STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as of June 10, 1999
(the "Effective Date"), by Xxxx X. Xxxxxxx, an individual resident in San Diego,
California ("Xxxxxxx") and Xxxxx X. Xxxxxx ("Xxxxxx") (Xxxxxx and, collectively
with Xxxxxxx, the "Buyers"), on the one hand, and REXX Environmental
Corporation, a New York corporation (the "Seller"), on the other hand.
The Seller desires to sell, and the Buyers desire to purchase, all of
the issued and outstanding shares (the "Shares") of capital stock of Xxxxxxx
Contracting, Inc., a Nevada corporation (the "Company"), for the consideration
and on the terms set forth in this Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Definitions.
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Best Efforts"-- the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible taking into account economic
limitations and practical business considerations that exist as of the date such
Best Efforts are required to be used, including, without limitation, the
Company's or the Seller's financial performance and condition and any limitation
on the availability of credit imposed by the Existing Lender.
"Breach"-- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any other occurrence or circumstance that is or was inconsistent with
such representation, warranty, covenant, obligation, or other provision, and the
term "Breach" means any such inaccuracy, breach, failure, occurrence, or
circumstance.
"Business"-- the business of providing asbestos abatement, hazardous
materials or soil remediation, demolition or services related thereto, to a
variety of Persons, including private or governmental clients. Specific services
include (without limitation) removal of asbestos containing materials (ACM),
lead paint, contaminated soils and polychlorinated biphenyls (PCB). Contaminated
soils remediation is related to material excavation. (The foregoing is referred
to in this Agreement as the "Business.")
"Buyers' Disclosure Letter"-- the disclosure letter delivered by the
Buyers to the Seller concurrently with the execution and delivery of this
Agreement.
"Buyers' Release" -- as defined in Section 2.5.
"Closing Date"-- the date and time as of which the Closing actually
takes place.
"Commission" -- the Securities and Exchange Commission.
"Consent"-- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions"-- all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Shares by the Seller to the Buyers;
(b) the execution, delivery, and performance of the
Noncompetition Agreements, the Seller's Release, and the Buyers' Release;
(c) the performance by the Buyers and the Seller of their
respective covenants and obligations under this Agreement; and
(d) the Buyers' acquisition and ownership of the Shares and
exercise of control over the Company.
"Contract"-- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Damages"-- as defined in Section 10.2.
"Encumbrance"-- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
"Environmental Law"-- any Legal Requirement that requires or relates
to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants or hazardous substances or
materials, violations of discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction, that
could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
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(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(g) cleaning up pollutants that have been released, preventing
the threat of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ERISA"-- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Exchange Act"-- the Securities Exchange Act of 1934, as amended, and
the rules and regulations issued pursuant thereto.
"Existing Lender" -- Xxxxx Fargo Bank.
"GAAP"-- generally accepted United States accounting principles,
applied on a consistent basis.
"Governmental Authorization"-- any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body"-- any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
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"Indemnified Persons"--as defined in Section 10.2.
"IRC"-- the Internal Revenue Code of 1986, as amended, or any successor
law, and regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
"IRS"-- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge"-- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is or was actually aware of such fact or
other matter ("Actual Knowledge"); or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
a reasonably comprehensive investigation concerning the existence of such fact
or other matter.
A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving, or who
has at any time served, as a director or officer of such Person (or in any
similar capacity) has, or at any time had, Knowledge of such fact or other
matter; provided, however, that no representation or warranty of the Seller
stated as made to as to its Knowledge will be subject to any Breach to the
extent the representation or warranty is based on a representation or warranty
of the Buyers in the Prior Acquisition Agreement (as seller thereunder) or any
written statement furnished by the Company to the Seller subsequent to October
22, 1997 and prior to or on the Closing (but excluding any written statements
constituting projections, estimates or forward looking statements) or on any
failure of an officer of the Company to furnish information in a circumstance
where the officer had a legal obligation to furnish information.
"Legal Requirement"-- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"Material Adverse Effect" -- any material adverse effect on the
business, assets, properties, operations, prospects, valuation or financial
condition of the Seller or the Company, taken as a whole, and taking into
account, with respect to the Seller and the Company, (a) losses attributable to
the Company's operations, (b) lower gross margins than anticipated by the
Company on certain of its jobs, and (c) the Company's noncompliance with certain
financial covenants of its line of credit with the Existing Lender and (d) the
limitations on the availability of credit that have been or may be required by
the Existing Lender.
"NASA Claim"-- the Company's claim for compensation from the National
Aeronautics and Space Administration with respect to work done at Xxxxxxx Air
Force Base on behalf of Innertex General Contractors.
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"Noncompetition Agreement"-- as defined in Section 2.5.
"Occupational Safety and Health Law"-- any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards, and any program, whether governmental or private
(including those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order"-- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"-- the ordinary course of business
consistent with the Company's past custom or practice (including with respect to
quantity and frequency).
"Organizational Documents"-- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"Person"-- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"Prior Acquisition Agreement" - the Stock Purchase Agreement dated as
of October 21, 1997 between the Seller (then known as Oak Hill Sportswear
Corporation), as buyer, and the Buyers as sellers, together with the Seller's
Closing Documents and the Buyers' Closing Documents and the Put Agreement
referred to therein.
"Proceeding"-- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Related Buyer Business" - any Related Person of a Buyer engaged in the
Business in Southern California (i.e., the area comprised of the greater Los
Angeles metropolitan area and all areas of California south thereof).
"Related Person"-- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one (1) or more members of such individual's Family;
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(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest;
and
(d) any Person with respect to which such individual or one
(1) or more members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least ten percent
(10%) of the outstanding voting power of a Person or equity securities or other
equity interests representing at least ten percent (10%) of the outstanding
equity securities or equity interests in a Person.
"Representative"-- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"Securities Act"-- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"Seller's Disclosure Letter"-- the disclosure letter delivered by the
Seller to the Buyers concurrently with the execution and delivery of this
Agreement.
"Seller SEC Documents"-- all reports, schedules, forms, statements and
other documents filed by the Seller with the Commission since October 22, 1997.
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"Seller's Release"-- as defined in Section 2.5.
"Stockholder Approval" -- the affirmative approval of the stockholders
of the Seller holding at least two-thirds (2/3) of the voting power of all such
stockholders and otherwise in full compliance with the requirements of
applicable law and any stock exchange regulations to which the Seller is
subject.
"Subsidiary"-- with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one (1) or more of its
Subsidiaries; when used without reference to a particular Person, "Subsidiary"
means a Subsidiary of the Company.
"Superior Proposal" - a bona fide proposal regarding an acquisition of
the Company or its assets made by a third Person that the Board of Directors of
the Seller determines in its good faith judgment to be more favorable on
financial terms to the Seller's stockholders than the Contemplated Transactions
and for which financing, to the extent required, is then committed or which, in
the good faith judgment of the Board of Directors of the Seller, is reasonably
capable of being obtained by such third Person.
"Tax"-- any tax (including any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax, or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency, or other fee,
and any related charge or amount (including any fine, penalty, interest, or
addition to tax), imposed, assessed, or collected by or under the authority of
any Governmental Body or payable pursuant to any tax-sharing agreement or any
other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.
"Tax Return"-- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"Threatened"-- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing)
to the Seller.
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2. Sale and Transfer of Shares; Closing.
2.1 Shares. Subject to the terms and conditions of this Agreement, at
the Closing, the Seller will sell and transfer the Shares to the Buyers, and the
Buyers will purchase the Shares from the Seller.
2.2 Purchase Price.
(a) The purchase price (the "Purchase Price") for the Shares
will be $1,300,000 payable in cash, and delivery of 125,000 shares of Common
Stock of the Seller with an agreed upon fair market value of $1.375 per share or
the closing price of such Shares as of the day prior to the Closing, whichever
is less.
(b) The Seller shall have the option of having a third party
purchase all or any portion of 125,000 shares from the Buyers for a price of
$1.375 or more per share, and the Buyers shall deliver the net proceeds of such
sale after the payment of all applicable Taxes with respect to such sale to the
Seller at Closing. Notwithstanding the foregoing, the Buyers shall not be
required to sell any shares of the Seller's Common Stock to a third party
hereunder if such third party is not a "accredited investor" as defined in
Regulation D promulgated under the Securities Act and such sale is not otherwise
in full compliance with all applicable federal and state securities laws, as
reasonably determined by counsel for the Buyers.
2.3 Other Consideration.
(a) Concurrently with the Closing, the Buyers shall cause the
Company to pay in full the remaining balance of the inter-company loan by the
Seller to the Company in the amount of $6,001 (without any interest accrued upon
such amount).
