Exhibit 10.1
ASSET PURCHASE AGREEMENT
by and between
▇▇▇▇▇▇▇▇ ENVIRONMENTAL GROUP, INC.,
as Seller,
and
VERIDIUM CORPORATION,
and
ENVIROSAFE CORPORATION,
collectively, as Purchaser,
Dated as of June 30, 2005
V.6.16.05
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of the 30th day of
June, 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:
▇▇▇▇▇▇▇▇ ENVIRONMENTAL GROUP, INC., a company formed
pursuant to the laws of the State of Rhode Island and having
an office for business located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (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,
utilizing its own employees and the services of subcontractors, through the
operation of a service center in Warwick, Rhode Island (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.
(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" has the meaning set forth in the Preamble.
(d) "Assumed Liabilities" has the meaning set forth in Section 2.3.
(e) "Balance Sheet" means the balance sheet of the Business as referred to
in Section 4.4.
(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.
(j) "Financial Statements" has the meaning set forth in Section 4.5.
(k) "GAAP" means United States generally accepted accounting principles as
in effect from time to time.
(l) "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.
(m) "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).
(n) "Purchase Price" has the meaning set forth in Section 2.5
(o) "Purchaser" has the meaning set forth in the Preamble.
(p) "Seller" has the meaning set forth in the Preamble.
(q) "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 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.
Section 1.5 Joint and Several Obligations of Veridium and Envirosafe
The obligations of each of Veridium and Envirosafe as Purchasers under this
Agreement shall be joint and several.
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, save for those associated with liabilities
identified in Section 2.3, and the Purchaser shall purchase and accept from the
Seller the assets of the Seller as are listed on Schedule 2.1 and as hereinafter
described (collectively, the "Seller's Assets") on an "AS IS, WHERE IS"
condition, including, but not limited to, the personal property and equipment
("Equipment"), customer contracts, to the extent assignable ("Customer
Contracts"), material contracts, to the extent assignable ("Material
Contracts"), accounts receivable ("Accounts Receivable"), as each is listed in
Schedule 2.1 as is attached hereto, and any cash on hand in excess of Ten
Thousand Dollars [need to discuss tax consequences]. The Seller's Assets shall
not include those excluded assets listed on Schedule 2.1 ("Excluded 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 in connection with the Assumed Liabilities.
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, including without limitation the following ("Assumed Liabilities"):
(a) any and all obligations pursuant to the Bank RI Line of Credit, as
defined on Schedule 2.3 in the approximate amount of $110,000 (which
amount is to be paid off at the Closing hereof);
(b) any and all obligations pursuant to the encumbrances which have been
personally guaranteed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as are listed on Schedule 2.3
("▇▇▇▇▇▇▇▇ Liabilities")(which amount is to be paid off at the Closing
hereof); and
(c) any and all other 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
miscellaneous expenses (accrued prior to the Closing) associated with
the Business, including, but not limited to, the Lease and Accounts
Payable, as each is defined on Schedule 2.1, utilities, and phone
expenses.
Section 2.4 Purchase Price
In consideration for the Seller's Assets, the Purchaser shall: (a) pay to Seller
at the Closing the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000) in cash by
wire transfer of immediately available funds ("Cash Payment"; (b) pay off, or
provide Seller with immediately available funds to pay off: (i) any and all
liabilities associated with the Bank RI Line of Credit and (ii) any and all
liabilities associated with the ▇▇▇▇▇▇▇▇ Liabilities at the Closing in cash by
wire transfer of immediately available funds ("Pay-Offs of Guaranteed
Liabilities";(c) issue to Seller at Closing a five year option to purchase ONE
MILLION FIVE HUNDRED THOUSAND (1,500,000) shares of Veridium common stock at an
exercise price per share equally to the closing market price of Veridium common
stock on the date of the closing, a form of which is attached hereto as Exhibit
F ("Option"); and (d) issue to Seller additional options pursuant to which
Seller shall have the right to purchase FIVE HUNDRED THOUSAND (500,000) shares
of Veridium common stock on each of the first, second and third anniversary of
the Closing (providing a right to purchase ONE MILLION FIVE HUNDRED THOUSAND
(1,500,000) shares in the aggregate), at an exercise price per share equally to
the closing market price of Veridium common stock on the date of the closing for
each grant, and said right to purchase shares of common stock shall be
exercisable for a period of five (5) years from the date of grant.
