4.24.00
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4.24.00
AGREEMENT
THIS AGREEMENT ( hereinafter the "Agreement") is made and entered into as
of the ___day of April, 2000, by and among AZIMUTH, INCORPORATED ("Seller"), a
South Carolina corporation having its principal place of business in Charleston,
South Carolina; ENVIROMETRICS, INC. ("EVRM"), a Delaware corporation having its
principal place of business in Charleston, South Carolina, and sole shareholder
of Seller; XXXXXXX X. XXXXXXX ("RDB"), an individual residing in Mount Pleasant,
South Carolina; and RISK TECHNOLOGIES, LLC a sole member limited liability
company formed under the laws of South Carolina ("Purchaser").
Background
Seller is engaged, inter alia, in the business of Industrial Safety and
Hygiene consulting at its office at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, XX
(the "Premises"), which business is expressly identified and segregated as
Seller's Consultative Business (the "Consultative Business") on Seller's
internal financial statements; and,
RDB was previously employed by Seller as its President and by EVRM as its
Senior Vice President under an employment agreement (the "Employment Agreement")
which contains provisions regarding nondisclosure and noncompetition by RDB from
which Purchaser and RDB wish to be released; and,
Seller desires to sell to the Purchaser and the Purchaser desires to
purchase from Seller, subject to the terms and conditions herein, its tangible
and intangible assets used in the Consultative Business which are described
below; and
EVRM is the lessee of the Premises, and Purchaser wishes to sublease an
area of the Premises for a period of time following the Closing hereof as
described below.
Agreement
In consideration of the mutual promises contained below and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I - PURCHASE AND SALE OF ASSETS
1.01 The Assets. At Closing the Seller hereby agrees to sell, convey,
transfer, assign, set over and deliver to the Purchaser, and the Purchaser
agrees to purchase and accept, the following assets (the "Assets"):
a. All of the equipment described in Exhibit "A" attached hereto;
b. The list of current and former Consultative Business clients attached
hereto as Exhibit "B" (the "Consultative Business Clients");
c. The "Azimuth" name and any service marks, logos, and trademarks for
"Azimuth" and Occupational Healthguard"; provided, however, that Seller
shall be permitted to retain the name "Azimuth" as its corporate name so
long as it adheres to the provisions below regarding noncompetition with
Purchaser;
d. Those segments or portions of outstanding contracts between Seller and
Consultative Business Clients which have yet to be performed ("Incomplete
Contract Segments"); and all outstanding proposals for prospective
engagements ("Outstanding Proposals"). All of the foregoing are listed and
described in Exhibit "C" attached hereto. Purchaser agrees to assume
Seller's obligations under such contracts and proposals and to discharge
such obligations on a timely basis with a high degree of professionalism,
diligence and skill; provided, however, that Seller shall retain its
contract with Xxxxx Corning, Anderson, SC plant (Job #98-069, commenced
8/17/98) and same shall not be conveyed to, nor assumed by, Purchaser under
this Agreement; and, provided further, all amounts which have been prepaid
to Seller, if any, shall be credited to Purchaser at Closing to the extent
that such prepayment is for work not yet completed on the Closing Date.
e. All records and files in Seller's possession of Consultative Business
Clients which have given Seller written instructions to release same to
Purchaser. Purchaser will keep and maintain such records and files in
safekeeping and make them available to Seller to the extent Seller, or
Seller's parent, successor or insurance company may require same to respond
to claims.
f. The good will of the Consultative Business.
No assets which are not explicitly described above are included in this
Agreement, and specifically excluded are Seller's laboratory and all assets,
clients, records and business related thereto (collectively, the "Laboratory
Business"). The Assets are being sold "as is" and "where is," and Seller makes
no express or implied representation or warranty whatever in regard thereto,
including warranty of merchantability, fitness for a particular purpose or any
other warranty of any nature, all which are hereby expressly disclaimed by
Seller to the maximum extent permitted by the laws of the State of South
Carolina.
