STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement") dated as of
February 23, 1999, by and among Hi-Rise Recycling Systems, Inc. ("Hi-Rise"), DII
Acquisition Corp. ("Buyer"), XxXxxx Industries, Inc. ("XxXxxx"), Ecological
Technologies, Inc. ("Eco" and, together with XxXxxx, the "Companies"), and Xxxxx
XxXxxx ("X. XxXxxx"), Xxxxxxx Xxxxxxxxxx ("Xxxxxxxxxx") and Xxxxxxx Xxxxxx
("Xxxxxx" and, together with X. XxXxxx and Xxxxxxxxxx, the "Shareholders").
W I T N E S S E T H
WHEREAS, the Companies manufacture and distribute waste
containers and "roll offs" to the waste hauling industry; and
WHEREAS, XxXxxx is a Connecticut corporation having an
authorized capital of 5,000 shares of common stock, no par value (the "XxXxxx
Common Stock"), of which, as of the date hereof, 4,900 shares and 100 shares are
issued and outstanding and owned of record and beneficially by Xxxxx XxXxxx and
Xxxxxxxxxx, respectively (collectively, the "XxXxxx Shares");
WHEREAS, Eco is a Connecticut corporation having an authorized
capital of 20,000 shares of common stock, no par value ("Eco Common Stock"), of
which, as of the date hereof, 80 shares, 10 shares and 10 shares are issued and
outstanding and owned of record and beneficially by X. XxXxxx, Xxxxxxxxxx and
Xxxxxx, respectively (the "Eco Shares" and, together with the XxXxxx Shares, the
"Shares");
WHEREAS, Buyer is a Connecticut corporation and a wholly-owned
subsidiary of Hi-Rise;
WHEREAS, the Shareholders desire to sell and Buyer desires to
purchase the Shares on the Closing Date (as defined below);
WHEREAS, Hi-Rise, Buyer, the Companies and the Shareholders
desire to make certain representations, warranties and agreements in connection
with the purchase and sale of the Shares and to prescribe various conditions to
the purchase and sale of the Shares;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto intending to be legally bound, hereby agree as follows:
ARTICLE I
SALE OF SHARES
Section 1.1 DELIVERY OF SHARES. On the terms and subject to
the conditions set forth in this Agreement, on the Closing Date, the
Shareholders will transfer, assign, convey and deliver to Buyer certificates
representing the Shares against receipt of the portion of the Purchase Price (as
defined below) payable on the Closing Date. Each of the certificates shall be
duly endorsed for transfer or accompanied by appropriate stock powers duly
executed, in either case in favor of Buyer, and each certificate shall have all
necessary stock transfer tax stamps affixed thereto at the Shareholders'
expense.
Section 1.2 PURCHASE CONSIDERATION. The aggregate
consideration to be paid for the Shares and the covenant not to compete set
forth in Section 11.1 shall be the Purchase Price (as defined below).
Section 1.3 CLOSING TRANSACTIONS. At the Closing (as defined
in Section 2.1 hereof), in payment for the Shares, the Buyer shall deliver to
the Shareholders (i) $11,707,200 and 600,900 shares of common stock, $.01 par
value, of Hi-Rise ("Hi-Rise Common Stock") in consideration for the purchase of
the XxXxxx Shares and (ii) 862,500 shares of Hi-Rise Common Stock in
consideration for the purchase of Eco Shares. The cash payments referred to in
the preceding sentence and the shares of the Hi-Rise Common Stock referred to in
the preceding sentence (the "Hi-Rise Shares") are referred to herein
collectively as the "Purchase Price.". The cash portion of the Purchase Price
shall be remitted to the Shareholders by wire transfer of immediately available
funds or paid by check in accordance with their written instructions delivered
to Buyer prior to the Closing and Hi-Rise shall deliver the Hi-Rise Shares to
each of the Shareholders or their designated representative(s) on the Closing
Date, in each case in the respective amounts indicated below opposite their
names:
(a) PURCHASE PRICE FOR THE XXXXXX SHARES:
-------------------------------------
Shareholder Purchase Price Purchase Price
----------- -------------- --------------
(Cash)` (Hi-Rise Shares)
Xxxxx XxXxxx $11,473,056 588,882 shares
Xxxxxxx Xxxxxxxxxx $ 234,144 12,018 shares
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(b) PURCHASE PRICE FOR THE ECO SHARES:
----------------------------------
Shareholder Purchase Price Purchase Price
----------- -------------- --------------
(Cash)` (Hi-Rise Shares)
Xxxxx XxXxxx N/A 690,000 shares
Xxxxxxx Xxxxxxxxxx N/A 86,250 shares
Xxxxxxx Xxxxxx N/A 86,250 shares
For purposes of this Agreement, the Hi-Rise Shares are valued
at $2.00 per share.
Section 1.4 TRANSFER TAXES. The Shareholders shall pay all
stock transfer taxes, recording fees and other sales, use, purchase or similar
taxes that may result from the sale of the Shares pursuant to this Agreement.
ARTICLE II
CLOSING
Section 2.1 CLOSING DATE. The closing (the "Closing") of the
transactions contemplated by this Agreement shall take place as soon as
practicable after satisfaction or waiver of all conditions set forth herein, but
no later than March 31, 1999, at the offices of Xxxxxx Xxxxxxxx Frome &
Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other time
and place as Buyer and the Shareholders shall agree (the date on which such
closing occurs being herein referred to as the "Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANIES AND THE SHAREHOLDERS
The Companies and the Shareholders for good and valuable
consideration, the receipt of which is hereby acknowledged, hereby, jointly and
severally, represent and warrant to Buyer as of the date hereof and as of the
Closing Date, as follows:
Section 3.1 CORPORATE ORGANIZATION; REQUISITE AUTHORITY TO
CONDUCT BUSINESS; CERTIFICATE OF INCORPORATION AND BY-LAWS. Each of the
Companies is a corporation duly organized, validly existing and in good standing
under the laws of the State of Connecticut. Each of the Companies has provided
Buyer with true and complete copies of its Certificates of Incorporation
(certified by the Secretary of State of Connecticut) and By-laws (certified by
its Secretary) as in effect on the date hereof. Prior to the Closing, the minute
books of each of the Companies will be delivered to Buyer, which minute books
shall be accurate and complete in all material respects.
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Each of the Companies has all corporate power and authority to own, operate and
lease its properties and to carry on its business as the same is now being
conducted. Neither of the Companies is duly qualified or licensed to do business
as a foreign corporation in any foreign jurisdiction, nor does any of the
Companies conduct its business or own or lease its properties such that it would
be required to be so qualified or licensed.
Section 3.2 CAPITALIZATION AND SHAREHOLDINGS. The authorized
capital stock of XxXxxx consists of 5,000 shares of Common Stock, no par value,
of which 5,000 shares are issued and outstanding. The authorized capital stock
of Eco consists of 20,000 shares of Common Stock, no par value, of which 100
shares are issued and outstanding. The Shareholders own all of the Shares free
and clear of all liens, claims or encumbrances of any nature, in the respective
amounts set forth on SCHEDULE 3.2. Each of the Shareholders has full right,
power, legal capacity and authority to transfer and deliver the Shares pursuant
to this Agreement. The XxXxxx Shares and the Eco Shares have, in each case, been
duly authorized and duly and validly issued and are fully paid and
non-assessable and free of preemptive rights. There are no subscriptions,
options, warrants, calls, rights, contracts, commitments, agreements,
understandings or arrangements to sell or issue any capital stock of either of
the Companies, including any right of conversion or exchange under any
outstanding security or other instrument, and no shares are reserved for
issuance for any purpose.
Section 3.3 SUBSIDIARIES, ETC. Neither of the Companies owns
(directly or indirectly) any equity interest in any corporation, partnership,
limited liability company, joint venture, affiliate, association or other
entity.
Section 3.4 AUTHORITY RELATIVE TO AND VALIDITY OF THIS
AGREEMENT. (i) Each of the Companies has all requisite corporate power and
authority to enter into this Agreement, to perform all of their respective
obligations hereunder and to consummate the transactions contemplated hereby
without the approval of any third party, except as listed on SCHEDULE 3.4. All
necessary action including, without limitation, obtaining the approval of the
Board of Directors of each of the Companies and the Shareholders, has been taken
by the Companies and the Shareholders with respect to the execution, delivery
and performance by the Companies and the Shareholders of this Agreement and the
consummation of the transactions contemplated hereby and no further
authorization will be necessary to authorize the execution and delivery by them
hereof and thereof, and the performance of their respective obligations
hereunder. There are no corporate, contractual, statutory or other restrictions
of any kind upon the power and authority of the Companies or the Shareholders to
execute and deliver this Agreement and to consummate the transactions
contemplated hereunder and no action, waiver or consent by any Federal, state,
municipal or other governmental department, commission or agency ("Governmental
Authority") is necessary to make this Agreement a valid instrument binding upon
the Companies and the Shareholders in accordance with its terms. This Agreement
has been duly executed and delivered by the Companies and the Shareholders and
constitutes the legal, valid and binding obligations of the Companies and the
Shareholders, enforceable against each such party in accordance with its terms,
except (i) as such enforceability may be limited by or subject to any
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) as such obligations are subject to
general principles of equity and (iii) as rights to indemnity may be limited by
Federal or state securities laws or by public policy.
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(ii) The employment agreement entered into on the date hereof
by and between Hi-Rise and X. XxXxxx (the "XxXxxx Employment Agreement") has
been duly executed and delivered by X. XxXxxx and constitutes the legal, valid
and binding obligation of X. XxXxxx, enforceable against him in accordance with
its terms, except (i) as such enforceability may be limited by or subject to any
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) as such obligations are subject to
general principles of equity and (iii) as rights to indemnity may be limited by
Federal or state securities laws or by public policy.
