EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the 4th day of December, 1995,
between Compost America Holding Company, Inc. ("CAHC" or the "Purchaser"), a New
Jersey Corporation, located at 000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX
00000,
AND
Xxxxxx X. Xxxxx, Xx. ("Seller"), with a mailing address of X.X. Xxx 000,
Xxxxxx, Xxx Xxxxxx 00000-0000,
AND
American Soil, Inc. ("Company"), a New York Corporation, with a mailing
address of X.X. Xxx 000, Xxxxxx, Xxx Xxxxxx 00000-0000.
W I T N E S S E T H:
BACKGROUND. The Purchaser desires to acquire, and the Seller desires to
sell and transfer to the Purchaser, all of the issued and outstanding stock of
the Company on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 Agreement means this Stock Purchase Agreement and all Exhibits attached
hereto.
1.2 Certain Assets shall mean:
(a) The assets, properties and business of the Company, wherever
located, that are reflected on Exhibit 1.2 attached hereto and made a part
hereof.
(b) All documents, books and records of the Company (including the
corporate minute book and stock transfer books), and all customer lists.
1.3 Closing Date shall mean a date which is as soon as practicable after
the fulfillment of the conditions precedent to closing hereinafter set forth,
but in no event later than January 18, 1996, or such later date as the parties
shall mutually agree.
1.4 Contractual Obligation means, for any Person, any evidence of
indebtedness or any agreement or instrument under or pursuant to which any
evidence of indebtedness has been issued, or any other agreement, instrument or
guaranty, whether written or oral, to which such Person is a party or by which
such Person or any of its assets or properties are bound.
1.5 ECRA means the New Jersey Environmental Cleanup Responsibility Act or
any legislation replacing or superseding ECRA.
1.6 EPA means the United States Environmental Protection Agency.
1.7 Escrow Agent means the Seller's legal counsel or such other person as
the parties shall mutually agree.
1.8 Facility means the existing composting facility located on the Site as
hereinafter defined.
1.9 GAAP means United States generally accepted accounting principles
consistently applied.
1.10 Government means the government of the United States, the government
of the State of New Jersey, any political subdivision (including, without
limitation, any state, commonwealth, territory, federal district, municipality
or possession) and any department, agency, or instrumentality thereof, and
"Governmental" means of, by or pertaining to, any Government.
1.11 Indebtedness means, at any date, for any Person, all items including,
but not limited to, deferred taxes which, in accordance with GAAP, would be
included in determining total liabilities as shown on the liability side of a
balance sheet (except deferred taxes) of such Person as at the date on which
Indebtedness is to be determined, but in any event including without limitation,
(a) Indebtedness secured by a Lien, whether or not the Indebtedness secured
thereby shall have been assumed, (b) obligations in respect of all leases, (c)
obligations in connection with letter of credit and banker's acceptances, and
(d) guaranties in the amounts of the Indebtedness, leases, dividends or other
obligations of the primary obligor to which they relate.
1.12 Liabilities means all liabilities of the Company relating in any way,
directly or indirectly, to the Site.
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1.13 Lease means the lease between the Township and the Company dated as of
April 27, 1994, a copy of which is attached as Exhibit 1.13.
1.14 Lien means any mortgage, deed of trust, lien, charge, security
interest, or encumbrance of any kind upon, or pledge of any property or asset
whether now owned or hereafter acquired, and includes the acquisition of, or
agreement to acquire, any property or asset subject to any conditional sale
agreement or other title retention agreement, including, without limitation, a
Lease on terms tantamount thereto or on terms otherwise substantially equivalent
to a purchase.
1.15 NJDEP means the New Jersey Department of Environmental Protection.
1.16 Person means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
Government.
1.17 Requirement of Law means, for any Person, any law, rule, judgment,
regulation, order, writ, injunction, or decree of any court or Government and
any decision or filing of any arbitrator to which such Person is a party or by
which such Person or any of its assets or property is bound or affected or from
which such Person derives benefits, and if such Person is a corporation, its
charter documents and codes of regulations or bylaws.
1.18 Site means all that tract or parcel of land leased to the Company by
the Township pursuant to the Lease and identified in Exhibit 1.13 as Parcel I,
consisting of approximately 10.462 acres, Block 92, Lot 40 and Parcel 11
consisting of approximately 8.296 acres, Block 92, Lot 39 in the Township of
Freehold, County of Monmouth, State of New Jersey and more specifically
described in a deed filed in the Monmouth County Clerk's Office in Deed Book
4797, Page 51.
1.19 Stock means all of the issued and outstanding stock in the Company.
1.20 Township means the Township of Freehold, County of Monmouth, State of
New Jersey.
