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EXHIBIT 2.1
STOCK PURCHASE AND NOTE ASSIGNMENT AGREEMENT
Dated as of September 29, 2000
Among
SPRUCE XXXXXXXXX HOLDING CORP.
And
X.X. Xxxxxxxx Environmental, Inc., X.X. Xxxxxxxx Contractors, Inc.,
X.X. Xxxxxxxx Services, Inc., X.X. Xxxxxxxx Northwest, Inc.
and U.S. Industrial Services, Inc.
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EXHIBIT 2.1
STOCK PURCHASE AND NOTE ASSIGNMENT AGREEMENT
STOCK PURCHASE AND NOTE ASSIGNMENT AGREEMENT, dated as of September 29,
2000, among Spruce XxxXxxxxx Holding Corp., a Nevada corporation ("Buyer"), X.X.
Xxxxxxxx Environmental, Inc., a Missouri corporation ("PWE"), X.X. Xxxxxxxx
Contractors, Inc., a Missouri corporation ("PWC"), X.X. Xxxxxxxx Services, Inc.,
a Missouri corporation ("PWS") and X.X. Xxxxxxxx Northwest, Inc., a Oregon
corporation ("PWN" and together with PWE, PWC and PWN collectively the "Targets"
and each individually a "Target") and U.S. Industrial Services, Inc., a Delaware
corporation ("Seller").
W I T N E S S E T H:
WHEREAS, the Seller is the record and beneficial owner of the following
shares of stock of PWC, PWE, PWS and PWN constituting all of the issued and
outstanding shares of stock of the Targets or other ownership interest therein
(collectively the "Seller Shares"):
TARGET COMMON SHARES PREFERRED SHARES PAR VALUE
COMMON/PREF.
PWE 200 0 $1.00/
PWC 200 0 $.25/$50
PWS 200 0 $.25
PWN 200 0 No Par
WHEREAS, the Seller desires to sell all Seller Shares to the Buyer and
Buyer desires to acquire all of the Seller Shares through such Sale, each on the
terms and subject to the conditions contained herein (the "Sale"); and
WHEREAS, the Seller wishes to assign for value, the Seller's interest in
the Note and the Loan Documents, as hereinafter defined, and any payment and
performance obligations evidenced thereby; and
WHEREAS, the Buyer desires to become an assignee for value of the
Seller's interest in the Note and the Loan Documents and any payment and
performance obligations evidenced thereby; and
WHEREAS, the Boards of Directors of the Targets and the Buyer and the
Board of Directors and the shareholders of the Seller holding at least sixty six
percent of its issued and outstanding shares of stock, respectively, have
determined that the transactions contemplated by this Agreement (the
"Transactions") are in the best interests of the Targets and the Seller and have
approved this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
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EXHIBIT 2.1
DEFINITIONS
As used in this Agreement, the terms identified on Exhibit "A" shall have the
meaning specified or referred to on that Exhibit "A" (terms defined in the
singular shall have the correlative meaning in the plural and vice versa).
ARTICLE I
SALE OF SELLER SHARES/CLOSING
1.1 SALE OF SELLER SHARES/ASSIGNMENT OF NOTE/CLOSING. Upon the terms and
subject to the conditions of this Agreement, at the Closing, Seller will sell,
convey, assign, transfer and deliver to Buyer, and Buyer will purchase, acquire
and accept from Seller all right, title and interest in and to (i) the Seller
Shares free and clear of any Lien and (ii) all of the Seller's right, title and
interest in and to the Note and the Loan Documents, free and clear of any Lien,
together with all payment and performance obligations evidenced by the Loan
Documents. The Closing of the Transactions shall take place at 10:00 a.m. on
September 29, 2000 at the offices of Buyer. All payments of principal and
interest, any late charges, prepayment fees or premiums, and all other sums paid
under the Note or Loan Documents prior to the date of this Agreement shall be
the property of the Seller. All payments of principal and interest, any late
charges, prepayment fees or premiums, or other sums paid, under the Note or the
Loan Documents on or after the date of this Agreement, whether or not due prior
to or on the date hereof, shall be the property of the Buyer.
1.2 CONVEYANCE. Such conveyance, assignment, transfer and delivery shall be
effected by delivery by the Seller to Buyer of (i) Certificates, duly endorsed
or accompanied by stock powers duly executed in blank with appropriate transfer
stamps, if any, affixed, and any other documents that are necessary to transfer
title to the Seller Shares to Buyer, free and clear of any and all Liens and
(ii) (a) the original of the Note or, if an original promissory note is lost or
otherwise not in the Seller's possession, an affidavit of lost instrument,
together with a copy of such promissory note, endorsed to the Buyer on the face
thereof; and, (b) the original of all other items listed on Schedule A, if any;
(c) and an Assignment of Note and/or Instruments, duly executed by the Seller,
substantially in the form attached hereto as Schedule 1.2; (d) such
assignment(s) of financing statements or other evidence of any lien or security
interest in any asset of any Obligor or other party to secure the payment of the
Note, if any, prepared by the Buyer on such forms as the Buyer deems
appropriate. At the Closing, against payment of the Purchase Price, the Seller
will delivery the afore-noted certificates and instruments to the Buyer.
1.3 CONSIDERATION. The Purchase Price for the Seller Shares and the assignment
of the Note shall be the sum of One Million Six Hundred Fifty Thousand Dollars
($1,650,000.00) and shall be provided at the Closing against delivery of the
Seller Shares and the other documents and instruments listed or identified in
schedule 1.2, by the Buyer delivering to Seller $100,000 and the Purchase Note;
the obligations of Buyer under the Note shall be (i) secured by the grant of a
security interest in all of the personal property assets of the Targets and the
Buyer pursuant to a security agreement in the form attached hereto as Exhibit
"E", (ii) a pledge by Buyer of the Seller Shares pursuant to the terms of that
form of Pledge Agreement attached as Exhibit "F", (iii) the payment of the same
shall be guaranteed by (a) the Borrower pursuant to the terms of that form of
Limited Guarantee attached as Exhibit "G" and (b) Spruce XxxXxxxxx Corporation
pursuant to the terms of that form of Guarantee attached as Exhibit "I", and
(iv) Spruce XxxXxxxxx Corporation's obligations to Lender under that form of
Guarantee attached hereto as Exhibit "I" shall be secured by a grant of a
security interest in all of the personal property assets
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EXHIBIT 2.1
of Spruce XxxXxxxxx Corporation pursuant to a security agreement in the form
attached hereto as Exhibit "E".
1.4 FURTHER ASSURANCES. The Seller and the Buyer shall execute and deliver to
the other all such documents, and take such further actions as the other may
reasonably deem necessary from time to time, to effect the assignment of the
Note and the Loan Documents and the transfer of the Seller Shares in accordance
with the terms of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE TARGETS
AND THE SELLER
The Seller does hereby represent, warrant and covenant to the Buyer singularly
and for the benefit of the Targets, after the Closing, and the Targets do each
hereby represent, warrant and covenant to the Buyer, all such representations,
warranties and covenants being effective as of the date of this Agreement and
again at Closing, as follows:
2.1 ORGANIZATION AND STANDING/SUBSIDIARY. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and to the actual knowledge of the Seller, each Target is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, the Seller is duly qualified to do business
as a foreign corporation and is in good standing in the states of the United
States and foreign jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified. True, accurate and
complete copies of the Seller's Certificate of Incorporation and By-laws, as in
effect on the date hereof, including all amendments thereto, have heretofore
been made available to Buyer. All such organizational documents are in full
force and effect. To the actual knowledge of the Seller each of the Targets is
not in violation of its organizational documents and the copies of all such
documents and leases, instruments, contracts, material note, bond, mortgage,
indenture, lease, license, agreement, franchise, permit, concession or other
instrument, obligation, understanding, commitment or other arrangement,
certificates or other documents which have been delivered or otherwise been made
available to the Buyer in connection with the transactions contemplated hereby
are complete and accurate and are true and correct copies of the originals
thereof. , based exclusively on the actual knowledge of the Seller.
2.2 POWER AND AUTHORITY. The Seller has all requisite right, power and
authority to own, lease and operate and to carry on its business as its business
is now being conducted and to execute and deliver this Agreement and to perform
all of its obligations under this Agreement. This Agreement and all attachments
hereto to which the Seller is a party and all other instruments delivered by the
Seller in connection with the consummation of the transactions contemplated
hereby constitute the valid and binding obligation of the Seller, enforceable
against it in accordance with its terms. To the actual knowledge of the Seller,
(i) each of the Targets has all requisite right, power and authority to own,
lease and operate and to carry on its business as its business is now being
conducted and to execute and deliver this Agreement and to perform all of its
obligations under this Agreement and (ii) this Agreement constitutes the valid
and binding obligation of each of the Targets, enforceable against them (and
each of them) in accordance with its terms.
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EXHIBIT 2.1
2.3 NO CONFLICTS/CONSENTS. Neither the execution and delivery of this Agreement
by the Seller nor the consummation by the Seller of the transactions
contemplated hereby (either at the Closing or with notice or lapse of time) will
violate, conflict with, result in a breach of, constitute a default under,
accelerate the performance required by, result in a right of termination or
acceleration, or result in the creation of any material lien, security interest,
charge or encumbrance upon any of its properties or assets under (i) the Seller'
Certificate of Incorporation or Bylaws, (ii) any agreement, instrument or
obligation to which the Seller is a party or by which it may be bound or its
properties subject or (iii) any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to the Seller or any of its
respective properties or assets. No consent, approval or other action of any
third party is required to be obtained by the Seller in connection with the
transactions contemplated in this Agreement. To the actual knowledge of the
Seller, (i) neither the execution and delivery of this Agreement by any of the
Targets nor the consummation by any of the Targets of the transactions
contemplated hereby (either at the Closing or with notice or lapse of time) will
violate, conflict with, result in a breach of, constitute a default under,
accelerate the performance required by, result in a right of termination or
acceleration, or result in the creation of any material lien, security interest,
charge or encumbrance upon any of its properties or assets under (a) each of the
Targets' Certificate of Incorporation or Bylaws, (b) any agreement, instrument
or obligation to which any of the Targets is a party or by which it may be bound
or its properties subject or (iii) any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to any of the Targets
or any of their respective properties or assets.
2.4 FINANCIAL STATEMENTS. (i) To the Actual Knowledge of the Seller, the
Balance Sheet and Financial Statements fairly presented the financial position
of the Seller (inclusive of the operations of the Targets as of the dates
thereof) and/or, as applicable, fairly presented the results of operations of
the Seller (inclusive of the operations of the Targets as of the dates thereof)
for the periods indicated thereon. (ii) To the actual knowledge of the Seller,
no Target has any liability or obligation, either accrued, absolute, contingent
or otherwise except as clearly set forth on the Balance Sheet as of such date.
(iii) The Seller has no liabilities or obligations, either accrued, absolute,
contingent or otherwise with respect to any of the Targets, except as clearly
set forth on the Balance Sheet and/or Financial Statement as of such date.
Notwithstanding any other provision hereof, the Seller's sole liability to the
Buyer in connection with a breach of the representation, warranty and covenant
contained in (iii) of this section 2.4 shall be to void any such obligation of
the Target to the Seller and forgive the same ab initio.
2.5 TITLE AND RELATED MATTERS. To the actual knowledge of the Seller, each
Target is the lawful owner of, and has good and marketable title to, all
properties which it purports to own, all assets which are reflected on the
Balance Sheet except for properties sold, consumed or otherwise disposed of by
that Target in the ordinary course of that Target's business since the date of
the Balance Sheet, and such properties are free and clear of all encumbrances
except for (a) encumbrances listed on Schedule 2.5, (b) liens for current taxes
not yet due and payable; and (c) encumbrances to secure indebtedness reflected
on the Financial Statements or indebtedness incurred in the ordinary course of
business after the date thereof. To the actual knowledge of the Seller and
subject to the other provisions of this Section 2, there is no significant asset
used or required by any Target in the conduct of the Business, including all
trade names, logos, trademarks and service marks which comprise the name, "X.X.
Xxxxxxxx", heretofore used by the Targets which is not owned and or leased by
one or more of the Targets.
2.6 LITIGATION AND OTHER PROCEEDINGS. Other than the "Liberty Complaint (as
defined in Section 7.7), the Seller is not a party to any pending or to its
actual knowledge threatened claim, action, suit, investigation or proceeding,
nor is it subject to any order, judgment or decree that relate to or affect the
proposed transaction hereunder.
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EXHIBIT 2.1
2.7 BROKERS AND FINDERS. The Seller has not employed, directly or indirectly
for the Seller or the Targets' benefit, any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions or
finders' fees, and no broker or finder has acted directly or indirectly for any
of the Targets or Seller in connection with this Agreement or the transactions
contemplated hereby.