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 July 15, 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 bills of sale, substantially in the form of Exhibit
A attached hereto, transferring Seller's Assets to Purchaser;
(ii) an employment agreement, substantially in the form of Exhibit B
attached hereto, duly executed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(iv) Seller's Assets, 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 to all of the Assets
and assignments of all Company Contracts, a list of which is
provided on Schedule 2.1 attached hereto, to the extent that such
contracts are assignable, 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 (or pay
directly to those to whom Seller is obligated):
(i) the cash portion of the Purchase Price (both Cash Payment and
Pay-Offs of Guaranteed Liabilities) by wire transfer in
immediately available funds paid directly to Bank RI in
accordance with the Purchase Price provisions hereof;
(ii) warrants to purchase 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, at the expense of Veridium, 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
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Rhode Island and has the corporate power and
authority to own, lease and operate the Seller's Assets as used in the Business
and to carry on the Business as now being conducted. Other than is specified in
Schedule 4.1, Seller 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 4.2 Authority, Approvals and Consents
Seller has the corporate power and authority to enter into this Agreement and to
perform its 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 it
has fully and properly complied with all aspects of applicable Rhode Island
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.
Furthermore, other than is listed on Schedule 4.2, 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 hereinbelow).
Section 4.3 Financial Information
Schedule 4.3 contains an unaudited Statement of Assets and Liabilities and a
Statement of Revenue and Expenses prepared, on a tax basis, by Seller for the
Business as of December 31, 2004 (the "Financial Statements") on a compilation
basis [obtain]. 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 4.3 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. 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 4.4 Title to Personal Property and Assets
The Seller's Assets comprise all of the material property and assets of the
Business, and no other person, firm or corporation owns any material assets used
by Seller or its subsidiaries in operating the Business, whether under a lease,
rental agreement or other arrangement. The sale of the Sellers' Assets by Seller
pursuant hereto will effectively convey to Purchaser all of the Assets,
including all tangible and intangible assets and properties of Seller. Unless
expressly designated otherwise herein, Seller has good, clear and marketable
title to all of the Seller's Assets and to all other properties reflected on the
Financial Statements or acquired after the date thereof (other than properties
and assets sold or otherwise disposed of after the date thereof in the ordinary
course of business), and, unless otherwise specified in this Agreement, 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, none of which has a material adverse
effect on such property or its present or contemplated use in the Business.
Except as is indicated on Schedule 2.1, all Equipment has been properly
maintained and is, given its age and subject to normal wear and tear, in good
operating and working condition for its continued use as it has been used in the
Business. The accounts and notes receivable reflected in the Financial
Statements, or thereafter acquired or incurred by Seller, arose in the ordinary
course of business. None of such accounts receivable is subject to any
counterclaim or setoff and, to the Seller's knowledge, are valid and current
receivables of Seller, collectible in the ordinary course of business, and the
Seller has no reason to believe that such accounts will not, assuming collection
efforts consistent with past practice, be collected in accordance and in amounts
consistent with past practices.
Section 4.5 No Undisclosed Liabilities
To its knowledge, Seller has complied with Rhode Island laws and regulations
regarding the operation of its Business. 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 4.6 Taxes
Seller has accurately prepared and timely filed with the appropriate taxing
authorities all Federal, state, local and other Tax returns required to be filed
by such Company (and any predecessors). All such Tax returns were correct and
complete in all material respects. All Taxes that Seller is required by law to
withhold or collect have been withheld or collected and have been paid over to
the proper governmental authorities or are properly held by Seller or a
depository for appropriate payment. All such taxes are and will be so withheld,
collected, paid over or held for payment as of the date of this Agreement and
the Closing Date
Section 4.7 No Violations
Unless otherwise expressly stated herein, 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 a Seller's 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 Seller's 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 Seller's 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 4.8 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 4.9 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 for a period of six (6) months;
provided that liability with respect to any representation, warranty, covenant
or obligation as to which a claim, or notice of a proposed claim, is made in
writing on or before the expiration of such six (6) month period, shall continue
until finally determined and paid.
Section 4.10 Indemnity
Subject to the provisions of Section 6.2 as well as the limitations contained in
Section 6.1, Seller agrees to indemnify and save harmless Purchaser 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 Seller 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 Seller
to Purchaser hereunder.