Section 3.5 REQUIRED FILINGS AND CONSENTS; NO CONFLICT. Except
as set forth on SCHEDULE 3.5 and assuming that the ultimate parent entity (as
such term is defined in Rule 801.1(a), 16 C.F.R. ss.801.1(a)(3)) ("Ultimate
Parent Entity") of Buyer has less than $100 million of annual net sales or total
assets (as determined in accordance with Rule 801.11, C.F.R. ss. 801.11) as
stated on its last regularly prepared income statement and balance sheet ("HSR
Assets and Revenues"), neither of the Companies or any of the Shareholders is
required to submit any notice, report or other filing with any Governmental
Authority in connection with the execution, delivery or performance of this
Agreement. The execution, delivery and performance of this Agreement by the
Companies and the Shareholders and the consummation of the transactions
contemplated hereby do not and will not (a) conflict with or violate any law,
regulation, judgment, order or decree binding upon the Companies or
Shareholders, (b) conflict with or violate any provision of the Certificate of
Incorporation or Bylaws of either of the Companies or (c) conflict with or
result in a breach of any condition or provision of, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of either of the Companies, pursuant
to, or cause or permit the acceleration prior to maturity of any amounts owing
under, any indenture, loan agreement, mortgage, deed of trust, lease, contract,
license, franchise or other agreement or instrument to which any of the
Companies is a party or which is or purports to be binding upon either of the
Companies, or by which any of their properties are bound. The execution,
delivery and performance of this Agreement by the Companies and the Shareholders
and the consummation of the transactions contemplated hereby will not result in
the loss of any license, franchise, legal privilege or permit possessed by any
of the Companies or give a right of termination to any party to any agreement or
other instrument to which any of the Companies is a party or by which any of
their respective properties are bound.
Section 3.6 FINANCIAL STATEMENTS. The balance sheets of XxXxxx
and Eco as of December 31, 1998 and the related statement of operations, cash
flow and changes in shareholder's equity for the twelve-month period ended
December 31, 1998, together with the notes thereto (the "Financial Statements"),
which are attached hereto as Exhibits A and B, respectively, have been prepared
from and are in accordance with the respective books and records of XxXxxx and
Eco, respectively, and are in conformity with GAAP consistently applied, and
fairly present the financial condition of XxXxxx and Eco, respectively, as at
the dates stated and the respective results of operations of XxXxxx and Eco,
respectively, for the periods then ended. All information submitted to Buyer by
the Companies or X. XxXxxx in connection with the Financial Statements was true
and correct as of the date or dates submitted, as of the date hereof and as of
the Closing Date. Neither of the Companies has any liability or obligation of
any kind or manner, either liquidated, unliquidated, direct, accrued, absolute,
contingent or otherwise, whether due or to become due, which was required to be
reflected by GAAP consistently applied, and which was not accurately reflected
in the Financial Statements or in the notes thereto, except for current
liabilities arising in
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the ordinary and usual course of business of the Companies subsequent to
December 31, 1998, which are accurately reflected on its books and records with
past practice.
Section 3.7 LIABILITIES. Except as set forth on SCHEDULE 3.7,
neither of the Companies has any liability, debt or obligation of any nature
(whether liquidated, unliquidated, accrued, absolute, contingent or otherwise
and whether due or to become due) other than:
(i) those set forth or reflected in the Financial
Statements that have not been paid or discharged since the
date thereof;
(ii) those arising under agreements or other
commitments expressly identified in any Schedule hereto
including, but not limited to, real property leases, personal
property leases and material contracts; and
(iii) current liabilities arising in the ordinary and
usual course of the business of each of the Companies
subsequent to December 31, 1998 that are either (A) identified
on or SCHEDULE 3.7 or (B) are accurately reflected on their
respective books and records in a manner consistent with past
practice and do not individually or in the aggregate exceed
$1,000.
Section 3.8 ABSENCE OF CERTAIN CHANGES AND EVENTS. Since
December 31, 1998, there has not been, with respect to any of the Companies, (i)
any damage, destruction or loss (whether or not covered by insurance) with
respect to any assets or properties; (ii) any entry into any commitment or
transaction (including, without limitation, any borrowing or capital
expenditure) other than commitments and/or transactions (A) described in
SCHEDULE 3.8, (B) entered into in the ordinary course of business in an amount
not to exceed $10,000 in the aggregate or (C) as contemplated by this Agreement;
(iii) any transfer, assignment or sale of, or rights granted under, any material
leases, licenses, agreements, patents, trademarks, trade names, copyrights or
other assets other than those transferred, assigned, sold or granted in the
ordinary course of business and consistent with past practice; (iv) any
mortgage, pledge, security interest or imposition of any other encumbrance on
any assets or properties except in the ordinary course of business; any payment
of any Liabilities of any kind other than Liabilities currently due; any
cancellation of any debts or claims or forgiveness of amounts owed to either of
the Companies; (v) any change in accounting principles or methods (except
insofar as may have been required by a change in U.S. GAAP); (vi) any change in
any Connecticut state or local law, rule or regulation applicable to or binding
upon the business of either of the Companies; (viii) any dividend or
distribution to the Shareholders other than as disclosed in SCHEDULE 3.8; or
(ix) any increase in the compensation payable to any Shareholder or any
executive employee of the Companies . Since December 31, 1998, each of XxXxxx
and Eco has conducted its business only in the ordinary course and in a manner
consistent with past practice and has not made any material change in the
conduct of its business or operations except, other than as disclosed in
SCHEDULE 3.8.
Section 3.9 TAXES AND TAX RETURNS. (i) The Companies and any
affiliated, consolidated, combined, unitary or similar group of which they
singly or in any combination are or have been members have filed or caused to be
filed in a timely manner all returns, declarations, reports, estimates,
information returns and statements with respect to Taxes ("Tax Returns")
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required to be filed under any United States federal, state or local or any
foreign law pertaining to Taxes and such Tax Returns are in all respects true,
complete and correct. Each of the Companies has paid, within the time and in the
manner prescribed by law, all Taxes required to be shown on such Tax Returns. No
claim has ever been made by an authority in a jurisdiction where either of the
Companies does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction. "Tax" or "Taxes" shall mean all taxes, charges, fees, levies
or other assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, value added, ad valorem, transfer,
franchise, profits, alternative (or add-on) minimum, license, withholding,
employment, environmental, payroll, disability, excise, estimated, severance,
stamp, occupation, property or other taxes, customs duties, fees, assessments or
charges of any kind whatsoever, whether computed on a consolidated, unitary,
combined, separate or any other basis, together with any interest and any
penalties, additions to tax or additional amounts imposed by any taxing
authority.
(ii) Each of the Companies has paid or accrued on its books
and records amounts that are adequate for the payment of all Taxes, whether or
not required to be shown on any Tax Return, not yet due and payable, including
Taxes for any period that ends on or before the Closing Date and for any period
that begins before the Closing Date and ends after the Closing Date to the
extent such Taxes are attributable to the portion of any such period ending on
the Closing Date.
(iii) Each of the Companies has complied in all respects with
all applicable laws, rules and regulations to the payment and withholding of
Taxes and has, within the time and in the manner prescribed by law, withheld
from employees and any other third parties and paid over to the proper
governmental authorities, all amounts required to be so withheld and paid under
all applicable laws.
(iv) Except for extensions as may be required for Federal and
State 1998 tax returns for the Companies, there are no outstanding waivers or
comparable consents regarding the application of the statute of limitations with
respect to any Taxes or Tax Returns that have been given by either of the
Companies and neither of the Companies is the beneficiary of any extension to
file any Tax Return.
(v) No Federal, state, local or foreign audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Returns of either of the Companies and no
deficiencies for any Taxes have been asserted or assessed against either of the
Companies that have not been resolved or paid in full. There are no tax liens or
similar encumbrances with respect to any of the assets of either of the
Companies that arose in connection with any failure (or alleged failure) to pay
any Tax. No material issue is currently being asserted by the Internal Revenue
Service (the "IRS") or other relevant taxing authority in any audit or
examination of the Tax Returns of either of the Companies. Neither XxXxxx nor
Eco has filed with respect to any item a disclosure statement pursuant to
Section 6662 of the Internal Revenue Code of 1986, as amended (the "Code") or
any comparable disclosure with respect to Federal, state and/or local tax
statutes.
(vi) No currently effective power of attorney has been granted
by either of the Companies with respect to any matter relating to Taxes which is
currently in force.
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(vii) Neither of the Companies has at any time been included
in a consolidated, affiliated, combined, unitary or similar Tax Return nor was
any such inclusion required or has any liability on Taxes of any other person as
a transferee, successor, by contract or otherwise.
(viii) Each of XxXxxx and Eco is an S corporation as defined
in Section 1361(a)(1) of the Code and in the case of Eco, has qualified as an S
corporation for each and every taxable year since inception in each tax
jurisdiction in which it is subject to income taxation and will continue to be
an S corporation in all such jurisdictions up to the Closing.