ARTICLE 2
PURCHASE OF STOCK
Subject to the terms and conditions herein set forth:
2.1 Purchase of Stock. On the Closing Date, the Seller will sell, assign,
convey, transfer and deliver all of the issued
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and outstanding Stock of the Company endorsed in blank to the Purchaser, and the
Purchaser will purchase and acquire all of the Company's right, title and
interest in and to the Stock.
2.2 Instrument of Conveyance. The sale, assignment, conveyance and transfer
of the Stock to the Purchaser, as herein provided, shall be effected by the
Seller's execution of sufficient instruments of transfer and conveyance as shall
be satisfactory in form and substance to the Purchaser and its counsel.
2.3 Consideration. For the Stock, Purchaser shall pay to the Seller Six
Hundred Thousand Dollars ($600,000) by wire transfer of immediately available
funds to such account as the Seller shall designate in writing to the Purchaser,
as follows:
(a) $37,500 upon execution of this Agreement, which amount shall be
non-refundable;
(b) $12,500 upon execution of this Agreement which amount shall be
refunded to the Purchaser within five (5) business days of the Closing Date if
the closing does not occur;
(c) $425,000 upon closing;
(d) $125,000 upon closing into an escrow account to be held by the
Escrow Agent for nine months for the payment by the Company of any accounts
payable greater than $150,000 (but excluding any liabilities arising under
equipment leases described in Exhibit 3.1 or any trade payables or similar
liabilities arising in the ordinary course of the Company's business in an
amount not to exceed $35,000 during the thirty-day period preceding the Closing
Date), for the payment of liabilities presently unknown and any environmental
clean up that may be required by law. The Escrow Agent shall distribute any
amount remaining at the end of such period to the Seller.
Additionally, the Purchaser shall make the following payments:
(e) At closing $150,000 into an escrow account to be held by the
Escrow Agent for nine months for the payment of Company accounts payable
liabilities or any other indebtedness (but excluding any liabilities arising
under equipment leases described in Exhibit 3.1 or any trade payables or similar
liabilities arising in the ordinary course of the Company's business in an
amount not to exceed $35,000 during the thirty-day period preceding the Closing
Date). Any and all remaining money, after all such liabilities have been
resolved, shall be split between CAHC and Seller, with CAHC receiving 75% and
the Seller receiving 25%; and
(f) Up to 4,000 cubic yards of screened non-sludge compost per year,
without charge, for the years 1996 through 1999,
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as Seller shall from time to time request for use only on research projects and
not for commercial clients.
2.4 Expenses of Transfer. The Purchaser, the Seller and the Company will
each pay all legal, accounting and other fees incurred by each of them,
respectively, in connection with the preparation and performance of this
Agreement.
2.5 Essential Assets
(a) NJDEP Permit. Promptly after the Closing Date, the Seller will use
his reasonable best efforts to arrange a meeting with appropriate departments at
NJDEP and the Purchaser to develop a plan between the Purchaser and NJDEP
whereby NJDEP will agree to issue to the Purchaser a major modification for
indoor in-vessel technology upgrade that will allow for the composting of
"source separated organic waste" along with the continuation of outdoor windrow
composting of leaves, grass and brush.
(b) It is acknowledged by all parties that the latest "NJDEP
composting/operating permit" has expired. Promptly after the Closing Date, the
Seller will use his reasonable best efforts to cause the NJDEP to issue a
"30,000 cubic yard foot print NJDEP yard waste composting/operating permit for
grass, leaves and brush" to the Company.
(c) Site Lease. All parties recognize that the Site Lease attached
hereto as Exhibit 1.13 is an essential part of the Company's operation of the
Site. The Company and the Seller will cooperate with CAHC to assure the
continuation of the Site Lease. Promptly after the Closing Date, the Seller will
use his reasonable best efforts to cause the Freehold Township to change the
Site Lease to reflect a ten (10) year term from the date hereof.
ARTICLE 3
LIABILITIES
The Seller hereby agrees that it shall indemnify the Purchaser against and
shall hold the Purchaser harmless from, all liability, of every nature
whatsoever, in respect of all Indebtedness and Liabilities of the Company other
than liabilities arising under equipment leases described in Exhibit 3.1 and any
trade payables or similar liabilities arising in the ordinary course of the
Company's business in an amount not to exceed $35,000 during the thirty-day
period preceding the Closing Date; provided, however, that the Seller's
obligation to indemnify the Purchaser pursuant to this Agreement shall be
limited to the $275,000 that will be placed in escrow upon closing, as provided
in Section
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2.3(d) and Section 2.3(e) of this Agreement, and shall in any event terminate on
the nine-month anniversary of the Closing Date.
