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Title: |
Acquisition Agreement |
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Date: |
2005 |
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Preview shows 23KB of 140KB total |
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$48 |
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#673282 |
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ACQUISITION AGREEMENT
by and between
R.M. JONES & CO., INC.,
as Seller,
and
VERIDIUM ENVIRONMENTAL CORPORATION,
as Purchaser.
Dated as of DECEMBER 11, 2002
V.12.11.02
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, dated as of DECEMBER 11, 2002 (the "Effective Date")
is made by and between R.M. Jones & Co., Inc., a corporation duly organized and
validly existing under the laws of the State of Connecticut, with a principal
place of business located at 461 Cooke Street, Farmington, CT ("RMJ Co.")(RMJ
Co. is hereinafter, at times, referred to as the "Seller") and VERIDIUM
ENVIRONMENTAL CORPORATION, a corporation duly organized and validly existing
under the laws of the State of Delaware, with a principal place of business at 1
Jasper Street, Paterson, New Jersey 07522 (the "Purchaser"). Purchaser and
Seller are hereinafter, at times, collectively referred to as the "Parties" or
individually, at times, referred to as a "Party", and this Acquisition Agreement
is hereinafter, at times, referred to as the "Agreement".
WHEREAS, RMJ Co., by itself and through its subsidiary, JONES ENVIRONMENTAL
SERVICES, LLC ("JES LLC"), or otherwise, is engaged in the business of providing
hazardous and non-hazardous waste collection, treatment and disposal services
through the operation of service centers in Farmington, Connecticut and Lowell,
Massachusetts or otherwise (the "Business") incidental to which it has certain
assets including but not limited to the following:
(a) Certain 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,
(e) 70% of the outstanding equity interests in JES LLC, which owns 100% of
the outstanding equity interest in JONES ENVIRONMENTAL SERVICES (North
East), INC. ("JES INC.")
(All of the foregoing and other assets contemplated to be sold to Purchaser by
Seller hereunder are hereinafter defined as the "Assets" and shall be as set
forth on Schedule A attached hereto and incorporated herein by this reference
verbatim and at length. Furthermore, all references to "Seller" herein shall
only include the Business as defined above and the Assets utilized in the
Business as set forth on Schedule A. Purchaser expressly acknowledges that RMJ
Co. operates numerous and diverse businesses and the assets to be sold and
purchased hereunder are only those utilized in the Business and as set forth on
Schedule A attached hereto).
WHEREAS, Seller desires to sell, convey, assign and transfer to Purchaser the
Assets as are hereinafter more particularly described on Schedule A and as are
utilized in the Business (the "Acquisition"); and
WHEREAS, Purchaser desires to acquire the same certain Assets of Seller; and
WHEREAS, Seller and Purchaser have reached an understanding with respect to the
sale by Seller and purchase by Purchaser of these certain Assets.
NOW, THEREFORE, in consideration of the above premises, the sums hereinafter
more particularly required to be paid, the mutual covenants, agreements,
warranties and representations herein expressed, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby expressly
acknowledged, the Parties hereto do hereby mutually covenant and agree as
follows:
ARTICLE I
DEFINITIONS
As used herein, the terms below shall have the following meanings:
"Accounts Receivable" has the meaning set forth in Section 2.1(b)(i).
"Acquisition" has the meaning set forth in the Recitals above.
"Affiliate" of a Person means any other Person that, directly or indirectly,
through one (1) or more intermediaries, controls, is controlled by, or is under
common control with the first mentioned Person.
"Agreement" has the meaning set forth in the Preamble.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Balance Sheet" means the balance sheet of the Business and Seller.
"Best Efforts" shall be deemed to not include any obligation on the part of any
person to undertake any liabilities or perform any acts (except liabilities or
performance, other than any best efforts obligations, expressly required to be
undertaken by the terms of this Agreement) which are materially burdensome to
such person; provided, however, that notwithstanding the foregoing, the term
"Best Efforts" shall include an obligation to take such actions which are
normally incident to or reasonably foreseeable in connection with such
obligation or the transactions contemplated hereby.
"Best Knowledge" shall mean the knowledge of a person (or of its executive
officers if a corporation) after having made due investigation and reasonable
inquiry of the senior managerial employees, having responsibility for such
matter or having access to such information.
"Business" has the meaning set forth in the Recitals.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Confidentiality Agreement" means that certain Confidentiality Agreement dated
as of October 15, 2002 , by and between the Sellers and Purchaser.
"Customer" has the meaning set forth in Section 6.7.
"Customer Contracts" has the meaning set forth in Section 2.1(b)(ii)(A).
"Effective Date" shall mean the date set forth in the Preamble.
"Environmental Laws" means laws, rules and regulations relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata) and
the treatment, storage, transportation or disposal of hazardous substances or
wastes as defined in any and all of such applicable laws.
"Escrow Agent" means the escrow agent under the Escrow Agreement to be agreed to
and executed by the Sellers and the Purchaser.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Employees" has the meaning set forth in Section 6.4.