Section 3.10 EMPLOYEE BENEFIT PLANS; EMPLOYEES. (i) SCHEDULE
3.10 contains a list of all plans, agreements or arrangements of any kind
relating to deferred compensation, pension, profit sharing, money purchase or
other retirement benefits, stock purchase, stock grant, stock option, stock
appreciation rights, and other equity-based compensation or benefits, salary,
bonus, commission, incentive, severance, parachute or change in control payments
or benefits, health and welfare benefits, life, disability or other insurance
benefits, layoff or unemployment benefits, or any other employee benefits or
fringe benefits maintained or contributed to by either of the Companies, or
under which either of the Companies have any liabilities or obligations
including, but not limited to, any employee benefit plan within the meaning of
Section 3(3) of the Employment Retirement Income Security Act of 1974, as
amended ("ERISA") (collectively referred to as the "Plans"). For purposes of
this Section 3.10, references to the Companies include any entity affiliated
with the Companies under Sections 414(b), (c) and (m) of the Code or Section
4001(b) of ERISA (excluding any foreign affiliate of the Companies). Neither of
the Companies is required to contribute to, and has no liability under or with
respect to, any multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA. Each of the Companies has previously delivered to Buyer true and complete
copies of (i) each written Plan, including all amendments to date, (ii) the most
recent Form 5500 and schedules thereto for each Plan required to file the same,
(iii) where applicable, trust or other funding agreements or policies under each
Plan, (iv) where applicable, investment management or other service agreements
in respect of each Plan, (v) where applicable, the most recent actuarial reports
and financial statements relating to each Plan, (iv) where applicable, the most
recent determination letter from the Internal Revenue Service regarding each
Plan intended to be qualified under Section 401(a) of the Code, (vii) summary
plan descriptions and any other material employee communications with respect to
each Plan and (viii) all employment or personal handbooks, policies or manuals.
(ii) All material obligations of the Companies existing on or
prior to the date hereof, whether arising by operation of law, by contract or by
past custom, for payments to trusts or other funds or to any governmental agency
or to or in respect of any Plan have been paid, or adequate accruals for such
payments have been made by the Companies on their respective books of account.
(iii) Each Plan has been administered and operated in all
material respects in accordance with its terms and applicable law. Each Plan
intended to be "qualified" within the meaning of Section 401(a) of the Code is
so qualified and each related trust is exempt from tax under Section 501(a) of
the Code. None of the Plans, nor any trust created thereunder, has engaged in
any non-exempt material "prohibited transaction" as such term is defined in
Section 4975 of the Code and Section 406 of ERISA.
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(iv) Each of the Plans is, and in administering each of the
Plans, each of the Companies is, in material compliance with all applicable laws
including, without limitation, ERISA and the Code. Neither of the Companies has
incurred any liability under Title IV of ERISA, Section 412 of the Code or
Section 302 of ERISA, with respect to any employee benefit plan subject to any
of those provisions, and there exist no facts, conditions or circumstances which
would make it reasonable to anticipate that the Companies will incur any such
liability.
(v) The projected benefit obligation, within the meaning of
Statement of Financial Accounting Standards No. 87 of the Financial Accounting
Standards Board, under each Plan which is subject to Title IV of ERISA,
determined on the basis of actuarial assumptions ordinarily used under such Plan
as of the most recent actuarial valuation date for such Plan and as of December
31, 1997, does not exceed the current value of all of the assets of such Plan.
(vi) All reports relating to the Plans required to be filed
with or furnished to any governmental body, agency or court, Plan participants
or beneficiaries prior to the date hereof have been timely filed or furnished in
accordance with applicable law.
(vii) Neither of the Companies has (i) experienced any
reportable event within the meaning of ERISA or other event or condition which
presents a material risk of the termination of any pension Plan by the Pension
Benefit Guaranty Corporation ("PBGC"); (ii) had any tax imposed on it by the IRS
for any violation under Section 4975 of the Code; and (iii) engaged in any
transaction which could reasonably be expected to subject any of them or any
Plan to any liability for any tax under Section 4975 of the Code.
(viii) To the best of the Companies' and the Shareholders'
knowledge, there is no matter involving any Plan maintained or established for
employees of the Companies which is pending before the IRS, the Department of
Labor or any other governmental agency or court.
(ix) As to any Plan subject to Title IV of ERISA, (i) there
has been no reportable event within the meaning of Section 4043 of ERISA; (ii)
no notice of intent to terminate the Plan has been given under Section 4041 of
ERISA; (iii) no proceeding has been instituted under Section 4042 of ERISA to
terminate any Plan; (iv) no liability to the PBGC has been incurred (other than
PBGC insurance premiums); and (v) as to any Plan intended to be qualified under
Section 401 of the Code, to the best of the Companies' and the Shareholders'
knowledge, there has been no termination or partial termination of any such Plan
within the meaning of Section 411(d)(3) of the Code.
(x) Each Plan which is a "welfare plan" (as defined in Section
(3)(1) of ERISA) is either (i) unfunded or (ii) funded through insurance
contracts.
(xi) Neither of the Companies provides medical or life
insurance benefits to or in respect of employees beyond the date of retirement
or other termination of employment, other than as required under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or other
applicable law, nor does it have any current or projected liability for any
unfunded post-retirement medical or life insurance benefits in respect of any
employee or former employee.
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(xii) No Plan (including any agreement with any employee or
former employee) provides for benefits by reason of severance or change in
control. Other than as provided under this Agreement, the consummation of the
transactions contemplated under this Agreement and as contemplated hereby will
not cause the payment, acceleration, vesting or funding of any compensation,
benefit or other entitlement with respect to any employee of the Companies under
any Plan.
(xiii) No employer securities, employer real property or other
employer property is included in the assets of any Plan.
(xiv) Neither of the Companies is party to any written or oral
deferred or incentive compensation, employment, severance, consulting or other
similar contract, arrangement or policy or labor contracts or collective
bargaining agreements relating to its employees.
(xv) SCHEDULE 3.10 also sets forth the salary or wage and
bonus arrangements for each current employee of each of the Companies as of the
date hereof and for the last two calendar years, and all accrued vacation time
for each current employee. There are no pending, or to the best of the
Companies' and the Shareholders' knowledge, threatened actions, suits or claims
by former or present employees (or their beneficiaries) of the Companies.
Section 3.11 TITLE TO PROPERTY. Neither of the Companies owns
any real property. X. XxXxxx is the sole owner in fee of all of the real
property leased or used by the Companies. On the Closing Date, each of the
Companies has and will have good and marketable title, or valid leasehold rights
(in the case of leased property), to all personal property, including any and
all motor vehicles, purported to be owned or leased by them or used in the
operation of their businesses (the "Property"), free and clear of all liens,
claims and encumbrances of any nature, except as set forth on SCHEDULE 3.11.
Neither of the Companies owns any real property. On the Closing Date, each of
the Companies will have good and marketable title, or valid leasehold rights (in
the case of leased Property) to all personal property set forth on SCHEDULE
3.11, free and clear of all liens, claims and encumbrances of any nature.
SCHEDULE 3.11 sets forth a complete and accurate list of (i) all real property
leased by the Companies in the conduct of business of the Companies, (ii) all
motor vehicles owned or leased by the Companies, (iii) all personal property
owned by the Companies and used in connection with the business as of the
Companies, including without limitation, all inventory, machinery, equipment,
tooling, parts, furniture, supplies, office equipment, including all invoices
received therefor, (iv) all leases of equipment or other personal property used
in the conduct of the business of the Companies and (v) all other owned or
leased property with an individual value in excess of $2,500. All equipment and
other property used in the conduct of the business of the Companies are owned by
the Companies, are held free and clear of all mortgages, pledges, liens,
security interests, claims, encumbrances and restrictions of any nature
whatsoever, except those obligations which will be paid at Closing and any
liabilities identified on Schedule 3.11 as "Permitted Liabilities." No financing
statement under the Uniform Commercial Code or similar law naming any of the
Companies as debtor has been filed in any jurisdiction in respect of the
Property, and neither of the Companies is a party to or bound under any
agreement or legal obligation authorizing any party to file any such financing
statement, except those financing statements that will be terminated at Closing.
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Except for the Indenture of Lease dated February 23, 1999
between XxXxxx and X. XxXxxx (the "Lease") relating to the real property used by
XxXxxx located at 00-00 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx, no real
property is leased or used by any of the Companies. The Lease is valid and
enforceable in accordance with its terms in all material respects and is in full
force and effect. No consent or approval of any landlord or other third party in
connection with the Lease is necessary for the Companies or the Shareholders to
enter into and execute this Agreement and consummate the transactions
contemplated hereby.
Section 3.12 TRADEMARKS, PATENTS AND COPYRIGHTS. (i) For
purposes of this Agreement, the term "Proprietary Rights" shall mean all
worldwide industrial and intellectual property rights, including, without
limitation, each patent, patent rights, license, patent application, trade name,
trademark, trade name and trademark registration, trademark applications,
copyright, copyright registration, copyright application, service xxxx, brand
xxxx and brand name, trade secrets relating to or arising from any proprietary
process, formula, source or object code, and all other proprietary rights owned
or possessed by any of the Companies, or the renewal rights therein. Each of the
Companies owns or has the right to use, sell or license all Proprietary Rights
and such Proprietary Rights are sufficient for the conduct of the businesses of
the Companies as they are currently being conducted as of the date hereof.
SCHEDULE 3.12 hereto lists each patent, patent right, patent application,
tradename registration, trademark registration, copyright registration,
copyright application, source and object code owned or possessed by any of the
Companies;
(ii) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not constitute
a material breach of any instrument or agreement governing any Proprietary
Rights, will not cause the forfeiture or termination or give rise to a right of
forfeiture or termination of any Proprietary Rights or impair the right of any
of the Companies to use, sell or license any Proprietary Rights or any portion
thereof;
(iii) Neither the manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by any of the Companies
or currently under development by any of the Companies violates any license or
agreement between any of the Companies and any third party relating to such
product or infringes any intellectual property right of any other party, and
there is no pending or, to the best of the Companies' and the Shareholders'
knowledge, threatened claim or litigation contesting the validity and ownership
by any of the Companies or right to use, sell, license or dispose of any
Proprietary Right nor, to the best of the Companies' and the Shareholders'
knowledge is there any basis for any such claim, nor has any of the Companies
received any notice asserting that any Proprietary Right or the proposed use,
sale, license or disposition thereof conflicts or will conflict with the rights
of any other party, nor, to the best of the Companies' and the Shareholders'
knowledge, is there any basis for any such assertion; and
(iv) Neither of the Companies or the Shareholders has received
any notice, and no current or prior officers, employees or consultants of any of
the Companies claim an ownership interest in any Proprietary Rights as a result
of having been involved in the development of such property while employed by or
consulting to any of the Companies or otherwise.
