================================================================================
Exhibit 10.1
ASSET PURCHASE AGREEMENT
by and between
NORTH COUNTRY ENVIRONMENTAL SERVICES, INC.,
and
NCES EQUIPMENT COMPANY, INC.
collectively, as Seller,
and
VERIDIUM CORPORATION,
and
ENVIROSAFE CORPORATION,
collectively, as Purchaser,
Dated as of March 31, 2005
V.3.30.05
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 31st day of March, 2005
AMONG:
VERIDIUM CORPORATION, a company formed pursuant to the laws of the
State of Delaware and having an office for business located at ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (referred to
herein individually as "Veridium" or together with EnviroSafe as the
"Purchaser")
AND:
ENVIROSAFE CORPORATION, a company formed pursuant to the laws of the
State of Massachusetts and having an office for business located at
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (referred to
herein individually as "EnviroSafe" or together with Veridium as the
"Purchaser")
AND:
NORTH COUNTRY ENVIRONMENTAL SERVICES, INC., a company formed
pursuant to the laws of the State of Massachusetts and having an
office for business located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ (referred to herein individually as "NCES" or together
with NCES Equipment as the "Seller")
AND:
NCES EQUIPMENT COMPANY, INC., a company formed pursuant to the laws
of the State of Massachusetts and having an office for business
located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
(referred to herein individually as "NCES Equipment" or together
with NCES as the "Seller")
WHEREAS:
A. The Purchaser is an environmental services provider specializing in the
recycling and reuse of industrial hazardous waste that provides
transportation, storage, disposal, remediation and recycling services for
public and private sector clients;
B. The Seller is engaged in the business of providing environmental services
through the operation of service centers in Sagamore Beach, Massachusetts,
Milford, Massachusetts, and Barre, Vermont (the "Business") incidental to
which it has certain assets including but not limited to the following:
(a) Accounts receivable, inventories, prepaid expenses and other
miscellaneous assets;
(b) Certain equipment and vehicles;
(c) Certain computer equipment and fixtures, furniture and the like;
(d) Certain telephone and facsimile numbers; and,
C. The Purchaser desires to purchase and acquire and the Seller desires to
sell, convey, assign and transfer, or cause to be sold, conveyed, assigned
and transferred, to the Purchaser, the Seller's Assets.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the terms below shall have the following meanings:
(a) "Accounts Receivable" has the meaning set forth in Section 2.1(a)(i).
(b) "Affiliate" of a Person means any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person.
(c) "Agreement" means this Asset Purchase Agreement.
(d) "Assumed Liabilities" has the meaning set forth in Section 2.3.
(e) "Balance Sheet" means the balance sheet of the Business.
(f) "Business" has the meaning set forth in the Recitals.
(g) "Closing" has the meaning set forth in Section 3.1.
(h) "Closing Date" has the meaning set forth in Section 3.1.
(i) "Customer Contracts" has the meaning set forth in Section
2.1(b)(ii)(A).
(j) "Excluded Liabilities" means any liabilities and obligations with
respect to, arising out of or relating to, the ownership, possession or use of
the Seller's Assets and the operation of the Business prior to the Closing Date
except those liabilities expressly assumed pursuant to Section 2.3 hereunder.
(k) "Financial Statements" has the meaning set forth in Section 4.4.
(l) "GAAP" means United States generally accepted accounting principles as
in effect from time to time.
(m) "Governmental Entity" means any federal, state, provincial, local,
county or municipal government, governmental, judicial, regulatory or
administrative agency, commission, board, bureau or other authority or
instrumentality, domestic or foreign.
(n) "Person" means an individual, corporation, partnership, association,
limited liability company, trust, joint venture, unincorporated organization,
other entity or group (as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended).
(o) "Purchase Price" has the meaning set forth in Section 2.5
(p) "Purchaser" has the meaning set forth in the Preamble.
(q) "Seller" has the meaning set forth in the Preamble.
(r) "Seller's Assets" has the meaning set forth in Section 2.1.
Section 1.2 Captions and Section Numbers
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.
Section 1.3 Section References and Schedules
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
Section 1.4 Severability of Clauses
If any part of this Agreement other than Section 2.5 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.
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.1 Acquired Assets
On the terms and subject to the conditions set forth in this Agreement, at the
Closing the Seller shall sell, assign, transfer, convey, and deliver to the
Purchaser free and (where applicable) clear of all liens, claims, interests and
encumbrances of any nature, and the Purchaser shall purchase and accept from the
Seller the assets of the Seller (the "Seller Assets") as hereinafter described
(collectively, the assets set forth in this Section 2.1 are referred to as
"Seller's Assets"). Any liens or encumbrances assumed by Purchaser are
identified in Schedule 2.2:
(a) all legal and beneficial right, title, and interest of the Seller,
whether prospective or actual, in and to the Seller Assets, whether tangible or
intangible, real, personal or mixed, wherever situated, owned, held or used by
the Seller or in which the Seller has any right, title or interest that is
owned, directly or indirectly, leased or otherwise held primarily for use in the
Business and specifically including the following:
(i) all accounts receivable arising out of the operation of the
Business existing on the date hereof including, without limitation, those listed
or described on Schedule 2.1(a)(i), or arising in the ordinary course under the
Customer Contracts after the date hereof (the "Accounts Receivable");
(ii) all rights and incidents of interest of the Seller to:
(A) all of the services agreements between the Seller and a
customer in any way relating to the Business (the "Customer Contracts") existing
on the date hereof or arising in the ordinary course after the date hereof and
listed or described on Schedule 2.1(a)(ii)(A) (which Schedule will be provided
by Purchaser prior to the Closing Date);
(B) the agreements, contracts and arrangements between the
Seller and a vendor or other third party providing goods or services relating to
the Business listed on Schedule 2.1(a)(ii)(B) (which Schedule will be provided
by the Purchaser prior to the Closing Date);
(C) all of the rights of the Seller regarding confidentiality
and/or non-competition with respect to its current and former employees; and
(iii) all equipment, computers, furniture, furnishings, fixtures,
office supplies, vehicles and all other tangible personal property currently
owned by, or on order to be delivered to, the Seller, that are used in the
operation of the Business or are located on, or to be delivered to, any owned
real property or premises subject to the real property leases (collectively, the
"Tangible Personal Property"), including without limitation, such of the
foregoing as are listed or described on Schedule 2.1(a)(iii);
(iv) all trade names, trademarks, registered copyrights, service
marks, trademark registrations and applications, service ▇▇▇▇ registrations and
applications, copyright registrations and applications, internet addresses and
other internet related assets used primarily in the operation of the Business as
are listed or described on Schedule 2.1(a)(iv) (the "Intellectual Property");
(v) all rights and claims under all contracts, warranties,
representations and guarantees made by suppliers, manufacturers and contractors
in connection with the Seller's Assets and all rights and claims relating to
Assumed Liabilities except those shown or described on Schedule 2.1(a)(v);
(vi) all licenses, permits, authorizations and approvals issued to
the Seller by any Governmental Entity relating to the operation of the Business,
including without limitation, such of the foregoing as are listed or described
on Schedule 2.1(a)(vii);
(vii) all surety bonds, collateral bonds, letters of credit, cash
trusts, cash deposits or the proceeds thereof for the Financial Assurance
requirements or performance bond requirements, whether or not required under
applicable Environmental Laws;
(viii) all books and records of the Business;
(x) all inventories of supplies and spare parts of the Seller relating to
the operation of the Business;
(xi) the following telephone numbers: (▇▇▇) ▇▇▇-▇▇▇▇ and (508)
634-8259 (facsimile) and those numbers listed on Schedule 2.1(a)(xi);
1
(xii) all goodwill primarily related to the Business; and,
(xiii) to the extent assignable, rights of indemnification from all
non-affiliated third parties for liabilities and obligations relating to the
Business or the Seller's Assets.
