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EXHIBIT 10.11
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made as of the 30th
day of April, 1998, by and between SANTI GROUP OF NEW YORK, INC., a Georgia
corporation, or its nominee or designee (the "Purchaser"), XXXXXX ENVIRONMENTAL
CORPORATION, a New York corporation (the "Sellers"), and XXXXXXX XXXXXXX (the
"Seller Shareholder").
WITNESSETH:
WHEREAS, the Seller owns certain contract rights, customer accounts,
trucks, containers and other assets and is engaged in the non-hazardous liquid
waste collection, transfer and handling business in the New York metropolitan
area, including but not limited to, under the names "Xxxxxx Environmental" (the
"Business"); and
WHEREAS, this Agreement contemplates a transaction in which the
Purchaser will purchase all of the assets of the Seller used in the Business and
assume certain of the liabilities of the Seller in return for payment of the
Purchase Price (as defined below);
NOW, THEREFORE, in consideration of the premises, mutual
representations, warranties, covenants and promises made in this Agreement, and
subject to the conditions contained in this Agreement, the parties agree as
follows:
1. PURCHASE AND SALE OF ASSETS; CLOSING.
1.1 PURCHASED ASSETS. Upon the execution of this Agreement and
effective as of 12:01 a.m. on the Closing Date (the "Time of Closing"), the
Seller agrees to sell, transfer, assign and deliver to the Purchaser, free and
clear of all liens, claims and encumbrances (except those which the Purchaser
has expressly agreed to assume in Section 1.3(c) hereof) the following assets
(the "Purchased Assets"):
(a) the machinery, equipment, vehicles and other operating assets owned
by the Seller identified on Schedule 1.1(a) to this Agreement (the "Operating
Assets");
(b) the Seller's right, title and interest (to the extent assignable
and transferable) in the customer accounts, customer accounts contracts, service
agreements, purchase orders and other rights to provide services to the
customers of Seller (collectively the "Customer Accounts"), other than those
customer accounts, rights, or contracts identified on Schedule 1.2 to this
Agreement;
(c) operating data (in both hard copy and computer format if available)
relevant to the Customer Accounts, including credit and accounting records for
the preceding twelve month period, customer contacts, phone numbers and
addresses, to the extent available (the "Operating Data");
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(d) the Seller's files, correspondence, records, and related
proprietary information and other property that is necessary, helpful or related
to providing the services related to the Business;
(e) the Seller's intellectual property (including, but not limited to,
the name "R.G.M. Liquid Waste Removal"), goodwill associated therewith, licenses
and sublicenses granted and obtained with respect thereto;
(f) to the extent transferable, franchises, approvals, permits,
licenses (including radio transmitter licenses), registrations, certificates,
variances and similar rights obtained from any government or agency thereof,
(g) the Seller's servicemarks, trademarks and logos; and
(h) telephone numbers and yellow page advertisings used in the
Business.
1.2 EXCLUDED ASSETS. Anything to the contrary in Section 1.1 notwithstanding,
the Purchased Assets shall exclude the following assets of the Seller
(collectively, the "Excluded Assets"):
(a) any corporate minute books, stock records and other corporate
records of the Seller;
(b) all note, accounts and other receivables of the Seller arising
prior to the Time of Closing;
(c) all cash, claims, deposits, refunds, causes of action, rights of
recovery and/or setoff and securities, and prepayments, retainage, security and
permit fees to the extent attributable to periods after the Closing;
(d) all leasehold improvements, fixtures and fittings used in the
Business;
(e) all insurance and bond premiums and other prepaid expenses (all as
outlined on Schedule 1.2 to this Agreement), to the extent relating to any
period after the Time of Closing; and
(f) any assets of the Seller specifically set forth on Schedule 1.2 to
this Agreement, including but not limited to those customer accounts, rights or
contracts set forth on Schedule 1.2.
