U.S. SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 31, 1996
AQUAGENIX, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24490 65-0419263
(State or other
jurisdiction of (Commission File Number) (I.R.S.Employer
incorporation) Identification No.)
6500 Northwest 15th Avenue, Fort Lauderdale, Florida 33309
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 975-7771
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. Other Events
On December 31, 1996, Aquagenix, Inc. (the "Company") acquired 100% of
the common stock of Good Shepherd, Inc. d/b/a Green Pastures, Inc.
("GPI") pursuant to a Stock Exchange Agreement, dated as of December
31, 1996, by and among the Company, GPI and Garry Seitz and Jan P.
Seitz (collectively the "Selling Shareholders"), the shareholders of
GPI. The aggregate purchase price was $600,000 which was paid by
the issuance of 96,000 shares ("Aquagenix Shares") of the Company's
common stock to the Selling Shareholders. Pursuant to the Stock
Exchange Agreement, the Selling Shareholders represent and covenant
that the Aquagenix Shares are being acquired solely for investment
purposes. The Aquagenix Shares have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any
state and may not be sold or otherwise transferred or disposed of
except pursuant to an effective registration statement under the
Act and any applicable state securities laws, or an opinion of
counsel satisfactory to counsel to the Company that an exemption
from registration under the Act and applicable state laws is available.
The assets acquired from GPI comprised mainly application equipment
and recurring service contracts. Based on the unaudited accounts for
the year ended December 31, 1996, GPI had total revenues and net
income of approximately $960,000 and $159,000, respectively.
In connection with the acquisition, the Company has entered into a
two-year employment agreement with Garry Seitz..
GPI, a Georgia-based private company, founded in 1988, is a provider
of roadside vegetation management services throughout the state of
Georgia using high-tech computer controlled application systems along
roadsides. The Company intends to continue and further develop the
existing business of GPI .
ITEM 7. Financial Statements and Pro Forma Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
Not Applicable.
(b) Pro Forma Condensed Consolidated Financial Statements of
Aquagenix, Inc.
Not Applicable.
(c) Exhibit
Stock Exchange Agreement, dated as of December 31, 1996,
by and among the Company, GPI and Garry Seitz and Jan P.
Seitz, the Selling Shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
AQUAGENIX, INC.
Date: January 15, 1997 By: /s/ Helen Chia
Helen Chia,
Chief Financial Officer
STOCK EXCHANGE AGREEMENT
by and among
AQUAGENIX, INC.,
GARRY SEITZ AND JAN P. SEITZ
AND
GOOD SHEPHERD, INC. d/b/a GREEN PASTURES, INC.
December 31, 1996
TABLE OF CONTENTS
1. Purchase and Sale.. . . . . . . . . . . . . . . . . . . . 2
1.1 GPI Shares to be Sold. . . . . . . . . . . . . . . . 2
1.2 Amount and Payment of Purchase Price . . . . . . . . 2
1.3 Payment of Purchase Price. . . . . . . . . . . . . . 2
2. The Closing.. . . . . . . . . . . . . . . . . . . . . . . 3
3. Items to be Delivered at Closing. . . . . . . . . . . . . 3
3.1 Selling Shareholders' Deliveries . . . . . . . . . . 3
3.2 Aquagenix's Deliveries . . . . . . . . . . . . . . . 3
3.3 Further Assurances . . . . . . . . . . . . . . . . . 4
3.4 Confidentiality. . . . . . . . . . . . . . . . . . . 4
3.5 Standstill . . . . . . . . . . . . . . . . . . . . . 5
4. Representations and Warranties of GPI and the Selling Shareholders..6
4.1 Organization and Corporate Authority . . . . . . . . 6
4.2 Charter, By-Laws and Minutes . . . . . . . . . . . . 6
4.3 Authorization and Validity . . . . . . . . . . . . . 7
4.4 No Violation . . . . . . . . . . . . . . . . . . . . 8
4.5 Absence of Certain Changes . . . . . . . . . . . . . 9
4.6 No Subsidiaries; Other Interests . . . . . . . . . . 10
4.7 Financial Statements.. . . . . . . . . . . . . . . . 10
4.8 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 Interests of Certain Affiliates. . . . . . . . . . . 15
4.10 Insurance. . . . . . . . . . . . . . . . . . . . . . 15
4.11 Names, Franchises, Permits, Etc. . . . . . . . . . . 15
4.12 Title to Assets. . . . . . . . . . . . . . . . . . . 16
4.13 Condition of Assets. . . . . . . . . . . . . . . . . 16
4.14 Leases . . . . . . . . . . . . . . . . . . . . . . . 17
4.15 Agreements . . . . . . . . . . . . . . . . . . . . . 17
4.16 Employment Matters . . . . . . . . . . . . . . . . . 18
4.17 Litigation . . . . . . . . . . . . . . . . . . . . . 18
4.18 Litigation . . . . . . . . . . . . . . . . . . . . . 19
4.19 Finder's Fee . . . . . . . . . . . . . . . . . . . . 20
4.20 Approvals. . . . . . . . . . . . . . . . . . . . . . 20
4.21 Licenses and Compliance with Law . . . . . . . . . . 20
4.22 Trademarks, Tradenames, Etc. . . . . . . . . . . . . 20
4.23 Disclosures. . . . . . . . . . . . . . . . . . . . . 21