Section 3.13 LEGAL PROCEEDINGS, CLAIMS, INVESTIGATIONS, ETC.
Except as set forth on SCHEDULE 3.13, there is no legal, administrative,
arbitration or other action or proceeding or
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governmental investigation pending, or to the knowledge of the Shareholders,
threatened, against the Companies (or any director, officer or employee of the
Companies) relating to the business or assets of the Companies. SCHEDULE 3.13
contains a complete and accurate description of the actions and/or proceedings
referred to therein. Neither the Companies nor the Shareholders has been
informed of any violation of or default under, any laws, ordinances,
regulations, judgments, injunctions, orders or decrees (including without
limitation, any immigration laws or regulations) of any court, governmental
department, commission, agency, instrumentality or arbitrator applicable to the
Companies or the business thereof. Neither of the Companies is currently subject
to any material judgment, order, injunction or decree of any court, arbitral
authority, administrative agency or other governmental authority.
Section 3.14 INSURANCE. SCHEDULE 3.14 hereto sets forth a list
and brief description of all existing insurance policies maintained by the
Companies pertaining to its respective business properties, personnel or assets.
Neither of the Companies is in default with respect to any provision contained
in any insurance policy, and has not failed to give any notice or present any
claim under any insurance policy in due and timely fashion. Prior to the
Closing, all such policies shall have been delivered to Buyer. All such policies
are in full force and effect and following the Closing will continue to be in
full force and effect. All payments with respect to such policies are current
and Neither of the Companies has received any notice threatening a suspension,
revocation, modification or cancellation of any such policy.
Section 3.15 MATERIAL CONTRACTS. SCHEDULE 3.15 sets forth a
complete and accurate list as of the Closing Date of all contracts or agreements
that (a) obligate any of the Companies to pay or to receive an annual amount of
$5,000 or more, (b) have an unexpired term as of September 30, 1998 in excess of
one year and that obligate any of the Companies to pay or to receive an amount
in any year in excess of $5,000, (c) contain a covenant not to compete or
otherwise significantly restrict any of the Companies' business activities, (d)
provide for a guaranty or indemnity by any of the Companies, (e) grant a power
of attorney, agency or similar authority by any of the Companies to another
person or entity, (f) provide for the grant by any of the Companies to any
person of any preferential rights to purchase any of the properties or assets of
any of the Companies, (g) involve a transaction between any of the Companies and
any affiliate, employee, officer or director thereof (other than the Lease), (h)
constitute a collective bargaining agreement or provides for severance benefits
to any officer, director or employee, or (i) are in writing, to which any of the
Companies is a party and the non-performance of which by any party thereto can
reasonably be expected to have a material adverse effect on any of the Companies
(collectively, "Material Contracts"). Any purchase order, written or oral, in
receipt of the Company requiring the provision by the Companies of products or
services the value of which exceeds $10,000 constitutes a Material Contract.
Copies of all written contracts and a description of the terms of all other oral
contacts to which any of the Companies is a party, including any and all
amendments and modifications thereto, have been delivered to Buyer prior to the
date hereof.
Each of the Material Contracts is valid and binding, in full
force and effect and enforceable against the parties thereto in accordance with
their respective provisions. Neither of the Companies has assigned, mortgaged,
pledged, encumbered, or otherwise hypothecated any of its respective right,
title or interest under any of the Material Contracts. Neither of the Companies,
or any other party thereto is in violation of, in default in respect of, nor has
there occurred an event or
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condition which, with the passage of time or giving of notice (or both), would
constitute a violation or a default of or under the Material Contracts. No
written or oral notice has been received by any of the Companies or the
Shareholders claiming any default by any of the Companies or indicating the
desire or intention of any other party thereto to amend, modify, rescind or
terminate any Material Contract.
Section 3.16 INVENTORIES. All Inventories reflected in the
Financial Statements are stated at the lower of cost or market on a
first-in-first-out basis in accordance with GAAP, with adequate reserves for
obsolete, obsolescent and slow moving items consistently applied in conformity
with past practices. SCHEDULE 3.16 contains a true and complete list of all
inventory (including work in progress) of the Companies as of December 31, 1998.
All inventory of the Companies is in good and marketable condition and otherwise
fit for sale. Since December 31, 1998, none of such Inventory has been sold or
otherwise disposed of except in the ordinary course of business. On the Closing
Date, each of the Companies will have Inventory sufficient in quantity, type and
quality for the conduct of their respective business in accordance with past
practice.
Section 3.17 CUSTOMERS. There are no pending or, to the best
of the Companies' and the Shareholders' knowledge, threatened disputes between
any of the Companies and any of their respective locations, vendors, suppliers,
customers or other parties that in any way relate to the operation of the
business of any of the Companies. SCHEDULE 3.17 lists all locations, vendors,
suppliers, customers or other parties that have commercial dealings with the
Companies relating to the businesses of the Companies, and a description of the
nature of such dealings.
Section 3.18 ACCOUNTS RECEIVABLE. All accounts receivables of
the Companies have arisen from bona fide transactions by the Companies in the
ordinary course of business. To the knowledge of the Companies and X. XxXxxx,
there are no defenses, claims of disabilities, offsets, refusals to pay or other
rights of offset against any such accounts receivable. Any allowances that the
Companies has established specifically for doubtful accounts, has been
established on a basis consistent with the Companies' respective prior practice,
credit experience and GAAP consistently applied.
Section 3.19 CERTAIN TRANSACTIONS. Except for the Lease and as
set forth on SCHEDULE 3.19, none of the Shareholders, any officer, director or
any employee of any of the Companies, or any member of any such person's or any
Shareholder's family is presently a party to any transaction with any of the
Companies relating to the business of any of the Companies, including without
limitation, any contract, agreement or other arrangement (i) providing for the
furnishing of services by, (ii) providing for the rental of real or personal
property from, or (iii) otherwise requiring payments to (other than for services
as officers, directors or employees of any of the Companies), any such person or
any corporation, partnership, trust or other entity in which any such person has
a substantial interest as a shareholder, officer, director, trustee or partner.
Section 3.20 BROKER. No broker, finder or investment banker is
entitled to any brokerage or finder's fee or other commission in connection with
the transactions contemplated hereby based on the arrangements made by or on
behalf of any of the Companies or the Shareholders.
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Section 3.21 ENVIRONMENTAL MATTERS. (a) Except as disclosed in
SCHEDULE 3.21, Item 4, neither X. XxXxxx nor the Companies is the subject of, or
being threatened to be the subject of (i) any enforcement proceeding, or (ii)
any investigation, brought in either case under any Federal, state or local
environmental law, rule, regulation, or ordinance at any time in effect or (iii)
any third party claim relating to environmental conditions on or off the
properties of any of the Companies. Except as disclosed in SCHEDULE 3.21, Item
4, neither Xx. XxXxxx nor the Companies has been notified that it must obtain
any permits and licenses or file documents for the operation of the business
under Federal, state and local laws relating to pollution protection of the
environment. Except as disclosed in SCHEDULE 3.21, Item 4, neither of the
Companies has been notified of any conditions on or off the properties of any of
the Companies which will give rise to any material liabilities, known or
unknown, under any Federal, state or local environmental law, rule, regulation
or ordinance, or as the result of any claim of any third party. For the purposes
of this Section 3.21, an investigation shall include, but is not limited to, any
written notice received by any of the Companies or the Shareholders that relates
to the onsite or offsite disposal, release, discharge or spill of any waste,
waste water, pollutant or contaminants.
(b) There are no toxic wastes or other toxic or hazardous
substances or materials, pollutants or contaminants that any of the Companies
(or, to the best of the Companies' and the Shareholders' knowledge, any previous
occupant of the facilities of any of the Companies) has used, stored or
otherwise held in or on any of the facilities of any of the Companies, that are
present at or have migrated from the Companies' facilities, whether contained in
ambient air, surface water, groundwater, land surface or subsurface strata.
Except as disclosed in SCHEDULE 3.21, Item 4, the facilities of the Companies
have been maintained by the Companies in material compliance with all
environmental protection, occupational, health and safety or similar laws,
ordinances, restrictions, licenses, and regulations. Neither of the Companies
has disposed of or arranged (by contract, agreement or otherwise) for the
disposal of any material or substance that was generated or used by any of the
Companies at any off-site location that has been or is listed or proposed for
inclusion on any list promulgated by any Governmental Authority for the purpose
of identifying sites which pose a danger to health and safety. Except as
described in SCHEDULE 3.21, Item 2, there have been no environmental studies,
reports and analyses made or prepared in the last five years relating to the
facilities of any of the Companies. Neither of the Companies has installed any
underground storage tanks in any of its respective facilities and, to the best
of the Shareholders' knowledge, none of such facilities contains any underground
storage tanks.
Section 3.22 ILLEGAL PAYMENTS. Neither of the Companies or the
Shareholders has, directly or indirectly, paid or delivered any fee, commission
or other sum of money or item of property, however characterized, to any finder,
agent, government official or other party, in the United States or any other
country, which is in any manner related to the business or operations of any of
the Companies, that the Shareholders know or have reason to believe to have been
illegal under any Federal, state or local laws or the laws of any other country
having jurisdiction. Neither of the Companies has participated, directly or
indirectly, in any boycotts affecting any of its actual or potential customers.