1.3 PURCHASE PRICE; ALLOCATION; PAYMENT. (a) As consideration for the
Purchased Assets and that certain Nondisclosure, Noncompetition and
Nonsolicitation Agreement to be entered into by the Purchaser, the Seller and
the Seller Shareholder (the "Nondisclosure Agreement"), the Purchaser agrees,
subject to the terms, conditions and limitations set forth in this Agreement, to
issue and deliver to the Seller the following (collectively, the "Purchase
Price"): (i) cash in the amount of $1,670,000, (ii) 80,000 shares of the common
stock of SanTi Group, Inc., a Delaware corporation (the "SanTi Stock"), and
(iii) documentation effecting the assumption of the Assumed Liabilities (as
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defined below). The Seller acknowledges and agrees that the Purchaser is
retaining $500,000 and 27,500 shares of SanTi Stock (the "Security Deposit") to
be held pursuant to the provisions of the Indemnification Agreement (as defined
below). The Purchaser may, at its election, cause the Security Deposit to not be
issued by SanTi Group, Inc. until the time that such SanTi Stock is due under
the Indemnification Agreement.
(b) The parties agree that the Purchase Price shall be allocated
consistent with the Internal Revenue Code of 1986, as amended, and in accordance
with the allocation schedule to be agreed upon by the parties at or before the
Closing, which allocation shall be adhered to by the parties in filing all
returns to the appropriate taxing authorities.
(c) On and subject to the terms and conditions of this Agreement, and
effective as of the Time of Closing, the Purchaser shall assume and become
responsible for all of the liabilities of the Seller set forth on Schedule
1.3(c) of this Agreement (the "Assumed Liabilities"). Except for the Assumed
Liabilities, nothing in this Agreement or any other document entered into on the
Closing Date shall in any way obligate the Purchaser in any way for any
liability (whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, and due, or to
become due), obligation, charges or tax of the Seller, any of its subsidiaries,
affiliates or related entities, or shareholders, officers, directors, agents, or
employees of the Seller.
(d) Notwithstanding anything contained herein to the contrary,
Purchaser shall have no responsibility whatsoever with respect to the following
liabilities, contracts, commitments, and other obligations of the Seller
(collectively, the "Excluded Liabilities"):
(i) any obligations or liabilities of the Seller arising
under this Agreement;
(ii) any lien or encumbrance affecting any of the Purchased
Assets, as set forth on Schedule 1.3(d) to this Agreement, which liens or
encumbrances, subject to the provisions of Section 1.11 of this Agreement,
subject to the provisions of Section 1.11 of this Agreement, will be removed at
Closing;
(iii) except as set forth in Section 6.1 of this Agreement,
any obligation of the Seller for federal, state or local income tax liability
(including interest and penalties) arising from the operations of the Seller up
to the Time of Closing or arising out of the sale by the Seller of the Purchased
Assets pursuant to the terms of this Agreement;
(iv) any obligation of the Seller for expenses incurred in
connection with the sale of the Purchased Assets pursuant to the terms of this
Agreement; or
(v) any other liability or obligation of the Seller for
expenses incurred in connection with the sale of the Purchased Assets pursuant
to this Agreement.
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1.4 TIME AND PLACE OF THE CLOSING. The Closing of the sale of the
Purchased Assets (the "Closing") shall take place at the offices of Purchaser at
10:00 a.m. local time, on May 1, 1998 (the "Closing Date"), or at such other
time and location as may be mutually agreed upon by the parties.
