complied with Section
6-105 of the New York Uniform Commercial Code-Bulk Transfers and Section 1141(e)
of the New York Tax Law.
14. OTHER COVENANTS.
14.1 Customer Change Over. Following the Closing Date, the Selling
Parties agree to provide reasonable cooperation with Buyer in connection with
transferring Seller's customers to Buyer including but not limited to the
drafting of a joint letter from Buyer and Seller to such customers informing
them of Buyer's new role in servicing such customers. Seller shall not be liable
or held responsible for the failure of anyone of Seller's customers to transfer
to Buyer.
14.2 Intentionally left blank.
14.3 Collection of Accounts Receivables. Notwithstanding the fact
that Buyer is not purchasing Seller's accounts receivable, following the Closing
Date, Buyer shall use reasonable efforts to collect the accounts receivable of
Seller directly connected with the mercury retorting and storage aspects of the
Business (not including any accounts receivable connected with the Precious
Metals Business) (the "Accounts Receivable"), without resort to litigation or
the use of third-parties, for a period of 120 days. Within ten (10) business
days of the end of each calendar month in which Buyer collects any of the
Accounts Receivable, Buyer shall transmit such amounts, if any, of the Accounts
Receivable collected in the prior month to Seller along with documentation to
identify each collected account. The Selling Parties shall indemnify and hold
harmless Buyer, its directors, officers, employees and agents, effective as and
from the Closing Date, from and against any claims, demands, actions, causes of
action, damages, losses, costs, liabilities or expenses (including but not
limited to reasonable attorneys' fees and other legal costs, whether or not suit
is filed) which may be made or brought against the aforementioned parties and/or
which it or they may suffer or incur as a result of, in respect of, related to,
or arising out of the Accounts Receivable. Buyer shall not be liable to the
Selling Parties in the event that Buyer fails to collect any of the Accounts
Receivable. Within a reasonable amount of time following the 120th day of such
collection period, Buyer shall deliver to Seller a copy of all remaining
Accounts Receivable records and Seller shall have sole collection responsibility
for such Accounts Receivables following the 120 day collection period. Seller
shall notify Buyer to the extent that Seller collects any of the Accounts
Receivable.
14.4 Reporting. Between the date of this Agreement and Closing,
Seller will deliver to Buyer (i) monthly financial reports within ten (10) days
after the end of each month, which will include statements of Seller's financial
condition and an operating statement and statement of earnings and retained
earnings of Seller for such month, and an aging of accounts receivable of Seller
as of the end of such month, (ii) weekly mercury barrel inventory logs as of the
end of each week within two (2) business days after the end of such week, and
(iii) within 24 hours of discovery by any Selling Party, a written report of any
violation of environmental laws, any spill of hazardous waste or other
contamination, any customer claims or complaints, any loss of customers, any
customer audit and the result thereof, any non-compliance with any customer
audit, criteria or contract and any litigation
proceeding or investigation or any threat thereof. In addition, each party will
promptly notify the other (subject to applicable securities laws) of the
occurrence of any event which might reasonably be expected to interfere with the
Closing.
14.5 Part B Permit. The Selling Parties will fully cooperate and
assist Buyer, from time to time, in the process of modifying and maintaining the
Part B Permit so as to provide for the change of operational control and
continued existence of the Part B Permit and the associated storage facility
during the term of the Part B Lease Agreement. To the extent that any such
cooperation and assistance is due solely to a change to the Part B Permit that
Buyer desires which is discretionary in nature and is not taken to comply with a
request from any government agency, Buyer will pay Seller's reasonable
attorney's fees in connection with such action if approved in advance in writing
by Buyer.
14.6 Retorting Equipment. Within six (6) months following Closing,
the Selling Parties, at Seller's cost, shall dismantle and transport (in
compliance with all Environmental Laws) to Union Grove, Wisconsin, the mercury
retorting and other related equipment and assets (the "Mercury Equipment") set
forth in SCHEDULE 14.6 attached hereto. The Mercury Equipment shall be in such
condition, in Buyer's sole opinion, as to allow Buyer to retort the Mercury
Equipment in its retorting ovens in Union Grove, Wisconsin. Buyer shall retort
the Mercury Equipment to remove all mercury contamination at no cost to Seller.
To the extent that the Mercury Equipment requires decontamination for any
substances other than mercury or to the extent that the Mercury Equipment cannot
be decontaminated or retorted at Buyer's Union Grove, Wisconsin facility, the
Selling Parties shall be responsible for and pay any and all such costs of
decontamination. Following retorting, Buyer shall dispose of the Mercury
Equipment as Buyer desires at Buyer's expense in compliance with applicable
laws. Prior to Closing, Buyer and Seller shall agree to the dimensions (size and
weight) to which the Mercury Equipment will be dismantled.
14.7 Buyer Non-Compete. For the three (3) year period following
Closing, Buyer shall not compete with Seller with respect to the silver oxide
cell recovery business as presently conducted by Seller's Precious Metals
Business; provided, however, Buyer shall be permitted to retort dental amalgam,
dental alloys and similar products. Furthermore, Buyer shall be permitted to
retort silver oxide cells provided however that such retorting is directly
incidental to the recovery of mercury and if Buyer does not send such processed
or retorted silver oxide cells back to the customer requesting such retorting or
on to a third party for silver recovery.