2.8 CONTINUATION OF BUSINESS. The Seller knows of no reason why the business of
the Targets will not continue on in the same manner following the execution of
this Agreement and the Closing as it has been operated prior thereto. The Seller
will use its best efforts to cause the customers, employees, agents, and
independent contractors who have performed services or purchased product as a
part of the business of any of the Targets in the past to continue to do so
following the Closing.
2.9 TAX MATTERS. Without limiting any other provision hereof, the Seller does
hereby represent, warrant and agree, for the benefit of the Buyer at all times
after the Closing that (i) to the actual knowledge of the Seller, Tax Returns
filed on behalf of the Seller for all periods ending on or before September 30,
1998 that are or were required to be filed, have been filed in accordance with
the laws, regulations and administrative requirement of each Governmental
Authority; (ii) to the actual knowledge of the Seller, either payment or
provision for payment of all Taxes as evidenced by these Tax Returns for FYE
1998 and all prior periods has been made; (iii) to the actual knowledge of the
Seller, nothing has come to the attention of the Seller that would lead it to
believe that the Tax Returns for FYE 1998 and any prior period with respect to
the Seller or any Target is not true, correct, complete and correctly reflect
the facts regarding the income, business, assets, operations, activities and
status of the tax payer and any other information required to be shown therein;
and (iv) to the actual knowledge of the Seller nothing has come to the attention
of the Seller that would lead it to believe that the "net operating losses"
carried on the Tax Returns for FYE 1998 and any prior period are not true and
accurate. Seller is not a foreign person as defined in the Internal Revenue
Code. In accordance with section 3.9 of this Agreement, Seller shall (i) work
and cooperate with Buyer in the preparation and filing of consolidated tax
returns for the Targets and Seller for FYE 1999 and 2000, (ii) provide the Buyer
and its accountants and tax advisers with all information concerning the Seller
and its operations during the applicable period that is necessary for the
preparation and/or filing of Tax Returns for these periods and (iii) cause these
Tax Returns to be executed by a duly authorized officer of the Seller.
2.10 FULL DISCLOSURE. Subject to the obligations of the Buyer under section 3.9,
hereof, no representation or warranty of the Seller in this Article III
(including the information provided to the Buyer included with the Schedules or
attached to this Agreement), when read together, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements herein or therein, in light of the circumstances in which
they are made, not misleading.
2.11 CAPITALIZATION OF THE COMPANY. As of the date hereof, the entire authorized
capital stock of each of the Targets of every class and series consists of the
following:
TARGET SHS AUTHORIZED SHS ISSUED TREASURY SHARES PAR VALUE
COMMON/PREF. COMMON/PREF COMMON/PREF. COMMON/PREF.
PWE 10,000 200/0 None/None $1.00/
PWS 430,000 200/0 None/None $.25/$50
PWN 10,000 200/0 None/None No Par/
PWC 30,000 200/0 None/None $.25
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EXHIBIT 2.1
All (i) such issued shares are validly issued and outstanding, (ii) such
outstanding shares are fully paid and nonassessable; (iii) such outstanding
shares are held by the Seller and (iv) such outstanding shares are duly
authorized and free of any preemptive rights in respect thereto. There are no
outstanding options, warrants, calls, rights or commitments, or any other
agreements of any character binding on any of the Targets with respect to the
issued or unissued capital stock of any of the Targets or obligating any of the
Targets to issue, transfer or sell, or cause to be issued, transferred or sold,
any shares of capital stock of, or other equity interests in, any of the Targets
or securities convertible into or exchangeable for such shares, or equity
interests, or obligating any of the Targets to grant, extend or enter into any
such option, warrant, call, right, commitment or other agreement. There are no
contractual obligations of any of the Targets to repurchase, redeem or otherwise
acquire any shares of capital stock of any of the Targets. After the date
hereof, no additional Seller Shares will have been issued. There are no voting
trusts, proxies or other agreements or understandings to which any of the
Targets or any owner of any of the shares are ownership interest of any of the
Targets is a party or is bound with respect to voting any shares of capital
stock of any of the Targets. The Seller has filed lost share certificates with
each Target and received a certificate for 200 shares of common stock from each
Target.
2.12 ABSENCE OF CERTAIN CHANGES OR EVENTS. To the actual knowledge of the
Seller, prior to June 23, 1999, each of the Targets conducted its businesses
only in the ordinary and usual course, and there has not been any change or
development, or combination of changes or developments, which has had or is
likely to have a materially adverse effect upon (a) the business, properties,
financial condition or results of operations of any of the Targets, taken as a
whole, or (b) the ability of the Seller to consummate the transactions
contemplated hereby.
2.13 AFFILIATE TRANSACTIONS. To the actual knowledge of the Seller, the Balance
Sheet and Financial Statements identify all reportable transactions from 1995
through June 23, 1999 between any of the Targets, on the one hand, and any
current or former director or officer of any of the Targets or any such
director's or officer's Affiliates known as such to any of the Targets, or any
entity known as such to any of the Targets, in which any such director, officer
or Affiliate has a direct or indirect material interest, other than the
Agreement, standard employment agreements or arrangements and employee benefit
plans.
2.14 SELLER SHARE OWNERSHIP. The Seller hereby represents, warrants and
covenants to Buyer, singularly and for the benefit of the Targets after the
Closing, that the Seller is the owner of record and beneficially of all issued
and outstanding shares of capital stock of each Target or equity or other
ownership interest in each of the Targets of any nature. The Seller Shares, as
defined herein, include and encompass all issued and outstanding shares of
capital stock of each Target or equity or other ownership interest in each of
the Targets of any nature. At the Closing the Seller shall transfer to Buyer
good and marketable title to the Seller Shares, free and clear of any and all
security interests, Liens, encumbrances, proxies and voting or other agreements,
except restrictions on transfer imposed by applicable federal and state
securities laws. The delivery to Buyer of the Certificates and the payment of
the Purchase Price by delivery of the Purchase Note will transfer to Buyer
record and beneficial ownership of and good and valid title to the Seller Shares
and ownership of all of the issued and outstanding capital stock of or other
ownership interest in each of the Targets, free and clear of all Liens.
2.15 NOTE REPRESENTATIONS. The Seller is the owner of an undivided legal and
equitable interest in and to the Note and the Loan Documents, and the Seller has
not previously assigned the Note and the Loan Documents, in whole or in part, to
any other person or entity. The Seller has good and
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EXHIBIT 2.1
marketable title to the Note and the Loan Documents, free and clear of any and
all security interests, liens, Claims, encumbrances, assignments or other
agreements. The delivery to Seller of the Assignment upon the payment of the
Purchase Price in accordance with section 1.3, hereof, will transfer to Seller
ownership of and good and valid title to the Note and the Loan Documents, free
and clear of all security interests, liens, Claims, encumbrances, assignments or
other agreements. The Loan Balance of the Note as of September 29, 2000 is
$1,323,340.14. The Note and the Loan Documents constitute the valid and binding
obligation of the Obligor, enforceable against the Obligor in accordance with
their terms. The Obligor had all requisite right, power and authority to execute
and deliver the Note and the Loan Documents and to perform all of its or their
obligations under the Note and/or the Loan Documents. Notwithstanding the
foregoing, Seller makes no representation or warranty as to: (i) the ability of
any Obligor to pay any sum due or to become due under the Note or the Loan
Documents; (ii) the financial condition of any Obligor; (iii) the existence,
value or condition of any collateral or (iv) or the accuracy, completeness or
reliability of any reports or other information prepared by third-parties.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents, warrants, covenants and agrees with the Seller as
follows:
3.1 ORGANIZATION AND STANDING. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada, is duly
qualified to do business as a foreign corporation and is in good standing in the
states of the United States and foreign jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified.
3.2 POWER AND AUTHORITY. Buyer has all requisite right, power and authority to
own, lease and operate and to carry on its business as its business is now being
conducted. This Agreement and all attachments hereto to which the Seller is a
party and all other instruments delivered by the Seller in connection with the
consummation of the transactions contemplated hereby and the obligations of the
Buyer under the Purchase Note constitute the valid and binding obligation of the
Seller, enforceable against it in accordance with its terms. constitutes the
valid and binding obligation of the Buyer, enforceable against it in accordance
with its terms. The Buyer has all requisite right, power and authority to
execute and deliver this Agreement and to perform all of its obligations under
this Agreement.
3.3 NO CONFLICTS. Neither the execution and delivery of this Agreement by the
Buyer nor the consummation by the Buyer of the transactions contemplated hereby
(either at the Closing or with notice or lapse of time) will violate, conflict
with, result in a breach of, constitute a default under, accelerate the
performance required by, result in a right of termination or acceleration, or
result in the creation of any material lien, security interest, charge or
encumbrance upon any of its assets under (i) the Buyer's Certificate of
Incorporation or Bylaws, (ii) any agreement, instrument or obligation to which
the Buyer is a party or by which it may be bound or its properties subject or
(iii) any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to the Buyer or any of its respective properties or
assets.
3.4 BROKERS AND FINDERS. The Buyer agrees that there are no finders, brokers or
other intermediaries to whom a fee or commission may be payable by the Seller
upon the Closing. Irrespective of Article X, hereof, the Buyer shall indemnify
and hold the Seller harmless from and against any
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liability for commissions or other fees from any other third party claiming
through the indemnifying party and each of the Targets harmless from and against
any liability for commissions or other fees from any other third party claiming
through the indemnifying party prior to the Closing.
3.6 CONSENTS TO CONSUMMATION. No consent, approval or other action of any third
party is required to be obtained by the Buyer in connection with the
transactions contemplated in this Agreement.
3.7 LITIGATION AND OTHER PROCEEDINGS. The Buyer is not a party to any pending
or threatened claim, action, suit, investigation or proceeding, nor is it
subject to any order, judgment or decree, except for matters which, in the
aggregate, would not have or cannot reasonably be expected to have, a material
adverse effect on the financial condition, results of operation or business of
the Buyer, and none that would relate to or affect the proposed transaction
hereunder.
3.8 TAXES RETURNS Subject to the obligation of the Seller to assist in such
effort, the Buyer shall cause consolidated Tax Returns with respect to all
applicable Federal and state income Taxes for the Targets and the Seller for FYE
1999 and 2000 to be filed with the appropriate taxing authority. Buyer may
deduct the cost of preparing these Tax Returns including the cost of accountants
and tax advisers from the payment under the Purchase Note, up to a maximum of
$20,000.00.
3.9 TAX PAYMENTS On or before the Maturity Date of the Purchase Note, the
Seller shall cause the Targets to discharge and pay all Taxes rising out of or
related to the operation of the Targets from June 23, 1999 through September 30,
2000.
3.10 FULL DISCLOSURE. No representation or warranty of the Buyer in this Article
V (including the information provided to the Seller, included with the Schedules
or attached to this Agreement), when read together, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements herein or therein, in light of the circumstances in
which they are made, not misleading.
3.11 NOTE REPRESENTATIONS. The Buyer acknowledges and agrees that this Agreement
is not contingent upon the Buyer obtaining any financing of any part of the
Purchase Price from a third party. The Buyer is an "Accredited Investor" as that
term is defined by the Securities Act of 1933.
ARTICLE IV
COVENANTS AND ADDITIONAL AGREEMENTS
4.1 CONTINUATION OF MANAGEMENT AGREEMENT. Between the date hereof and the
Closing Date, the Targets shall not and the Seller shall not and shall not cause
the Targets to take any action with respect to the Targets prior to the Closing
Date or in violation of the terms and provisions of the Management Agreement,
including, but not limited to: (i) making any change in any Targets Articles of
Incorporation or By-laws or issue any additional shares of Target Capital Stock,
equity securities or any right or entitlement to acquire the same; (ii) make any
material change in the conduct of any Targets' business and operations or enter
into any transaction without the consent of the Operator under the Management
Agreement, (iii) declare, set aside or pay any dividends, other distributions,
fees or payments to any Affiliates in respect of any shares of any Targets
Capital; or (iv) take any action (a) resulting in the operation of the Targets
in a manner inconsistent with their method of operation under
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the terms of the Management Agreement or (b) with respect to the Targets which
is not approved by the Operator under the Management Agreement.
Contemporaneously with the execution hereof, the Seller and Buyer shall execute
and deliver or cause to be executed and delivered general releases in the form
attached hereto as Exhibit "H" to the Escrow Agent. Upon payment in full of the
Purchase Note or otherwise at the instruction of the Seller, the Escrow Agent
shall deliver the general releases to the Buyer and Seller and the other
signatories or releasees, respectively. Immediately following the Closing each
Target shall terminate the Management Agreement without obligation from the
Targets to Spruce XxxXxxxxx Corporation for any termination fee.