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 their businesses 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 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. Notwithstanding the
foregoing, the right of the Purchaser to indemnification under
this Section 6.1 above shall be subject to the time limitations
set forth in Section 4.9 as well as the limitations below. No
indemnification shall be payable to the Purchaser unless and
until the total of all claims for indemnification pursuant to
this Section shall exceed $10,000 in the aggregate (the
"Threshold") and, in the event that the total of all claims of
the Purchaser exceeds the Threshold, the Purchaser shall be
entitled to payment and indemnity for the amount of such claims
in excess of $10,000. In addition, the aggregate liability of the
Seller pursuant to Section 6 shall not exceed $100,000 (excluding
losses arising from fraud on the part of Seller). Finally,
neither Party shall have any liability in connection with this
Agreement by reason of any inaccuracy of a representation or
warranty if, and to the extent that, the other party has actual
knowledge of such inaccuracy as of the Closing Date, and such
other party elects, nevertheless, to consummate the transactions
contemplated hereby. For purposes of this Section, a party shall
be deemed to have actual knowledge that a representation or
warranty was inaccurate if such inaccuracy was disclosed to such
party, or if any studies, tests, reports, or analyses prepared by
or for the Party or any of its employees, agents, representatives
or attorneys contains information that contradicts such
representation or warranty or contains information that would
make such representation or warranty inaccurate.
(ii) Purchaser shall indemnify and hold harmless Seller and ▇▇▇▇▇
▇▇▇▇▇▇▇▇, individually, 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, or agent of 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.
Section 6.2 Exclusive Remedy
The Parties acknowledge and agree that the foregoing indemnification provisions
in this Section shall be the exclusive remedy of the Purchaser and the Seller
with respect to breaches of any representations or warranties contained in this
Agreement as well as any other breach by Seller or Purchaser of any obligations
contained in or made pursuant to this Agreement including, without limitation,
with respect to all liabilities, commitments and obligations.
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) save for encumbrances arising from liabilities specified in Section
2.3(b) and (c), the Seller's Assets are fee and clear of all
perfected, filed and recorded liens, charges and encumbrances. 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) from the date hereof to the Closing Date, except as otherwise
consented to or approved by the Purchaser in writing or as
contemplated by this Agreement: (i) except for borrowings in the
ordinary course of business and consistent with past practice, no
funds shall be borrowed or loaned by Seller nor guaranteed for another
party by Seller; (ii) no capital expenditure exceeding $2,500
individually or $10,000 in the aggregate, shall be incurred or
contracted for by Seller; (iii) except for sales in the ordinary
course of business, Seller shall not sell, lease, mortgage, pledge,
assign, license or otherwise encumber or dispose of any property or
asset; (iv) Seller shall conduct its business in the ordinary course,
in substantially the same manner as conducted to the date hereof, and
shall use its ordinary and traditional efforts to continue to solicit
new customers, to maintain its current customers, to collect and
maintain its Accounts Receivable and payable, to preserve its business
organization and properties intact, to keep available the services of
its employees, and to preserve the goodwill of its customers,
suppliers, lessors and others with whom business relationships exist;
and (v) Seller shall use commercially reasonable efforts to comply
with all laws applicable to it and to the conduct of Seller's
business.
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
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
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, 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. Notwithstanding the
foregoing, Purchaser shall reimburse Seller for any and all reasonable legal and
accounting fees associated with the negotiation and consummation of this
Agreement, the Employment Agreement, and other related documents and filings.
Section 9.2 Paragraph Headings and Language Interpretations
The paragraph headings contained herein are for reference only and shall not be
considered substantive provisions of this Agreement. The use of a singular or
plural form shall include the other form, and the use of a masculine, feminine
or neuter gender shall include the other genders, as applicable.
Section 9.3 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:
▇▇▇▇▇▇▇▇ Environmental Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
with a copy to:
▇▇▇▇▇ ▇. Main, Esq.
Holland and Knight
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Section 9.4 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 9.5 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 9.6 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 9.7 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 9.8 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 9.9 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 9.10 Severability
If any one (1) or more of provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remaining provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party waives any provision of law which
renders any provision of this Agreement invalid, illegal or unenforceable in any
respect.
Section 9.11 Specific Performance
Purchaser and Seller recognize that any breach of the terms of 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 9.12 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 Rhode Island 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 ▇▇▇▇▇ ▇. Main, 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 9.13 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 9.14 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 9.15 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 9.16 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 9.17 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 9.18 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 9.19 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 9.20 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 9.21 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.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
VERIDIUM CORPORATION
By: _______________________
▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
ENVIROSAFE CORPORATION
By: _______________________
▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
▇▇▇▇▇▇▇▇ ENVIRONMENTAL GROUP, INC.
By: _______________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer