Exhibit 10.1
ASSET PURCHASE AGREEMENT
by and between
MARSHALL ENVIRONMENTAL GROUP, INC.,
as Seller,
and
VERIDIUM CORPORATION,
and
ENVIROSAFE CORPORATION,
collectively, as Purchaser,
Dated as of June 30, 2005
V.6.16.05
<PAGE>
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 14B Jan Sebastian Drive, Sandwich, Massachusetts
02563 (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 14B Jan Sebastian Drive, Sandwich,
Massachusetts 02563
(referred to herein individually as
"EnviroSafe" or together with Veridium as the "Purchaser")
AND:
MARSHALL
ENVIRONMENTAL
GROUP, INC.,
a company formed
pursuant to the laws of the State of Rhode Island and having
an office for business
located at 3034 Post Road, Warwick,
Rhode Island 02818 (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 Peter Marshall, as are listed on Schedule
2.3
("Marshall 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 Marshall
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 Peter Marshall;
(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