(b) Prior to the Closing, the Buyers and the Company shall use
their Best Efforts to obtain or cause the Company to obtain and deliver to
Seller the release from and termination of all agreements, guarantees and other
instruments by the Seller to Safeco Credit Company, Inc., CAT Financial and
Reliance Insurance Companies (Reliance Surety Company, Reliance Insurance
Company, United Pacific Insurance Company and Reliance Surety Company). If the
Buyers do not obtain and deliver a release and termination of any such Persons
(a "Non-Releasing Person"), (x) on the Closing the Buyers will deliver (i) to
the Seller their agreement to guarantee, indemnify and hold the Seller harmless
with respect to any of the Seller's obligations or liabilities to such
Non-Releasing Persons in substantially the form previously delivered by Buyers
to Seller, (ii) to all such Non-Releasing Persons their guarantees in a form
reasonably acceptable to such Non-Releasing Persons, and furnish evidence to
Seller, reasonably satisfactory to it, of deliveries of such guarantees, and (y)
after the closing use their Best Efforts to obtain and deliver to Seller the
releases in a form reasonably acceptable to the Seller, from all such
Non-Releasing Persons.
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2.4 Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of the Buyers' counsel at 000 Xxxx
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx at 10:00 a.m. (local time) as soon
as practicable following the receipt of (a) Stockholder Approval or (b) the
Certificate referred to in Section 7.2 hereof, or at such other time and place
as the parties may agree. The parties agree that neither the Seller, the Buyers
nor their representatives need attend the Closing in person and that the
execution and delivery of the documents to be delivered at Closing may take
place via facsimile with original signatures to follow via overnight courier.
2.5 Closing Obligations. At the Closing:
(a) The Seller will deliver to the Buyers:
(i) certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock powers), with signatures
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange, for transfer to the Buyers;
(ii) a release in the form of Exhibit "A" executed by
the Seller (the "Seller's Release");
(iii) a noncompetition agreement in the form of
Exhibit "B" executed by the Seller (the "Noncompetition Agreement");
(iv) indemnification agreements in favor of each of
the Buyers in a form reasonably acceptable to the Buyers executed by the Seller
(the "Buyer Indemnification Agreements"); and
(v) a certificate executed by the Seller representing
and warranting to the Buyers that each of the Seller's representations and
warranties in this Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if made on
the Closing Date (giving full effect to any supplements to the Seller's
Disclosure Letter that were delivered by the Seller to the Buyers prior to the
Closing Date in accordance with Section 5.6); and
(b) The Buyers will deliver to the Seller:
(i) the Purchase Price;
(ii) a release in the form of Exhibit "C" executed by
each of the Buyers (the "Buyers' Release");
(iii) a pay-off letter executed by the Existing
Lender confirming to Seller that all amounts due pursuant to the Company's
existing credit agreement with the Existing Lender have been paid in full; and
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(iv) a certificate executed by the Buyers to the
effect that, except as otherwise stated in such certificate, each of the Buyers'
representations and warranties in this Agreement were accurate in all respects
as of the date of this Agreement and are accurate in all respects as of the
Closing Date as if made on the Closing Date.
3. Representations and Warranties of the Seller. Except as set forth in
the Seller's Disclosure Letter delivered by the Seller to the Buyers, and which
exceptions to representations and warranties are applicable to the section of
this Agreement to which they expressly relate and no other representation and
warranty in this Agreement, the Seller represents and warrants to the Buyers as
follows:
3.1 Organization, Good Standing.
(a) The Seller is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to conduct its business
as it is now being conducted, to own or use the properties and assets that it
purports to own or use, and to perform all its obligations under Contracts.
(b) The Seller has delivered to the Buyers originals of the
Organizational Documents of the Company, as currently in effect.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms. The Noncompetition Agreement and the Seller's Release (collectively, with
this Agreement, the Seller's Disclosure Letter and all certificates of the
Seller delivered under this Agreement, the "Seller's Closing Documents")
constitute the legal, valid, and binding obligations of the Seller enforceable
against the Seller in accordance with their respective terms. The Seller has the
absolute and unrestricted right, power, authority, and capacity to execute and
deliver this Agreement and the Seller's Closing Documents and, subject solely to
Shareholder Approval or delivery of the certificate referred to in Section 7.2,
to perform its obligations under this Agreement and the Seller's Closing
Documents.
(b) Except as set forth in Part 3.2(b) of the Seller's
Disclosure Letter, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents of the Seller, or
(B) any resolution adopted by the board of directors or the stockholders of the
Seller;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which the Seller
may be subject or Contract to which the Seller is a party; or
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(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by the Seller.
(c) Except as set forth in Part 3.2(c) of the Seller's
Disclosure Letter, the Seller will not be required to give any notice to or
obtain any consent, from any Person in connection with its execution, delivery
or performance of this Agreement or a Seller's Closing Document or its
consummation or performance of any of the Contemplated Transactions.
3.3 Capitalization. Assuming the accuracy as of the Closing of the
Prior Acquisition Agreement of the representations in Section 3.3 of the Prior
Acquisition Agreement, (i) the authorized equity securities of the Company
consist of 2,500 shares of common stock, no par value, of which 2 shares are
issued and outstanding; (ii) the Seller is the record and beneficial owner and
holder of all the Shares, free and clear of all Encumbrances; (iii) no legend or
other reference to any purported Encumbrance appears upon any certificate
representing the Shares, and such Shares are subject to no Encumbrance other as
may be applicable to restricted securities under the Securities Act; (iv) all of
the outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable; and (v) there are no
Contracts, other than this Agreement, relating to the issuance, sale, transfer
or voting of shares of capital stock or other securities of the Company.
3.4 Seller SEC Documents. The Seller has filed all the Seller SEC
Documents required to be filed by it. As of the respective dates, the Seller SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations thereunder, and when filed contained no untrue statement of material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the Seller
makes no representation or warranty to the extent the Seller SEC Documents were
based upon representations and warranties of the Buyers in the Prior Acquisition
Agreement (as sellers thereunder) or any written statement furnished to the
Seller by the Company subsequent to October 22, 1997 and prior to the Closing.
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3.5 Taxes.
(a) Since October 22, 1997 through the Closing, the Company
has filed all Tax Returns that it was required to file. All such Tax Returns
were correct and complete in all respects. All Taxes owed by the Company
(whether or not shown on any Tax Return) with respect to the period since
October 22, 1997 through the Closing have been paid or reflected or reserved
against and shown on the face of the December 31, 1998 balance sheet of the
Company or, with respect to Tax with respect to a period after the date thereof
through the Closing, reflected or reserved against and shown on the face of the
last regularly prepared balance sheet of the Company. Except as set forth in
Part 3.5(a) of the Seller's Disclosure Letter, the Company is not currently the
beneficiary of any extension of time within which to file any Tax Return during
the period from October 22, 1997 to the date of this Agreement. No claim has
been made by any Government Body in a jurisdiction where the Company does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
There are no Encumbrances on any of the assets of the Company that arose in
connection with any failure (or alleged failure) to pay any Tax during the
period from October 22, 1997 to the date of this Agreement.
(b) The Seller does not expect any authority to assess any
additional Taxes on the Company for the period for from October 22, 1997 to the
date of this Agreement. There is no dispute or claim concerning any Tax
Liability of the Company either (A) claimed or raised by any Governmental Body
in writing or (B) as to which the Seller has Knowledge based upon personal
contact with any agent or such Body.
(c) Part 3.5(c) of the Seller's Disclosure Letter lists all
federal, state, local and foreign income Tax Returns filed with respect to the
Company for all taxable periods since October 22, 1997 and indicates those Tax
Returns that currently are the subject of audit. The Seller has delivered to the
Buyers correct and complete copies of all federal, state and local income Tax
Returns, examination reports, and statements of deficiencies assessed against or
agreed by the Company since October 22, 1997.
(d) Except as set forth on Part 3.5(d) of the Seller's
Disclosure Letter, during the period from October 22, 1997 through the Closing
Date, the Company has not waived any statute of limitations in respect of Taxes
or agreed to any extension of time with respect to a Tax assessment or
deficiency.
(e) During the period from October 22, 1997 through the
Closing Date, the Company is not a party to any Tax allocation or sharing
agreement. The Company has no liability for the Taxes of any Person (other than
the Company) under IRC Reg. ss.1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract, or otherwise.
