ASSET AND STOCK PURCHASE AGREEMENT
BY AND AMONG
TRIUMVIRATE ENVIRONMENTAL, INC.
AND
GS ENVIRO SERVICES, INC.,
ENVIRO-SAFE CORPORATION AND
ENVIRO-SAFE CORPORATION (NE)
March 31, 2008
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Table of Contents
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ARTICLE
I.........................................................................................................1
1.1
Definitions..........................................................................................1
1.2
Other Defined
Terms..................................................................................7
ARTICLE
II........................................................................................................8
2.1
Purchase of
Assets...................................................................................8
2.2
Retained
Assets......................................................................................9
2.3
Liabilities.........................................................................................10
ARTICLE
III......................................................................................................11
ARTICLE
IV.......................................................................................................11
4.1
Purchase
Price......................................................................................11
4.2
Use
of
Proceeds.....................................................................................11
4.3
Allocation of Purchase
Price........................................................................11
4.4
Adjustment to Asset Purchase
Price..................................................................12
ARTICLE
V........................................................................................................13
ARTICLE
VI.......................................................................................................14
6.1
Organization and
Qualification......................................................................14
6.2
Authority; No
Violation.............................................................................14
6.3
Authorized and Outstanding
Stock....................................................................15
6.4
Subsidiaries........................................................................................15
6.5
SEC
Filings; Financial
Statements...................................................................15
6.6
Absence of Undisclosed
Liabilities..................................................................16
6.7
Absence of Certain
Changes..........................................................................17
6.8
Title, Sufficiency and Condition of the Purchased Assets;
Enviro-Safe (NE) Stock....................18
6.9
Real
Estate.........................................................................................18
6.10
Accounts
Receivable.................................................................................19
6.11
Inventories.........................................................................................20
6.12
Intellectual
Property...............................................................................20
6.13
Trade
Secrets and Customer
Lists....................................................................20
6.14
Contracts...........................................................................................21
6.15
Customers...........................................................................................22
6.16
Compliance
with
Laws................................................................................22
6.17
Taxes...............................................................................................23
6.18 Employee Benefit
Plans.............................................................................24
6.19
Environmental
Matters...............................................................................25
6.20
Employees...........................................................................................27
6.21
Litigation..........................................................................................27
6.22
Insurance...........................................................................................27
6.23
Brokers.............................................................................................28
6.24
Burdensome
Agreements...............................................................................28
6.25
Records
and
Books...................................................................................28
6.26
Transactions with Interested
Persons................................................................28
6.27
No Corrupt
Practices................................................................................28
6.28
Disclosure
of Material
Information..................................................................28
ARTICLE
VII......................................................................................................29
7.1
Organization and
Qualification......................................................................29
7.2
Authority; No
Violation.............................................................................29
7.3
Required Filings and
Consents.......................................................................29
7.4
Brokers.............................................................................................29
ARTICLE
VIII.....................................................................................................29
8.1
Covenants of each Company and
Parent................................................................29
8.2
Covenants of the
Buyer..............................................................................35
8.3
Covenants of the Parent, Company and
Buyer..........................................................36
ARTICLE
IX.......................................................................................................36
9.1
Conditions to Obligations of the
Buyer..............................................................36
9.2
Conditions to Obligations of the Company and
Parent.................................................39
ARTICLE
X........................................................................................................40
10.1
Termination of
Agreement............................................................................40
10.2
Effect of
Termination and Right to
Proceed..........................................................41
ARTICLE
XI.......................................................................................................41
11.1
Survival
of Representations and
Warranties..........................................................42
11.2
Indemnification by the Enviro-Safe and
Parent.......................................................42
11.3
Indemnification by the
Buyer........................................................................43
11.4
Notice and
Opportunity to
Defend....................................................................43
11.5
Limitations on Certain Indemnification
Obligations..................................................45
11.6
Treatment
of Indemnification
Payments...............................................................46
ARTICLE
XII......................................................................................................46
12.1
Tax
Indemnity.......................................................................................46
12.2
Tax
Returns.........................................................................................47
12.3
Cooperation, Audits; Tax
Claims.....................................................................48
12.4
Tax
Sharing
Agreements..............................................................................48
12.5
Intentionally
Omitted...............................................................................48
12.6
2008
Estimated
Taxes................................................................................49
ARTICLE
XIII.....................................................................................................49
13.1
Fees and
Expenses...................................................................................49
13.2
Notices.............................................................................................49
13.3
Successors
and
Assigns..............................................................................50
13.4
Counterparts; Descriptive Headings; Variations in
Pronouns..........................................50
13.5
Severability; Entire
Agreement......................................................................50
13.6
Further
Assurances..................................................................................50
13.7
Attorneys'
Fees.....................................................................................51
13.8
Course of
Dealing...................................................................................51
13.9
GOVERNING
LAW.......................................................................................51
13.10 WAIVER OF
JURY
TRIAL................................................................................51
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51
ASSET AND STOCK PURCHASE AGREEMENT
Asset and Stock Purchase Agreement (the "Agreement"), dated as of
March 31,
2008, by and among Triumvirate Environmental, Inc., a Massachusetts
corporation
("TEI" and together with one or more wholly-owned subsidiaries of
TEI, "Buyer");
GS Enviro Services, Inc., a Delaware corporation ("Parent"), Enviro-Safe
Corporation, a Massachusetts corporation and a wholly-owned
subsidiary of Parent
("Enviro-Safe"); and
Enviro-Safe Corporation (NE), a Massachusetts corporation
and a wholly-owned
subsidiary of Parent
("Enviro-Safe
(NE)"; and, at times,
collectively with Enviro-Safe, the "Companies" and individually a
"Company").
Parent owns 100% of the capital stock of Enviro-Safe and
Enviro-Safe (NE),
each of which is an environmental management companies providing services to
a
client base located in the Northeast region of the United States.
Such services
and business
include the provision of industrial waste, transportation,
distribution,
recycling and disposal services; field services for its
clients,
including remedial,
industrial
cleaning and other
related services at their
respective sites and
facilities;
and the operation of a licensed transfer,
storage and
disposal business at Howard Street, Lowell, Massachusetts
(collectively, the "Business").
This
Agreement sets forth
the terms and
conditions upon which
Buyer will
(i) purchase from Enviro-Safe, and Enviro-Safe will sell to Buyer,
substantially
all the assets of Enviro-Safe (other than the Retained
Assets, as hereinafter
defined) including all such assets used by Enviro-Safe in the
Business; and (ii)
purchase from
Parent 100% of the issued and outstanding capital stock of
Enviro-Safe (NE), for the consideration provided herein.
In
consideration of the foregoing, the mutual representations,
warranties
and covenants set forth herein, and for other good and valuable
consideration,
the receipt and
sufficiency of which
are hereby
acknowledged, the
parties to
this Agreement hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1
Definitions. For the
purposes of this Agreement, all capitalized words
or expressions
used in this
Agreement (including the Schedules and Exhibits
annexed hereto)
shall have the
meanings specified in this Article I, unless
otherwise defined
herein (such
meanings to be equally
applicable to both
the
singular and plural forms of the terms defined):
"Affiliate" means (i)
in the case of an
individual, the
members of the
immediate family
(including the individual's spouse and the parents,
siblings
and children of the individual and/or the individual's spouse) and any Business
Entity that
directly or indirectly, through one or more intermediaries,
controls, or is
controlled
by, or is under common
control with, any of the
foregoing individuals,
or (ii) in the case of a Business Entity, another
Business Entity or a
person that directly
or indirectly,
through one or
more
intermediaries,
controls, or is controlled by, or is under common control with,
the Business Entity.