4.2 NEGOTIATIONS. Without limiting the duties and obligations of the Targets
and/or the Seller under the Management Agreement, until the earlier of the
termination of the Management Agreement or the Closing Date, neither the Seller,
nor the Targets, nor their officers, directors, employees, advisors, agents,
representatives, Affiliates or anyone acting on behalf of the Seller, the
Targets or such persons, shall, directly or indirectly, encourage, solicit,
initiate or engage in discussions or negotiations with, or provide any
information to, any person (other than Buyer, its representatives, the Targets'
affiliates, officers, directors, employees, and representatives in the ordinary
course) concerning any merger, sale of assets (other than in the ordinary course
of business), purchase or sale of shares of capital stock, business
combinations, joint ventures or similar transaction involving the Targets. The
Seller shall promptly communicate to Buyer any serious inquiries or
communications concerning any such transaction (including the identity of any
person making such inquiry or communication) which the Seller or its officers,
directors, employees, advisors, agents, representatives, Affiliates or anyone
acting on its behalf may become aware.
4.3 ADDITIONAL AGREEMENTS. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to (i) use its reasonable best
efforts at its own expense to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement; (ii) to defend, consistent with applicable
principles and requirements of law, any lawsuit or other legal proceedings,
whether judicial or administrative, whether brought derivatively or on behalf of
third persons (including Governmental Entities) challenging this Agreement or
the transactions contemplated hereby and thereby; and (iii) to furnish each
other such information and assistance as may reasonably be requested in
connection with the foregoing. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers of the Targets and/or the Seller shall take all such
necessary action.
4.4 NOTIFICATION OF CERTAIN MATTERS. Between the date hereof and the Closing,
each party to this Agreement will give prompt notice in writing to the other
party hereto of: (i) any information that indicates that any representation or
warranty of such party contained herein was not true and correct as of the date
hereof or will not be true and correct as of the Closing, (ii) the occurrence of
any event which could result in the failure to satisfy a condition specified in
Article 7 or Article 8 hereof, as applicable and (iii) any notice or other
communication from any third person alleging that the consent of such third
person is or may be required in connection with the transactions contemplated by
this Agreement. The Seller shall give prompt notice to Buyer of any notice or
other communication from any third person asserting any right, title or interest
in any of the Seller Shares (including, without limitation, any threat to
commence, or notice of the commencement of any action or other proceeding with
respect to the Seller Shares) or the occurrence of any other event of which the
Seller has knowledge which could result in any failure to consummate the sale of
the Seller Shares as contemplated hereby.
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EXHIBIT 2.1
4.5 TAXES. Between the Date of this Agreement and the Closing Date, the Seller
shall cooperate with the Buyer in connection with the filing of all Tax Returns
required to be filed by or with respect to each Target. The Seller shall not on
behalf of itself or any of the Targets cause or, to the extent it is empowered
to do so, permit the Target on or prior to the Closing to make any election or
file any amended tax return reflecting any position that would result in an
adverse tax consequence to Buyer or any of the Targets, including any that would
affect the net operating loss carryover/carry forwards or reserves properly
characterized as losses or net operating losses or carryovers/carry forwards as
set forth on the Tax Returns filed for the Seller and/or the Targets for FYE
1998. The Seller shall consent, if required, and cooperate with the Buyer in any
election it may make in connection with the transfer of the Seller Shares,
including, without limitation, an election pursuant to section 338 of the
Internal Revenue Code and the regulations promulgated thereunder.
4.6 SELLER/TARGET LOANS. All extensions of credit or other obligations of any
Target to the Seller or any Affiliate of the Seller arising prior to June 23,
1999 and outstanding on the date of this Agreement and/or on the Closing Date,
including, without limitation, those identified on Schedule 4.6, and all other
all funds advanced by the Seller or any Affiliate of the Seller to any Target
from June 23, 1999 through, to and including the Closing Date and all
due-to/due-from accounts evidencing any obligation of any Target to the Seller
from June 23, 1999 through, to and including the date of this Agreement and/or
on the Closing Date, all as set forth on Schedule 4.6, shall each constitute
paid in capital/capital contribution by the Seller to the applicable Target and
all such loans, obligations, due-to and due-from as of the Closing Date shall be
null and void.
4.7 SELLER GUARANTEES. Prior to the Closing Date the Seller has guaranteed one
or more obligations of one or more of the Targets to third parties, including,
without limitation, the Seller's guarantee of equipment lease obligations of one
or more Targets. The Seller's guarantee of the obligations of one or more of the
Targets to third parties, other than the Seller or any affiliate of the Seller,
are collectively referred to herein as the "Seller Guarantees". The Buyer shall
indemnify, defend and hold harmless the Seller from and against any and all
claims made against the Seller arising out of or in connection with the Seller
Guarantees, including, without limitation, all liabilities, damages, costs and
expenses related thereto (including without limitation legal fees and expenses).
The Seller has not taken and shall take no action to terminate the Seller
Guarantees or otherwise affect the enforceability thereof, and shall take no
such action prior to the earlier of the following (i) the Maturity Date of the
Purchase Note or (ii) the Buyer's default in making any payment due under the
Purchase Note by the due date thereof, including all grace periods provided
therein.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF BUYER TO EFFECT THE CLOSING
The obligations of Buyer required to be performed by it at the Closing
shall be subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, each of which may be waived by Buyer as provided herein
except as otherwise required by applicable law:
5.1 REPRESENTATIONS AND WARRANTIES; AGREEMENTS; COVENANTS. Each of the
representations and warranties of each of the Targets and the Seller contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and (having been deemed to have been made again at and as of the
Closing) shall be true and correct in all material respects as of the Closing.
Each of the obligations of the Targets and the Seller required by this Agreement
to be performed by them at or
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EXHIBIT 2.1
prior to the Closing shall have been duly performed and complied with in all
material respects as of the Closing. At the Closing, Buyer shall have received a
certificate, dated the Closing Date and duly executed by the Seller and the
Chairman or President of the Targets, to the effect that the conditions set
forth in the two preceding sentences have been satisfied.
5.2 AUTHORIZATION; CONSENTS: OPINIONS. All corporate action necessary to
authorize the execution, delivery and performance of this Agreement and the
Documents, and the consummation of the transactions contemplated hereby and
thereby shall have been duly and validly taken by the Targets. All filings
required to be made under the HSR Act in connection with the transactions
contemplated hereby, if any, shall have been made and all applicable waiting
periods with respect to each such filing, including any extensions thereof,
shall have expired or been terminated. All notices to, and declarations, filings
and registrations with, and consents, authorizations, approvals and waivers
from, governmental and regulatory bodies and third persons, including, any of
the Targets' lenders, required to consummate the transactions contemplated
hereby and all consents or waivers shall have been made or obtained. Buyer shall
have been furnished with the opinion of counsel for the Seller, dated the
Closing Date, in form and substance reasonably satisfactory to Buyer and its
counsel.
5.3 ABSENCE OF LITIGATION. No order, stay, injunction or decree of any court of
competent jurisdiction in the United States shall be in effect (i) that prevents
or delays the Sale or (ii) would impose any limitation on the ability of Buyer
effectively to exercise full rights of ownership of the Seller Shares. No
action, suit or proceeding before any court or any Governmental Entity shall be
pending or threatened, and no investigation by any Governmental Entity shall
have been commenced (and be pending), seeking to restrain or prohibit (or
questioning the validity or legality of) the Sale or seeking damages in
connection therewith which Buyer, in good faith and with the advice of counsel,
believes makes it undesirable to proceed with the Sale.
5.4 LEGAL MATTERS/DELIVERY OF DOCUMENTS/RELEASE. All certificates, instruments,
opinions and other documents required to be executed or delivered by or on
behalf of the Seller and the Targets under the provisions of this Agreement, and
all other actions and proceedings required to be taken by or on behalf of the
Seller and the Targets in furtherance of the Sale, shall be reasonably
satisfactory in form and substance to counsel for Buyer. The following documents
shall have been delivered to the Buyer at the Closing in such form as the Buyer
and its counsel shall reasonably require or the following actions shall have
been taken by the Seller and/or Targets prior thereto: (i) Effective as of the
Closing Date, the Seller shall have caused the Targets to take all action
necessary to name those Persons designated by Buyer as the officers and
directors of the Targets and obtain the resignation of all other Persons who
serve as officers and directors of the Targets and (ii) At the Closing against
delivery of the Purchase Price, the Seller shall deliver to Buyer the
Certificates representing the Seller Shares, duly endorsed for transfer to
Buyer, or accompanied by stock powers duly endorsed in blank, with all requisite
documentary tax stamps affixed thereto. Seller shall execute and deliver to the
Buyer a release, pursuant to the terms of which the Seller shall release the
Buyer and its Affiliates and SMC from any claim which the Seller may have
against the same, except claims arising out of this Agreement or the purchase of
the Seller Shares.
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EXHIBIT 2.1
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE SELLER
TO EFFECT THE CLOSING
The obligations of the Seller required to be performed by it at the Closing
shall be subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, each of which may be waived by the Seller as provided
herein except as otherwise required by applicable law:
6.1 REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects on the date made and shall be true and correct in all material
respects as of the Closing. Each of the obligations of Buyer required by this
Agreement to be performed by it at or prior to the Closing shall have been duly
performed and complied with in all material respects as of the Closing. At the
Closing, the Seller shall have received a certificate, dated the Closing Date
and duly executed by the chief financial officer of Buyer to the effect that the
conditions set forth in the preceding two sentences have been satisfied.
6.2 AUTHORIZATION; CONSENTS; OPINIONS. All corporate action necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by Buyer. All filings required to be made under the HSR Act in
connection with the transactions contemplated hereby shall have been made and
all applicable waiting periods with respect to each such filing, including
extensions thereof, shall have expired or been terminated. All notices to, and
declarations, filings and registrations with, and consents, authorizations,
approvals and waivers from, governmental and regulatory bodies and third
required to consummate the transactions contemplated hereby and all consents or
waivers shall have been made or obtained. Seller shall have been furnished with
the opinion of counsel for the Buyer, dated the Closing Date, in form and
substance reasonably satisfactory to Seller and its counsel.
6.3 ABSENCE OF LITIGATION. No order, stay, injunction or decree of any court of
competent jurisdiction in the United States shall be in effect that prevents or
delays the Sale. No action, suit or proceeding before any Governmental Entity
shall be pending or threatened, and no investigation by any Governmental Entity
shall have been commenced (and be pending), seeking to restrain or prohibit (or
questioning the validity or legality of) the Sale or seeking damages in
connection therewith which Seller, in good faith and with the advice of counsel,
believes makes it undesirable to proceed with the Sale.
6.4 LEGAL MATTERS/DELIVERY OF PURCHASE PRICE. All certificates, instruments,
opinions and other documents required to be executed or delivered by or on
behalf of Buyer under the provisions of this Agreement, and all other actions
and proceedings required to be taken by or on behalf of Buyer in furtherance of
the Sale, shall be reasonably satisfactory in form and substance to counsel for
the Seller. At the Closing, against delivery of the Seller Shares, the Buyer
shall deliver the Purchase Price in the form of the Purchase Note.
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EXHIBIT 2.1
ARTICLE X
INDEMNIFICATION/SURVIVAL/POST CLOSING OBLIGATIONS
7.1 INDEMNIFICATION BY SELLER.
7.1.1 Notwithstanding the Closing, the delivery of the Seller Shares or the
delivery of the Note Assignment Agreement, the Seller agrees that it will
indemnify, defend and hold harmless the Buyer, each of the Targets and their
successors and assigns (the "Buyer Indemnified Parties") from and against all
claims, damages, other liabilities, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses, including reasonable attorneys'
fees and expenses of investigation whether absolute, accrued, conditional or
otherwise, and whether or not resulting from Third Party Claims (as defined
herein) (collectively, the "Damages"), incurred or sustained by any Buyer
Indemnified Party as a result of, in connection with or because of any
inaccuracy in, breach or violation of any representation, warranty, covenant or
agreement made by the Seller in this Agreement.
7.1.2 In the event that any Buyer Indemnified Party desires to make a claim
against the Seller under Section 7.1.1 in connection with any action, suit,
proceeding or demand at any time instituted against, or made upon, the Buyer or
any of the Targets by any third party for which the Buyer or any Target may seek
indemnification hereunder (a "Third Party Claim"), the Buyer and/or one or more
of the Targets shall promptly notify the Seller, of such Third Party Claim and
of the Buyer's and/or Targets' claim of indemnification with respect thereto;
provided, however, that no reasonable delay on the part of the Buyer in
notifying the Seller shall relieve the Seller from any obligation hereunder. The
Seller shall have thirty (30) days after receipt of such notice to notify the
Buyer if its elects to assume the defense of such Third Party Claim. If the
Seller timely elects to assume the defense of such Third Party Claim, the Seller
shall be entitled at its own expense to conduct and control the defense and
settlement of such Third Party Claim through counsel of its own choosing,
provided that (a) the Buyer and/or Targets may participate in the defense of
such Third Party Claim with its or their own counsel at its or their own
expense, (b) the Seller must conduct the defense of the Third Party Claim
actively and diligently in order to preserve its rights in this regard and (c)
the Seller may not settle any claim or matter which imposes a material
obligation or adverse impact upon the Buyer and/or Targets without the consent
of the Buyer, which it may grant or withhold in its sole and complete
discretion. If the Seller fails to notify the Buyer within thirty (30) days
after receipt of the notice of a Third Party Claim, the Buyer and/or Targets
shall be entitled to assume the defense of such Third Party Claim (and the Buyer
need not consult with, or obtain the consent of the Seller) and in the Buyer's
or the Targets' sole discretion prosecute, litigate, settle and perform such
other actions as the Buyer and/or Targets may deem necessary in order fully to
protect the Buyer's and/or Targets' interests, and the Seller will remain
responsible for indemnification of the Buyer and the Targets to the full extent
provided in this Article X.