14.8 Data Files. For an indefinite period following Closing, Seller
shall have full access to and a right to copy at Seller's expense, all data
files applicable to the Business associated with or related to all Seller's
computer software, owned or licensed, whether for general business usage (e.g.,
accounting (including ACT and Great Plains software), contact management, word
processing, graphics and spreadsheet analysis) or specific,
unique-to-the-business usage (e.g., order processing, manufacturing, waste
tracking, process control and shipping). The Selling Parties shall, for the six
(6) year period following Closing, maintain such files in good working
condition, reasonable wear and tear accepted.
14.9 Use of Name. For the six (6) month period following Closing,
Buyer shall have the right to use Seller's names and trade names, including but
not limited to the names "Mercury Refining" and "MERECO", in Buyer's
advertising, for the collection of accounts receivable and for general business
use in the transition of Seller's customers to Buyer.
14.10 Customer Referral. The Selling Parties shall refer all
customers and potential customers who contract Seller by any method concerning
the Business to Buyer as requested by Buyer. Furthermore, the Selling Parties
shall keep (and shall cause their employees and agents to keep) a daily log of
all customer and potential customer calls made to or letters received by any of
the Selling Parties concerning the Business, which log shall include the date
and time of call or letter, the customer's or potential customer's name, phone
number and address (for letters) and the requested product and/or service. A
copy of such log shall be faxed to Buyer daily by the close of business on the
following day. A copy of all correspondence from such customers or potential
customers shall also be delivered to Buyer.
14.11 Processing Existing Barrels of Mercury Waste. With respect to
barrels of unbilled, revenue generating mercury waste inventory (the "Barrels")
located at the Storage Facility as of the Closing and set forth on SCHEDULE
14.11 which shall be completed jointly by Buyer and Seller immediately prior to
Closing, Buyer will process such Barrels at a price equal to the greater of (i)
$600.00 or (ii) the price payable by Seller's customer who is having such Barrel
processed, net of any actual freight or transportation costs. When Buyer has
received an aggregate of $150,000 net of freight and transportation costs, Buyer
will process such Barrels at a price equal to the greater of (i) $600.00 or (ii)
50% of the price payable by Seller's customer who is having such Barrel
processed, net of any actual freight or transportation costs. Such processing
fees shall be referred to as the "Processing Fees". Notwithstanding the fact
that Buyer may be collecting the accounts receivable with respect to the
Barrels, the Selling Parties shall be responsible for payment to Buyer of all
Processing Fees. Buyer may withhold any of the Accounts Receivable it collects
to set off against the Processing Fees. In the event the withheld Accounts
Receivables are insufficient to pay Buyer for the Processing Fees owed by the
Selling Parties, the Selling Parties shall pay Buyer the Processing Fees within
10 days of receipt of an invoice from Buyer. Buyer reserves the right to reject
any Barrels that it cannot, in its sole opinion, appropriately process or
process in the normal course of its business. The freight and transportation
costs will be paid by the Selling Parties. The Selling Parties shall be
responsible for all costs associated with the Barrels following retorting
including but not limited to the cost of disposing of the retorted materials.
15. OPERATION OF BUSINESS PRIOR TO CLOSING. The Selling Parties agree
that, except with the prior written consent of Buyer, from the date of this
Agreement to the Closing:
15.1 Maintenance of Business. Each of the Selling Parties will use
their best efforts to preserve intact the Business, keep available the services
of key employees on terms no less favorable to Seller than those on which such
officers and employees are presently employed, and preserve for Buyer the
goodwill of suppliers, customers and others having business relationships with
the Business. Seller will maintain its books and records during such period in a
manner consistent with past practice.
15.2 Capital Structure. From the date hereof to and including the
Closing Date, the Selling Parties shall not: (i) redeem any stock of Seller,
(ii) change the capital structure of Seller in any way, or (iii) make any
distribution or disbursement of income or cash to any shareholder of Seller
without the express written permission of Buyer which permission shall not be
unreasonably withheld.
15.3 Employees. Seller will not hire any new employees for the
Business or effect any increase in compensation or employee benefits for its
employees engaged in operating the Business without the express written
permission of Buyer which permission shall not be unreasonably withheld.
15.4 No Disposition of Assets. Seller will not sell, transfer,
dispose of or abandon any portion of the Assets, except in the ordinary course
of business and consistent with past practice.
15.5 No Additional Liens. Seller will not permit any of the Assets
to become subject to any mortgage, lien, charge, or encumbrance.
15.6 No Modification of Agreements. Seller will not modify or amend
any Assigned Contract, any material contract, lease, commitment or agreement to
be assigned to or assumed by Buyer hereunder or the Office Lease, or waive or
assign to any third party any of its rights under any such contract, lease,
commitment or agreement or under any Assigned Contract.
15.7 Maintenance of Tangible Assets. Seller will maintain all
tangible Assets in good order and repair, ordinary wear and tear excepted.
15.8 Maintenance of Intangible Assets. Seller will maintain and
protect all material intangible Assets including but not limited to the
Intellectual Property.
15.9 No Extraordinary Agreements. Seller will not enter into any
contract or agreement which relates to the Business or Assets and which contains
terms or conditions inconsistent with past business practices of Seller or the
continued operation of the Business as a going concern.