4.24 Books and Records. . . . . . . . . . . . . . . . . . 21
4.25 Environmental . . . . . . . . . . . . . . . . . 21
4.26 Announcement . . . . . . . . . . . . . . . . . . . . 24
4.27 Personal Property. . . . . . . . . . . . . . . . . . 24
5. Representations of Aquagenix. . . . . . . . . . . . . . . 25
5.1 Organization of Aquagenix and Corporate Authority. . 25
5.2 Aquagenix's Authority. . . . . . . . . . . . . . . . 26
5.3 No Violation . . . . . . . . . . . . . . . . . . . . 26
5.4 Approvals. . . . . . . . . . . . . . . . . . . . . . 27
6. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 27
7. Survival of Representations and Warranties. . . . . . . . 27
8. Covenants of Selling Shareholders . . . . . . . . . . . . 28
8.1 Access to Information. . . . . . . . . . . . . . . . 28
8.2 Obtaining Consents . . . . . . . . . . . . . . . . . 28
8.3 Covenant to Satisfy Conditions . . . . . . . . . . . 28
8.4 Provide Information. . . . . . . . . . . . . . . . . 29
8.5 Investment Intent. . . . . . . . . . . . . . . . . . 29
8.6 Right of First Refusal . . . . . . . . . . . . . . . 29
8.7 Piggy-Back Registration Rights . . . . . . . . . . . 31
9. Conditions Precedent to the Obligations of Aquagenix. . . 32
9.1 Representations and Warranties True. . . . . . . . . 32
9.2 No Obstructive Proceedings . . . . . . . . . . . . . 32
9.3 Certificates, Documents, Financial Statements and Due Diligence
Inspection Satisfactory. . . . . . . . . . . . . . . 33
9.4 Performance. . . . . . . . . . . . . . . . . . . . . 33
9.5 Opinion of Counsel . . . . . . . . . . . . . . . . . 33
9.6 Governmental Permits and Approvals Corporate Resolutions 35
9.7 Third Party Consents . . . . . . . . . . . . . . . . 36
9.8 Compliance Certificate . . . . . . . . . . . . . . . 36
9.9 Resignation of Officers and Directors. . . . . . . . 36
10. Conditions Precedent to the Obligations of Selling Shareholders 36
10.1 Representations and Warranties True. . . . . . . . . 36
10.2 No Obstructive Proceeding. . . . . . . . . . . . . . 37
10.3 Performance by Aquagenix . . . . . . . . . . . . . . 37
10.4 Compliance Certificate . . . . . . . . . . . . . . . 37
11. Conduct of GPI's Business Pending the Closing . . . . . . 37
11.1 Regular Course of Business . . . . . . . . . . . . . 37
11.2 Amendments . . . . . . . . . . . . . . . . . . . . . 37
11.3 Capital Changes; Dividends; Redemptions. . . . . . . 38
11.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . 38
11.5 Organization . . . . . . . . . . . . . . . . . . . . 38
11.6 Certain Changes. . . . . . . . . . . . . . . . . . . 38
11.7 Insurance/Properties. . . . . . . . . . . . . . 39
11.8 Chemicals and Other Inventories. . . . . . . . . . . 39
11.9 Compliance with the Laws . . . . . . . . . . . . . . 40
11.10 Wrongful Action . . . . . . . . . . . . . . . . 40
12. Termination . . . . . . . . . . . . . . . . . . . . . . . 40
12.1 Termination. . . . . . . . . . . . . . . . . . . . . 40
12.2 Effect of Termination. . . . . . . . . . . . . . . . 40
13 Additional Agreements.. . . . . . . . . . . . . . . . . . 41
13.1 Agreement Not to Compete . . . . . . . . . . . . . . 41
13.2 Non-Competition Agreements . . . . . . . . . . . . . 43
13.3 Liabilities Assumed. . . . . . . . . . . . . . . . . 44
14. Indemnification by Selling Shareholders.. . . . . . . . . 44
14.1 Obligation of Selling Shareholders to Indemnify 44
14.2 Claims by Third Parties. . . . . . . . . . . . . . . 45
14.3 Defensive Claims by Third Parties. . . . . . . . . . 45
15. Indemnification by Aquagenix. . . . . . . . . . . . . . . 46
15.1 Obligation of Aquagenix to Indemnify . . . . . . . . 46
15.2 Claims by Third Parties. . . . . . . . . . . . . . . 47
15.3 Defensive Claims by Third Parties. . . . . . . . . . 47
16. General . . . . . . . . . . . . . . . . . . . . . . . . . 48
16.1 Entire Agreement . . . . . . . . . . . . . . . . . . 48
16.2 Separate Counterparts. . . . . . . . . . . . . . . . 48
16.3 Parties in Interest. . . . . . . . . . . . . . . . . 48
16.4 Assignment . . . . . . . . . . . . . . . . . . . . . 49
16.5 Notices. . . . . . . . . . . . . . . . . . . . . . . 49
16.6 Gender . . . . . . . . . . . . . . . . . . . . . . . 50
16.7 Governing Law. . . . . . . . . . . . . . . . . . . . 50
16.8 Jurisdiction . . . . . . . . . . . . . . . . . . . . 50
SCHEDULES
1.0 Selling Shareholders
4.2 Charter, By-Laws and Minutes of GPI
4.3(d) Resolution of Board of Directors
4.6 New Subsidiaries; Other Interests
4.7(b) Undisclosed Liabilities
4.10 Insurance
4.14 Leases/Contracts
4.15 Agreements
4.16 Employment Agreement
4.17 Litigation
4.21 Licenses
EXHIBITS
To Be Supplied By Section #
Exhibit A Articles of Incorporation, Bylaws
and Certificate of Good Standing Buyer Preamble
Exhibit B Financial Statements Seller 4.7
Exhibit C Opinion of Counsel Buyer 9.5
<PAGE>
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") dated as of December
31, 1996, by and among AQUAGENIX, INC. ("Aquagenix"),a Delaware corporation,
and the shareholders set forth on Schedule 1, who are Garry Seitz and Jan P.