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EXHIBIT 2.1
7.2 BUYER INDEMNIFICATION.
7.2.1 Notwithstanding the Closing or the delivery of the Purchase Price,
the Buyer agrees that it will indemnify, defend and hold harmless the Seller and
its respective successors and assigns (the "Seller Indemnified Parties") from
and against all claims, damages, other liabilities, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses, including reasonable
attorneys' fees and expenses of investigation whether absolute, accrued,
conditional or otherwise, and whether or not resulting from Third Party Claims
(collectively, the "Damages"), incurred or sustained by any Seller Indemnified
Party as a result of, in connection with or because of any inaccuracy in, breach
or violation of any representation, warranty, covenant or agreement made by the
Buyer in this Agreement.
7.2.2 In the event that the Seller desires to make a claim against the
Buyer under Section 7.2.1 in connection with any action, suit, proceeding or
demand at any time instituted against, or made upon, the Seller by any third
party for which the Seller may seek indemnification hereunder (a "Third Party
Claim"), the Seller shall promptly notify the Buyer of such Third Party Claim
and of the Seller's claim of indemnification with respect thereto; provided,
however, that no reasonable delay on the part of the Seller in notifying the
Buyer shall relieve the Buyer from any obligation hereunder. The Buyer shall
have thirty (30) days after receipt of such notice to notify the Seller if it
has elected to assume the defense of such Third Party Claim. If the Buyer timely
elects to assume the defense of such Third Party Claim, the Buyer shall be
entitled at its own expense to conduct and control the defense and settlement of
such Third Party Claim through counsel of its own choosing, provided that (a)
the Seller may participate in the defense of such Third Party Claim with its or
their own counsel at its or their own expense, (b) the Buyer must conduct the
defense of the Third Party Claim actively and diligently in order to preserve
its rights in this regard and (c) the Buyer may not settle any claim or matter
which imposes a material obligation or adverse impact upon the Seller without
the consent of the Seller, which it may grant or withhold in its sole and
complete discretion. If the Buyer fails to notify the Seller within thirty (30)
days after receipt of the notice of a Third Party Claim, the Seller shall be
entitled to assume the defense of such Third Party Claim (and the Seller need
not consult with, or obtain the consent of the Buyer) and in the Seller's sole
discretion prosecute, litigate, settle and perform such other actions as the
Seller may deem necessary in order fully to protect the Seller's interests, and
the Buyer will remain responsible for indemnification of the Seller to the full
extent provided in this Article X.
7.3 LIMITATION ON INDEMNIFICATION.
Notwithstanding anything contained herein to the contrary, the
indemnification in favor of the Buyer contained in Section 7.1 and the
indemnification in favor of the Seller contained in Section 7.2 shall not be
effective until the aggregate dollar amount of all Damages for which
indemnification is therein permitted under the applicable section exceeds One
Hundred Thousand Dollars ($100,000; the "Threshold Amount"), and then only the
extent such aggregate amount exceeds the Threshold Amount. All Damages shall be
reduced by the amount of (i) any tax savings resulting from the indemnified
matter to which such costs relate which are actually realized by the Indemnified
Party and (ii) any insurance proceeds actually received by the Indemnified Party
in respect of the indemnified matter to which such costs relate. In no event
shall the liability of the Seller hereunder exceed the total of all payments due
from the Buyer to the Seller under the Purchase Note; provided, however, that
the Seller shall only be required to remit any cash payment to the Buyer in an
amount equal to the total of all cash payments received by the Seller from the
Buyer through the date of such payment. The balance of any such Seller
indemnification obligation shall be paid through forgiveness/cancellation of so
much of the then outstanding principal balance due under the Purchase Note as is
needed to satisfy the remainder of that
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EXHIBIT 2.1
indemnification obligation. Without limiting the foregoing, in no event shall
the Seller have any liability to the Buyer arising out of or in connection with
any claim, offset, defense or other basis asserted by the Obligor for non
payment of the Note or release from any liability thereunder.
7.4 ESCROWED PAYMENTS. In the event Buyer or any Buyer Indemnification Party
shall have any claim for indemnification or breach hereunder (an
"Indemnification Claim"), then Buyer shall be entitled to notify the Seller of
such an Indemnification Claim and remit any and all payments due under the
Purchase Note thereafter to the Escrow Agent to be disbursed by the Escrow Agent
in accordance with the terms and provisions of the Escrow Agreement. Such right
of payment in escrow shall not constitute Buyer's sole remedy hereunder. If the
Buyer shall have exercised its rights under this section 7.4 but shall fail to
make any payment due under the Purchase Note to the Escrow Agent by the due date
thereof, including all applicable grace periods, the Buyer shall be deemed to
have waived its right to assert an Indemnification Claim, hereunder; provided,
however, that nothing contained herein shall or shall be deemed to affect the
right of the Buyer to assert any Indemnification Claim arising out of or with
respect to Seller's breach of the representations, warranties and/or covenants
contained in sections 2.11., 2.14 and/or 2.15, Seller's ownership of the Seller
Shares and/or the Note and Sellers ability to transfer/assign and
transfer/assignment of all rights, title and interest in the Seller Shares
and/or Note to Buyer, free and clear of lien.
7.5 INTENTIONALLY OMITTED
7.6 SURVIVAL. All representations and warranties made by the parties in this
Agreement or in any certificate, schedule, statement, document or instrument
furnished hereunder shall survive the Closing and any claim or cause of action
for indemnification under this Article VII for breaches of representations or
warranties or failure to perform any covenants set forth in this Agreement or in
any schedule, statement or document furnished hereto shall be made so long as
any claim may be made in respect of such matters under applicable statutes of
limitation. The inclusion of any information on any of the Schedules hereto
shall not, in and of itself, be deemed to be an admission or acknowledgment that
such information is material or outside of the ordinary course of business for
purposes of this Agreement.
7.7 LIMITATION ON REPRESENTATIONS. The Buyer hereby acknowledges that it has
extensive knowledge of the operations of the Targets from June 23, 1999 to the
date of this Agreement and the Closing Date. Furthermore, Buyer's principals,
officers and directors have been extensively involved in the operation of the
Targets pursuant to the terms of that certain Management Agreement dated June
23, 1999 between the Seller and others. The current officers and directors of
the Seller have served in such position for only a limited period of time and as
such they and the other current management of Seller have limited knowledge of
the operations of the Targets. As a result of the knowledge and experience of
its management, the Buyer has knowledge concerning the Targets that may from
time to time exceed the knowledge of the current management of the Seller.
Therefore, if, and to the extent, any officer or director of any of the Targets
as of the date of this Agreement, including, without limitation, Xxxxxxx
Xxxxxxx, has actual knowledge, as of the Closing, of any event, state of facts
or circumstances constituting an alleged breach by the Seller of any
representation or warranty contained in Article II, herein, the Seller shall not
have liability or responsibility for such alleged breach; provided, however,
that any such knowledge shall not affect or impact the Seller's liability or
responsibility with respect to a breach of the representations, warranties and
covenants set forth in section 2.11 and 2.14. The inclusion of any information
on any of the Schedules hereto shall not, in and of itself, be deemed to be an
admission or acknowledgment that such information is material or outside of the
ordinary course of business for purposes of this Agreement. Attached hereto as
Schedule 7.7 is a copy of a summons and
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EXHIBIT 2.1
complaint filed by Liberty Mutual Insurance Company v. X.X. Xxxxxxxx Services,
Inc. a Corp. (such summons and complaint as the same may be amended from time to
time is referred to herein as the "Liberty Complaint"). The parties do hereby
acknowledge (i) the presence of this litigation and the filing of the Liberty
Complaint, (ii) that the Liberty Complaint asserts one or more causes of action
against X.X. Xxxxxxxx Services, Inc. (nothing contained herein shall be deemed
to constitute an acknowledgement of any liability on the part of X.X. Xxxxxxxx
Services, Inc. or any other Target under the Liberty Complaint), (iii) that the
presence of the Liberty Complaint shall not constitute a breach of any
representation, warranty or covenant made by the Seller hereunder; and (iv) that
any liability incurred by any of the Targets in connection with or arising out
of the Liberty Complaint shall not be the responsibility of Seller. Seller does
hereby assign to Buyer any and all claims and causes of action it may have
against any third party for indemnification in connection with any liability
imposed on any Target or Buyer in connection with, arising out of or associated
with any cause of action in the Liberty Complaint, including, without
limitation, any claim the Seller may have against Xxxxxxx X. Xxxxxxxxx or any
affiliate thereof, in connection with its acquisition of the shares of stock of
X.X. Xxxxxxxx, Inc. or otherwise. Seller shall cooperate with the Buyer and or
any Target in the commencement and prosecution of any such claim for
indemnification, including, without limitation, the commencement of any action
against any third party in its own name (at the cost and expense of the Buyer)
and the remittance of any proceeds therefrom to the Buyer. Provided, however,
that in the event Seller is named as a defendant in the Liberty Complaint, the
afore mentioned assignment shall be null and void with respect to claims and
causes of action for indemnification brought by or on behalf of Seller, but the
Seller shall remit over to the Buyer the amount collected by the Seller in
connection with any such indemnification/contribution or like action in excess
of the amount of any judgment taken against the Seller in connection with the
Liberty Complaint plus the cost and expenses incurred by Seller in connection
with such action.
7.8 BUYER'S POST CLOSING OBLIGATIONS. The Buyer agrees to be bound, after the
Closing, by the terms of the Note and the Loan Documents and hereby assumes, as
of the Closing, all obligations of the Seller thereunder, including but not
limited to loan administration and servicing obligations. The Buyer shall,
immediately after the Closing, give notice of this Agreement to all Obligors, by
certified United States Mail at (a) the most recent notice address of each of
the Obligors provided in the Loan Documents, or (b) in the absence of a
specified address in the Loan Documents for any Obligor, such Obligor's current
or last known address of record. Buyer shall use best efforts to consummate a
Refinancing, as such capitalized term is defined in the Purchase Note.
7.8 SELLER'S OPTION FOR LIQUIDATED DAMAGES. If the Buyer shall fail to make the
first $100,000 principal payment plus accumulated interest due under section
2(B)(i) of the Purchase Note by the due date of such payment, inclusive of all
grace periods, then the Seller may in its sole, absolute and complete discretion
retain the initial $100,000 payment made under section 1.3, hereof in liquidated
damages, and exercise all rights it may have at law or in equity as a creditor
under the terms of the Purchase Note, the Security Agreement and all other
instruments, documents and agreements attached hereto, referenced herein or
otherwise delivered in connection with the transactions contemplated hereby.
ARTICLE VIII
MISCELLANEOUS
8.1 FEES AND EXPENSES/HEADINGS/NOTICES. Except as otherwise expressly provided
in this Agreement, all legal and other fees, costs and expenses incurred in
connection with this
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EXHIBIT 2.1
Agreement and the transactions contemplated hereby through the Closing Date
shall be paid by the party incurring such fees, costs or expenses. The section
headings herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof. All notices or other communications required or permitted
hereunder shall be given in writing and shall be deemed sufficient if delivered
by hand, recognized overnight delivery service or facsimile transmission or
mailed by registered or certified mail, postage prepaid (return receipt
requested), as follows:
If to the Targets:
X.X. Xxxxxxxx Environmental Companies
0000 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
If to the Buyer:
Spruce XxxXxxxxx Holding Corp.
00 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxx
both with a copy to:
Xxxxxx XxxXxxxx Xxxxxxxx, LLC
00 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxx Xxxx 00000-0000
ATTN: Xxxxx Xxxx, Esq.
If to the Seller:
U.S. Industrial Services, Inc.
00 Xxxxxx Xxxx., Xxx. 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx, Pres.
with a copy to:
or such other address as shall be furnished in writing by such party, and any
such notice or communication shall be effective and be deemed to have been given
as of the date so delivered or three (3) days after the date so mailed;
PROVIDED, HOWEVER, that any notice or communication changing any of the
addresses set forth above shall be effective and deemed given only upon its
receipt.
