EXHIBIT 10.8
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of the 21st day of March, 1997,
between EARTH SCIENCES, INC., a Colorado corporation with principal executive
offices located at 000 00xx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 (the "Company"), and
the undersigned ("Buyer").
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase from the Company, and the Company
desires to issue and sell to the Buyer, upon the terms and subject to the
conditions of this Agreement, the Company's 4% Convertible Debentures due March
31, 1999 (the "Debentures") which, upon the terms and subject to the conditions
of the Debentures, will be convertible into shares of the Company's common
stock, $.01 par value (the "Common Stock", and together with the Debentures, the
"Securities");
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. PURCHASE AND SALE OF DEBENTURES
a. Transaction. Buyer hereby agrees to purchase from the Company, and the
Company hereby agrees to issue and sell to the Buyer, $2,510,000 aggregate
principal amount of the Debentures having the terms and conditions and being in
the form attached hereto as Annex I.
b. Purchase Price; Form of Payment. The purchase price for the Debentures
to be purchased by Buyer hereunder shall be $2,510,000 (the "Purchase Price").
Buyer shall pay the Purchase Price by wire transfer of immediately available
funds to the escrow agent (the "Escrow Agent") identified in the Joint Escrow
Instructions attached hereto as Annex II (the "Joint Escrow Instructions").
Simultaneously against receipt by the Escrow Agent of the Purchase Price, the
Company shall deliver one or more duly authorized, issued and executed
certificates (I/N/O Buyer) evidencing the Debentures, to the Escrow Agent or its
designated depository. By executing and delivering this Agreement, the Buyer and
the Company each hereby agrees to observe the terms and conditions of the Joint
Escrow Instructions, all of which are incorporated herein by reference as if
fully set forth herein.
c. Method of Payment. Payment into escrow of the Purchase Price shall be
made by wire transfer of immediately available funds to:
X.X. Xxxxxx Services, Inc.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
ABA# 000000000
SWIFT# MGTCUS33
For the Account of: Weil, Gotshal & Xxxxxx LLP Special
Account
Account# 000-00-000
Reference# 73601.0001
Simultaneously with the execution of this Agreement, the Buyer shall deposit
with the Escrow Agent the Purchase Price and the Company shall deposit with the
Escrow Agent the Debentures.
2. BUYER'S REPRESENTATIONS, WARRANTIES; ACCESS TO INFORMATION; INDEPENDENT
INVESTIGATION.
Buyer represents and warrants to and covenants and agrees with the Company
as follows:
a. Buyer is purchasing the Debentures (and the shares of Common Stock
issuable upon conversion thereof) for its own account, for investment purposes
only and not with a view towards or in connection with the public sale or
distribution thereof in violation of the Securities Act of 1933, as amended (the
"Securities Act").
b. Buyer is (i) an "accredited investor" within the meaning of Rule 501 of
Regulation D under the Securities Act, (ii) experienced in making investments of
the kind contemplated by this Agreement, (iii) capable, by reason of its
business and financial experience, of evaluating the relative merits and risks
of an investment in the Securities, and (iv) able to afford the loss of its
investment in the Securities.
c. Buyer understands that the Debentures (and the Common Stock issuable
upon conversion thereof) are being offered and sold by the Company in reliance
on an exemption from the registration requirements of the Securities Act and
equivalent state securities and "blue sky" laws, and that the Company is relying
upon the accuracy of, and Buyer's compliance with, Buyer's representations,
warranties and covenants set forth in this Agreement to determine the
availability of such exemption and the eligibility of Buyer to purchase the
Debentures;
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d. Buyer has been furnished with or provided access to all materials
relating to the business, financial position and results operations of the
Company, and all other materials requested by Buyer to enable it to make an
informed investment decision with respect to the Debentures.
e. Buyer acknowledges that it has been furnished with copies of the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1995, the Company's Quarterly Reports on Form 10-QSB for the fiscal quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996, respectively, and
all other reports and documents heretofore filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act")
since December 31, 1995 (collectively the "Commission Filings").
f. Buyer acknowledges that in making its decision to purchase the
Debentures it has (i) relied upon independent investigations made by it and its
professional advisors, (ii) visited the Company's principal executive offices
and been given access and the opportunity to examine all material agreements,
books and records of the Company and all documents relating to the Company's
private placement of the Debentures, and (iii) been given an opportunity to ask
questions of and to receive answers from the Company's executive officers,
directors and management personnel concerning the terms and conditions of the
private placement of the Debentures by the Company.
g. Buyer understands that the Securities have not been approved or
disapproved by the Commission or any state securities commission and that the
foregoing authorities have not reviewed any documents or instruments in
connection with the offer and sale to it of the Securities and have not
confirmed or determined the adequacy or accuracy of any such documents or
instruments.
h. This Agreement has been duly and validly authorized, executed and
delivered by the Buyer and is a valid and binding agreement of the Buyer
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally.
i. Neither Buyer nor its affiliates nor any person acting on its or their
behalf has the intention of entering, or will enter into, prior to the Closing,
any put option, short position or other similar instrument or position with
respect to the Common Stock and neither Buyer nor any of its affiliates nor any
person acting on its or their behalf will use at any time shares of Common Stock
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acquired pursuant to this Agreement or the Debentures to settle any put option,
short position or other similar instrument or position that may have been
entered into prior to the execution of this Agreement.