"Excluded Liabilities" means any liabilities and obligations with respect to,
arising out of or relating to, the ownership, possession or use of the Sellers'
Assets and the operation of the Business prior to the Closing Date, including,
without limitation, those (i) with respect to fines imposed by any Governmental
Entity, (ii) with respect to injuries suffered by employees of the Sellers or
any Business Subsidiary, (iii) with respect to tort (other than environmental
clean-up) and common law claims for which post-1986 general liability insurance
containing pollution exclusions normally would provide coverage, or (iv) which
are Taxes (other than Taxes for which the Purchaser is expressly liable pursuant
to the terms of this Agreement) arising out of or relating to any period or any
portion thereof ending on or prior to the Closing Date without regard to when
asserted, commenced or identified.
"Farmington Location" shall refer to the Business location at 461 Cooke Street,
Farmington, Connecticut.
"Financial Assurance" means a demonstration of the ability of the owner or
operator of a facility to properly perform closure, post-closure, corrective
action, or other environmental activities which demonstration is required by,
and must be satisfied in the manner set forth in (a) the Solid Waste Disposal
Act, as amended, 42 U.S.C. Sec. 6901 et seq. (including without limitation Sec.
6991b); (b) the Toxic Substances Control Act, as amended, 15 U.S.C. Sec 2601 et
seq.; (c) any state, county or municipal Law analogous to, or similar to, the
foregoing; (d) any rules or regulations promulgated pursuant to any of the
foregoing federal, state, county or municipal Laws, including without limitation
regulations set forth in 40 C.F.R. Sections 258, 264, 265, 280 and 761; or (e)
transfer, assumption or other compliance with any and all bonding requirements.
"Financial Assurance Commitment" means a commitment from a responsible insurance
company with respect to Financial Assurance required by Governmental Entities in
order for the Purchaser to own and/or operate the Owned Real Property and the
Real Property subject to Real Property Leases.
"Financing Commitment" means capital commitments reasonably satisfactory to the
Purchaser which are sufficient to (i) pay the Cash Payment, (ii) refinance the
People's Bank working capital line of credit and term debt (as hereinafter
defined) at Closing, (iii) fund the payment of all reasonable costs and expenses
of the transactions described in this Agreement and (iv) provide ongoing funding
to Purchaser for working capital needs and general corporate purposes. Such
capital commitments shall contain normal and customary conditions including
material adverse change but excluding syndication and due diligence.
"Financial Statements" has the meaning set forth in Section 4.5.
"Financing" means the commitment from the Purchaser's qualified funding sources,
including without limitation, the New Jersey Economic Development Authority,
commercial lenders and certain accredited investors.
"GAAP" means United States generally accepted accounting principles as in effect
from time to time, consistently applied.
"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.
"Initial Working Capital Statement" has the meaning set forth in Section 2.7(a).
"Interests" has the meaning set forth in Section 2.1(a).
"Lowell Location" shall refer to 263 Howard Street, Lowell, Massachusetts.
"Material Adverse Effect" shall mean any change in, or effect on, Purchaser or
any Subsidiary (including the business thereof) which is, or with reasonable
probability might be, materially adverse to the Business, operations, Assets,
condition (financial or otherwise) or prospects of Purchaser and its
subsidiaries, taken as a whole.
"People's Bank Line of Credit and Term Debt" shall mean that indebtedness of
Seller to People's Bank relating to a working line of credit for the Business
("People's Bank Line of Credit") and certain term debt associated with certain
vehicles (as hereinafter defined) and equipment utilized in the Business
("People's Bank Term Debt") and being conveyed by Seller to Purchase hereunder.
"Permits" has the meaning set forth in Section 3.7(b).
"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).
"Purchase Price" has the meaning set forth in Section 2.6.
"Purchaser" has the meaning set forth in the Preamble.
"Schedules", as referred to throughout this Agreement, shall refer to all
schedules mentioned throughout this Agreement as same shall be attached to the
Agreement and signed by the Parties at Closing.
"Seller" has the meaning set forth in the Preamble and is limited to the
hazardous and non-hazardous waste collection, treatment and disposal service
business of Seller.
"Seller's Assets" has the meaning set forth in the Section 2.1 and Schedule A.
"Tangible Personal Property" has the meaning set forth in Section 2.1(b)(iii).
"Target Working Capital" means Zero ($0.00) Dollars.
"Working Capital" has the meaning set forth in Section 2.7(b).
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.0. RECITALS AND DEFINITIONS. The recitals and definitions set forth
above are incorporated herein by this reference as though set forth verbatim and
at length.
Section 2.1 ASSETS TO BE SOLD AND PURCHASED. On the terms and subject to the
conditions set forth in this Agreement, at the Closing Seller shall sell,
assign, transfer, convey and deliver to Purchaser free and clear of any and all
liens, claims, interests and encumbrances of any nature (except as set forth on
Schedule J hereto), and Purchaser shall purchase and accept from Seller those
assets of Seller (the "Seller's Assets") as hereinafter described:
(collectively, the assets set forth in this Section 2.1 and as are set forth on
Schedule A are referred to as "Seller's Assets"):
(a) Seventy (70.00%) Percent of the issued and outstanding equity
interests of JES LLC (the "Interests"), which owns 100% of the issued
and outstanding equity of JES INC.