8.2 ASSIGNMENT/ENTIRE AGREEMENT/WAIVER AND AMENDMENTS/ COUNTERPARTS/ACCOUNTING
TERMS/SCHEDULES. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and the provisions of Article 7 hereof shall
inure to the benefit of the Indemnified Parties referred to therein; PROVIDED,
HOWEVER, that neither this Agreement nor any of the rights, interests, or
obligations hereunder may be assigned by Seller without the prior written
consent
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EXHIBIT 2.1
of the Buyer. This Agreement (including the Schedules hereto) embodies the
entire agreement and understanding of the parties with respect to the
transactions contemplated hereby and supersedes all prior written or oral
commitments, arrangements or understandings between the parties with respect
thereto and all prior drafts of this Agreement, except the Management Agreement.
There are no restrictions, agreements, promises, warranties, covenants or
undertakings with respect to the transactions contemplated hereby other than
those expressly set forth herein or in the Documents. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach, whether or not similar. This
Agreement may be amended, modified or supplemented only by a written instrument
executed by the parties hereto. This Agreement may be executed by facsimile
signature(s) or original signature and in any number of counterparts, all of
which shall be considered one and the same agreement and each of which shall be
deemed an original. All accounting terms used herein which are not expressly
defined or modified in this Agreement shall have the respective meanings given
to them in accordance with GAAP. Disclosure of any matter in any Schedule hereto
or in the Financial Statements shall be considered as disclosure pursuant to any
other provision, subprovision, section or subsection of this Agreement or
Schedule to this Agreement.
8.3 SEVERABILITY/TIME IS OF THE ESSENCE/GOVERNING LAW/INTERPRETATION. If any
one or more of the provisions of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality or enforceability of the
remaining provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party waives any provision of law which
renders any provision of this Agreement invalid, illegal or unenforceable in any
respect. Time is of the essence for purposes of this Agreement. This Agreement
shall be governed under the laws of the State of Illinois without regard to
conflict of law principles. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include," "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement," "the date hereof" and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to September 29, 2000.
19
20
EXHIBIT 2.1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SPRUCE XXXXXXXXX HOLDING CORP.
By:
--------------------------------
Its:
U.S. INDUSTRIAL SERVICES, INC.
By:
--------------------------------
Its:
/s/ X.X. Xxxxxxxx Environmental, Inc.,
/s/ X.X. Xxxxxxxx Contractors, Inc.,
/s/ X.X. Xxxxxxxx Services, Inc.,
/s/ X.X. Xxxxxxxx Northwest, Inc.
BY:
--------------------------------
Its:
20
21
EXHIBIT 2.1
EXHIBIT "A"
Definitions
"Actual Knowledge" or "Actually Known" means that whenever a statement regarding
the existence or absence of facts on the part of the Seller in this Agreement is
qualified by a phrase such as "to such Person's actual knowledge" or "actually
known by such Person," the parties intend that the information to be attributed
to such Person is information that is actually know to the officers and/or
directors of the Seller on the date of this Agreement and as of the execution
thereof.
"Affiliate" means with respect to any Person any entity that, directly or
indirectly, controls or is controlled by that Person, or is under common control
with that person. For purposes of this definition (i) "control", as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities or by contract or
otherwise and (ii) in the case of a specified Person who is a natural person,
his/her spouse, his/her issue, his/her parents, his/her estate and any trust
entirely for the benefit of his/her spouse and/or issue.
"Assignment" means that certain Assignment of Note dated of even date herewith
from Seller to Buyer in the form attached to the Stock Purchase Agreement as
Schedule 1.2.
"Balance Sheet" means the balance sheet of the Targets as reflected in the
Seller's filing with the Securities and Exchange Commission for the period
including June 23, 1999, in the form attached hereto as Exhibit "C".
"Borrower" means American Temporary Sanitation, Inc., a New York corporation.
"Buyer" means Spruce XxxXxxxxx Holding Corp., its successors and/or assigns.
"Certificates" means the certificates evidencing the Seller Shares.
"Claim" means, without limitation, any claim, demand or legal or regulatory
proceeding.
"Closing" means the consummation of the Transactions.
"Closing Date" means the date and time at which the Closing occurs.
"Costs" shall mean all liabilities, losses, costs, damages (not including
consequential damages), expenses, claims, attorneys' fees, experts' fees,
consultants' fees, and disbursements of any kind or of any nature whatsoever.
"Financial Statements" means the statements of income, changes in any of the
Targets' equity, and cash flows with respect to each and every Target as
reflected in the Seller's filing with the Securities and Exchange Commission for
the period including June 23, 1999, in the form attached hereto as Exhibit "D".
21
22
EXHIBIT 2.1
"Governmental Authority", "Governmental Body" or "Governmental Entity" means any
court, arbitral tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
"Knowledge" or "Known" means that whenever a statement regarding the existence
or absence of facts is Agreement is qualified by a phrase such as "to such
Person's knowledge" or "known by such Person," the parties intend that the
information to be attributed to such Person is information that is actually know
to (a) a Person in the case of an individual, or (b) in the case of a
corporation or other entity, an officer or any employee who devoted attention to
matters of such nature during the course of his/her employment.
"Lien" means any lien, encumbrance, security interest, mortgage, pledge, charge,
claim, option, right of first refusal or call, or restriction of any kind.
"Loan" means the loan obligations and debt evidenced by the Loan Documents for
such Loan.
"Loan Balance" means the "legal" principal balance due under the Note.
"Loan Documents" means each of the documents, instruments and agreements listed
on Schedule D-LD all payment and performance obligations evidenced thereby and
any and all agreements or instruments with respect to the Note or granting the
Seller any security interest, lien, claim or encumbrance in or on any asset or
property of any Obligor or third party to secure the Note or any other Loan
Document.
"Note" means that certain Promissory Note of American Temporary Sanitation, Inc.
in the original principal amount of One Million Two Hundred Thousand Dollars
($1,396,000.00) dated January 4, 1999, a copy of which is attached hereto as
Exhibit "A" and incorporated by reference herein.
"Obligor" means the Borrower, any guarantor(s) of a Loan, any endorser(s) of any
of the Loan Documents, and any other party whose property, or any part thereof,
is collateral.
"Person" means any individual, corporation, partnership, joint venture, limited
liability company, trust, association, unincorporated organization, other entity
or Governmental Entity.
"Purchase Note" means that promissory note of the Buyer for the benefit of the
Seller in the original principal amount of $1,000,000.00 as contemplated by
section 1.3, hereof and in the form of Note attached hereto as Exhibit "B".
"Purchase Price" means the consideration payable by the Buyer to the Seller in
exchange for the consummation of the Transactions in the amount of
$1,000,000.00, payable in accordance with the terms and provisions of this
Agreement .
"Sale" means the transfer of the Sellers Shares to the Buyer and the
consummation of the transactions contemplated by this Agreement.
"Seller" means U.S. Industrial Services, Inc., a Delaware corporation.
22
23
EXHIBIT 2.1
"Seller Shares" shall have that meaning ascribed to such term in the recitals
set forth in this Agreement constituting all of the issued and outstanding
shares of stock of and all ownership interest in the Targets and any and all
other rights, title or interest of Seller in and to the Targets.
"Targets" means PWE, PWC, PWN and PWS.
"Transaction" means the Sale and any and all other transactions contemplated by
this Agreement or otherwise undertaken in connection herewith.
"Taxes" means (a) any federal, state, local, foreign and other income,
alternative or add-on minimum, accumulated earnings, personal holding company,
franchise, capital stock, profits, windfall profits, gross receipts, value
added, sales, use, excise (including the golden parachute excise tax imposed by
section 4999 of the Internal Revenue Code and the green mail excise tax imposed
by section 5881 of the Internal Revenue Code), customs duties, transfer,
conveyance, registration, stamp, documentation, recording, premium, severance,
environmental (including taxes under section 59A of the Internal Revenue Code),
real property, personal property, ad valorem, intangibles, rent, occupancy,
firearm, ammunition, license, occupation, employment, unemployment insurance,
social security, disability, workers' compensation, payroll, withholding,
estimated or any other tax, duty governmental fee or other like assessment or
charge of any king whatsoever (including all interest and penalties thereon and
additions thereto whether disputed or not) imposed by any Governmental Authority
and (b) any obligations under any agreements or arrangements with respect to
Taxes described in clause (a) above.
"Tax Returns" means any returns, reports, declarations, forms, claims for refund
or information returns or statements relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.
23
24
EXHIBIT 2.1
EXHIBIT "B"
PROMISSORY NOTE
24
25
EXHIBIT 2.1
NOTE
ST. LOUIS, MISSOURI SEPTEMBER 29, 2000
$1,550,000.00
Spruce XxxXxxxxx Holding Corp., with an address of 00 Xxxxxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxxxxxxx 00000 ("Borrower") acknowledges itself indebted and for
value received does hereby promise to pay to U.S. Industrial Services, Inc., a
Delaware corporation with an address of 00000 Xxxxx Xxxx, Xxxxxxx, Xxxxx 00000
the principal sum of ONE MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS
($1,550,000.00) with interest thereon as set forth below.
SECTION 1. DEFINITION OF TERMS. The following words and terms as used in this
Note shall have the following meanings unless the context or use indicates
another or different meaning or intent:
"DEFAULT RATE" means a rate per annum equal to five percent (5%) above the
rate of interest applicable to the Note.
"MATURITY DATE" means June 15, 2001, unless extended upon the occurrence of
a Refinancing failure in accordance with the terms and provisions hereof.
"PAYMENT DATE" means the dates upon which payments of principal and
interest are due and owing under the terms of this Note.
"PRINCIPAL BALANCE" means the outstanding Principal Balance of this Note
from time to time.
"REFINANCING" means (i) an extension of credit from a third party, other
than the Lender or an affiliate of the Borrower, in an amount sufficient to
pay the outstanding Principal Balance on June 15, 2001 or (ii) an extension
of credit from a third party, other than the Lender or an affiliate of the
Borrower, in an amount sufficient to pay the outstanding Principal Balance
on June 15, 2001 and all obligations of American Temporary Sanitation, Inc.
outstanding on such date.
"REFINANCING FAILURE" means the inability of the Borrower after its best
efforts to consummate a Refinancing by June 15, 2001.
All capitalized terms used in this Note which are not otherwise defined herein
shall have that meaning ascribed to such term in that certain Stock Purchase and
Note Assignment Agreement dated as of September 29, 2000 by and between the
Borrower and the Lender.
SECTION 2. PAYMENTS. (A) Subject to the provisions of Section 4 of this Note,
commencing on the date of this Note and continuing thereafter up to and
including the Maturity Date, interest (based upon a year of 360 days and
calculated on the basis of the actual number of days elapsed in a 365 day
period) shall accrue and be payable at a rate per-annum equal to nine and one
half percent (9.5%) on the Principal Balance. Without limiting any other
provisions hereof, any Principal Balance which remains outstanding after the
Maturity Date shall accrue at a rate per annum equal to the Default Rate.
(B) The Principal Balance of the Note shall be paid as follows:
(i) A payment of $100,000 plus all accrued and unpaid interest on the
Principal Balance from December 1, 2000 through December 29, 2000
in the combined amount of One Hundred Eleven Thousand Eight
Hundred Sixty One and 80/100's Dollars ($111,861.80) shall be due
and owing on December 29, 2000;
(ii) A payment of $450,000 plus all accrued and unpaid interest on the
Principal Balance from December 30, 2000 through February 28,
2001 in the combined amount of Four Hundred Seventy Three
Thousand Three Hundred Forty and 97/100's Dollars ($473,340.97)
shall be due and owing on February 28, 2001; and
(iii) A payment of $1,000,000.00 plus all accrued and unpaid interest
on the Principal Balance from March 1, 2001 through June 15, 2001
in the combined amount of One Million Twenty Eight Thousand Two
Hundred Thirty Five and 16/100's Dollars ($1,028,235.16) shall be
due and owing on June 15, 2001.
1
26
EXHIBIT 2.1
(C) In the event of a Refinancing Failure and provided that the Borrower
has made the payments required by sub provisions (B)(i) and (ii) hereof with the
time period permitted hereby , the interest rate on the Principal Balance shall
be increased to ten percent (10%) per annum and the Principal Balance plus all
accrued and unpaid interest on the Principal Balance from March 1, 2001 through
June 15, 2001 shall be paid in twelve equal monthly installments of interest and
principal commencing on June 15, 2001 and continuing on the fifteenth day of
each month thereafter through to and including May 15, 2002.
(D) In the event that any portion of any payment due hereunder is not made
within fifteen (15) days of the date such payment became due, the Borrower shall
pay to the Holder on demand a late payment charge equal to five percent (5%) of
the portion of any such payment not paid within such fifteen (15) day period.
(E) Notwithstanding anything to the contrary herein contained, on the
Maturity Date, the entire outstanding principal amount hereof and all
accumulated, accrued and unpaid interest thereon shall be due and payable. The
Borrower does hereby acknowledge that the payments required by section 2(B) of
this Note are not sufficient to repay the Principal Balance by the Maturity Date
and that on the Maturity Date the then Principal Balance will balloon and be due
and payable in full on that date.