ARTICLE 4
THE CLOSING
The consummation of the transactions provided for in this Agreement shall
take place at the offices of the Purchaser or its counsel, on the Closing Date,
or at such other place as may be mutually agreed upon between Purchaser and the
Seller.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE COMPANY
The Seller and the Company hereby represent and warrant to the Purchaser as
follows:
5.1 Stock Ownership. The Seller owns all of the Stock free and clear of all
liens, encumbrances, claims and other charges of every kind and has the full
right to transfer the Stock to the Purchaser free and clear of all liens,
encumbrances, claims and other charges of every kind without violating any
agreement or understanding to which the Seller is a party or by which he is
bound.
5.2 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York. Documentation verifying the Company's good standing shall be provided
as of the Closing Date as Exhibit 5.2. The Company has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as and in the places where such properties are now owned, leased or operated or
such business is now conducted, including but not limited to the Site.
5.3 Authority. The Seller and the Company each has full authority and power
to execute and to perform this Agreement in accordance with its terms. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby does not and will not result in a breach,
violation or default or give rise to an event which, with the giving of notice
or after the passage of time, would result in a breach, violation or default of
any of the terms or provisions of the Company's Articles of Incorporation or
By-Laws or of any contractual obligation, indenture, agreement, judgment, decree
or other instrument or restriction to which the Company is a party or by which
the Company or any of the Assets may be bound. This Agreement and all
transactions contemplated hereby have been duly authorized, copies of such
authorization shall be provided as of the Closing Date in Exhibit 5.3 by all
requisite corporate action
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of the Company and the Seller and no further authorization or approval, whether
of the directors or shareholders of the Company or Governmental bodies (except
as set forth in Exhibit 5.3) is necessary in order to enable the Seller and the
Company to enter into and perform this Agreement.
5.4 Binding Effect. This Agreement constitutes a valid and binding
obligation of the Seller and the Company and is enforceable in accordance with
its terms.
5.5 Financial Statements. The books of the Company fairly reflect the
income, expenses, assets and liabilities of the Company in accordance with GAAP.
Seller has provided Purchaser the opportunity to review all such books prior to
entering into this Agreement. As of the date of this Agreement, the Company has
no Indebtedness or other liabilities or obligations of any nature, either
absolute, accrued, contingent or otherwise, that are required by GAAP to be
fully and properly reflected in the books of the Company and that were not so
reflected.
5.6 Conduct of Business. Since on or about September 7, 1988, the Company
has conducted the business of composting vegetative waste at the site. The
Company has been permitted and has received an Administrative Consent Order from
the NJDEP, Division of Solid Waste Management. A copy of such Administrative
Consent Order and all predecessor communications from NJDEP and post
communications from NJDEP from the issuance of the Administrative Consent Order
to the present date are attached in Exhibit 5.6.
5.7 Title to Certain Assets. The Company has good and marketable title to
all of the Certain Assets, free and clear of all Liens, charges and
encumbrances, of any nature whatsoever, excepting only such as are listed and
described in Exhibit 5.7, attached hereto and made a part hereof.
5.8 Leases. The Lease is in good standing, valid and effective in
accordance with its terms, and all rents and payments due thereunder have been
fully paid to the date hereof, and will be fully paid through the Closing Date.
There are no other Leases of land or equipment on the Site or at the Facility
other than as listed and described in Exhibit 5.8.
5.9 Condition of Property. The Company makes no representation or warranty
with respect to the condition of the Certain Assets which are tangible personal
property, all of which are sold "WHERE IS, AS IS".
5.10 Governmental Approval. Other than an NJDEP composting/operating
permit, the Company has all permits, licenses,
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orders and approvals of all Governmental bodies that are required for it to
conduct its business as presently conducted, all of which are set forth in
Exhibit 5.10, attached hereto and made a part hereof. All such permits,
licenses, orders and approvals are in full force and effect and no suspension or
cancellation of any of them has been threatened in writing, and pursuant to such
permits the Company is authorized to operate the Facility on the Site. None of
such permits, licenses, orders or approvals will be adversely affected by the
consummation of the transactions contemplated by this Agreement and will permit
Purchaser to operate the Facility on the Site. Except as set forth in Exhibit
5.10, no approval or authorization of or filing with any Governmental authority
on the part of the Company is required as a condition to the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
5.11 Contractual Obligations. The Company has performed, in all material
respects, all of the Contractual Obligations required to be performed by it to
date under all contracts to which it is a party. The Company has not breached,
violated or defaulted under any material provisions of such Contractual
Obligations, and no event exists which, with the giving of notice or after the
passage of time, would give rise to a breach, violation or default under any
such provision.