3. COMPANY'S REPRESENTATIONS
The Company represents and warrants to Buyer that:
a. Capitalization. (i) The authorized capital stock of the Company consists
of 25,000,000 shares of Common Stock, of which 8,577,951 shares are outstanding
on the date hereof; all of the issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable. The Common Stock issuable upon conversion of the Debentures has
been duly and validly authorized and reserved for issuance by the Company, and
when issued by the Company upon conversion of, or as dividends on, the
Debentures, will be duly and validly issued, fully paid and non-assessable and
will not subject the holder thereof to personal liability by reason of being
such holder. There are no preemptive, subscription, "call" or other similar
rights to acquire the Common Stock (including Common Stock issuable upon
conversion of the Debentures) that have been issued or granted to any person,
except as disclosed in the Commission Filings or otherwise previously disclosed
in writing to Buyer.
(ii) Except as disclosed in the Commission Filings, the Company does not
own or control, directly or indirectly, any interest in any other corporation,
partnership, limited liability company, unincorporated business organization,
association, trust or other business entity. Except as disclosed in the
Commission Filings, the Company owns 100% of the outstanding shares of capital
stock of each of its subsidiaries, free and clear of any and all liens, pledges,
encumbrances, charges, agreements, security interests, mortgages or claims of
any kind whatsoever.
b. Organization; Reporting Company Status. (i) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado and is duly qualified as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a material adverse
effect on the business, properties, prospects, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries, taken
as a whole, or on the consummation of any of the transactions contemplated by
this Agreement (a "Material Adverse Effect"). Each of the Company's subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and is duly qualified as a
foreign corporation in all jurisdictions in which the failure to so qualify
would have a Material Adverse Effect.
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(ii) The Company has registered the Common Stock pursuant to Section 12 of
the Exchange Act and has timely filed with the Commission all reports and
information required to be filed by it pursuant to all reporting obligations
under Section 13(a) or 15(d), as applicable, of the Exchange Act for the
24-month period immediately preceding the date hereof. The Common Stock is
listed and traded on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") Small Capitalization Market System and the
Company has not received any notice regarding, and to its knowledge there is no
threat, of the termination or discontinuance of the eligibility of the Common
Stock for such listing.
c. Authorized Shares. The Company has duly and validly authorized and
reserved for issuance shares of Common Stock sufficient in number for the
conversion, in full, of the Debentures (assuming for purposes of this Section
3.c. a conversion price of $.75).
d. Terms of Debentures. The Debentures when issued to Buyer pursuant to
this Agreement shall be in the form of Annex I attached hereto.
e. Authority; Validity and Enforceability. The Company has the requisite
corporate power and authority to enter into this Agreement and the Registration
Rights Agreement of even date herewith between the Company and Buyer, a copy of
which is annexed hereto as Annex III (the "Registration Rights Agreement") and
to perform all of its obligations hereunder and thereunder (including the
issuance, sale and delivery to Buyer of the Debentures and the Common Stock
issuable upon conversion thereof). The execution, delivery and performance by
the Company of this Agreement and the Registration Rights Agreement, and the
consummation by the Company of the transactions contemplated hereby and thereby,
has been duly authorized by all necessary corporate action on the part of the
Company. Each of this Agreement and the Registration Rights Agreement has been
duly and validly executed and delivered by the Company and constitutes a valid
and binding agreement of the Company enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally. The Debentures have been duly and validly authorized for
issuance by the Company and, when executed and delivered by the Company, will be
valid and binding obligations of the Company enforceable against it in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally.
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f. Non-contravention. The execution and delivery by the Company of this
Agreement and the Registration Rights Agreement, the issuance of the Debentures
(and the Common Stock issuable upon conversion thereof), and the consummation by
the Company of the other transactions contemplated hereby and thereby, do not
and will not conflict with or result in a breach by the Company of any of the
terms or provisions of, or constitute a default (or an event which, with notice,
lapse of time or both, would constitute a default) under, the articles of
incorporation or by-laws of the Company, or any indenture, mortgage, deed of
trust or other material agreement or instrument to which the Company or any of
its subsidiaries is a party or by which its or any of its subsidiaries'
properties or assets are bound, or any law, rule, regulation, decree, judgment
or order of any court or public or governmental authority having jurisdiction
over the Company or any of its subsidiaries or any of its or its subsidiaries'
properties or assets, except such conflict, breach or default which would not
have a Material Adverse Effect.
g. Approvals. No authorization, approval or consent of any court or public
or governmental authority is required to be obtained by the Company for the
issuance and sale of the Debentures (and the Common Stock issuable upon
conversion thereof) to Buyer as contemplated by this Agreement, except such
authorizations, approvals and consents that have been obtained by the Company
prior to the date hereof.
h. Commission Filings. None of the Commission Filings contained at the time
they were filed any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
i. Absence of Certain Changes. Since the Balance Sheet Date (as defined in
Section 3.m.), there has not occurred any change, event or development, and
there has not existed any condition having or reasonably likely to have, a
Material Adverse Effect.
j. Full Disclosure. There is no fact known to the Company (other than
general economic or industry conditions known to the public generally) that has
not been fully disclosed in writing to the Buyer that (i) reasonably could be
expected to have a Material Adverse Effect or (ii) reasonably could be expected
to materially and adversely affect the ability of the Company to perform its
obligations pursuant to this Agreement or the Registration Rights Agreement.