(F) All payments received pursuant to this Note shall, at the option of
the Holder, be applied first to the payment of accrued, accumulated and unpaid
interest, then in reduction of the Principal Balance hereof and finally to the
payment of any late charges due hereunder provided that should an Event of
Default have occurred and be continuing, payments received hereunder shall be
applied at the discretion of the Holder.
(G) All payments of interest and principal are to be made for the account
of Holder at the address set forth at the commencement of this Note. All
payments shall be in lawful money of the United States in immediately available
funds.
(H) The obligations of the Borrower under this Note are secured pursuant
to the terms of that certain Security Agreement from the Borrower and Targets to
the Seller and that certain Pledge Agreement from the Borrower to the Seller,
both dated as of the date hereof.
SECTION 3. PREPAYMENT. The outstanding principal balance may be prepaid from
time to time in whole or in part.
SECTION 4. DEFAULT; ACCELERATION. The entire unpaid Principal Balance of this
Note, together with all accrued and unpaid interest due hereon, may be declared
immediately due and payable, without demand or notice, by the Holder upon (i)
failure of the Borrower to make any payment due hereunder within fifteen days
following its due date or (ii) if the Borrower has a judgment rendered against
it, becomes insolvent, makes a general assignment for the benefit of creditors,
files a voluntary petition in bankruptcy, in any manner takes advantage or
attempts to take advantage of any provisions for the relief of debtors under any
laws relating to bankruptcy now existing or hereafter enacted by Congress of the
United States or the legislature of any state in the United States, or has a
petition in bankruptcy filed against it; if an application for receivership of
any nature is filed or a receiver is appointed of any property or assets of the
undersigned or any party liable herefore; if a notice of tax lien is filed
against any property of the Borrower or any party liable herefore. Provided,
however, that from and after the date of any such declaration, the outstanding
Principal Balance hereof and all accrued and unpaid interest thereon shall be
due and payable, interest shall
2
27
EXHIBIT 2.1
continue to accrue on the unpaid Principal Balance to the date of payment at a
rate per annum equal to the Default Rate.
SECTION 5. COVENANT AGAINST USURY. All agreements between the Borrower and the
Holder are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the
Holder for the use or the forbearance of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used herein, the term
"applicable law" shall mean the law in effect as of the date hereof provided,
however that in the event there is a change in the law which results in a higher
permissible rate of interest, then this Note shall be governed by such law as of
its effective date. In this regard, it is expressly agreed that it is the intent
of the Borrower and the Holder in the execution, delivery and acceptance of this
Note to contract in strict compliance with the laws of the State of Illinois
from time to time in effect. If, under or from any circumstances whatsoever,
fulfillment of any provision hereof or of any law of the Financing Documents at
the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such
validity, and if under or from circumstances whatsoever the Holder should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest.
SECTION 6. WAIVER OF DILIGENCE, PRESENTMENT, DEMAND, ETC. The Borrower hereby
waives with respect to this Note: diligence, presentment, demand for payment,
filing of claims with a court in the event of bankruptcy of the Borrower or any
other person or entity liable in respect to this Note, any right to require a
proceeding first against the Borrower or any other such Person; protest, notice
of dishonor or nonpayment of any such liabilities and any other notice and all
demands whatsoever except as specifically set forth in this Note or any of the
other Financing Documents.
SECTION 7. WAIVER, CHANGE, MODIFICATION OR DISCHARGE. The provisions of this
Note may not be waived, changed, modified or discharged orally, but only by
agreement in writing, signed by the party against whom any enforcement of any
waiver, change, modification or discharge is sought.
SECTION 8. JURY TRIAL WAIVER. THE BORROWER AND THE HOLDER MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS NOTE OR ANY OTHER FINANCING DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR THE HOLDER TO ACCEPT THIS NOTE AND MAKE THE LOAN. THE
BORROWER DOES HEREBY SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN ILLINOIS.
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28
EXHIBIT 2.1
IN WITNESS WHEREOF, the Borrower has executed this instrument as of the day and
year first above written.
SPRUCE XXXXXXXXX HOLDING CORP.
By:
-------------------------------
Its:
4
29
EXHIBIT 2.1
EXHIBIT "C"
BALANCE SHEET
EXHIBIT "D"
FINANCIAL STATEMENT
EXHIBIT "E"
SECURITY AGREEMENT
30
EXHIBIT 2.1
SECURITY AGREEMENT
(BUSINESS ASSETS)
X.X. XXXXXXXX ENVIRONMENTAL, INC., X.X. XXXXXXXX CONTRACTORS, INC., X.X.
XXXXXXXX SERVICES, INC. and X.X. XXXXXXXX NORTHWEST, INC., each with an address
for the receipt of mail at 0000 Xxxxx Xxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000
and SPRUCE XXXXXXXXX HOLDING CORP., with an address for the receipt of mail at
00 Xxxxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000 and SPRUCE XXXXXXXXX
CORPORATION., with an address for the receipt of mail at 00 Xxxxxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxxxxxxx 00000 (collectively and individually the "Debtor") agree
as follows for the benefit of U.S. INDUSTRIAL SERVICES, INC., 00 Xxxxxx Xxxx.,
Xxx. 000, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Secured Party") as follows:
1. SECURITY INTEREST.
(a) Each Debtor hereby grants to Secured Party a security interest (the
Security Interest) in its FURNITURE, FIXTURES, EQUIPMENT, MACHINERY, INVENTORY,
SUPPLIES, RAW MATERIALS, WORK-IN PROCESS, ACCOUNTS RECEIVABLE, CONTRACT RIGHTS
(INCLUDING WITHOUT LIMITATION ALL PATENTS, COPYRIGHTS, LICENSES AND TRADEMARKS),
CHOSES IN ACTION, GENERAL INTANGIBLES AND ACCOUNTS AND TOGETHER WITH ALL
ACCESSIONS THERETO, SUBSTITUTIONS THEREFOR, ADDITIONS, RENEWALS, OR REPLACEMENTS
THEREOF AND ALL PROCEEDS AND PRODUCTS FROM THE SALE, EXCHANGE, COLLECTION,
FORECLOSURE OF, LIQUIDATION OR OTHER DISPOSITION OF ANY OF THE FOREGOING.
2. INDEBTEDNESS SECURED. The Security Interest secures payment of that certain
indebtedness of SPRUCE XXXXXXXXX HOLDING CORP. to the Secured Party evidenced by
that certain Promissory Note of even date herewith in the original principal
amount of $1,550,000.00 (collectively the "Indebtedness").
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR. Each Debtor represents and
warrants and, so long as any Indebtedness remains unpaid, shall be deemed
continuously to represent and warrant that: (a) Debtor is authorized to enter
into this Security Agreement and (b) the Collateral is used or bought for use
primarily for the purpose marked below:
[X] Business operations and the Debtor's business is carried on in the
State of Missouri and/or Washington, except Spruce XxxXxxxxx Holding Corp. whose
business is carried on in California and Nevada and Spruce XxxXxxxxx Corporation
whose business is carried on in Nevada, California, Missouri and New York.
[ ] Personal, family or household purposes and the address specified above
is Debtor's residence.
Attached hereto as Exhibit "A" is a financial statement/balance sheet and a list
of the equipment owned by Spruce XxxXxxxxx Corporation ("SMC"). SMC does hereby
represent and warrant unto the Secured Party as follows: (i) that on or before
the tenth day following the execution and delivery hereof, SMC shall deliver to
the Secured Party financial statements/balance sheet which fairly present the
financial position of SMC and the results of operations of SMC for the period
indicated thereon and all liabilities or obligations of SMC as of such date,
either accrued, absolute, contingent or otherwise, are set forth on the attached
and (ii) the attached list of equipment is a fair and accurate listing of the
equipment owned by SMC as of the date thereof, subject to liens to secure the
indebtedness set forth on the financial statements/balance sheet.
4. COVENANTS OF EACH DEBTOR. So long as any Indebtedness remains unpaid, each
Debtor: (a) will defend the Collateral against the claims and demands of all
other entities having a security interest
1
31
EXHIBIT 2.1
initially perfected after the date hereof; (b) will keep the Collateral in good
condition and repair; and will not use the Collateral in violation of any
provisions of this Security Agreement, of any applicable statute, regulation or
ordinance or of any policy insuring the Collateral; and (c) will pay all taxes,
assessments and other charges of every nature which may be levied or assessed
against the Collateral; will insure the Collateral against risks, and in
coverage, form and amount, satisfactory to Secured Party. Nothing contained
herein shall restrict any Debtor's right to (i) sell or otherwise use inventory
in the ordinary course of such Debtor's business, (ii) collect accounts
receivable and use the proceeds thereof, (iii) sell any item of Collateral as
long as (a) such item is replaced with an item of equal or greater value, (b)
such item is reasonably determined by such Debtor to be excess property or (c)
the net proceeds from the sale of that item are used for the payment of any sums
due with respect to the Indebtedness and/or (iv) enter into any real or capital
lease for any asset. Secured Party will execute all releases necessary to
evidence the release of its security interest in any Collateral pursuant to this
paragraph 4. No Seller may create, assume or suffer to exist any pledge, lien,
security interest, or other encumbrance on the Collateral to secure any
obligation not outstanding on the date of this Security Agreement, including,
without limitation those existing liens and encumbrances identified on schedule
3.5 to that certain Stock Purchase Agreement to which a copy of the form of this
Security Agreement is attached as Exhibit E, without the express written consent
of the Secured Party; provided, however, that any Debtor may create, assume or
suffer to exist a pledge, lien, security interest or other encumbrance on the
Collateral (1) created in connection with purchase money indebtedness related to
the acquisition of personal or real property, (2) if the net proceeds from any
extensions of credit so secured are used solely for the payment of any sums due
with respect to the Indebtedness, (3) to increase the borrowings under any
working capital line of credit or renewal of any working capital line of credit,
provided, that the total amount outstanding under any such working capital line
of credit does not exceed $400,000 and/or (4) encumbrances for real property
taxes not yet due and payable.
5. DEFAULT.
(a) Any of the following events or conditions shall constitute an event of
default hereunder: (i) nonpayment when due, inclusive of any cure periods,
whether by acceleration or otherwise, of principal of or interest on any
Indebtedness or default by any Debtor in the performance of any obligation, term
or condition of this Security Agreement (ii) the filing by or against any Debtor
of a petition for adjudication as a bankrupt; the filing by or against any
Debtor of a petition for reorganization under Chapter 11 of the Bankruptcy Code
or any similar statute; or the filing by any Debtor of a petition for an
arrangement or reorganization under Chapter 7, 12, 13 or an other provision or
chapter of the Bankruptcy Code or any similar statute; and (iii) the making of
any general assignment by any Debtor for the benefit of creditors; the
appointment of a receiver or trustee for any Debtor or for any of any Debtor's
assets; or the institution by or against any Debtor of any other type of
insolvency proceeding (under the Bankruptcy Act or otherwise) or of any formal
or informal proceeding for the dissolution or liquidation of, settlement of
claims against or winding up of affairs of any Debtor.
(b) Secured party, at its sole election, may declare all or any part of any
Indebtedness not payable on demand to be immediately due and payable without
demand or notice of any kind upon the happening of any event of default.
(c) Upon the happening of any event of default, Secured Party's rights and
remedies with respect to the Collateral shall be those of a Secured Party under
the Uniform Commercial Code and under any other applicable law, as the same may
from time to time be in effect, in addition to those rights granted herein and
in any other agreement now or hereafter in effect between Any Debtor and Secured
Party.
(d) Without in any way requiring notice to be given in the following
manner, each Debtor agrees that any notice by Secured Party of sale, disposition
or other intended action hereunder or in connection herewith, whether required
by the Uniform Commercial Code or otherwise, shall constitute reasonable notice
to such Debtor if such notice is mailed by certified mail, postage prepaid, at
least fifteen (15) days
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32
EXHIBIT 2.1
prior to such action, to Such Debtor's address specified above or to any other
address which Such Debtor has specified in writing to Secured Party as the
address to which notices hereunder shall be given to Such Debtor.
6. MISCELLANEOUS.
(a) Upon Each Debtor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all such
duties, and such Debtor shall pay an amount equal to the expense thereof to
Secured Party forthwith upon written demand by Secured party.
(b) No delay or omission by Secured Party in exercising any right or remedy
hereunder or with respect to any Indebtedness shall operate as a waiver thereof
or of any other right or remedy, and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. Secured Party may remedy any default by any Debtor hereunder or
with respect to any Indebtedness in any reasonable manner without waiving the
default remedied and with out waiving any other prior or subsequent default by
Such Debtor. All rights and remedies of Secured party hereunder are Cumulative.