Section 2.2 Encumbrances
The sale and transfer of the Seller's Assets at the time of the Closing shall be
free and clear of all obligations, security interests, liens and encumbrances,
except as identified above and described in Schedule 2.2 and other schedules
attached hereto, or unless expressly assumed in writing by the Purchaser.
Section 2.3 Assumed Liabilities
On the terms and subject to the conditions set forth in this Agreement, at the
Closing, the Purchaser shall assume from the Seller and thereafter pay, perform
or otherwise discharge in accordance with their terms all of the liabilities and
obligations of the Seller with respect to, arising out of or relating to, the
ownership, possession or use of the Seller's Assets and the operation of the
Business other than the Excluded Liabilities, including without limitation the
following:
(a) the Wellesley Co-operative Bank line of credit facility in the
approximate amount of $355,000 (which amount is to be paid off at the Closing
hereof);
(b) certain Seller officer loans in the approximate amount of $178,000
(which amount is to be paid off at the Closing hereof); and,
(c) liabilities and obligations with respect to, arising out of or
relating to, the ownership, possession or use of the Seller's Assets and the
operation of the Business arising after the Closing Date, as well as accounts
payable, accruals for expected accounts payable, notes payable, accrued salaries
and wages, and other accrued miscellaneous expenses associated with the
Business, as shown in Schedule 2.3.
Section 2.4 Excluded Liabilities
Notwithstanding anything to the contrary contained in this Agreement, and except
as set forth in Section 2.3 above and as set forth on Schedule 2.3 hereto,
Purchaser shall not assume or agree to pay, perform or otherwise discharge or
have any liability whatsoever for any Excluded Liabilities or any other
liabilities, obligations or expenses, if any, of Seller whatsoever other than
the Assumed Liabilities. Included in the foregoing, without limitation of the
Excluded Liabilities, are the following:
(a) Purchaser does not assume or agree to pay, satisfy, discharge or
perform, and shall not be deemed by virtue of the execution and delivery of this
Agreement or the conveyance of the Assets hereunder, or of any instrument, paper
or document delivered by it pursuant to this Agreement, or as a result of the
consummation of the transactions contemplated by this Agreement, to have
assumed, or to have agreed to pay, satisfy, discharge or perform, any liability,
obligation or indebtedness of Seller (whether absolute, accrued, or contingent,
whether filed or asserted prior to or after the Closing Date and whether arising
out of or in any way connected with the Assets or Business of Seller or
otherwise except those set forth on Schedule 2.3 or included in Section 2.3
hereof) all of which, Seller agrees to pay, satisfy, discharge and perform.
Without limitation of the foregoing, the following liabilities shall not be
assumed by Purchaser:
(i) any obligation or liability of Seller to perform this Agreement
or relating to the breach of any representation or warranty made by Seller
hereunder;
(ii) any obligation or liability of Seller for expenses, taxes,
commissions, fees and charges, legal costs and damages incident to the
preparation of this Agreement or the consummation of the transactions
contemplated hereby;
(iii) any liability of Seller to its stockholders, members, equity
owners or to its creditors, including with respect to trade creditors or
landlords or lessors or disputes with stockholders, members, equity owners or
any and all other accounts payable or liabilities (except such specific amounts
as are expressly assumed by Purchaser and subject to Section 2.3 hereof);
2
(v) any liability of Seller with respect to its capital stock,
membership units, or other securities of Seller or any warrants, options or
rights to purchase its capital stock, membership units or other securities;
(vi) any liability claimed as a result of any service provided by
Seller, or any liability for death, personal injuries (including libel or
slander), property damages or incidental or consequential damages relating to
any act or omission alleged to have been taken by Seller prior to the Closing
Date;
(vii) any liability for claims based solely upon Seller's
negligence:
(viii) any liability or obligation under any agreement binding upon
Seller, including, without limitation, any liability or obligation resulting
from any breach or failure of Seller to perform or any alleged breach or failure
to perform prior to the Closing Date or any liability for non-performance with
respect to any agreement which cannot be timely performed after the Closing
Date;
(ix) any liability or obligation, prior to the Closing Date, under
any collective bargaining agreement with any labor union or liability for claims
thereunder including, without limitation, any liability for premature withdrawal
from any multi-employer plan.
(x) any liability to employees or former employees of Seller or any
of their respective beneficiaries, heirs or assignees, including (i) any
liabilities arising by virtue of any collective bargaining relationship or
agreement or pursuant to the National Labor Relations Act or any other labor
relations law or pursuant to any employment agreement, (ii) any liabilities for
workers' compensation, and (iii) any liabilities or obligations under any ERISA
Plan Compensation Commitment or any other agreements or understandings involving
employees of Seller;
(xi) any liability to the Pension Benefit Guaranty Corporation or
United States Department of Labor or any similar organization, whether arising
out of the employment by Seller of any employees or former employees or
otherwise;
(xii) any liability under any law ordinance, rule or regulation
including, without limitation, antitrust, civil rights, health, safety, labor,
discrimination and environmental laws, ordinances, rules and regulations,
including, without limitation, any environmental clean-up liability;
(xiii) any liability arising out of or based upon any action, suit,
claim, investigation, consent decree, review or proceeding, at law or in equity
or before any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or other instrumentality, that exists now or
at the Closing or that arises after the Closing with respect to matters
occurring at or prior to the Closing; and,
(xiv) any liability under any compensation commitment of Seller or
any liability in connection with the layoff, termination or other action or
inaction affecting Sellers' employees, including, but not limited to, claims
arising out of or related to Seller's obligations under the Labor Management
Relations Act, as amended, Title VII of the Civil Rights Act of 1964, as
amended, all state fair employment practice laws, ERISA, COBRA, any collective
bargaining agreement to which any Seller is a party, and any individual or other
collective contracts of employment.
Section 2.5 Purchase Price
In consideration for the Seller's Assets, the Purchaser shall: (a) pay off
Seller's line of credit facility with Wellesley Co-operative Bank at the Closing
by the sum of THREE HUNDRED FIFTY-FIVE THOUSAND DOLLARS ($355,000) in cash by
wire transfer of immediately available funds; (b) pay off Seller's loan to ▇▇▇
▇▇▇▇▇▇ at the Closing by the sum of ONE HUNDRED SEVENTY-EIGHT THOUSAND DOLLARS
($178,000), FIFTY THOUSAND DOLLARS ($50,000) of such amount shall be paid in
cash by wire transfer of immediately available funds, and ONE HUNDRED
TWENTY-EIGHT THOUSAND DOLLARS ($128,000) of this amount shall be paid out of the
earnings before interest, taxes depreciation and amortization of the Business in
the form of cash or, at the sole option of ▇▇▇ ▇▇▇▇▇▇, shares of Veridium common
stock, on or before the end of the sixth month after the Closing; and (c), issue
to Seller shares of Veridium common stock in the amount of SEVENTY-FIVE THOUSAND
DOLLARS ($75,000).
ARTICLE III
THE CLOSING
Section 3.1 Closing
The consummation of the transactions contemplated by this Agreement (the
"Closing") shall take place on or before April 30, 2005 at (i) the offices of
Purchaser's attorney or, (ii) if requested by the Purchaser at least two (2)
business days prior to the Closing, at the Purchaser's place of business (the
date of the Closing being herein referred to as the "Closing Date").
Section 3.2 Deliveries at Closing
(a) At the Closing, the Seller shall deliver to the Purchaser:
(i) duly executed instruments or other evidence sufficient to
transfer to Purchaser Seller's Assets;
(ii) duly executed bills of sale, substantially in the form of
Exhibit A attached hereto, transferring Seller's Assets to Purchaser;
(iii) an employment agreement, substantially in the form of Exhibit
B attached hereto, duly executed by ▇▇▇▇ ▇▇▇▇▇▇▇;
(iv) Seller's Assets (as set forth on Schedule 2.1), by making
Seller's Assets available to Purchaser at their locations as of the Closing
Date; and,
(v) any documents or certificates that are necessary to transfer to
Purchaser good, clear and marketable title all of the Assets and assignments of
all Company Contracts, and (ii) all opinions, certificates and other instruments
and documents required by the terms of this Agreement to be delivered by Seller
at or prior to Closing or otherwise required in connection with the Acquisition.
(b) At the Closing, the Purchaser shall deliver to the Seller:
(i) the cash portion of the Purchase Price by wire transfer in
immediately available funds paid directly to Wellesley Co-operative Bank and ▇▇▇
▇▇▇▇▇▇ in accordance with the Purchase Price provisions hereof;
(ii) Veridium common stock in accordance with the Purchase Price
provisions hereof; and,
(iii) all documents required to be delivered by Purchaser to Seller
at or prior to the Closing Date in connection with this Agreement.
Section 3.3 Post-Closing Matters
Forthwith after the Closing, the parties, as the case may be, agree to use all
their best efforts to:
(a) issue a news release reporting the Closing;
(b) file a Form 8K with the Securities and Exchange Commission disclosing
the terms of this Agreement within 4 days of the Closing and, not more than 60
days following the filing of the Form 8K, file and amended Form 8K which
includes the financial statements of Seller as well as pro forma financial
information of Purchaser and Seller as required by Item 310 of Regulation SB as
promulgated by the Securities and Exchange Commission.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller represents and warrants that as of the date hereof and as of the Closing
Date, the following representations shall be true and correct and in full force
and effect:
Section 4.1 Organization and Good Standing
North Country Environmental Services, Inc. and NCES Equipment Corporation each
is a corporation duly organized and validly existing under the laws of the
Commonwealth of Massachusetts and has the corporate power and authority to own,
lease and operate the Assets used in the Business and to carry on the Business
as now being conducted.
3
Section 4.2 Authority, Approvals and Consents
Seller has the corporate power and authority to enter into this Agreement and to
perform their obligations hereunder. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized and validly approved by the Board of Directors of Seller
and by their respective stockholders and no other corporate or other proceedings
on the part of Seller are necessary to authorize and approve this Agreement and
the transactions contemplated hereby. Seller hereby expressly represents that
they have fully and properly complied with all aspects of applicable
Massachusetts corporate law in entering into this Agreement and for consummating
the transactions contemplated hereunder. This Agreement has been duly executed
and delivered by, and constitutes a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
Except as set forth or referred to above on Schedule 4.2(ii) hereto, no
authorization, consent, order, permit or approval of, or notice to, or filing,
registration or qualification with, any governmental, administrative or judicial
authority is necessary to be obtained or made by Seller to enable Purchaser to
continue to conduct the Business and use the Assets after the Closing in a
manner which is in all material respects consistent with that in which the
Business is presently conducted and as the Assets are currently utilized.
Furthermore, no authorization, consent, order, permit or approval of, or notice
to, or filing, registration or qualification with, any governmental,
administrative or judicial authority, creditor or other party is necessary to be
obtained or has not been obtained by Seller prior to Closing to effectively
convey to Purchaser good, clear and marketable title to the Assets, free of any
and all claims of any party with respect thereto (except as set forth in Section
4.4 herein below and provided in Schedule 4.2(ii)).
Section 4.3 Consents and Approvals
No consent, approval, or authorization of, or declaration, filing, or
registration with, any Governmental Entity will be required to be made or
obtained by Seller in connection with the execution, delivery, and performance
of this Agreement and the consummation of the transactions contemplated hereby,
except as set forth on Schedule 4.2(ii) hereto. Excluded from the foregoing are
any and all state or federal environmental regulatory agency requirements or
filings which shall be Purchaser's sole responsibility; provided, however, that
Seller does hereby agree to provide reasonable cooperation to assist Purchaser's
satisfaction of such requirements.
Section 4.4 Financial Information
Schedule 4.4 contains an unaudited Balance Sheet and income statement prepared
by the finance and accounting staff of Seller for the Business as of December
31, 2004, with the representation that they have been prepared in accordance
with GAAP (the "Financial Statements") on a review (not audited) basis (with
exception for footnotes, summaries and statements of cash flows). The Financial
Statements were prepared by Sellers and have not been reviewed by an independent
certified public accounting firm. Except as set forth on Schedule 4.4 hereto,
the Financial Statements are in accordance with the books and records of the
Seller and fairly and accurately present the financial position, results of
operations, stockholder's equity and cash flows of Seller as of the dates and
for the periods indicated, in each case in conformity with GAAP, consistently
applied (with exception for footnotes, summaries and statements of cash flows).
The statements of income included in the Financial Statements do not contain any
items of special or nonrecurring income except as expressly specified therein,
and the balance sheets included in the Financial Statements do not reflect any
write-up or revaluation increasing the book value of any Assets. The books and
accounts of Seller are complete and correct and fully and fairly reflect all of
the transactions of Seller and are presently located solely at the offices of
Seller and not at any other location.
Section 4.5 Title to Property/Assets
The Seller's Assets comprise all of the property and assets of the Business, and
no other person, firm or corporation owns any assets used by Seller or its
subsidiaries in operating the Business, whether under a lease, rental agreement
or other arrangement. Except as set forth in Schedule 4.5 attached hereto and
incorporated herein by this reference verbatim and at length, the sale of the
Assets by Seller pursuant hereto will effectively convey to Purchaser all of the
Assets, including all tangible and intangible assets and properties of Seller,
as specified on Schedule 2.2. Seller has good, clear and marketable title to all
of the Assets and to all other properties reflected on the Financial Statements
or acquired after the date thereof (other than properties and assets sold or
4
otherwise disposed of after the date thereof in the ordinary course of
business), and each such Asset is held free and clear of (i) all leases,
licenses and other rights to occupy or use such property and (ii) all Security
Interests, rights of way, easements, restrictions, exceptions, variances,
reservations, covenants or other title defects or limitations of any kind,
except (with respect to all such properties) those set forth on Schedule 4.5
hereto, none of which has a Material Adverse Effect on such property or its
present or contemplated use in the Business. All Equipment is in good operating
and working condition for its continued use as it has been used in the Business.
Section 4.6 Absence of Material Adverse Change; Conduct of Business
Since December 31, 2004, there has been no Material Adverse Effect and there is
no condition, development or contingency of any kind existing or in prospect
which, so far as reasonably can be foreseen at this time, may result in any
Material Adverse Effect to the Business or which would violate Section 6.1
hereof. With the exception of transactions listed on Schedule 4.6, since
December 31, 2004:
(a) Seller has not sold or transferred any assets that are material to the
Business other than in the ordinary course of business;
(b) the has been no labor dispute, strike, union organizational activity
allegation or other similar occurrence which might reasonably be expected to
materially and adversely affect the Business; and
(c) Seller has not taken any actions which would adversely effect the
Financial Statements or any Company Agreements and has not obtained any
information relative to the Financial Statements or any Company Agreements which
has not been disclosed to Purchaser.
Section 4.7 No Undisclosed Liabilities
Seller has not incurred any liabilities or obligations that would both be
required to be reflected or provided for in a Balance Sheet prepared in
accordance with the policies, procedures and methods used to prepare the
Financial Statements.
Section 4.8 No Violations
Except as set forth in Schedule 4.2(ii), Neither the execution, delivery, or
performance of this Agreement by Seller, nor the consummation by Seller of the
transactions contemplated hereby, nor compliance by Seller with any of the
provisions hereof will (a) conflict with or result in any breach of any
provisions of the certificate of incorporation or bylaws of the Seller, (b)
result in a violation, or breach of, or constitute (with or without due notice
or lapse of time) a default (or give rise to any right of termination,
cancellation, vesting, payment, exercise, acceleration, suspension or
revocation) under any of the terms, conditions or provisions of any contract,
agreement or arrangement that is included as an Asset or any material note,
bond, mortgage, deed of trust, security interest, indenture, license, contract,
agreement, plan or other instrument or obligation to which Seller is a party or
by which the properties or Assets related to the Business may be bound or
affected or (c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Seller or the Assets, except in the case of clauses (b)
or (c) for violations, breaches, defaults, terminations, cancellations,
accelerations, creations, impositions, suspensions or revocations that would not
be reasonably likely to have a Material Adverse Effect.
Section 4.9 Absence of Litigation/Legal Matters
Except as set forth on Schedule 4.9 attached hereto and incorporated herein by
this reference verbatim and at length (said Schedule 4.9 having been presented
to Purchaser and its counsel in final form well prior to Closing), (i) there is
no claim, action, suit, litigation, investigation, inquiry, review, or
proceeding pending against, or, to the Best Knowledge of Seller, threatened
against or affecting, Seller in regard, including, but not limited to, the
Business or the Assets, before or by any court, arbitrator, panel, agency or
other governmental, administrative or judicial entity in the United States of
America or elsewhere, and (ii) Seller is not subject to any judgment, decree,
writ, injunction or order of any governmental, administrative or judicial
authority in the United States of America or elsewhere. To the Best Knowledge of
Seller, the Business is being conducted in full compliance with all laws,
ordinances, codes, rules, regulations, standards, judgments, decrees, writs,
rulings, injunctions, orders and other requirements of all governmental,
administrative or judicial entities in the United States of America or elsewhere
(collectively, "Legal Requirements") applicable to the Business and the Assets.
Seller holds all licenses, franchises, permits, registrations, certificates,
consents, approvals, rights or authorizations (collectively "Permits") required
by all applicable Legal Requirements, (iii) Seller owns or holds all Permits
material to the conduct of the Business and (iv) no event has occurred and is
continuing which permits, or after notice or lapse of time or both would permit,
any modification or termination of any Permit or violation of any Legal
Requirement. Seller (A) has not received any notice asserting any noncompliance
with any Legal Requirements or Permit, or (B) is not subject to any Legal
Requirements or Permit which if enforced against or complied with by Seller
would have a Material Adverse Effect on the Business. No governmental,
administrative or judicial authority has given notice of any intention to
initiate any investigation, inquiry or review involving Seller or the Business.
5
Section 4.10 Labor Relations
Seller has paid or made provision for the payment of all salaries and accrued
wages and has complied in all respects with all applicable laws, rules and
regulations relating to the employment of labor, including those relating to
wages, hours, collective bargaining and the payment and withholding of taxes,
and has withheld and paid to the appropriate government authority, or is holding
for payment not yet due to such authority, all amounts required by law or
agreement to be withhold from the wages or salaries of its employees, as any of
such relates to the Business. If applicable, Seller has filed all necessary
documents and obtained all necessary approval in connection with claiming
Targeted Job Credits under Section 51 of the Internal Revenue Code of 1986, as
amended (the "Code"), and true and complete copies of all written Company
Agreements relating to the participation by Seller in any targeted job program
have heretofore been made available or delivered to Purchaser. There are no
controversies pending or threatened between Seller and any labor union or other
collective bargaining unit representing any employees of Seller or other
employees of Seller. Except as set forth on Schedule R hereto, (i) no union or
other collective bargaining unit has been certified or recognized by Seller as
representing any of their employees and (ii) during the past ten (1) years, (A)
no strike, work stoppage, slowdown or similar labor disruption has been
recommended by any labor union or collective bargaining unit representing any
employees of Seller; (B) nor has the membership of such union or unit voted on
any call for a strike, work stoppage, slowdown or similar labor disruption; (C)
nor has any strike, work stoppage, slowdown or similar labor disruption occurred
with respect to such employees and (D) no lawsuit, claim or other proceeding or
cause of action has occurred between the Seller and any employee which has not
been set forth on Schedule 10.
Section 4.11 Employment
Set forth on Schedule 4.11 attached hereto and incorporated herein by this
reference verbatim and at length is a true and complete list (relating to the
Business) of:
(a) each stock purchase, option, stock ownership, deferred compensation,
performance, bonus, incentive, expense reimbursement, vacation pay, holiday pay,
insurance, severance, retirement, excess benefit or other plan, trust,
arrangement or standard policy with respect to the Seller's employees, whether
written or oral, which Seller maintains or to which Seller is required to make
contributions;
(b) each other agreement, arrangement, commitment, understanding or
dispute of any kind, whether written or oral, with any current or former
employee or associate of Seller pursuant to which payments may be required to be
made at any time following the date hereof (including, without limitation, any
employment, deferred compensation, severance, supplemental pension, termination
or consulting agreement or other arrangement);
True and complete copies of all of the written plans, arrangements and
agreements referred to on Schedule 4.11 ("Compensation Commitments"), and all
employee or employment policy manuals relating to employees of Seller have
heretofore been delivered to Purchaser together with, where prepared by or for
Seller, any valuation, actuarial or other financial reports with respect to each
Compensation Commitment for the last five (5) years. An accurate and complete
written summary has been provided to Purchaser with respect to any Compensation
Commitment which is unwritten.
(c) Each Compensation Commitment:
(i) has been operated, since its inception, in accordance with its
terms;
(ii) is not currently under investigation, audit or review by the
Internal Revenue Service and/or the United States Department of Labor, and, to
the Best Knowledge of Seller, no such action is contemplated or under
consideration;
(iii) has no liability for any federal, state, local or foreign
taxes;
(iv) has no claims subject to dispute or litigation except as
disclosed on Schedule Q hereof;
(v) has met all material applicable requirements, if any, of the
Code; and
(vi) has operated since its inception in material compliance with
the reporting and disclosure requirements imposed under any Legal Requirements
and the Code.
Section 4.12 Taxes
Seller, and for any period during all or part of which the tax liability of any
other corporation or other entity was determined to be on a combined or
consolidated basis with Seller, such other corporation or other entity (as such
relates to the Business), have timely filed all federal, state, local and
foreign tax returns, information reports and declarations required to be filed
(or have obtained or timely applied for an extension with respect to such
filing(s) and have disclosed same to Purchaser) and have paid, or made adequate
provision for the payment of, all Taxes (as defined below) which are due
pursuant to said returns or pursuant to an assessment(s) received by Seller or
any such other corporation or entity. As used herein, "Taxes" shall mean all
taxes, fees, levies or other assessments including, but not limited to, income,
excise, property, sales, use, franchise, foreign, withholding, Social Security
and unemployment taxes imposed by the United States, any state, county, local or
foreign government or any agency or subdivision thereof or taxing authority
therein, and any interest, penalties or additions to tax relating to such taxes,
charges, fees, levies or other assessments.
Section 4.13 Inventories and Deferred Services
The values at which Seller's inventories and deferred services to be performed
are carried on the Financial Statements reflect the normal inventory valuation
and contract valuation policies of Seller and such values are in conformity with
GAAP, consistently applied.
Section 4.14 Insurance
All of Seller's Assets utilized in the Business which are of an insurable
character are insured by Seller against loss or damage by fire and other risks
to the extent and in the manner customary for companies engaged in similar
businesses or owning similar assets. Set forth on Schedule 4.14 attached hereto
and incorporated herein by this reference verbatim and at length is a list of
all policies for such insurance and Seller previously have furnished to
Purchaser true and complete copies of all such policies. All such policies are
in full force and effect and Seller represent that they have not received any
notification of cancellation or claim with respect thereto.
Section 4.15 Binding Nature
This Agreement shall be, when duly executed and delivered, a legally binding
obligation of the Seller enforceable in accordance with its terms.
Section 4.16 Non-Merger and Survival
The representations and warranties of Seller contained herein will be true at
and as 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 Purchaser, the representations and
warranties of Seller shall survive the Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser represents and warrants that as of the date hereof and as of the
Closing Date, the following representations shall be true and correct and in
full force and effect:
Section 5.1 Organization and Good Standing
Veridium and EnviroSafe are corporations duly organized, validly existing and in
good standing under the laws of the State of Delaware and Massachusetts,
respectively, and have the corporate power and authority to operate and to carry
on its business as now being conducted. Purchaser is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where qualification as a foreign corporation or otherwise is required to conduct
the Business.
Section 5.2 Authority, Approvals and Consents
Purchaser has the corporate power and authority to enter into this Agreement and
to perform their obligations hereunder. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized and validly approved by the Board of Directors of
Purchaser and by their respective stockholders and no other corporate or other
proceedings on the part of Purchaser are necessary to authorize and approve this
Agreement and the transactions contemplated hereby. Purchaser hereby expressly
represents that they have fully and properly complied with all aspects of
applicable Delaware and Massachusetts, as relevant, corporate law in entering
into this Agreement and for consummating the transactions contemplated
hereunder. This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
Section 5.3 Consents and Approvals
No consent, approval, or authorization of, or declaration, filing, or
registration with, any Governmental Entity will be required to be made or
obtained by Purchaser in connection with the execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby.
Section 5.4 Binding Nature
This Agreement shall be, when duly executed and delivered, a legally binding
obligation of the Seller enforceable in accordance with its terms.
Section 5.5 Non-Merger and Survival
The representations and warranties of Purchaser contained herein will be true at
and as 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 Seller, the representations and
warranties of Purchaser shall survive the Closing.
Section 5.6 Indemnity
Purchaser agrees to indemnify and save harmless Seller 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 Purchaser to defend any such
claim), resulting from the breach by it of any representation or warranty made
under this Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished by Purchaser to
Seller hereunder.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business by the Seller Pending the Closing.
The Seller hereby covenants, represents and warrants to the Purchaser that
pending completion of the Closing unless otherwise agreed to in writing by the
Purchaser:
(a) the Seller shall not engage in any sale, enter into any transaction,
contract or commitment, incur liability or obligation or make any disbursement
not in the ordinary course of the Business, including, without limitation, the
payment, of any kind and in any amount, to the Seller's shareholders (or their
affiliates), and the declaration and/or payment of any dividends, purchase,
redemption or other distributions with respect to the Seller's capital stock;
(b) the Seller shall carry and continue in force through the Closing, all
existing insurance coverages including without limitation to theft, liability
and other insurance as set forth in Schedule 6.1(b). For any loss occurring
between the date of this Agreement and the Closing Date, the parties rights and
liabilities thereunder shall be determined as follows:
(i) Casualty Prior to Closing. The risk of any loss, destruction or
other damage, other than ordinary wear and tear, between the date of execution
hereof and the completion of the Closing, shall be solely that of the Seller. If
before the completion of the Closing, any of the Seller's machinery or equipment
which is the subject of this Agreement is damaged by fire, casualty or any other
cause: (A) if the replacement or repair cost is $10,000 or more, the Purchaser
may either: (x) terminate this Agreement without liability or (y) complete the
Closing hereunder in which event the Purchaser shall be entitled to a credit to
the insurance proceeds arising with respect to such damage, and (B) if such
replacement or repair cost, as the case may be, is less than $10,000, the
Purchaser shall be obligated to complete the Closing hereunder and shall be
entitled to the insurance proceeds arising with respect to such damage.
(c) the Seller shall not amend, modify or terminate any agreement related
to the Business to which it is a party except in the ordinary course of
business;
(d) the Seller shall use its best efforts to preserve the Business and
maintain all of its equipment and records in good order and keeping the same
available for the Purchaser and further to preserve for the Purchaser the
goodwill of suppliers, customers and others having business relationships with
the Seller; and,
(e) the Seller shall give the Purchaser prompt notice of all events prior
to Closing which may materially relate to any term of this Agreement.
Section 6.2 Access and Information
The Seller shall afford to the Purchaser and to the Purchaser's financial
advisors, legal counsel, accountants, consultants, financing sources and other
authorized representatives reasonable access during normal business hours
throughout the period prior to the Closing Date to the books, records,
properties and personnel of the Seller, the Selling Subsidiaries and the
Transferred Subsidiaries relating to the Business and, during such period, shall
furnish reasonably promptly to the Purchaser such information as the Purchaser
reasonably may request. All such information disclosed to the Purchaser shall
remain subject to the Confidentiality Agreement. Without limitation of the other
provisions of this Section 6.2, the Seller shall permit the Purchaser or its
consultant, in accordance with a mutually acceptable confidentiality agreement
entered into by the Purchaser, the Seller and, if relevant, the Purchaser's
consultant, to migrate any data concerning the Business which the Purchaser
shall deem appropriate onto a server maintained by the Purchaser or its
consultant but using the Purchaser's software programs. It is the Purchaser's
intent that if the Closing shall occur, the Purchaser shall have immediate
access to such migrated data in order to operate the Business and comply with
the Purchaser's reporting obligations for the combined operations of the
Purchaser and the Business under applicable securities laws. If the Closing
shall not occur, such consultant shall destroy all of such migrated data in
compliance with such confidentiality agreement.
Section 6.3 Additional Matters
Subject to the terms and conditions herein provided, each of the parties hereto
agrees to use all reasonable best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
Section 6.4 Additional Financial Information
On or prior to the Closing Date, the Purchaser shall have received from the
Seller the Financial Statements as of December 31, 2004, December 31, 2003, and
December 31, 2002. The Seller will provide the Purchaser with monthly Financial
Statements and income statements for the Business as prepared in the ordinary
course and consistent with past practice by the finance and accounting staff of
the Business for each month after December 2004 until the Closing for which the
Seller has closed the accounting books of the Business, which statements shall
be delivered within forty-five (45) days after each such closing.
Section 6.5 Indemnification
The Parties shall indemnify each other as set forth below:
(i) Seller shall indemnify and hold harmless Purchaser and each of
its affiliates or other related entities from and against any and all losses,
damages, liabilities and claims (including legal fees and costs) arising out of,
based upon or resulting from any inaccuracy as of the date hereof or as of the
Closing Date of any representation or warranty of Seller which are contained in
or made pursuant to this Agreement or any breach by Seller of any obligations
contained in or made pursuant to this Agreement including, without limitation,
with respect to all liabilities, commitments and obligations of Seller.
(ii) Purchaser shall indemnify and hold harmless Seller from any and
all losses, damages, liabilities and claims arising out of, based upon or
resulting from any inaccuracy as of the date hereof or as of the Closing Date of
any representation or warranty of Purchaser which is contained in or made
pursuant to this Agreement or any breach by Purchaser of any of its obligations
contained in or made pursuant to this Agreement.
(iii) As a material inducement to Purchaser entering into and
consummating the transaction contemplated hereunder, Seller does hereby agree to
hold Purchaser completely free and harmless and indemnify Purchaser from and
against any and all claims which Seller has or may have against any stockholder,
member, director, officer, agent or other Person related to Seller whatsoever.
Purchaser shall have no obligation whatsoever to participate in any litigation
or other action between Seller and any stockholder, member, director, officer,
agent or other Person related to Seller, and if Purchaser is forced to
participate in any such action, Seller shall be solely responsible for any and
all costs incurred by Purchaser in connection therewith, including, without
limitation, all economic costs incurred by Purchaser and payment of reasonable
attorneys fees and costs.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions Precedent in Favor of the Seller
The obligation of Seller to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing Date of the following additional conditions:
(a) the Purchaser shall have performed in all material respects its
obligations under this Agreement required to be performed by the Purchaser at or
prior to the Closing Date; and,
(b) each of the representations and warranties of the Purchaser contained
in this Agreement shall be true and correct as of the Closing Date as if made at
and as of such date, except where the failure of such representation and
warranty to be true and correct would not have a material adverse effect on the
Purchaser or the transactions contemplated by this Agreement.
The conditions precedent set out in this section are inserted for the exclusive
benefit of Seller and any such condition may be waived in whole or in part by
Seller at or prior to the Closing by delivering to Purchaser a written waiver to
that effect signed by Seller. In the event that the conditions precedent set out
in this section are not satisfied on or before the Closing, Seller shall be
released from all obligations under this Agreement.
Section 7.2 Conditions Precedent in Favor of the Purchaser
The obligation of the Purchaser to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing Date of the following additional conditions:
(a) the Seller shall have performed in all material respects its
obligations under this Agreement required to be performed by the Seller at or
prior to the Closing Date;
(b) each of the representations and warranties of the Seller contained in
this Agreement shall be true and correct as of the Closing Date as if made at
and as of such date;
(c) the Purchaser and ▇▇▇▇ ▇▇▇▇▇▇▇ shall have entered into a mutually
satisfactory employment agreement (attached hereto as Exhibit B);
(d) the successful completion by the Purchaser of that level of due
diligence the Purchaser deems reasonably required;
(g) the Seller's Assets are fee and clear of all perfected, filed and
recorded liens, charges and encumbrances except those noted in Schedule 2.2. The
instruments of assignment, transfer and ▇▇▇▇ of sale of Seller's Assets to the
Purchaser will comply in all respects with the terms of this Agreement and are
sufficient to vest in the Purchaser all of the Seller's right, title and
interest in respect to all of the Seller's Assets being sold and/or transferred
hereunder; and,
(h) Opinion of Sellers' Counsel. Purchaser shall have been furnished with
the opinion of Hermes, Netburn, ▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. attorneys at law,
counsel for Seller, dated the Closing Date, in form and substance satisfactory
to Purchaser and Purchasers' counsel, as to the following (i) the good standing
and authority of Seller to carry on the Business and own the Assets, (ii) that
all appropriate corporate or business entity actions necessary to complete the
transactions contemplated hereunder have been taken, (iii) Seller's proper
execution and delivery of this Agreement, the schedules hereto and any other
documents required or necessary hereunder and the validity and binding legal
effect thereof and of Seller's obligations hereunder, (iv) Seller's good and
marketable title to the Assets, (v) disclosure of litigation, proceedings or
investigations pending or threatened against Seller or which Seller's counsel is
aware, (vi) that this Agreement does not violate any other agreement of which
Seller's counsel is aware, and (vii) that the documents conveying title to
Seller's interest in the Assets are valid and legally binding. In rendering the
foregoing opinions, such counsel may rely as to factual matters upon
certificates or other documents furnished by officers and directors of Purchaser
and by government officials and upon such other documents and data as such
counsel deems appropriate as a basis for their opinions. Such counsel may
specify the jurisdiction or jurisdictions in which they are admitted to
practice, that they are not admitted to the Bar in any other jurisdiction or
experts in the law of any other jurisdiction and that such opinions are limited
accordingly. If such counsel is not authorized to practice law in the
Commonwealth of Massachusetts, Purchaser may require Seller's counsel to obtain
an opinion from counsel authorized to practice law in such jurisdiction(s).