Seitx (collectively the "Selling Shareholders"), the holders of all
outstanding shares of capital stock of Good Shepherd, Inc. d/b/a Green
Pastures, Inc. ("GPI"), a Georgia corporation.
WHEREAS, GPI is engaged in the business of providing industrial
vegetation management, further defined as weed, brush, and tree control,
growth regulation of grasses, weeds and plants along roadsides, right of
ways, airports, industrial sites and along safety guardrails (GPI's
activities in pursuing the business of providing industrial vegetation
management and right of way maintenance are herein referred to as the
"Business"); and
WHEREAS, the Selling Shareholders desire to own 500 shares of the
issued and outstanding capital stock of GPI which constitute 100% of the
issued and outstanding shares of GPI. The foregoing shares of capital stock
are hereinafter collectively referred to as the "GPI Shares".
WHEREAS, this Agreement sets forth the terms and conditions upon which
the Selling Shareholders will sell the GPI Shares to Aquagenix, and Aquagenix
will purchase from the Selling Shareholders one hundred (100%) percent of the
GPI Shares.
In consideration of the mutual promises contained herein and intending
to be legally bound, the parties hereto covenant and agree as follows:
1. Purchase and Sale.
1.1 GPI Shares to be Sold. Subject to the terms and conditions of
this Agreement, at the Closing (as hereinafter defined) the Selling
Shareholders shall sell,transfer, convey, assign and deliver to Aquagenix all
the GPI Shares free and clear of all liens, claims, charges and encumbrances
of whatever nature. The purchase price to be paid by Aquagenix and the terms
and conditions of such purchase shall be as specified in Section 1.2 and 1.3
hereof.
1.2 Amount and Payment of Purchase Price. Subject to the terms and
conditions of this Agreement, Aquagenix agrees to pay the Selling Shareholder
the purchase price, 96,000 shares of Aquagenix unregistered Common Stock
delivered at Closing. The terms of payment for the Aquagenix Purchase Price
shall be as set forth in Section 1.3 hereof.
1.3 Payment of Purchase Price. The Purchase Price shall be payable
by the issuance to the Selling Shareholders of 96,000 shares of Aquagenix
unregistered Common Stock ("Aquagenix Shares").
2. The Closing.
The Closing (the "Closing") shall take place on December 31, 1996 at
9:00 a.m. EST at the offices of Aquagenix, Inc., 6500 N.W. 15th Avenue, Fort
Lauderdale, Florida, or at such other place and time as agreed upon by the
parties.
3. Items to be Delivered at Closing.
3.1 Selling Shareholders' Deliveries. At the Closing, the Selling
Shareholders will deliver to Aquagenix:
(i) stock certificates evidencing the GPI Shares owned by the
Selling Shareholders, duly endorsed in blank and with all requisite stock
transfer and tax stamps affixed, with signatures; and (ii) all such
schedules, exhibits, opinions, contracts, resolutions, agreements and
documents as are provided for herein to be delivered by the Selling
Shareholders to Aquagenix and such other instruments, documents and
agreements as Aquagenix may reasonably request for the purpose of carrying
out the transactions contemplated by this Agreement.
3.2 Aquagenix's Deliveries. At the Closing, Aquagenix will cause to
be delivered to the Selling Shareholders (i) stock certificates evidencing
the Aquagenix Shares, and (ii) all such schedules, exhibits, opinions,
contracts, resolutions, agreements and documents as are provided for herein
to be delivered by Aquagenix to the Selling Shareholders and such other
instruments, documents and agreements as Selling Shareholders may reasonably
request for the purpose of carrying out the transactions contemplated by this
Agreement.
3.3 Further Assurances. After the Closing, the Selling Shareholders
shall from time to time, at the request of Aquagenix and at Aquagenix's
expense, execute and deliver such other instruments and take such other
actions as Aquagenix may reasonably request, in order to more effectively
consummate the transactions contemplated hereby. After the Closing,
Aquagenix shall from time to time at the request of the Selling Shareholders
and at the Selling Shareholders' expense, execute and deliver such other
instruments and take such other actions as the Selling Shareholders may
reasonably request, in order to more effectively consummate the transaction
contemplated hereby.