1.02 Purchase Price. The purchase price for the Assets (the "Purchase
Price") shall be One Hundred Thousand Dollars ($100,000.00), payable at Closing
as follows:
a. Purchaser's and RDB's assumption of and agreement to pay the two
promissory notes to the U.S. Small Business Administration described in
Exhibit "D" attached hereto (the "SBA Loans") having combined balances of
approximately Eighty-five Thousand Dollars ($85,000.00). Such assumption
shall be as of the May 1, 2000 payment; and,
b. A Promissory Note from Purchaser to Seller, co-signed and guaranteed by
RDB in the principal amount of the difference between the combined
outstanding balances of the SBA Loans and the Purchase Price, minus a
credit of $100.00 to Purchaser for the proration of personal property taxes
related to the Assets as set forth below, with principal and accrued
interest payable not later than on the first anniversary of Closing.
Interest shall accrue at a rate equal to the lowest interest rate being
quoted on the Closing Date by Wachovia Bank, Charleston, South Carolina for
short term, unsecured loans to its best customers plus one per cent (1%).
Purchaser's and RDB's agreement assuming the SBA Loans shall indemnify and
hold harmless Seller, EVRM and Dr. and Xxx. Xxxxxxx X. Xxxxxxx from any further
obligation or liability thereon. Purchaser shall make its best efforts to obtain
the release of Seller from its liability under the SBA Loans as well as a
release of Dr. and Xxx. Xxxxxxx and the collateral Dr. and Xxx. Xxxxxxx have
pledged as security for the SBA Loans. Seller will cooperate with Purchaser in
this regard.
1.03 Security Agreement.
a. Pledge of Stock. The obligations of Purchaser and RDB under Section 1.02
(a) and (b) above shall be secured by a first security interest granted to
EVRM in One Hundred Thousand (100,000) shares of EVRM common stock owned by
RDB (the "Shares"), the certificates for which shall be delivered at
Closing to Seller with stock powers duly endorsed in blank by RDB.
b. Pledge of Additional Stock. If Seller, Dr. and Xxx. Xxxxxxx and their
collateral are not released from liability under the SBA loans by ninety
(90) days after Closing RDB will provide a first security interest in an
additional Two Hundred Thousand (200,000) of such shares (the "Additional
Shares") as collateral for EVRM's security interest. At Closing, the
certificate(s) representing the Additional Shares with stock powers duly
endorsed in blank shall be deposited with a mutually acceptable escrow
agent which will either return them to RDB upon such release of Seller, the
Feigleys and their collateral or deliver them to Seller at the expiration
of the ninety day period if such releases have not been obtained.
c. RDB may notify EVRM at the end of any calendar quarter following Closing
if the "bid" price for EVRM Common Stock for each trading day of such
quarter on the OTC-BB or such recognized exchange on which the Shares and
Additional Shares (collectively, the "Pledged Securities") were traded was
such that the average of their "bid" prices on each day of such quarter
bore a ratio to the combined outstanding balances as of the last day of
such quarter, including accrued interest, of the SBA Loans (for which such
releases have not been obtained) and the Promissory Note provided for in
Section 1.02 (b) above (collectively, the "Outstanding Loans Balance"),
which was in excess of 3 to 2. Such notice will contain such daily "bid"
prices of the EVRM Common Stock and the Outstanding Loans Balance. After
verification of the data contained in such notice, EVRM will deliver an
amount of the Pledged Securities to RDB having a value equal to (a) their
average daily "bid" price for that quarter minus (b) the Outstanding Loans
Balance multiplied by the fraction, 3/2.
d. At Closing, RDB shall execute a security agreement in favor of EVRM
containing the foregoing terms, as well as such other terms and provisions
as are usual and customary in such security and stock pledge agreements in
addition to a UCC-1 Financing Statement containing the requisite
information regarding the security interest. Such agreement shall provide
that, absent a default therein or in the obligations which it secures, RDB
shall retain his rights to all cash dividends and his rights to vote the
Pledged Securities in addition to his right to execute any waivers or
consents with respect thereto.
