ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of the 25th day of
January, 1999.
AMONG:
AMERICLEAN, INC., a body corporate formed pursuant to the laws of
the State of Delaware and having an office for business located at
1910, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇
("Americlean")
AND:
▇▇▇▇▇ & COMPANY (1998), INC., a body corporate formed pursuant to
the laws of the State of North Carolina and a wholly-owned
subsidiary of Americlean
("▇▇▇▇▇ 1998", and Americlean and ▇▇▇▇▇ 1998 being
hereinafter collectively referred to as the
"Purchasers")
AND:
▇▇▇▇▇ & COMPANY, INC., a body corporate formed pursuant to the laws
of the state of North Carolina and having an office for business
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
("▇▇▇▇▇")
AND:
JKG GROUP, INC., a body corporate formed pursuant to the laws of the
state of Florida and having an office for business located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
("JKG", and ▇▇▇▇▇ and JKG being hereinafter
collectively referred to as the "Vendors")
AND:
▇▇▇ ▇. ▇▇▇▇▇, Businessman, of ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
("▇▇▇▇▇")
AND:
▇▇▇▇▇ ▇▇▇▇▇▇▇, Businessman, of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
("▇▇▇▇▇▇▇", and ▇▇▇▇▇ and ▇▇▇▇▇▇▇ being hereinafter
collectively referred to as the "Covenantors")
WHEREAS:
A. The Vendors own and operate a laundry and dry cleaning equipment and
supply distribution business and repair business under the trade name
"▇▇▇▇▇ & Company" and variations thereof (the "Business");
B. The Vendors have agreed to sell to ▇▇▇▇▇ 1998 and ▇▇▇▇▇ 1998 has agreed to
purchase from the Vendors, subject to certain exceptions hereinafter
enumerated, substantially all of the property, assets and undertaking of
the Business as a going concern, on the terms and subject to the
conditions contained in this Agreement; and
C. The Covenantors are the owners of the Vendors and are being made parties
to this Agreement for the purpose of jointly and severally covenanting
with the Vendors to indemnify the Purchasers in the manner hereinafter
provided.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement, including its recitals, the following terms will have the
following meanings:
(a) "Accounts Receivable" means all accounts receivable, trade accounts,
notes receivable and other debts owing to the Vendors in connection
with or arising out of the Business, and the full benefit of all
securities for such accounts, notes or debts, as of the Closing
Date, but not including any Accounts Receivable comprised in the
Excluded Assets;
(b) "Acquisition Shares" means the Americlean Shares to be issued in the
names of the Vendors at the Time of Closing as calculated pursuant
to Article 2 hereof;
(c) "Advance" means the sum of $50,000 to be paid by ▇▇▇▇▇ 1998 to the
Vendors concurrent with the execution of this Agreement;
(d) "Agreement" means this asset purchase agreement among the
Purchasers, the Vendors and the Covenantors;
(e) "Americlean" means Americlean, Inc.;
(f) "Americlean Shares" means the shares of common stock in the capital
of Americlean;
(g) "Assumed Accounts Payable and Liabilities" means all accounts
payable and liabilities of the Vendors relating to the Business
or the Purchased Assets on the Closing Date excluding the
Excluded Liabilities. For greater certainty the Assumed Accounts
Payable and Liabilities shall include the trade payables of the
Vendors incurred in the ordinary course up to the Closing Date,
the liabilities of the Vendors on the most recent Financial
Statements (including Closing Date balances), and liabilities
related to the Purchased Assets;
(h) "Assumed Material Contracts" means those trade and non-trade
contracts, engagements or commitments to which the Vendors are a
party in connection with the Business or the Purchased Assets to
be assigned to and assumed by ▇▇▇▇▇ 1998 at the Time of Closing
as set forth in Schedule "E" hereto together with the full
benefit and advantages of all warranties and warranty rights
(implied, expressed or otherwise) against manufacturers or
sellers which apply to any of the Purchased Assets to the extent
that they are assignable by the Vendors, but not including the
Excluded Assets and which include the contracts in respect of the
Leased Equipment;
(i) "Average Trading Price" in respect of a particular date means the
average closing trading price of the Americlean Shares on the most
senior exchange or quotation system on which the Americlean Shares
are traded for the 10 trading days immediately preceding that
particular date;
(j) "▇▇▇▇▇" means ▇▇▇▇▇ & Company, Inc.;
(k) "▇▇▇▇▇ 1998" means ▇▇▇▇▇ & Company (1998), Inc.;
(l) "▇▇▇▇▇ Shares" means the 762 issued and outstanding shares of common
stock of ▇▇▇▇▇;
(m) "Books and Records" means all books, records, files, documents and
other written, electronically maintained or computer accessed
information relating to the Business or the Purchased Assets,
including the following
(i) list of customers and suppliers (past, present and
potential),
(ii) price lists,
(iii) records with respect to production, engineering, product
development, costs, inventory, machinery and equipment,
(iv) business development plans,
(v) advertising matter, catalogues, correspondence, mailing lists,
photographs, sales materials and records, purchasing materials
and records,
(vi) personnel records of employees who will be employed by ▇▇▇▇▇
1998 following the Time of Closing,
(vii) manufacturing and quality control records and procedures,
(viii) research and development files, records, data and
laboratory books,
(ix) media materials and plates,
(x) sales order and purchase order files,
(xi) information from accounting, tax and litigation files
reasonably requested by the Purchasers from time to time,
(xii) correspondence files (including correspondence relating to
discounts, rebates, future commitments, product returns,
production errors, standards of any relevant governmental
authority, social service taxes, value added taxes,
environmental legislation and fitness and service warranties
relating to the Purchased Assets), and
(xiii)other records used in or required to continue the Business as
heretofore and presently being conducted by the Vendors
excluding the corporate record books of the Vendors, and their
corporate charters, seals, minute books, and stock transfer books
and where the Vendors are required by law to retain a particular
book, record or file, "Books and Records" shall mean a copy thereof;
(n) "Business" means all aspects of the laundry and dry cleaning
equipment and supply distribution business and repair business
presently conducted by the Vendors under the trade name "▇▇▇▇▇ &
Company" and variations thereof;
(o) "Cash" means all cash on hand or on deposit to the credit of the
Vendors on the Closing Date;
(p) "Cash Purchase Price" means collectively the Advance, the Closing
Price and the Hold-back Amount;
(q) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 13
hereof;
(r) "Closing Date" means the day on which all conditions precedent to
the completion of the transactions as contemplated hereby have been
satisfied or waived; provided that in no event shall the Closing
Date be later than March 3, 1999;
(s) "Closing Price" means the sum of $25,000, less the Transaction
Costs, to be paid by ▇▇▇▇▇ 1998 to the Vendors at the Time of
Closing;
(t) "Employment Agreements" means collectively the employment agreements
among ▇▇▇▇▇ 1998 and each of the Covenantors, respectively, to be
entered into pursuant to Article 9 hereof substantially in the form
attached hereto as Schedule "Q";
(u) "Encumbrance" means any mortgage, charge, pledge, hypothecation,
lien, security interest, assignment, option, execution, claim or any
other title defect or other encumbrance of any kind or nature
whatsoever (including any agreement to give any of the foregoing),
whether or not registered or registrable and whether consensual or
arising by operation of law (statutory or otherwise);
(v) "Environmental Audit" means any audit, assessment, study, test
or evaluation performed by an environmental engineer or
consultant or by a governmental or regulatory agency in relation
to the environmental condition of the Leasehold Property and any
air, land surface or subsurface, soil, subsoil, bedrock, surface
water, ground water, fish, plant life, animal life and any other
natural resources comprising the Leasehold Property or located
on, in, above, under or adjacent to or within the immediate
vicinity of the Leasehold Property;
(w) "Environmental Infractions" means all of the infractions of the
Vendors against the Environmental Laws in respect of the Premises as
set forth in Schedule "J" attached hereto;
(x) "Environmental Laws" means all federal, state and municipal
environmental, land use, zoning, health, chemical use, safety and
sanitation laws, statutes, bylaws and regulations, and any
international treaties to which the United States or a state
thereof is a party, relating to the protection of the environment
and governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of
Hazardous Material, including air pollution, water pollution and
noise control and the rules, regulations, policies, guidelines,
interpretations, decisions, orders and directives of any federal,
state and municipal governmental agencies and authorities and
international tribunals having jurisdiction with respect thereto;
(y) "Environmental Permits" means any and all permits, licenses,
approvals, authorizations, consents or registrations required by
any applicable Environmental Law in connection with the
ownership, use and/or operation of the Leasehold Property for the
storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Material or the
sale, transfer or other disposition of the Leasehold Property as
more particularly described in Schedule "K" hereto;
(z) "Equipment" means all machinery, equipment, automobiles, trucks,
trailers, tractors, office equipment, yard equipment, furniture,
furnishings, spare parts, tools, stores and supplies of all kinds
used in connection with the Business including, without
limitation, the machinery, equipment, and other property
described in Schedule "B" hereto, but not including the
machinery, equipment and other property comprised in the Excluded
Assets;
(aa) "Escrow Agent" means the law firm of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of Vancouver,
British Columbia, or such other law firm as the Purchasers and the
Vendors may mutually agree upon;
(bb) "Escrow Agreement" means the escrow agreement among the Purchasers,
the Vendors and the Escrow Agent to be entered into pursuant to
Article 3 hereof substantially in the form attached hereto as
Schedule "R";
(cc) "Excluded Assets" means the following property and assets of the
Vendors pertaining to the Business
(i) all contracts, commitments and engagements with employees
or contracted employees of the Vendors,
(ii) all assets of the Vendors enumerated in Schedule "F" hereto,
and
(iii) all original records relating to any Excluded Assets and all
of the corporate, financial and other records of the Vendors
not pertaining primarily to the Business;
(dd) "Excluded Liabilities" means any and all liabilities of the Vendors
related to the presence of Hazardous Materials or other
environmental contamination on the Premises;
(ee) "Financial Statements" means collectively the audited financial
statements of the Vendors for the periods ended September 30, 1997
and 1998 and the management prepared financial statements of the
Vendors dated December 31, 1997 and 1998, true copies of which are
attached as Schedule "A" hereto;
(ff) "Goodwill" means the goodwill of the Business together with the
exclusive right of ▇▇▇▇▇ 1998 to represent itself as carrying on
the Business in succession of the Vendors subject to the terms
hereof and the right to use any words indicating that the
Business is so carried on including the right to use the name
"▇▇▇▇▇ & Company" or any variation thereof as part of the name of
or in connection with the Business or any part thereof carried on
or to be carried on by ▇▇▇▇▇ 1998, the right to all corporate,
operating and trade names associated with the Business, or any
variations of such names as part of or in connection with the
Business, all telephone listings and telephone advertising
contracts, all lists of customers, books and records and other
information relating to the Business, all necessary licenses and
authorizations and any other rights used in connection with the
Business;
(gg) "Guarantees" means all of the guarantees, pledges, sureties and
bonds undertaken by the Covenantors and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ for the
benefit of the Vendors as more particularly described in Schedule
"P" hereto;
(hh) "Hazardous Material" means, without limitation, any radioactive
materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, flammable explosives, radon, petroleum
and petroleum products, methane, perchloroethylene and any other
hazardous materials, hazardous wastes, hazardous or toxic substances
and any substances, materials, liquids or gases regulated under any
applicable Environmental Laws;
(ii) "Hold-back" means the hold-back of the Hold-back Amount and the
Hold-back Shares pursuant to Article 3 hereof;
(jj) "Hold-back Amount" means the sum of $25,000, less the Transaction
Costs, if any, to be delivered by ▇▇▇▇▇ 1998 to the Escrow Agent at
the Time of Closing;
(kk) "Hold-back Shares" means one half of the Acquisition Shares and
which are to be issued in the name of the Vendors and delivered by
Americlean to the Escrow Agent at the Time of Closing;
(ll) "Indebtedness", in respect of any person, means, at any time and
from time to time, all indebtedness, liabilities and obligations,
absolute or contingent, direct or indirect, due or accruing due,
matured or unmatured, liquidated or unliquidated, of such person;
(mm) "Intangible Assets" means all of the intangible assets of the
Vendors, including, without limitation, the Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and
industrial property;
(nn) "Inventory" means all inventory and supplies of the Business
existing on the Closing Date;
(oo) "JKG" means JKG Group, Inc.;
(pp) "JKG Shares" means the 950 issued and outstanding shares of
common stock of JKG;
(qq) "Lease Adjustment Agreement" means the lease adjustment agreement to
be entered into among ▇▇▇▇▇ 1998 and the Covenantors pursuant to
Article 10 hereof substantially in the form attached hereto as
Schedule "S";
(rr) "Leased Equipment" means all of the machinery and equipment used in