3.6 Compliance With Legal Requirements; Governmental Authorizations.
(a) Except as set forth in Part 3.6(a) of the Seller's
Disclosure Letter:
(i) the Seller is in substantial compliance with each
Legal Requirement that is or was applicable to it that could adversely affect
the Contemplated Transactions or reasonably be expected to result in a Material
Adverse Effect or further materially deteriorate or exacerbate circumstances
referenced in subsections (a) through (d) of the definition of Material Adverse
Effect;
(ii) no event has occurred or circumstance exists
that (with or without notice or lapse to time) may constitute or result in a
violation by the Seller or a failure on the part of the Seller to comply with,
any Legal Requirement that could adversely affect the Contemplated Transactions
or reasonably be expected to result in a Material Adverse Effect or further
materially deteriorate or exacerbate circumstances referenced in subsections (a)
through (d) of the definition of Material Adverse Effect;
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(iii) the Seller, has not received, at any time since
October 22, 1997, any notice or other communication (whether oral or written)
sent by any Governmental Body regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal Requirement
applicable to the Seller, or (B) any actual, alleged, possible, or potential
obligation on the part of the Seller to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature; and
(iv) the Seller has not received, at any time since
October 22, 1997, any notice or other communication (whether oral or written)
sent by any Governmental Body regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any term or requirement of any
Governmental Authorization applicable to the Seller, or (B) any actual,
proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification by any Governmental Authorization
applicable to the Seller.
3.7 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.7(a) of the Seller's
Disclosure Letter, there is no pending Proceeding against the Seller or any
Related Person:
(i) that reasonably may result in A Material Adverse
Effect or materially further deteriorate or exacerbate circumstances referenced
in subsections (a) through (d) of the definition of Material Adverse Effect; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
(b) To the Knowledge of the Seller, (1) no such Proceeding has
been Threatened, and (2) no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
The Seller has made available to the Buyers copies of all pleadings,
non-privileged correspondence, and other non-privileged documents relating to
each Proceeding listed in Part 3.7 of the Seller's Disclosure Letter and (3) the
Proceedings listed in Part 3.7 of the Seller's Disclosure Letter will not have a
Material Adverse Effect.
(c) Except as set forth in Part 3.7(c) of the Seller's
Disclosure Letter, the Seller is not subject to any Order that relates to the
business of, or any of the assets owned or used by, the Company.
3.8 Environmental and Safety Matters. Except as set forth in Part 3.8
of the Seller's Disclosure Letter:
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(a) The Seller has no Actual Knowledge of any actual or
Threatened order, notice, or other communication from (i) any Governmental Body
or private citizen acting in the public interest, or (ii) the current or prior
owner or operator of any facilities of the Company, of any actual or potential
violation or failure to comply with any Environmental Law or Occupational Health
and Safety Law.
(b) The Seller has no Actual Knowledge of, nor has the Seller
received, any citation, directive, inquiry, notice, Order, summons, warning, or
other communication that relates to any alleged, actual, or potential violation
or failure to comply with any Environmental Law or Occupational Health and
Safety Law.
3.9 Disclosure.
(a) No representation or warranty of the Seller in this
Agreement and no statement in the Seller's Disclosure Letter omits to state a
material fact necessary to make the statements herein or therein, in light of
the circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 5.6 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
3.10 Relationships with Related Persons. The Seller nor any Related
Person of the Seller has, or since October 22, 1997 has had, any interest in any
property (whether real, personal, or mixed and whether tangible or intangible),
used in or pertaining to the Company's businesses. Neither the Seller nor any
Related Person of the Seller owns, or since October 22, 1997 has owned (of
record or as a beneficial owner) an equity interest or any other financial or
profit interest in, a Person that has had business dealings or a material
financial interest in any transaction with the Company other than business
dealings or transactions conducted in the Ordinary Course of Business with the
Company at substantially prevailing market prices and on substantially
prevailing market terms. Except as set forth in Part 3.10 of the Seller's
Disclosure Letter, neither the Seller nor any Related Person of the Seller is a
party to any Contract with, or has any claim or right against, the Company
(other than statutory indemnification rights as a director). For purposes of
this Section 3.10, neither Buyer shall be considered a Related Person of the
Seller.
3.11 Brokers or Finders. Neither the Seller nor any agents have
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement.
4. Representations and Warranties of the Buyers. Except as set forth in
the Buyers' Disclosure Letter delivered by the Buyers to the Seller, which
exceptions to representations and warranties are applicable solely to the
section of this Agreement to which they expressly relate to and no other
representation and warranty in this Agreement, the Buyers jointly and severally
represent and warrant to the Seller as follows:
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4.1 Authority; No Conflict.
(a) This Agreement, the Buyers' Release and the Buyers'
Indemnification (collectively, with the Buyers' Disclosure Letter and all of the
certificates of the Buyers delivered pursuant to this Agreement, the "Buyers'
Closing Documents") constitute the legal, valid, and binding obligations of the
Buyers, enforceable against the Buyers in accordance with their respective
terms. The Buyers have the absolute and unrestricted right, power, and authority
to execute and deliver this Agreement and the Buyers' Release and to perform
their obligations under this Agreement and the Buyers' Closing Documents.
(b) Neither the execution and delivery of this Agreement by
the Buyers nor the consummation or performance of any of the Contemplated
Transactions by the Buyers will give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any Legal Requirement or Order to which either
Buyer may be subject; or
(ii) any Contract to which either Buyer is a party or
by which either Buyer may be bound.
Neither Buyer is nor will be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
4.2 Investment Intent. The Buyers are acquiring the Shares for their
own account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act. Each Buyer is an accredited investor as
defined by Regulation D promulgated under the Securities Act. Buyers acknowledge
that the Shares are restricted securities under the Securities Act.
4.3 Certain Proceedings. There is no pending Proceeding that has been
commenced against either Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To each Buyer's Knowledge, no such Proceeding has
been Threatened.
4.4 Brokers or Finders. The Buyers have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement.
4.5 Status of Company. Except as expressly provided herein, Buyers are
acquiring the Shares, the Business and the Company's assets and liabilities
represented thereby "as is." Buyers acknowledge that they are the principal
executive officers of the Company and are familiar with the Business and the
operations, conditions and prospects of the Company.
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4.6 Relationships with Related Persons. Except as set forth in Section
4.6 of the Buyers' Disclosure Letter, neither of the Buyers nor any Related
Person of either Buyer has, or has since October 22, 1997 to the Closing has
had, any interest in the property (whether real, personal, or mixed or whether
tangible or intangible) used in or pertaining to the Company's businesses
neither of the Buyers nor any Related Person of either of the Buyers owns, or
since October 22, 1997 has owned (of record or as beneficial owner) an equity
interest or any other financial or profit interest in, a Person that has had
business dealings or a material financial interest in any transaction with the
Company other than business dealings or transactions conducted in the Ordinary
Course of Business with the Company at substantially prevailing market prices or
on substantially prevailing market terms. Except as set forth in Section 4.6 of
the Buyers' Disclosure Letter, neither of the Buyers nor any Related Person of
either of the Buyers is a party to any Contract with, or has any claim or right
against, the Company.
4.7 Proceedings and Legal Compliance. Except as set forth on Part 4.7
of the Buyers' Disclosure Letter, to the Actual Knowledge of each of the Buyers:
(i) there is no Proceeding pending or threatened against the Seller; and (ii)
the Seller is in compliance with all Legal Requirements relating to the Company
and its operations.
4.8 Financial Information. The Buyers have delivered to the Seller all
written correspondence or Contracts between the Buyers and either the Existing
Lender or Scripps Bank.
4.9 Certain Claims. To either Buyer's Knowledge, no claim or threat of
a claim of the type referred to in Section 7.6 has been made.
5. Covenants of the Seller Prior to Closing Date.
5.1 Access and Investigation. Between the date of this Agreement and
the Closing Date, the Seller will, and will authorize and direct the Company and
its Representatives to, (a) afford the Buyers and their Representatives and the
Buyers' counsel and prospective lenders and their Representatives (collectively,
the "Buyers' Advisors") full and free access to the Company's personnel,
properties (including subsurface testing), contracts, books and records, and
other documents and data, (b) furnish the Buyers and the Buyers' Advisors with
copies of all such contracts, books and records, and other existing documents
and data as the Buyers may reasonably request, and (c) furnish the Buyers and
the Buyers' Advisors with such additional financial, operating, and other data
and information as the Buyers may reasonably request.