1.5 PROCEDURE AT THE CLOSING. At the Closing, the parties will take the
following actions and the completion of each action shall be a further condition
to the Closing:
(a) the Seller shall deliver to the Purchaser, in form reasonably
satisfactory to the Purchaser, such deeds, bills of sale, endorsements,
assignments, receipts and other instruments, as shall be sufficient to vest in
the Purchaser good title to the Purchased Assets, free and clear of all liens,
claims and encumbrances, except as otherwise permitted by this Agreement;
(b) the Purchaser shall deliver to the Seller the Purchase Price in
accordance with the provisions of Section 1.3(a) above;
(c) the Purchaser shall deliver to the Seller, in form and content
reasonably satisfactory the Seller, instruments of assumption relating to the
Assumed Liabilities;
(d) the Purchaser shall enter into a lease with Equitable Realty for
certain property located at 972 and 000 Xxxxxxx Xxxx, Xxxx Xxxx, Xxx Xxxx
containing conditions to be as mutually agreed;
(e) the Purchaser shall enter into an employment agreement with Xxxxx
Xxxxxxx, containing terms and conditions to be as mutually agreed;
(f) the Purchaser shall enter into a consulting agreement with Xxxxx
Xxxxxxx, containing terms and conditions to be as mutually agreed;
(g) the Seller and the Seller Shareholder shall enter into a
nondisclosure, noncompetition and nonsolicitation agreement, containing terms
and conditions to be as mutually agreed;
(h) SanTi Group, Inc. shall deliver to the Seller and the Seller
Shareholder a guaranty of the Purchaser's obligations under this Agreement and
under the other agreements of the Purchaser contemplated by this Agreement,
containing terms and conditions to be as mutually agreed;
(i) the Seller, the Seller Shareholder and SanTi Group, Inc. shall
enter into an agency agreement covering any nontransferable and/or nonassignable
Customer Accounts or Permits, containing terms and conditions to be as mutually
agreed;
(j) the Seller, the Seller Shareholder, the Purchaser and such other
parties as may be appropriate or necessary shall enter into the Indemnification
Agreement, containing terms and conditions to be as mutually agreed;
(k) the Seller shall execute subscription documents and an investor
questionnaire relating to the issuance of the SanTi Stock; and
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(1) each party shall deliver to the other party such other documents,
CERTIFICATES and other instruments as may be contemplated by this Agreement or
necessary to accomplish the transaction contemplated by this Agreement.
1.6 USE OF NAME; RECEIVABLES. Following the Time of Closing, the
Sellers shall not use or give permission to any other person or entity to use
the name "Xxxxxx Environmental " or any substantially similar name in connection
with any business or enterprise. Notwithstanding the foregoing, the Seller is
hereby granted a license to use such name for the sole purposes of collecting
receivables, and maintaining bank accounts for as short a period of time after
the Time of Closing as is commercially reasonable in order to wind up its
affairs, provided that any such use does not in any way adversely affect the
Purchaser. In that regard, the Purchaser shall cooperate with the Seller from
time to time as the Seller may reasonably request in connection with the
Seller's efforts to collect its receivables.
1.7 CONFIDENTIALITY. The Purchaser, the Seller and the Seller
Shareholder each agree that for a period of five (5) years after the Closing
Date, none of them nor any other person connected with any of them shall at any
time divulge, and each of them shall cause their respective agents, employees
and Affiliates (as such term is defined in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended) not to
divulge the existence and ten-ns of negotiations resulting in this Agreement,
the terms and conditions of this Agreement and the financing arrangements of the
Purchaser and its Affiliates, except as required by applicable federal, state or
local statutes pursuant to subpoena or court order, or as required to enforce
its rights under this Agreement.
1.8 TELEPHONE REFERRALS. From and after the Closing Date, the Sellers
shall refer, and cause its agents to refer, all telephone calls to it or them
for septic tank service and liquid waste collection, transfer and handling to
the Purchaser.
1.9 COOPERATION WITH AUDITS. The Seller and the Seller Shareholder
agree to cooperate with the Purchaser in conducting any audits of the Business
during the period of time preceding the Closing, which audits shall be at the
Purchaser's sole expense.
1.10 PRESERVATION OF FILES AND RECORDS; ACCESS BY THE SELLER. The
Purchaser agrees to preserve and maintain for a period of not less than seven
(7) years from the Closing Date substantially all files, correspondence, records
and related proprietary information and other property acquired by the Purchaser
from the Seller which are part of the Purchased Assets. The Seller shall have
access after reasonable notice to the Purchaser to such files, correspondence,
records and related proprietary information to the extent reasonably necessary.
1.11 ENCUMBRANCES AFFECTING THE PURCHASED ASSETS. The Seller agrees to
take all actions reasonably necessary to promptly remove any lien or encumbrance
affecting any of the Purchased Assets as soon as possible after Closing, with
the exception of such encumbrances filed by Merco A Joint Venture (for which the
Seller Shareholder shall provide indemnification against pursuant to separate
agreement to be delivered at Closing).