Section 3.23 LICENSES. Each of the Companies is the holder of
all state, Federal and local licenses, permits and approvals required to conduct
its business as it is presently being conducted (the "Licenses"). All of the
Licenses are in good standing, valid and effective, and free
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and clear of any liens, conditions or restrictions which might limit their full
utilization as authorized by any governmental authority. SCHEDULE 3.23 lists
each License so held and its date of expiration.
Section 3.24 COMPLIANCE WITH LAW. (a) Except as disclosed in
SCHEDULE 3.21, Item 4, each of the Companies and X. XxXxxx (but in the case of
X. XxXxxx, only in respect of the property covered by the Lease) have complied
in all material respects with all laws, rules, regulations, arbitral
determinations, orders, writs, decrees and injunctions that are applicable to or
binding upon any of the Companies, their respective business or the Property,
and has no notice or knowledge of any violations, whether actual, claimed or
alleged, thereof.
Section 3.25 LABOR MATTERS. Neither of the Companies or the
Shareholders has received any notice from any labor union or group that it
represents or intends to represent the employees of any of the Companies. Each
of the Companies has complied in all material respects with all applicable laws
affecting employment and employment practices, terms and conditions of
employment and wages and hours. Neither of the Companies has received any notice
of and there is no complaint alleging unfair labor practices against it pending,
or to the best knowledge of the Companies and the Shareholders, threatened
before the National Labor Relations Board or any other charges or complaints
pending, or to the best knowledge of the Companies and the Shareholders,
threatened before the Equal Employment Opportunity Commission, any state or
local Human Rights Commission or any other state or local agency in respect of
labor or employment matters. No labor strike, material dispute, slowdown or
stoppage has occurred with respect to the employees of the Companies and there
is no labor strike, material dispute, slowdown or stoppage pending or threatened
with respect to their employees. There are no pending grievances or arbitration
proceedings against any of the Companies with respect to the operation of their
respective businesses.
Section 3.26 BOOKS OF ACCOUNT; RECORDS. The general ledgers,
books of account and other records of each of the Companies in respect of their
respective business are complete and correct in all material respects and have
been maintained in accordance with good business practices and on a consistent
basis from period to period reflected therein.
Section 3.27 COMPLETE DISCLOSURE. No representation or
warranty made by the Companies and/or the Shareholders in this Agreement and no
exhibit, schedule, statement, certificate or other writing furnished to Buyer by
or on behalf of the Companies or the Shareholders pursuant to this Agreement or
in connection with the transactions contemplated hereby 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 and therein
not misleading.
Section 3.28 CONDITION OF THE ASSETS. All material items of
equipment used in the operation of the business of the Companies and in good
working order and condition, reasonable wear and tear and obsolescence excepted.
Neither of the Companies has any assets with a value in excess of $1,000 in the
aggregate, used in, related in any way to, or required for the conduct of their
respective businesses that are not owned or leased by the Companies.
Section 3.29 INVESTMENTS IN COMPETITORS. None of the
Shareholders nor any of their affiliates owns directly or indirectly any
interests or has any investment in any person that is a
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competitor of any of the Companies other than the securities of any issuer that
are listed for trading on a national securities exchange or are traded in the
over-the-counter market which do not, in the case of any shareholder, constitute
more than 3.0% of the total amount of such securities that are outstanding.
Section 3.30 INVESTMENT REPRESENTATIONS. (a) The Hi-Rise
Shares received by each of the Shareholders pursuant to Article I hereof will be
acquired by each of the Shareholders for investment solely for the accounts of
each of the Shareholders and not for distribution, transfer or sale to others in
connection with any distribution or public offering.
(b) Each of the Shareholders (i) has received all information
that each of the Shareholders deems necessary to make an informed investment
decision with respect to an investment in The Hi-Rise Shares; (ii) has had the
opportunity to make such investigation as each of the Shareholders desires
pertaining to Hi-Rise and an investment therein and (iii) has had the
opportunity to ask questions of representatives of Hi-Rise concerning Hi-Rise.
(c) Each of the Shareholders understands that each of the
Shareholders must bear the economic risk of an investment in Hi-Rise for an
indefinite period of time because (i) The Hi-Rise Shares have not been
registered under the Securities Act and applicable state securities laws and
(ii) the Hi-Rise Shares received by each of the Shareholders pursuant to Article
I hereof may not be sold, transferred, pledged or otherwise disposed of except
if they are subsequently registered in accordance with the provisions of the
Securities Act and applicable state securities laws or registration under the
Securities Act or any applicable state securities laws is not required.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND HI-RISE
Buyer and Hi-Rise hereby jointly and severally represent and
warrant to the Companies and the Shareholders as follows:
Section 4.1 CORPORATE ORGANIZATION; REQUISITE AUTHORITY TO
CONDUCT BUSINESS. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Connecticut. Hi-Rise is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware. On or prior to the Closing, each of Buyer and Hi-Rise
will have full corporate power and authority to enter into this Agreement, the
XxXxxx Employment Agreement, the Lease and the Guaranty of the Lease executed by
Hi-Rise in favor of X. XxXxxx (the "Lease Guaranty") (collectively, the "Buyer's
Documents") to which it is to be a party and to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The Buyer's Documents have been or will be on or prior to the
Closing duly authorized and approved by Buyer's and Hi-Rise's Board of Directors
and no further action on the part of Buyer or Hi-Rise will be necessary to
authorize the execution and delivery by either of them of, and the performance
of their respective obligations under, the Buyer's Documents. There are no
corporate, contractual, statutory or other restrictions of any kind upon the
power and authority of Buyer or Hi-Rise to execute and deliver the Buyer's
Documents and to consummate the transactions contemplated
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hereunder and thereunder and no action, waiver or consent by any Governmental
Authority is necessary to make this Agreement a valid instrument binding upon
Buyer in accordance with its terms.
Section 4.2 EXECUTION AND DELIVERY. Assuming that the Ultimate
Parent Entity of the Companies has less than $100 million of HSR Assets and
Revenues, neither Buyer nor Hi-Rise is required to submit any notice, report or
other filing with any Governmental Authority in connection with the execution,
delivery or performance of the Buyer's Documents, other than filings to be made
by Hi-Rise following the closing under applicable U.S. securities laws. The
Buyer's Documents to which each of Buyer and Hi-Rise have been or will be duly
executed and delivered on behalf of Buyer and Hi-Rise, as the case may be, and
when executed will constitute its legal, valid and binding obligations,
enforceable against it in accordance with their respective terms, except (i) as
such enforceability may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) as such obligations are subject to general principles of equity
and (iii) as rights to indemnity may be limited by Federal or state securities
laws or by public policy.
Section 4.3 NO CONFLICTS; ABSENCE OF DEFAULTS. The execution,
delivery and performance of the Buyer's Documents to which each of them shall be
a party by Buyer and Hi-Rise and the consummation of the transactions
contemplated hereby and thereby do not and will not conflict with or violate (a)
the Buyer's or Hi-Rise's Certificate of Incorporation, as amended, or Bylaws or
(b) any material law, administrative regulation or rule or court order, judgment
or decree applicable to the Buyer or Hi-Rise and the execution and delivery of
the Buyer's Documents or the consummations of the transactions contemplated
thereby will not constitute a material breach of, or any event of default under,
any material contract or agreement to which the Buyer or Hi-Rise is bound, or by
which the Buyer or Hi-Rise may be bound or affected.
Section 4.4 INVESTMENT. Buyer is acquiring the Shares solely
for its own account as an investment and not with a view to any distribution or
resale thereof within the meanings of such terms under the Securities Act.
ARTICLE V
COVENANTS OF THE COMPANIES, THE SHAREHOLDERS AND BUYER
Section 5.1 COVENANTS. Each of the Companies, Shareholders,
Buyer and Hi- Rise covenants and agrees as follows:
(a) BEST EFFORTS. Each of the parties hereto agrees to proceed
diligently and use their best efforts to take or cause to be taken all actions
and to do or cause to be done all things necessary, proper and advisable to
consummate the transactions contemplated by this Agreement.
(b) COMPLIANCE. Each of the parties hereto agrees to comply in
all material respects with all applicable rules and regulations of any
Governmental Authority in connection
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with the execution, delivery and performance of this Agreement and the
transactions contemplated hereby; to use all reasonable efforts to obtain in a
timely manner all necessary waivers, consents and approvals and to take, or
cause to be taken, all other actions and to do, or cause to be done, all other
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement.
(c) NOTICE. Each of the parties hereto agrees to give prompt
notice to the other party of (i) the occurrence, or failure to occur, of any
event whose occurrence or failure to occur, would be likely to cause any
representation or warranty of such party contained in this Agreement to be
untrue or incorrect in any material respect at any time from the date hereof and
(ii) any material failure on its part, or on the part of any of its officers,
directors, employees or agents to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any such notice shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
(d) CONFIDENTIALITY. (i) The Shareholders agree to hold in
strict confidence all data and information obtained from the other parties
hereto or any subsidiary, division, associate, representative, agent or
affiliate of any such party (unless such information is or becomes publicly
available without the fault of any representative of such party, or public
disclosure of such information is required by law in the opinion of counsel to
such party) and shall insure that such representatives do not disclose
information to others without the prior written consent of the other parties
hereto, and in the event of the termination of this Agreement, to cause its
representatives to return promptly every document furnished by the other parties
hereto or any subsidiary, division, associate, representative, agent or
affiliate of any such party in connection with the transactions contemplated
hereby and any copies thereof which may have been made, other than documents
which are publicly available.