5.2 Operation of the Business of the Company. Between the date of this
Agreement and the Closing Date, the Seller will use its Best Efforts to, and
will its Best Efforts to cause the Company to:
(a) conduct its business only in the Ordinary Course of
Business; and
(b) maintain the relations and good will with suppliers,
customers, landlords, creditors, employees, agents, and others having business
relationships with the Company.
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5.3 Negative Covenants. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, the Seller
will not, and will not cause the Company to, without the prior consent of the
Buyers:
(a) take any affirmative action, or fail to use its Best
Efforts to take any reasonable action within its control that could reasonably
result in or further materially deteriorate or exacerbate circumstances
referenced in Sections (a) through (d) of the definition of Material Adverse
Effect; or
(b) pay or accrue salaries, draws, management fees or other
compensation or remuneration from the Company to Seller or any of its executive
officers or directors from March 1, 1999 through the Closing.
5.4 Required Approvals. As promptly as reasonably practicable after the
date of this Agreement, the Seller will, and will authorize and direct the
Company to, make all filings required by Legal Requirements to be made by them
in order to consummate the Contemplated Transactions. Between the date of this
Agreement and the Closing Date, the Seller will, and will authorize and direct
the Company to, cooperate with the Buyers with respect to all filings that the
Buyers elect to make or are required by Legal Requirements to make in connection
with the Contemplated Transactions. The Seller will cooperate with the Buyers
and the Company in all reasonable respects in obtaining all consents from third
parties which the Buyers deem necessary or appropriate in connection with the
Contemplated Transactions.
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5.5 Proxy Statement; Stockholder Approval.
(a) The Seller shall, as promptly as reasonably practicable
following the date of this Agreement, prepare and file with the Commission, and
will use its Best Efforts to have cleared by the Commission and thereafter shall
mail to its stockholders as promptly as reasonably practicable a proxy statement
(the "Proxy Statement") and a form of proxy in connection with, among other
things, the vote of the Company's stockholders to approve the Contemplated
Transactions. The Seller acknowledges that the preparation and filing of the
Proxy Statement shall not be delayed due to the pendency of negotiations by the
Seller of any other transaction. The Proxy Statement will contain the
affirmative recommendation of the Board of Directors of the Seller in favor of
adoption of this Agreement and the approval of the Contemplated Transactions;
provided, however, that nothing contained in this Agreement shall prohibit the
Board of Directors of the Seller from withdrawing its recommendation and
approving another transaction regarding the Company or its assets if, and only
to the extent that (a) the Board of Directors of the Seller concludes in good
faith that such other transaction would constitute a Superior Proposal, (b) the
Board of Directors of the Seller determines in good faith (after consultation
with independent legal counsel) that the failure to take such action would
result in a breach by the Board of Directors of the Seller of its fiduciary
duties to the Seller's stockholders under applicable law and (c) prior to
furnishing information to, or entering into discussions or negotiations with any
third party, the Seller provides prompt written notice to the Buyers to the
effect that it is furnishing information to, or entering into discussion or
negotiations with, such third party (which notice shall identify the nature and
material terms of the competing proposal). The Proxy Statement, and any
amendments thereof or supplements thereto, will not, at the time of the mailing
of the Proxy Statement or any amendments thereof or supplements thereto and at
the time of the Stockholders Meeting (as hereinafter defined), contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading, except
that no representation is made by the Seller with respect to information
supplied in writing by the Buyers or the Company specifically for inclusion in
the Proxy Statement. The Proxy Statement will comply as to form in all material
respects with the provisions of the Exchange Act and the rule and regulations
promulgated thereunder.
(b) The Seller shall duly call, give notice of, convene and
hold its annual, or a special meeting of its stockholders (the "Stockholders
Meeting") and shall use its Best Efforts to obtain the requisite affirmative
approval of its stockholders at the Stockholders Meeting of the Contemplated
Transactions. Xxxxxx Xxxx and Xxxxxxx Xxxx shall be present, in person (or, if
either cannot attend because of exigent circumstances, by proxy), at the
Stockholders Meeting and shall vote or cause to be voted all shares of Common
Stock held of record or beneficially owned (with the power to vote or direct the
vote) by Xxxxxx Xxxx and Xxxxxxx Xxxx and eligible to vote as of the record date
for such meeting in favor of the proposal seeking such approval.
(c) The provisions of Sections 5.5(a) and 5.5(b) shall not
apply as of the date the Seller delivers the Certificate referred to in Section
7.2 hereof.
5.6 Notification. Between the date of this Agreement and the Closing
Date, the Seller will promptly notify the Buyers in writing if the Seller
becomes aware of any fact or condition that causes or constitutes a Breach of
any of the Seller's representations and warranties as of the date of this
Agreement, or if the Seller or the Company becomes aware of the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a Breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. Should any
such fact or condition require any change in the Seller's Disclosure Letter if
the Seller's Disclosure Letter were dated the date of the occurrence or
discovery of any such fact or condition, the Seller will promptly deliver to the
Buyers a supplement to the Seller's Disclosure Letter specifying such change.
During the same period, the Seller will promptly notify the Buyers of the
occurrence of any Breach of any covenant of the Seller in this Section 5 or of
the occurrence of any event that may make the satisfaction of the conditions in
Section 7 impossible or unlikely.
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5.7 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 9, the Seller will not, and will cause the
Company and its Representatives not to, directly or indirectly solicit,
initiate, or encourage any inquiries or proposals from, discuss or negotiate
with, provide any non-public information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other than the Buyers)
relating to any transaction involving the sale of the business or assets (other
than in the Ordinary Course of Business) of the Company, or any of the capital
stock of the Company, or any merger, consolidation, business combination, or
similar transaction involving the Company; provided, however, that the Seller
and the Company may negotiate an unsolicited proposal from a third Person
regarding the Company or its assets if the Board of Directors of the Seller has
withdrawn its recommendation in favor of the Contemplated Transactions in
compliance with Section 5.5(a) above.
5.8 Best Efforts. Between the date of this Agreement and the Closing
Date, the Seller will use its Best Efforts to cause the conditions in Sections 7
and 8 to be satisfied.
6. Covenants of the Buyers Prior to Closing Date.
6.1 Approvals. As promptly as practicable after the date of this
Agreement, the Buyers will make all filings required by Legal Requirements to be
made by them to consummate the Contemplated Transactions. Between the date of
this Agreement and the Closing Date, the Buyers will cooperate with the Seller
and the Company with respect to all filings that the Seller or the Company are
required by Legal Requirements to make in connection with the Contemplated
Transactions. Without limiting the generality of the foregoing, the Buyers will
provide the Seller whatever information and assistance in connection with the
filing of the Proxy Statement as the Seller reasonably may request. The Buyers
shall vote or cause to be voted all shares of Common Stock held of record or
beneficially owned by the Buyers and eligible to vote as of the record date for
the stockholder meeting held in connection with the Proxy Statement in favor of
the proposal seeking approval.
6.2 Notification. Between the date of this Agreement and the Closing
Date, the Buyers will promptly notify the Seller in writing if the Buyers become
aware of any fact or condition that causes or constitutes a Breach of any of the
Buyers' representations and warranties as of the date of this Agreement, or if
the Buyers become aware of the occurrence after the date of this Agreement of
any fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such representation or warranty
had such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition require
any change in the Buyers' Disclosure Letter if the Buyers' Disclosure Letter
were dated the date of the occurrence or discovery of any such fact or
condition, the Buyers will promptly deliver to the Seller a supplement to the
Buyers' Disclosure Letter specifying such change. During the same period, the
Buyers will promptly notify the Seller of the occurrence of any Breach of any
covenant of the Buyers in this Section 6 or of the occurrence of any event that
may make the satisfaction of the conditions in Section 7 impossible or unlikely.
6.3 Best Efforts. Between the date of this Agreement and the Closing
Date, each of the Buyers will use his Best Efforts to cause (i) the conditions
in Sections 7 and 8 to be satisfied and (ii) the loan referred to in the
commitment letter dated March 22, 1999 of Scripps Bank (which the Buyers will
use their Best Efforts to have extended through the Closing) or a commitment
which is superior from another bank or financial institution (the "Loan") to
close. The Buyers' efforts shall include, but not be limited to, cooperating
with prospective lender(s) in conducting due diligence and appraisals and
valuations of the property owned by the Buyers.
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7. Conditions Precedent to the Buyers' Obligation to Close. The Buyers'
obligation to purchase the Shares and to take the other actions required to be
taken by the Buyers at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which may be waived
by both of the Buyers, in whole or in part):
7.1 Accuracy of Representations. All representations and warranties of
the Seller in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the Seller's Disclosure
Letter.