3.4 Confidentiality. Each party hereto agrees that it will hold
and cause its affiliates, employees, auditors, attorneys, financial advisors,
bankers and other consultants, to hold in strict confidence, unless compelled
to disclose by judicial or administrative process, all documents and
information concerning the other party furnished to it by such other party or
their representatives in connection with transactions contemplated by this
Agreement (except to the extent that such party can show that such
information furnished was (i) previously known by the party to which it was
furnished, (ii) in the public domain through no fault of such party, (iii)
lawfully acquired from other sources by the party to which it was furnished),
and each party agrees that it will treat such information as the sole
property of the party furnishing such information and it will not use such
information other than for evaluating the transactions described herein or
release or disclose such information to any other person, except its
employees, auditors, attorneys, financial advisors, banks and other
consultants and advisors in connection with this Agreement. If the
transactions contemplated by this Agreement are not consummated, such
confidence shall be maintained except to the extent such information comes
into the public domain through no fault of the party required to hold it in
confidence, and such information shallnot be used to the detriment of, or in
relation to any investment in, the other party and all such documents
(including copies thereof) shall be returned to the other party immediately
upon the written request of such other party.
3.5 Standstill. The Selling Shareholders and GPI agree, until
such time as this Agreement has been terminated in accordance with the
provisions of Section 12, that neither the Selling Shareholders nor GPI
shall initiate, solicit, or encourage, or use their best efforts to cause
any officer, director or employee, or any investment banker, attorney,
accountant or other agent retained by the Selling Shareholders or GPI to
initiate, solicit or encourage any proposal or offer to acquire all or any
part of the business and properties or capital stock of GPI or any of its
subsidiaries, whether by merger, purchase of assets, tender offer or
otherwise. The Selling Shareholders and GPI shall not provide any
information to any other person, firm or corporation for such a purpose
and the Selling Shareholders and GPI further agree that promptly hereafter
they shall notify Aquagenix and any other person, firm or corporation which
hereafter express an interest in acquiring the GPI Shares or any part of the
business or assets of GPI that the Selling Shareholders and GPI have entered
into this Agreement and have agreed not to discuss this matter further with
any third party.
4. Representations and Warranties of GPI and the Selling Shareholders.
As a material inducement to Aquagenix to enter into and perform this
Agreement and complete the purchase of the GPI Shares, GPI and the Selling
Shareholders, jointly and severally make the representations and warranties
set forth in this Section 4, intending Aquagenix to rely, and acknowledging
that Aquagenix is relying, on such representations and warranties in
executing this Agreement and entering into the transactions contemplated
hereby:
4.1 Organization and Corporate Authority. GPI is a corporation
duly organized,validly existing and in good standing under the law of the State
of Georgia withfull corporate power and authority to own or lease and use its
properties and assets, andto carry on its business as now conducted. GPI is
qualified as a foreign corporation to do business in every other jurisdiction
where such qualification is necessary to conduct its business as presently
conducted.
4.2 Charter, By-Laws and Minutes. The copies of the Articles of
Incorporation, Certficate of Good Standing dated within 20 days from the date
of Closing, the By-Laws of GPI attached hereto as Exhibit A and minutes of
meetings of its Board of Directors and shareholders (or consents in lieu
thereof), and any shareholders' agreements among any or all shareholders of
GPI, all as furnished to Aquagenix (in the form attached as Schedule
4.2) are true, correct and complete copies thereof.
4.3 Authorization and Validity.
(a) The Selling Shareholders have the full right, power and
authority to enter into this Agreement and to sell, transfer and convey to
Aquagenix at the Closing the GPI Shares to be sold to Aquagenix by such
Selling Shareholders pursuant to this Agreement, and, upon consummation of
the transactions contemplated by this Agreement, Aquagenix will acquire the
GPI Shares free and clear of all covenants, conditions, restrictions, voting
trust arrangements, liens, claims, charges, encumbrances, options and
other rights of any kind. The Selling Shareholders shall indemnify and hold
harmless Aquagenix, its officer and directors, from any claims, lawsuits or
legal expenses associated with actions relating to ownership or profit sharing
of GPI.
(b) The Selling Shareholders have good and marketable title to the
GPI Shares to be sold to Aquagenix by such Selling Shareholders pursuant to
this Agreement, free and clear of all covenants, conditions, restrictions,
voting trust arrangements, liens, claims, charges, encumbrances, options and
other rights of any kind.
(c) This Agreement constitutes the valid and binding obligation of
the Selling Shareholders, enforceable against such Selling Shareholders in
accordance with its terms.
(d) This Agreement has been duly and validly authorized by all
necessary corporate action and upon execution constitutes the valid and legally
binding obligations of GPI enforceable in accordance with their respective
terms. A copy of the Resolution is attached as Schedule 4.3(d).
4.4 No Violation.
(a) No Selling Shareholder or GPI is a party to,subject to or bound
by any agreement or judgment, order, writ, prohibition, injunction or decree of
any court or governmental body that would prohibit or prevent the execution,
delivery or performance of this Agreement by GPI or such Selling Shareholder.
Neither the execution, delivery or performance of this Agreement, nor the
consummation of the transactions contemplated hereby will violate, or be in
conflict with, or constitute a default (or an event which with notice or lapse
or time or both, would constitute a default) under, or result in a termination
of or accelerate the performance required, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any security interest,lien or other encumbrance upon any
property or assets of the Selling Shareholder or GPI under any agreement,
commitment, indenture or other instrument to which any Selling Shareholder or
GPI is bound, or violate any statute or law or any judgment, decree, order,
award, regulation or rule of any court, governmental authority or arbitration
tribunal applicable any Selling Shareholder or GPI.