5.12 Litigation. The Company is not operating under, subject to, in
violation of or in default with respect to, any judgment, order, writ,
injunction or decree of any court or federal, state, municipal or other
Governmental department, commission, board, agency or instrumentality domestic
or foreign, and there is no known basis for any action, suit, proceeding or
investigation the outcome of which would have a material adverse effect upon the
business, property, prospects, profits or condition (financial or otherwise) of
the Company including but not limited to matters affecting the Facility or the
Site.
5.13 Comp1iance with Law. The Seller and the Company are not in violation
of any Requirement of Law, whether federal, state or local, the compliance with
which would require the Company to undertake a course of action involving a
material expense, including but not limited to the Bulk Sales Act.
5.14 Taxes. Except as disclosed in Exhibit 5.14, all federal, state and
local tax returns and reports that are required by law to be filed by the
Company have been filed or extensions of time have been obtained, and all taxes,
assessments, fees, penalties, interest and other governmental charges now due
and payable by the Company have been paid, including but not limited to the
Facility and the Site and the ownership and operation thereof.
5.15 Except as disclosed in Exhibit 3.1, the Company has good and
marketable title to the Certain Assets and all of its other property, free and
clear of all liens, charges, encumbrances and claims of any nature whatsoever.
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5.16 ERISA. The Company has not established, nor are any of its employees
covered by, any benefit plans to which the provisions of the Employee Retirement
Income Security Act of 1974, as amended, and the related provisions of the
Internal Revenue Code of 1986, as amended, apply.
5.17 Existing Contractual Obligations. Except as otherwise disclosed in
Exhibit 5.17, attached hereto and made a part hereof, the Company is not a party
to any:
(a) Written employment contract, except contracts terminable on not
more than 30 days' notice without cost or other liability to the Company or any
successor or assign;
(b) Contract with any labor union or other labor organization;
(c) Bonus, pension, profit-sharing, retirement stock purchase,
hospitalization, insurance or other plan or arrangement providing employee
benefits;
(d) Lease with respect to any real or personal property, whether as
lessor or lessee (other than the Lease);
(e) Contract continuing for a period of more than 90 days from the
date hereof and involving an aggregate expenditure of more than $100; or
(f) Contract for borrowed money or guaranty for borrowed money.
5.18 Employment Matters. Except as otherwise disclosed herein, the Company
has not received written notice from any Governmental agency that it has failed
to comply, and the Company has complied, in all material respects with (or it
has not failed to satisfy all written notices received from any Governmental
agency with respect to), all applicable laws, rules and regulations relating to
the employment of labor, including, without limitation, those relating to wages,
hours, collective bargaining, the payment and withholding of taxes and the
Federal Occupational Safety and Health Act of 1970, as amended, and the rules
and regulations issued thereunder, and the Company is not liable for any arrears
of wages or other taxes or penalties for failure to comply with any of the
foregoing.
5.19 Environmental Matters. To the best of the Seller's and the Company's
knowledge, the Site and Facility in Freehold Township, Monmouth County, New
Jersey, are, and at all times during the Company's occupancy thereof have been,
free of contamination from any substance or material now identified to be toxic
or hazardous under any Federal, state or local requirements of law and
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are in material compliance with all environmental laws and regulations.
5.20 Business Prospects. There is no fact known to the Seller which
materially and adversely affects the value of the Company or the Stock.
5.21 Filing Reports. Except as otherwise disclosed herein, all returns,
reports, plans and filings of any kind or nature necessary to be filed by the
Company with any Governmental authorities have been properly completed and filed
in compliance with all applicable requirements, and no penalties or other fines
or censures are outstanding or pending.
5.22 Insurance. The Company has maintained all prudent insurance coverage
against liability, loss or casualty on its assets and all aspects of its
operations. The insurance policies which provide the foregoing insurance
coverage are listed and described in Exhibit 5.22 of this Agreement.
5.23 Stock Option and Warrants. There are no options or warrants
outstanding in respect of the Stock.
5.24 Broker's Fees. Neither the Seller nor the Company has employed or
retained any broker or finder in connection with the sale of the Stock hereunder
to the Purchaser, and the Seller does not and will not owe any fees to any third
party in connection with such sale.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
6.1 Organization and Good Standing. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey.
6.2 Corporate Authority. The Purchaser has full authority and power to
execute and to perform this Agreement in accordance with its terms. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in a breach, violation or
default or give rise to an event which, with the giving of notice or after the
passage of time, would result in a breach, violation or default of any of the
terms or provisions of the Purchasers Articles of Incorporation or By-Laws or of
any other contractual obligation, Rule of Law or other instrument or restriction
to which the Purchaser is a party or by which the Purchaser may be bound. This
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Agreement and all transactions contemplated hereby have been duly authorized by
all requisite corporate action on the part of the Purchaser and no further
authorization or approval, whether of any partner, shareholder or director of
the Purchaser or Governmental bodies or otherwise, is necessary in order to
enable the Purchaser to enter into and perform this Agreement.