7.2 Stockholder Approval. The Seller shall have received Stockholder
Approval with respect to the Contemplated Transactions or, in the alternative,
shall have delivered to the Buyers a Certificate stating that Stockholder
Approval is not required to consummate the Contemplated Transaction and further
certifying that the Seller has consulted legal counsel with expertise in federal
and New York state corporate and securities laws to advise the Seller as to the
necessity of such Stockholder Approval.
7.3 Seller's Performance.
(a) All of the covenants and obligations that the Seller is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section
2.4 must have been delivered.
7.4 Additional Documents. Each of the following documents must have
been delivered to the Buyers:
(a) an opinion of Xxxxxx Xxxxxxxxxxx, dated the Closing Date,
in a form reasonably acceptable to Buyers and their counsel, which opinion,
solely if the certificate referenced in Section 7.2 has been delivered to the
Buyers, shall not be required to opine with respect to the necessity for
Stockholder Approval of the Contemplated Transactions; and
(b) such other documents as the Buyers may reasonably request
for the purpose of (i) enabling its counsel to provide the opinion referred to
in Section 8.3(a), (ii) evidencing the accuracy of any of the Seller's
representations and warranties, (iii) evidencing the performance by the Seller
of, or the compliance by the Seller with, any covenant or obligation required to
be performed or complied with by the Seller, (iv) evidencing the satisfaction of
any condition referred to in this Section 7, or (v) otherwise facilitating the
consummation or performance of any of the Contemplated Transactions.
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7.5 No Proceedings. Since the date of this Agreement, there must not
have been commenced or Threatened against either Buyer, or against any Person
affiliated with either Buyer, any Proceeding (other than a Proceeding initiated
by or on behalf of a spouse or former spouse or trust or other entity of which a
spouse or former spouse is an affiliate of either Buyer) (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
Contemplated Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions.
7.6 No Claim Regarding Stock Ownership or Sale Proceeds. There must not
have been made or Threatened by any Person against the Seller any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, any stock of, or any
other voting, equity, or ownership interest in, any of the Company, or (b) is
entitled to all or any portion of the Purchase Price payable for the Shares.
7.7 No Prohibition. Neither the consummation nor the performance of any
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause either Buyer or any Person affiliated with
either Buyer to suffer any material adverse consequence under any Legal
Requirement or Order that has been published, introduced, or otherwise formally
proposed by or before any Governmental Body after the Effective Date.
8. Conditions Precedent to the Seller's Obligation to Close. The
Seller's obligation to sell the Shares and to take the other actions required to
be taken by the Seller at the Closing is subject to the satisfaction, at or
prior to the Closing, of each of the following conditions (any of which may be
waived by the Seller, in whole or in part):
8.1 Accuracy of Representations. All of the Buyers' representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the Buyers' Disclosure
Letter.
8.2 The Buyers' Performance.
(a) All of the covenants and obligations that the Buyers are
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all material respects.
(b) The Buyers must have delivered each of the documents
required to be delivered by the Buyers pursuant to Section 2.4 and must have
paid the Purchase Price.
8.3 Additional Documents. The Buyers must have caused the following
documents to be delivered to the Seller:
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(a) an opinion of Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx Xxxxxx &
Fognani, L.L.P. dated the Closing Date, in a form reasonably acceptable to
Seller and its counsel;
(b) such other documents as the Seller may reasonably request
for the purpose of (i) enabling their counsel to provide the opinion referred to
in Section 7.4(a), (ii) evidencing the accuracy of any representation or
warranty of the Buyers, (iii) evidencing the performance by the Buyers of, or
the compliance by the Buyers with, any covenant or obligation required to be
performed or complied with by the Buyers, (iv) evidencing the satisfaction of
any condition referred to in this Section 8, or (v) otherwise facilitating the
consummation of any of the Contemplated Transactions.
8.4 No Proceedings. Since the date of this Agreement, there must not
have been commenced or Threatened against the Seller, or any Person affiliated
with the Seller, any Proceeding (other than a Proceeding initiated by or on
behalf of Xxxxxx Xxxx or Xxxxxxx Xxxx or a Related Person thereto) (a) involving
any challenge to, or seeking damages or other relief in connection with, any of
the Contemplated Transaction, or (b) that may have the effect of preventing,
delaying, making illegal, or other interfering with any of the Contemplated
Transactions.
8.5 No Prohibition. Neither the consummation nor the performance of any
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause either the Seller or any Person affiliated
with the Seller to suffer any material adverse consequence under any Legal
Requirement or Order that has been published, introduced or otherwise formally
proposed by or before any Governmental Body after the Effective Date.
9. Termination.
9.1 Termination Events. This Agreement may, by notice given prior to or
at the Closing, be terminated:
(a) by either of the Buyers or the Seller if a material Breach
of any provision of this Agreement has been committed by the other party and
such Breach has not been waived;
(b) unless the Certificate referred to in Section 7.2 shall
have been given, by the Buyers if Stockholder Approval is not obtained at the
meeting referred to in Section 5.5 on or before November 30, 1999, or if Seller
ceases using its Best Effort to obtain Stockholder Approval;
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(c) (i) by the Buyers if any of the conditions in Section 7
has not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of the Buyers
to comply with their obligations under this Agreement) and the Buyers have not
waived such condition on or before the Closing Date; or (ii) by the Seller, if
any of the conditions in Section 8 has not been satisfied of the Closing Date or
if satisfaction of such a condition is or becomes impossible (other than through
the failure of the Seller to comply with its obligations under this Agreement)
and the Seller has not waived such condition on or before the Closing Date;
(d) by mutual consent of the Buyers and the Seller; or
(e) by either the Buyers or the Seller if the Closing has not
occurred (other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before November 30, 1999, or such later date as the parties may agree upon.
9.2 Effect of Termination. Each party's right of termination under
Section 9.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 9.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 12.1 and 12.3 will survive; provided, however,
that if this Agreement is terminated by a party because of the Breach of the
Agreement by the other party or because one (1) or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
10. Indemnification; Remedies.
10.1 Survival; Right to Indemnification Not Affected by Knowledge. All
representations and warranties in this Agreement, the supplements to the
Disclosure Letters, the certificate delivered pursuant to Section 2.5(a)(v), or
in any other certificate or document delivered pursuant to this Agreement will
expire at the Closing, except for the Seller's representations and warranties in
Section 3.3 and 3.5, which will survive the Closing until the expiration of the
applicable statute of limitations. The right to indemnification, payment of
Damages or other remedy based on such representations, warranties, covenants,
and obligations will not be affected by any investigation conducted with respect
to, or any Knowledge acquired (or capable of being acquired) at any time,
whether before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of or compliance with,
any such representation or warranty. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
10.2 Indemnification and Payment of Damages by the Seller. The Seller
will indemnify and hold harmless the Buyers, the Company, and their respective
Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage (excluding incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, whether or not
involving a third-party claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with:
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(a) any Breach of any representation or warranty made by the
Seller in Sections 3.3 and 3.5 of this Agreement (without giving effect to any
supplement to the Seller's Disclosure Letter);
(b) any Breach by the Seller of any covenant or obligation of
the Seller in this Agreement;
(c) any and all liabilities or actions, suits, claims or
legal, administrative, arbitration, governmental or other proceedings or
investigations against either the Company or the Buyers in which the principal
event giving rise thereto is attributable to or arose out of any action or
inaction by the Seller, or any director, officer, employee, agent,
representative or subcontractor of the Seller (other than any director, officer,
employee, agent, representative or subcontractor of the Company or to the extent
arising out of an action or in action based upon written information supplied by
either Buyer and/or the Company prior to the Closing);
(d) any and all actions, suits, claims or legal,
administrative, arbitration, government or other proceedings or investigations
against the Company or the Buyers or other Damages that result from or arise out
of the Closing of the Contemplated Transactions without obtaining Stockholder
Approval;
(e) any liability for Taxes of the Company attributable to the
period from October 22, 1997 through and including the Closing Date and any
liability of the Company for Taxes of any Person other than the Company under
Treasury Regulation Section 1.5102-6 (or a similar provision of any state, local
or foreign law), as a transferee, successor, by contract or otherwise; and
(f) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with the Seller (or any Person
acting on their behalf) in connection with any of the Contemplated Transactions.
The remedies provided in this Section 10.2 will not be exclusive of or limit any
other remedies that may be available to the Buyers or the other Indemnified
Persons.