(b) Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby will
(i) violate any provision of the Articles of Incorporation or Bylaws of GPI
(ii) violate, or be in conflict with, or constitute a default (or an event
which with notice or lapse of time or both, would constitute a default) under,
or give rise to a right of termination of or result in the termination or
accelerate the performance required by or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance upon any
property or assets of GPI under, any agreement, commitment, indenture or other
instrument to which GPI is a party or by which GPI is bound, or to which the
property of GPI is subject; (iii) violate any statute or law or any
judgment, decree, order, award, regulation or rule of any court, governmental
authority or arbitration tribunal applicable to GPI; or (iv) give rise to the
right of termination by any domestic or foreign governmental authority or
tribunal of any license, registration, certificate, right of authority to
engage in business in such places where GPI now does or has a right to engage
in business or heretofore has engaged in business.
4.5 Absence of Certain Changes. Since September 30, 1996, GPI has
not:
(i) suffered any material adverse change in its working capital, financial
condition, assets, liabilities (absolute, accrued, contingent or otherwise),
reserves, business, operations or prospects; (ii) paid, discharged or
satisfied any claims, liabilities or obligations (absolute accrued, contingent
or otherwise) other than the payment, discharge or satisfaction in the
ordinary course of business and consistence with past practice or as agreed to
by the parties; (iii) written off as uncollectible any notes or accounts
receivable; (iv) cancelled any debts or waived any claims or rights of
substantial value; (v) sold, transferred or otherwise disposed of any of its
properties or assets (personal or mixed, tangible or intangible),
except in the ordinary course of business and consistent with past practice;
(vi) granted any general increase in the compensation of officers or employees
(including any such increase pursuant to any bonus, pension, profit or other
profit sharing or other plan or commitment) or any increase in the compensation
payable or to become payable to any officer, employee, except where such
increase is customary on a periodic basis; (vii) declared, paid or set aside
for payment any dividend or other distribution in respect of its
capital stock or redeemed, purchased or otherwise acquired, directly or
indirectly, any shares of capital stock or other securities of GPI; or (viii)
agreed, whether in writing or otherwise, to take any action described in this
section.
4.6 No Subsidiaries; Other Interests. Except as set forth on Schedule
4.6 attached hereto, GPI does not own, directly or indirectly,any capital stock
or other equity securities of any corporation nor have any direct or indirect
equity ownership interest in any business or entity nor is GPI otherwise under
any obligation to purchase or subscribe to any interest income or make any
loan or other advance other than business and travel advances to employees in
the ordinary course of business, to or any manner make any
investment in any person, business or entity.
4.7 Financial Statements.
(a) As contained in Exhibit B, Selling Shareholders have heretofore
delivered to Aquagenix: (i) a reviewed balance sheet of GPI as of November 30,
1996, including statements of income, changes in stockholders' equity for the
period ending November 30, 1996 (the "Financial Statements"), together with
notes thereto, all prepared in accordance with generally accepted accounting
principals which reports upon the Financial Statements are included as a part
thereof; (ii) a balance sheet of GPI as of December 20, 1996, and statements of
income, changes in stockholders' equity for the period then ended which are
not subject to review the "Interim Financial Statements"). The Financial
Statements and the Interim Financial Statements fairly present the assets,
liabilities, financial condition and results of operations for the period
therein referred to; all in accordance with generally accepted accounting
principals consistently applied throughout the periods involved.
(b) Undisclosed Liabilities. GPI has no liability, duty or
obligation, including obligations under liability claims, or other tort,
contractual claims or obligations, to employees, or otherwise, and GPI has
not committed any act or omission, and no event has occurred and no condition
exists, which could give rise to such a liability, which is not
disclosed or reflected in the Financial Statements or Interim Financial
Statements, whether current, long-term, fixed, contingent, or otherwise and
which would be required to be reflected, disclosed or accrued on the Financial
Statements or Interim Financial Statements (under FASB 5) in accordance with
GAAP. GPI has no other such liability, duty or obligation, whether fixed,
contingent or otherwise. No claim has been threatened or asserted by any
present or former employee, customer or client of GPI regarding any act
or omission of either GPI or its personnel, nor has any claim been threatened
or asserted by any person regarding any violation by either GPI or its
personnel of any laws or any rules, guidelines, policies or regulations of any
governmental agency or state regulatory authority, (ii) no event has occurred
and no condition exists that might give rise to any such
claim, and (iii) GPI and the Selling Shareholders have no knowledge of any
event or condition which might lead them to believe that any such claim might
be asserted.
(c) Accounting Changes. GPI has not since inception, changed it
accounting practices, methods or principles in any respect. Since January 1,
1996, there has not (i) been any material adverse change in the assets,
business, operations, liabilities (absolute, accrued, contingent or otherwise),
prospects or financial condition of GPI other than as reflected on the
Financial Statements and Interim Financial Statements.
(d) Internal Controls. GPI maintains internal controls with
respect to its books, records, finances, customer accounts and other operations
which are adequate under state regulatory rules and regulations and are in
accordance with standard industry practices.
(e) Capitalization. GPI's authorized capitalization consists of
one hundred thousand (100,000) shares of common stock having One ($1.00)
Dollar par value, of which 500 shares are issued and outstanding. All issued
and outstanding shares of capital stock of GPI are validly issued, fully paid
and non-assessable. Except as set forth on Schedule 4.7(f) there are no
outstanding (a) securities convertible into or exchangeable
for the shares of capital stock of GPI; (b) options, warrants or other rights
to purchase or subscribe shares of capital stock of GPI or securities
convertible into or exchangeable for shares of capital stock of GPI; or (iii)
contracts, commitments, agreements, understandings or arrangements of any kind
relating to the issuance of any capital stock of GPI, any such
convertible or exchangeable securities or any such options, warrants or rights.
(f) Accounts Receivable. All accounts receivable of GPI that are
reflected on the Financial Statements and Interim Financial Statements or on
the accounting records of GPI as of the Closing (collectively, the "Accounts
Receivable")represent or will represent valid obligations arising from services
actually performed in the ordinary course of business. Unless paid prior to
the Closing, the accounting records of GPI as of the Closing (which reserves
are adequate and calculated consistent with past practice) will not represent a
greater percentage of the Accounts Receivable as of the Closing than as
reflected in the Financial Statements and Interim Financial Statements
represented of the Accounts Receivable reflected therein and will not
represent a material adverse change in the composition of such Accounts
Receivable in terms of aging. Schedule 4.7(g) contains a complete and accurate
list of all Accounts Receivable on the date of Closing, which list sets for
the aging of such Accounts Receivable.
4.8 Taxes.
(a) Filing and Payment. Except as set forth on Schedule 4.8(a),
GPI has filed all federal, state, local and other tax returns which are
required to be filed by it and which have become due and has paid tax returns
which are required to be filed by it and which have become due and has paid
all taxes shown thereon, including without limitation all taxes on properties,
income, business and occupation, licenses, sales and payrolls, and none of
the assets or properties of GPI are subject to any lien or charge for taxes,
except statutory liens for taxes not yet due. For purposes of this Agreement,
"Taxes" shall mean all taxes, charges, fees, levies and other assessments
however denominated, including any interest, penalties or additions to tax
that may become payable in respect thereof, imposed by any governmental body,
including, without limiting the generality of the foregoing, all net income,
gross income, payroll, withholding, unemployment insurance, social security,
sales, use, excise, franchise, gross receipts, occupation, real and personal
property, stamp, transfer, workers' compensation, ad valorem, profits, license,
employment, estimated, severance and other taxes, customs, duties, fees,
assessments or charges of any kind whatever. "Tax" shall mean any one of the
foregoing.
(b) Audits. No federal income, state excise or business or
occupation Tax returns of the GPI have been audited by the Internal Revenue S
Service or other applicable authorities, and the GPI has not granted any power
of attorney to any person to represent it before the Internal Revenue Service
or other applicable authorities. No federal or state Tax liabilities have been
assessed or proposed which remain unpaid. GPI is unaware of any basis upon
which any assessment for a material amount of additional Taxes of GPI could be
made.
(c) Withholding. All Taxes which GPI 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 GPI for such payment, and all
withholdings, collections or other payments payable in connection therewith as
of the dates of the Financial Statements and Interim Financial Statements are
fully reflected or disclosed in the balance sheets included as part of the
Financial Statements and Interim Financial Statements at such dates and for
the periods then ended. No waivers of statutes of limitations with respect to
any Tax returns of GPI nor extensions of time for the assessment of any Tax
have been given which are now in effect.
(d) Sales Tax. All sales Tax on goods, products, materials,
services, etc. have been paid for properly in full compliance with local, state
and federal laws. All sales Tax has been fully reflected or disclosed in the
balance sheets included as part of the Financial Statements and Interim
Financial Statements s at such dates and for the periods then ended. No waivers
of statutes of limitations with respect to any Tax returns or sales tax issues
of GPI nor extensions of time for the assessment of any Tax have been given
which are now in effect.
(e) Transfer Taxes; Transferee Tax Liability. No transfer Taxes are
or will be due and payable as a result of the sale of the GPI Shares or the
transactions contemplated hereby.
4.9 Interests of Certain Affiliates. No officer, director, shareholder
or employee of GPI has any loan, other obligation or other transaction
outstanding and owing from GPI or for which GPI is or may be liable under
guaranty or otherwise.
4.10 Insurance. GPI does not carry directors' and officers' liability
insurance. Schedule 4.10, provides a list of all insurance policies maintained
by GPI, the nature of the policy, the deductible and the term of such policy,
and except as set forth in Schedule 4.10, GPI has no other insurance policies.
Schedule 4.10 also contains a description of claims against GPI that are
currently unsettled or uncompromised (whether insured or uninsured
or in litigation or not).
4.11 Names, Franchises, Permits, Etc. GPI has not infringed or violated
in any way any software or other license, or any trademark, trade name,
copyright, trade secret right or contractual relationship of others,or received
any notice, claim or protest respecting any such violation or infringement.
4.12 Title to Assets. GPI owns good and marketable title to all the
properties and assets of the type required to be reflected on the Interim
Financial Statement which it purports to own (whether personal or mixed,
tangible or intangible). Except as set forth on Schedule 4.12, all such
properties and assets are free and clear of all title defects or objections,
liens, claims, charges, security interest or other encumbrances of any nature
whatsoever, including, without limitation, leases, chattel mortgages,
conditional sales contracts, collateral security agreements and other title or
interest retention agreements. The rights, properties and other assets
presently owned, leased or licensed by GPI and described elsewhere in this
Agreement include all rights, properties and other assets necessary to permit
GPI to conduct its business in all material respects in the same general
manner as its business has been conducted since inception. To the extent that
any assets included in the Financial Statements are owned by the Selling
Shareholders or any other third party and as are set forth on Schedule 4.12,
title to such assets shall be good and marketable and such assets shall be
transferred by appropriate conveyance of title with any costs associated
therewith (tag fees, transfer taxes, etc.) being borne by the Selling
Shareholders.