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k. Absence of Litigation. There is no action, suit, claim, proceeding,
inquiry or investigation pending or, to the Company's knowledge, threatened, by
or before any court or public or governmental authority which, if determined
adversely to the Company or any of its subsidiaries, would have a Material
Adverse Effect.
l. Absence of Events of Default. No "Event of Default" (as defined in any
agreement or instrument to which the Company or any of its subsidiaries is a
party) and no event which, with notice, lapse of time or both, would constitute
an Event of Default (as so defined), has occurred and is continuing, which could
have a Material Adverse Effect.
m. Financial Statements; No Undisclosed Liabilities. Seller has delivered
to Buyer true and complete copies of its (i) audited consolidated balance sheet
as at December 31, 1995 and the related audited consolidated statements of
operations and cash flows for the fiscal years ended December 31, 1995 and
December 31, 1994 and (ii) unaudited consolidated balance sheets as at March 31,
1996, June 30, 1996 and September 30, 1996, respectively, and the related
unaudited consolidated statements of operations and cash flows for the
three-month periods ended March 31, 1996, June 30, 1996 and September 30, 1996,
respectively, including in all such cases the related notes and schedules
thereto (collectively, the "Financial Statements"), and all management letters,
if any, from the Company's independent auditors relating to the dates and
periods covered by the Financial Statements. Each of the Financial Statements is
complete and correct in all material respects, has been prepared in accordance
with United States General Accepted Accounting Principles ("GAAP") (subject, in
the case of the interim Financial Statements, to normal year-end adjustments and
the absence of footnotes) and in conformity with the practices consistently
applied by the Company without modification of the accounting principles used in
the preparation thereof, and fairly presents the financial position, results of
operations and cash flows of the Company and its consolidated subsidiaries as at
the dates and for the periods indicated. For purposes hereof, the audited
consolidated balance sheet of the Company and its subsidiaries as at December
31, 1995 is hereinafter referred to as the "Balance Sheet" and December 31, 1995
is hereinafter referred to as the "Balance Sheet Date". Neither the Company nor
any of its subsidiaries has any indebtedness, obligations or liabilities of any
kind (whether accrued, absolute, contingent or otherwise, and whether due or to
become due) that would have been required to be reflected in, reserved
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against or otherwise described in the Balance Sheet or in the notes thereto in
accordance with GAAP, which was not fully reflected in, reserved against or
otherwise described in the Balance Sheet or the notes thereto or was not
incurred in the ordinary course of business consistent with the Company's past
practices since the Balance Sheet Date.
n. Compliance with Laws; Permits. The Company and each of its subsidiaries
is in compliance with all laws, rules, regulations, codes, ordinances and
statutes (collectively "Laws") applicable to it or to the conduct of its
business, except for such non-compliance which would not have a Material Adverse
Effect. The Company and each of its subsidiaries possesses all permits,
approvals, authorizations, licenses, certificates and consents from all public
and governmental authorities which are necessary to conduct its business, except
for those the absence of which would not have a Material Adverse Effect.
o. Related Party Transactions. Except as set forth in the Commission
Filings, neither the Company nor any of its officers, directors or "Affiliates"
(as such term is defined in Rule 12b-2 under the Exchange Act) has borrowed any
moneys from or has outstanding any indebtedness or other similar obligations to
the Company. Neither the Company nor any of its officers, directors or
Affiliates (i) owns any direct or indirect interest of any kind in, or controls
or is a director, officer, partner, member or employee of, or consultant to or
lender to or borrower from, or has the right to participate in the profits of,
any person or entity which is (x) a competitor, supplier, customer, landlord,
tenant, creditor or debtor of the Company or any of its subsidiaries, (y)
engaged in a business related to the business of the Company or any of its
subsidiaries, or (z) a participant in any transaction to which the Company or
any of its subsidiaries is a party or (ii) is a party to any contract,
agreement, commitment or other arrangement with the Company or any of its
subsidiaries.
p. Insurance. The Company maintains property and casualty, general
liability, workers' compensation, environmental hazard, personal injury and
other similar types of insurance with financially sound and reputable insurers
that is adequate, consistent with industry standards and the Company's
historical claims experience, to cover all loss contingencies which forseeably
may arise in the conduct of the business of the Company and its subsidiaries.
The Company has not received notice from, and has no knowledge of any threat by,
any insurer (that has issued any insurance policy to the Company or any of its
subsidiaries) that such insurer intends to deny coverage under or cancel,
discontinue or not renew any insurance policy presently in force.
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q. Securities Law Matters. Based, in part, upon the representations and
warranties of Buyer set forth in Section 2 hereof, the offer and sale by the
Company of the Debentures (and the Common Stock issuable upon conversion
thereof) is exempt from (i) the registration and prospectus delivery
requirements of the Securities Act and the rules and regulations of the
Commission thereunder and (ii) the registration and/or qualification provisions
of all applicable state securities and "blue sky" laws. Other than pursuant to
an effective registration statement under the Securities Act, the Company has
not issued, offered or sold the Debentures or any shares of Common Stock
(including for this purpose any securities of the same or a similar class as the
Debentures or Common Stock, or any securities convertible into or exchangeable
or exercisable for the Debentures or Common Stock or any such other securities)
within the six-month period next preceding the date hereof, except as disclosed
in the Commission Filings or otherwise previously disclosed in writing to Buyer,
and the Company shall not directly or indirectly take, and shall not permit any
of its directors, officers or Affiliates directly or indirectly to take, any
action (including, without limitation, any offering or sale to any person or
entity of the Debentures or shares of Common Stock), so as to make unavailable
the exemption from Securities Act registration being relied upon by the Company
for the offer and sale to Buyer of the Debentures (and the Common Stock issuable
upon conversion thereof) as contemplated by this Agreement. No form of general
solicitation or advertising has been used or authorized by the Company or any of
its officers, directors or Affiliates in connection with the offer or sale of
the Debentures (and the Common Stock issuable upon conversion thereof) as
contemplated by this Agreement or any other agreement to which the Company is a
party.