10.3 Indemnification and Payment of Damages by the Buyers. The Buyers
will, and shall cause the Company and each Related Buyer Business to indemnify
and hold harmless the Seller, and will pay to the Seller the amount of any
Damages arising, directly or indirectly, from or in connection with:
(a) any breach by the Buyers of any covenant or obligation of
the Buyers in this Agreement;
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(b) any and all actions, suits, claims or legal,
administrative, arbitration, governmental or other proceedings or investigations
against the Seller to the extent they result from or arise out of operation of
the Business (and are not subject to indemnification by the Seller Parties
pursuant to Section 10.2 above); or
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such Person with the Buyers (or any Person acting
on its behalf) in connection with any of the Contemplated Transactions.
The remedies provided in this Section 10.3 will not be exclusive of or
limit any other remedies that may be available to the Seller or the other
Indemnified Persons.
10.4 Limitations. If the Closing occurs, the Seller will have no
liability (for indemnification or otherwise) with respect to any representation
or warranty, other than those in Sections 3.3 and 3.5, which liability will
continue until the expiration of the applicable statutes of limitations. If the
Closing occurs, the Buyers will have no liability (for indemnification or
otherwise) with respect to any representation or warranty. No Related Buyer
Business in which the Buyers do not in the aggregate own a majority interest (a
"Minority Related Buyer Business") shall have any obligation to indemnify the
Seller for claims made on or after the third anniversary of the Closing.
10.5 Limitations on Amount -- Seller. The Seller will have no liability
(for indemnification or otherwise) with respect to the matters described in
clause (a) or clause (b) of Section 10.2 until the total of all Damages with
respect to such matters exceeds $50,000, at which time the Buyers shall be
indemnified for the full amount of such Damages. However, this Section 10.5 will
not apply to any Breach of the Seller's representations and warranties of which
the Seller had Actual Knowledge at any time prior to the date on which such
representation and warranty is made or any intentional Breach by the Seller of
any covenant or obligation, and the Seller will be liable for all Damages with
respect to such Breaches.
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10.6 Limitations on Amount and Recourse -- Buyers. The Buyers will have
no liability (for indemnification or otherwise) with respect to the matters
described in clause (a) or (b) of Section 10.3 until the total of all Damages
with respect to such matters exceeds $50,000, at which time the Seller shall be
indemnified for the full amount of such Damages. However, this Section 10.6 will
not apply to any Breach of any of the Buyers' representations and warranties of
which either Buyer had Actual Knowledge at any time prior to the date on which
such representation and warranty is made or any intentional Breach by the Buyers
of any covenant or obligation, and the Buyers will be jointly and severally
liable for all Damages with respect to such Breaches. The Seller's recourse (for
indemnification or otherwise) with respect to the matters in Section 10.3(a) and
(b) shall be limited in any event solely to (i) the ownership interests of the
Buyers or a Buyer or the transferee referred to in Section 12.10 hereof in the
Company and Related Buyer Businesses and (ii) the assets of the Company and such
Businesses. In no event shall the Seller have recourse for indemnification
against either of the Buyers' personal assets other than as set forth in the
prior sentence. This limitation as to recourse shall not limit the amount of
Damages for which an arbitral award in favor of the Seller may be entered
pursuant to Section 12.5. However, the Seller agrees that after it has satisfied
any such arbitral award for indemnification and any judgment entered thereon by
executing against those items against which it has recourse pursuant to the
terms of this Section 10.6, the Seller will promptly take all reasonable steps
legally necessary to extinguish any remaining award or judgment.
10.7 Procedure for Indemnification -- Third Party Claims.
(a) Promptly after receipt by an indemnified party under
Section 10.2 or 10.3, of notice of the commencement of any Proceeding against
it, such indemnified party will, if a claim is to be made against an
indemnifying party under such Section, give notice to the indemnifying party of
the commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
(b) If any Proceeding referred to in Section 10.7(a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will,
unless the claim involves Taxes, be entitled to participate in such Proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is also a
party to such Proceeding and the indemnified party determines in good faith that
joint representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel
reasonably satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such Proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified party under this
Section 10 for any fees of other counsel or any other expenses with respect to
the defense of such Proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the indemnifying party assumes the defense
of a Proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within the scope of and
subject to indemnification; (ii) no compromise or settlement of such claims may
be effected by the indemnifying party without the indemnified party's consent
unless (A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on any
other claims that may be made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in full by the indemnifying
party; and (iii) the indemnified party will have no liability with respect to
any compromise or settlement of such claims effected without its consent. If
notice is given to an indemnifying party of the commencement of any Proceeding
and the indemnifying party does not, within ten (10) days after the indemnified
party's notice is given, give notice to the indemnified party of its election to
assume the defense of such Proceeding, the indemnifying party will be bound by
any determination made in such Proceeding or any compromise or settlement
effected by the indemnified party.
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(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
(d) Each of the Seller and the Buyers hereby consents to the
non-exclusive jurisdiction of any court in which a Proceeding is brought against
any Indemnified Person for purposes of any claim that an Indemnified Person may
have under this Agreement with respect to such Proceeding or the matters alleged
therein, and agree that process may be served on each of the Seller and the
Buyers with respect to such a claim anywhere in the world.
10.8 Procedure for Indemnification -- Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
11. Post-Closing Covenants.
11.1 Transition. The Seller will not take any action that is designed
or intended to have the effect of discouraging any lessor, licensor, customer,
supplier or other business associate of the Company from maintaining the same
business relationships with the Buyers after the Closing as it maintained with
the Company prior to the Closing.
11.2 Insurance. The Seller and the Buyers shall cooperate with each
other in the handling of insurance claims relating to the Company that straddle
the Closing Date.
11.3 Books and Records; Information. After the Closing Date, the
Seller, on the one hand, and the Buyers, on the other hand, shall retain all
accounting, tax, payroll and similar books and records pertaining to the
Businesses for a period of at least seven (7) years after the annual period to
which they relate, and shall provide access to such books and records and
related information to the other party and its representatives, and allow them
to make copies thereof and extracts therefrom, upon their reasonable request and
at their expense. In addition, the Seller on one hand, and the Buyers, on the
other hand, shall on the request of the other party during said period provide
the other party with such information as the other party may reasonably request
in connection with any accounting, tax, Commission filing or legal requirement.
The Buyers shall use reasonable and diligent efforts to cause the Company to
provide any information necessary for the Seller to make required filings with
the Commission in a timely fashion. Such access and information shall be
provided reasonably promptly during normal business hours, and the requesting
party shall in good faith attempt to minimize any disruption to the other
party's business.
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11.4 Tax Matters.
(a) Tax Sharing Agreements. Any tax sharing agreement between
the Seller and the Company is terminated as of the date of this Agreement and
will have no further effect for any taxable year (whether the current year, a
future year, or a past year).
(b) Returns for Periods Through the Closing Date. The Seller
will include the income of the Company (including any deferred income triggered
into income by Reg. ss.1.1502-13 and Reg. ss.1.1502-14 and any excess loss
accounts taken into income under Reg. ss.1.1502-19) on the Seller's consolidated
federal income Tax Return and other Tax Returns for all periods from October 22,
1997 through the Closing Date and pay any Taxes attributable to such income. The
Company will furnish Tax information to the Seller for inclusion in the Seller's
Tax Returns for the period which includes the Closing Date in accordance with
the Company's past custom and practice. The Seller will allow the Buyers an
opportunity to review and comment upon such Tax Returns (including any amended
returns) to the extent that they relate to the Company. The Seller will take no
position on such returns that relate to the Company that would adversely affect
the Company after the Closing Date. The income of the Company will be
apportioned to the period from October 22, 1997 up to and including the Closing
Date and the period after the Closing Date by closing the books of the Company
as of the end of the Closing Date.
(c) Audits. The Seller will allow the Company and its counsel
to participate at their own expense in any audits of the Seller's Tax Returns to
the extent that such returns relate to the Company. The Seller will not settle
any such audit in a manner which would adversely affect the Company after the
Closing Date without the prior written consent of the Buyers, which consent
shall not unreasonably be withheld.