(c) Secured party shall have no obligation to take, and Debtor shall have
the sole responsibility for taking, any and all steps to preserve rights against
any and all prior parties to any Instrument or Chattel Paper in Secured Party's
possession as Proceeds in connection with this Security Agreement.
(d) The rights and benefits of Secured Party hereunder shall, if Secured
Party so agrees, inure to any party acquiring any interest in the Indebtedness
or any part thereof.
(e) Secured Party and Debtor as used herein shall include the heirs,
executors and administrators, or successors or assigns, of those parties.
(f) If more than one Debtor executes this Security Agreement, the term
"Debtor" shall include each as well as all of them and their obligations,
warranties and representations hereunder shall be joint and several.
(g) No modification, rescission, waiver, release or amendment of any
provision of this Security Agreement shall be made except by a written agreement
subscribed by each Debtor and by a duly authorized officer of Secured Party.
(h) This Security Agreement and the transaction evidenced hereby shall be
construed under the laws of the State of Illinois, as the same may from time to
time be in effect, including, without limitation, the Uniform Commercial Code.
EACH DEBTOR DOES HEREBY SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN ILLINOIS.
(k) This Security Agreement is and is intended to be a continuing Security
Agreement and shall remain in full force and effect until all of the
Indebtedness contracted for or created before the receipt of such notice by
Secured Party, and any extension or renewals thereof (whether made before or
after receipt of such notice) together with interest accruing thereon after such
notice, shall be paid in full.
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EXHIBIT 2.1
DEBTOR:
X.X. XXXXXXXX ENVIRONMENTAL, INC.
X.X. XXXXXXXX CONTRACTORS, INC.
X.X. XXXXXXXX SERVICES, INC.
X.X. XXXXXXXX NORTHWEST, INC.
By:
-------------------------------------------------
Xxxxxxx Xxxxxxx, President
SPRUCE XXXXXXXXX HOLDING CORP.
BY:
-------------------------------------------------
Its:
SPRUCE XXXXXXXXX CORPORATION
BY:
-------------------------------------------------
Its:
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34
EXHIBIT 2.1
EXHIBIT "F"
PLEDGE AGREEMENT
1
35
EXHIBIT 2.1
EXHIBIT "G"
2
36
PLEDGE AGREEMENT
Pledgor and Borrower: SPRUCE XXXXXXXXX HOLDING, CORP., a Nevada corporation
having an address for the receipt of mail at 00 Xxxxxxxxxx Xxxxx, Xxxx Xxxxx,
Xxxxxxxxxx 00000. Lender: U.S. INDUSTRIAL SERVICES, INC., a Delaware Corporation
with a principal office at 00000 Xxxxx Xxxx, Xxxxxxx 00000.
THIS PLEDGE AND SECURITY AGREEMENT (the "Pledge") is granted to the Lender by
the Pledgor named above in consideration of and as further security for payment
of the Obligations, and for other valuable consideration, the receipt of which
is acknowledged. Pledgor agrees with the Lender as follows:
1. DEFINITIONS; Capitalized terms not defined below have the meanings
assigned in the Uniform Commercial Code as in effect in the State of Illinois
from time to time.
a. "Collateral" means the Securities described on Schedule A (the
"Securities").
b. An "Event of Default" will be occurred if (i) Pledgor defaults
in the payment when due of any of the Obligations, after all
cure periods therefore or (ii) X.X. Xxxxxxxx, Inc., a
California corporation, defaults under the terms of that
negative pledge agreement from that corporation to Lender of
even date herewith, a Pledgor falls to cure that default
within fifteen days of notification thereof.
c. "Obligations" means the indebtedness of Pledgor to Lender
evidenced by that certain promissory note of even date
herewith in the original principal amount of $1,550,000.
d. "Pledgor" means each of the persons identified above as
Pledgor and owner of the Collateral, in any capacity, and the
legal representative, successor or assign of any of them.
2. SECURITY INTEREST. Pledgor grants a security interest in, and assigns,
pledges and hypothecates the Collateral to the Lender, as further security for
payment and performance of the Obligations. This Pledge is unconditional and
shall continue until payment in full of the Obligations and the Pledgor's
satisfaction of its tax payment obligations under section 3.9 of that certain
Stock Purchase and Note Assignment Agreement dated of even date herewith by and
between the Lender and the Pledgor, among others (the "SPA").
37
3. REPRESENTATIONS, WARRANTIES AND CONVENANTS OF PLEDGOR. Pledgor
represents and warrants to and agrees with the Lender that now and until this
Pledge is terminated: a. Pledgor is sole owner of the Collateral (registered, if
applicable) and has full right and capacity to pledge and assign it to the
Lender. There are no other pledges of, security interests in or other liens or
encumbrances upon any portion of the Collateral. b. No Restricted Stock. Except
for transfer restrictions arising under applicable securities law, there are no
transfer restrictions applicable to any of the Collateral unless fully and
accurately described in an exhibit to this Pledge. Each instrument, certificate
or other document evidencing any of the Collateral is genuine, is in all
respects what is purports to be and is enforceable in accordance with its terms.
c. Defense of Collateral. Pledgor shall defend the Collateral against any
demand, claim, counterclaim, set off and defense asserted by any person other
than the Lender. Notwithstanding the foregoing, any such representations and
warranty shall be limited to the extent of any claim for which the Pledgor shall
have a right of indemnification against the Lender pursuant to the SPA.
4. DEFAULT. a. Until an Event of Default has occurred, Pledgor shall be
entitled to receive and retain or reinvest all dividends, interest and other
earnings with respect to the Collateral. Until a transfer of the Pledged
Securities upon the occurrence of an event of default, pursuant to the terms
hereof, the Pledgor shall be entitled to vote and exercise all other ownership
interest and rights with respect to the Pledged Securities. After an Event of
Default, the Lender may collect, retain and apply to the Obligations the
dividends, interest, profits, increases or other earnings of the Collateral. b.
Registered Pledge. The Lender has the right to have Pledgor's pledge registered
on the books of the issuer of each eligible Security/Collateral at Pledgor's
expense. c. Direct Payment. At any time and from time to time after the
occurrence or existence of any Event of Default (i) The Lender may transfer and
realize upon its interest in all or any portion of the Collateral by public sale
on fifteen days notice to the Pledgor in accordance with the notice provisions
of the SPA. (ii) The Lender shall set off against the Obligations any amount
owing by the Lender or any of its affiliates in any capacity to any Pledgor in
any capacity. (iii) Proceeds of the Collateral shall be applied to the Lender's
costs of collection and then to the Obligations, first to interest and then to
principal. No course of dealing or other conduct, no oral agreement or
representation made by the Lender, or usage of trade, shall operate as a waiver
of any right or remedy of the Lender. No waiver of any right or remedy of the
Lender shall be effective unless made specifically in writing by the Lender.
7. STANDARD OF CARE. The Lender shall have only such duties of custody and
due care of the Collateral as provided by the UCC. The Lender shall be deemed to
have exercised reasonable care in the custody and preservation of any portion of
the Collateral which is in its possession and control if the Lender affords the
Collateral treatment substantially equal to the treatment that the Lender
accords its own assets of a similar nature; provided, however, that the Lender
shall have no duty to sell or convert Collateral whose market value is
declining. Pledgor does hereby acknowledge that the Pledged Securities shall be
delivered to an escrow agent pursuant to the terms of an Escrow Agreement
between the Pledgor and Pledgee, among others, dated of even date herewith.
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38
8. COSTS AND EXPENSES. Pledgor shall pay to the Lender on demand all costs
and expenses (including but not limited to reasonable attorney's fees and
reasonable disbursements) incurred by the Lender in searching public records or
issuers records registering, transferring or taking any other action to perfect
the Lender's interest in the Collateral, including without limitation fees for
custody or safekeeping of instruments, securing copies of financing statements,
performing any obligation of Pledgor pursuant to this Pledge, or exercising any
of the Lender's rights or remedies in realizing on the Collateral or in custody,
preservation, defense, or release of the Collateral (collectively, "Costs").
9. MISCELLANEOUS.
a. Governing Law. No change in this Pledge shall be effective
unless made in a writing duly executed by the Lender. This
Pledge shall be governed by the laws of the State of Illinois,
without regard to its principles of conflict of laws. PLEDGOR
DOES HEREBY CONSENT TO THE JURISDICTION OF THE FEDERAL AND
STATE COURTS IN ILLINOIS IN CONNECTION WITH THE RESOLUTION OF
ANY CONTROVERSY ARISING UNDER THIS AGREEMENT. This Pledge is a
binding obligation enforceable against Pledgor and its
successors and assigns and shall inure to the benefit of the
Lender and its successors and assigns. Each provision of this
Pledge shall be interpreted as consistent with existing law
and shall be deemed amended to the extent necessary to comply
with any conflicting law. If a court deems any provision
invalid, the remainder of this Pledge shall remain in effect
Section headings are for convenience only. Neuter pronouns
shall be construed as masculine or feminine, and singular form
as plural, as appropriate.
b. Pledgor's Waivers. Pledgor waives without notice each demand,
presentment, protest and other act or thing upon which any of
Pledgor's obligations or the Lender's rights or remedies
pursuant to this Pledge would or might be conditioned. In
addition, this Pledge shall not be modified or terminated as
to Pledgor by any renewal, refinancing or extension of the
time for payment, any change or disposition of security; or
acceptance by the Lender of any writing intended by any other
person to create an accord and satisfaction, with respect to
the Obligations secured by the Pledge.
c. TIN CERTIFICATION. Under penalties of perjury, Pledgor
certifies: (1) the taxpayer number set forth below is
Pledgor's correct employer identification number.
Dated: September 29, 2000
TIN#
SPRUCE XXXXXXXXX HOLDING, CORP.
BY:
------------------------------------------------
Its:
3
39
SCHEDULE "A" TO PLEDGE OF SECURITIES
COLLATERAL
Common
Corporation Certificate Number Shares
PWE 2 200
PWS 2 200
PWN 2 200
PWC 2 200
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40
EXHIBIT 2.1
LIMITED GUARANTEE
THIS GUARANTY is made as of September 29, 2000 (the "Guaranty") from
American Temporary Sanitation, Inc., a New York corporation having an address
for the receipt of mail at _____ (the "Guarantor") to U.S. Industrial Services,
Inc., a Delaware corporation with an address of 00 Xxxxxx Xxxx., Xxx. 000,
Xxxxxxxxxx, Xxxxxxxx 00000 (the "Lender").
WHEREAS, SPRUCE XXXXXXXXX HOLDING CORP. ("Borrower") is indebted to the
Lender in the principal amount of One Million and Five Hundred Fifty Thousand
and 00/100 Dollars ($1,550,000.00) as evidenced by that certain promissory note
dated September 29, 2000 from the Borrower to the Lender (the "Note"); and
WHEREAS, the Lender has agreed that it will make the loan to the Borrower
if the Guarantor guarantees the payment of up to One Million Three Hundred
Twenty Three Thousand Three Hundred Forty and 14/100's Dollars of all sums due
or to become due under the Note.
NOW, THEREFORE, in consideration of the premises herein contained, the
Guarantor does hereby guarantee to the Lender the full and prompt payment of the
Note including all interest accrued or accumulated thereon when and as the same
shall become due whether at the stated maturity thereof, by acceleration or
otherwise. The obligations of the Guarantor under this Guaranty shall remain in
full force and effect until the Note has been paid in full. The Guarantor hereby
waives with respect to the Note and this Guaranty: diligence; presentment;
demand for payment; protest; notice of dishonor or nonpayment of any such
liabilities and any other notice and all demands whatsoever. The Guarantor
hereby waives notice from the Lender (A) of the execution of the Note and (B) of
acceptance of, or notice and proof of reliance on, the benefits of this
Guaranty. This Guaranty shall terminate and the obligations of the Guarantor
created hereunder shall be discharged when the Note has been paid in full. This
Guaranty is, and shall be deemed to be, a contract entered into under and
pursuant to the laws of the State of Illinois and shall be in all respects
governed, construed, applied and enforced in accordance with the laws of said
State. THE GUARANTOR DOES HEREBY SUBMIT TO THE JURISDICTION OF THE STATE AND
FEDERAL COURTS LOCATED IN ILLINOIS. The provisions of this Guaranty are intended
to be for the benefit of the Lender. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings, (with the
exception of the Note which is not to be deemed superseded), both written and
oral, among the parties with respect to the subject matter hereof and may be
executed simultaneously in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. No amendment, change, modification, alteration or termination of
this Guaranty shall be made except upon the written consent of the Guarantor and
the Lender. The invalidity or unenforceability of any one or more phrases,
sentences, clauses or sections in this Guaranty shall not affect the validity or
enforceability of the remaining portions of this Guaranty or any part hereof.
The headings of the several sections of this Guaranty have been prepared for
convenience of reference only and shall not control, affect the meaning or be
taken as an interpretation of any provision of this Guaranty. The Lender may
proceed against the Guarantor under this Guaranty without proceeding first
against any other collateral it may have to secure the repayment of the Note.