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2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller and the Seller
Shareholders jointly and severally represent and warrant to the Purchaser the
following, which representations and warranties shall be reaffirmed as of the
Closing Date:
2.1 ORGANIZATION; POWER AND AUTHORITY. The Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of New York. The Seller is duly authorized to conduct business and the Business,
and is in good standing, under the laws of each jurisdiction where such
qualification is required. The Seller has the corporate power and authority (a)
to own or lease its properties and carry on its business as it is now being
conducted, (b) to enter into this Agreement and to sell, convey, assign,
transfer and deliver the Purchased Assets to the Purchaser as provided herein,
and (c) to carry out the other transactions and agreements contemplated by this
Agreement. The Seller Shareholder has full power and authority to execute and
deliver this Agreement and perform such Seller Shareholder's obligations
hereunder.
2.2 OWNERSHIP OF THE PURCHASED ASSETS. (a) The Seller has good title
to, or a valid leasehold interest in, all of the Purchased Assets, free and
clear of all title defect, liens, claims or other encumbrances of any kind or
character, except for liens for current taxes, assessments and governmental
charges not yet due and payable and except for those liens shown on Schedule 1.3
(d) to this Agreement, and subject to the provisions of Section 1. II to this
Agreement, which liens will be discharged at Closing.
(b) Subject to Section 6.1, the Seller has paid all applicable taxes
that are due and payable with respect to the Purchased Assets.
2.3 DUE AUTHORIZATION; BINDING OBLIGATION. The execution, delivery and
performance of this Agreement and each of the other agreements contemplated by
this Agreement and consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate actions of the
Seller. This Agreement has been duly executed and delivered by the Seller and is
a valid and binding obligation of the Seller and the Seller Shareholder,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency or similar laws and equitable principals.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will: (a) conflict with or violate any
provision of the Seller's articles of incorporation or bylaws, or, to the
Seller's and the Seller Shareholder's knowledge, of any law, ordinance or
regulation or any decree or order of any court or administrative or other
governmental body which is either applicable to, binding upon or enforceable
against any Seller or any Seller Shareholder; or (b) except as set forth on
Schedule 2.3 to this Agreement, result in any breach of or default under any
mortgage, contract, agreement or other instrument which is either binding upon
or enforceable against the Seller, the Seller Shareholder or the Purchased
Assets.
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2.4 LITIGATION. Except as set forth on Schedule 2.4 to this Agreement,
there are no actions, suits, claims, governmental investigations or arbitration
proceedings, to the knowledge of the Seller pending or threatened, against or
affecting the Purchased Assets. Except as set forth on Schedule 2.4 to this
Agreement, there are no orders, decrees, judgments or stipulations currently in
effect issued by any local, state or federal judicial authority in any
proceeding relating to the Purchased Assets to which the Seller is or was a
party or by which the Seller is bound.
2.5 COMPLIANCE WITH LAWS. (a) Subject to Schedule 2.4, the Seller has
operated the Purchased Assets in compliance in all material respects with all
applicable laws, regulations, permits, franchises, licenses and orders. Without
limiting the generality of the foregoing, in the conduct of the business with
respect to the Purchased Assets, to Seller's knowledge, the Seller has not
transported, stored, treated or disposed of any quantities of waste to or at any
location other than a site lawfully permitted to receive such waste for such
purposes; nor to the Seller's knowledge has the Seller performed, arranged for
or allowed by any method or procedure such transportation or disposal in
contravention of any laws or regulations or in any other manner which could
reasonably be expected to result in material liability for contamination of the
environment.
(b) With respect to the conduct of the Business, the Seller has not
received any notification of any past or present failure by the Seller to comply
in any material respect with any laws, regulations, permits, franchises,
licenses or orders applicable to the Purchased Assets. Except as set forth on
Schedule 2.5(b), with respect to the Purchased Assets, the Seller has not
received any notification (including requests for information directed to the
Seller) from any governmental agency asserting that the Seller is or may be a
"potentially responsible person" for a remedial action at a waste storage,
treatment or disposal facility, pursuant to the provisions of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), or
any other similar federal or state statute assigning responsibility for the
costs of investigating or remediating releases of contaminants into the
environment.
(c) Except as set forth on Schedule 2.4 to this Agreement, the Seller
has complied in all material respects with all applicable laws, of federal,
state, local, and foreign governments (and all agencies thereof) and, to the
Seller's and the Seller Shareholder's knowledge, no action suit, proceeding,
hearing, investigation, charge, complaint, claim, demand or notice has been
filed or commenced against the Seller alleging any failure so to comply.