r. Environmental Matters. (i) The operations of the Company and each of its
subsidiaries are in compliance with all applicable Environmental Laws and all
permits issued pursuant to Environmental Laws or otherwise;
(ii) to its knowledge, the Company and each of its subsidiaries has
obtained all permits required under all applicable Environmental Laws necessary
to operate its business;
(iii) neither the Company nor any of its subsidiaries is the subject of any
outstanding written order of or agreement with any governmental authority or
person respecting (i) Environmental Laws, (ii) Remedial Action or (iii) any
Release or threatened Release of Hazardous Materials;
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(iv) neither the Company nor any of its subsidiaries has received any
written communication alleging either or both that the Company or any of its
subsidiaries may be in violation of any Environmental Law or any permit issued
pursuant to Environmental Law, or may have any liability under any Environmental
Law;
(v) neither the Company nor any of its subsidiaries has any current
contingent liability in connection with any Release of any Hazardous Materials
into the indoor or outdoor environment (whether on-site or off-site);
(vi) except as set forth in the Commission Filings, to the Company's
knowledge, there are no investigations of the business, operations, or currently
or previously owned, operated or leased property of the Company or any of its
subsidiaries pending or threatened which could lead to the imposition of any
liability pursuant to any Environmental Law;
(vii) to the Company's knowledge, there is not located at any of the
properties of the Company or any of its subsidiaries any (A) underground storage
tanks, (B) asbestos-containing material or (C) equipment containing
polychlorinated biphenyls; and,
(viii) the Company has provided to Buyer all environmentally related
audits, studies, reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned, leased or operated
properties of the Company or any of its subsidiaries.
For purposes of this Section 3.r.:
"Environmental Law" means any foreign, federal, state or local statute,
regulation, ordinance, or rule of common law as now or hereafter in effect in
any way relating to the protection of human health and safety or the environment
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Clean Water Act
(33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss. 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), and the
regulations promulgated pursuant thereto.
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"Hazardous Material" means any substance, material or waste which is
regulated by the United States, Canada or any of its provinces, or any state or
local governmental authority including, without limitation, petroleum and its
by-products, asbestos, and any material or substance which is defined as a
"hazardous waste," "hazardous substance," "hazardous material," "restricted
hazardous waste," "industrial waste," "solid waste," "contaminant," "pollutant,"
"toxic waste" or toxic substance" under any provision of any Environmental Law;
"Release" means any release, spill, filtration, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, or leaching into the indoor
or outdoor environment, or into or out of any property;
"Remedial Action" means all actions to (x) clean up, remove, treat or in
any other way address any Hazardous Material; (y) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment; or (z) perform pre-remedial
studies and investigations or post- remedial monitoring and care.
s. Labor Matters. Except as set forth on Schedule 3.s., neither the Company
nor any of its subsidiaries is party to any labor or collective bargaining
agreement and there are no labor or collective bargaining agreements which
pertain to employees of the Company or any of its subsidiaries. No employees of
the Company or any of its subsidiaries are represented by any labor organization
and none of such employees has made a pending demand for recognition, and there
are no representation proceedings or petitions seeking a representation
proceeding presently pending or, to the Company's knowledge, threatened to be
brought or filed, with the National Labor Relations Board or other labor
relations tribunal. There is no organizing activity involving the Company or any
of its subsidiaries pending or to the Company's knowledge, threatened by any
labor organization or group of employees of the Company or any of its
subsidiaries. There are no (i) strikes, work stoppages, slowdowns, lockouts or
arbitrations or (ii) material grievances or other labor disputes pending or, to
the knowledge of the Company, threatened against or involving the company or any
of its subsidiaries. There are no unfair labor practice charges, grievances or
complaints pending or, to the knowledge of the Company, threatened by or on
behalf of any employee or group of employees of the Company.
t. ERISA Matters. Each of the Company, its subsidiaries and their ERISA
Affiliates is in compliance in all material respects with all provisions of
ERISA applicable to it. No Reportable Event has occurred, been waived or exists
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as to which the Company or any of its subsidiaries or any ERISA Affiliate was
required to file a report with the Pension Benefits Guaranty Corporation, and
the present value of all liabilities under all Plans (based on those assumptions
used to fund such Plans) did not, as of the most recent annual valuation date
applicable thereto, exceed the value of the assets of all such Plans in the
aggregate. None of the Company or any of its subsidiaries or ERISA Affiliates
has incurred any Withdrawal Liability that could result in a Material Adverse
Effect. None of the Company or any of its subsidiaries or ERISA Affiliates has
received any notification that any Multiemployer Plan is in reorganization or
has been terminated within the meaning of Title IV of ERISA, and no
Multiemployer Plan is reasonably expected to be in reorganization or termination
where such reorganization or termination has resulted or could reasonably be
expected to result in increases to the contributions required to be made to such
Plan or otherwise.
For purposes of this Section 3.t.:
"ERISA" means the Employee Retirement Income Security Act of 1974, or any
successor statute, together with the regulations thereunder, as the same may be
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that was, is or hereafter may become, a member of a group of which the Company
or any of its subsidiaries is a member and which is treated as a single employer
under ss. 414 of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code").
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate (other than one
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of ss. 414
of the Internal Revenue Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Plan" means any pension plan (other than a Multiemployer Plan) subject to
the provision of Title IV of ERISA or ss. 412 of the Internal Revenue Code that
is maintained for employees of the Company or any ERISA Affiliate.