connection with the Business which are subject to leases or
conditional sales contracts as described in Schedule "C";
(ss) "Leasehold Property" means the leases of the leasehold land and
interests therein and all plant, improvements, appurtenances and
fixtures (including fixed machinery and fixed equipment) situated
thereon or forming part thereof used in connection with the Business
described in Schedule "L" hereto, but does not include the lands and
premises comprised in the Excluded Assets;
(tt) "Loss" has the meaning ascribed to it in section 4.4 hereof;
(uu) "Material Contracts" means the burden and benefit of and the
right, title and interest of the Vendors in, to and under all
trade and non-trade contracts, engagements or commitments,
whether written or oral, to which the Vendors are entitled in
connection with the Business whereunder the Vendors are or may
become obligated to pay or entitled to receive the sum of $25,000
or more including, without limitation, any pension plans, profit
sharing plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees,
lessees, licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, attorneys or others which
cannot be terminated without liability on not more than one
month's notice, and those contracts listed in Schedule "D" hereto;
(vv) "Option Agreements" means collectively the option agreements among
Americlean and each of the Covenantors, respectively, to be entered
into pursuant to Article 9 hereof substantially in the form attached
hereto as Schedule "Q";
(ww) "Permits" means all licenses, consents, permits, authorities,
certificates and registrations which are required, necessary or
desirable for the conduct in the usual and ordinary course of the
operation of the Business and the ownership or leasing of and the
uses to which the Purchased Assets have been and presently are put;
(xx) "Permitted Encumbrances" means those Encumbrances on the Purchased
Assets and the Business described in Schedule "G" hereto;
(yy) "Place of Closing" means the offices of ▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇, P.L.L.C. or such other place as the Purchasers and the
Vendors may mutually agree upon;
(zz) "Plan" means the Vendors' profit sharing plan as disclosed in the
Financial Statements into which the sum of $4,517 has been
contributed as at the date hereof;
(aaa) "Premises" means the locations at which the Vendors have conducted
the Business as more particularly enumerated in Schedule "M"
attached hereto;
(bbb) "Prepaid Expenses and Deposits" means the benefit of all expenses
pre-paid by the Vendors and all deposits made by the Vendors,
excluding any such prepaid expenses or deposits comprised in the
Excluded Assets;
(ccc) "Purchase Price" means the purchase price and other consideration to
be paid and given by the Purchasers to the Vendors for the Purchased
Assets as provided for in Article 2 hereof;
(ddd) "Purchased Assets" means the undertaking and all the property and
assets of the Business of every kind and description wheresoever
situated including, without limitation, the Equipment, the Leased
Equipment, the Inventory, the Assumed Material Contracts, the
Accounts Receivable, the Cash, the Intangible Assets, the Prepaid
Expenses, the Books and Records, the Goodwill and the Leasehold
Property, and all credit cards, charge cards and banking cards
issued to the Vendors but excluding any property or assets of the
Business comprised in the Excluded Assets;
(eee) "Summary of Ongoing Litigation" means the summary of all of the
Vendors' ongoing litigation attached hereto as Schedule "I";
(fff) "Time of Closing" means 10:00 a.m. local time at the Place of
Closing on the Closing Date, or such other time as the Purchasers
and the Vendors may mutually agree upon;
(ggg) "Transaction Costs" has the meaning ascribed to it in section
11.8 hereof; and
(hhh) "Vendor Shares" means collectively the ▇▇▇▇▇ Shares and the JKG
Shares.
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
Captions and Section Numbers
1.2 The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
Extended Meanings
1.3 The words "hereof", "herein", "hereunder" and similar expressions used in
any clause, paragraph, section or Article of this Agreement will relate to the
whole of this Agreement and not to that clause, paragraph, section or Article
only, unless otherwise expressly provided.
Number and Gender
1.4 Whenever the singular or masculine or neuter is used in this Agreement, the
same will be construed to mean the plural or feminine or body corporate where
the context of this Agreement requires.
Section References and Schedules
1.5 Any reference to a particular "Article", "section", "paragraph", "clause" or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information concerning the Vendors
Schedule "A" Financial Statements
Schedule "B" Equipment
Schedule "C" Leased Equipment
Schedule "D" Material Contracts
Schedule "E" Assumed Material Contracts
Schedule "F" Excluded Assets
Schedule "G" Permitted Encumbrances
Schedule "H" Insurance Policies
Schedule "I" Summary of Ongoing Litigation
Schedule "J" Environmental Infractions
Schedule "K" Environmental Permits, Compliance and Other Matters
Schedule "L" Leasehold Property
Schedule "M" Premises
Schedule "N" Employees
Schedule "O" Bank Accounts
Information concerning the Covenantors
Schedule "P" Guarantees
Agreements
Schedule "Q" Employment Agreements and Option Agreements
Schedule "R" Escrow Agreement
Schedule "S" Lease Adjustment Agreement
Severability of Clauses
1.6 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
Currency
1.7 Unless otherwise specified, all sums referred to herein and all payments to
be made hereunder will be in lawful money of the United States of America.
ARTICLE 2
PURCHASE AND SALE
Purchase and Sale
2.1 Relying on the representations and warranties set forth in this
Agreement, and subject to the terms and conditions hereof, at the Time of
Closing ▇▇▇▇▇ 1998 will purchase from the Vendors and the Vendors will sell,
assign, transfer and convey to ▇▇▇▇▇ 1998 the Purchased Assets, free and clear
of all Encumbrances, except the Permitted Encumbrances, in exchange for the
Purchase Price and the additional consideration set forth in this Article 2.
Notwithstanding the foregoing the Purchasers shall not obtain any right, title
or interest in the Excluded Assets.
Purchase Price
2.2 The Purchase Price payable by the Purchasers hereunder for the Purchased
Assets shall be the aggregate of the following amounts:
(a) the Cash Purchase Price;
(b) that number of Americlean Shares which is equal to $500,000 divided
by the Average Trading Price on the Closing Date (the "Acquisition
Shares"); and
(c) the assumption of all of the duties and obligations of the Vendors
under the Assumed Material Contracts and the Assumed Accounts
Payable and Liabilities .
Consideration
2.5 In consideration of the acquisition of the Purchased Assets from the Vendors
by ▇▇▇▇▇ 1998, ▇▇▇▇▇ 1998 agrees to pay the Advance to the Vendors concurrent
with the execution of this Agreement and the Purchasers agree to pay and issue
the following consideration to the Vendors at the Time of Closing:
(a) the Closing Price; and
(b) the Acquisition Shares less the Hold-back Shares.
2.6 In further consideration of the acquisition of the Purchased Assets from the
Vendors by ▇▇▇▇▇ 1998, the Purchasers agree to deliver to the Escrow Agent at
the Time of Closing and pursuant to the terms of the Escrow Agreement:
(a) the Hold-back Amount; and
(b) the Hold-back Shares, which shall be issued in the name of the
respective Vendors.
Resale of Acquisition Shares
2.7 The Vendors agree that they will not offer, sell or otherwise transfer,
pledge or hypothecate any of the Acquisition Shares (other than pursuant to an
effective Registration Statement under the Securities Act of 1933 (United
States), as amended) directly or indirectly unless:
(a) the sale is to Americlean;
(b) the sale is made pursuant to the exemption from registration under
the Securities Act of 1933 (United States) provided by Rule 144
thereunder; or
(c) the Shares are sold in a transaction that does not require
registration under the Securities Act of 1933 (United States) or any
applicable United States state laws and regulations governing the
offer and sale of securities, and the Vendor selling same has
furnished to Americlean an opinion of counsel to that effect or such
other written opinion as may be reasonably required by Americlean.
The Vendors acknowledge that the certificates representing the Acquisition
Shares shall bear the following legend:
NO SALE, OFFER TO SALE, OR TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS
THEN IN FACT APPLICABLE TO SAID SHARES.
Allocation between the Vendors
2.8 The Purchase Price shall be allocated and issued to the Vendors on the
following basis:
(a) 77.2% to ▇▇▇▇▇; and
(b) 22.8% to JKG.
Allocation of Purchase Price
2.9 The parties hereto agree that that they shall negotiate in good faith to
agree upon a reasonable allocation of the Purchase Price to the assets comprised
in the Purchased Assets as enumerated in paragraph 1.1 (ddd) hereof prior to the
Time of Closing in accordance with s. 1060 of the Internal Revenue Code (United
States).
Assumption of Obligations
2.10 From and after the Closing Date, ▇▇▇▇▇ 1998 shall:
(a) assume all of the duties and obligations of the Vendors under the
Assumed Material Contracts and the Vendors shall assign all of their
right, title and interest in and to the Assumed Material Contracts
to ▇▇▇▇▇ 1998; and
(b) assume the Assumed Accounts Payable and Liabilities and the duties
and obligations related thereto.
Obligations not Assumed
2.11 Except as provided in this Agreement, the Purchasers do not assume and
shall not be liable for any duties, obligations, commitments or liabilities of
the Vendors or the Covenantors whatsoever, and without limiting the generality
of the foregoing and notwithstanding any other provision hereof, the Purchasers
do not assume and shall not be liable for the following duties, obligations,
commitments or liabilities of the Vendors or the Covenantors:
(a) any taxes and related interests, assessments or penalties under the
tax legislation of any jurisdiction having authority, including any
obligation recorded on the Financial Statements and denoted as
deferred income taxes; and
(b) the payment of any and all wages, salaries and bonuses, pension plan
payments, all amounts due in lieu of holiday pay and other benefits
to the employees listed on Schedule "N" hereto up to and including
the Closing Date.
and the Vendors and Covenantors hereby agree to jointly and severally indemnify
and save harmless the Purchasers from and against all such duties, obligations,
commitments and liabilities.
ARTICLE 3
HOLD-BACK
3.1 Pursuant to Article 2 hereof, the Purchasers shall deliver to the Escrow
Agent the Hold-back Amount and the Hold-back Shares and the parties hereto agree
that the Hold-back Amount and the Hold-back Shares shall be applied pursuant to
section 4.4 hereof, subject to the restrictions contained therein, and dealt
with as follows:
(a) the Hold-back Amount and the Hold-back Shares shall be held by the
Escrow Agent pursuant to the terms of the Escrow Agreement and shall
not be released by the Escrow Agent until such time as the Escrow
Agent has received a written direction from both Americlean and the
Vendors in respect of the disposition of the Hold-back Amount and
the Hold-back Shares;
(b) in the event that neither Americlean, the Vendors nor the
Covenantors has received any notice, written or otherwise, of any
Loss on or before the date which is six (6) months from the Closing
Date, Americlean and the Vendors shall forthwith deliver to the
Escrow Agent a written direction to deliver the Hold-back Amount to
the Vendors allocated pursuant to section 2.8 hereof;
(c) in the event that neither Americlean, the Vendors nor the
Covenantors have received any notice, written or otherwise, of any
Loss on or before the date which is one (1) year from the Closing
Date, Americlean and the Vendors shall forthwith deliver to the
Escrow Agent a written direction to deliver the Hold-back Shares to
the Vendors allocated pursuant to section 2.8 hereof;
(d) in the event that either Americlean, the Vendors or the
Covenantors receive any notice, written or otherwise, of a Loss the
parties hereto agree that the Hold-back Amount then held by the
Escrow Agent together with the Hold-back Shares shall continue to be
held by the Escrow Agent pending resolution of the Loss pursuant to
sections 4.4 and 4.5 hereof and the parties hereto further agree in
good faith to take all such steps as may be necessary or incidental
to such removal. In the event that the Purchasers and the Vendors
have not reached an agreement in respect of such Loss within sixty
(60) days of the date of receipt of a notice of such Loss and do not
mutually deliver to the Escrow Agent a written direction in respect
of the disposition of the Hold-back Amount and the Hold-back Shares
then held by the Escrow Agent, the parties hereto agree to refer the
dispute as to the disposition of the Hold-back Amount and the
Hold-back Shares then held by the Escrow Agent to arbitration in
accordance with section 15.1 hereof. In addition, the Vendors and
the Purchasers agree that where such Loss is to be dealt with by a
payment by the Vendors to the Purchasers, the Hold-back Shares shall
be valued at the Average Trading Price on the date on which notice
of the Loss is first received by either the Purchasers, the Vendors
or the Covenantors, as applicable, and shall be returned to
Americlean at such times as permitted under applicable securities
laws to the extent necessary to fund such payment (the "Returned
Shares"), and only in the event that the value of the Returned
Shares is insufficient to fund such payment will the Purchasers draw
upon the Hold-back Amount then held by the Escrow Agent;
(e) in any event Americlean and the Vendors shall deliver to the Escrow
Agent a written direction to deliver all the Hold-back Shares to the
Vendors no later than one (1) year from the Closing Date unless
there is a bona fide dispute between Americlean and the Vendors in
respect of the Hold-back Shares;
(f) the Hold-back Shares shall be shown as issued to the Vendors and
outstanding on Americlean's balance sheet and such Hold-back Shares
shall be legally outstanding; and
(g) as long as any of the Hold-back Shares remain deposited with the
Escrow Agent, the Vendors shall be entitled to vote the Hold-back
Shares and receive dividends thereon but may not otherwise deal with
the Hold-back Shares.