(ii) Buyer and Hi-Rise agree to hold in strict
confidence all personal data and information obtained from Shareholders (unless
such information is or becomes publicly available, or public disclosure of such
information is required by law in the opinion of counsel to such party), and in
the event of the termination of this Agreement, to promptly return every
document furnished by Shareholders containing such personal data and
information.
(e) ANNOUNCEMENTS. That all public announcements, statements
and press releases concerning the transactions contemplated by this Agreement
shall be mutually agreed to by the Companies, on one hand, and Hi-Rise, on the
other hand, before the issuance or the making thereof and, subject to the advice
of counsel, no party shall issue any such press releases or make any such public
statement prior to such mutual agreement, except as may be required by law
(including Federal securities laws). Notwithstanding the foregoing, the parties
hereto acknowledge that Hi-Rise may be required to file a copy of this
Agreement, including all exhibits and schedules hereto, with the Securities and
Exchange Commission.
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ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE COMPANIES AND THE SHAREHOLDERS
The obligations of the Companies and the Shareholders under this
Agreement are subject to the satisfaction, on or prior to the Closing Date,
unless waived in writing by the Shareholders, of each of the following
conditions:
Section 6.1 CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS.
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer and Hi-Rise set forth in Article IV of this Agreement shall
have been true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing as if such
representations and warranties were made as of the Closing.
(b) PERFORMANCE OF AGREEMENT. All covenants, conditions and
other obligations under this Agreement which are to be performed or complied
with by Buyer shall have been performed and complied with in all material
respects on or prior to the Closing including the delivery of funds and stock
certificates and the fully executed instruments and documents in accordance with
this Agreement.
(c) NO ADVERSE PROCEEDING. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or administrative,
or governmental investigation against Buyer, the Shareholders, or any of the
Companies for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation hereof
is illegal.
(d) CERTIFICATES. Buyer shall have delivered to the
Shareholders (i) a certificate, dated the Closing Date, executed by an executive
officer of the Buyer to the effect that the conditions set forth in subsections
(a), (b) and (c) of this Section 6.1 have been satisfied and (ii) a certificate
dated the Closing Date, executed by Buyer's Secretary, to the effect that (A)
the Articles of Incorporation and By-laws of Buyer shall have not been amended
since the date upon which certified copies of each had been delivered to the
Shareholders and remain in full force and effect and (B) the officers executing
the Agreement on behalf of Buyer are duly elected and hold the offices set forth
therein, with resolutions approved by the Board of Directors of Buyer attached
as an exhibit thereto.
Section 6.2 CONSENTS AND APPROVALS. All filings and
registrations with, and notifications to, all Federal, state, local and foreign
authorities required for consummation of the transactions contemplated by this
Agreement shall have been made, and all consents, approvals and authorizations
of all Federal, state, local and foreign authorities and parties to material
contracts, licenses, agreements or instruments required for consummation of the
transactions contemplated by this Agreement shall have been received and shall
be in full force and effect.
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Section 6.3 EMPLOYMENT AGREEMENT. The XxXxxx Employment
Agreement and satisfactory employment agreements shall have been entered into
between Hi-Rise and each of Xxxxxxxxxx and Xxxxxx.
Section 6.4 LEASE. The Lease shall have been duly executed and
delivered by X. XxXxxx and the Lease Guaranty shall have been executed and
delivered by Hi-Rise.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND HI-RISE
The obligations of Buyer and Hi-Rise under this Agreement are subject
to the satisfaction, on or prior to the Closing Date, unless waived in writing
by Buyer, of each of the following conditions:
Section 7.1 CONDITIONS TO OBLIGATIONS OF BUYER AND HI-RISE.
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Companies and the Shareholders set forth in Article III of
this Agreement shall have been true and correct in all respects when made and
shall be true and correct in all material respects at and as of the Closing as
if such representations and warranties were made as of the Closing.
(b) PERFORMANCE OF AGREEMENT. All covenants, conditions and
other obligations under this Agreement which are to be performed or complied
with by the Companies and the Shareholders shall have been performed and
complied with in all material respects on or prior to the Closing including,
without limitation, the delivery of (i) the certificates of all outstanding
shares of common stock of the Companies pursuant to the terms of, and as more
fully set forth in, Section 1.1 and (ii) fully executed instruments and
documents in accordance with this Agreement.
(c) NO ADVERSE PROCEEDING. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or administrative,
or governmental investigation against Buyer, the Shareholders or any of the
Companies for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation hereof
is illegal.
(d) CERTIFICATES. Each of the Companies shall have delivered
to Buyer (i) certificates, dated the Closing Date, executed by the President of
each of the Companies, to the effect that the conditions set forth in
subsections (a), (b) and (c) of this Section 7.1 have been satisfied and (ii)
certificates dated the Closing Date, executed by the respective Secretary of the
Companies, to the effect that (A) the Certificate of Incorporation and By-laws
of the Companies shall have not been amended since the date upon which certified
copies of each had been delivered to Buyer and remain in full force and effect
and (B) the officers executing this Agreement on behalf of each of the Companies
are duly elected and hold the offices set forth therein, with copies of
resolutions approved by the respective Board of Directors of each of the
Companies and the Shareholders attached as an exhibit thereto.
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Section 7.2 DUE DILIGENCE. The completion to the commercially
reasonable satisfaction of Buyers of a due diligence review of the businesses of
the Companies by Buyer and its agents.
Section 7.3 CONDUCT OF THE BUSINESS. No Material Adverse
Effect shall have occurred, as determined by Buyer in its sole discretion.
Section 7.4 CONSENTS AND APPROVALS. All filings and
registrations with, and notifications to, all Federal, state, local and foreign
authorities required for consummation of the transactions contemplated by this
Agreement shall have been made, and all consents, approvals and authorizations
of all Federal, state, local and foreign authorities and parties to material
contracts, licenses, agreements or instruments required for consummation of the
transactions contemplated by this Agreement shall have been received and shall
be in full force and effect.
Section 7.5 OPINION OF COUNSEL OF XXXXXX AND ECO AND THE
SHAREHOLDERS. Buyer shall have received the opinion of Pullman & Xxxxxx, LLC,
counsel to XxXxxx, Eco and the Shareholders, dated the Closing Date,
substantially in the form attached as EXHIBIT D hereto.
Section 7.6 LEASE. The Lease shall have been duly executed and
delivered by X. XxXxxx.
Section 7.7 EMPLOYMENT AGREEMENT. The XxXxxx Employment
Agreement shall have been duly executed and delivered by X. XxXxxx and
satisfactory employment agreements shall have been entered into between Hi-Rise
and each of Xxxxxxxxxx and Xxxxxx.
Section 7.8 CONSENT OF FINANCING SOURCES. Buyer shall have
received the consent of its lenders and financing sources to enter into this
Agreement and to consummate the transactions contemplated hereby.
Section 7.9 W-9 FORMS. Shareholders shall have provided to
Buyer duly executed I.R.S. Form W-9's.
ARTICLE VIII
TAX MATTERS
Section 8.1 CERTAIN TAX MATTERS. (a) The Shareholders hereby
indemnify and hold harmless Buyer, Hi-Rise, XxXxxx and Eco with respect to any
and all Taxes that may be imposed on Buyer, Hi-Rise, XxXxxx or Eco (if any) (i)
with respect to all taxable periods of XxXxxx or Eco ending on or prior to
December 31, 1998 and (ii) all Taxes allocated to Shareholders pursuant to
Section 8.1(c) hereof.
(b) XxXxxx and Eco shall elect and its Shareholders shall
consent, pursuant to Section 1362(d) of the Code, to terminate their respective
"S corporation" elections, with such termination to be effective as of January
1, 1999.
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(c) (i) XxXxxx, Eco and Shareholders covenant and agree that
they have duly included, or will duly include, in their own Tax Returns their
own allocable share of items of income, gain, loss, deduction or credit
attributable to any period (or that portion of any period) during which XxXxxx
or Eco was an S corporation as required by applicable law.
(ii) Whenever a taxing authority asserts a claim, makes an
assessment or otherwise disputes the amounts of Taxes payable ending on or
before December 31, 1998, Buyer shall notify Shareholders within ten (10) days
and thereafter Shareholders shall have the right to control any resulting
proceedings and to determine when, whether and to what extent to settle any such
claim, assessment or dispute. Notwithstanding the foregoing, the failure of
Buyer to give notice under the preceding sentence shall not relieve Shareholders
of any obligations hereunder unless such failure shall preclude the defense of
such claim. Shareholders shall make any payment of any Tax liability for which
Shareholders are liable under law within thirty (30) days after the final
determination (as such term is defined in Section 1313(a) of the Code).
Shareholders shall agree to no adjustment or adjustments that would have the
effect of increasing Tax liability with respect to any period after December 31,
1998 without obtaining the prior written consent of Buyer.
(d) Shareholders shall prepare or cause to be prepared, and
file or cause to be filed, all Tax Returns of XxXxxx or Eco for all taxable
periods of XxXxxx or Eco that end on or prior to December 31, 1998. All such
returns shall be prepared on a basis that is consistent with the manner in which
Shareholders prepared or filed such Tax Returns for prior periods. Except as
otherwise provided in this subparagraph (d), Buyer shall be responsible for
filing all Tax Returns required to be filed by or on behalf of XxXxxx or Eco for
taxable periods ending after December 31, 1998.
(e) After the Closing Date, Buyer and Shareholders shall
provide each other with reasonable cooperation in connection with the
preparation of Tax Returns of XxXxxx or Eco and shall make available to the
other and to any taxing authority, as reasonably requested, all information,
records or documents relating to Tax liabilities or potential Tax liabilities of
XxXxxx or Eco for all periods prior to or including the Closing Date and shall
preserve all such information, records and documents until the expiration of any
statute of limitations or extensions thereof.