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"Reportable Event" means any reportable event as defined in Section 4043(b)
of ERISA or the regulations issued thereunder with respect to a Plan (other than
a Plan maintained by an ERISA Affilare that is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of ss. 414 of the Internal Revenue Code.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
u. Tax Matters. (i) The Company and each of its subsidiaries have filed all
Tax Returns which they are required to file under applicable Laws, except for
such Tax Returns in respect of which the failure to so file does not and could
not have a Material Adverse Effect; all such Tax Returns are true and accurate
and have been prepared in compliance with all applicable Laws; the Company and
each of its subsidiaries have paid all Taxes due and owing by them (whether or
not such Taxes are required to be shown on a Tax Return) and have withheld and
paid over to the appropriate taxing authorities all Taxes which they are
required to withhold from amounts paid or owing to any employee, stockholder,
creditor or other third parties; and since the Balance Sheet Date, the charges,
accruals and reserves for Taxes with respect to the Company (including any
provisions for deferred income taxes) reflected on the books of the Company are
adequate to cover any Tax liabilities of the Company and its subsidiaries if
their current tax year were treated as ending on the date hereof.
(ii) No claim has been made by a taxing authority in a jurisdiction where
either the Company or any of its subsidiaries does not file tax returns that
such corporation is or may be subject to taxation by that jurisdiction. There
are no foreign, federal, state or local tax audits or administrative or judicial
proceedings pending or being conducted with respect to the Company or any of its
subsidiaries; no information related to Tax matters has been requested by any
foreign, federal, state or local taxing authority; and no written notice
indicating an intent to open an audit or other review has been received by the
Company from any foreign, federal, state or local taxing authority. There are no
material unresolved questions or claims concerning the Company's or any of its
subsidiaries' Tax liability. Neither the Company nor any of its subsidiaries (A)
has executed or entered into a closing agreement pursuant to ss. 7121 of the
Internal Revenue Code or any predecessor provision thereof or any similar
provision of state, local or foreign law; or (B) has agreed to or is required to
make any adjustments pursuant to ss. 481 (a) of the Internal Revenue Code or any
similar provision of state, local or foreign law by reason of a change in
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accounting method initiated by the Company or any of its subsidiaries or has any
knowledge that the IRS has proposed any such adjustment or change in accounting
method, or has any application pending with any taxing authority requesting
permission for any changes in accounting methods that relate to the business or
operations of the Company or any of its subsidiaries. Neither the Company nor
any of its subsidiaries has been a United States real property holding
corporation within the meaning of ss. 897(c)(2) of the Internal Revenue Code
during the applicable period specified in ss. 897(c)(1)(A)(ii) of the Internal
Revenue Code.
(iii) Neither the Company nor any of its subsidiaries has made an election
under ss. 341(f) of the Internal Revenue Code. Neither the Company nor any of
its subsidiaries is liable for the Taxes of another person that is not a
subsidiary of the Company under (A) Treas. Reg. ss. 1.1502-6 (or comparable
provisions of state, local or foreign law), (B) as a transferee or successor,
(C) by contract or indemnity or (D) otherwise. Neither the Company nor any of
its subsidiaries is a party to any tax sharing agreement. Neither the Company
nor any of its subsidiaries has made any payments, is obligated to make payments
or is a party to an agreement that could obligate it to make any payments that
would not be deductible under ss. 280G of the Internal Revenue Code.
For purposes of this Section 3.u.:
"IRS" means the United States Internal Revenue Service.
"Tax" or "Taxes" means federal, state, county, local, foreign, or other
income, gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.
"Tax Return" means any return, information report or filing with respect to
Taxes, including any schedules attached thereto and including any amendment
thereof.
v. No Misrepresentation. No representation or warranty of the Company
contained in this Agreement, any schedule, annex or exhibit hereto or any
agreement, instrument or certificate furnished by the Company to Buyer pursuant
to this Agreement, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, not misleading.
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4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Restrictive Legend. Buyer acknowledges and agrees that, upon issuance
pursuant to this Agreement, the Debentures (and any shares of Common Stock
issued in conversion thereof) shall have endorsed thereon a legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the Debentures and the shares of Common Stock issuable upon
conversion thereon):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR THE SECURITIES LAWS OF ANY STATE, AND ARE BEING OFFERED
AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS."
b. Filings. The Company shall make all necessary filings in connection with
the sale of the Debentures to the Buyer as required by all applicable Laws, and
shall provide a copy thereof to the Buyer promptly after such filing.
c. Reporting Status. So long as the Buyer beneficially owns any of the
Securities, the Company shall file all reports required to be filed by it with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act and shall not
terminate its status as an issuer required to file reports under the Exchange
Act even if such act or the rules and regulations thereunder would otherwise
permit such termination.
d. Use of Proceeds. The Company shall use the proceeds from the sale of the
Debentures (excluding amounts paid by the Company for legal fees and finder's
fees in connection with such sale) for the construction, retrofit and
refurbishing of the Company's phosphate plants in Calgary, Alberta, and fees and
expenses payable to Corporate Relations Group Inc.