(d) None of the Seller Shareholder or the directors, officers and
management employees of the Seller has any knowledge of any basis (existing
prior to the Closing) which could reasonably be expected to result in (i) any
failure of the Purchaser (based upon its acquisition of the Business) to comply
in all material respects after the Closing with any and all applicable laws of
federal, state, local and foreign governments (and all agencies thereof), or
(ii) any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand or notice being filed or commenced after the Closing against the
Purchaser or any of its Affiliates alleging any failure to so comply.
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2.6 SELLER'S SHAREHOLDERS. The Seller Shareholder owns all of the
issued and outstanding capital stock of the Seller.
2.7 SUBSIDIARIES. The Seller does not now have, nor has the Seller in
the past had, any corporation with respect to which any Seller owns a majority
of the common stock or has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors (a "Subsidiary"). The Seller
does not now have nor, except for Merco A Joint Venture, has it had any direct
or indirect equity participation in any corporation, partnership, trust or
other business association.
2.8 EMPLOYMENT TAXES. Proper amounts have been withheld by the Seller
for the employees set forth on Schedule 2.9(a) to this Agreement in compliance
in all material respects with applicable laws. Proper applicable tax returns
have been filed for which returns were due for employee income tax withholding,
social security and unemployment taxes with respect to the employees set forth
in Schedule 2.9(a).
2.9 EMPLOYEE MATTERS. (a) Set forth on Schedule 2.9(a) is a true,
complete and accurate list of the name, present position, starting date of
employment and rate of compensation of each of Seller's employees directly
involved with the business represented by the Purchased Assets immediately prior
to the Closing. The Seller has no knowledge of any such employees or any
independent contractors servicing the Purchased Assets who will not be available
for employment by the Purchaser after the Closing Date.
(b) Except as may be set forth on Schedule 2.9(b) of this Agreement,
the Seller is not a party to or bound by any employment agreement with any
employee or any collective bargaining agreement or any other agreement with any
labor union.
(c) Set forth on Schedule 2.9(c) is a complete list of (i) all pension
and employee benefit plans (as defined in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) maintained or contributed to
by the Sellers and (ii) all other benefit programs available to the Sellers'
employees (collectively, the "Plans"). Such plans comply in form and in
operation with the applicable ERISA requirements, except where the failure to
comply would not have a material adverse effect on the financial condition of
the business with respect to the Purchased Assets. All contributions that are
due have been paid to such Plans. No action, suit, proceeding, hearing or
investigation with respect to the administration or the investment of assets of
any such Plans (other than routine claims for benefits) is pending, except where
such action, suit, proceeding, hearing or investigation would not have a
material adverse effect on the financial condition of the business with respect
to the Purchased Assets.
2.10 CONDUCT OF BUSINESS. Since April 8, 1998, except as otherwise
approved by the prior written consent of the Purchaser, the Seller (i) has
conducted the business and operations with
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respect to the Purchased Assets in substantially the same manner in which the
same have been traditionally conducted, and (ii) there has been no material
adverse change in the Purchased Assets.
2.11 NET WORTH. The net worth of the Seller is as shown on Schedule
2.11 to this Agreement. The Sellers is not, and immediately after the
consummation of the transaction contemplated hereunder will not be, "insolvent"
within the meaning of the United States Bankruptcy Code as in effect as of the
Closing Date. The Seller does not intend to, nor believes that it will, incur
debts beyond its ability to pay such debts as they mature.
2.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 2.12 are the
following financial statements (collectively, the "Financial Statements"): (i)
federal tax returns for the period ending October 31, 1994, October 31, 1995 and
October 31, 1996 (the "Most Recent Fiscal Year End") for the Seller. The
Financial Statements present fairly in all material respects the financial
condition of the Seller as of such dates and the results of the operations of
the Seller for such periods, and are consistent with the books and records of
the Seller (which books and records are correct and complete in all material
respects).
2.13 EVENTS SUBSEQUENT TO MOST RECENT FISCAL MONTH END. Since March 31,
1998, there has not been any material adverse change in the Business or the
financial condition, operations or results of operations of the Seller.