"Acquired
Assets" means
collectively
the Purchased Assets and the
Enviro-Safe Assets.
"Business Day" means any day, excluding Saturday, Sunday and any other day
on which commercial banks in Boston, Massachusetts, are authorized or required
by law to close.
"Business Entity"
means any corporation,
partnership, limited
liability
company, trust or
other domestic or
foreign form of
business association
or
organization.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, and the regulations thereunder, and court
decisions in respect thereof, all as the same shall be in effect at
the time.
"Charter" means the Certificate of Incorporation, Articles of
Incorporation or Organization or other organizational document of a
corporation
or limited liability company or other Business Entity, as amended
and restated
through the date hereof.
"Claim" means
an action, suit, proceeding, hearing, investigation,
litigation, charge, complaint, claim or demand.
"Code" means
the Internal Revenue Code of 1986, and the regulations
thereunder, published
Internal Revenue Service rulings, and court decisions in
respect thereof, all as the same shall be in effect at the
time.
"Compliance" or words similar meaning shall mean adherence, in all
material
respects, to any and all Legal Requirements.
"Current Assets"
means as of the
Closing Date the sum, calculated in
accordance with GAAP
on a combined basis,
of the Companies' (i)
cash and cash
equivalents, (ii)
restricted cash, (iii) marketable securities, (iv) trade and
other accounts
receivable, (v)
inventories, (vi)
prepaid expenses, and
(vii)
other current assets (other than any balance in deferred
income taxes or
income
taxes receivable,
Inter-Company Accounts and/or outstanding accounts receivable
of either Company
greater than 120 days
old as of a date sixty (60) days after
the Closing Date.
"Current Liabilities"
means as of the Closing Date the sum, calculated in
accordance with GAAP on a combined basis, of the Companies'
liabilities
(other
than (i) accrued income taxes, (ii) any balance in deferred income
taxes payable
or income tax receivable, (iii) Inter-Company Accounts, and (iv) reserves for
onsite or offsite clean-up or any other environmental liabilities), including
any accrued compensation payable, and obligations under capital
equipment leases
and the current portion of the Vehicle Loans.
"Environmental Action"
means any administrative, regulatory or judicial
action, suit,
demand, demand letter, claim, notice of non-compliance or
violation, investigation, request for information,
proceeding, Lien,
notice of
Lien, consent
order or consent agreement relating in any way to any
Environmental Law or any Environmental Permit, including, without limitation,
(a) any claim by any
governmental or
regulatory
authority for enforcement,
cleanup, removal, response, remedial or other actions or damages
pursuant to any
Environmental Law
and (b) any claim by any third party seeking damages,
contribution,
indemnification, cost recovery, compensation or injunctive
relief
resulting from Hazardous Materials, damage to the environment or
alleged injury
or threat of injury to human health or safety from pollution or other
environmental degradation.
"Environmental Law"
means as applicable to the Business or the Companies,
any federal, state and local laws, statutes, ordinances, rules, regulations
and
the like, as well as
common law, relating
to protection of human health or the
environment, relating
to Hazardous
Substances, relating
to liability
for or
costs of Remediation
or prevention of Releases of Hazardous Substances or
relating to liability
for or costs of other
actual or future
danger to human
health or the environment or relating to any wrongful death,
personal injury or
property damage
that is caused by or related to the presence, growth,
proliferation,
reproduction, dispersal, or contact with any biological
organism
or portion
thereof, including molds or other fungi, bacteria or other
microorganisms or any
etiologic agents or
materials. The term
"Environmental
Law" includes the
following statutes,
as amended,
and in effect from
time to
time up to the Closing Date, and any regulations promulgated pursuant thereto,
and any state or local
statutes, ordinances,
rules, regulations and the like
addressing similar
issues: Massachusetts General Laws, Chapter 21E; the
Massachusetts
Contingency Plan, 310
CMR 40.000 et seq;
Massachusetts
General
Laws, Chapter 21C, the
Hazardous Waste Management Act and its implementing
regulations 310 CMR 30.00, et seq.; the Comprehensive Environmental Response,
Compensation and
Liability Act; the Emergency Planning and Community
Right-to-Know Act; the
Hazardous Substances
Transportation
Act; the Resource
Conservation and
Recovery Act (including but not limited to Subtitle I relating
to underground
Storage Tanks); the Solid Waste Disposal Act; the
Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; and any similar
state
and local laws or by-laws, the rules, regulations and interpretations
thereunder, all as the same shall be in effect from time to
time.
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental
Law.
"Enviro-Safe (NE) Assets" means all assets, contracts and rights, real or
personal, tangible or
intangible, owned,
used by or accruing to the benefit of
Enviro-Safe (NE), and including all such assets, contracts and rights reflected
on the Individual
Financial Statements of Enviro-Safe (NE) referred to in
Section 6.5(d) below.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any
similar or
successor federal statute, and the rules, regulations and
interpretations thereunder, all as the same shall be in effect at
the time.
"ERISA Affiliate"
means, for purposes of Title IV of ERISA,
any trade or
business, whether or
not incorporated,
that together with Parent or either
Company, would be deemed to be a "single employer" within the
meaning of Section
4001 of ERISA, and,
for purposes of the Code, any member of any group that,
together with Parent or either Company, is treated as a "single
employer" for
purposes of Section 414 of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally
accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American
Institute of Certified Public Accountants and statements and
pronouncements of
the Financial
Accounting Standards
Board or in such other
statements by such
other entity as may be
approved by a significant segment of the accounting
profession, which
are applicable to the circumstances as of the date of
determination.
"Governmental
Authority" shall mean any federal, state, regional, local or
foreign government, or any political subdivision of any of the
foregoing, or any
court, agency or other
entity, body,
organization
or group, exercising any
executive, legislative, judicial, quasi-judicial, regulatory or administrative
function of government.
"GS
CleanTech" means GS CleanTech Corporation, a Delaware
corporation.
"Hazardous Materials" includes but is not limited to any and all
substances
or materials
(whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials or extremely
hazardous wastes and
regulated under any
Environmental
Laws, including but
not limited to petroleum and petroleum products, asbestos
and
asbestos-containing materials, chlorinated solvents; polychlorinated
biphenyls, lead, lead-based paints, radon, radioactive materials,
flammables and
explosives.
"Indebtedness" means
all obligations,
contingent or
otherwise,
whether
current or long-term, which in accordance with GAAP would be
classified upon the
obligor's balance
sheet as liabilities
(other than deferred
taxes) and shall
also include
capitalized
leases, guaranties, endorsements (other than for
collection in the
ordinary course of
business) or other
arrangements
whereby
responsibility is assumed for the obligations of others, including
any agreement
to purchase or otherwise acquire the obligations of others or any agreement,
contingent or otherwise, to furnish funds for the purchase of
goods, supplies or
services for the purpose of payment of the obligations of
others.
"Independent
Accountants" shall
mean Grant Thornton or any successor
thereto or such other
firm of independent
accountants
as are agreed
upon by
Buyer and Parent.