e. Restrictions on Additional Financings; Right of First Offer. Except for
the transactions previously disclosed in writing to Buyer, the Company shall not
conduct or enter into any agreement, commitment or arrangement providing for the
15
offer or sale of debt or equity securities (or any securities convertible into
or exchangeable or exercisable for debt or equity securities) with any third
party until the 241st day after the Closing Date, except that (i) with respect
to an additional amount of up to $1 million, to the extent the Buyer does not
invest such funds in securities of the Company within 30 days following the
Closing Date on terms to be mutually agreed upon, the Company shall have the
right to sell debt or equity securities (or securities convertible into or
exchangeable or exercisable for debt or equity securities) to any third party
provided the Buyer is first offered the opportunity (which shall remain open for
a period of 30 days from the date the Buyer receives notice thereof) to purchase
such additional securities on terms and conditions no less favorable to Buyer
than those offered in writing by such third party ("right of first refusal"),
(ii) commencing on the 131st day after the Closing Date, the Company shall have
the right to sell debt or equity securities to any third party to the extent
necessary to raise an additional $2 million provided the Buyer is offered a
right of first refusal (as defined in clause (i) above) with respect to such
securities, and (iii) for the 60-day period commencing on the 181st day after
the Closing Date, the Company shall have the right to sell debt or equity
securities to any third party (in addition to the amount referred to in (ii)
above) provided the Buyer is offered a right of first refusal (as defined in
clause (i) above) with respect to such securities. In the event that Buyer
declines to participate in any such right of first refusal, the Company shall
provide the Buyer with prompt written notice of the consummation of any such
transaction with a third party, specifying the material terms thereof; provided,
however, the provisions of this Section 4.f. shall not apply to the issuance of
Company securities in connection with a merger, consolidation, business
combination, sale of all or substantially all of the Company's assets or similar
extra-ordinary corporate transaction involving the Company or any of its
subsidiaries.
f. Listing. Except to the extent the Company becomes eligible to list its
Common Stock on a national securities exchange or obtained authorization to
include the Common Stock for quotation on the NASDAQ National Market System, the
Company shall maintain its listing of the Common Stock on the NASDAQ Small
Capitalization Market System.
g. Reserved Conversion Shares. The Company at all times from and after the
date hereof shall have a sufficient number of shares of Common Stock duly and
validly authorized and reserved for issuance to satisfy the conversion, in full,
of the Debentures (assuming for purposes of this Section 3.g., a conversion
price of $.75).
16
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company undertakes and agrees that no instruction other than the
instructions referred to in this Section 5 and customary stop transfer
instructions prior to the registration and sale of the Common Stock pursuant to
an effective Securities Act registration statement will be given to its transfer
agent for the Common Stock and that the Common Stock issuable upon conversion of
the Debentures otherwise shall be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement, the Registration
Rights Agreement and applicable law. Nothing contained in this Section 5.a.
shall affect in any way Buyer's obligations and agreement to comply with all
applicable securities laws upon resale of such Common Stock. If, at any time,
Buyer provides the Company with an opinion of counsel reasonably satisfactory to
the Company that registration of the resale by Buyer of such Common Stock is not
required under the Securities Act and that the removal of restrictive legends is
permitted under applicable law, the Company shall permit the transfer of such
Common Stock and, promptly instruct the Company's transfer agent to issue one or
more certificates for Common Stock without any restrictive legends endorsed
thereon.
b. The Company shall permit Buyer to exercise its right to convert the
Debentures by telecopying an executed and completed Notice of Conversion to the
Company and delivering to the Company by express courier within five business
days thereafter, the original Notice of Conversion and the Debentures being
converted. Each date on which a Notice of Conversion is telecopied to and
received by the Company in accordance with the provisions hereof shall be deemed
a Conversion Date. The Company shall transmit the certificates evidencing the
shares of Common Stock issuable upon conversion of any Debentures (together with
certificates evidencing any principal amount of the Debentures not being so
converted) to Buyer via express courier, by electronic transfer or otherwise,
within five business days after receipt by the Company of the original Notice of
Conversion and the Debentures to be converted (the "Delivery Date").
c. The Company understands that a delay in the issuance of the shares of
Common Stock upon such conversion beyond the Delivery Date could result in
economic loss to Buyer. As compensation to Buyer for such loss (and not as a
penalty), the Company agrees to pay to Buyer for late issuance of Common Stock
upon conversion in accordance with the following schedule (where "No. Business
Days" is defined as the number of business days beyond five (5) days from
Delivery Date):
17
Compensation For Each
$20,000 Principal
Amount of Debentures
No. Business Days Not Converted Timely
----------------- --------------------
1 $25
2 $50
3 $75
4 $100
5 $125
6 $150
7 $175
8 $200
9 $225
10 $250
more than 10 $250 + $100 for each
Business Day Late
beyond 10 days
The Company shall pay to Buyer the compensation described above by the transfer
of immediately available funds upon Buyer's demand. Nothing herein shall limit
Buyer's right to pursue actual damages for the Company's failure to issue and
deliver Common Stock to Buyer, and in addition to any other remedies which may
be available to Buyer, in the event the Company fails for any reason to effect
delivery of such shares of Common Stock within five business days after the
relevant Delivery Date, Buyer shall be entitled to rescind the relevant Notice
of Conversion by delivering a notice to such effect to the Company whereupon the
Company and Buyer shall each be restored to their respective original positions
immediately prior to delivery of such Notice of Conversion.
For purposes of this Section 5.c., an act of God shall excuse the delay in
issuance of shares of Common Stock upon conversion beyond the Delivery Date in
the event that acts of war or terrorism, or some other catastrophic event not
encountered in business renders the Company's or its transfer agent's
performance impossible. Such delay in issuance of shares shall be excused only
for so long as the act of God in fact renders performance impossible but in no
event longer than seven (7) business days.
6. DELIVERY INSTRUCTIONS.
The Debentures shall be delivered by the Company to the Escrow Agent
pursuant to Section 1(b) hereof on a "delivery-against-payment basis" at the
Closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the Debentures (the "Closing
Date") shall be the date hereof or such other as shall be mutually agreed upon
18
in writing. The issuance and sale of the Debentures shall occur on the Closing
Date at the offices of the Escrow Agent. Notwithstanding anything to the
contrary contained herein, the Escrow Agent shall not be authorized to release
to the Company the Purchase Price and to Buyer the certificate(s) (I/N/O Buyer)
evidencing the Debentures being purchased by Buyer unless the conditions set
forth in Section 8(c) and 9(g) hereof have been satisfied.
8. CONDITIONS TO THE COMPANY'S OBLIGATIONS.
The Buyer understands that the Company's obligation to sell the Debentures
on the Closing Date to Buyer pursuant to this Agreement is conditioned upon:
a. Delivery by Buyer to the Escrow Agent of the Purchase Price;
b. The accuracy on the Closing Date of the representations and warranties
of Buyer contained in this Agreement as if made on the Closing Date (except for
representations and warranties which, by their express terms, speak as of and
relate to a specified date, in which case such accuracy shall be measured as of
such specified date) and the performance by Buyer in all material respects on or
before the Closing Date of all covenants and agreements of Buyer required to be
performed by it pursuant to this Agreement on or before the Closing Date;
c. There shall not be in effect any Law or order, ruling, judgment or writ
of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.
9. CONDITIONS TO BUYER'S OBLIGATIONS.
The Company understands that Buyer's obligation to purchase the Debentures
on the Closing Date pursuant to this Agreement is conditioned upon:
a. Delivery by the Company to the Escrow Agent of one or more certificates
(I/N/O Buyer) evidencing the Debentures to be purchased by Buyer pursuant to
this Agreement;
b. The accuracy on the Closing Date of the representations and warranties
of the Company contained in this Agreement as if made on the Closing Date
(except for representations and warranties which, by their express terms, speak
as of and relate to a specified date, in which case such accuracy shall be
measured as of such specified date) and the performance by the Company in all
19
material respects on or before the Closing Date of all covenants and agreements
of the Company required to be performed by it pursuant to this Agreement on or
before the Closing Date;
c. Buyer having received an opinion of counsel for the Company, dated the
Closing Date, in form, scope and substance reasonably satisfactory to the Buyer,
to the effect set forth in Annex III attached hereto.
d. There not having occurred (i) any general suspension of trading in, or
limitation on prices listed for, the Common Stock on the NASDAQ Small
Capitalization Market System, (ii) the declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States, (iii) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States or any of its
territories, protectorates or possessions, or (iv) in the case of the foregoing
existing at the date of this Agreement, a material acceleration or worsening
thereof.
e. There not having occurred any event or development, and there being in
existence no condition, having or which reasonably and forseeably could have a
Material Adverse Effect.
f. The Company shall have delivered to Buyer (by bank or certified check or
wire transfer of immediately available funds to an account (or accounts)
specified by Buyer to the Company) reimbursement of Buyer's out-of-pocket costs
and expenses incurred in connection with the transactions contemplated by this
Agreement (including the reasonable fees and disbursements of Buyer's legal
counsel), upon submission by Buyer to the Company of appropriate documentary
evidence of such out-of-pocket costs and expenses.
g. There shall not be in effect any Law or order, ruling, judgment or writ
of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.
10. TERMINATION.
a. Termination by Mutual Written Consent. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned, for any reason and at
any time prior to the Closing Date, by the mutual written consent of the Company
and Buyer.
20
b. Termination by the Company or Buyer. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned by action of the
Company or Buyer if (i) the Closing shall not have occurred at or prior to 5:00
p.m., New York City time, on March 31, 1997; provided, however, that the right
to terminate this Agreement pursuant to this Section 10.a.(i) shall not be
available to any party whose failure to fulfill any of its obligations under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur at or before such time and date or (ii) any court or public or
governmental authority shall have issued an order, ruling, judgment or writ, or
there shall be in effect any Law, restraining, enjoining or otherwise
prohibiting the consummation of any of the transactions contemplated by this
Agreement.
c. Termination by Buyer. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by Buyer at any time prior to
the Closing Date, if (i) the Company shall have failed to comply in any material
respect with any of its covenants or agreements contained in this Agreement,
(ii) there shall have been a breach by the Company with respect to any
representation or warranty made by it in this Agreement, or (iii) there shall
have occurred any event or development, or there shall be in existence any
condition, having or reasonably and forseeably likely to have a Material Adverse
Effect.
d. Termination by the Company. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by the Company at any time
prior to the Closing Date, if (i) Buyer shall have failed to comply in any
material respect with any of its covenants or agreements contained in this
Agreement or (ii) there shall have been a breach by Buyer with respect to any
representation or warranty made by it in this Agreement.
11. SURVIVAL; INDEMNIFICATION.
a. The representations, warranties and covenants made by each of the
Company and Buyer in this Agreement, the annexes, schedules and exhibits hereto
and in each instrument, agreement and certificate entered into and delivered by
them pursuant to this Agreement, shall survive the Closing and the consummation
of the transactions contemplated hereby. In the event of a breach or violation
of any of such representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all rights
and remedies for such breach or violation available to it under the provisions
of this Agreement or otherwise, whether at law or in equity, irrespective of any
investigation made by or on behalf of such party on or prior to the Closing
Date.
21
b. Indemnification of Buyer by the Company.
The Company hereby agrees to indemnify and hold harmless the Buyer, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "Buyer Indemnitees"), from and against any and all losses,
claims, damages, judgments, penalties, liabilities and deficiencies
(collectively, "Losses"), and agrees to reimburse the Buyer Indemnitees for all
out-of-pocket expenses (including the fees and expenses of legal counsel), in
each case promptly as incurred by the Buyer Indemnitees and to the extent
arising out of or in connection with:
(i) any misrepresentation, omission of fact or breach of any
of the Company's representations or warranties contained in this
Agreement, the annexes, schedules or exhibits hereto or any instrument,
agreement or certificate entered into or delivered by the Company
pursuant to this Agreement; or
(ii) any failure by the Company to perform in any material
respect any of its covenants, agreements, undertakings or obligations
set forth in this Agreement, the annexes, schedules or exhibits hereto
or any instrument, agreement or certificate entered into or delivered
by the Company pursuant to this Agreement.
c. Indemnification of the Company by Buyer.