6.3 Binding Effect. This Agreement constitutes a valid, binding and
enforceable obligation of the Purchaser.
6.4 Investment Intention. Purchaser is acquiring the Stock for its own
account, for investment purposes only and not with a view to the distribution
thereof (as such term is used in Section 2(11) of the Securities Act of 1933, as
amended (the "Securities Act")). Purchaser understands that the Stock has not
been registered under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.
6.5 Broker's Fees. The Purchaser has not employed or retained any broker or
finder in connection with the sale of the Stock hereunder to the purchaser, and
the Purchaser does not and will not owe any fees to any third party in
connection with such sale.
ARTICLE 7
COVENANTS OF THE SELLER AND THE COMPANY
7.1 Investigation. The Seller and the Company will, at all reasonable
times, permit such review and investigation by the Purchaser and its agents
(including, but without limitation, accountants, lawyers and appraisers) of the
Company's assets and the Certain Assets to include by way of example and not
limitation, the Company's books, records, business assets, contracts,
agreements, commitments and financial condition as the Purchaser may determine
to be necessary or desirable for the purpose of considering and evaluating the
transaction provided for herein. The Company will furnish to the Purchaser such
information and copies of such documents and records as the Purchaser shall
reasonably request (at the cost of the Purchaser) from time to time, and shall
afford such access as it may reasonably require for the purpose of such
investigation. As part of such review, the Purchaser may make such inquiries of
such Persons having business relationships with the Company as the Purchaser
shall reasonably determine, and the Company shall cooperate fully with the
Purchaser in connection therewith; provided, however, that the Purchaser must
notify the Seller before communicating with any such Person and the Seller must
give his consent to such communication, which consent shall not be unreasonably
withheld. In the event that the transaction provided for herein is not
consummated, all information
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obtained as a result of such review will be kept confidential, and all documents
(and any copies or facsimiles thereof) obtained by the Purchaser during the
course thereof shall be returned to the Company.
7.2 Further Assurances. The Seller will, at any time and from time to time
after the Closing Date, upon the request of and at the expense of the Purchaser,
do, execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acknowledgments, deeds,
assignments, transfers, conveyances and assurances as may be required for the
better assigning, transferring, granting, conveying, assuring and confirming to
the Purchaser, or for aiding and assisting in collecting and reducing to
possession, of the Stock.
ARTICLE 8
CONDITIONS PRECEDENT OF THE PURCHASER'S OBLIGATION
The obligation of the Purchaser to consummate the transactions contemplated
hereby is subject to the fulfillment of each of the following conditions prior
to or on the Closing Date, any one or more of which may be waived in writing by
the Purchaser.
8.1 Representations and Warranties True. All the representations and
warranties of the Seller and the Company contained in this Agreement or any
other document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct in all material respects on the
Closing Date as if made at and as of the Closing Date, subject to such changes
or exceptions as may be contemplated by this Agreement or consented to in
writing by the Purchaser.
8.2 Covenants Performed. The Seller and the Company shall have performed
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by the
Seller and the Company prior to or on the Closing Date.
8.3 New Stock. The Seller will not vote the Stock to cause or permit to be
issued any authorized but unissued stock of the Company.
8.4 Conduct of Business. Except and to the extent otherwise contemplated by
this Agreement, the Seller will cause the Company to conduct its business only
in the ordinary course of business and in compliance with all statutory and
regulatory requirements of all federal, state or local authorities, and not to
enter into any contract or other transaction other than in the ordinary course
of business without the prior written consent of the Purchaser. Seller shall not
enter into any contracts that
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extend beyond the Closing Date without the prior consent of Purchaser, which
consent shall not be unreasonably withheld.
8.5 Mergers. Etc. The Seller will not permit the Company to merge or
consolidate into any other corporation, sell, lease or otherwise dispose of any
of the Certain Assets (except for retirements and replacements in the ordinary
course of business, provided that all items which are retired or replaced are
contemporaneously replaced by items of substantially equivalent value, if
appropriate under the circumstances), acquire any of the stock or business or
assets of any other person, corporation, or business organization, liquidate or
dissolve, nor agree to do any of the foregoing.
8.6 Tax and Legal Matters. All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental thereto, and all
related tax and legal matters, shall have been approved by counsel for the
Purchaser.
8.7 Approvals. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly
authorized by the Seller and the Company, and the Seller and the Company shall
have delivered to the Purchaser certified copies of the resolutions of the
Company's Board of Directors authorizing the execution, delivery and performance
of this Agreement and approving the transactions contemplated herein, such
resolutions to be certified as true and correct by the President or Secretary of
the Company. In addition, the Purchaser shall have obtained all other approvals
that it has determined in its reasonable judgment may be necessary or desirable
for it to perform its obligations hereunder.
8.8 Litigation. There shall be no injunction, restraining order or other
order of any nature issued by a court of competent jurisdiction which shall
direct that this Agreement or any of the transactions contemplated hereby not be
consummated as herein provided, and no proceeding (or investigation that could
lead to a proceeding) challenging such transactions shall have been instituted
or threatened by any Governmental agency or body.
8.9 Insurance. The Purchaser shall have obtained results of a Phase I
Environmental Audit of the Site by an approved engineering company such as will
enable the Purchaser to obtain environmental liability insurance on the Site.
8.10 Legal Opinion. The Purchaser shall have received such legal opinions
as counsel to the Purchaser recommends.
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ARTICLE 9
CONDITIONS PRECEDENT OF THE SELLER AND THE COMPANY
The obligations of the Seller and the Company to consummate the
transactions contemplated hereby are subject to Purchaser's fulfillment of each
of the following conditions prior to or on the Closing Date, any one or more of
which may be waived in writing by the Seller and the Company.
9.1 Representations and Warranties True. All the representations and
warranties of the Purchaser contained in this Agreement or any other document
delivered pursuant hereto or in connection with the transactions contemplated
hereby shall be true and correct in all material respects on the Closing Date as
if made at and as of the Closing Date, subject to such changes or exceptions as
may be contemplated by this Agreement.
9.2 Tax and Legal Matters. All actions (including the payments described in
Section 2.3), proceedings, instruments and documents required to carry out this
Agreement or incidental thereto, and all related tax and legal matters, shall
have been approved by counsel for the Company.
9.3 Approval. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly
authorized by the Purchaser. The Purchaser shall have delivered to the Company a
certified copy of the resolutions of its Board of Directors authorizing the
execution and delivery of this Agreement and approving the transactions herein
contemplated, such resolutions to be certified as true and correct by the
Secretary of the Purchaser.
9.4 Litigation. There shall be no injunction, restraining order or other
order of any nature issued by a court of competent jurisdiction which shall
direct that this Agreement or any of the transactions contemplated hereby not be
consummated as herein provided, and no proceeding (or investigation that could
lead to a proceeding) challenging such transactions shall have been instituted
or threatened by any Governmental agency or body.
ARTICLE 10
ENVIRONMENTAL MATTERS
10.1 Environmental Matters. As used herein, the term "Environmental Laws"
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges,
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releases or threatened releases of chemicals, pollutants, contaminants, or
industrial, toxic or hazardous substances or wastes into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment
storage, disposal, transport or handling of chemicals, pollutants, contaminants,
or industrial, toxic or hazardous substances or wastes, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.
10.2 Permits. Except as set forth in Exhibit 5.2 hereto, the Company has
obtained all permits, licenses and other authorizations, has filed all
notifications that are required with respect to the operation of its respective
business or the ownership or use of the real properties of the Company including
the Site and the Facility under the Environmental Laws, and such permits,
licenses and other authorizations are still in full force and effect. Exhibit
5.10 contains a list of all such notifications, permits, licenses and other
authorizations.
10.3 Compliance. Except as set forth in Exhibit 5.10 hereto, to the best of
the knowledge, information and belief of Seller and the Company, the Company is
in full compliance with all terms and conditions of all required permits,
licenses and authorizations, and is also in full compliance with all other
conditions, limitations, obligations, prohibitions, requirements, restrictions,
schedules, standards and timetables contained in the Environmental Laws relating
to the Company's real property and to operations including the Facility and the
Site. Except as set forth in Exhibit 5.6, the Company has not received any
written communication, whether from Governmental authorities, citizens groups or
otherwise, that alleges that the Company is not in such full compliance.
10.4 Legal Action. Except as set forth in Exhibit 10.4 hereto, there is no
civil, criminal or administrative action, claim, demand, demand letter, hearing,
investigation, notice, notice letter, notice of violation, proceeding or suit
pending or threatened against the Company relating in any way to the
Environmental Laws as they apply to the Site or the Facility. Copies of all
documents relating to such actions, claims, demands, demand letters, hearings,
investigations, notices, notice letters, notices of violation, proceedings and
suits have been provided to Purchaser.
10.5 Course of Conduct. Except as set forth in Exhibit 10.5 hereto, there
are no past, present, or, to the knowledge of the Company, future actions,
activities, circumstances, conditions, events, incidents, plans or practices of
the Company which may (i) interfere with or prevent compliance or continued
compliance by the Company with the Environmental Laws, (ii) give rise to any
common
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law or other legal liability, on the part of the Company or the Seller,
including, without limitation, liability under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 ("CERCLA") or similar state or
local laws, or (iii) otherwise form the basis of any Compost Management, Inc.,
chemical or administrative action, claim, demand, demand letter, hearing,
investigation, notice, notice letter, notice of violation, proceeding or suit
under the Environmental Laws. Exhibit 10.5 hereto contains a list of all on-site
and off-site locations used by the Company for the treatment (including
recycling), storage or disposal of any hazardous substance, as that term is
defined in CERCLA. Copies of all documents in the possession of the Company
relating to such actions, activities, circumstances, conditions, events,
incidents, plans and practices set forth in Exhibit 10.5 hereto have been
provided to Purchaser.
10.6 Except as set forth in Exhibit 10.6 hereto, the Company has received
no reports, submissions, notices, orders, directives, findings or correspondence
from the NJDEP, the EPA, the United States Occupational Safety and Health
Administration or any other federal, state or local authority pursuant to:
(a) The Worker and Community Right to Know Act, N.J.S.A. ss.34:5A-1 et
seq., and the regulations promulgated thereunder,
(b) The Toxic Catastrophe Prevention Act, N.J.S.A. ss.13:lK-19 et seq,
and the regulations promulgated thereunder;
(c) The Environmental Cleanup Responsibility Act, N.J.S.A. ss.13:1 K-6
et seq, and the regulations promulgated thereunder;
(d) The Spill Compensation and Control Act, N.J.S.A. ss.58:10-23 et
seq, and the regulations promulgated thereunder,
(e) N.J.S.A. ss.13:lK-15 et seq, and the regulations promulgated
thereunder,
(f) The Occupational Safety and Health Act of 1979, 29 U.S.C. ss.651
et seq, and the regulations promulgated thereunder, or
(g) Any other federal, state or local law, code or ordinance and all
rules and regulations promulgated thereunder which require informational
submissions concerning environmental, health or safety matters.
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ARTICLE 11
INDEMNIFICATION
11.1 Indemnification of Purchaser. For a period of nine (9) months from the
Closing Date, Seller hereby agrees to indemnify and hold harmless Purchaser from
and against any and all claims, liabilities, damages, losses, costs and
expenses, including reasonable attorneys' fees, resulting from:
(a) Any inaccurate representations made by the Seller and/or the
Company in this Agreement or any document or certificate delivered pursuant to
this Agreement;
(b) Breach of any warranty of the Company made in this Agreement or
any document or certificate delivered pursuant to this Agreement;
(c) Breach or default in the performance or observance by the Company
of any of the covenants or other obligations which the Company is to perform or
observe hereunder;
(d) Any claim, action, suit, proceeding, arbitration, investigation or
inquiry referred to in any schedule attached hereto or provision hereof;
(e) Any state of facts in existence on or prior to the Closing Date
with respect to the Company which results in, creates or may give rise to any
material liability to Purchaser out of the ordinary course of the Company's
business insofar as such liability is not reserved against or reflected in full
on the books of the Company as of the date of this Agreement or otherwise
disclosed to and approved by the Purchaser; provided, however, that the Seller's
obligation to indemnify the Purchaser pursuant to this Agreement shall be
limited to the $275,000 that will be placed in escrow upon closing, as provided
in Section 2.3(d) and Section 2.3(e) of this Agreement, and shall in any event
terminate on the nine-month anniversary of the Closing Date.
11.2 Indemnification of the Seller and the Company. For a period of nine
(9) months from the Closing Date, Purchaser agrees to indemnify and hold the
Seller and the Company harmless from and against any and all claims,
liabilities, damages, losses, costs and expenses, including reasonable
attorneys' fees, resulting from:
(a) Any inaccurate representations made by Purchaser in this Agreement
or any document or certificate delivered pursuant to this Agreement;
(b) Breach of any warranty of Purchaser made in this Agreement or in
any document oR certificate delivered pursuant to this Agreement;
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(c) Breach or default in the performance or observance by Purchaser of
any other covenants or other obligations which Purchaser is to perform or
observe hereunder;
(d) Any claim, action, suit, proceeding, arbitration, investigation or
inquiry, arising out of the operation of the business of the Company assumed by
Purchaser after the Closing Date.