(b) all legal and beneficial right, title, and interest of Seller in RMJ
Co.'s and JES LLC's assets of every kind and description, whether
tangible or intangible, real, personal or mixed, wherever situated,
owned, held or used by RMJ Co. or JES LLC or in which RMJ Co. or JES
LLC has any right, title or interest that is owned, directly or
indirectly, leased or otherwise held primarily for use in the Business
(as set forth on Schedule A), except for the Excluded Assets, and
specifically including the following:
(i) all accounts receivable arising out of the operation of the
Business existing on the Closing Date including, without
limitation, those listed or described on Schedule B, or arising
in the ordinary course under the Customer Contracts after the
date hereof (the "Accounts Receivable");
(ii) all rights and incidents of interest of Seller to:
(A) all of the waste management services agreements between
Seller, JES LLC and any customer(s) relating to the Business
(the "Customer Contracts") existing on the date hereof or
arising in the ordinary course after the date hereof and
listed or described on Schedule C (which Schedule shall be
provided to Purchaser prior to the Closing Date);
(B) the agreements, contracts and arrangements between Seller,
JES LLC and any vendor(s) or other third party providing
goods or services relating to the Business listed on
Schedule D (which Schedule shall be provided to Purchaser
prior to the Closing Date);
(C) all of the rights of Seller and JES LLC regarding employment
agreements and confidentiality and/or non-competition
agreements with respect to Seller's and/or JES LLC's
employees or former employees;
(iii)all equipment, computers, furniture, furnishings, fixtures,
office supplies, Vehicles (as defined in Schedule A and subject
to the liens disclosed on Schedule J) and all other tangible
personal property currently owned by, or on order to be delivered
to, Seller and JES LLC that are used primarily in the operation
of the Business or are located on, or to be delivered to, any
real property or premises subject to the Real Property Leases
(collectively, the "Tangible Personal Property"), including
without limitation, such of the foregoing as are listed or
described on Schedule A;
(iv) trade names, trademarks, registered copyrights, service marks,
trademark registrations and applications, service mark
registrations and applications, copyright registrations and
applications, corporate or other entity names, internet addresses
and other internet related assets used primarily in the operation
of the Business, including without limitation such of the
foregoing as are listed or described on Schedule E (the
"Intellectual Property");
(v) all rights and claims under all warranties, representations and
guarantees made by suppliers, manufacturers and contractors in
connection with Seller's Assets and all rights and claims
relating to Assumed Liabilities except those shown or described
on Schedule F;
(vi) the right to lease the real property which is used in the
operation of the Business at Building A, Cooke Street, Farmington
Connecticut for $3,000.00 per month, triple net, on a month to
month basis.
(vii)all licenses, permits, authorizations and approvals issued to
Seller and JES LLC by any Governmental Entity primarily relating
to the operation of the Business, including without limitation,
such of the foregoing as are listed or described on Schedule I;
(viii) all surety bonds, collateral bonds, letters of credit, cash
trusts, cash deposits or the proceeds thereof for the Financial
Assurance requirements or performance bond requirements, whether
or not required under applicable Environmental Laws, if
transferrable;
(ix) copies of all books and records of the Business and JES LLC;
(x) all inventories of supplies and spare parts of the Seller and JES
LLC relating to the operation of the Business;
(xi) the following telephone numbers: (800) 585-7916, (860) 284-9670,
(860) 284-9834 (facsimile), (978) 453-7772 and (978) 453-7775
(facsimile) or such other numbers as are used in the Business
(subject to approval by any applicable telecommunication
company);
(xii) all goodwill primarily related to the Business; and
(xiii) to the extent assignable, rights of indemnification from all
non-affiliated third parties for liabilities and obligations
relating to the Business or Seller's Assets.
(c) the seals, minute books, charter documents, stock or equity record
books and such other books and records as pertain to the organization,
existence or capitalization of JES LLC as well as any other records or
materials relating to the Business (or copies thereof where counsel to
Purchaser deems such to be sufficient).
Section 2.2 EXCLUDED ASSETS. Notwithstanding anything contained in this
Agreement to the contrary, the following rights, properties and assets
(collectively, the "Excluded Assets") will, to the extent not included in the
calculation of Working Capital, not be included in the Seller's Assets:
(a) any and all assets of Seller not described in Section 2.1 above;
(b) any interest that may presently be held by Seller in Enviro-Safe
Corporation, J & M Environmental Corp and Green Management Corp.;
(c) any options to purchase common stock in Purchaser, issued pursuant to
the performance based threshold set forth in the Parties' Joint
Venture Agreement dated May, 2000; and,
(d) the current RMJ Co. telephone number, (860) 585-7916.
(e) Any assets of Seller not utilized in the Business or listed on
Schedule A.
Section 2.3 NO ENCUMBRANCES. The sale and transfer of Seller's Assets at the
time of Closing shall be free and clear of all obligations, security interests,
liens, mortgages, and encumbrances, except as above and described in Schedule J
and other schedules attached hereto, or unless expressly assumed in writing by
Purchaser at or prior to Closing.
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