3.2 The parties hereto agree that the rights of the Purchasers pursuant to
this Agreement shall in no way be limited to the Hold-back Amount and the
Hold-back Shares.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
THE VENDORS AND THE COVENANTORS
Representations and Warranties
4.1 Each of the Vendors and the Covenantors jointly and severally represents and
warrants to the Purchasers, with the intent that the Purchasers will rely
thereon in entering into this Agreement and in completing the transactions
contemplated hereby, that:
The Vendors - Corporate Status and Capacity
(a) Incorporation. The Vendors are corporations duly incorporated and
validly subsisting under the laws of North Carolina and Florida, and
are in good standing with the office of respective Secretary of
State having jurisdiction over the Vendors;
(b) Non-Reporting. The Vendors are not reporting or public companies
under the laws of the United States of America nor of any other
jurisdiction;
(c) Carrying on Business. The Vendors carry on business in the
States of North Carolina, South Carolina, Virginia, Tennessee,
Georgia and Florida and do not carry on any material business
activity in any other jurisdiction. The Vendors have offices in
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and in no
other locations and are duly authorized to carry on business in
such states. Neither the ownership of the Purchased Assets nor
the nature of the Business requires the Vendors to register or
otherwise be qualified to carry on business in any other
jurisdiction;
(d) Corporate Capacity. Except as disclosed in this Agreement, the
Vendors have the full corporate power, right, capacity and authority
to own, lease and dispose of the Purchased Assets, to carry on the
Business as now being conducted by them, to enter into and complete
this Agreement, to complete the transactions contemplated hereby and
to duly observe and perform all of their covenants and obligations
set forth herein;
The Vendors - Records and Financial Statements
(e) Charter Documents. The charter documents of the Vendors have not
been altered since the incorporation of the Vendors, except as filed
in the record books of the Vendors;
(f) Books and Records. The Books and Records fairly and correctly set
out and disclose in all material respects the financial position of
the Vendors, and all material financial and other transactions of
the Vendors relating to the Business, including any and all Material
Contracts and any amendments thereto, have been accurately recorded
or filed in such books and records;
(g) Financial Statements. As at the date of this Agreement, the
Vendor Financial Statements dated September 30, 1998 are, and to
the best of the Vendors' knowledge, information and belief the
management prepared financial statements of the Vendors dated
December 31, 1997 and 1998 are, true and correct and present
fairly and correctly the assets and liabilities (whether accrued,
absolute, contingent or otherwise) of the Vendors as of the
respective dates thereof and the sales and earnings of the
Business during the periods covered thereby, in all material
respects, and have been prepared in substantial accordance with
generally accepted accounting principles consistently applied;
(h) Accounts Receivable. All Accounts Receivable are bona fide and
are good and collectible without, to the knowledge and belief of
the Vendors, set-off or counterclaim, except as disclosed in
Schedule "G" hereto; provided that the term "good and
collectible" as used herein is not to be interpreted to mean that
a Vendor warrants that a particular account receivable will
actually be collected and in such instance such non-collection
shall not render the Financial Statements inaccurate nor
constitute a breach of the Vendors' representations and
warranties with respect thereto;
(i) Bank Accounts. All bank accounts, and the identity of those
individuals who have signing authority in respect thereof, which are
in the names of the Vendors and relating to the Business or used in
connection with the Business, whether or not in the name of the
Business, are set forth in Schedule "O" attached hereto;
(j) No Ownership of Companies. The Vendors do not own any subsidiary and
do not otherwise own, directly or indirectly, any shares or interest
in any other corporation, partnership, joint venture or firm other
than as described herein;
Material Contracts
(k) Material Contracts. The contracts listed in Schedule "D"
constitute all of the Material Contracts of the Vendors;
(l) No Default. There has not been any default in any material
obligation of either of the Vendors or, to the knowledge of the
Covenantors any other party to be performed under any of the
Material Contracts, each of which is in good standing and in full
force and effect and unamended, and the Vendors and the Covenantors
are not aware of any default in the obligations of any other party
to any of the Material Contracts;
(m) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of the Vendors other
than as referred to herein. The Vendors are not obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law other than as referred to
herein;
The Vendors - Employees
(n) Employees. The names of all of the employees of the Vendors employed
in connection with the Business and such employees' respective job
titles, rates of pay, length of employment with the Vendors,
benefits and annual vacation entitlement are enumerated in Schedule
"N" attached hereto;
(o) Employment Arrangements. There is no employment contract,
commitment or arrangement, whether written, oral or implied,
relating to the Business which contains any specific agreement as
to notice of termination or severance pay in lieu thereof or
which cannot be terminated without cause upon giving reasonable
notice as may be implied by law without the payment of, or any
Indebtedness in respect of, any bonus, damages, share or profits
or penalty, except as enumerated in Schedule "N" attached hereto;
(p) Vacations and Overtime. The Books and Records accurately set out all
banked vacation entitlement, regular and supplementary vacation pay,
banked and deferred overtime compensation, time-off entitlement,
severance and retirement benefits and any other emoluments or
benefits due or accruing to all employees employed in the Business;
(q) Labour Matters. Neither of the Vendors is a party to any collective
agreement relating to the Business with any labour union or other
association of employees and no part of the Business has been
certified as a unit appropriate for collective bargaining or, to the
knowledge of the Covenantors and the Vendors, has made any attempt
in that regard;
The Vendors - Employee Benefit Plans
(r) No Separation. The Plan does not obligate the Vendors to pay
separation, severance, termination or similar-type benefits solely
as a result of any transaction contemplated by this Agreement or
solely as a result of a "change of control" as such term as used in
Section 280G of the Internal Revenue Code of 1986, as amended, and
the regulation promulgated thereunder (the "Code");
(s) Maintenance. The Plan and all related trusts, insurance
contracts, and funds have been maintained, funded and
administered in compliance in all respects with all applicable
laws and regulations, including but not limited to the Employee
Retirement Income Security Act of 1974, as amended, ("ERISA") and
the Code. None of the Vendors, any trustee or administrator of
the Plan, or any other person in respect of the Plan which could
subject the Vendors, or any trustee or administrator thereof, or
any party dealing with the Plan, of the Purchasers to any tax or
penalty imposed by the ERISA of the Code. None of the assets of
the Vendors is the subject of any lien arising under Section
302(f) of the ERISA or Section 412(n) of the Code, the Vendors
have not been required to post any security pursuant to Section
307 of the ERISA or Section 401(a)(29) of the Code, and neither
Vendors nor any director or officer of the Vendors has knowledge
of any facts which could be expected to give rise to such lien or
such posting of security;
(t) No Unfunded Defined Benefit Plan. No unfunded "defined benefit
plan" (as such term is defined in Section 3(35) of the ERISA has
been, during the five years preceding the Closing Date,
transferred out of the controlled group of companies (within the
meaning of Sections 414(b), (c) and (m) of the Code) and which
either of the Vendors is a member or was a member during such
five year period. With respect to the Plan, all required or
recommended payments, premiums, contribution, reimbursements or
accruals for all periods ending prior to or as of the Closing
Date have been made. The Plan does not have an unfunded
liability;
The Vendors - Related Party Debt
(u) No Debt to Related Parties. The Vendors are not now, and on Closing
will not be, materially indebted to any of the Covenantors nor to
any family member of any of the Covenantors, nor to any affiliate of
the Covenantors except as set forth in Schedule "G" hereto;
(v) No Related Party Debt to the Vendors. None of the Covenantors is now
nor on Closing will be indebted to or under any financial obligation
to the Vendors on any account whatsoever, except for advances on
account of travel and other expenses not exceeding $5,000 in total;
The Business
(w) No Dividends. No dividends or other distributions on any shares in
the capital of the Vendors have been made, declared or authorized
since the date of the most recently prepared Financial Statements;
(x) No Payments. No payments of any kind have been made or authorized
since the date of the most recently prepared Financial Statements to
or on behalf of the Vendors or to or on behalf of officers,
directors, shareholders or employees of the Vendors or under any
management agreements with the Vendors, except payments made in the
ordinary course of business and at the regular rates of salary or
other remuneration payable to them;
(y) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting the Vendors other than the Plan;
(z) Maintenance of Business. Since the date of the most recently
prepared Financial Statements
(i) except as disclosed to Americlean in writing prior to the
date hereof, there has been no material change in any of
the Purchased Assets or the organization, operations,
affairs, business, properties, prospects or financial
condition or position of the Business (excluding trends
identified to the Purchasers prior to the date hereof),
including changes arising as a result of any legislative or
regulatory change, revocation of any license, Permit or
right to do business, or any change in any Indebtedness of
the Business or any of the Purchased Assets, other than
changes in the usual and ordinary course of the operation
of the Business, none of which changes have materially and
adversely affected any of the Purchased Assets or the
organization, operations, affairs, business, properties,
prospects or financial condition or position of the
Business,
(ii) there has been no act of God, damage, destruction, loss, fire,
explosion, accident, casualty, labour disruption or trouble,
or other event (whether or not covered by insurance)
materially and adversely affecting any of the Purchased Assets
or the organization, operations, affairs, business,
properties, prospects or financial condition or position of
the Business,
(iii) to the knowledge of the Vendors and the Covenantors no event
has occurred which the Vendors and the Covenantors, acting
reasonably, could believe would lead to a reduction in the
value of the Goodwill,
(iv) the Vendors have not, directly or indirectly, materially
increased or agreed to increase the salary, pay, fringe
benefits or other compensation of, or paid or agreed to pay
any pension, bonus, share or profits or other benefit,
compensation or payment to, or for the benefit of, any
officers, employees or agents of the Business, save and
except remuneration paid to employees of the Business in
the usual and ordinary course of the operation of the
Business and save and except increases agreed to in writing
by the Purchasers,
(v) the Vendors have maintained in force insurance against
loss on such of the Purchased Assets against such risks
with such limits and insurance against public liability
from such risks with such limits as in accordance with
prudent business practices prevailing in the industry in
which the Business is involved and having regard to the
location, age and character of the Purchased Assets and has
materially complied fully with all requirements of such
insurance, including the prompt giving of any notice of any
claim or possible claims thereunder,
(vi) the Vendors have carried on the Business in the usual and
ordinary course and the Vendors have not entered into any
material agreement or commitment except in the ordinary
course,
(vii) the Vendors have not, directly or indirectly, purchased or
agreed to purchase or leased or agreed to lease or acquired or
agreed to acquire any asset, other than as required in the
usual and ordinary course of the operation of the Business,
(viii)the Vendors have not, directly or indirectly, sold,
transferred, disposed of, mortgaged, pledged, charged or
leased any asset, other than as required in the usual and
ordinary course of operation of the Business,
(ix) the Vendors have not, directly or indirectly, engaged or
entered in any transaction or made any disbursement or
assumed or incurred any liability or obligation or made any
commitment to make any expenditure which might materially
and adversely affect any of the Purchased Assets or the
organization, operations, affairs, business, properties,
prospects or financial condition or position of the
Business, and
(x) no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made;
(aa) No Adverse Information. Except as disclosed in this Agreement
or to Americlean in writing prior to the Closing Date, neither of
the Vendors nor any of the Covenantors has any information or
knowledge of any fact relating to the Business, the Purchased
Assets or any Indebtedness of the Business or the transactions
contemplated hereby which might reasonably be expected to affect,
materially and adversely, any of the Purchased Assets or the
organization, operations, affairs, business, properties,
prospects or financial condition or position of the Business;
(bb) Forward Sales. All outstanding forward commitments by or on behalf
of the Vendors for the purchase or sale of the Inventory have been
made in accordance with established price lists of the Vendors or
its suppliers, or if otherwise, then in accordance with the Vendors'