The conditions precedent set out in this section are inserted for the exclusive
benefit of Purchaser and any such condition may be waived in whole or in part by
Purchaser at or prior to the Closing by delivering to Seller a written waiver to
that effect signed by Purchaser. In the event that the conditions precedent set
out in this section are not satisfied on or before the Closing, Purchaser shall
be released from all obligations under this Agreement.
Section 7.3 Nature of Conditions Precedent
The conditions precedent set forth in this Article 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 favor of the other party or parties set forth in this Article.
ARTICLE VIII
TERMINATION, AMENDMENT, AND WAIVER
Section 8.1 Termination Events
This Agreement may be terminated at any time prior to the Closing Date as
follows:
(a) by mutual written agreement of the Purchaser and the Seller;
(b) by the Seller (provided that the Seller is not then in material breach
of any representation, warranty, covenant or other agreement contained herein
for which the Purchaser shall have previously notified the Seller), if there has
been a breach by the Purchaser of any of its representations, warranties,
covenants or agreements contained in this Agreement, or any such representation
and warranty shall have become untrue, and such breach or condition has not been
promptly cured within 30 days following receipt by the Purchaser of written
notice of such breach;
(c) by the Purchaser (provided that the Purchaser is not then in material
breach of any representation, warranty, covenant or other agreement contained
herein for which the Seller shall have previously notified the Purchaser), if
there has been a breach by the Seller of any of its representations, warranties,
covenants or agreements contained in this Agreement, or any such representation
and warranty shall have become untrue, and such breach or condition has not been
promptly cured within 30 days following receipt by the Seller of written notice
of such breach; and,
(d) by the Purchaser (provided that the Purchaser is not then in material
breach of any representation, warranty, covenant or other agreement contained
herein) at or prior to the Closing Date, if the Purchaser is not satisfied with
its due diligence review of the Business.
Section 8.2 Effect of Termination and Abandonment
In the event of termination of this Agreement pursuant to this Article VIII,
written notice thereof shall be given as promptly as practicable to the other
party to this Agreement and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by any of the
parties hereto. If this Agreement is terminated as provided herein (a) there
shall be no liability or obligation on the part of the Seller, the Purchaser, or
their respective officers, directors and Affiliates, and all obligations of the
parties shall terminate, except for (i) the obligations of the parties pursuant
to the Confidentiality Agreement, and (ii) that a party that is in material
breach of its representations, warranties, covenants, or agreements set forth in
this Agreement shall be liable for damages occasioned by such breach, including
without limitation any expenses, including the reasonable fees and expenses of
attorneys, accountants and other agents, incurred by the other party in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that the Purchaser shall not be deemed to be in material
breach of this Agreement solely by reason of its inability to satisfy one or
more of the conditions set forth in Section 7.2 if the Purchaser is attempting
to satisfy such conditions in good faith.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Expenses
Each of the Parties hereto shall pay its own fees and expenses (including the
fees of any attorneys, accountants, or others engaged by such Party) in
connection with this Agreement and the transactions contemplated hereby whether
or not the transactions contemplated hereby are consummated.
Section 9.2 Notices
All notices, claims, demands, and other communications hereunder shall be in
writing and shall be deemed given upon (a) confirmation of receipt of a
facsimile transmission, (b) confirmed delivery by a standard overnight carrier
or when delivered by hand, or (c) the expiration of five (5) business days after
the day when mailed by registered or certified mail (postage prepaid, return
receipt requested), addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
(a) If to the Purchaser, to:
Veridium Corporation
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, President and Chief Executive Officer
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Sonageri & Fallon, PC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
and,
(b) If to the Seller, to:
North Country Environmental Services, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
with a copy to:
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Esq.
Hermes, Netburn, ▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 9.3 Assignments
This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and
permitted assigns; provided, however, that neither this Agreement nor any of the
rights, interests, or obligations hereunder may be assigned by any of the
Parties hereto without the prior written consent of the other Party, except that
this Agreement and such rights, interests and obligations may be assigned by
Purchaser to one (1) or more Affiliates. Purchaser agrees that any such
assignment shall not relieve Purchaser of its obligations hereunder.
Section 9.4 Entire Agreement
This Agreement (including the Schedules and any Exhibits hereto) embodies the
entire agreement and understanding of the Parties with respect to the
transactions contemplated hereby and supersedes all prior written or oral
commitments, arrangements, understandings and agreements with respect thereto.
There are no restrictions, agreements, promises, warranties, covenants or
undertakings with respect to the transactions contemplated hereby other than
those expressly sat forth herein.
Section 9.5 Modifications, Amendments and Waivers
At any time prior to the Closing, to the extent permitted by law, (i) Purchaser
and Seller may, by written agreement, modify, amend or supplement any term or
provision of this Agreement and (ii) any term or provision of this Agreement may
be waived in writing by the Party which is entitled to the benefits thereof.
Section 9.6 Counterparts
This Agreement may be executed in two (2) or more counterparts, all of which
shall be considered one (1) and the same agreement and each of which shall be
deemed an original. Each Party shall receive a fully signed copy of this
Agreement.
Section 9.7 Governing Law
This Agreement shall be governed by the laws of the State of New Jersey and the
United States of America (regardless of the laws that might be applicable under
principles of conflicts of law or international law) as to all matters
including, but not limited to, matters of validity, construction, effect and
performance.
Section 9.8 Accounting Terms
All accounting terms used herein which are not expressly defined in this
Agreement shall have the respective meanings given to them in accordance with
generally accepted accounting principles on the date hereof.