ATS does hereby represent and warrant for the benefit of Lender that ATS owns
all of the issued and outstanding shares of stock of X.X. Xxxxxxxx, Inc., a
California corporation.
IN NO EVENT AND UNDER NO CIRCUMSTANCE SHALL THE GUARANTOR'S LIABILITY HEREUNDER
OR OTHERWISE FOR THE DEBTS AND OBLIGATIONS OF THE BORROWER UNDER THE NOTE, IF
ANY, EXCEED THE SUM OF ONE MILLION THREE HUNDRED THOUSAND DOLLARS
($1,323,340.14). ALL PAYMENTS MADE BY THE GUARANTOR TO
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41
EXHIBIT 2.1
THE LENDER SHALL BE CREDITED AGAINST THE OBLIGATIONS OF THE GUARANTOR, IF ANY,
UNDER THAT CERTAIN PROMISSORY NOTE OF THE GUARANTOR ORIGINALLY TO LENDER IN THE
ORIGINAL PRINCIPAL AMOUNT OF ONE MILLION THREE HUNDRED NINETY SIX THOUSAND
DOLLARS ($1,396,000.00) DATED JANUARY 4, 1999 WHICH NOTE AS OF THE DATE HEREOF
HAS BEEN ASSIGNED BY THE LENDER TO THE BORROWER.
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42
EXHIBIT 2.1
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty and dated this Guaranty the day and year first above written.
AMERICAN TEMPORARY SANITATION, INC.
BY:
------------------------
Its:
5
43
EXHIBIT 2.1
EXHIBIT "H"
GENERAL RELEASE
6
44
EXHIBIT 2.1
GENERAL RELEASE
TO ALL WHOM THESE PRESENTS SHALL COME OR MAY CONCERN:
GREETING: KNOW YE, That U.S. INDUSTRIAL SERVICES, INC., on behalf of
itself, its administrators, successors, assigns, officers, directors, employees
and agents for good and valuable consideration received from Spruce XxxXxxxxx
Corporation, Spruce XxxXxxxxx Holding Corp. and American Temporary Sanitation,
Inc. the receipt and sufficiency of which is hereby acknowledged, has remised,
released, and forever discharged, and by these presents does for itself, its
heirs, executors, administrators, successors, assigns, administrators,
affiliates, officers, directors, shareholders, employees, successors and agents
remise, release and forever discharge the said Spruce XxxXxxxxx Corporation,
Spruce XxxXxxxxx Holding Corp. and American Temporary Sanitation, Inc., their
assigns, administrators, affiliates, officers, directors, shareholders,
employees, successors and agents of and from any and all manner of action and
actions, cause and causes of action, suits, debts, dues, sums of money,
accounts, reckoning, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extent, executions, claims for personal injuries, property damage and demands
whatsoever, in law or in equity, which against the said Spruce XxxXxxxxx
Corporation, Spruce XxxXxxxxx Holding Corp. and American Temporary Sanitation,
Inc. their assigns, administrators, affiliates, officers, directors, employees,
successors and agents the undersigned can, shall or may have from the beginning
of the world to the later of (i) the date hereof or (ii) the delivery hereof to
Spruce XxxXxxxxx Corporation, or any affiliate thereof. NOTWITHSTANDING THE
FOREGOING, NOTHING CONTAINED HEREIN SHALL OR SHALL BE DEEMED TO CONSTITUTE A
RELEASE OF ANY CLAIM WHICH U.S. INDUSTRIAL SERVICES, INC. OR ANY AFFILIATE MAY
HAVE AGAINST SPRUCE XXXXXXXXX HOLDING CORP. OR ANY AFFILIATE ARISING OUT OF OR
PURSUANT TO THE TERMS OF THAT CERTAIN STOCK PURCHASE AND NOTE ASSIGNMENT
AGREEMENT BY AND BETWEEN THE SAME DATED AS OF SEPTEMBER 29, 2000 OR THE NOTE AS
DEFINED THEREIN.
1
45
EXHIBIT 2.1
IN WITNESS WHEREOF, U.S. INDUSTRIAL SERVICES, INC. has caused this release
to be executed as of the 29th day of September in the year Two Thousand.
U.S. INDUSTRIAL SERVICES, INC.
BY:
--------------------------------
Name:
Title:
STATE OF )
)ss:
COUNTY OF )
On the __ day of ___________ in the year __________ before me, the
undersigned, a Notary Public in and for said State, personally appeared
____________________________, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument, the individual(s), or the person upon behalf of
which the individual(s) acted, executed the instrument.
-------------------------
Notary Public
2
46
EXHIBIT 2.1
GENERAL RELEASE
TO ALL WHOM THESE PRESENTS SHALL COME OR MAY CONCERN:
GREETING: KNOW YE, That SPRUCE XXXXXXXXX HOLDING CORP. SPRUCE XXXXXXXXX
CORPORATION AND AMERICAN TEMPORARY SANITATION, INC., on behalf of themselves,
their administrators, successors, assigns, affiliates, officers, directors,
employees and agents for good and valuable consideration received from U.S.
Industrial Services, Inc., the receipt and sufficiency of which is hereby
acknowledged, has remised, released, and forever discharged, and by these
presents does for itself, its heirs, executors, administrators, successors,
assigns, administrators, affiliates, officers, directors, shareholders,
employees, successors and agents remise, release and forever discharge the said
U.S. Industrial Services, Inc., its assigns, administrators, affiliates,
officers, directors, shareholders, employees, successors and agents of and from
any and all manner of action and actions, cause and causes of action, suits,
debts, dues, sums of money, accounts, reckoning, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extent, executions, claims for personal
injuries, property damage and demands whatsoever, in law or in equity, which
against the said U.S. Industrial Services, Inc., its assigns, administrators,
affiliates, officers, directors, employees, successors and agents the
undersigned can, shall or may have from the beginning of the world to the later
of (i) the date hereof or (ii) the delivery hereof to U.S. Industrial Services,
Inc., or any affiliate thereof. NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED
HEREIN SHALL OR SHALL BE DEEMED TO CONSTITUTE A RELEASE OF ANY CLAIM WHICH
SPRUCE XXXXXXXXX HOLDING CORP., SPRUCE XXXXXXXXX CORPORATION OR AMERICAN
TEMPORARY SANITATION, INC., OR ANY AFFILIATE MAY HAVE AGAINST U.S. INDUSTRIAL
SERVICES, INC. ARISING OUT OF OR PURSUANT TO THE TERMS OF THAT CERTAIN STOCK
PURCHASE AND NOTE ASSIGNMENT AGREEMENT BY AND BETWEEN THE SAME DATED AS OF
SEPTEMBER 29, 2000.
1
47
EXHIBIT 2.1
IN WITNESS WHEREOF, SPRUCE XXXXXXXXX HOLDING CORP. SPRUCE XXXXXXXXX
CORPORATION AND AMERICAN TEMPORARY SANITATION, INC., have caused this release to
be executed as of the 29th day of September in the year Two Thousand.
SPRUCE XXXXXXXXX HOLDING CORP. SPRUCE XXXXXXXXX CORPORATION
BY: BY:
-------------------------------- --------------------------------
Name: Name:
Title: Title:
AMERICAN TEMPORARY SANITATION, INC.
BY:
--------------------------------
Name:
Title:
STATE OF )
)ss:
COUNTY OF )
On the __ day of ___________ in the year __________ before me, the
undersigned, a Notary Public in and for said State, personally appeared
____________________________, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument, the individual(s), or the person upon behalf of
which the individual(s) acted, executed the instrument.
-------------------------
Notary Public
2
48
EXHIBIT 2.1
EXHIBIT "I"
Guarantee of Spruce XxxXxxxxx Corporation
3
49
EXHIBIT 2.1
GUARANTEE
THIS GUARANTY is made as of September 29, 2000 (the "Guaranty") from Spruce
XxxXxxxxx Corporation, a Nevada corporation having an address for the receipt of
mail at _____ (the "Guarantor") to U.S. Industrial Services, Inc., a Delaware
corporation with an address of 00 Xxxxxx Xxxx., Xxx. 000, Xxxxxxxxxx, Xxxxxxxx
00000 (the "Lender").
WHEREAS, SPRUCE XXXXXXXXX HOLDING CORP. ("Borrower") is indebted to the
Lender in the principal amount of One Million and Five Hundred Fifty Thousand
and 00/100 Dollars ($1,550,000.00) as evidenced by that certain promissory note
dated September 29, 2000 from the Borrower to the Lender (the "Note"); and
WHEREAS, the Lender has agreed that it will make the loan to the Borrower
if the Guarantor guarantees the payment of all sums due or to become due under
the Note.
NOW, THEREFORE, in consideration of the premises herein contained, the
Guarantor does hereby guarantee to the Lender the full and prompt payment of the
Note including all interest accrued or accumulated thereon when and as the same
shall become due whether at the stated maturity thereof, by acceleration or
otherwise. The obligations of the Guarantor under this Guaranty shall remain in
full force and effect until the Note has been paid in full. The Guarantor hereby
waives with respect to the Note and this Guaranty: diligence; presentment;
demand for payment; protest; notice of dishonor or nonpayment of any such
liabilities and any other notice and all demands whatsoever. The Guarantor
hereby waives notice from the Lender (A) of the execution of the Note and (B) of
acceptance of, or notice and proof of reliance on, the benefits of this
Guaranty. This Guaranty shall terminate and the obligations of the Guarantor
created hereunder shall be discharged when the Note has been paid in full. This
Guaranty is, and shall be deemed to be, a contract entered into under and
pursuant to the laws of the State of Illinois and shall be in all respects
governed, construed, applied and enforced in accordance with the laws of said
State. THE GUARANTOR DOES HEREBY SUBMIT TO THE JURISDICTION OF THE STATE AND
FEDERAL COURTS LOCATED IN ILLINOIS. The provisions of this Guaranty are intended
to be for the benefit of the Lender. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings, (with the
exception of the Note which is not to be deemed superseded), both written and
oral, among the parties with respect to the subject matter hereof and may be
executed simultaneously in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. No amendment, change, modification, alteration or termination of
this Guaranty shall be made except upon the written consent of the Guarantor and
the Lender. The invalidity or unenforceability of any one or more phrases,
sentences, clauses or sections in this Guaranty shall not affect the validity or
enforceability of the remaining portions of this Guaranty or any part hereof.
The headings of the several sections of this Guaranty have been prepared for
convenience of reference only and shall not control, affect the meaning or be
taken as an interpretation of any provision of this Guaranty. . The Lender may
proceed against the Guarantor under this Guaranty without proceeding first
against any other collateral it may have to secure the repayment of the Note.
1
50
EXHIBIT 2.1
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty and dated this Guaranty the day and year first above written.
SPRUCE XXXXXXXXX CORPORATION
BY:
------------------------
2
51
EXHIBIT 2.1
SCHEDULE 3.5
Encumbrances
SCHEDULE 4.6
Obligations of Targets to Seller/Seller Affiliates
SCHEDULE D-LD
Loan Documents
PROMISSORY NOTE dated January 4, 1999 in the original principal amount of
$1,396,000.00 given by American Temporary Sanitation, Inc. to U.S. Industrial
Services, Inc., a copy of which is attached hereto as Exhibit "A", and
incorporated by reference herein.
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52
EXHIBIT 2.1
SCHEDULE 1.2
Assignment of Note
4
53
EXHIBIT 2.1
ASSIGNMENT OF NOTE
U.S. Industrial Services, Inc. (the "Seller"), a Delaware corporation
having a place of business at 00000 Xxxxx Xxxx, Xxxxxxx, Xxxxx 00000 does hereby
assign PURSUANT TO THE TERMS, CONDITIONS, REPRESENTATIONS AND WARRANTIES OF THAT
CERTAIN STOCK PURCHASE AND NOTE ASSIGNMENT AGREEMENT DATED AS OF SEPTEMBER 29,
2000 unto Spruce XxxXxxxxx Holding Corp., a Nevada corporation with a mailing
address of 00 Xxxxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000 (the "Buyer") the
following instruments and all other Loan Documents as such term is defined in
the afore noted Note Purchase and Sale Agreement:
PROMISSORY NOTE dated January 4, 1999 in the original principal amount of
$1,396,000.00 given by American Temporary Sanitation, Inc. to U.S. Industrial
Services, Inc., a copy of which is attached hereto as Exhibit "A", and
incorporated by reference herein.
This Assignment is made in accordance with, and subject to, the terms of that
certain Note Purchase and Sale Agreement between the Seller and the Buyer dated
as of September 29, 2000.
Executed as an instrument under seal as of September 29, 2000.
U.S. INDUSTRIAL SERVICES, INC.
By:
------------------------------
Xxxxx Xxxxxxxx
President
[ACKNOWLEDGMENT]
1