11.5 Indemnification and Insurance. The Seller agrees that all rights
to indemnification or exculpation now existing in favor of the employees,
agents, directors or officers of the Company (the "Company Indemnified Parties")
as provided in the Articles of Incorporation or Bylaws of the Seller or other
comparable governing documents (the "Governing Instruments"), or as provided in
the agreements referred to in Section 2.5(iv) (the "Indemnification Agreements")
shall continue in full force and effect for a period of not less than seven (7)
years from the Closing Date; provided, however, that, in the event any claim or
claims are asserted or made within such seven (7) year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims. Any determination required to be made
with respect to whether a Company Indemnified Party's conduct complies with the
standards set forth in the Governing Instruments or the Indemnification
Agreements shall be made by independent counsel selected by the Company
Indemnified Party reasonably satisfactory to the Seller (whose fees and expenses
shall be paid by the Seller). The Seller agrees to fully perform all obligations
to be performed by the Seller under the Governing Instruments and the
Indemnification Agreements. The Seller further agrees that, for so long as the
Seller shall maintain officers' and directors' liability insurance policies
indemnifying and holding harmless its officers, directors, employees and agents
with respect to any actions or omissions occurring prior to the Closing,
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providing insurance coverage on terms no less advantageous to the Company
Indemnified Parties than the Company's existing policy. In the event the Seller
or any of its successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger, or (ii) transfers all or substantially all of
its properties, assets or stock to any person, then and in each such case,
proper provision shall be made so that the successors and assigns of the Seller
(or their successors and assigns) shall assume the obligations set forth in this
Section 11.5.
11.6 Indemnification and Insurance. The Buyers agree to cause the
Company to provide that all rights to indemnification or exculpation now
existing in favor of the employees, agents, directors or officers of the Seller
(the "Seller Indemnified Parties") as provided in the Articles of Incorporation
or Bylaws of the Company or other comparable governing documents (the "Company
Governing Instruments"), or as provided in any agreements between a Seller
Indemnified Party and the Company (the "Company Indemnification Agreements")
shall continue in full force and effect for a period of not less than seven (7)
years from the Closing Date; provided, however, that, in the event any claim or
claims are asserted or made within such seven (7) year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims. Any determination required to be made
with respect to whether a Seller Indemnified Party's conduct complies with the
standards set forth in the Company Governing Instruments or the Company
Indemnification Agreements shall be made by independent counsel selected by the
Seller Indemnified Party reasonably satisfactory to the Company (whose fees and
expenses shall be paid by the Company). The Buyers agree to cause the Company to
fully perform all obligations to be performed by the Company under the Company
Governing Instruments and the Company Indemnification Agreements. In the event
the Company or any of its successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger, or (ii) transfers all or
substantially all of its properties, assets or stock to any person, then and in
each such case the Buyers shall cause the Company to make proper provision shall
be made so that the successors and assigns of the Company (or their successors
and assigns) shall assume the obligations set forth in this Section 11.6.
11.7 Post-Closing Operations of the Business. The Buyers will not
operate a Business in Southern California other than through the Company or a
Related Buyer Business and the Buyers will cause each Related Buyer Business to
perform all the obligations which the Buyers are required to cause the Company
to perform hereunder.
11.8 NASA Claim. The Buyers shall cause the Company to pay the Seller
fifty percent (50%) of all net recoveries to the Company as of the Closing and
thereafter with respect to the NASA Claim in a reasonably prompt fashion. This
obligation to cause payments to the Seller with respect to the NASA Claim is
expressly conditioned upon the Seller paying fifty percent (50%) of all costs
and expenses incurred by the Company by reason of its prosecuting or pursuing
the NASA Claim when due, and, if the Seller shall fail to pay any such costs or
expenses when due, shall irrevocably forfeit its right to be paid any portion of
the net recoveries with respect to the NASA Claim.
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11.9 Buyer Notification. As soon as practicable after the Closing, the
Buyers shall send notification to all vendors, customers or other third parties
to which the Company has a material relationship setting forth the fact that the
Buyers (or their permissible assignees) have acquired ownership of the Company
and that the Seller has no continuing right, title or interest in the Company or
involvement with its operations.
12. General Provisions.
12.1 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. Neither the Seller nor the
Buyers will cause the Company not to incur any fees or out-of-pocket expenses in
connection with this Agreement. In the event of termination of this Agreement,
the obligation of each party to pay its own expenses will be subject to any
rights of such party arising from a breach of this Agreement by another party.
In the event this Agreement is terminated by the Buyers pursuant to Section
9.1(b), the Seller shall promptly pay the Buyers all costs and expenses
(including reasonable legal fees and expenses) incurred by the Buyers in
connection with the Contemplated Transactions; including, without limitation,
all appraisal fees or other expenses incurred in connection with attempting to
obtain the Loan referred to in Section 6.3.
12.2 Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, at such time and in such manner as are mutually agreed upon by the
Buyers and the Seller; provided, however, that the Seller may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement with the stock exchange or quotation system
concerning its publicly traded securities (in which case the Seller will use
Best Efforts to provide the Buyers with a copy of such communication prior to
making the disclosure). Unless consented to by the Buyers in advance or required
by Legal Requirements, prior to the Closing the Seller shall, and shall cause
the Company to, keep this Agreement strictly confidential and may not make any
disclosure of this Agreement to any Person. The Seller and the Buyers will
consult with each other concerning the means by which the Company's employees,
customers, and suppliers and others having dealings with the Company will be
informed of the Contemplated Transactions, and the Buyers will have the right to
be present for any such communication.
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12.3 Confidentiality. Between the date of this Agreement and the
Closing Date, the Buyers and the Seller will maintain in confidence, and will
cause the directors, officers, employees, agents, and advisors of the Seller and
the Company to maintain in confidence any written, oral, or other information
obtained in confidence from another party in connection with this Agreement or
the Contemplated Transactions, unless (a) such information is already known to
such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
Contemplated Transactions, and fulfilling Seller's periodic reporting
obligations to the Commission or to facilitate due diligence of any potential
acquirer of Seller (but not a potential acquirer of the Company) if such
potential acquirer is aware of and legally bound by the restrictions contained
in this Section 12.3, or (c) the furnishing or use of such information is
required by legal proceedings or the threat thereof. If the Contemplated
Transactions are not consummated, each party will return or destroy as much of
such written information as the other party may reasonably request.
12.4 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
To the Seller: REXX Environmental Corporation
Attention: Xxxxxx Xxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a required copy to: Xxxxxx Xxxxxxxxxxx, Esq.
1370 Avenue of the Americas
New York, New York, 10019-4602
Facsimile: (000) 000-0000
To the Buyers: Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
with a required copy to: Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx
Xxxxxx & Fognani, L.L.P.
Attention: Xxxxxx X. Xxxxxx, Esq.
000 Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
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12.5 Arbitration.
(a) Any claims by the Company or the Buyers against the
Seller, or by the Seller against the Buyers arising out of or in connection with
this Agreement or the Seller's Closing Document shall be determined by
arbitration in Chicago, Illinois by an arbitrator appointed by JAMS/Endispute,
in accordance with the applicable rules of JAMS/Endispute, and as provided in
this Section 12.5. The arbitration may be commenced by a demand for arbitration
with notice of claims pursuant to Section 12.4, with a simultaneous copy thereof
to the JAMS/Endispute office in Chicago, Illinois. Except as otherwise provided
for herein, the arbitration shall be conducted in accordance with the
JAMS/Endispute Comprehensive Rules and Procedures then in effect. There shall be
one (1) arbitrator agreed upon by the parties, or if the parties cannot agree on
the identity of the arbitrator within five (5) days of the arbitration demand,
the arbitrator shall be selected by the JAMS/Endispute Administrator. Any issue
about whether a claim is covered by this Agreement to arbitrate shall be
determined by the arbitrator.
(b) The parties may perform reasonable discovery in such scope
as determined by the arbitrator. Depositions may be taken and discovery may be
obtained in any arbitration under this Agreement in accordance with said
statute, as amended or replaced as of the arbitration. The arbitrator shall not
be bound by rules of evidence, but may consider such writings and oral
presentations as reasonable business people would use in the conduct of their
day-to-day affairs, and may require the parties to submit some or all of their
case by written or such other manner of presentation as the arbitrator may
determine to be appropriate. Pre-trial memoranda shall be exchanged no later
than five (5) days before the hearing starts. The parties intend to limit live
testimony and cross-examination to the extent necessary to ensure a fair hearing
on material issues without unnecessarily prolonging the arbitration.
(c) The arbitrator shall take such steps as he or she may
consider necessary to start the hearing within sixty (60) days of the
appointment of the arbitrator and to conclude the hearing within twenty (20)
days; and the arbitrator's written decision shall be made not later than ten
(10) days after the conclusion of the hearing. A stenographic record shall be
kept of the hearing, except that the arbitrator may employ telephonic conference
calls with the parties' attorneys to decide discovery and procedural issues, and
no stenographic record shall be required thereof. The parties have included
these time limits in order to expedite the proceeding, but they are not
jurisdictional, and the arbitrator shall for good cause (including the inability
of a party to complete its discovery despite diligent efforts in connection
therewith) allow reasonable extensions or delays, which shall not affect the
validity of the award. The arbitrator's written decision shall contain a brief
statement of the claim(s) determined and the xxxx made on each claim. In making
the decision and award, the arbitrator shall apply applicable Delaware law,
without giving effect to its principles of conflicts of law. Absent fraud,
collusion or willful misconduct by the arbitrator, the award shall be final, and
judgment may be confirmed and entered in any court having jurisdiction thereof.
The arbitrator may xxxx injunctive relief or any other substantive or procedural
direction available from a judge in an action, in law or equity. The arbitrator
shall xxxx the predominantly prevailing party its reasonable attorneys' fees and
disbursements and expenses (including stenographic, witnesses', experts', and
investigation fees and expenses) in connection with the arbitration. Until the
arbitrator's award of costs, the fees and disbursements of JAMS/Endispute, the
arbitrator, stenographic recording expenses and similar arbitration expenses
shall be borne and paid fifty percent (50%) by the Seller and fifty percent
(50%) by the Buyers or the Company (whichever may be a party to the
arbitration).
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(d) Notwithstanding any term in this Agreement to the
contrary, each party hereto, on or prior to the commencement of arbitration
hereunder, shall first notify the other party in writing of its or his intention
to seek arbitration and the specific bases upon which its claims are made.
Within seven (7) days thereof, the party in receipt of such notification may
request that JAMS/Endispute provide mediation services with a mediator in
accordance with its Rules and as selected by the Administrator, and on such
request the other party shall submit to such mediation, the fees and
disbursements of said mediation shall be borne fifty percent (50%) by the Seller
and fifty percent (50%) by the Company or the Buyers (whichever may be a party
to the mediation). The pendency of a request for mediation, or of a mediation,
shall not stay a demand for arbitration pursuant to Section 12.5(a), or any
arbitration procedures, hearing or determination pursuant to Section 12.5(b),
12.5(c) or 12.5(d). Nothing herein shall limit the Company or the Buyers from
seeking or obtaining injunctive relief.
(e) For purposes of Section 12.5 hereof, the term "Buyers"
includes all Related Buyer Businesses and all permitted transferees referred to
in Section 12.10 hereof. The Buyers agree to cause such Related Buyer Businesses
and permitted transferees to execute and deliver to the Seller agreements in
form and substance reasonably satisfactory to the Seller so agreeing to such
arbitration provisions.
12.6 Further Assurances. The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
12.7 Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one (1) party, in whole or in part, by a waiver or renunciation of the claim
or right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one (1) party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
12.8 Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
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12.9 Disclosure Letters.
(a) The disclosures in the Disclosure Letters, and those in
any Supplement thereto, must relate only to the representations and warranties
in the Section of the Agreement to which they expressly relate and not to any
other representation or warranty in this Agreement.
(b) In the event of any inconsistency between the statements
in the body of this Agreement and those in the Disclosure Letters (other than an
exception expressly set forth as such in the Disclosure Letters with respect to
a specifically identified representation or warranty), the statements in the
body of this Agreement will control.
12.10 Assignments, Successors, and No Third-Party Rights. No party may
assign any of its rights under this Agreement without the prior consent of the
other parties (which any party may withhold, in its sole and absolute
discretion) except that each of the Buyers may assign any of his right, title
and interest under this Agreement to any corporation or limited liability
company wholly-owned by the assigning Buyer without the need for consent by the
Seller; provided, however, that any such transferee shall assume in writing the
liabilities, obligations and duties of performance of the assigning Buyer under
this Agreement and the assigning Buyer shall remain jointly and severally liable
with such transferee with respect to the assigning Buyer's liability under this
Agreement. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
12.11 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.12 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All references to Buyers
herein include each Buyer, and all references to Buyer herein include both
Buyers. All words used in this Agreement will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
12.13 Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
12.14 Joint and Several Liability. The obligations hereunder of the
Buyers, Related Buyer Businesses and transferees referred to in Section 12.10
shall be joint and several.
-34-
12.15 Governing Law. This Agreement will be governed by the laws of the
State of Delaware without regard to conflicts of laws principles.
12.16 Counterparts; Facsimile. This Agreement may be executed in one
(1) or more counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one (1) and the same agreement. This Agreement may be executed by
facsimile (with originals to follow by United States mail), and such facsimile
shall be conclusive evidence of the consent and ratification of the signatories
hereto.
12.17 Minority Related Buyer Business Obligations. The obligations of
either Buyer hereunder to cause any Minority Related Buyer Business to
acknowledge, comply with or perform under the provisions of this Agreement shall
expire in their entirety on the third anniversary of the Closing.
[Remainder of Page Intentionally Left Blank]
-35-
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyers
/s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx
Seller REXX ENVIRONMENTAL CORPORATION,
a New York corporation
By: /s/ Xxxxxx X. Xxxx
-----------------------------
Name: Xxxxxx X. Xxxx
----------------------------
Title: Chairman of the Board
---------------------------
[Signature Page to Stock Purchase Agreement]
Schedule of Omitted Exhibits
Exhibit A Seller's Release
Exhibit B Noncompetition Agreement
Exhibit C Buyers' Release
REXX
ENVIRONMENTAL CORPORATION
November 29, 1999
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx Contracting, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Re: Stock Purchase Agreement dated June 10, 1999
Dear Xxxx and Xxxxx:
As we have discussed, it will not be practicable to file proxy materials for the
planned transactions until later in November or in December. When the Agreement
was signed in June, it was expected that the meeting date would be before
November 30. Since the shareholder meeting cannot be held by that date, all
references to November 30, 1999 in the Agreement need to be changed to a
reasonable later date. I expect it reasonable to assume that the shareholder
meeting will be held before February 29, 2000.
As we have also discussed, you have requested the right to pay REXX $171,875 on
Closing of the Agreement in lieu of 125,000 REXX shares as part of the Purchase
Price.
Accordingly, as we have discussed, please confirm that (i) all references to
November 30, 1999 in the Agreement are to be considered changed to references to
February 29, 2000, (ii) Section 2.2(a) of the Agreement is deleted in its
entirety and replaced by (a) The purchase price (the Purchase Price") for the
Shares will be (x) $1,300,000 payable in cash, and (y) delivery of 125,000
shares of Common Stock of the Seller with an agreed upon fair market value of
$1.375 per share or the closing price of such Shares as of the day prior to the
Closing, whichever is less, or $171,875 in cash, and (iii) in all other respects
the Agreement remains unchanged and unaffected by the delay in the shareholder
meeting.
Very truly yours,
/s/ Xxxxxx X. Xxxx
-----------------------
Xxxxxx X. Xxxx
Chairman of the Board
CONFIRMED:
/s/ Xxxx X. Xxxxxxx
-----------------------
Xxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx
-----------------------
Xxxxx X. Xxxxxx
000 Xxxx Xxxxxx x Xxx Xxxx, Xxx Xxxx 00000
o (000) 000-0000 o Fax: (000) 000-0000
REXX
ENVIRONMENTAL CORPORATION
January 6, 2000
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx Contracting, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Re: Stock Purchase Agreement dated June 10, 1999
and Letter Agreement dated November 29, 1999
Dear Xxxx and Xxxxx:
As we have discussed, it will not be practicable to file proxy materials for the
planned transactions until later this month. When the Letter Agreement was
signed in November, it was expected that the meeting date would be before
February 29, 2000. Since the shareholder meeting cannot be held by that date,
all references to February 29, 2000 in the Stock Purchase Agreement as amended
by the Letter Agreement of November 29, 1999 need to be changed to a reasonable
later date. I expect it reasonable to assume that the shareholder meeting will
be held before April 30, 2000.
Accordingly, as we have discussed, please confirm that (i) all references to
November 30, 1999 and/or February 29, 2000 in the Stock Purchase Agreement and
the Letter Agreement are to be considered changed to references to April 30,
2000, and (ii) in all other respects the Stock Purchase Agreement and the Letter
Agreement remain unchanged and unaffected by the delay in the shareholder
meeting.
Very truly yours,
/s/ Xxxxxx X. Xxxx
-----------------------
Xxxxxx X. Xxxx
Chairman of the Board
CONFIRMED:
/s/ Xxxx X. Xxxxxxx
-----------------------
Xxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx
-----------------------
Xxxxx X. Xxxxxx
000 Xxxx Xxxxxx x Xxx Xxxx, Xxx Xxxx 00000
o (000) 000-0000 o Fax: (000) 000-0000