normal business custom in varying therefrom;
The Vendors - Income Tax Matters
(cc) Tax Returns. All tax returns and reports of the Vendors required by
law to be filed have been filed and are substantially true, complete
and correct, and any taxes payable in accordance with any return
filed by the Vendors or in accordance with any notice of assessment
or reassessment issued by any taxing authority have been so paid;
(dd) Current Taxes. Adequate provisions have been made for taxes
payable for the current period for which tax returns are not yet
required to be filed and there are no agreements, waivers, or
other arrangements providing for an extension of time with
respect to the filing of any tax return by, or payment of, any
tax, governmental charge or deficiency by the Vendors. Neither
of the Vendors nor any of the Covenantors are aware of any
contingent tax liabilities or any grounds which would prompt a
reassessment including aggressive treatment of income and
expenses in filing earlier tax returns;
The Vendors - Applicable Laws and Legal Matters
(ee) Licenses. To the best of the knowledge, information and belief of
the Vendors, the Vendors hold all Permits as may be requisite for
carrying on the Business in the manner in which it has heretofore
been carried on, which Permits have been maintained and continue to
be in good standing;
(ff) Applicable Laws. Except as disclosed in this Agreement, the
Vendors have not been charged with or received notice of breach
of any laws, ordinances, statutes, regulations, by-laws, orders
or decrees to which they are subject or which apply to them the
violation of which would have a material adverse effect on the
Vendors, and the Vendors are not in breach of any laws,
ordinances, statutes, regulations, by-laws, orders or decrees the
contravention of which would result in a material adverse impact
on the Business, such compliance to be construed with reference
to similar businesses similarly situated;
(gg) Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding or
inquiry pending or threatened against or relating to the Vendors,
the Business, or any of the Purchased Assets, nor do the Vendors
have any knowledge of any deliberate act or omission of the
Vendors that would form any material basis for any such action,
proceeding or inquiry, other than as disclosed in Schedule "I"
hereto;
(hh) Ongoing Litigation. The Summary of the Ongoing Litigation
presented in Schedule "I" hereto is true and correct and presents
fairly and correctly the status of the ongoing litigation of the
Vendors as at the date hereof;
(ii) No Bankruptcy. Neither of the Vendors has made any voluntary
assignment or proposal under applicable laws relating to insolvency
and bankruptcy and no bankruptcy petition has been filed or
presented against either of the Vendors and no order has been made
or a resolution passed for the winding-up, dissolution or
liquidation of either of the Vendors;
(jj) Finder's Fees. The Vendors are not party to any agreement which
provide for the payment of finder's fees, brokerage fees,
commissions or other fees or amounts which are or may become payable
to any third party in connection with the execution and delivery of
this Agreement and the transactions contemplated herein except as
set forth in Schedule "D" hereto;
(kk) Authorizations and Approvals. To the knowledge of the Vendors
and the Covenantors and except as enumerated in this Agreement no
authorization, approval, order, license, permit, consent,
certificate or registration of any governmental authority, court
or arbitrator, and no registration, declaration or filing by the
Vendors or the Covenantors with any governmental authority, court
or arbitrator, is required in order for the Vendors and the
Covenantors
(i) to incur the obligations expressed to be incurred by the
Vendors and the Covenantors in or pursuant to this
Agreement,
(ii) to execute and deliver all other documents and instruments to
be delivered by the Vendors or the Covenantors pursuant to
this Agreement,
(iii) to duly perform and observe the terms and provisions of this
Agreement, or
(iv) to render this Agreement legal, valid, binding and
enforceable;
Execution and Performance of Agreement
(ll) Authorization and Enforceability. except as disclosed in this
Agreement the execution and delivery of this Agreement, and the
completion of the transactions contemplated hereby, have been
duly and validly authorized by all necessary corporate action on
the part of the Vendors and this Agreement constitutes a legal,
valid and binding obligation of each of the Vendors and the
Covenantors and is enforceable against each of them in accordance
with its terms;
(mm) No Violation or Breach. The performance of this Agreement will
not
(i) violate the charter documents of either of the Vendors or
result in any breach of, or default under, any loan agreement,
mortgage, deed of trust, or any other agreement to which the
Vendors or the Covenantors, or any of them, is a party,
(ii) to the knowledge of the Vendors and the Covenantors, give any
person any right to terminate or cancel any agreement
including, without limitation, the Material Contracts, or any
right or rights enjoyed by the Vendors,
(iii) to the knowledge of the Vendors and the Covenantors result in
any alteration of the Vendors' obligations under any agreement
to which the Vendors or any of them are party including,
without limitation, the Material Contracts,
(iv) to the knowledge of the Vendors and the Covenantors result in
the creation or imposition of any Encumbrance or restriction
of any nature whatsoever in favour of a third party upon or
against the Purchased Assets,
(v) result in the imposition of any tax liability to the Vendors
which would create an Encumbrance on the Purchased Assets, or
(vi) violate any Court order or decree to which the Vendors and the
Covenantors or any of them are subject
except as set forth in this Agreement or the Schedules hereto;
(nn) No Untrue Statements. This Agreement does not contain any
untrue statement by the Vendors or the Covenantors of a material
fact nor have the Vendors and the Covenantors omitted to state in
this Agreement a material fact necessary in order to make the
statements contained herein not misleading, no certificate
furnished by or on behalf of the Vendors or the Covenantors to
the Purchasers at the Time of Closing in respect of the
representations, warranties or covenants of the Vendors and the
Covenantors contained in this Agreement will contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading
and all information set out in the Schedules to this Agreement is
accurate and correct in every material respect;
The Purchased Assets - Ownership and Condition
(oo) Business Assets. Excluding the Excluded Assets, the Purchased
Assets comprise all of the rights, assets and properties that are
usually and ordinarily used or held for use in connection with or
otherwise relate to the operation of the Business in the usual
and ordinary course, the Purchased Assets include all rights,
assets and properties the use and exercise of which are necessary
for the performance of any agreement contemplated by this
Agreement to be assumed by ▇▇▇▇▇ 1998 and the conduct of the
Business as now conducted and presently proposed by the Vendors
to be conducted, and none of the Vendors nor any other person,
firm or corporation owns any assets used by the Vendors in
operating the Business, whether under a lease, rental agreement
or other arrangement, except as disclosed in Schedules "C" or "D"
hereto;
(pp) No Encumbrances. Other than the Assumed Accounts Payable and
Liabilities and the indebtedness of the Vendors to the CIT
Group/Credit Finance, Inc., there is no indebtedness to any
person which does, by operation of law or otherwise, now or
hereafter constitute or be capable of forming an Encumbrance,
except a Permitted Encumbrance, upon any of the Purchased Assets
and, save as aforesaid, there is no Indebtedness of any kind
whatsoever relating to the Business in respect of which the
Purchasers may become liable on or after the Closing Date;
(qq) Location. All of the Purchased Assets are in the Vendors'
possession at the Premises;
(rr) Condition. All tangible rights, assets and properties comprising the
Purchased Assets are, considered as a whole, in good condition and
repair and (where applicable) are in proper working order, ordinary
wear and tear excepted, having regard to the use and age thereof;
(ss) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the
purchase of any of the Purchased Assets;
(tt) Insurance. The Vendors maintain the public liability insurance
and insurance against loss or damage to the Purchased Assets and
the Business as described in Schedule "H" hereto;
The Purchased Assets - Equipment
(uu) Equipment. The Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner;
(vv) Leased Equipment. The Leased Equipment is leased by the Vendors
on normal business terms from persons with whom the Vendors deal
at arm's length and are in the Vendors' possession at the
Premises;
The Purchased Assets - Goodwill and Other Assets
(ww) Goodwill. The Vendors carry on the Business only under the name
"▇▇▇▇▇ & Company", "JKG Group, Inc.", and variations thereof and
under no other business or trade names. The Vendors have the
legal right to use one or both of their corporate names in the
States of North Carolina, South Carolina, and Florida and to the
knowledge of the Vendors and the Covenantors Virginia, Tennessee
and Georgia and neither of the Vendors nor any of the Covenantors
is aware of any names similar to ▇▇▇▇▇ & Company or JKG Group,
Inc. in use in any areas where the Business is conducted. None of
the Vendors or the Covenantors has any knowledge of any
infringement by the Vendors of any patent, trademark, copyright
or trade secret;
Environmental Compliance
(xx) Leasehold Property Use. Neither the Leasehold Property nor, to
the knowledge of the Vendors and the Covenantors, any property
adjacent to or within the immediate vicinity of the Leasehold
Property is being or has been used for the storage, treatment,
generation, transportation, processing, handling, production or
disposal of any Hazardous Material or as a landfill or other
waste disposal site, or for military purposes, other than as
disclosed in Schedule "J" hereto;
(yy) Storage Tanks. No underground storage tanks are or have ever
been located on the Leasehold Property, other than as disclosed
in Schedule "J" hereto;
(zz) Condition of Leasehold Property. The soil, subsoil, bedrock,
surface water and ground water of the Leasehold Property are free
of any Hazardous Material other than as disclosed in Schedule "J"
hereto;
(aaa) No Release of Hazardous Materials. There has been no release nor is
there the threat of any release of any Hazardous Material on, at or
from the Leasehold Property or, to the knowledge of the Vendors and
the Covenantors, any property adjacent to or within the immediate
vicinity of the Leasehold Property which through soil, subsoil,
bedrock, surface water or ground water migration could come to be
located on the Leasehold Property, and neither the Vendors nor the
Covenantors have received any form of notice or inquiry from any
federal, state or municipal governmental agency or authority, any
operator, tenant, subtenant, licensee or occupant of the Leasehold
Property or, to the knowledge of the Vendors or the Covenantors, any
property adjacent to or within the immediate vicinity of the
Leasehold Property or any other person with respect to a release or
the threat of a release of any Hazardous Material on, at or from the
Leasehold Property or any property adjacent to or within the
immediate vicinity of the Leasehold Property other than as disclosed
in Schedule "J" hereto;
(bbb) No Legal Proceedings. There are no actions, suits, claims or
proceedings, whether pending or threatened against or materially
adversely affecting, or which could materially adversely affect, the
Leasehold Property or the Purchased Assets that arise out of, relate
to or result from
(i) a violation or alleged violation of any applicable
Environmental Laws or non-compliance or alleged non-compliance
with any Environmental Permits,
(ii) the presence of any Hazardous Material or a release or the
threat of a release of any Hazardous Material on, at or from
the Leasehold Property or any property adjacent to or within
the immediate vicinity of the Leasehold Property, or
(iii) human exposure to any Hazardous Material or noises, vibrations
or nuisances of any kind to the extent that they arise from
the condition of the Leasehold Property or the ownership, use,
operation, sale or other disposition of the Leasehold Property
other than as disclosed in Schedule "J" hereto;
(ccc) Environmental Permits. All Environmental Permits required by the
Vendors in connection with the use of the Leasehold Property and the
operation of the Business have been obtained by the Vendors and are
in full force and effect, and there are no outstanding orders,
notices or similar requirements related thereto issued by any
federal, state, municipal, foreign or international government or
regulatory body under any applicable Environmental Laws with respect
thereto other than as disclosed in Schedule "J" hereto. Attached
hereto as Schedule "K" is a true and complete list of all
Environmental Permits necessary or reasonably required by the
Vendors to own and operate the Leasehold Property and to conduct the
Business in the manner in which the Vendors are presently conducting
same;
(ddd) Compliance with Environmental Laws. The Vendors are using the
Leasehold Property and conducting the Business in compliance with
all Environmental Laws, and the Vendors have never been convicted
of, nor charged with, any offense for non-compliance with any
Environmental Laws, nor defaulted in reporting to the appropriate
governmental or regulatory authority on the release of any
Environmental Material or the occurrence of any event which is
required to be reported under any Environmental Laws other than as
disclosed in Schedule "K" hereto;
(eee) Documents and Records. The Vendors have maintained all
documents and records relating to its operation of the purchased
business and the ownership of the Leasehold Property in full
compliance with all Environmental Laws; and
(fff) No Environmental Audit. Neither the Vendors nor the Covenantors have
ever conducted or caused to be conducted an Environmental Audit nor,
to the knowledge of the Vendors, has the Leasehold Property ever
been the subject of an Environmental Audit other than as disclosed
in Schedule "J" hereto.
Representations and Warranties in Closing Documents
4.2 All statements contained in any certificate or other instrument delivered by
or on behalf of the Vendors or the Covenantors pursuant hereto or in connection
with the transactions contemplated hereby shall be deemed to be representations
and warranties by the Vendors and the Covenantors hereunder.
Non-Merger and Survival
4.3 Unless otherwise stated herein, the representations and warranties of the
Vendors and the Covenantors contained herein will be true at and as of the Time
of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by the Purchasers, the representations and
warranties of the Vendors and the Covenantors shall survive the Closing and will
remain in full force and effect for a period of two (2) years thereafter.
Indemnity
4.4 The Vendors and the Covenantors jointly and severally agree to indemnify and
save harmless the Purchasers from and against any and all claims, demands,
actions, suits, proceedings, assessments, judgments, damages, costs, losses and
expenses, including any payment made in good faith in settlement of any claim
(subject to the right of the Vendors and the Covenantors to defend any claim as
herein provided), resulting from the breach by any of them of any representation
or warranty of such party under this Agreement or from any material
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by the Vendors or the Covenantors to the Purchasers
(a "Loss"), subject to the following qualifications and limitations:
(a) the Purchasers must give written notice of the Loss to the Vendors
or the Covenantors or any of them setting forth the nature of the
Loss on or before the date which is two (2) years from the Closing
Date;
(b) the Purchasers shall not make any claim against any Vendor or
Covenantor for any indemnification pursuant to this section 4.4
unless and until the aggregate liability therefore of any or all the
Vendors and Covenantors combined exceeds $35,000 in the aggregate
and the Purchasers further agree that in such event the Purchasers
shall be entitled to such indemnification only for liability in
excess of $20,000; and
(c) the liability of a particular Vendor or Covenantor for a Loss is
limited in all instances, except as specifically provided below
in this paragraph (c), to 100% of the value of the total
consideration received by that particular Vendor or Covenantor
directly or indirectly as a holder of Vendor Shares, from the
Purchasers (and for the purpose of determining such value, each
of the Americlean Shares so received shall have a deemed value
equal to the Average Trading Price at the time at which the
Vendors or Covenantors or any of them are notified of the said
Loss notwithstanding their value at the Time of Closing);
provided further that the liability of a particular Vendor or
Covenantor for a Loss shall not be limited, nor shall paragraph
(b) of this section 4.4 apply, if such Loss arises from any bad
faith and willful omission to disclose any material information
or fact concerning a matter which is actually known to that
particular Vendor or Covenantor, or a breach of any
representation and warranty of that particular Vendor or
Covenantor set forth in paragraphs 4.1 (cc), (dd), (jj), (kk),
and (pp) hereof.
Notice and Defense of Third Party Claims
4.5 If any action, claim or proceeding shall be brought or asserted under
section 4. 4 against the Purchasers in respect of which indemnity is claimed due
hereunder from the Vendors and the Covenantors or any of them (such of the
Vendors or the Covenantors against whom a claim of indemnity is made being
referred to in this section 4.5 individually as an "Indemnitor" and collectively
as the "Indemnitors"), the Purchasers shall give prompt written notice of such
action or claim to the Indemnitors, together with copies of all material
documents, correspondence and pleadings in connection therewith. If the
Indemnitors consider such claim to be a claim for which the Indemnitors are
required to indemnify the Purchasers, the Indemnitors shall assume the defense
thereof including the employment of counsel satisfactory to the Purchasers,
acting reasonably, and the payment of all expenses related thereto; provided
that no delay or failure to so notify any Indemnitor shall relieve such
Indemnitor of his obligations hereunder except to the extent, if at all, that he
is prejudiced by reason of such delay or failure. The Purchasers shall have the
right to employ separate counsel in any of the foregoing actions, claims or
proceedings and to participate in the defense thereof at their own expense;
provided that if the Purchasers are named as parties and the Purchasers shall in
good faith determine that representation of the Purchasers and the Indemnitors
by the same legal counsel is inappropriate, the Purchasers may engage
independent counsel whose fees and expenses shall be borne by the Indemnitors if
the Indemnitors are determined to be liable to the Purchasers under their
indemnity. If the Indemnitors, or any of them, within ten (10) days after
receipt of notice of any such action or claim, fail to assume the defense
thereof, the Indemnitors shall be deemed to have given notice to the Purchasers
that the Indemnitors do not consider the claim or action to be one for which
they are obligated to indemnify the Purchasers hereunder. Thereupon, the
Purchasers shall have the right, but not the obligation, to undertake the
defense, compromise or settlement of such action, claim or proceeding in their
own names, subject to the right of the Indemnitors or any of them to assume the
defense of such action, claim or proceeding with counsel reasonably satisfactory
to the Purchasers at any time, prior to the settlement, compromise or final
determination thereof. If the Indemnitors do not undertake the defense,
compromise or settlement of such action, claim or proceeding, they shall not be
entitled to challenge the validity or merits of such proceedings, settlement or
compromise in any subsequent arbitration proceedings to determine the liability
of the Indemnitors in any claim of indemnity by the Purchasers hereunder,
provided that the Purchasers have acted reasonably and in good faith in the
defense, compromise or settlement of such action. If the Purchasers undertake
the defense of such action or claim and believe in good faith that the
Purchasers have a valid claim against the Indemnitors or any of them in
connection therewith under the indemnity provisions of this Agreement, then
notwithstanding section 15.1 hereof the Purchasers may, but shall not be
obliged, to join the Indemnitors or any of them as parties to the proceedings
brought by the third party claimant against the Purchasers. If the Indemnitors
or any of them are not named as parties to those proceedings, or if they are so
named but there is no determination as to the issue of the liability of the
Indemnitors or any of them to the Purchasers in those proceedings, then the
Purchasers or the Indemnitors or any of them may refer the dispute as to the
liability of the Indemnitors or any of them to the Purchasers under the
indemnity provisions hereof to arbitration in accordance with section 15.1
hereof. Anything in this section 4.5 to the contrary notwithstanding, the
Vendors shall not, without the Purchasers' prior written consent, which consent
shall not be unreasonable withheld, settle or compromise any action or claim or
consent to the entry of any judgment with respect to any action, claim or
proceeding for anything other than monetary damages paid by the Vendors,
provided that the Vendors may, without the Purchasers' prior written consent,
settle or compromise any such action, claim or proceeding or consent to entry of
any judgment with respect to any such action or claim that requires solely the
payment of monetary damages by the Vendors and that includes as an unconditional
term thereof the full and final release by the claimant or the plaintiff of the
Purchasers from all liability in respect of such action, claim or proceeding.
ARTICLE 5
COVENANTS OF THE VENDORS AND THE COVENANTORS
Covenants
5.1 The Vendors and the Covenantors jointly and severally covenant and agree
with the Purchasers that from and after the date of execution of this Agreement
to the Closing Date:
(a) as soon as any of the Vendors or the Covenantors has determined that
a state of facts exists which results in or is reasonably likely to
result in
(i) a representation or warranty contained in section 4.1 hereof
being untrue or incorrect in any material respect,
(ii) the non-fulfillment of any of the conditions precedent set
forth in section 11.1 hereof, or
(iii) any change in any of the Purchased Assets or the organization,
operations, affairs, business, properties, prospects or
financial condition or position of the Business, including
changes arising as a result of any legislative or regulatory
change, revocation of any license, Permit or right to do
business, or any change in any Indebtedness of the Business or
any of the Purchased Assets, other than changes in the usual
and ordinary course of the operation of the Business, which
taken as a whole, materially and adversely affects any of the
Purchased Assets or the organization, operations, affairs,
business, properties, prospects or financial condition or
position of the Business
the Vendors and the Covenantors will notify the Purchasers of
such state of facts;
(b) except with the prior written consent of the Purchasers, neither the
Vendors nor the Covenantors will willfully do or fail to do anything
that would result in any of the representations and warranties set
forth in section 4.1 hereof not being true and correct in all
material respects at the time of Closing;
(c) the Vendors and the Covenantors will cooperate in good faith with
the Purchasers to obtain any release, waiver, consent or approval
that the Purchasers, acting reasonably, may advise is required in
order that none of the execution and delivery of this Agreement, the
completion of the transactions contemplated hereby, or the
observance and performance of the obligations of the Vendors and the
Covenantors herein will
(i) constitute or result in a material breach of or a material
default under, or an event which, with the giving of notice or
lapse of time or otherwise, would constitute or result in a
material breach of or material default under, or
(ii) give to any other person, after the giving of notice or
otherwise, any right of termination, cancellation or
acceleration in or with respect to
any indenture, mortgage, deed of trust, agreement, contract, lease,
franchise, certificate, consent, Permit, licence or other instrument
or commitment to which any of the Vendors or the Covenantors is a
party or is subject, or by which they are bound or from which they
derive benefit or which is required or desirable for the conduct in
the usual and ordinary course of the operation of the Business;
(d) the Vendors and the Covenantors will cooperate in good faith
with the Purchasers to obtain all necessary releases, waivers,
consents and approvals, including all necessary approvals from
the lessors of each of the Leasehold Property and the Leased
Equipment and all relevant governmental authorities, as may be
required to validly and effectively transfer the Purchased Assets
to ▇▇▇▇▇ 1998 as contemplated by this Agreement and all such
releases, waivers, consents and approvals will be in a form, and
upon such terms, as may be reasonably acceptable to the
Purchasers;
(e) each of the Vendors and the Covenantors will take or cause to be
taken all proper corporate proceedings and related steps and actions
on their part (including the approval of the sale by the directors
and shareholders of the Vendors) to enable them to vest a good and
marketable title in ▇▇▇▇▇ 1998 to the Purchased Assets, free and
clear of all Encumbrances, except the Permitted Encumbrances;
(f) the Vendors and the Covenantors will use good faith efforts to make
all necessary applications for, and each of the Vendors and the
Covenantors will cooperate with the Purchasers to obtain, all
necessary approvals of the relinquishment and reissue or the
transfer to ▇▇▇▇▇ 1998 of all Permits;
(g) the Vendors will maintain in force policies of insurance heretofore
maintained;
(h) the Vendors will take reasonably good care of all the Purchased
Assets and do all reasonably necessary repairs and maintenance to
such assets as are used by the Vendors in the usual an ordinary
course of the operation of the Business, and take reasonable care to
protect and safeguard the Purchased Assets;
(i) the Vendors and the Covenators agree to indemnify and hold the
Purchasers harmless from and against any and all claims, demands,
actions, suits, proceedings, assessments, judgments, damages, costs,
losses and expenses arising from the Vendors' failure to comply with
applicable bulk sales legislation.
(j) the Vendors and the Covenantors will permit the Purchasers,
their officers, directors, agents, professional advisors, or
other authorized representatives at any time and from time to
time to inspect the Purchased Assets, the Business, the Books and
Records and to inspect, review, audit and copy any or all
information relating thereto or to any other transactions between
the parties hereto wherever and however such information may be
stored, and for these purposes will permit such persons at any
time and from time to time upon reasonable notice and during
regular business hours to enter into or upon any premises, lands
or buildings where the Purchased Assets or any such information
is or may be, or where the Business is conducted and, in the
event that use of a computer system is required to access such
information, will allow such persons the use of its computer
system for such purposes and will provide assistance in that
regard. If for any reason such information cannot be accessed
and retrieved at the Vendors' premises, the Vendors will permit
such persons to remove the medium in which such information is or
may be stored from the Vendors' premises to any other place which
has a computer system that will give such persons the opportunity
to retrieve, record and copy such information, and will permit
such persons to reproduce and retain a copy of any such
information in any format whatsoever. The Vendors will
immediately deliver to the Purchasers upon request from time to
time all computer software, tapes, disks, drums, cards, books of
account, records, ledgers, agreements, licenses, permits,
consents, correspondence, schedules, documents, statements,
lists, and other writings relating to the Purchased Assets or the
Business and such other documents and information as the
Purchasers may from time to time reasonably request, for the
purpose of inspecting, reviewing, auditing and copying the same;
(k) the Vendors will not sell, consume or dispose of or transfer
possession of any of the Purchased Assets except those sold,
consumed or disposed of in the usual and ordinary course;
(l) the Vendors will conduct the Business only in the usual and
ordinary course, endeavour to preserve the organization of the
Business intact and keep available the services of the present
officers and employees (subject to voluntary resignations and
dismissals in accordance with proper business practice) and
preserve the goodwill of the suppliers and customers and others
having business relations with the Vendors relating to the
Business;
(m) the Vendors will make all necessary tax, governmental and other
filings in a timely fashion;
(n) the Vendors shall
(i) pay to all employees in the Business, as listed on Schedule
"N" hereto, all wages, salaries and bonuses and all amounts
due in lieu of holiday pay and other benefits up to and
including the Closing Date, and
(ii) use good faith best efforts to obtain, in conjunction with
the offers of employment from ▇▇▇▇▇ 1998 described in
paragraph 7.1 hereof, resignations from all of the
employees listed on Schedule "N" hereof, provided that the
resignations of those employees to whom Schedule "N" hereof
specifies that ▇▇▇▇▇ 1998 will not make offers of
employment shall not be obtained in conjunction with any
offer employment;
(n) the Vendors will use their reasonable best efforts to take all
actions and to do all things necessary in order to consummate and
make effective the transactions contemplated by this Agreement
including satisfaction of the conditions precedent set forth in
section 11.3 hereof and the covenants set forth in this section 5.1
provided that notwithstanding the foregoing, neither of the Covenantors shall
have any obligation to advance any funds to the Vendors or to guarantee any
obligations of the Vendors.
Enduring
5.2 From and after the execution of this Agreement, both before and after the
Closing Date, each of the Vendors and the Covenantors covenants and agrees with
the Purchasers that:
(a) the Vendors and the Covenantors will execute and do all such further
deeds, acts, things and assurances as may be requisite in the
reasonable opinion of the Purchasers' solicitors for more perfectly
and absolutely assigning, transferring, assuring to and vesting in
▇▇▇▇▇ 1998 title to the Purchased Assets, free and clear of the
Encumbrances except the Permitted Encumbrances;
(b) the Vendors and the Covenantors will at the request of the
Purchasers take and cause to be taken all necessary corporate
proceedings and make all necessary filings on its part to effect
a change of its name to some name of which the name "▇▇▇▇▇ &
Company" or any similar name does not form a part and will at the
request of the Purchasers deliver such consent as may be required
to enable ▇▇▇▇▇ 1998 to use a name of which the same name "▇▇▇▇▇
& Company" or any similar name forms a part;
(c) the Vendors and the Covenators will continue the ongoing
environmental remediation of the property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as disclosed in the monitoring
report prepared by Triangle Environmental, Inc. dated November,
1998;
(d) for a period of sixty days following the Closing Date, the
Vendors shall permit ▇▇▇▇▇ 1998 to continue to occupy and use the
property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ at the cost and expense of ▇▇▇▇▇ 1998 provided that such
costs and expenses are consistent with what is paid by the
Vendors to the Covenantors in respect of the said property prior
to the Closing Date, being the sum of $4,700 per month plus taxes
and ▇▇▇▇▇ 1998 hereby agrees to indemnify and save harmless the
Covenantors from any and all liabilities incurred by them in
their capacities as landlords of that property during the said
period and for greater certainty, ▇▇▇▇▇ 1998 will not be required
to indemnify the Covenantors for any such liabilities incurred
prior to the Closing Date. On or before the expiry of such sixty
day period, ▇▇▇▇▇ 1998 shall at its expense move the Business and
Purchased Assets to a new location of its choice; and
(e) each of the Vendors and the Covenantors, and any and all of
their agents, employees, representatives, relatives and other
persons who acted on behalf of the Vendors or the Covenantors and
were or are involved in any negotiations relating to this
Agreement, or had, have, will or may have any knowledge about any
part in such negotiations, will not, without the prior written
consent of the Purchasers, reveal or disclose any of the terms of
this Agreement, any portion of this Agreement or any of the
transactions contemplated hereby, and will keep strictly
confidential the terms of this Agreement, all information,
communications, documents and material of any kind and in any
form whatsoever, whether written, oral, technical, copied or
relating to this Agreement and any of the transactions
contemplated hereby. Notwithstanding the generality of the
foregoing, each of the Vendors and the Covenantors shall be
permitted to disclose the terms of this Agreement to any
governmental authority which lawfully requires any of the Vendors
and the Covenantors to do so, and each of the Vendors and the
Covenantors shall be permitted to disclose any information which
is within the public domain. Each of the Vendors and the
Covenantors acknowledge that breach of the covenants contained in
this paragraph will result in damage to the Purchasers, that such
damage will be difficult to determine and that the Purchasers
could not be adequately compensated for such damage by monetary
award. Accordingly, in the event of a breach of any of the
covenants contained in this paragraph, in addition to any and all
other remedies available to the Purchasers are law or in equity,
each of the Vendors and the Covenantors hereby consent to the
covenants, and each of them, contained in this paragraph being
enforced by temporary or permanent injunction, restraining order
or declaration, or all of such relief, and to such enforcement
being without the necessity of a bond. Each of the Vendors and
the Covenantors acknowledge and agree that the scope of this
paragraph is reasonable and commensurate with protection of the
legitimate interests of the Purchasers.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Representations and Warranties
6.1 The Purchasers represent and warrant to the Vendors, with the intent that
the Vendors will rely thereon in entering into this Agreement and in completing
the transactions contemplated hereby, that:
(a) Incorporation. Americlean is a corporation duly incorporated and
validly subsisting under the laws of the State of Delaware, and is
in good standing with the office of the Delaware Department of State
and ▇▇▇▇▇ 1998 is a corporation duly incorporated and validly
subsisting under the laws of the State of North Carolina, and is in
good standing with the office of the North Carolina Department of
State;
(b) Corporate Capacity. The Purchasers have the power and capacity to
own their assets and to carry on their business as presently being
carried on by them, and to enter into this Agreement and to carry
out the transactions contemplated hereby;
(c) Authorization and Enforceability. The execution and delivery of this
Agreement and the completion of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate
action on the part of the Purchasers and this Agreement constitutes
a legal, valid and binding obligation enforceable against it in
accordance with its terms;
(d) Authorized and Issued Capital. The authorized capital of
Americlean consists of 50,000,000 shares of common stock, $0.0001
par value and 5,000,000 shares of preferred stock. $0.0001 par
value, of which 1,773,629 shares of common stock (on an undiluted
basis) and no shares of preferred stock are presently issued and
outstanding and the authorized capital of ▇▇▇▇▇ 1998 consists of
100,000 shares of common stock of which 100 shares are presently
issued and outstanding;
(e) Acquisition Shares. The Acquisition Shares when delivered pursuant
to Article 2 hereof shall be validly issued and outstanding as fully
paid and non-assessable shares, subject to the provisions of this
Agreement, and the Acquisition Shares shall be transferable upon the
books of Americlean, in all cases subject to the provisions and
restrictions of all applicable securities laws;
(f) Over-the-Counter Bulletin Board Listing. The Americlean Shares
are quoted for trading on the Over-the-Counter Bulletin Board
operated by the National Association of Securities Dealers, Inc.
(the "NASD"), and Americlean is current in its filings with the
NASD;
(g) Carrying on Business. Americlean carries on business in Alberta and
British Columbia and does not carry on business in any other
jurisdiction, and neither the ownership of its assets nor the nature
of its business requires Americlean to be qualified in any other
jurisdiction;
(h) No Bankruptcy. The Purchasers are not insolvent and have not
committed an act of insolvency, nor have they made any voluntary
assignment or proposal under the applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed
or presented against the Purchasers, nor any order made or
resolution passed for the winding up, dissolution, or liquidation of
the Purchasers;
(i) Licenses. To the best of the knowledge, information and belief of
Americlean, Americlean holds all licenses and permits as may be
requisite for carrying on its business in the manner in which it has
heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing;
(j) Applicable Laws. Americlean has not been charged with or received
notice of breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees to which it is subject or which apply to
it, the violation of which would have a material adverse effect on
Americlean, and to the best of the knowledge, information and belief
of Americlean, Americlean is not so in breach;
(k) Charter Documents. The charter documents of the Purchasers have not
been altered since the incorporation of the Purchasers, except as
filed in the record book of the Purchasers;
(l) Books and Records. The books and records of the Purchasers fairly
and correctly set out and disclose in all material respects the
financial position of the Purchasers, and all material financial and
other transactions of Purchasers relating to its business have been
accurately recorded in such books and records; and
(m) No Violation or Breach. The performance of this Agreement will
not
(i) violate the charter documents of the Purchasers or result in
any breach of, or default under, any other agreement to which
the Purchasers are a party,
(ii) give any person any right to terminate or cancel any agreement
or any right or rights enjoyed by the Purchasers,
(iii) result in any alteration of the Purchaser's obligations under
any agreement to which the Purchasers are a party, or
(iv) violate any Court order or decree to which the Purchasers are
subject.
Non-Merger and Survival
6.2 The representations and warranties of the Purchasers contained herein will
be true at and as of the Time of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by the Vendors, the
representations and warranties of the Purchasers shall survive the Closing and
will remain in full force and effect for a period of two (2) years thereafter.
Indemnity
6.3 The Purchasers agree to jointly and severally indemnify and save harmless
the Vendors and each of them from and against any and all claims, demands,
actions, suits, proceedings, assessments, judgments, damages, costs, losses and
expenses (collectively, "Losses") resulting from any misrepresentation or breach
of warranty on the part of the Purchasers under this Agreement or from any
material misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished to the Vendors by the Purchasers
hereunder, subject to the following qualifications and limitations:
(a) the Vendors must give written notice of the claim to the Purchasers
setting forth the nature of the claim on or before the date which is
two (2) years from the Closing Date;
(b) a particular Vendor shall not make any claim against the Purchasers
for any indemnification pursuant to this section 6.3 unless the
liability therefore of the Purchasers to the Vendors considered
collectively exceeds $35,000 in the aggregate and the Vendors
further agree that in such event the Vendors shall together be
entitled to such indemnification only for liability in excess of
$20,000;
(c) the liability of the Purchasers to a particular Vendor for
breach of any representation or warranty hereunder is limited in
all instances to 100% of the value of the consideration received
by that particular Vendor from the Purchasers at any time for his
portion of the Vendor Shares (and for the purpose of determining
such value, each of the Americlean Shares received by that
particular Vendor shall have a deemed value equal to the Average
Trading Price at the time at which the Purchasers are notified of
the said claim notwithstanding their actual value at the time
that any such liability is determined or is payable) provided
further that the liability of a particular Purchaser for a Loss
shall not be limited, nor shall paragraph (b) of this section 6.3
apply, if such Loss arises from any bad faith and willful
omission to disclose any material information or fact concerning
a matter which is actually known to that particular Purchaser, or
a breach of any representation and warranty of that particular
Purchaser set forth in paragraph 6.1 (m) hereof.
6.4 In addition to and without limiting the extent of this Article 6, the
Purchasers agree to jointly and severally indemnify and hold the Vendors and the
Covenantors harmless from and against any and all Losses related to the breach
or default of the Vendors or the Covenantors of any contract or agreement with
The CIT Group/Credit Finance, Inc. caused by the completion of the transactions
contemplated by this Agreement by the Vendors or the Covenantors.
ARTICLE 7
COVENANTS OF THE PURCHASERS
Guarantees
7.1 The Purchasers jointly and severally covenant and agree with the Vendors and
the Covenantors that they:
(a) will cause the Covenantors and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ to be released from
the Guarantees listed in Schedule "P" hereto and cause the Vendors
to be released and relieved from all liabilities to The CIT
Group/Credit Finance, Inc. at or prior to Closing and will secure
the assignment to and the assumption by ▇▇▇▇▇ 1998 of the Assumed
Accounts Payable and Liabilities and the Assumed Contracts;
(b) will, from and after the Closing Date, indemnify and save the
Covenantors harmless from and against any claims, demands,
actions, damage, loss, deficiency, cost, liability and expense
which may be made or brought against the Vendors or the
Covenantors or which the Vendors or Covenantors may suffer or
incur in respect of or related to the Guarantees, the Assumed
Accounts Payable and Liabilities or the Assumed Contracts
specifically including without limitation the liability of the
Vendors to The CIT Group/Credit Finance, Inc.;
(c) will, from and after the Closing Date, defend, indemnify and
hold harmless the Vendors and the Covenantors, their heirs,
personal representatives, successors and assigns, from and
against any and all claims, judgments, damages, liens,
administrative orders, consent agreements and orders,
liabilities, penalties, costs, fees and expenses (including
without limitation attorneys' and engineer's fees and expenses)
of any kind, including claims by any third party or governmental
agency, arising directly or indirectly from or in connection with
any conditions existing on the Leasehold Property which arise out
of ▇▇▇▇▇ 1998's use, storage, treatment, release, disposal of
Hazardous Materials on the Leasehold Property or into or upon any
land, body of water or the atmosphere adjacent to the Leasehold
Property or the failure by ▇▇▇▇▇ 1998 to comply with
Environmental Laws provided that such events occur after the
Closing Date and are not caused by the willful act or negligence
of the Vendors or the Covenantors and provided that such defense
and indemnification is not prohibited by public policy;
(d) will satisfy all disclosure requirements of all securities laws and
regulations applicable to the Acquisition Shares and the
transactions contemplated herein, including without limitation all
applicable SEC disclosure requirements;
(e) on and after the Time of Closing, assume and pay in the normal
course the Assumed Accounts Payable and Liabilities and indemnify
and save the Vendors and the Covenantors harmless of and from all
claims, demands, suits and actions in respect thereof;
(f) on and after the Time of Closing, assume, perform and discharge all
obligations arising under the Assumed Material Contracts;
(g) on the Closing Date ▇▇▇▇▇ 1998 shall offer employment to those
employees listed in Schedule "N" attached hereto employed on the
Closing Date in connection with the Business, save and except those
persons identified on Schedule "N" attached hereto as persons to
whom employment shall not be offered by ▇▇▇▇▇ 1998, on substantially
the terms and conditions of their employment in effect on the
Closing Date; and
(h) the Purchasers will use their reasonable best efforts to take all
action and to do all such things necessary in order to consummate
and make effective the transactions contemplated by this Agreement
on or before the Closing Date, including satisfaction of the
conditions precedent set forth in section 11.1 hereof and the
covenants set forth in this section 7.1.
Survival
7.2 The covenants set forth in this Article 7 shall survive the Closing and
continue in full force and effect for the benefit of the Vendors and the
Covenantors for the respective periods stipulated therein.
ARTICLE 8
LINE OF CREDIT
The Vendors and the Covenantors shall cooperate in good faith with the
Purchasers to cause the Vendors to maintain until the Time of Closing its
present operating line of credit of up to $3,000,000 with The CIT Group/Credit
Finance, Inc. The Vendors and the Covenantors represent to the Purchasers that
such line of credit is in the aforesaid amount, that it is secured by the
accounts receivable and other assets of the Vendors, and any draws on the line
of credit are subject to the terms and conditions of said loan contained in
Schedule "D" attached hereto.
ARTICLE 9
EMPLOYMENT AGREEMENTS AND OPTION AGREEMENTS
At the Time of Closing, ▇▇▇▇▇ 1998 shall enter into the Employment
Agreements with each of the Covenantors pursuant to which each of them will
provide services to ▇▇▇▇▇ 1998 and Americlean shall enter into the Option
Agreements with each of the Covenantors. The Employment Agreements and Option
Agreements shall be substantially in the form of Schedule "Q" hereto.
ARTICLE 10
LEASE ADJUSTMENT AGREEMENT
At the Time of Closing, ▇▇▇▇▇ 1998 shall enter into the Lease Adjustment
Agreement with the Vendors pursuant to which ▇▇▇▇▇ 1998 will agree to compensate
the Covenantors for certain losses which they may suffer arising from the lease
of the property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇. The
Lease Adjustment Agreement shall be substantially in the form of Schedule "S""
hereto.
ARTICLE 11
CONDITIONS PRECEDENT
Conditions Precedent in favour of the Purchasers
11.1 The Purchaser's obligation to carry out the transactions contemplated
hereby is subject to the fulfillment of each of the following conditions
precedent on or before the Time of Closing:
(a) all documents or copies of documents required to be executed and
delivered to the Purchasers hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed in all material respects by the Vendors
and the Covenantors at or prior to the Closing will have been
complied with or performed and the representation and warranties of
the Vendors and the Covenantors shall be true in all material
respects at the Time of Closing;
(c) title to the Purchased Assets will be free and clear of all
mortgages, liens, charges, pledges, security interests,
Encumbrances or other claims whatsoever, except for the Permitted
Encumbrances, provided however that this paragraph 11.1(c) shall
not constitute a condition precedent to the Purchasers'
obligations if title to the Purchased Assets is not free and
clear due to any security interest in favour of The CIT
Group/Credit Finance, Inc.;
(d) subject to Article 12 hereof and except as disclosed to the
Purchasers in writing prior to the date hereof, there will not have
occurred since the date of this Agreement
(i) any material adverse change in the financial position or
condition of the Vendors, their liabilities or the
Purchased Assets or any damage, loss or other change in
circumstances materially and adversely affecting the
Vendors, the Business or the Purchased Assets or the
Vendors' right to carry on the Business, other than changes
in the ordinary course of business and trends identified to
the Purchasers prior to the date hereof, none of which has
been materially adverse, or
(ii) any damage, destruction, loss or other event, including
changes to any laws or statutes applicable to the Vendors' or
the Business (whether or not covered by insurance) materially
and adversely affecting the Vendors, the Business or the
Purchased Assets;
(e) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any; and
(f) on or before the Closing Date:
(i) no governmental authority shall have enacted any statue,
regulation or bylaws or announced any policy that will
materially and adversely affect the Business, any of the
Purchased Assets or the right of the Purchasers to the full
enjoyment of the Purchased Assets, and
(ii) no injunction or restraining order of a court of
administrative tribunal or competent jurisdiction shall be in
effect which prohibits the transactions contemplated hereunder
and no action or proceeding shall have been instituted and
remain pending before any such court or administrative
tribunal to restrain or prohibit the transactions contemplated
hereby.
Waiver by Americlean
11.2 The conditions precedent set out in section 11.1 hereof are inserted for
the exclusive benefit of the Purchasers and any such condition may be waived in
whole or in part by the Purchasers at or prior to the Closing by delivering to
the Vendors a written waiver to that effect signed by the Purchasers. In the
event that the conditions precedent set out in section 11.1 hereof are not
satisfied on or before the Time of Closing the Purchasers shall be released from
all obligations under this Agreement.
Conditions Precedent in Favour of Vendors
11.3 Subject to section 11.5 hereof, the obligation of the Vendors to carry out
the transactions contemplated hereby is subject to the fulfillment of each of
the following conditions precedent on or before the Time of Closing:
(a) all documents or copies of documents required to be executed and
delivered to the Vendors hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed in all material respects by the
Purchasers at or prior to the Closing will have been complied with
or performed and the representation and warranties of the Purchasers
shall be true in all material respects at the Time of Closing;
(c) Americlean will have delivered the Hold-back Shares and the
Hold-back Amount to the Escrow Agent and the Acquisition Shares will
be registered on the books of Americlean in the name of the Vendors
at the Time of Closing and the remaining Purchase Price will be
delivered directly to the Vendors;
(d) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances
or other claims whatsoever, save and except as provided for in this
Agreement;
(e) the Covenantors and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall have been fully and
completely released from their obligations under the Guarantees and
the Vendors shall have been fully and completely released from their
obligations with respect to or related to the Assumed Accounts
Payable and Liabilities and indebtedness to The CIT Group/Credit
Finance, Inc.; and
(f) the transaction contemplated herein shall not cause a default or
breach of any contract that either Vendor is a party to unless ▇▇▇▇▇
1998 agrees to unconditionally indemnify and hold each Vendor
harmless from any and all liability related thereto.
Waiver by Vendors
11.4 Subject to section 11.5 hereof, the conditions precedent set out in section
11.3 hereof are inserted for the exclusive benefit of the Vendors and any such
condition may be waived in whole or in part by the Vendors at or prior to the
Closing by delivering to the Purchasers a written waiver to that effect signed
by the Vendors. In the event that the conditions precedent set out in section
11.3 hereof are not satisfied on or before the Time of Closing the Vendors shall
be released from all obligations under this Agreement.
No Waiver of Paragraph 11.3(e)
11.5 The Vendors agree that the condition precedent contained in section 11.3(e)
hereof which provides that the Covenantors and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall have been
fully and completely released from their obligations under the Guarantees prior
to the completion of the transactions contemplated hereby will not be waived by
the Vendors until such time as The CIT Group/Credit Finance, Inc. has agreed in
writing to release the Vendors from their obligations to The CIT Group/Credit
Finance, Inc. and to release the Covenantors from their obligations under the
Guarantees and a copy of such agreement is delivered to Americlean.
Nature of Conditions Precedent
11.6 The conditions precedent set forth in this Article 11 are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favour of the other party or parties set forth in
this Article 11.
Termination
11.7 Notwithstanding any provision herein to the contrary, save and except for
sections 11.8 and 11.9 hereof, if Closing does not occur on or before March 3,
1999, this Agreement will be at an end and will have no further force or effect,
unless otherwise agreed upon by the parties in writing.
Confidentiality
11.8 The parties hereto agree that the existence and terms of this Agreement are
confidential and that if this Agreement is terminated pursuant to section 11.7
hereof, the parties agree to return to one another any and all financial,
technical and business documents delivered to the other party or parties in
connection with the negotiation and execution of this Agreement and shall keep
the terms of this Agreement and all information and documents received from the
Vendors and the contents thereof confidential and not utilize nor reveal or
release same, provided, however, that Americlean will be required to issue one
or more news release respecting the proposed transactions contemplated hereby.
Transaction Costs
11.9 At the Time of Closing the Vendors and the Covenantors shall provide to the
Purchasers a statement of all accounting, legal and other costs incurred by the
Vendors prior to the Time of Closing directly related to completing the
transactions contemplated herein and excluding costs which would otherwise be
incurred by the Vendors in the ordinary course (the "Transaction Costs"). The
Vendors agree that the Transaction Costs, to the extent that they were not paid
by the Vendors prior to the Time of Closing from the Advance, shall be deducted
from Closing Price and, if necessary, the Hold-back Amount.
ARTICLE 12
RISK
If any material loss or damage to the Purchased Assets occurs prior to
Closing and such loss or damage, in the Purchasers' reasonable opinion, cannot
be substantially repaired or replaced within sixty (60) days, the Purchasers
shall, within seven (7) days following any such loss or damage, by notice in
writing to the Vendors, at their option, either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the purchase of the Purchased Assets and the
other transactions contemplated hereby, in which case the
proceeds and the rights to receive the proceeds of all insurance
covering such loss or damage will, as a condition precedent to
the Purchasers' obligations to carry out the transactions
contemplated hereby, be vested in the Purchasers or otherwise
adequately secured to the satisfaction of the Purchasers on or
before the Closing Date.
ARTICLE 13
CLOSING
Closing
13.1 The purchase and sale of the Purchased Assets, the assumption of the
Assumed Accounts Payable and Liabilities and the other transactions contemplated
by this Agreement will be closed at the Place of Closing and Time of Closing in
accordance with the closing procedure set out in this Article 13.