15.10 Maintenance of Insurance. Except as set forth on SCHEDULE
15.10 hereto, Seller will continue to carry all existing policies of insurance
or will effect renewals or replacements thereof in substantially the same form
and amount, and providing substantially the same coverage, as such existing
policies.
15.11 Ordinary Operations. Without limiting the generality of the
foregoing, Seller will in all other material respects operate the Business in
the ordinary course.
15.12 Inspection Rights. Prior to Closing, Seller will, to the
extent Buyer does not materially interfere with Seller's business operations,
permit employees and agents of Buyer during normal business hours to inspect the
Assets and to inspect all contracts, agreements, other documents and records
reflecting or reasonably relating to the Assets or the Business. All information
and records obtained by Buyer pursuant to this Section shall be maintained as
confidential and shall not be disclosed to any third party without the consent
of Seller except in response to legal process or to the extent required to
comply with applicable law. Buyer shall not be obligated to maintain as
confidential any information obtained from Seller which is publicly available,
readily ascertainable from public sources, known to Buyer at the time the
information was disclosed or which is rightfully obtained from a third party.
The obligations of confidentiality arising under this Section shall survive the
termination or abandonment of this Agreement.
16. OPERATION OF BUSINESS AFTER CLOSING. The Selling Parties will have the
obligation and will be solely responsible for the implementation of corrective
action and remediation
arising from the Release of Hazardous Materials at, adjacent to, under or
migrating from the Real Property arising from past or Seller's on-going
activities at or near the Real Property, and which was not solely the result of
Buyer's actions. Nothing in this Agreement is intended, in any manner, to
relieve Seller, or its predecessors, assigns, agents, affiliated entities,
successors, officers or directors of the sole responsibility to implement
corrective action and remediation of contamination on or migrating from the Real
Property arising from past activities or on-going activities of Seller. Seller
shall comply with all Environmental Laws and orders of state and federal
environmental agencies with regard to the implementation of corrective action
and remediation of alleged contamination on or migrating from its Real Property.
17. BULK TRANSFER LAW. Seller shall comply with the requirements of any
applicable laws applicable to Seller relating to bulk sales and transfers, and
each of the Selling Parties, jointly and severally agrees to indemnify Buyer and
hold Buyer harmless from any and all claims, liabilities or costs arising with
respect to such bulk sales laws, including reasonable attorneys' fees and other
legal costs, whether or not suit is filed.
18. TAXES, FEES AND OTHER EXPENSES.
18.1 Taxes and Fees. Seller shall be responsible for and shall pay
all sales, transfer or similar taxes or governmental charges, if any, and all
deed taxes and recording fees with respect to the sale and purchase of the
Assets, whether levied against the Assets, Seller or Buyer.
18.2 Expenses. Except as otherwise specifically provided in this
Agreement, each party shall pay all of the costs and expenses incurred by it in
negotiating and preparing this Agreement (and all other agreements,
certificates, instruments and documents executed in connection herewith), in
performing its obligations under this Agreement, and in otherwise consummating
the transactions contemplated by this Agreement, including without limitation
its attorneys' fees and accountants' fees.
19. INDEMNIFICATION BY THE SELLING PARTIES.
19.1 Generally. Each of the Selling Parties shall, jointly and
severally, indemnify, defend and hold harmless Buyer and its directors,
officers, employees, agents, consultants, representatives, successors,
transferees and assigns (individually a "Buyer Indemnified Party"; and
collectively the "Buyer's Indemnified Parties"), promptly upon demand, at any
time and from time to time, from, against, and in respect of any and all
demands, claims, losses, damages, judgments, liabilities, assessments, suits,
actions, proceedings, interest, penalties, and expenses (including, without
limitation, settlement costs and any legal, accounting and other expenses for
investigating or defending any actions or threatened actions or for enforcing
such rights of indemnity and defense) incurred or suffered by the Buyer's
Indemnified Parties, in connection with, arising out of or as a result of each
and all of the following:
(a) any breach of any representation or warranty made by any
of the Selling Parties in this Agreement or any other document or instrument
delivered by any of the Selling Parties to Buyer or entered into as part of the
transactions contemplated by this Agreement;
(b) the breach of any covenant, agreement or obligation of any
of the Selling Parties contained in this Agreement or any other document or
instrument delivered by the Selling Parties to Buyer or entered into as part of
the transactions contemplated by this Agreement;
(c) any misrepresentation or omission contained in any
statement or certificate furnished by any of the Selling Parties pursuant to
this Agreement or in connection with the transactions contemplated by this
Agreement;
(d) any and all liabilities and obligations of any of the
Selling Parties except to the extent specifically assumed and agreed to be paid
by Buyer pursuant to Section 3 hereof, and any and all liabilities and
obligations arising from ownership of the Assets, operation of the Business and
incidents and occurrences on or prior to the Closing Date, including without
limitation, any and all products liability or similar claims in respect of
products sold or services provided by Seller on or prior to the Closing Date,
whether or not reflected in its book and records and whether or not manifest on
or prior to the Closing Date;
(e) the failure of Buyer to obtain the protection afforded by
compliance with the notification requirements of the Bulk Sales Laws in force in
the jurisdictions in which such laws may be applicable to Seller or the
transactions contemplated by this Agreement if such failure is the result of or
caused by Seller's acts or omissions;
(f) any claim of any broker, finder or investment banker
engaged by any of the Selling Parties; and
(g) any environmental liabilities, however so denominated
including but not limited to clean-up, remediation and closure, related to,
connected with or arising out of (i) the Selling Parties's operation of the
Business; (ii) Seller's ownership of the Assets prior to the Closing Date; (iii)
the past Release of Hazardous Materials on, under or near the Real Property; or
(iv) the Real Property, regardless of the merit thereof, and without regard to
whether any such environmental claim, assessment or liability is the direct or
indirect consequence of any violation of the Selling Parties' representations in
Section 10.9 unless such liability arises solely from acts of Buyer.