ARTICLE IX
INDEMNIFICATION
Section 9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. Subject to the limitations set forth in this Article IX and
notwithstanding any investigation conducted at any time with regard thereto by
or on behalf of Buyer or Hi-Rise, on one hand, or the Companies or the
Shareholders, on the other hand, all representations, warranties, covenants and
agreements of Buyer, the Companies or the Shareholders in this Agreement shall
survive the execution, delivery and performance of this Agreement and shall be
deemed to have been made again by Buyer, the Companies and the Shareholders at
and as of the Closing. The representations and warranties contained in this
Agreement shall remain in full force and effect for a period of three years
after the Closing Date; PROVIDED, HOWEVER, that the representations, warranties
and covenants contained
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in Section 3.9, relating to Taxes, shall remain in full force and effect until
the expiration of the applicable statute of limitations (including any
extensions thereof). The obligation of indemnity provided herein shall survive
the Closing. All statements contained in any Exhibit, Schedule, statement,
certificate or other writing pursuant to this Agreement or in connection with
the transactions contemplated hereby shall be deemed representations and
warranties of Buyer, the Companies or the Shareholders, as the case may be, set
forth in this Agreement within the meaning of this Article.
Section 9.2 INDEMNIFICATION.
(a) Subject to the limitations set forth in this Article IX,
each of the Companies and the Shareholders shall jointly and severally indemnify
and hold harmless Buyer and Hi-Rise from and against any and all losses,
liabilities, damages, demands, claims, suits, actions, judgments or causes of
action, assessments, costs and expenses including, without limitation, interest,
penalties, reasonable attorneys' fees, any and all reasonable expenses incurred
in investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation (collectively, "Damages"), asserted against,
resulting to, imposed upon, or incurred or suffered by Buyer or Hi-Rise,
directly or indirectly, as a result of or arising from the following
(individually an "Indemnifiable Claim" and collectively "Indemnifiable Claims"
when used in the context of Buyer or Hi-Rise as the Indemnified Party (as
defined below)):
(i) Any inaccuracy in or breach of any of the
representations, warranties or agreements made in this
Agreement of the Companies or the Shareholders or the
non-performance of any covenant or obligation to be performed
by any of the Companies or the Shareholders under this
Agreement;
(ii) Any violation by any of the Companies or the
Shareholders of any law, rule, regulation, arbitral
determination, order, writ, decree or injunction on or prior
to the Closing Date;
(iii) The matters described in Schedule 3.21, Item 4,
to the extent such Damages arise from actions or inactions of
the Shareholders or the Companies prior to the Closing; and
(iv) Any misrepresentation in or any omission from
any Exhibit, Schedule, statement, certificate or other writing
furnished or to be furnished by or on behalf of the Companies
or the Shareholders under this Agreement.
(b) Subject to the limitations set forth in this Article IX,
Buyer and Hi-Rise shall jointly and severally indemnify and hold harmless the
Companies and the Shareholders from and against any and all Damages asserted
against, resulting to, imposed upon, or incurred or suffered by the Companies or
the Shareholders, directly or indirectly, as a result of or arising from the
following (individually an "Indemnifiable Claim" and collectively "Indemnifiable
Claims" when used in the context of the Companies or any of the Shareholders as
the Indemnified Party):
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(i) Any inaccuracy in or breach of any of the
representations, warranties or agreements made by Buyer or
Hi-Rise in this Agreement or the non-performance of any
covenant or obligation to be performed by Buyer or Hi-Rise
under this Agreement;
(ii) Any additional income tax payable by the
Shareholders as reflected in amended income tax returns for
the tax years 1996 and 1997 filed after the Closing Date by
any of the Shareholders specifically attributable to
adjustments in the value of inventory resulting from an audit
of XxXxxx for each of the fiscal years ended December 31, 1997
and 1998 conducted by Xxxx & Company; provided that the total
liability of Buyer and Hi-Rise under this clause (ii) shall
not exceed $75,000.
(iii) Any misrepresentation in or any omission from
any Exhibit, Schedule, statement, certificate or other writing
furnished or to be furnished by or on behalf of Buyer or
Hi-Rise under this Agreement; and.
(c) Without duplication of Damages, Buyer and/or Hi-Rise shall
be deemed to have suffered Damages arising out of or resulting from the matters
referred to in subsection (a) above if the same shall be suffered by any parent,
subsidiary or affiliate of Buyer or Hi-Rise.
(d) Neither the Companies and the Shareholders on one hand,
nor Buyer and Hi-Rise, on the other hand, shall be required to indemnify the
other until the aggregate of all indemnifiable claims which the Companies and
the Shareholders, on one hand, and Buyer and Hi-Rise, on the other hand, may
have against the other exceeds $50,000, but after the $50,000 threshold is
reached, each indemnified person shall be entitled to be indemnified for the
full amount of all claims arising hereunder.
Section 9.3 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO
THIRD PARTY CLAIMS. The Indemnified Party shall give the Indemnifying Party
prompt written notice of any third party claim, demand, assessment, suit or
proceeding to which the indemnity set forth in this Article IX applies which
notice shall describe said claim in reasonable detail (the "Indemnification
Notice"). Notwithstanding the foregoing, the Indemnified Party shall not have
any obligation to give any notice of any assertion of liability by a third party
unless such assertion is in writing, and the rights of the Indemnified Party to
be indemnified hereunder in respect of any third party claim shall not be
adversely affected by its failure to give notice pursuant to the foregoing
unless and, if so, only to the extent that, the Indemnifying Party is materially
prejudiced thereby. The Indemnifying Party shall have the right to control the
defense or settlement of any such action subject to the provisions set forth
below in the event such claim solely involves an action for monetary damages and
could not affect the Indemnified Party's business going forward, but the
Indemnified Party may, at its election, participate in the defense of any action
or proceeding at its sole cost and expense. Notwithstanding the foregoing, if
there exists a conflict of interest that would make it inappropriate for the
same counsel to represent both the Indemnified Party, on one hand, and the
Indemnifying Party, on the other hand, in connection with any Indemnifiable
Claim, then the Indemnified Party shall be entitled to retain its own counsel as
is reasonably satisfactory to the Indemnifying Party at the Indemnifying Party's
expense. In the event that such Indemnified Party shall seek indemnification as
provided
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herein, such Indemnified Party shall make available to the Indemnifying Party,
at its expense, all witnesses, pertinent records, materials and information in
the Indemnified Party's possession or under the Indemnified Party's control
relating thereto as is reasonably required by the Indemnifying Party. Should the
Indemnifying Party fail to defend any such Indemnifiable Claim (except for
failure resulting from the Indemnified Party's failure to timely give notice of
such Indemnifiable claim), then, in addition to any other remedy, the
Indemnified Party may settle or defend such action or proceeding through counsel
of its own choosing and may recover from the Indemnifying Party the amount of
such settlement, demand, or any judgment or decree and all of its costs and
expenses, including reasonable fees and disbursements of counsel. Except as
permitted in the preceding sentence, the Indemnifying Party shall not be liable
for any settlement effected without its written consent, which consent shall not
be unreasonably withheld; PROVIDED, HOWEVER, if such approval is unreasonably
withheld, the liability of the Indemnifying Party shall be limited to the amount
of the proposed compromise or settlement and the amount of the Indemnified
Party's reasonable counsel fees incurred in defending such claim, as permitted
by the preceding sentence, at the time such consent is unreasonably withheld.
Notwithstanding the preceding sentence, the right of the Indemnified Party to
compromise or settle any claim without the prior written consent of the
Indemnifying Party shall only be available if a complete release of the
Indemnifying Party is contemplated to be part of the proposed compromise or
settlement of such third party claim. Shareholders shall agree to no adjustment
or adjustments that would have the effect of increasing Tax liability with
respect to any period ending after the Closing Date without obtaining the prior
written consent of Buyer and Hi-Rise.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
Section 10.1 TERMINATION. This Agreement may be terminated and
the transactions contemplated by this Agreement abandoned at any time prior to
the Closing:
(a) By mutual written consent of Buyer and Hi-Rise, on one
hand, and the Companies and the Shareholders, on the other hand;
(b) By Buyer and Hi-Rise, on one hand, or the Companies and
the Shareholders, on the other hand, if the transactions contemplated by this
Agreement shall not have been consummated on or before March 31, 1999, unless
extended pursuant to Section 2.1 of this Agreement; PROVIDED, HOWEVER, neither
Buyer, on one hand, nor the Companies and the Shareholders, on the other hand,
as the case may be, may terminate this Agreement pursuant to this Section
10.1(b) if any condition specified in Article VI or Article VII, respectively,
is not satisfied or waived or any such condition can no longer be satisfied; (c)
By the Companies and the Shareholders if any condition specified in Article VI
hereto has not been met, or waived by the Companies and the Shareholders, at
such time as such condition can no longer be satisfied; or
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(d) By Buyer and Hi-Rise if any condition specified in Article
VII of this Agreement has not been met, or waived by Buyer and Hi-Rise, at such
time as such condition can no longer be satisfied; or
(e) By Buyer and Hi-Rise, on one hand, or the Companies and
the Shareholders, on the other hand, if a court of competent jurisdiction or
Governmental Authority shall have issued a final, non-appealable order, decree
or ruling or taken any other action (which order, decree or ruling the parties
hereto shall use their best efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement.
Section 10.2 EFFECT OF TERMINATION. In the event of any
termination of this Agreement in accordance with Sections 10.1(a), (b) or (e)
hereof, this Agreement shall forthwith become void and there shall be no
liability under this Agreement on the part of any party hereto or their
respective affiliates, officers, directors, employees or agents by virtue of
such termination. In the event of any termination of this Agreement in
accordance with Sections 10.1(c) or (d), the parties hereto reserve their rights
to take any action permitted by law, including as provided in Section 11.4
hereof.