2.14 UNDISCLOSED LIABILITIES. The Seller does not have any material
liability (whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, and due or to
become due) obligation, charge or tax, and, to the knowledge of the Seller,
there is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against any of them which
would give rise to a material liability, obligation, charge or claim except for
those liabilities, obligations, charges, taxes or claims (i) shown on the Most
Recent Financial Statements; or (ii) which have arisen in the ordinary course of
business of the Seller (none of which results from, arises out of, relates to,
is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
2.15 TAX MATTERS. The Seller has filed all federal and state tax
returns that it is required to file and all taxes shown to be due have been paid
in full. Subject to Schedule 2.15, all such tax returns were correct and
complete in all respects. Subject to Schedule 2.15, no Seller Shareholder or
director, officer or employee responsible for tax matters of the Seller expects
any authority to assess any additional taxes for any period for which tax
returns have been filed.
2.16 REAL PROPERTY. The Seller does not own any real property used in
the Business.
2.17 TANGIBLE ASSETS. The Seller owns or leases all buildings,
machinery, equipment, other tangible assets, permits, licenses and agreements
necessary for the conduct of the Business as
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presently conducted and as presently proposed to be conducted. Except as set
forth on Schedule 2.17 to this Agreement, each such tangible asset is in good
operating condition and repair, normal wear and tear excepted. The net book
value of these assets is $0.
2.18 CONTRACTS. (a) Schedule 2.18 of this Agreement is an accurate and
complete list of each agreement, contract or commitment to which the Seller is a
party or by which the Seller is bound and which is either (i) material to the
operation of the Business, or (ii) cannot be terminated without liability on 30
days notice or less. The Seller has delivered true and accurate copies of each
of the items shown on Schedule 2.18 of this Agreement.
(b) Neither the Seller nor, to the knowledge of the Seller, any party
thereto or bound thereby, is in material default under any of the contracts,
agreements or instruments comprising Schedule 2.18, and no act or event has
occurred which with notice or lapse of time, or both,
would constitute such a default on the part of the Seller or, to the knowledge
of the Seller, any other party thereto or bound thereby.
(c) With respect to all contract, agreements and instruments comprising
Schedule 2.18:
(i) each is in full force and effect and legally binding upon
the Seller; and
(ii) except as set forth on Schedule 2.3 to this Agreement,
the Seller has not released any of its rights thereunder nor will any other
party bound thereby be released from its obligations nor will any obligations of
any party be affected as the result of the transfer contemplated hereby nor will
the consent of any other party to any of the above be required with respect to
the transfer contemplated hereby.
2.19 INSURANCE. Schedule 2.19 to this Agreement lists all current
policies of liability, property damage, fire, workers' compensation/liability,
title or other forms of insurance related to the Business which are presently
owned or carried by the Seller and insurance agents and/or brokers providing
such insurance coverage and of all performance bonds and letters of credit
securing any obligations of the Seller presently maintained by the Seller in the
conduct of its business.
2.20 SERVICE WARRANTIES. Each service provided by the Seller has been
in conformity in all material respects with all applicable contractual
commitments and all express and implied warranties. Except as otherwise shown on
Schedule 2.20 to this Agreement, no service provided or delivered by the Seller
is subject to any guaranty, warranty or other indemnity beyond the applicable
standard terms and conditions of sale and as provided by applicable law.
Schedule 2.20 includes copies of the standard terms and conditions of sale for
the Sellers (containing applicable guaranty, warranty and indemnity provisions).
2.21 BUSINESS RELATIONSHIPS. Neither the Seller nor the Seller
Shareholder owns or has an interest in any person or entity (other than the
Seller) conducting a liquid waste collection,
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handling or transfer business, other than ancillary to the laundromat business
or real estate ownership and operation.
2.22 INVESTMENT. Each of the Seller and the Seller Shareholders (i)
understands that the SanTi Stock has not been, and will not at the Closing be,
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or under any state securities laws, and is being offered and sold in reliance
upon federal and state exemptions for transactions not involving any public
offering, (ii) understands that the Seller is acquiring the SanTi Stock solely
for its own account for investment purpose, and not with a view to the
distribution thereof, (iii) has received certain information concerning the
Purchaser and SanTi and has had the opportunity to obtain additional information
as desired in order to evaluate the merits and the risks inherent in holding the
SanTi Stock, (iv) is able to bear the economic risk and lack of liquidity
inherent in holding the SanTi Stock, and (v) is an Accredited Investor (as such
term is defined in Regulation D promulgated under the Securities Act) for the
reasons set forth in Schedule 2.22 to this Agreement.
2.23 POSSESSION OF FRANCHISES, LICENSES, ETC. The Seller possesses all
franchises, certificates, licenses, permits, clearances, consents and other
authorizations from governmental political subdivisions or regulatory
authorities that are necessary for (i) the continued ownership, maintenance and
operation of the Business, as currently being operated and conducted, (ii) the
continued operation, use and ownership of the Purchased Assets, as currently
being operated and used, and (iii) the servicing of the Customer Accounts, as
currently being serviced (collectively, the "Permits"). Schedule 2.23 to this
Agreement sets forth all of the Permits and for each Permit accurately describes
the expiration and/or renewal date thereof. No material violation of any of the
Permits has occurred that would reasonably likely result in a termination,
cancellation or suspension thereof and the Seller has complied in all material
respects with all applicable covenants and conditions of each of the Permits.
Except as set forth on Schedule 2.23, there is no action, proceeding, permit
revocation, permit amendment, writ, injunction or claim pending or, to the
knowledge of the Seller, threatened, concerning or relating to any of the
Permits.
2.24 ACQUISITION QUESTIONNAIRE. All statements and representations
contained in that certain Acquisition Questionnaire attached to Schedule 2.24 to
this Agreement initialed by the Seller Shareholder and tendered by the Seller to
the Purchaser is true and correct in all material respects.
2.25 DISCLOSURE. The representations and warranties contained in this
Article 2 do not contain any untrue statement of a material fact or omit or fail
to state any material fact necessary in order to make the statements and
information contained in this Article 2, in light of the circumstances in which
they were made, not misleading.
2.26 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in this Article 2 shall survive for a period of one (1)
year from the Closing.
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3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser represents to
the Seller and the Seller Shareholder the following, which representations and
warranties shall be reaffirmed as of the Closing Date:
3.1 ORGANIZATION OF THE PURCHASER. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The Purchaser is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required. The Purchaser has the corporate power and authority
(a) to own or lease its properties and carry on its business as it is now being
conducted, (b) to enter into this Agreement and to purchase the Purchased Assets
as provided herein, and (c) to carry out the other transactions and agreements
contemplated by this Agreement.
3.2 DUE AUTHORIZATION; BINDING OBLIGATION. The execution, delivery and
performance of this Agreement and each of the other agreements contemplated by
this Agreement and consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate actions of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and is a valid and binding obligation of the Purchaser, enforceable in
accordance with its terms. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will: (a) conflict
with or violate any provision of the Purchaser's articles of incorporation or
bylaws, or of any law, ordinance OR regulation or any decree or order of any
court or administrative or other governmental BODY which is either applicable
to, binding upon or enforceable against the Purchaser; OR (b) result in any
breach of or default under any mortgage, contract, agreement or other instrument
which is either binding upon or enforceable against the Purchaser.
3.3 LITIGATION. There are no actions, suits, claims, governmental
investigations or arbitration proceedings, to the knowledge of the Purchaser
pending or threatened, against the Purchaser.
3.4 DISCLOSURE. Neither the representations and warranties contained in
this Article 3 nor the statements in the offering memorandum provided to the
Seller in connection with the SanTi Stock contain any untrue statement of a
material fact or omit or fail to state any material fact necessary in order to
make the statements and information contained in this Article 3 or in such
offering memorandum, in light of the circumstances in which they were made, not
misleading.
3.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Article 3 shall survive for a period of one (1)
year from the Closing.
4. INDEMNIFICATION. The Seller, the Seller Shareholder, the Purchaser and others
are entering into a separate Indemnification Agreement (the "Indemnification
Agreement") at the Closing. The remedies provided therein shall be the sole
remedies available to the parties for claims for money damages arising
hereunder.
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5. SECURITY DEPOSIT. The cash portion of the Security Deposit will be held
pursuant to that certain Escrow Agreement between the Seller, the Seller
Shareholder, the Purchaser and others and disbursed in accordance therewith and
the terms of the Indemnification Agreement.
6. MISCELLANEOUS.
6.1 TAXES. The Seller shall pay all federal, state and local income
taxes due as a result of the purchase, sale or transfer of the Purchased Assets
in accordance herewith. The Purchaser shall pay all sales, use and transfer
taxes due as a result of the purchase, sale and transfer of the Purchased
Assets.
6.2 NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be (i)
delivered by hand, (ii) mailed by United States registered or certified mail,
return receipt requested, first class prepaid and properly addressed, or (iii)
sent by national overnight courier service to the parties or their permitted
assigns at the address set forth opposite the parties' signatures to this
Agreement. All notices, requests, instructions or documents given to any party
in accordance with this Section 6.2 shall be deemed to have been given (i) on
the date of receipt if delivered by hand or overnight courier service, or (ii)
on the date five (5) days after depositing with the United States Postal Service
if mailed by United States registered or certified mail, return receipt
requested, first class postage prepaid and properly addressed. Any party may
change its address specified for notices by designating a new address in
accordance with this Section 6.2.
6.3 ENTIRE AGREEMENT. All Schedules and Exhibits referred to in this
Agreement are intended to be, and hereby are, specifically incorporated into and
made a part of this Agreement. This Agreement constitutes the entire agreement
among the parties relating to the subject matter hereof and supersedes all prior
and contemporaneous negotiations, writings and agreements relating to the
subject matter of this Agreement.
6.4 MODIFICATIONS, AMENDMENTS AND WAIVERS. The parties may, by mutual
agreement in written form and in no other manner, modify or amend the terms of
this Agreement. The failure or delay of any party at any time or times to
require the performance of any provision of this Agreement shall in no manner
affect its right to enforce that provision. No single or partial waiver by any
party of any condition of this Agreement, or the breach of any term, agreement
or covenant of, or the inaccuracy of any representation or warranty in, this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be construed or deemed to be a @er or continuing waiver of any such condition,
breach or inaccuracy or a waiver of any condition, breach or inaccuracy.
6.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the parties to this
Agreement and their respective successors and permitted assigns. This Agreement
may not be assigned by any party without written consent of the
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other parties, except that the Purchaser may assign this Agreement and its
rights and obligations hereunder to one or more of its Affiliates or to any of
its lenders as collateral security.
6.6 GOVERNING LAW. This Agreement shall be controlled, construed and
enforced in accordance with the substantive laws of the State of New York,
without regard to any laws to choice or conflicts of laws.
6.7 SEVERABILITY. Should any one or more of the provisions of this
Agreement be determined to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be adversely affected or impaired thereby. The
parties shall endeavor in good faith to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as practicable to that of the invalid, illegal or unenforceable
provisions.
6.8 NO BENEFIT TO OTHERS. The representations, warranties, covenants
and agreements contained into this Agreement are for the sole benefit of the
par-ties and, in the case of Article 4 hereof, the other Indemnified Parties,
and their respective heirs, executors, administrators, legal representatives,
successors and assigns, and they shall not be construed as conferring any rights
on any other person.
6.9 CONSTRUCTION. The parties intend that each representation,
warranty and covenant contained herein shall have independent significance. If
any party has breached any representation, warranty or covenant contained in
this Agreement in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant.
6.10 EXPENSES. Except as otherwise provided herein, each of the parties
will bear such party's own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
6.11 FURTHER ASSURANCES. From time to time, at any party's request and
without @er consideration (unless the requesting party is entitled to indemnity
therefor as provided herein), the other parties will execute and deliver to the
requesting party such documents and take such other action as such party may
reasonably request in order to consummate more effectively the transactions
contemplated by this Agreement.
6.12 KNOWLEDGE. Whenever the term "to the best of the knowledge" of a
party is used, such term shall mean that the party making such representation or
warranty has conducted a reasonable investigation to determine the existence or
absence of the facts represented or warranted.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SELLER:
Xxxxxx Environmental Company
Address: By: /s/ Xxxxxxx Xxxxxxx
----------------------- ------------------------------------
Name:
----------------------- ----------------------------------
Title:
----------------------- ---------------------------------
SELLER SHAREHOLDER:
Address: /s/ Xxxxxxx Xxxxxxx
----------------------- ---------------------------------------
Xxxxxxx Xxxxxxx
-----------------------
-----------------------
PURCHASER:
SanTi Group of New York, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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