Section 9.9 Specific Performance
Purchaser and Seller recognize that any breach of the terms this Agreement may
give rise to irreparable harm for which money damages would not be an adequate
remedy, and accordingly agree that any non-breaching party shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy as a remedy of money damages. If
specific performance is elected as a remedy hereunder, the electing Party shall
be deemed to have waive any claim for other damages, except reasonable attorneys
fees, costs of suit and expenses related to the enforcement of specific
performance.
Section 9.10 Consent to Jurisdiction
Seller and Purchaser hereby submit and consent to the exclusive venue and
jurisdiction of the Superior Court of the State of New Jersey, County of Bergen,
in respect of the interpretation and enforcement of the provisions of this
Agreement, and hereby waive and agree not to assert as a defense in any action,
suit or proceeding for the interpretation or enforcement of this Agreement, that
it is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that this Agreement may not be
enforced in or by said courts or that its property is exempt or immune from
execution, that the suit, action or proceeding is brought in an inconvenient
forum, or that the venue of the suit, action or proceeding is improper. Seller
and Purchaser agree that service of process may be made in any manner permitted
by the laws of the State of New Jersey or the federal laws of the United States
in any such action, suit or proceeding against Seller or Purchaser with respect
to this Agreement, and Seller and Purchaser hereby irrevocably designate and
appoint ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Esq., and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., as their respective
authorized agents upon which process may be served in any such action, suit or
proceeding, it being understood that such appointment and designation shall
become effective without any further action on the part of Seller or Purchaser.
Service of process upon such authorized agent shall be deemed, in every respect,
effective service of process upon Seller or Purchaser and shall remain effective
until Seller or Purchaser shall appoint another agent for service or process
acceptable to the other Party. Seller and Purchaser agree that final judgment
(with all right of appeal having expired or been waived) against it in any such
action, suit or proceeding shall be conclusive and that the other Party is
entitled to enforce such judgment in any other jurisdiction by suit on the
judgment, a certified copy of which shall be conclusive evidence of the fact and
amount of indebtedness arising from such judgment.
Section 9.11 U.S. Currency
All payments made under this Agreement at any time shall be made in the lawful
currency of the United States of America.
Section 9.12 Risk of Loss
(i) The risk of loss or damage to the Assets to be sold to Purchaser
hereunder shall be borne by Seller until title or right to possession shall have
passed to Purchaser on the Closing Date.
(ii) If, prior to the Closing Date, any of the Assets shall be
damaged or destroyed, the Purchase Price shall be adjusted for the value of the
Assets so damages or destroyed and in such case Seller shall be solely entitled
to any insurance proceeds paid or payable thereon.
(iii) If, prior to the Closing Date, any of the Assets shall be
damaged or destroyed or taken in condemnation proceedings or if the Business is
materially affected to an extent which will materially adversely affect
operations similar to those heretofore carried on by Seller, Purchaser, at its
option, may (A) elect to become entitled to any proceeds of condemnation or
insurance with respect to such loss or (B) cancel this Agreement. If so
canceled, this Agreement will be of no force and effect, and in such event no
Party hereto, or any of its officers, directors, employees, agents, consultants,
stockholders or principals shall have any further liability obligation hereunder
with respect thereto other than as specified herein.
Section 9.13 Transfer Documents
Seller agrees that the sale and transfer hereunder of the Assets shall be made
on the Closing Date, as of the Closing Date, by bills of sale, assignments or
other instruments of transfer as shall be appropriate to vest in Purchaser good,
clear and marketable title to the Assets subject to liabilities expressly
assumed by Purchaser pursuant to Section 2.3. From and after the Closing Date,
upon the request of Purchaser, Seller shall do, execute, acknowledge and deliver
all such further acts, assignments, transfers, instruments and conveyances as
may reasonably be required to convey to and vest in Purchaser and protect its
right, title and interest in and enjoyment of any of the Assets, and as may be
appropriate to otherwise carry out the transactions contemplated by this
Agreement. To the extent that the assignment of any of the Assets shall require
the consent of other parties, this Agreement shall not constitute an assignment
or agreement to assign the same if such action would constitute a breach of any
contract or agreement relating to any of the Assets. Each of Seller and
Purchaser agree to use its Best Efforts to obtain the consents of other parties
to the sale and assignment hereunder to Purchaser. If any such consent is not
obtained, Seller and Purchaser shall cooperate with each other in a reasonable
arrangement designed to provide for Purchaser the benefits thereof and to permit
the performance of remaining unfulfilled obligations thereunder by Purchaser.
Failure of a Party to cooperate shall be actionable to the extent that said
Party is responsible for act or omission complained of by the other Party.
Section 9.14 Allocation of Purchase Price
The Parties shall allocate the Purchase Price as their respective accountants
shall mutually determine and shall execute and file identical IRS Forms 8594,
Asset Acquisition Statement under Section 1060, of the Internal Revenue Code of
1986, as amended.
Section 9.15
THE PARTIES ACKNOWLEDGE THAT THEY HAVE EACH RECEIVED A COPY OF THIS
AGREEMENT, THAT THEY HAVE READ AND FULLY UNDERSTAND THIS AGREEMENT, AND THAT
THEY HAVE BEEN ADVISED TO SEEK AND HAVE EITHER SOUGHT OR WAIVED INDEPENDENT
LEGAL COUNSEL OF THEIR CHOICE TO AID IN THEIR UNDERSTANDING HEREOF.
Section 9.16 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors, legal representatives and
assigns.
Section 9.17 Parties in Interest
Nothing in this Agreement, express or implied, is intended to confer upon any
Person not a Party to this Agreement any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 9.18 Furnishing Information; Announcements
Sellers shall not issue any press releases or otherwise make any statement,
public or otherwise, to any third party with respect to the transactions
contemplated hereby without the prior written consent of Purchaser. Any
notification of Sellers' employees of the transactions contemplated hereby shall
be subject to prior approval by Purchaser. Any notices or other information to
be disseminated shall be submitted to Purchaser prior to distribution or
dissemination.
Section 9.19 Force Majeure
Neither Party hereto shall be liable for failure to perform any obligation under
this Agreement if such failure to perform is caused by the occurrence of any
contingency beyond the reasonable control of such Party, including, without
limitation, fire, flood, strike or other industrial disturbance, failure of
transport, accident, war, riot, insurrection, act of God or order of
governmental agency or act of terrorism. Performance shall be resumed as soon as
is possible after cessation of such cause. However, if such inability to perform
continues for more than Ninety (90) days, the other Party may terminate this
Agreement without penalty and without further notice.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
VERIDIUM CORPORATION
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
---------------
▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
ENVIROSAFE CORPORATION
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
---------------
▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
NORTH COUNTRY ENVIRONMENTAL SERVICES, INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------
▇▇▇▇ ▇▇▇▇▇▇▇
President
NCES EQUIPMENT COMPANY, INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------
▇▇▇▇ ▇▇▇▇▇▇▇
President