Documents to be Delivered by Vendors and the Covenantors
13.2 On or before the Closing, the Vendors and the Covenantors will deliver or
cause to be delivered to the Purchasers:
(a) certificates of status in respect of the Vendors and a certificate
of incumbency in respect of the authorized signatories of the
Vendors;
(b) a statutory declaration of the Presidents of the Vendors and the
Covenantors dated the Closing Date to the effect that the
representations and warranties of the Vendors contained in this
Agreement are true and correct and that the covenants and agreements
of the Vendors and the Covenantors to be performed on or before the
Closing Date pursuant to the terms of this Agreement have been duly
performed;
(c) all deeds of conveyance, bills of sale, transfer and assignments,
duly executed in form and content satisfactory to the Purchasers'
solicitors, appropriate to effectively vest good and marketable
title to the Purchased Assets in ▇▇▇▇▇ 1998 to the extent
contemplated by this Agreement, and immediately registrable in all
places where registration of such instruments is necessary or
desirable;
(d) all consents or approvals required by this Agreement to be obtained
by the Vendors;
(e) possession of the Purchased Assets;
(f) a statement of the Assumed Accounts Payable and Liabilities signed
by the Vendors;
(g) available evidence of the transfer to ▇▇▇▇▇ 1998 or acquisition by
▇▇▇▇▇ 1998 of all Permits;
(h) duly executed releases of, or evidence to the reasonable
satisfaction of the Purchasers as to the discharge of any and all
Indebtedness which ▇▇▇▇▇ 1998 has not agreed to assume and which may
be enforceable against any of the Purchased Assets being purchased
hereunder;
(i) certified copies of such resolutions of the shareholders and
directors of the Vendors as are required to be passed to authorize
the execution, delivery and implementation of this Agreement;
(j) an acknowledgement from each of the Vendors of the satisfaction of
the conditions precedent set forth in section 11.3 hereof;
(k) the Employment Agreements, duly executed by the Covenantors;
(l) the Option Agreements, duly executed by each of the Vendors;
(m) the Escrow Agreement, duly executed by each of the Vendors;
(n) the Lease Adjustment Agreement, duly executed by each of the
Vendors;
(o) the favourable legal opinion of the Vendors' solicitors, in form
reasonably satisfactory to the Purchaser's solicitors stating
that the Vendors have the corporate authority to own the
Purchased Assets, conduct the Business, execute and deliver this
Agreement and undertake and complete the transactions
contemplated hereby, that all necessary steps and corporate
proceedings have been taken by the Vendors and the Covenantors to
permit the sale of the Purchased Assets under this Agreement and
that this Agreement and all other agreements and instruments
required hereunder have been duly and validly authorized,
executed and delivered by each of the Vendors and Covenantors and
are legal, valid and binding obligations of each of the Vendors
and the Covenantors in accordance with its terms, except as may
be limited by laws of general application affecting the rights of
creditors generally; and
(p) such other documents as the Purchasers may reasonably require to
give effect to the terms and intention of this Agreement.
Documents to be Delivered by the Purchasers
13.3 On or before the Closing, the Purchasers shall deliver or cause to be
delivered to the Vendors, the Covenantors or the Escrow Agent, as applicable:
(a) certificates of status in respect of the Purchasers and a
certificate of incumbency in respect of the authorized signatories
of the Purchasers;
(b) a certified cheque, bank draft or solicitor's trust cheque made
payable to the Escrow Agent in the amount of the Closing Price;
(c) a certified cheque, bank draft or solicitor's trust cheque made
payable to the Escrow Agent in the amount of the Hold-back Amount;
(d) share certificates duly registered in the names of the Vendors and
representing the Acquisition Shares;
(e) certified copies of such resolutions of the directors of the
Purchasers as are required to be passed to authorize the execution,
delivery and implementation of this Agreement;
(f) a duly executed covenant of the Purchasers in favour of the Vendors
and the Covenantors agreeing to assume and pay or perform and
indemnify the Vendors and the Covenantors against the Assumed
Accounts Payable and Liabilities, obligations under the Assumed
Material Contracts, and other obligations agreed to be assumed
hereunder by the Purchasers in the manner and to the extent herein
provided;
(g) a statutory declaration of the Presidents of the Purchasers dated
the Closing Date to the effect that the representations and
warranties of the Purchasers contained in this Agreement are true
and correct and that the covenants and agreements of the Purchasers
to be performed on or before the Closing Date pursuant to the terms
of this Agreement have been duly performed;
(h) releases from all Guarantees and indebtedness as required by Article
7 hereof;
(i) the Escrow Agreement, duly executed by the Purchasers;
(j) the Employment Agreements, duly executed by ▇▇▇▇▇ 1998;
(k) the Option Agreements, duly executed by Americlean;
(l) the Lease Adjustment Agreement, duly executed by ▇▇▇▇▇ 1998;
(m) an acknowledgement from the Purchasers of the satisfaction of the
conditions precedent set forth in section 13.1 hereof;
(n) a favourable legal opinion of the Purchasers' solicitors, in
form reasonably satisfactory to the Vendors' solicitors stating
that the Purchasers have the capacity to execute and deliver this
Agreement and complete the transactions contemplated hereby, that
all necessary steps and corporate proceedings have been taken to
permit the purchase of the Purchased Assets by ▇▇▇▇▇ 1998 under
this Agreement and that this Agreement and all other agreements
required hereunder have been duly and validly authorized,
executed and delivered by the Purchasers and are legal, valid and
binding obligations of the Purchasers in accordance with its
terms, except as may be limited by laws of general application
affecting the rights of creditors generally; and
(o) such other documents as the Vendors and the Covenantors may
reasonably require to give effect to the terms and intention of this
Agreement.
Third Party Consents
13.4 The Purchasers and the Vendors will use commercially reasonable efforts
mutually to secure prior to the Closing Date all reasonable consents or
approvals required to be obtained by the Vendors and the Covenantors for the
purposes of validly transferring the Purchased Assets to ▇▇▇▇▇ 1998 and
preserving and maintaining the interests of the Vendors under any and all
contracts and in relation to the Purchased Assets until the Time of Closing,
specifically including without further limitation all consents and approvals of
The CIT Group/Credit Finance, Inc. The obligations of the Vendors and the
Covenantors hereunder are separately conditioned upon such consents and
approvals.
ARTICLE 14
CONVEYANCE
Conveyance of Purchased Assets
14.1 On completion of the Closing, this Agreement shall, without further act or
formality, operate as a transfer to ▇▇▇▇▇ 1998 of all Purchased Assets to be
sold and purchased hereunder as the same shall be at the close of business on
the Closing Date. The Vendors shall nevertheless, at the Closing and from time
to time after the Closing, execute and deliver to ▇▇▇▇▇ 1998 all such
conveyances, transfers, assignments and other instruments in writing and further
assurances as the Purchasers or the Purchasers' solicitors shall reasonably
require from the Vendors, and the Purchasers shall execute and deliver to the
Vendors all such agreements of assumptions and other instruments in writing and
further assurances as the Vendors or the Vendors' solicitors shall reasonably
require in order to give effect to the provisions of this Agreement.
Trust Regarding Purchased Assets Not Conveyed
14.2 Should any of the Purchased Assets intended to be transferred hereunder not
be transferred to ▇▇▇▇▇ 1998 at the completion of the Closing on the Closing
Date, the Vendors shall hold as bare trustee in trust for, and at the sole cost
of ▇▇▇▇▇ 1998, all such Purchased Assets from the commencement of business on
the Closing Date until such Purchased Assets are effectively transferred.
ARTICLE 15
GENERAL PROVISIONS
Arbitration
15.1 The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good faith negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of Charlotte, North Carolina.
The arbitration panel shall consist of a single arbitrator selected by the joint
agreement of the parties to the dispute; provided that if the parties cannot
agree upon the identity of a single arbitrator within fifteen (15) days, then
the arbitration panel shall consist of three (3) arbitrators, one (1) of whom
shall be appointed by each party within ten (10) days and the third duly
appointed by mutual agreement of the two (2) arbitrators so appointed by the
parties; provided further that if the two arbitrators cannot select the third
arbitrator within ten (10) days after their appointment, the selection of the
third arbitrator shall be made in accordance with the general rules of
arbitration in relation to arbitrations in the State of North Carolina (the
"Rules"). If no such arbitrator is appointed within ten (10) days of such
request, either party may apply to a Court having jurisdiction to make such
appointment. Once the arbitration panel has been selected, the arbitration of
the dispute shall be conducted in English in accordance with the Rules in the
City of Charlotte, North Carolina, unless otherwise provided or limited by the
Rules. The arbitrator(s) shall give each of the parties a fair opportunity to
prepare, including pre-arbitration hearing discoveries, and present its position
with respect to the dispute, and each party shall be entitled to call witnesses
to testify, examine and cross-examine witnesses that the other party calls to
testify, introduce documents and other materials and submit written statements
of position and arguments. The arbitration panel shall make a final
determination, to be provided in writing to each party, that resolves the
dispute and includes an allocation of the aggregate fees, costs and expenses of
the arbitration between the parties to the dispute, such allocation to be made
in the sole discretion of the arbitration panel after giving due consideration
to the relative merits of the parties' positions in the dispute. All results of
the arbitration proceedings shall be final, conclusive and binding on all
parties to this Agreement, and shall not be subject to judicial review. Judgment
upon the award rendered by the arbitrator may be entered in State of North
Carolina or any other Court having competent jurisdiction. For the purposes of
this section 15.1, the Vendors and the Covenantors shall collectively be deemed
to be one party, and their selection of an arbitrator or concurrence therein
shall be made by notice in writing duly executed by a simple majority of the
Vendors and the Covenantors.
Notice
15.2 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
telecopier. Any notice delivered by mail shall be deemed to have been received
on the fourth business day after and excluding the date of mailing, except in
the event of a disruption in regular postal service in which event such notice
shall be deemed to be delivered on the actual date of receipt. Any notice
delivered personally or by telecopier shall be deemed to have been received on
the actual date of delivery.
Addresses for Service
15.3 The address for service of notice of each of the parties hereto is as
follows:
(a) the Covenantors:
▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) the Purchasers:
1910, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(c) the Vendors:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Change of Address
15.4 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
Further Assurances
15.5 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
Time of the Essence
15.6 Time is expressly declared to be the essence of this Agreement.
Entire Agreement
15.7 The provisions contained herein constitute the entire agreement among the
Vendors, the Covenantors and the Purchasers respecting the subject matter hereof
and supersede all previous communications, representations and agreements,
whether verbal or written, among the Vendors, Covenantors and the Purchasers
with respect to the subject matter hereof.
Inurement
15.8 This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
Assignment
15.9 This Agreement is not assignable without the prior written consent of the
parties hereto, which consent shall not be unreasonably withheld.
Counterparts
15.10 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
Applicable Law
15.11 This Agreement is subject to the laws of the State of North Carolina and
the laws of the United States of America applicable therein. Subject to section
15.1 hereof, any disputes arising out of, in connection with, or with respect to
this Agreement, the subject matter hereof, the performance or non-performance of
any obligation hereunder, or any of the transactions contemplated hereby shall
be adjudicated in a Court of competent civil jurisdiction sitting in the City of
Charlotte, North Carolina and nowhere else.
Bulk Sales Legislation
The parties agree to waive the requirements, if any, of all applicable bulk
sales laws.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
AMERICLEAN, INC.
By: ___________________________
Witness Authorized Signatory
Name ____________________________
Name
Address ____________________________
Title
▇▇▇▇▇ & COMPANY (1998), INC.
By: ___________________________
Witness Authorized Signatory
Name ____________________________
Name
Address ____________________________
Title
▇▇▇▇▇ & COMPANY, INC.
By: ___________________________
Witness Authorized Signatory
Name ____________________________
Name
Address ____________________________
Title
JKG GROUP, INC.
By: ___________________________
Witness Authorized Signatory
Name ____________________________
Name
Address ____________________________
Title
___________________________________
Witness ▇▇▇ ▇. ▇▇▇▇▇
Name
Address
___________________________________
Witness ▇▇▇ ▇▇▇▇▇▇▇
Name
Address