19.2 Deductible. No claim for indemnification under this Section 19
shall be made by a Buyer Indemnified Party unless and until the aggregate amount
of such claims (including attorneys's fees and costs) by all Buyer's Indemnified
Parties shall exceed Twenty-five Thousand Dollars ($25,000) (the "Threshold
Amount"), and in such event, the Buyer's Indemnified Parties shall each be
entitled to all amounts including but not limited to the Threshold Amount.
19.3 Limitation on Indemnification. The right to indemnification
under this Section 19 to the extent based on any breach of any representation or
warranty shall terminate on the tenth anniversary of the Closing Date, except
(a) for any for any claim based on the untruth or inaccuracy of any
representation or warranty made herein or in any statement, certificate or
schedule furnished hereunder with an intent to deceive or defraud or with
reckless disregard for the truth or accuracy thereof, (b) for any claim arising
out of or connected to the violation of any of the Environmental Laws set forth
in Section 10.9 or any other similar law, and (c) for any pending claim for
indemnity hereunder which shall have been made prior to such termination dates,
the right to indemnity shall have no limit as to time and such claim shall not
terminate until the final determination
and satisfaction of such claim. Furthermore, the maximum liability under this
Section 19 for the Shareholders shall be Six Hundred Thousand Dollars ($600,000)
plus settlement costs and any legal, accounting and other expenses for
investigating or defending any actions or threatened actions or for enforcing
such rights of indemnity and defense, and the obligation to indemnify under this
Section 19 with respect to the Shareholders to the extent based on a claim under
this Section 19 shall terminate on the second anniversary of the Closing Date.
19.4 Procedures. In the event any demands or claims are asserted
against a Buyer Indemnified Party or any actions, suits or proceedings are
commenced against a Buyer Indemnified Party for which the Selling Parties are
obligated to indemnify a Buyer Indemnified Party under this Section 19, then the
Buyer Indemnified Party shall give notice thereof to any of the Selling Parties
in order to permit the Selling Parties the necessary time to evaluate the merits
of such demand, claim, action, suit or proceeding and defend, settle or
compromise the same so that the Selling Parties' interests are not materially
prejudiced. Within 10 business days after such notice, the Selling Parties shall
assume the defense thereof with counsel chosen by the Selling Parties or their
insurer and reasonably acceptable to the Buyer Indemnified Party. The Selling
Parties shall not be liable for any costs or expenses incurred by a Buyer
Indemnified Party in connection with any demand, claim, action, suit or
proceeding for which the Selling Parties are obligated to indemnify the Buyer
Indemnified Party under this Section 19, provided that the Selling Parties shall
have assumed the defense thereof in accordance with this Section 19. The Buyer
Indemnified Parties shall be entitled to participate in (but not control) the
defense of any such action, with its counsel and at its own expense. If the
Selling Parties do not assume the defense of any such claim or litigation
resulting therefrom, (a) a Buyer Indemnified Party may defend against such claim
or litigation, in such manner as it may deem appropriate, at the Selling Parties
expense, including, but not limited to, settling such claim or litigation, after
giving notice of the same to the Selling Parties on such terms as such Buyer
Indemnified Party may deem appropriate, and (b) the Selling Parties shall be
entitled to participate in (but not control) the defense of such action, with
their own counsel and at its own expense. Buyer shall provide thirty (30) days
written notice to a Selling Party prior to initiating any direct suit against
such Selling Party pursuant to this Section 19 provided that such notice does
not, in Buyer's reasonable opinion, negatively impact or jeopardize any of
Buyer's rights under this Agreement (including but not limited to Buyer's rights
under this Section 19) or any law.
19.5 Settlement and Compromise. The Selling Parties shall not settle
or compromise any demands, claims, actions, suits or proceedings for which a
Buyer Indemnified Party has sought indemnification from the Selling Parties
unless they shall have given the Buyer Indemnified Party not less than 15 days
prior written notice of the proposed settlement or compromise and afforded the
Buyer Indemnified Party an opportunity to consult with the Selling Parties
regarding the proposed settlement or compromise.
19.6 Manner of Indemnification. All indemnification by the Selling
Parties shall be effected by the payment of cash or delivery of a certified or
official bank check within 30 days of the resolution of any such claim. Any and
all indemnification payments shall be deemed an adjustment to the Purchase
Price.
19.7 Non-Waiver, Non-Exclusive Remedy. Failure of the Buyer
Indemnified Parties to give reasonably prompt notice of any claim or claims
shall not release, waive or otherwise affect any of the Selling Parties'
obligations with respect thereto except to the extent that the Selling Parties
can demonstrate actual loss and prejudice as a result of such failure. The
indemnification
provisions contained in this Section 19 are in addition to, and not in
derogation of, any statutory, common law or equitable rights or remedies any
party may have for breach of any representation, warranty, covenant or
agreement.
19.8 Shareholder Liability. In the event Shareholders can
demonstrate that as of the Closing Buyer had actual knowledge of any facts or
circumstances which Buyer had actual knowledge would cause Buyer to suffer
damages which Buyer had actual knowledge would give rise to a cause of action by
any Buyer Indemnified Party against any Selling Party under Section 19, then,
and only then, Buyer shall have been deemed to waive such cause of action
against the Shareholders under Section 19 hereof as particularly described in
this Section 19.8. This Section 19.8 shall not prejudice or otherwise affect in
any manner whatsoever any cause of action Buyer or any Buyer Indemnified Party
may have against Seller. For the purpose of this Section 19.8, actual knowledge
of Buyer shall be limited to the actual knowledge of Xxxxxxx Xxxxxxx, Xxxx
Xxxxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxxxx (regardless of the source
from which such actual knowledge was acquired). For the purpose of this Section
19.8, actual knowledge shall not include constructive knowledge and shall not
include matters that Buyer should have known but did not know.
20. INDEMNIFICATION BY BUYER
20.1 Generally. Buyer shall indemnify, defend and hold harmless the
Seller and its directors, officers, employers, agents, consultants,
representatives, successors, transferees and assigns (individually a "SP
Indemnified Party"; and collectively the "SP Indemnified Parties"), promptly
upon demand, at any time and from time to time, from, against, and in respect of
any and all demands, claims, losses, damages, judgments, liabilities,
assessments, suits, actions, proceedings, interest, penalties, and expenses
(including, without limitation, settlement costs and any legal, accounting and
other expenses for investigating or defending any actions or threatened actions
or for enforcing such rights of indemnity and defense) incurred or suffered by
the SP Indemnified Parties, in connection with, arising out of or as a result of
each and all of the following:
(a) any breach of any representation or warranty made by Buyer
in this Agreement or any other document or instrument delivered by Buyer to
Seller or entered into as part of the transactions contemplated by this
Agreement;
(b) the breach of any covenant, agreement or obligation of
Buyer contained in this Agreement or any other document or instrument delivered
by Buyer to Seller or entered into as part of the transactions contemplated by
this Agreement;
(c) any misrepresentation or omission contained in any
statement or certificate furnished by Buyer pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement;
(d) any liabilities and obligations arising from ownership of
the Assets after the Closing Date (other than environmental related liabilities
associated with contamination that exists, whether known or unknown, as of the
Closing Date resulting or arising from Seller's operations or ownership of the
Assets, the Business or Real Property), including without limitation, any and
all products liability or similar claims in respect of products sold by Buyer
after the Closing Date, whether or not reflected in its book and records and
whether or not manifest after the Closing Date; and
(e) any claim of any broker, finder or investment banker
engaged by Buyer.
20.2 Deductible. No claim for indemnification under this Section 20
shall be made by an SP Indemnified Party unless and until the aggregate amount
of such claims by all SP Indemnified Parties shall exceed Twenty-five Thousand
Dollars ($25,000) (the "Threshold Amount"), and in such event, the SP
Indemnified Parties shall each be entitled to all amounts including but not
limited to the Threshold Amount.
20.3 Limitation on Indemnification. The right to indemnification
under this Section 20 to the extent based on any breach of any representation or
warranty shall terminate on the tenth anniversary hereof, except that (a) for
any claim based on the untruth or inaccuracy of any representation or warranty
made herein or in any statement, certificate or schedule furnished hereunder
with an intent to deceive or defraud or with reckless disregard for the truth or
accuracy thereof, and (b) for any pending claim for indemnity hereunder which
shall have been made prior to such termination date, the right to indemnity
shall have no limit as to time and such claim shall not terminate until the
final determination and satisfaction of such claim. In addition, no such loss,
cost or expense indemnified under this Section 20 shall be deemed to have been
sustained by the SP Indemnified Parties to the extent of any proceeds received
by the SP Indemnified Parties from any insurance policy with respect thereto.
Furthermore, the maximum liability under this Section 20 for the Buyer shall be
an amount equal to the Purchase Price plus settlement costs and any legal,
accounting and other expenses for investigating or defending any actions or
threatened actions or for enforcing such rights of indemnity and defense.
20.4 Procedures. In the event any demands or claims are asserted
against the SP Indemnified Parties or any actions, suits or proceedings are
commenced against any SP Indemnified Party for which Buyer is obligated to
indemnify a SP Indemnified Party under this Section 20, then the SP Indemnified
Party shall give notice thereof to Buyer in order to permit Buyer the necessary
time to evaluate the merits of such demand, claim, action, suit or proceeding
and defend, settle or compromise the same so that Buyer's interest is not
materially prejudiced. Within 10 business days after such notice, Buyer shall
assume the defense thereof with counsel chosen by Buyer or its insurer and
reasonably acceptable to the SP Indemnified Party. Buyer shall not be liable for
any costs or expenses incurred by the SP Indemnified Party in connection with
any demand, claim, action, suit or proceeding for which Buyer is obligated to
indemnify the SP Indemnified Party under this Section 20, provided that Buyer
shall have assumed the defense hereof in accordance with this Section 20. The SP
Indemnified Parties shall be entitled to participate in (but not control) the
defense of any such action, with its counsel and at its own expense. If Buyer
does not assume the defense of any such claim or litigation resulting therefrom,
(a) the SP 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 Buyer on such terms
as the SP Indemnified Party may deem appropriate, and (b) Buyer shall be
entitled to participate in (but not control) the defense of such action, with
their own counsel and at its own expense.
20.5 Settlement and Compromise. Buyer shall not settle or compromise
any demands, claims, actions, suits or proceedings for which the SP Indemnified
Parties have sought indemnification from Buyer unless it shall have given the SP
Indemnified Parties not less than 15 days
prior written notice of the proposed settlement or compromise and afforded the
SP Indemnified Parties an opportunity to consult with Buyer regarding the
proposed settlement or compromise.
20.6 Manner of Indemnification. All indemnification by the Buyer
shall be effected by the payment of cash or delivery of a certified or official
bank check within 30 days of the resolution of any such claim. Any and all
indemnification payments shall be deemed an adjustment to the Purchase Price.
20.7 Non-Waiver, Non-Exclusive Remedy. Failure of the SP Indemnified
Parties to give reasonably prompt notice of any claim or claims shall not
release, waive or otherwise affect any of the Buyer's obligations with respect
thereto except to the extent that the Buyer can demonstrate actual loss and
prejudice as a result of such failure. The indemnification provisions contained
in this Section 20 are in addition to, and not in derogation of, any statutory,
common law or equitable rights or remedies any party may have for breach of any
representation, warranty, covenant or agreement.
21. TERMINATION OF AGREEMENT. In addition to certain provisions contained
in this Agreement, this Agreement may be terminated at any time prior to the
Closing Date:
21.1 Mutual Consent. By mutual consent of Buyer and Seller.
21.2 Breach of Agreement. By Buyer giving written notice to any of
the Selling Parties if any of the Selling Parties is in breach, or by Seller
giving written notice to Buyer if Buyer is in breach, in any material respect of
any representation, warranty or covenant contained in this Agreement.
21.3 Results of Due Diligence. By Buyer giving written notice to
Seller or Xxxxx Xxxxx on or before the Closing Date, if Buyer is not satisfied
with the results of its continuing business, legal, and accounting due diligence
regarding Seller, or on or prior to the Closing Date if Buyer is not able to
verify that Seller's 1997 "sales" (as that term is defined in Section 12.6)
associated with the Business were not at least One Million Nine Hundred Thousand
Dollars (as determined by Buyer in its reasonable discretion), or by either
party respectively, if a condition of such party to close is conclusively found
to be impossible to achieve and such party will not waive such condition to
closing.
21.4 Government Action. By Buyer or Seller if any court of competent
jurisdiction in the United States or other governmental body shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become final
and non-appealable.
22. ASSIGNMENT. This Agreement may not be assigned by either party hereto
without the prior written consent of the other. The terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their successors and assigns, and no person, firm or corporation other
than the parties, their successors and assigns, shall acquire or have any rights
under or by virtue of this Agreement. Notwithstanding the foregoing, Buyer may
assign its rights and obligations under this Agreement to a related or
affiliated Person.
23. EXCLUSIVE DEALING. From the date hereof and until the later of the
Closing Date or the lawful termination of this Agreement, each of the Selling
Parties agree that neither they nor any of their subsidiaries, officers,
directors, or the directors and officers of their subsidiaries, nor any of their
other affiliates shall, and each of them shall cause their and their
subsidiaries' employees, agents and representatives (including, without
limitation, any investment banking, legal or accounting firm retained by any of
the Selling Parties or any of their subsidiaries and any individual member or
employee of the foregoing) not to (a) initiate, solicit or seek, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, consolidation, recapitalization,
liquidation, dissolution or similar transaction involving, or any purchase of
all or a portion of the assets or any equity securities of, Seller or any of its
subsidiaries (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal"), or (b) engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any person relating to an Acquisition Proposal, or (c) otherwise cooperate in
any effort or attempt to make, implement or accept an Acquisition Proposal. In
the event that any of the Selling Parties receives an Acquisition Proposal, such
party shall immediately (but not more than twenty-four (24) hours following
receipt or knowledge of the Acquisition Proposal) notify Buyer of the existence
of such Acquisition Proposal.
24. COVENANT OF FURTHER ASSURANCES. From time to time after the Closing,
at the request of Buyer and without further consideration, the Selling Parties
and Buyer will execute and deliver such other instruments of transfer and take
such other actions as Buyer or a Selling Party, as the case may be, may
reasonably require to transfer the Assets to, and vest title of the Assets in,
Buyer, and to put Buyer in possession of the Assets.
25. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained herein, and all other written representations and
warranties of Buyer and the Selling Parties contained in the instruments
executed in connection with the consummation of the transactions provided for
herein, shall survive the and delivery of this Agreement and the consummation of
the transactions contemplated hereby, and shall terminate on the tenth
anniversary hereof, provided, however, that the foregoing shall not bar the
parties hereto, and their respective successors and assigns from asserting at
any time thereafter any cause of action based on (a) the untruth or inaccuracy
of any representation or warranty of the Selling Parties contained in Section
10.9 hereof or (b) the untruth or inaccuracy of any other representation or
warranty made herein or in any statement, certificate or schedule furnished
hereunder with an intent to deceive or defraud or with reckless disregard for
the truth or accuracy thereof and (c) any representation or warranty of which a
pending claim for indemnity hereunder shall have been made prior to such
termination dates, such representation and warranty shall not terminate until
the final determination and satisfaction of such claim. Notwithstanding the
foregoing, in no event shall Buyer's representations or warranties extend beyond
the term of the Part B Lease Agreement.
26. PUBLIC ANNOUNCEMENT. Except to the extent required by law, any and all
public announcements of any kind or nature whatsoever concerning the
transactions contemplated hereby made before, on or after the Closing Date shall
require the prior written approval of Buyer and Seller; provided, however,
either party may make any announcements required by securities or other
applicable law or NASDAQ rules.
27. ENTIRE AGREEMENT. This Agreement, including the exhibits and schedules
attached to this Agreement, constitutes the entire agreement and understanding
between the Selling Parties and Buyer with respect to the sale and purchase of
the Assets and the other transactions contemplated by this Agreement. All prior
representations, understandings and agreements between the parties with respect
to the purchase and sale of the Assets and the other transactions contemplated
by this Agreement are superseded by the terms of this Agreement.
28. AMENDMENT AND WAIVER. Any provision of this Agreement may be amended
or waived by a writing which specifically references this Agreement and which is
signed by the party against which enforcement of the amendment or waiver is
sought.
29. CHOICE OF LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Minnesota, without regard to its choice
of law provisions, as though all acts and omissions related to this Agreement
occurred in the State of Minnesota; provided, however, that all disputes arising
under this Agreement shall be resolved by arbitration pursuant to the commercial
rules of the American Arbitration Association then in effect. If such dispute
involves environmental matters, the arbitration shall be held in Albany, New
York. All other disputes shall be arbitrated in Minneapolis, Minnesota.
30. SEVERABILITY. The provisions of this Agreement shall, where possible,
be interpreted so as to sustain their legality and enforceability, and for that
purpose the provisions of this Agreement shall be read as if they cover only the
specific situation to which they are being applied. The invalidity or
unenforceability of any provision of this Agreement in a specific situation
shall not affect the validity or enforceability of that provision in other
situations or of other provisions of this Agreement.
31. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be considered an original.
32. FACSIMILE EXECUTION. This Agreement may be executed by one or more of
the parties by facsimile transmitted signature and all parties agree that the
reproduction of signatures by way of telecopying device will be treated as
though such reproductions were executed originals.
33. INTERPRETATION. All references herein to Articles and Sections refer
to Articles and Sections of this Agreement. All Article and Section headings are
for reference purposes only and shall not affect the interpretation of this
Agreement. Within this Agreement, the singular shall include the plural and the
plural shall include the singular, and any gender shall include all other
genders, all as the meaning and the context of this Agreement shall require. The
parties acknowledge that this Agreement and the Transaction Documents were
mutually drafted by both parties and that the interpretation thereof will not
prejudice any one party due to control of the Agreement.
34. NEGOTIATIONS. Until all parties have fully executed this agreement,
this Agreement constitutes nonbinding negotiations between the parties hereto
and no rights shall arise hereunder.
35. NOTICES. All notices given pursuant to this Agreement shall be
delivered in writing by overnight courier or sent by United States registered
mail, postage prepaid, or Telecopier, addressed as follows (or to another
address or person as a party may specify on notice to the other):
(i) If to the Selling Parties:
Mercury Refining Company, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Young & Xxxx
Executive Xxxxx
Three Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
and
Xxxxxxxx Xxxxxxxx & Xxxxx
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Apple, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
(ii) If to Buyer:
MWS New York, Inc.
000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. XxXxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
36. KNOWLEDGE CONVENTION. Whenever any statement herein or in any
schedule, exhibit, certificate or other document delivered to any party pursuant
to this Agreement is made "to Seller's, the Selling Parties' or Buyer's
knowledge" or "to the best of Seller's, the Selling Parties' or Buyer's
knowledge" or words of similar intent or effect of any party or its
representative, such statement shall be deemed to be made to the best knowledge
of the party and, to the extent applicable, its senior management and shall be
deemed to include a representation that a reasonable investigation of the
subject matter thereof has been conducted.
37. INDEPENDENT ENTITIES. It is the intention of the parties hereto that
Seller and Buyer remain independent entities and that no joint venture,
partnership or similar arrangement exist among Buyer and Seller.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date and year first
above written.
MWS NEW YORK, INC.
By s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, its Chief Executive Officer
MERCURY REFINING COMPANY, INC.
By s/ Xxx Xxxxx
Its Chairman
00 XXXXXXXX XXX., INC.
By s/ Xxxxx Xxxxx
Its President
s/ Xxxxx Xxxxx
Xxxxx Xxxxx
s/ Xxx Xxxxx
Xxx Xxxxx
Certain related transaction documents and exhibits (the "Exhibits") to the Asset
Purchase Agreement (Exhibit 2.1) are not being filed herewith. The Registrant
undertakes to furnish a copy of any omitted Exhibit to the Commission upon
request. Pursuant to Item 601(b)(2) of Regulation S-K, the following is a list
of the omitted Exhibits:
Exhibits
EXHIBIT A - ASSUMPTION AGREEMENT
EXHIBIT E - PART B FORM OF LEASE AGREEMENT
EXHIBIT B
XXXXX XXXXX CONFIDENTIALITY AND NON-COMPETE AGREEMENT
TERM OF NON-COMPETE: 7 years
GEOGRAPHIC AREA: North America
NON-COMPETE BUSINESS: Mercury recovery, retorting or processing and hazardous
waste storage (other than minimal storage of hazardous waste in connection with
the Precious Metals Business as set forth in the final agreement).
DUTIES: Xxxxx Xxxxx shall consult with Buyer not less
than three business days per week for a period of one year following Closing.
ADDITIONAL COMPENSATION: In addition to the consideration for entering
into the Agreement and the Transaction Documents and consummating the
transactions contemplated thereby, Xxxxx Xxxxx will receive $65,000 payable over
the twelve months following Closing in twenty-four equal bimonthly installments,
and at Xxxxx Xxxxx'x option, either 20,000 shares of Buyer's common stock or
warrants (at an exercise price of $.001 per share) to purchase the same
delivered at Closing.
EXHIBIT C
XXX XXXXX CONFIDENTIALITY AND NON-COMPETE AGREEMENT
TERM OF NON-COMPETE: 7 years
GEOGRAPHIC AREA: North America
NON-COMPETE BUSINESS: Mercury recovery, retorting or processing and
hazardous waste storage (other than minimal storage of hazardous waste in
connection with the Precious Metals Business as set forth in the final
agreement).
DUTIES: Xxx Xxxxx shall assist in the transition of the
Assets and Seller's customers to Buyer and be reasonably available in Albany,
New York (subject to health considerations) periodically for a period of six
months after the Closing to assist Buyer in such transition.
EXHIBIT D
SELLER OPERATIONS AND NON-COMPETE AGREEMENT
TERM OF NON-COMPETE: 10 years
GEOGRAPHIC AREA: North America
NON-COMPETE BUSINESS: Mercury recovery or processing and hazardous
waste storage (other than minimal storage of hazardous waste in connection with
the Precious Metals Business as set forth in the final agreement).
OTHER TERMS: The Selling Parties, their subsidiaries and
related and affiliated entities, must only process and retort mercury waste for
Buyer until the Part B Lease Agreement is terminated, except for the processing
and retorting of silver oxide materials in connection with Seller's precious
metals business. Buyer will use commercially reasonable efforts to process and
retort barrels of mercury waste for Seller related to Seller's Precious Metals
Business at its plant in Union Grove, Wisconsin throughout the term of the
agreement pursuant to the following conditions and terms: (i) Buyer will not be
required to perform more than 12 retorting runs per year; (ii) Buyer is able to
perform such retorting without incurring any substantial increase in costs with
respect to power, equipment and time above its normal processing costs; (iii)
Buyer is able to perform such retorting utilizing its present equipment; (iv)
Buyer is able to perform such retorting in the ordinary course of its retorting
business; (v) during the first two years of the agreement, in each year Buyer
shall retort the first 50 barrels received from Seller for $500 per barrel,
barrels 51 to 80 for $600 per barrel, barrels 80 to 100 for $800 per barrel; and
barrels over 100 for $1,000 per barrel; (vi) following the first two years of
the agreement, the foregoing prices are subject to increase in proportion to the
increase in fees charged to Buyer's other battery recycling customers, however
such increase shall be subject to a 25% discount which increase shall be
evidenced by Buyer's prior written notice to the Selling Parties of changes in
Buyer's fees; and (vii) Seller's materials shall be non-hazardous and will not
be stored at Buyer's facility. Seller shall be responsible for all shipping
costs including the return cost of the retorted material.
Notwithstanding the foregoing, between the time of executing this
Agreement and the Closing, Seller shall deliver a quantity (to be determined by
Seller and Buyer) of silver oxide cells to Buyer to be retorted at Buyer's Union
Grove, Wisconsin plant. Seller shall also deliver the retorting protocols and
procedures to Buyer following Buyer's of a confidentiality and noncompete
agreement agreed upon between Buyer and Seller. The purpose of the foregoing is
to test the adequacy and suitability of Buyer's Union Grove retorting equipment
to process Seller's silver oxide cells to Seller's specifications and
requirements pursuant to procedures and protocols acceptable to Buyer. The
foregoing procedures shall be referred to as the "Test".
EXHIBIT F
OFFICE SUBLEASE
Seller and Buyer will enter into a sublease for a portion of the premises of the
Office Lease. Buyer shall sublease one-half (1/2) of the usable square feet of a
total of 2,895 square feet for a period of six (6) months following the Closing
at a total sublease payment of $9.35 per square foot per year. The other
nonmonetary terms of the Office Lease shall control all other aspects of the
landlord/tenant relationship.