"Inter-Company
Accounts" means certain inter-company balances among Parent
and the Companies,
and Parent and any
other Affiliate
of Parent,
including,
without limitation,
inter-company
loans, accounts receivables and accounts
payable as of the Closing Date.
"IRS" means the
Internal Revenue
Service and any similar or successor
agency of the federal government administering the Code.
"Knowledge" or words of similar meaning shall mean, with respect
to Parent
or a Company, (i)
information
ascertainable
by a review of
Parent's and each
Company's books and
records and (ii) the
actual knowledge
of James F. Green,
after due diligence
and inquiry of management of Parent and each Company, each
of whom has made reasonable and appropriate due inquiry.
"Lien" means,
with respect to any asset, any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, charge,
restriction,
adverse claim
by a third
party, title defect or encumbrance of any kind
(including any conditional sale or other title retention agreement,
any lease in
the nature thereof,
any assignment or other conveyance of any right to
receive
income and any assignment of receivables with recourse against assignor), any
filing of any financing statement as debtor under the Uniform
Commercial Code or
comparable law of any
jurisdiction and any agreement to give or make any of the
foregoing.
"Material Adverse
Effect" means a material adverse impact or effect on (a)
the business, operations, assets, liabilities, condition or
prospects (financial
or otherwise) of either of the Companies or the Companies and
Parent as a whole,
(b) the ability of the
Companies and/or Parent to perform their respective
obligations under
any of the Purchase Documents, (c) the validity or
enforceability of any
of the Purchase
Documents or (d) the rights and remedies
of the Buyer under any of the Purchase Documents, provided, however, that any
such impact or effect les than $15,000 individually or less than $40,000
in the
aggregate for all such
events, circumstances or other matters shall not be
considered a Material Adverse Effect.
"Necessary Permits"
means all licenses,
permits, Environmental
Permits,
franchises, orders,
approvals,
accreditations,
written
waivers and other
governmental and other
authorizations
as are necessary in
order to enable the
Companies (prior to
Closing) and Buyer (after Closing) to continue to own,
operate and conduct
the Business as
currently conducted and proposed to be
conducted and to
occupy and use their
real and personal properties without
incurring any material liability.
"Net
Working Capital" means
the difference between
the Current Assets and
Current Liabilities of the Companies, determined on a combined
basis.
"Officer's
Certificate" means
a certificate signed in the name of a
corporation, partnership, association, trust or limited liability
company by its
President, Chief
Executive Officer,
Treasurer, Chief Financial Officer, or, if
so specified, the
Clerk, Secretary or officer appointed to execute on behalf of
the partnership,
association, trust or limited liability company, acting in his
or her official capacity.
"Person" means any
individual,
firm, partnership, association, trust,
corporation, limited liability company, governmental body or other
entity.
"PBGC" means the Pension Benefit Guaranty Corporation, and any successor
thereto.
"Predecessor" means
any Person, if any,
whose status and activities could
give rise to a claim against Buyer, Parent or a Company as
successor in interest
to such Person.
"Purchase Documents" means this Agreement, the Bill of Sale, the
Assignment
Documents, the Stock Assignment and any other certificate,
document, instrument,
stock power, or agreement executed in connection therewith.
"Release" means any
release, issuance,
disposal, discharge, dispersal,
leaching or migration
into the indoor or outdoor environment or into or out of
any property,
including the movement of Hazardous Materials through or in the
air, soil,
surface water,
ground water,
or property other than
in compliance
with all Environmental Laws and Permits.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means,
with respect to any Person (a) any corporation,
association or other
entity of which at
least a majority in
interest of the
outstanding capital stock or other Equity Securities having by the
terms thereof
voting power under ordinary circumstances to elect a majority
of the directors,
managers or trustees thereof, irrespective of whether or not at the
time capital
stock or other equity securities of any other class or classes of such
corporation,
association or other
entity shall have or might have power by
reason of the happening of any contingency, is at the time, directly or
indirectly, owned or
controlled by such Person, or (b) any entity (other than a
corporation) in which such Person, one or more Subsidiaries of such Person,
or
such Person and one or more Subsidiaries of such Person,
directly or
indirectly
at the date of determination thereof, has at least majority
ownership interest.
For purposes of this
Agreement, a
Subsidiary of a
Company shall
include the
direct and indirect Subsidiaries of such Company.
"Tax" means any federal, state, local or foreign income,
gross receipts,
license, payroll,
employment, excise,
severance, stamp,
occupation,
premium,
windfall profits,
environmental,
customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added,
alternative
or add-on minimum, estimated, or other tax of any kind whatsoever,
including any
interest, penalty, or addition thereto, whether disputed or
not.
"Tax
Return" means any return, declaration, report, claim for refund, or
information return or
statement relating to
Taxes, including
any schedule or
attachment thereto, and including any amendment thereof.
"Vehicle Loans" means the Companies' obligations under certain
outstanding
loans incurred to
finance certain motor
vehicles, which loans are secured by
such motor vehicles.
"written," "in
writing" or words of
similar import
includes any
written
materials, emails or
any other forms of written documentation or communication
(including any electronic form).
"YAGI" means YA Global Investments, LP.
"YAGI Debenture" means the Parent's $2,000,000 Convertible
Debenture issued
to YAGI, dated January 11, 2008.
"YAGI/GS
CleanTech
Obligations" means
any and all liabilities and
obligations of Parent or any Company to YAGI and/or GS CleanTech,
including, but
not limited to, those
liabilities and obligations entered into between Parent,
YAGI and GS CleanTech,
and affiliated entities in January 2008, as described in
Parent's Form 8-K, dated January 25, 2008, and the following
agreements attached
as exhibits thereto: a
Stock Purchase Agreement by and between GS CleanTech and
Parent; the YAGI Debenture; a Global Guaranty Agreement,
dated January 11,
2008
by and among Parent,
GS CleanTech, YAGI and certain other entities named
therein; a Letter
Agreement, dated
January 11, 2008,
between Parent and YAGI;
and an Amended and Restated Forbearance Agreement, among GS CleanTech, YAGI
certain other
entities named therein; and any and all security
agreements,
pledges, and other contractual agreements or obligations of the
Parent or either
Company to or with
YAGI, GS CleanTech and/or any Affiliate of YAGI or GS
CleanTech.
1.2
Other Defined
Terms. For purposes of this Agreement, the following
terms have the respective meanings set forth in the section
opposite each term:
Term
..................
Section
----
-------
Agreed Amount..............
11.4(b)
Agreement..................
Preamble
Allocation Schedules.......
4.2
Asset Payment..............
4.1
Assignment Agreement.......
9.1(h)
Assignment Documents.......
9.1(h)
Assumed Liabilities........
2.3
Basket Amount..............
11.5(a)
Bill of Sale...............
9.1(h)
Business ..................
Preamble
Buyer
..................
Preamble
Buyer Indemnitees..........
11.2
Buyer Losses...............
11.2
Cap
..................
1.5(b)
Cash Purchase Price........
4.1
Claim Notice...............
1.4(a)
Claimed Amount.............
11.4(a)
Closing
..................
5.0
Closing Balance Sheets.....
4.3(b)
Closing Date...............
5.0
Closing Memorandum.........
9.1(u)
Closing Net Working Capital
4.3(b)
Company
..................
Preamble
Company Indemnitees........
11.3
Company Intellectual Property
6.12
Company Losses.............
11.3
Contested Amount...........
11.4(c)
Default
..................
6.14
Disclosure Schedules.......
6.0
EPA
..................
6.19
Employment Agreement.......
9.1(r)
Enviro-Safe ...............
Preamble
Enviro-Safe (NE)...........
Preamble
Enviro-Safe (NE) Stock.....
3.0
Estimated Net Working Capital
4.4(a)
Extensions ................
8.1(q)
Hired Employee.............
8.2(a)
Indemnifying Party.........
11.4(a)
Indemnitees................
11.3
Individual Financial Statements
6.5(d)
Large Customers............
6.15
Large Suppliers............
6.15
Legal Requirements.........
6.16
Notice of Disagreement.....
4.4(b)
Parent
..................
Preamble
Parent Common Stock........
6.2
Parent SEC Reports.........
6.5(a)
Parent Stockholder Approval
6.2
PCBs
..................
6.19
Plan
..................
6.18
Pre-Closing Tax Period.....
12.1(a)
Proposed Transaction.......
8.1(g)(A)
Purchased Assets...........
2.1
Response Notice............
11.4(b)
Restricted Parties.........
8.1(f)
Restricted Period..........
8.1(f)
Retained Assets............
2.2
Retained Liabilities.......
2.3
SEC
..................
6.5(a)
Statement..................
8.1(n)
Stock Assignment...........
9.1(n)
Stock Payment..............
4.1
Straddle Period............
12.1(b)
Surviving Representations and Warranties
11.1
Tax Claim..................
12.3(b)
TEI
..................
Preamble
ARTICLE II
PURCHASE AND SALE OF ASSETS OF ENVIRO-SAFE
2.1
Purchase of Assets. Upon the terms and subject to the conditions
contained in this Agreement, at the Closing, Enviro-Safe shall sell, assign,
transfer and convey to Buyer, and Buyer shall purchase,
acquire and accept
from
Enviro-Safe, all of
Enviro-Safe's
assets of every kind
and description
(the
"Purchased Assets")
(other than those
assets defined as "Retained Assets," as
such term is defined
in Section 2.2
below). The Purchased Assets include,
without limitation, the following assets and properties of
Enviro-Safe:
(a)......all machinery, equipment, processing equipment, computers,
fixtures, furniture
and leasehold
improvements and all motor vehicles and
all
other tangible assets,
including, without
limitation those
listed on
Schedule 2.1(a) hereto;
(b)......all
inventories wherever
located, including raw
materials,
goods consigned to
vendors or
subcontractors, work
in process,
finished
goods and goods in transit
(c)......all
trade and other accounts receivable (other than
Inter-Company Accounts);
(d)......all
contracts, including
contracts for the purchase of
materials, supplies
and services
and the sale of
products and
services,
real
estate leases,
equipment leases and licenses of Enviro-Safe, and any
other contract rights of Enviro-Safe, including without limitation,
those
listed on Schedule
2.1(d) attached hereto
(other than any that constitute
Retained Liabilities);
(e)......all books,
records and other
data, in written form,
except
minute and stock
record books,
journals, ledgers and books of original
entry;
(f)......all goodwill,
dealer and customer
lists and all other sales
and
marketing information, and all know-how, technology, drawings,
engineering
specifications,
bills of materials, software and other
intangible assets of Enviro-Safe;
(g)......all of
Enviro-Safe's
interest
in patents, patent
applications,
proprietary designs,
copyrights, trade names (including the
name
"Enviro-Safe" and all variants thereof), servicemarks, trademarks and
trademark applications, in each case together with the goodwill
appurtenant
thereto, all federal,
state, local and foreign registrations thereof, if
applicable, all
common law
rights thereto, and all claims or causes of
action for infringement thereof;
(h)......all permits (including, without limitation, all
Environmental
Permits) licenses,
orders, ratings and approvals of all
federal, state,
local or foreign
governmental or
regulatory
authorities
or industrial
bodies which
are held by Enviro-Safe, to the extent the same are
transferable;
(i)......all
computer
software, files,
records
and related
documentation;
(j)......all prepaid expenses as of the Closing Date;
(k)......all customer accounts and backlog as of the Closing
Date;
(l) all marketable securities, deposits and other non-current
assets;
(m)......all
cash and cash equivalents and restricted cash of
Enviro-Safe as of the Closing Date; and
(n)......except for
Retained Assets
described in Section
2.2 below,
all
other items of
property, real or
personal, tangible or intangible,
including without limitation all securities, corporate names, restrictive
and
negative covenant agreements with employees and others,
owned, used by
or
accruing to the benefit of Enviro-Safe.
2.2
Retained Assets. Enviro-Safe will retain ownership only of the
following assets and contracts (collectively, the "Retained
Assets"):
(a).....Enviro-Safe's minute and stock record books, journals,
ledgers
and
books of original entry;
(b)......Enviro-Safe's rights under this Agreement;
(c)......All accounts
receivable of
Enviro-Safe that are
either (i)
written off from Enviro-Safe's books and records as of the Closing
Date, or
(ii)
more than 120 days
past due as of a date
sixty (60) days
after the
Closing Date, provided
that in either case any such accounts receivable are
excluded in calculating the Closing Net Working Capital; and
(d)......those
specific assets and
contracts identified
on Schedule
2.2
attached hereto,
and any other
assets or contracts Buyer elects to
exclude at or
prior to Closing; Schedule 2.2 may be supplemented or
modified by Buyer at or prior to Closing (to reflect any such additional
excluded assets or
contracts determined in the course of Buyer's due
diligence or arising after the date of this Agreement).
2.3......Liabilities.
Effective on and after the Closing Date, Buyer shall
assume and agree to pay, perform and discharge,
as additional
payment for the
purchase of the Purchased Assets, the following obligations and liabilities of
Enviro-Safe's and
which will be
expressly assumed by
the Buyer at the Closing
(collectively, the "Assumed Liabilities"):
(a)......trade
accounts payable
of a fixed
amount arising in the
ordinary course of business, which are unpaid as of the Closing
Date;
(b)......accrued
expenses (exclusive
of Inter-Company Accounts,
accrued Taxes
and reserves for environmental clean up costs and other
environmental liabilities) of a fixed amount arising in the
ordinary course
of
business, which are unpaid as of the Closing Date;
(c)......all of
Enviro-Safe's
obligations
under
those certain
contracts, equipment
leases and real estate leases, set forth on Schedule
2.3(c) attached hereto (as updated by Buyer at or prior to
Closing), to the
extent such
obligations are by the terms of such contracts required to be
performed or paid at the Closing Date and relate to the Purchased
Assets;
(d)......accrued
compensation of Hired Employees of a fixed amount as
of
the Closing Date; and
(e)......Vehicle Loans not to exceed $500,000 in the aggregate.
Notwithstanding the foregoing, Buyer shall not assume or agree to
perform, pay
or discharge, and
Enviro-Safe and Parent, jointly and severally,
shall remain
unconditionally liable
for, and shall pay and perform, all other obligations,
liabilities and commitments, existing or contingent, of Parent
and Enviro-Safe,
including, without
limitation, (i) any
and all liabilities of Enviro-Safe with
respect to the Retained Assets; (ii) any and all liabilities with
respect to any
federal, state or
local Taxes required
to be paid by
Enviro-Safe or Parent or
with respect to the Purchased Assets or the Business
conducted by
Enviro-Safe
for any period ending
on or before the Closing Date, or arising as a result
of
the closing of the transactions contemplated hereby or any transactions with
YAGI or GS
CleanTech;
(iii) any and all liabilities arising out of the
termination of Enviro-Safe's insurance policies, employee benefit pension and
profit sharing plans
and severance
obligations; (iv) any
and all
liabilities
incurred by Enviro-Safe or Parent in connection with the
negotiation,
execution
or performance of this
Agreement (including,
without limitation, all legal,
accounting, brokers'
finders and other
professional
fees and expenses);
(v)
Inter-Company
Accounts; and (vi) all obligations and liabilities for onsite
and
offsite contamination;
(vii) the YAGI/GS CleanTech Obligations; (vii) the
litigation listed on
Schedule 6.21), and
any claims,
liabilities or judgments
entered thereunder and any litigation reported in the Parent SEC
Report; and (x)
any and all other
liabilities of
Enviro-Safe
or Parent that are
incurred and
arise subsequent to the Closing Date (collectively, the "Retained
Liabilities").
ARTICLE III
PURCHASE AND SALE OF ENVIRO-SAFE (NE) STOCK
Upon
the terms and subject to the conditions set forth in the Agreement
and
on the basis of the representations, warranties, covenants, agreements,
undertaking and obligations contained herein, at the Closing,
Parent agrees to
sell to Buyer and Buyer agrees to purchase from Parent all of the issued and
outstanding shares of
Enviro-Safe
(NE) capital stock
(the "Enviro-Safe
(NE)
Stock"), free and clear of any and all Liens, for the consideration
set forth in
Section 4.1 hereof,
such that subsequent
to the Closing Date,
Buyer shall own
100% of all of the Enviro-Safe (NE) Stock.
ARTICLE IV
PURCHASE PRICE; ALLOCATION
4.1
Purchase
Price. The aggregate "Purchase Price" for the Enviro-Safe
(NE) Stock
and the Purchased Assets shall be $5,000,000, which shall be
allocated for the purchase of the Enviro-Safe (NE) Stock (the "Stock
Payment")
and for the purchase
of the Purchased Assets (the "Asset Payment") in the
amounts set forth in Schedule 4.1, subject to adjustments as provided in this
Agreement (the "Cash Purchase Price"), plus, for the Purchased Assets,
Buyer's
assumption of the
Assumed Liabilities.
At Closing, Buyer shall pay the Cash
Purchase Price to Parent by wire transfer of immediately available
federal funds
and assume the Assumed Liabilities.
4.2
Use of Proceeds. At Closing, Parent and Enviro-Safe will apply the
Cash
Purchase Price (x) to pay and satisfy in full, and to obtain
discharges of, all
Liens securing the
following:
(i) all YAGI/CleanTech Obligations; (ii) all
indebtedness of Parent
and/or the Companies to TD BankNorth and (iii) all other
outstanding debentures
of Parent;
and (y) to pay any
accrued and unpaid Tax
liabilities as of the Closing Date.
4.3......Allocation of Purchase Price.
(a)......Buyer and Parent shall agree on an allocation of the
Purchase
Price to be set forth on Schedule 4.3(a) attached hereto on or
before April
30,
2008. If Buyer and Parent are not able to agree upon the
allocation of
the
Purchase Price by April 30, 2008, Buyer and Parent shall submit
the
allocation to the
Independent Accountant
for resolution.
The report and
determination of the
Independent Accountant
shall be binding for purposes
of
this Agreement and the costs and expenses thereof shall be borne
equally
by
Buyer and Parent.
(b)......The Purchase
Price shall be
allocated among the
Purchased
Assets and the Enviro-Safe (NE) Assets in accordance with
their respective
fair
market values and in compliance with Section 1060 of the Code.
(c)......Buyer and
Parent shall file all Tax Returns (including
amended Tax Returns and claims for refunds) in a manner consistent
with the
Allocation Schedule,
as adjusted, and shall not take any position
inconsistent with the allocations set forth in the Allocation
Schedule, as
adjusted, except as otherwise required by law; provided,
however, that the
Tax
basis in the Acquired
Assets may exceed the total amount allocated in
order to reflect Buyer's capitalized transaction costs not included in
the
Purchase Price or the Assumed Liabilities and Parent's amount
realized may
be
less than the
total amount allocated in order to reflect Parent's
transaction costs.
4.4
Adjustment to Asset Purchase Price.
(a)......Estimated Net
Working Capital.
Not more than ten (10)
days
prior to the Closing
Date, Parent and the Companies shall prepare and
deliver to Buyer an estimate of the Net Working Capital as of the Closing
Date
(the "Estimated Net Working Capital"). In the event that the
Estimated
Net
Working Capital is
equal to or less than
$500,000, then Parent
shall
cause a sufficient amount of the Companies' account payables to be paid in
full
at or prior to the
Closing such that at
Closing the
Estimated Net
Working Capital will
not be less than
$500,000. At Closing
Parent shall
provide Buyer with
documented
evidence of the
payment of such
accounts
payable pursuant to the foregoing sentence.
(b)......Closing Net Working Capital. Within sixty (60) days
following
the
Closing Date,
Buyer shall
deliver to Parent
combined and
combining
balance sheets of the
Companies (in their final and binding form, the
"Closing Balance
Sheets") as of the Closing Date and a supplemental
schedule setting forth
the Net Working
Capital of the Companies as of the
Closing Date,
determined in a manner consistent with the provisions of the
Agreement (the "Closing Net Working Capital"). The Closing Balance Sheets
and
determination
of Closing Net Working
Capital shall include
all known
adjustments required
in a year-end closing of the books and shall be
prepared in accordance with GAAP consistent with past practices.
Parent and
Enviro-Safe
shall cooperate
with Buyer as reasonably requested in
connection with the
preparation
of the Closing Balance Sheets and the
determination of the Closing Net Working Capital. The determination of the
Closing Balance
Sheets and the Closing
Net Working Capital
shall become
final and binding upon the parties ten (10) days following Parent's
receipt
thereof, unless Parent
shall give written
notice of its
disagreement (a
"Notice of
Disagreement")
to Buyer prior to such date. Any Notice of
Disagreement shall
specify in reasonable detail the nature and dollar
amount of any disagreement so asserted. If a timely Notice of
Disagreement
is
received by Buyer,
then the Closing
Balance Sheets and the Closing Net
Working Capital
(as revised in
accordance
with clause (x) or (y)
below)
shall become final and
binding upon the parties on the earliest of (x) the
date
the parties resolve in writing any differences they have with respect
to
the matters specified
in the Notice of Disagreement or (y) the date all
matters in dispute are
finally resolved
by the Independent Accountant.
During the thirty (30) days following delivery of a Notice of
Disagreement,
the
parties shall seek in good faith to resolve in writing any
differences
that
they may have with
respect to the matters
specified in the Notice of
Disagreement.
Following delivery of
a Notice of Disagreement, Parent and
its
agents and representatives shall be permitted to review Buyer's and
its
representatives' working papers relating to the Notice of
Disagreement. At
the
end of the thirty (30)-day period referred to above, the parties shall
submit to the
Independent Accountant
for review and resolution of all
matters (but only such
matters) which remain in dispute and which were
properly included
in the Notice of Disagreement, and the Independent
Accountant shall make
a final determination
of the Closing Balance Sheets
and
the Closing
Net Working
Capital, to the extent such amounts are in
dispute, in accordance with the guidelines and procedures set forth
in this
Agreement. In
resolving any matters in dispute, the Independent Accountant
may
not assign a value to any item in dispute greater than the greatest
value for such item assigned by Buyer, on the one hand, or Enviro-Safe
and
Parent, on the other
hand, or less than the
smallest value for
such item
assigned by Buyer,
on the one hand,
or Parent,
on the other
hand. The
Independent
Accountant's
determination
will be based solely on
presentations made by
Buyer and Parent in accordance with the guidelines
and
procedures set forth in this Agreement (i.e., not on the basis of an
independent review).
The determination of the Closing
Balance Sheets and
the
Net Working Capital
shall become final and binding on the
parties on
the
date the Independent
Accountant
delivers its final resolution in
writing to the parties (which final resolution shall be delivered not
more
than
forty-five (45) days following submission of such disputed
matters).
The
fees and expenses of the Independent Accountant, in making the final
determination of the
Closing Balance Sheets and the Closing Net
Working
Capital, shall be shared equally by Buyer and the Parent.
(c)......Post-Closing
Adjustment. If the
Closing Net Working Capital
is
greater than $0.00,
then the Purchase
Price shall be increased by such
excess on a dollar for dollar basis. In the event the Closing Net
Working
Capital is less than $0.00, then the Purchase Price shall be decreased by
such
deficiency
on a dollar
for dollar basis. Any adjustment to the
Purchase Price
shall be made
within three (3) Business Days after the
determination of the
Closing Net Working Capital becomes final and binding
on
the parties, by wire transfer to Buyer or Parent, as the case may
be, in
immediately available
funds of the amount of such difference. Buyer shall
be
entitled to offset and
deduct from any
payment due Parent
under this
Section 4.4(c) any
amounts due Buyer
under any other
provision of this
Agreement or any other Purchase Document, including any amounts for
which
Buyer is entitled to indemnification under Articles XI and XII
below.
ARTICLE V
CLOSING
The
closing of the transactions described herein (the "Closing") shall
take
place at 10:00 a.m.,
Eastern time, on a
date to be specified by Parent, Buyer
and the Companies,
which shall be no
later than the fifth
Business Day after
satisfaction or waiver
of the conditions
set forth in Article
IX (other than
delivery of items to be delivered at the Closing and other than
satisfaction of
those conditions
that by their nature
are to be satisfied at
the Closing, it
being understood that
the occurrence of the Closing shall remain subject to the
delivery of such items and the satisfaction or waiver of such
conditions at the
Closing), at the
offices of Posternak
Blankstein & Lund
LLP, The Prudential
Tower, 800 Boylston Street, Boston, Massachusetts, 02199, or at
such other place
or time as the parties hereto may mutually agree. The date and time
at which the
Closing actually occurs is hereinafter referred to as the "Closing
Date."
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF THE COMPANIES AND PARENT
Each
Company and Parent,
jointly and
severally,
hereby represents and
warrants to the Buyer as of the date hereof, that the statements contained in
this Article VI are
true and correct as the date hereof and the Closing
Date,
except as set forth in the Disclosure Schedules attached hereto
(the "Disclosure
Schedules"). The
Disclosure
Schedules
shall
be arranged by Schedules
corresponding to the numbered and lettered sections and subsections
contained in
this Article
VI, and the
disclosures
in any section or subsections of the
Disclosure Schedules
shall qualify other sections and subsections in this
Article VI only to the
extent it is
readily apparent from a reading of the
disclosure that such
disclosure
is applicable to such other sections and
subsections.
6.1
Organization and
Qualification. Each of
the Companies and Parent
is a corporation duly organized, validly existing and in good
standing under the
laws of the state of its incorporation. Each of the Companies and Parent has
full power and authority to own, use and lease its properties and
to conduct its
business as such
properties are owned,
used or leased and as
such business is
currently conducted
and as it is proposed to be conducted. The copies of each
Company's Charter and
By-Laws, as amended to
date, certified by its
Secretary
and delivered to the Buyer's counsel prior to the Closing,
are true, complete
and correct.
The Parent and each
Company is
qualified to do business as a
foreign corporation
and is in good
standing in the jurisdictions listed on
Schedule 6.1,
which include all jurisdictions in which it owns or leases
property or maintains
inventories or where
the conduct of its
business would
require such
qualification, except
where such failure to qualify would not be
expected to result in a Material Adverse Effect.
6.2
Authority; No Violation. Each Company and Parent has all
requisite
corporate power and authority to enter into this Agreement,
including,
without
limitation,
Parent Stockholder
Approval,
to carry out the transactions
contemplated hereby.
The execution,
delivery and performance of this Agreement
by each Company and Parent has been duly and validly authorized and approved by
all necessary
corporate action,
including Parent
Stockholder
Approval, and
Parent has provided Buyer an Officer's Certificate evidencing such approvals.
This Agreement
constitutes
the legal and
binding obligation of each of the
Companies and Parent,
enforceable against
each in accordance
with its terms,
except that the enforceability hereof may be subject to bankruptcy,
insolvency,
reorganization,
moratorium or other
similar laws now or hereafter in effect
relating to
creditors'
rights generally and that the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to
equitable defenses
and to the discretion of the court before which any
proceeding may be brought. The affirmative vote by, or written consent of,
the
holders of a majority
of the issued
and outstanding common stock of Parent
("Parent Common
Stock") on the record date for a meeting of Parent's
stockholders or for written consents executed by Parent's
stockholders, are
the
only votes or
consents of the holders of any classes or series of Parent's
capital stock or other
securities necessary
for the approval of this Agreement
and the transactions
contemplated hereby ("Parent Stockholder Approval"). The
entering into of this
Agreement by each of
the Companies and
Parent does not,
and the consummation
by each of the
Company and Parent of the transactions
contemplated hereby,
including,
without
limitation,
the transfer of the
Purchased Assets to the Buyer by Enviro-Safe, and the sale and
assignment of the
Enviro-Safe (NE) stock from Parent to Buyer, will not violate the provisions
of
(a) any applicable
federal, state, local or foreign laws;
(b) each entity's
Charter or
by-laws; or (c) any provision of, or result in a default or
acceleration of any
obligation under, or
result in any change in the rights or
obligations of Parent or either Company or under, any Lien,
contract, agreement,
license, lease,
instrument, indenture,
order, arbitration
award, judgment, or
decree to which Parent
or either Company is a
party or by which any of them is
bound, or to which any property of Parent or either Company is
subject.
6.3
Authorized and
Outstanding
Stock. The authorized and issued
capital
stock of each Company is set forth on Schedule 6.3 attached hereto.
Enviro-Safe
(NE) does not have any treasury stock. Parent is the sole record and
beneficial
owner of all of
the Enviro-Safe (NE) Stock, and none of the shares of
Enviro-Safe (NE) Stock
are subject
to, or were
issued in violation of, any
purchase option,
call option, right of first refusal or preemptive right,
subscription right or
any similar right. All
of the shares of Enviro-Safe (NE)
Stock were duly authorized, and are fully paid and no
assessable. There are
no
options, warrants
or other agreements or rights to purchase any shares of
capital stock or other
securities of
Enviro-Safe (NE)
authorized,
issued or
outstanding, nor is
Enviro-Safe (NE) obligated in any other manner to issue any
shares of its capital
stock or other
securities, or any
options, warrants
or
other rights to
acquire such
securities. There are
no voting trusts,
voting
commitments, proxies
or other agreements or
understandings to which the Parent
or Enviro-Safe
(NE) is a party with
respect to the voting of capital stock of
Enviro-Safe (NE) or the disposition by Parent of the Enviro-Safe
(NE) Stock.
6.4
Subsidiaries. Neither Company has any Subsidiaries.
6.5 SEC Filings;
Financial Statements
(a) .... Parent
or its predecessors in interest have filed all
registration statements, forms, reports and other documents
required to be
filed by Parent with the Securities Exchange Commission (the "SEC") over
the
past five (5) years. All such registration statements, forms, reports
and
other documents
(including
those that Parent may
file after the date
hereof until the
Closing) are referred to herein as the "Parent SEC
Reports." The
Parent SEC Reports (i) were or will be filed on a
timely
basis or within
applicable
extension periods; (ii) at the time filed,
complied, or will comply when filed,
as to form in all
material respects
with
the applicable
requirements
of the Securities Act and the
Exchange
Act,
as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Parent SEC Reports; and (iii) did not
or will
not
at the time they were or are filed contain any untrue statement of a
material fact or omit
to state a material
fact required
to be stated in
such
Parent SEC Reports or
necessary in order to
make the statements
in
such
Parent SEC Reports, in the light of the circumstances under which
they
were
made, not misleading, except to the extent corrected prior to the
date
of
this Agreement by a subsequently filed Parent SEC Report. Neither
of the
Companies is subject
to the reporting
requirements
of Section
13(a) or
Section 15(d) of the Exchange Act.
(b) .....Each of the consolidated financial statements (including,
in
each
case, any related notes and schedules) contained or to be contained
in
the
Parent SEC Reports at the time filed (i) complied or will comply as to
form
in all material respects with applicable accounting requirements and
the
published rules and regulations of the SEC with respect
thereto, (ii)
were
or will be prepared in
accordance with GAAP
applied on a
consistent
basis throughout the
periods involved
(except as may be
indicated in the
notes to such financial statements or, in the case of unaudited
statements,
as
permitted by the SEC
on Form 10-Q or Form 8-K under the Exchange Act)
and
(iii) fairly presented or will fairly present in all material
respects
the
consolidated financial
position of Parent and
the Companies as of the
dates indicated and
the consolidated
results of its
operations and
cash
flows for the periods indicated, except that the unaudited interim
financial statements
were or are subject to normal and recurring year-end
adjustments.
(c)......Parent
maintains disclosure controls and procedures required
by
Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure controls
and
procedures
are effective to ensure that all material information
concerning Parent
is made known on a timely basis to the individuals
responsible for the
preparation of the
Parent's filings with
the SEC and
other public disclosure documents. Parent is in compliance in all
material
respects with the applicable listing and other rules and
regulations with
the
stock market or
exchange on which
shares of Parent
Common Stock are
listed for trading and
does not anticipate
that shares of Parent
Common
Stock will be delisted by such stock market or exchange in the
foreseeable
future. Parent has not
received any notice, other than as already publicly
disclosed, regarding
the possible
delisting of shares of Parent Common
Stock from the securities exchange on which they are principally
listed.
(d)......Attached
hereto as Schedule 6.5(d) are the separate audited
consolidating
financial statements
of Parent and each Company as of
December 31, 2005,
2006 and 2007 and for the fiscal years then ended, and
their unaudited separate consolidating financial statements as at the
end
of
the months of January and February, 2008, and for the months then
ended
(together with any additional financial statements provided by Parent to
Buyer pursuant to
Section 8.1(t)
below, collectively, the "Individual
Financial
Statements").
Each of the Individual Financial Statements
complies and
will comply as to form in all material respects with
applicable accounting
requirements and the published rules and regulations
of
the SEC with respect thereto (ii) were and will be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved and (iii) fairly presents and will fairly present
in all material
respects the
financial positions of each such entity as at the dates
indicated and the
results of its
operation and cash
flow for the periods
indicated,
except that unaudited
interim financial
statements were or are
subject to normal recurring year end adjustments.
6.6......Absence of
Undisclosed
Liabilities.
Except as set forth in
the
Parent SEC Reports
filed within twelve (12) months of the date
hereof and in
Schedule 6.6
attached hereto, there are no liabilities of Parent or either
Company, whether accrued, absolute, contingent or otherwise
(including,
without
limitation, liabilities as guarantor or otherwise with respect to
obligations of
any other Person,
or liabilities for Taxes due or then accrued or to become
due), except
for liabilities which have arisen in the ordinary course of
business of such Company since December 31, 2007.
6.7......Absence of
Certain Changes.
Except as otherwise disclosed in
Schedule 6.7 attached hereto or in any Parent SEC Report filed
prior to the date
of execution
of this Agreement, since December 31, 2007 there has not
been,
except as would not reasonably be expected to have a Material
Adverse Effect on
Parent:
(a)......any change in the business, operations, assets,
liabilities,
or
conditions (financial
or otherwise) of Parent or any Company, that, by
itself or in
conjunction with all
other such changes,
not arising in the
ordinary course of business that involves more than $25,000;
(b)......any
obligation or liability incurred by Parent or a Company,
other than obligations
and liabilities
incurred in the ordinary course of
business for an amount not more than $10,000 in each case or
$25,000 in the
aggregate;
(c)......any Lien
placed on any of assets of Parent or a Company
(including, without
limitation,
the Purchased Assets) which remains in
existence on the date hereof;
(d)......any
contingent liabilities
incurred by Parent or
a Company
with
respect to the
obligations of any other Person that would result in a
Material Adverse Effect;
(e)......any purchase,
sale, lease, assignment, transfer or other
disposition, or any
agreement or other arrangement for the purchase, sale,
lease, assignment,
transfer or other disposition, of any part of Parent's
or a
Company's properties
or assets,
other than
purchases for and
sales
from
inventory for fair
consideration in the
ordinary course of business,
except for fixed assets purchased or other capital expenditures made in
amounts not
exceeding $10,000 for any single item and $25,000 in the
aggregate for all such items;
(f)......any damage,
destruction
or loss to property or assets,
whether or not covered by insurance having a Material Adverse
Effect;
(g)......any labor trouble or claim of unfair labor practices
involving a Company; any material change in the employment
contracts of or
compensation payable or to become payable by a Company to any of
its officers,
directors or employees or any bonus payment or arrangement made to
or with any
of such officers, directors or employees or any change in coverage
or benefits
available under any Plan described in Section 6.18;
(h)......any change
with respect to a Company's management or
supervisory personnel;
(i)......any material
obligation or liability incurred by Parent or a
Company with
respect to any loan,
advance or
commitment
to lend by any
bank, financial institution or institutional lender to any of the
officers,
directors, employees
or stockholders of a
Company or to any other Person;
or
any material
loans or advances
made by the
Company to any
officers,
directors, employees
or stockholders of a Company, except for normal
compensation,
professional fees and expense allowances payable to officers
and
directors;
(j)......any contracts, licenses, leases or agreements entered into
by
a
Company which are
outside the ordinary course of business or which
obligate a
Company for more than $10,000 in any one case or more than
$25,000 in the aggregate;
(k)......any recapitalization or reorganization;
(l)......any amendment
or other change (or any authorization to make
such
an amendment
or change) to the
Parent's or a
Company's Charter or
by-laws, except as
required in connection
with the consummation of the
transactions contemplated hereby;
(m)......any
postponement or delay in payment of any accounts payable
or
other liability of a
Company except in the ordinary course of business
consistent with prior practices;
(n)......any cancellation, waiver, compromise or release of
any right
or
claim either involving
more than $50,000 or outside the ordinary course
of
business consistent with prior practices; or
(o)......any cancellation, termination, modification, or
acceleration
by
any party to any contract, license, lease or agreement involving more
than
$50,000 to which any
of a Company is a party or by which it is bound;
or
(p)......any other occurrence, action, failure to act or transaction
involving a Company
that could reasonably
be expected to have a
Material
Adverse Effect on either Company, other than transactions in the ordinary
course of business consistent with prior practices.