11.3 Notification. The Seller and Purchaser hereby agree that promptly upon
receipt by either of them of any demand, assertion, claim, action or proceeding,
judicial or otherwise, with respect to any matter to which either has the right
of indemnification from the other, the party receiving such notice will give
prompt notice of the receipt thereof in writing to the indemnifying party,
together in each instance, with a statement of such information respecting such
demand, assertion, claim, action or proceeding as the indemnified party shall
have. The indemnifying party shall reserve the right to contest and defend by
all appropriate legal or other proceedings any demand, assertion, claim, action
or proceeding with respect to which it may have been called upon to indemnify
under the provisions of this Agreement; provided, however, that:
(a) Notice of intention to contest shall have been delivered to the
indemnified party within twenty (20) calendar days from the date of receipt by
the indemnifying party of notice of assertion of such demand, claim, action or
proceeding;
(b) The indemnifying party shall pay all costs and expenses of such
contest, including reasonable attorneys' and accountants' fees, and the cost of
any bond required by law to be posted in accordance with such contest; and
(c) Such contest shall be conducted by reputable attorneys employed by
the indemnifying party at the indemnifying party's sole cost and expenses.
The indemnified party shall have the right to participate in such
proceedings and to be represented by attorneys of its own choosing at its own
cost and expense.
(i) If, after such opportunity, the indemnified party does not
elect to participate, or does not participate in any such proceeding, the
indemnified party shall be bound by the results obtained by the indemnifying
party, including without limitation, out-of-court settlement or compromise;
(ii) Should the indemnifying party elect to contest any demand or
claim, it shall not be required or obligated to make any payments to the
indemnified party with respect thereto
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until the legal remedies available to the indemnifying party with respect to
such demand or claim shall have been exhausted;
(iii) If requested by the indemnifying party, the indemnified
party agrees to cooperate with the indemnifying party in contesting any demand
or claim that the indemnifying party elects to contest or, if appropriate in the
making of any counterclaim against the person asserting such demand or claim or
any costs claimed against such person, the indemnifying party will reimburse the
indemnified party for any expense incurred by it in so cooperating with the
indemnifying party. If such counterclaim or cross complaint results in the
receipt by the indemnified party of amounts in excess of any amount that the
indemnified party is required to pay with respect to any such demand, assertion
or claim, such excess shall be first applied to the payment of reasonable costs
and expenses of the indemnifying party occurred in connection with such
contests, counterclaim or cross complaint with the balance to be retained by the
indemnified party.
11.4 In the event the indemnifying party fails to defend, settle or
otherwise dispose of a claim, demand or action as contemplated by this Article
11, the indemnified party shall be entitled to do so in good faith and any
result obtained will be binding upon the indemnifying party.
ARTICLE 12
NOTICE
12.1 Notices. All notices, requests, demands and other communications
hereunder shall be in writing, shall be deemed to have been duly given when
received by the addressee thereof, and shall be delivered by courier or
certified first class mail, postage prepaid, return receipt requested.
ARTICLE 13
NON-COMPETE
13.1 Covenant Not to Compete. The Seller agrees not to participate, either
directly or indirectly, in the operation, management, ownership or consulting
for any composting facilities located in (i) the State of New Jersey, (ii) New
York City (except that the Seller may perform consulting services for composting
facilities located in New York City), and (iii) any county in the State of
Pennsylvania that is contiguous to the Delaware River, for a period of two (2)
years from the Closing Date. The Seller shall execute the Non-Compete Agreement
included as Exhibit 13.1 of the Agreement.
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ARTICLE 14
GENERAL
14.1 Modification. This Agreement contains the entire agreement among the
parties hereto with respect to the transactions contemplated herein and there
are no agreements, warranties or representations which are not set forth herein.
All prior negotiations, agreements and understandings between the Purchaser or
the Purchaser's predecessor and the Company are superseded hereby. This
Agreement may not be modified or amended except by an instrument in writing
signed by or on behalf of the parties hereto.
14.2 Consents. The Purchaser and the Company will cooperate with one
another after the Closing Date to obtain any required consents or approvals of
third parties with respect to the Purchaser's assumption of liabilities
hereunder.
14.3 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New Jersey.
14.4 Binding Effect. This Agreement shall be binding upon the parties and
inure to the benefit of the respective successors and assigns of the parties
hereto.
14.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute but one and the same instrument.
14.6 Paragraph Headings. The paragraph headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
14.7 This Agreement survives the Closing Date.
IN WITNESS WHEREOF, the parties hereto have duty executed this Agreement as
of the day and year first above written.
PURCHASER
COMPOST AMERICA HOLDING COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxx 12/4/96
------------------------------ -----------------------------------
Xxxxx X. Xxxxxx, President Date
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SELLER
/s/ Xxxxxx X. Xxxxx, Xx. December 4th, 1995
--------------------------------- -----------------------------------
Xxxxxx X. Xxxxx, Xx. Date
COMPANY
AMERICAN SOIL, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx. December 4th, 1995
------------------------------ -----------------------------------
Xxxxxx X. Xxxxx, Xx. Date
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