1.04 Closing. The Closing of this Agreement shall be the consummation of
all transactions contemplated hereby to be performed at Closing and shall take
place at 2:00 p.m. on April 26, 2000, at the Premises or at such other time and
place as Seller and Purchaser may mutually agree in writing (the "Closing
Date").
ARTICLE II - REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of the Seller. Seller and EVRM hereby
represent and warrant to the Purchaser as follows:
a. Formation and Organization. Seller is a corporation duly formed and
validly existing and in good standing under the laws of the State of South
Carolina.
b. Authority, Binding Effect. Seller and EVRM have the authority to own
property and carry on business, to execute and deliver this Agreement and
the other instruments and documents required or contemplated hereby, to
perform the obligations hereunder, and to consummate this Agreement. This
Agreement has been duly executed and delivered by Seller and EVRM and
constitutes a legal, valid, and binding obligation enforceable in
accordance with its terms and the other agreements required or contemplated
hereby to be executed by the Seller, subject only to its ratification by
Seller's and EVRM's Boards of Directors.
c. Title to the Assets. Seller has good and marketable title to the Assets
and shall convey same to Purchaser at Closing, free and clear of all liens,
claims, encumbrances, charges, restrictions and other burdens, except as
disclosed in this Agreement and expressly assumed by Purchaser pursuant to
the terms of this Agreement; provided, that any file or record referred to
in Section 1.01 (e) above will be conveyed to Purchaser if, as and when the
written instructions therefor are received by Seller, for a period of
Ninety (90) days following Closing. After that time, Seller shall have no
further obligation to Purchaser in this regard.
d. Right to Use of Name. Seller has good title and possesses complete
ownership of the trade name "Azimuth," free and clear of all claims,
charges, liens, encumbrances or restrictions.
e. Absence of Violations, Compliance. To the best of the knowledge of
Seller, the use of the Assets in its Consultative Business does not
constitute a violation of any applicable zoning, building, environmental or
other ordinances, regulations, codes or other laws. Seller currently
complies in all material respects with all other laws applicable to it and
its business, properties and relationships.
f. Consents. To the best of the Seller's knowledge, no third party consent
or agreements of any party, judicial, governmental, creditor, lender or
otherwise, is necessary for the execution and delivery of this Agreement
and the other instruments and documents required or contemplated hereby
other than the consent of the landlord of the Premises to the Sublease (as
described below).
g. Litigation. There is no litigation, claim, arbitration, governmental
investigation or other proceeding pending or threatened which affects the
Assets or which may impair the ability of Seller to perform the obligations
contained in this Agreement, including any claim by any client of the
Consultative Business regarding unsatisfactory work by Seller.
h. Payment of Taxes and Wages. Seller has properly filed all returns that
are required to be filed by it which relate to the Assets with any
government authority, and all compensation, employment and other taxes and
withholding, fees, and other governmental charges related thereto have or
will be paid by Seller except the personal property taxes related to the
Assets which are due in December, 2000. For the purposes of this Agreement,
the sum of One Hundred Dollars ($100.00) shall be deemed to be a fair
proration of Seller's portion of such taxes.
i. Material Accuracy. None of the agreements, covenants, representations or
warranties contained in this Agreement or in any Exhibit hereto pursuant to
this Agreement contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
2.02 Representations and Warranties of Purchaser. The Purchaser hereby
represents and warrants to Seller as follows:
a. Formation and Organization. Purchaser is a limited liability company
duly formed and validly existing and in good standing under the laws of the
State of South Carolina, and RDB is its sole member.
b. Authority, Binding Effect. Purchaser has the authority to own property
and carry on business, to execute and deliver this Agreement and the other
instruments and documents required or contemplated hereby, to perform the
obligations hereunder, and to consummate this Agreement. This Agreement has
been duly executed and delivered by Purchaser and constitutes a legal,
valid, and binding obligation enforceable in accordance with its terms and
the other agreements required or contemplated hereby to be executed by the
Purchaser.
c. Litigation. There is no litigation, claim, obligation, proceeding,
investigation pending or threatened or any other thing which may impair the
Purchaser's ability to perform any of its obligations contained in this
Agreement.
ARTICLE III - COVENANTS
3.01 Covenants of the Seller and EVRM.
a. Sublease. EVRM hereby agrees to sublease to Purchaser approximately
1,000 square feet of office space in the Premises (the "Sublease") on a
week-to-week basis at a rental of One Hundred Seventy Dollars ($170.00) per
week commencing on the day of Closing and payable on the first day of each
week thereafter. The Sublease will be revocable by either party upon one
week's notice to the other. Such rent and sublease shall be entirely net to
EVRM which will have no responsibility whatever thereunder for any services
to Purchaser except the provision of electricity, water and HVAC. Purchaser
agrees to be responsible for all other expenses associated with the
Sublease.
b. Use of Certain Telephone Numbers. Seller agrees to allow Purchaser to
use existing Azimuth telephone numbers, including the existing toll free
telephone number, during the term of the Sublease. Purchaser will reimburse
Seller for any costs incurred under such agreement. The parties acknowledge
that the toll free number is currently in use by the Laboratory Business as
are two of the local numbers, and another number is the main corporate
number for EVRM and is listed on its 10-K's. At such time as EVRM and the
Laboratory Business no longer need their telephone and telefax numbers,
EVRM will use its best efforts to transfer them to Purchaser as soon
thereafter as practicable. Any unrecovered deposits will be reimbursed by
Purchaser. In the meantime, should Purchaser so elect, EVRM will use its
best efforts to transfer the number (000) 000-0000 to Purchaser. Should
Purchaser terminate the sublease, Seller agrees to transfer incoming calls
for Purchaser to a number provided to Seller and to provide such number to
caller for future use.
c. Release. Effective upon Closing, Seller and EVRM forever release and
discharge Purchaser and RDB, individually, from and against any and all
claims, demands, counterclaims, actions, costs, causes of action, damages,
debts, obligations and liabilities of whatever nature arising out of the
Employment Agreement or out of RDB's relationship with Seller and EVRM up
to and including the date of this Agreement. This release is subject to the
Closing of this Agreement.
d. Noncompetition. For a period of Three (3) years following Closing within
the State of South Carolina, neither Seller nor EVRM shall, directly or
indirectly, (i) engage in the Industrial Safety and Hygiene consulting
business; (ii) solicit in competition with the Purchaser any Consultative
Business Clients or accept Industrial Safety and Hygiene consulting
business from any of them; or (iii) without the consent of the Purchaser,
solicit any person who is or has been employed by the Purchaser or
encourage any such person to leave the employ of the Purchaser.
e. Notwithstanding any provision herein to the contrary:
(i) Nothing herein is intended, nor shall it be deemed, to impair or
prevent in any way whatsoever Seller's continued, unfettered
engagement in the Laboratory Business, including the performance of
laboratory services for Consultative Business Clients. Seller may
continue to use the name "Azimuth Laboratories" in its conduct of such
business.
(ii) Should Seller convey all or any portion of the Laboratory
Business, it will not convey the use of the name, "Azimuth
Laboratories" for a period of longer than six months from the Closing
of such transaction, and it will make its best efforts to acquire a
noncompetitive agreement from the purchaser(s) in such transaction
preventing such purchaser(s) from competing with the Consultative
Business.
3.02 Covenants of the Purchaser.
a. Sublease. Purchaser agrees to abide by the terms of the sublease as set
forth in Paragraph 3.01(a) above.
b. Release. Effective upon Closing, Purchaser and RDB forever release and
discharge Seller and EVRM, and their respective directors, officers and
representatives, from and against any and all claims, demands,
counterclaims, actions, costs, causes of action, damages, debts,
obligations and liabilities of whatever nature arising out of the
Employment Agreement or out of RDB's relationship with Seller and EVRM up
to and including the date of this Agreement. This release is subject to the
Closing of this Agreement.
c. Noncompetition. For a period of Three (3) years following Closing within
the State of South Carolina, neither Purchaser nor RDB shall, directly or
indirectly, (i) engage in any business competitive with an Industrial
Safety and Hygiene laboratory business; (ii) solicit in competition with
the Laboratory Business any clients of the Laboratory Business or accept
Industrial Safety and Hygiene laboratory business from any of them; or
(iii) without the consent of Seller and EVRM, solicit any person who is or
has been employed by either of them or encourage any such person to leave
the employ of either of them (iv) use the name "Azimuth" as a trade name in
conjunction with the word "laboratory" or "laboratories."
d. Receivables, Revenues and Revenue Sharing.
(i) Notice. At Closing, or as soon thereafter as is practicable,
Seller will notify all Consultative Business Client accounts
receivable of this transaction.
(ii) Receivables. All amounts due, as of Closing, for completed
contracts and completed segments of outstanding contracts between
Seller and Consultative Business Clients shall be receivables which
belong to Seller and Seller shall invoice such Clients accordingly at
or prior to Closing. So long as such invoice, or any portion thereof,
remains outstanding, Purchaser will pay to Seller all revenues which
Purchaser receives from such invoiced Client until such invoice is
paid in full, at which xxxx Xxxxxx shall assign to Purchaser so much
of such account receivable as remains unpaid by such Client.
(iii) Until August 18, 2000 Purchaser shall pay to EVRM, upon receipt,
(a) seven and one-half per cent (7.5%) of all gross revenues which
result from Incomplete Contact Segments or Outstanding Proposals,
excluding PHT, PHTS and PHT Members.
(iv) Purchaser shall submit to EVRM at the beginning of each month
following Closing a report of receivables and receipts from
Consultative Business Clients for the preceding month, each of which
shall include: copies of all invoices to, and a breakdown of all
receipts from, Consultative Business Clients for the preceding month;
a breakdown of Purchaser's payments to EVRM the preceding month; and
such other information as EVRM may reasonably request. EVRM or its
representatives may inspect all records related to Purchaser's
revenues at any time during normal business hours upon 2 days notice.
For purposes of this Agreement, any outstanding invoice for revenues
included in (iii) above which is less than forty-five days old on
August 18, 2000 shall be deemed to have been paid in full prior to
that date, and the related percentage shall be paid to EVRM at that
time.
e. Engagement of Seller's Employees. Purchaser agrees to engage Xxxx
Xxxxxx, Xxxxx Xxxxxxx, and Xxx Xxxxx as employees upon the same terms they
are currently employed by Seller for a period of at least six months
following Closing, provided that any such employment may be terminated for
cause, and that those employees will enter into reasonable employment
agreements with Purchaser.
f. Release of Third Parties. At Closing, EVRM will execute a release,
prepared by Purchaser and in form and substance approved by EVRM prior to
Closing, of PHT and PHTS from liability resulting from their engagement of
Purchaser.
ARTICLE IV - MISCELLANEOUS
For purposes of this Article IV, the word "party" shall be deemed to
include EVRM and Seller jointly and severally, as the applicable context may
require, on the one hand, and Purchaser and RDB, jointly and severally, as the
applicable context may require, on the other.
4.01 Survival of Representations. The following shall survive the Closing:
(a) all representations and warranties contained herein; (b) all provisions
containing covenants to be performed subsequent to the Closing.
4.02 Injunctive Relief; Costs of Actions. The parties agree that failure by
Purchaser or RDB on the one hand, or Seller or EVRM on the other, to comply with
the provisions of Section 3.01(d) or 3.02(c) of this Agreement will cause
irreparable damage to the other party that may not be compensated adequately by
monetary damages. Accordingly, the parties agree that, in the event of breach or
threatened breach of the terms of either provision, the non-defaulting party
shall be entitled to injunctive or other preliminary or equitable relief in
addition to such other remedies as may be available to it for such breach or
threatened breach, including damages. In the event of any action at law or in
equity to enforce the provisions of this Agreement, the unsuccessful party shall
pay to the other all costs and expenses so incurred, including attorneys' fees.
4.03 Brokerage Fees. The parties each represent and warrant that no
statement or representation has been made to anyone which would incur liability
for any broker's or finder's fees or commissions payable in connection with this
Agreement. If any finder's fee or brokerage or other commission is claimed by
any person to be due on the basis of any statement or representation alleged to
have been made by any party, that party alleged to have so made the statement or
representation shall indemnify and hold harmless the other party from and
reimburse the other party for any loss, cost, expense, or liability in
connection with any such claim.
4.04 Expenses. The parties shall pay their own expenses incurred in
connection with this Agreement, including the fees of any attorneys,
accountants, consultants or others engaged by it.
4.05 Notices. All notices and other communications to be given hereunder
shall be in writing and shall be deemed to have been given when personally
delivered, or mailed by certified mail, return receipt requested, postage
prepaid, addressed as follows:
a. If to the Seller or EVRM: Envirometrics, Inc.
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
b. If to the Purchaser or RDB: Risk Technologies, LLC and
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxx, XX 00000
Communications sent by other means shall be deemed operative only upon actual
receipt. Addresses may be changed by either party upon written notice to the
other given as provided herein.
4.06 Binding Effect. All of the terms of this Agreement shall be binding
upon and shall inure to the benefit of the respective successors and assigns of
the parties hereto.
4.07 Assignment. This Agreement may not be assigned by either party without
the consent of the other party; provided, (1) Seller may assign its rights
hereunder to EVRM, and (2) Seller may assign its rights to enforce the
provisions of Section 3.02(c) above to a purchaser of the Laboratory Business
provided that, as a condition of such assignment, the purchaser of the
Laboratory Business agrees and covenants to be bound to noncompetitive covenants
identical to those contained in Section 3.01(d) and Seller assigns the right of
enforcement of same, including enforcement rights identical to those contained
in Section 4.02, to Purchaser.
4.08 Choice of Laws. This Agreement shall be construed and enforced in
accordance with the laws of the State of South Carolina.
4.09 Waiver. The waiver of any right under this Agreement by any party
hereto in any particular instance or instances shall not, unless so specified by
such party, be construed as or constitute a continuing waiver.
4.10 Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties. There are no representations or warranties made by
any party hereto and relied upon by any other party hereto except as set forth
herein.
4.11 Severability. If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions hereof shall not be affected thereby.
4.12 Amendment. This Agreement may not be amended or supplemented except by
a writing signed by the party against whom such amendment or supplementation is
sought to be enforced.
THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK
4.13 Availability of Representation by Independent Counsel. The Purchaser
and RDB confirm and acknowledge that they have been represented by independent
counsel who has reviewed this Agreement and advised them regarding its
provisions.
4.14 Parties. The terms "Seller" and "Purchaser" herein shall mean and
include any successors-in-interest of either party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective authorized signatories as of the date first above written.
Azimuth, Incorporated 'Seller'
____________________________ By: ________________________________
Witness Xxxxxx X. Xxxxxxx III, Chief Executive Officer
Envirometrics, Inc. 'EVRM'
____________________________ By: ________________________________
Witness Xxxxxx X. Xxxxxxx III, Chief Executive Officer
Risk Technologies, LLC 'Purchaser'
____________________________ By:___________________________________
Witness Xxxxxxx X. Xxxxxxx, Sole Member
____________________________ ____________________________________
Witness Xxxxxxx X. Xxxxxxx 'RDB'