6.8......Title,
Sufficiency and
Condition of the Acquired Assets;
Enviro-Safe (NE)
Stock. Except as set
forth on Schedule 6.8
attached hereto,
each Company has good and marketable title to, or a valid leasehold
interest in,
all of its assets,
free and clear of all liens and free of any material
infractions or material non-compliance with applicable laws. Parent
has good and
marketable title to the Enviro-Safe (NE) Stock, free and clear of
all Liens, and
free of any material
infractions or
non-compliance with
applicable laws.
The
sale and delivery of
the Purchased
Assets and the
Enviro-Safe
(NE) Stock to
Buyer pursuant
hereto shall vest in
Buyer good and
marketable title
thereto,
free and clear of any and all Liens, other than as disclosed in Schedule 6.8
hereto or as may be
created by Buyer.
Each Company owns or leases all real,
personal, tangible and
intangible property and assets necessary for the conduct
of the Business as are
presently conducted
and as proposed to be
conducted by
it, and all such
property and assets are included in the Acquired Assets. All
tangible properties
and assets
owned or leased by
each Company,
(including,
without limitation,
the Acquired
Assets) are in good
operating condition
and
repair, ordinary wear and tear excepted.
6.9...... Real Estate.
(a)......
(i) Schedule 6.9(a)
attached hereto lists and describes
briefly the real property owned by Enviro-Safe (NE). With
respect
to each such real property owned by Enviro-Safe (NE): (i) there
are no pending or, to
the Knowledge
of Parent and
Enviro-Safe
(NE), threatened
condemnation
proceedings,
lawsuits,
or
administrative actions
relating to the property; (ii) the legal
description for the
parcel contained in the deed thereof provided
to Buyer describes such parcel fully and adequately; (iii) to
the
Knowledge of Parent
and Enviro-Safe
(NE), the buildings and
improvements thereon are located within the boundary lines of
the
described parcels
of land, are prior existing non-conforming
structures and as such are not in violation of applicable
zoning
and building
laws and ordinances, and do not encroach on any
easement which may burden the land in any manner that materially
impairs or
interferes
with its current use or violates any
applicable Necessary
Permit; (iv) to the Knowledge of Parent and
each Company,
the use thereof for
the Business is in Compliance
with all building,
zoning and other applicable laws and (iv), to
the Knowledge of Parent and Enviro-Safe (NE), the land does not
serve any adjoining
property for any purpose inconsistent with
the use of the land.
Enviro-Safe (NE) has good, clear record and
marketable title to
all such real property owned by it, free and
clear of all Liens and
encumbrances that
could materially or
adversely interfere
with the use thereof
for the conduct of the
Business as now conducted or as required for Compliance
with all
Necessary Permits applicable to such real property.
(ii) Enviro-Safe does not own any real property.
(b)......Schedule
6.9(b) lists and describes all real property leased
or
subleased to each Company. With respect to each such lease and
sublease:
(i)
correct and complete
copies thereof have
been delivered to the Buyer;
(ii)
the lease or sublease is legal, valid binding, enforceable, and in
full
force and effect and will continue to be so on identical terms
following the consummation of the transactions contemplated hereby; and
(iii) no party to the lease or sublease is in breach or default
thereunder.
Each
Company has good and
marketable leasehold
interests in, and enjoys
peaceful and quiet
possession of, all of
the real property
described in
each
lease and sublease set forth on Schedule 6.9(b), there are no pending
disputes thereunder,
and, to the
Knowledge of each of
the Companies and
Parent, they
have not received any written notices of default or
cancellation thereof.
All necessary
government approvals required of each
Company as tenant with respect to such leased property have been obtained,
all
necessary filings or registrations therefore have been made, and
there
have
not been, to the
Knowledge of each
Company and Parent,
any written
notices of
cancellation
thereof and there are no outstanding disputes
thereunder. To the
Knowledge of each Company and Parent, the owner or
lessor of each such leased property has all necessary governmental
approvals required of
it to own and operate
such leased
property. Each
Company has performed all obligations required to be performed by it
under
such
leases and all of such
leased or subleased
real property, and all
equipment and
fixtures on or serving such leased or subleased real
property, are in good
operating condition and repair, ordinary wear and
tear
excepted.
(c)......No work has
been performed
or is in progress at, and no
materials have been
furnished to, any of
the Companies'
leased or owned
real
property by or on behalf of Parent or either Company which will not
be
paid
for as of the Closing
Date and therefore might give rise to Liens
against such property or any portion thereof.
6.10.....Accounts
Receivable. All
of the accounts receivable of each
Company are properly
reflected on its books and records and are, subject to the
allowances for
doubtful accounts set forth therein, valid and enforceable
claims, and subject to
no set-off or
counterclaim and are
collectible in such
amounts in the
ordinary course of business. No Company has any accounts
receivable or loans or notes receivable from any Affiliates or from any of
its
officers, directors,
consultants,
employees, agents or stockholders, except as
set forth on Schedule 6.10 respectively.
6.11.....Inventories. All of the inventories of each Company can be
used or
consumed in the ordinary course of business as now conducted. Since
December 31,
2007, except as set
forth on Schedule 6.11, there has been no change in
the
amount of such
inventory of each Company except for changes as a result of
the
material purchase and sale of, adjustment to, or consumption of
inventory in the
ordinary course of business consistent with prior practice,
including,
but not
limited to, established seasonal patterns.
6.12.....Intellectual Property. All patents, patent applications,
proprietary designs, copyrights, software, trade names,
servicemarks, trademarks
and trademark
applications
which are owned by or
licensed to each Company are
listed in Schedule 6.12 attached hereto (collectively, "Company Intellectual
Property"). To each
Company's and Parent's Knowledge, none of the Company
Intellectual Property
violates or will violate any license or infringes or will
infringe any
intellectual property
rights of any other party. Other than with
respect to
commercially available
software products under standard
end-user
object code license
agreements, there are
no outstanding
options, licenses,
agreements, claims,
encumbrances
or shared ownership interests of any kind
relating to the Company Intellectual Property, nor is each Company
bound by or a
party to any options,
licenses or
agreements
of any kind with
respect to the
patents, trademarks,
service marks,
trade names,
copyrights,
trade secrets,
licenses, information,
proprietary
rights and
processe