ARTICLE XI
MISCELLANEOUS
Section 11.1 NON-COMPETITION; NON-DISCLOSURE;
NON-SOLICITATION. (a) During the period commencing on the Closing Date and
continuing through the later of the third anniversary of (i) the Closing Date or
(ii) the termination of the applicable Shareholder's employment with Hi-Rise or
any of its subsidiaries (such later date being the "Termination Date"), the
Shareholders shall not individually or jointly with others, directly or
indirectly, own, manage, operate, join, control, participate in, invest in, or
otherwise be connected with, in any manner, whether as an officer, director,
employee, partner, investor or otherwise, any business entity that is engaged or
otherwise involved in the manufacture, distribution or leasing of non-mobile
waste and recycling equipment and containers or in any business similar to the
business of Hi-Rise or any of its subsidiaries, whether through ownership,
leasing or other operations, within the Designated Territories, or operate any
businesses under a name using any derivative of the name "XxXxxx," or "Eco"
within the Designated Territories without first obtaining the prior written
consent of Buyer, which may be withheld for any reason in the sole discretion of
the Buyer; provided that such provision shall not apply to any Shareholder's
ownership of Common Stock of Hi-Rise or the acquisition by any Shareholder,
solely as an investment, of securities of any issuer that is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
that are listed or admitted for trading on any United States national securities
exchange or that are quoted on the National Association of Securities Dealers
Automated Quotations System, so long as such Shareholder does not own, or
control, acquire a controlling interest in or become a member of a group which
exercises direct or indirect control of, more than three percent of any class of
capital stock of such corporation. As used herein, "Designated Territories" in
respect of any Shareholder shall mean any State of the United States in which
Hi-Rise or any of its subsidiaries is currently engaged or becomes engaged in
business prior to the Termination Date of the applicable Shareholder.
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(b) In the course of operation of the business of the
Companies, the Shareholders have received, and will continue to receive
information, that gives the Companies an advantage over their respective
competitors, and which is confidential and proprietary, relating to names and
preferences of customers, the costs and profits of particular lines, products
and markets, technological data, computer programs, know-how, potential
acquisitions, sources of financing, corporate operating and financing
strategies, expansion plans and similar related information (together, the
"Confidential Material"). At no time during the period commencing on the date
first written above and continuing through the third anniversary of the
Termination Date, shall any Shareholder individually or jointly with others, for
the benefit of himself or any third party, publish, disclose, use, or authorize
anyone else to publish, disclose, or use any Confidential Material. The
Shareholders acknowledge that any disclosure of the Confidential Material would
cause material and irrevocable harm to Buyer and Hi-Rise and its business.
(c) At no time from the date of this Agreement through the
Termination Date shall any Shareholder, for himself or on behalf of any other
person, firm, corporation or other entity, directly or indirectly, through an
agent or otherwise, (i) contact any employee of Buyer, Hi-Rise or the Companies
for the purpose of hiring, diverting or otherwise soliciting such employee; or
(ii) contact any customer, client or business partner of Buyer, Hi-Rise or the
Companies for the purpose of soliciting, diverting or taking away any customer,
client or business partner from Buyer, Hi-Rise or the Companies.
(d) The Shareholders acknowledge and agree that Buyer's remedy
at law for any breach of any of the Shareholders' obligations under this Section
11.1 would be inadequate, and agree and consent that temporary and permanent
injunctive relief may be granted in a proceeding which may be brought to enforce
any provision of this Section 11.1 without the necessity of proof of actual
damage.
Section 11.2 EXPENSES. Except as otherwise specified in this
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
costs and expenses regardless of the termination of this Agreement or the
failure to consummate the transactions contemplated hereby.
Section 11.3 NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered personally
or three days after being sent by registered or certified mail, return receipt
requested, postage prepaid:
(a) If to Buyer to:
Hi-Rise Recycling Systems, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
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with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
(b) If to the Shareholders or the Companies to:
Xxxxx XxXxxx
00 Xxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Xxxxxxx Xxxxxxxxxx
0 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Xxxxxxx Xxxxxx
0 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000
in each case with a copy (which shall not constitute
notice) to:
Pullman & Xxxxxx, LLC
000 Xxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxx Sharp, Esq.
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 11.3.
Section 11.4 SPECIFIC PERFORMANCE. All parties hereto
recognize that, because of the nature of the subject matter of this Agreement,
it would be impractical and extremely difficult to determine actual damages in
the event of a breach of this Agreement. Accordingly, if any of the Companies or
the Shareholders commits a breach, or threatens to commit a breach, of any of
the provisions of hereof, as applicable, of this Agreement, Buyer shall have the
right to seek and receive a temporary restraining order, injunction or other
equitable remedy relating to the prevention or cessation of such breach or
threatened breach, including, without limitation, the right to have the
provisions of this Agreement specifically enforced by any court having equity
jurisdiction, it being mutually acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury and that monetary damages will
not provide an adequate remedy.
Section 11.5 ENTIRE AGREEMENT. This Agreement, including the
exhibits and schedules attached hereto, and the Disclosure Binder dated the date
hereof, constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof and
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supersedes all prior agreements, representations and understandings among the
parties hereto, including but not limited to that certain Expression of Intent
Term Sheet between X. XxXxxx and Xxxxxx Xxxxx.
Section 11.6 BINDING EFFECT, BENEFITS, ASSIGNMENTS. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns; nothing in this Agreement,
expressed or implied, is intended to confer on any other person, other
than the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement. This
Agreement may not be assigned without the prior written consent of the other
parties hereto; PROVIDED, HOWEVER, that Buyer may assign its rights and
obligations under this Agreement without the consent of the other parties so
long as any such assignee shall also assume the Buyer's obligations hereunder.
Notwithstanding the foregoing, the parties hereto acknowledge that Hi-Rise and
DII have assigned and granted a security interest in all of their rights under
this Agreement to General Electric Capital Corporation, as administrative agent
on behalf of various lenders.
Section 11.7 APPLICABLE LAW. This Agreement and the legal
relations between the parties hereto shall be governed by and construed in
accordance with the laws of the State of Connecticut, without regard to
conflicts of law rules of such state.
Section 11.8 SEVERABILITY. With respect to any provision of
this Agreement finally determined by a court of competent jurisdiction to be
unenforceable, such court shall have jurisdiction to reform such provision so
that it is enforceable to the maximum extent permitted by law, and all the
parties hereto shall abide by such court's determination. In the event that any
provision of this Agreement cannot be reformed, such provision shall be deemed
to be severed from this Agreement, but every other provision of this Agreement
shall remain in full force and effect.
Section 11.9 FURTHER ASSURANCES. At, and from time to time
after the date first written above, but prior to the third anniversary of the
Closing Date, at the request and expense of Buyer but without further
consideration, the Companies and the Shareholders will execute and deliver such
other instruments of conveyance, assignment, transfer, and delivery and take
such other action as Buyer reasonably may request in order more effectively to
convey, transfer, assign and deliver to Buyer, and to place Buyer in possession
and control of, any of the rights, properties, assets and business intended to
be sold, conveyed, transferred, assigned and delivered hereunder, or to assist
in the collection or reduction to possession of any and all of such rights,
properties, and assets or to enable Buyer to exercise and enjoy all rights and
benefits of the Companies or the Shareholders with respect thereto.
Section 11.10 NO THIRD PARTY BENEFICIARIES. Subject to Section
11.6 hereof, nothing hereof, nothing herein, expressed or implied, is intended
or shall be construed to confer upon or give to any person, firm, corporation or
legal entity, other than the parties hereto, any rights, remedies or other
benefits under or by reason of this Agreement.
Section 11.11 HEADINGS. The headings and captions in this
Agreement are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
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Section 11.12 PRONOUNS AND PLURALS. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, singular
or plural as the context may require. All references herein to "he," "him" or
"his" or "she," "her" or "hers" shall be for purposes of simplicity and, except
with reference to the Shareholders, are not intended to be a reference to a
particular gender.
Section 11.13 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year hereinabove first set forth.
HI-RISE RECYCLING SYSTEMS, INC.
By: /S/ J. Xxxx XxXxxxx
----------------------------------------------
J. Xxxx XxXxxxx
Chief Operating Officer
DII ACQUISITION CORP.
By: /S/ J. Xxxx XxXxxxx
----------------------------------------------
J. Xxxx XxXxxxx
Chief Financial Officer
XXXXXX INDUSTRIES, INC.
By: /S/ Xxxxx Xxxxxx
----------------------------------------------
Xxxxx XxXxxx
President
ECOLOGICAL TECHNOLOGIES, INC.
By: /S/ Xxxxx Xxxxxx
----------------------------------------------
Xxxxx XxXxxx
President
/S/ Xxxxx Xxxxxx
----------------------------------------------
Xxxxx XxXxxx
/S/ Xxxxxxx Xxxxxxxxxx
----------------------------------------------
Xxxxxxx Xxxxxxxxxx
/S/ Xxxxxxx Xxxxxx
----------------------------------------------
Xxxxxxx Xxxxxx
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SCHEDULE 3.2
CAPITALIZATION AND SHAREHOLDINGS
--------------------------------
XXXXXX INDUSTRIES, INC.
-----------------------
Xxxxx XxXxxx - 4,900 shares of Common Stock
Xxxxxxx Xxxxxxxxxx - 100 shares of Common Stock
ECOLOGICAL TECHNOLOGIES, INC.
-----------------------------
Xxxxx XxXxxx - 80 shares of Common Stock
Xxxxxxx Xxxxxxxxxx - 10 shares of Common Stock
Xxxxxxx Xxxxxx - 10 shares of Common Stock