Buyer hereby agrees to indemnify and hold harmless the Company, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "Company Indemnitees"), from and against any and all Losses,
and agrees to reimburse the Company Indemnitees for all out-of-pocket expenses
(including the fees and expenses of legal counsel), in each case promptly as
incurred by the Company Indemnitees and to the extent arising out of or in
connection with:
(i) any misrepresentation, omission of fact, or breach of any
of Buyer's representations or warranties contained in this Agreement,
the annexes, schedules or exhibits hereto or any instrument, agreement
or certificate entered into or delivered by Buyer pursuant to this
Agreement; or
(ii) any failure by Buyer to perform in any material respect
any of its covenants, agreements, undertakings or obligations set forth
in this Agreement or any instrument, certificate or agreement entered
into or delivered by Buyer pursuant to this Agreement.
22
d. Third Party Claims. Promptly after receipt by either party hereto
seeking indemnification pursuant to this Section 11 (an "Indemnified Party") of
written notice of any investigation, claim, proceeding or other action in
respect of which indemnification is being sought (each, a "Claim"), the
Indemnified Party promptly shall notify the party against whom indemnification
pursuant to this Section 11 is being sought (the "Indemnifying Party") of the
commencement thereof; but the omission to so notify the Indemnifying Party shall
not relieve it from any liability that it otherwise may have to the Indemnified
Party, except to the extent that the Indemnifying Party is materially prejudiced
and forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (x) the Indemnifying Party shall have agreed to pay such fees,
out-of-pocket costs and expenses, (y) the Indemnified Party and the Indemnifying
Party reasonably shall have concluded that representation of the Indemnified
Party by the Indemnifying Party by the same legal counsel would not be
appropriate due to actual or, as reasonably determined by legal counsel to the
Indemnified Party, potentially differing interests between such parties in the
conduct of the defense of such Claim, or if there may be legal defenses
available to the Indemnified Party that are in addition to or disparate from
those available to the Indemnifying Party, or (z) the Indemnifying Party shall
have failed to employ legal counsel reasonably satisfactory to the Indemnified
Party within a reasonable period of time after notice of the commencement of
such Claim. If the Indemnified Party employs separate legal counsel in
circumstances other than as described in clauses (x), (y) or (z) above, the
fees, costs and expenses of such legal counsel shall be borne exclusively by the
Indemnified Party. Except as provided above, the Indemnifying Party shall not,
in connection with any Claim in the same jurisdiction, be liable for the fees
and expenses of more than one firm of legal counsel for the Indemnified Party
(together with appropriate local counsel). The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party (which consent shall
not unreasonably be withheld), settle or compromise any Claim or consent to the
entry of any judgment that does not include an unconditional release of the
Indemnified Party from all liabilities with respect to such Claim or judgment.
23
e. Other Claims.
In the event one party hereunder should have a claim for indemnification
that does not involve a claim or demand being asserted by a third party, the
Indemnified Party promptly shall deliver notice of such claim to the
Indemnifying Party. If the Indemnified Party disputes the claim, such dispute
shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration conducted in accordance with the
procedures and rules of the American Arbitration Association. Judgment upon any
award rendered by any arbitrators may be entered in any court having competent
jurisdiction thereof.
12. GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
of such state. Each of the parties consents to the jurisdiction of the federal
courts whose districts encompass any part of the City of New York or the state
courts of the State of New York sitting in the City of New York in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions. A
facsimile transmission of this signed Agreement shall be legal and binding on
all parties hereto. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original. The headings of this Agreement are
for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. This Agreement may be amended only by an instrument
in writing signed by the party to be charged with enforcement. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.
13. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or seven business days after deposit in the United
States Postal Service, by (a) advance copy by fax, and (b) mailing by express
courier or registered or certified mail with postage and fees prepaid, addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by ten days advance written
notice to each of the other parties hereto.
24
COMPANY: EARTH SCIENCES, INC.
000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Parcel, Mauro, Xxxxxx & Xxxxxxxxx
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
BUYER: THE SHAAR FUND LTD.
Apartment 4F
62 King Xxxxxx Street
Jerusalem, Israel
Attention: Xxxxxx Xxxxxxxx
Telephone: 00-000-0-000-0000
Fax: 00-000-0-000-0000
ESCROW AGENT: WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Block, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
14. CONFIDENTIALITY. Each of the Company and Buyer agrees to keep
confidential and not to disclose to or use for the benefit of any third party
the terms of this Agreement or any other information which at any time is
communicated by the other party as being confidential without the prior written
approval of the other party; provided, however, that this provision shall not
apply to information which, at the time of disclosure, is already part of the
public domain (except by breach of this Agreement) and information which is
required to be disclosed by law.
15. ASSIGNMENT. This Agreement shall not be assignable by either of the
parties hereto prior to the Closing without the prior written consent of the
other party, and any attempted assignment contrary to the provisions hereby
shall be null and void; provided, however, that Buyer may assign its rights and
obligations hereunder, in whole or in part, to any affiliate of Buyer who
furnishes to the
25
Company the representations and warranties set forth in Section 2 hereof.
26
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the date first above written.
EARTH SCIENCES, INC.
By: /s/ Xxxx X. XxXxxxxxx
---------------------------------
Name: Xxxx X. XxXxxxxxx
Title: President
THE SHAAR FUND LTD.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name:Xxxxxx Xxxxx
Title: Secretary
27