4.13 Condition of Assets. The equipment, machinery and all other
tangible assets of GPI are in good operating condition and repair, subject only
to ordinary wear and tear and are all adequate for the use to which they are
being put. None of such equipment or machinery is in need of maintenance or
repair except for ordinary, routine maintenance and repairs which are not
material in nature or cost.
4.14 Leases. Schedule 4.14 sets forth all leases pursuant to which GPI
leases real or personal property for its facilities of operations. Such
agreements are in good standing and valid and enforceable in accordance with
their respective terms, and there are no existing defaults or events of default
by GPI or, to the best knowledge of GPI, by any other party thereto or events
which with notice or lapse of time or both would constitute defaults or events
of default under or with respect to any of such agreements. GPI has not
received any notice of any default or claim of default with respect to any such
agreements or knows of any fact or circumstance which might constitute or give
rise to such a claim.
4.15 Agreements. Schedule 4.15 sets forth any material contract or
arrangement to which GPI is a party or by or to which it or its assets,
properties or business are bound or subject, whether oral or written. All of
the agreements set forth in Schedule 4.15 are valid, binding, enforceable
agreements in full force and effect. GPI is not in default under any of them
(nor is any other party to any of such agreements, nor does any condition
exist which with notice or lapse of time or both would constitute a default
thereunder) and the transfer of ownership in GPI will not cause a default in
any such agreements. To the knowledge of GPI and the Selling Shareholders,
there has been no threatened cancellation or termination of any Contract. GPI
is not a party to, nor are the assets of GPI subject to or bound by or
affected by, any provision of any order of any court or other agency of
government or any indenture, agreement or other instrument or commitment
which adversely effects the operations of GPI.
4.16 Employment Matters.
(a) Except as described in Schedule 4.16, GPI is not a party to any
consulting agreement,employment agreement or agreement to lend to, or guarantee
any loan to any employee or agreement relating to a bonus, severance pay or
similar plan, agreement, arrangement or understanding. GPI has incurred no
liability, or taken or failed to take, any action which will result in any
liability in respect of any failure to comply with the Fair Labor Standards
Act or any other applicable laws dealing with minimum wages or maximum hours
for any employees, and all payments due from GPI on account of its employee
health and welfare insurance, holiday and vacation pay and similar benefits
have been paid. GPI is not a party to any collective bargaining agreement
governing its employees. There is no pending or threatened election for union
representation of GPI's employees. The Selling Shareholders have heretofore
delivered to Aquagenix complete and correct copies of all Employment and
Consulting Agreements to which GPI is a party or by which it is bound as
currently in effect.
4.17 Litigation. Except as described in Schedule 4.17, no action, suit,
order, judgment, injunction, award or proceeding of any kind has been filed or
commenced, or, to the knowledge of GPI, is threatened, before any court,
commission, agency or other administrative authority against GPI or which
questions or challenges the validity of this Agreement or any action taken or
to be taken by GPI or by any Selling Shareholder pursuant to this Agreement
or in connection with the transactions contemplated hereby which could be
anticipated to materially and adversely affect GPI's performance or
consummation of the transactions contemplated hereunder or the financial
condition of GPI; and (ii) to the best knowledge of the Selling Shareholders
and GPI, there is no basis for any such suit, proceeding or investigation.
GPI is not subject to any unsatisfied judgment, order or decree entered in
any law suit or proceeding.
(b) GPI has complied in all material respects with the requirement
of Section 4980B of the Code and Sections 5601 to 608 of ERISA relating to
continuation coverage for group health plans. Schedule 4.16(b) lists every
pension, savings, retirement, severance, health, insurance or other employee
benefit plan (collectively referred to herein as the "Plans") which GPI
maintains, or has any obligation to contribute to.
(c) Schedule 41.6(c) sets forth the names, address and
functions/positions of all employees and consultants of GPI.
4.18 Litigation. No action, suit, order, judgment, injunction, award or
proceeding of any kind has been filed or commenced, or,to the knowledge of GPI,
is threatened, before any court, commission, agency or other administrative
authority against GPI or which questions or challenges the validity of this
Agreement or any action taken or to be taken by GPI or by any Selling
Shareholder pursuant to this Agreement or in connection with the transactions
contemplated hereby which could be anticipated to materially and adversely
affect GPI's performance or consummation of the transactions contemplated
hereunder or the financial condition of GPI; and (ii) to the best knowledge
of the Selling Shareholders and GPI, there is no basis for any such suit,
proceeding or investigation. GPI is not subject to any unsatisfied judgment,
order or decree entered in any law suit or proceeding.
4.19 Finder's Fee. GPI has not incurred any obligation of any kind
whatsoever to any party for a finder's fee in connection with the transactions
contemplated by this Agreement.
4.20 Approvals. No approval, waiver, authorization, order, license or
consent of or registration, qualification or filing with or notification to any
governmental or regulatory authority, agency or other person or entity is
required in connection with or as a condition of the execution, delivery or
performance by GPI or the Selling Shareholders of this Agreement or any related
agreements.
4.21 Licenses and Compliance with Law. GPI has had and continues to have
all federal, state and local licenses and permits required to transact its
business and, is in compliance with all applicable federal, state and local
laws, regulations, and guidelines applicable to GPI's business. GPI has
accurately and timely filed all reports, claims and other filings required to
be filed in connection with all federal, state and local laws and regulations
governing the business of GPI. No validation review or program integrity
review related to GPI has been conducted by any federal, state or local
governmental agency and, no such review is scheduled, pending or threatened
against or affecting GPI or the consummation of the transactions contemplated
hereby.
4.22 Trademarks, Tradenames, Etc. GPI has no and there are no trademarks,
tradenames, copyrights, registrations, technology, know how and process (the
"Intellectual Property") necessary for the operation of GPI's business as
presently conducted.
4.23 Disclosures. No representations or warranties contained in this
Agreement and no statements contained in the Financial Statements, the
Interim Financial Statements, the Schedules or in any Exhibits, or any
certificate delivered to Aquagenix pursuant to the provisions hereof, contains
or will contain any untrue statement of a material fact or omits or will omit
to state any material fact necessary, in order to make the statements contained
herein or therein not misleading and in order to fully and fairly
provide the information required to be provided in any such document.
4.24 Books and Records. The books and records of GPI are complete and
correct and have been maintained in accordance with sound business practices,
including, but not limited to, the maintenance of an adequate system of
internal control.
4.25 Environmental.
(a) Except as set forth on Schedule 4.24, GPI has obtained all
permits, licenses, and other authorizations (collectively,the "Licenses") which
are required in connection with the conduct of the Business under all
applicable Environmental Laws (as defined below) and regulations relating to
pollution or protection of the environment, including Environmental Laws and
regulations relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including without limitation, ambient
air, surface water, groundwater, or land) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.
(b) Except as set forth in Schedule 4.24(b), GPI is in compliance
in all material respects in the conduct of the Business with all terms and
conditions of the Licenses, labels and treatment products and is in compliance
in all material respects with federal, state and local label laws associated
with treatment products used in the Business and FIFRA, and all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental Laws
or contained in any regulation, code, plan, order, decree, judgment,injunction,
notice (written or verbal) or demand letter issued, entered, promulgated or
approved thereunder in connection with the Business.
(c) Except as set forth on Schedule 4.24(c), GPI has not received
any written or verbal notice of, any past, present or future events,conditions,
circumstances, activities, practices, incidents, actions or plans which would
interfere with or prevent compliance or continued compliance with any
Environmental Laws or any regulations, code, order, decree, judgment,
injunction, notice (written or verbal) or demand letter issued, entered,
promulgated or approved thereunder, or which would give rise to any common law
or legal liability, or otherwise form the basis of any claim, action, demand,
suit, proceeding, hearing, study or investigation, based on or related to the
GPI's manufacture, processing, storage, distribution, use, treatment, disposal,
transport or handling or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical or industrial,
toxic or hazardous substance or waste.
(d) Except as set forth on Schedule 4.24(d), there is no civil,
criminal or administrative action, suit, demand, claim, hearing, notice or
demand letter, notice of violation, investigation or proceeding pending or to
the best knowledge of the Selling Shareholders, threatened against GPI, in
connection with the conduct of the Business relating in any way to any
Environmental Laws or regulation, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder.
(e) For purposes of this Agreement, "Environmental Laws" means
collectively, all federal, state and local environmental laws, common laws,
statutes, rules and regulations including, without limitation,the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Sec. 9061
et seq.), as amended, the Hazardous Materials Transportation Act (49 U.S.C.
Sec. 1801 et seq.), as amended, the Resource Conservation and Recovery Act
(42 U.S.C. Sec. 6901 et seq.), as amended, the Federal Water Pollution Control
Act (33 U.S.C. Sec. 1251 et seq.), as amended, the Safe Drinking
Water Act (42 U.S.C. Sec. 300f et seq.), as amended, the Clean Air Act
(42 U.S.C. Sec. 7401 et seq.), as amended, the Toxic Substances Control Act
(15 U.S.C. Sec. 2601 etseq.), as amended, the Federal Emergency Planning and
Community Right-to-Know Act (42 U.S.C. Sec. 11001 et seq.), as amended, any
so-called "superfund" or "super-lien" law and such statutes and ordinances as
may be enacted by state and local governments with jurisdiction over any real
property now or ever owned or leased by GPI or any real property upon which GPI
now conducts or has ever conducted its Business and any permits, licenses,
authorizations, variances, consents, approvals, directives or requirements of,
and any agreements with, any governments, departments, commissions, boards,
courts, authorities, agencies, officials and officers applicable to such real
property or the use thereof and regulating, relating to, or imposing liability
or standards of conduct concerning any pollutant, contaminant, chemical or
industrial, toxic or hazardous substance or waste.
4.26 Announcement. No announcement with respect to this Agreement or the
substance thereof shall be made by GPI and the Selling Shareholders unless
Aquagenix shall consent prior thereto.
4.27 Personal Property. Section 4.26 sets forth a complete and correct
list and brief description of each item of machinery, equipment, furniture,
fixtures and other tangible personal property owned, leased or used by GPI
having an original purchase cost or aggregate lease cost to the Companies
exceeding $5,000 (the "Machinery and Equipment"). Except as set forth in
Schedule 4.27, GPI owns outright and has good title, free and clear of all
title defects and objections, security interests, liens, charges and
encumbrances of any nature whatsoever (other than the lien of current property
taxes and assessments not in default, if any, liens of landlords and other
lessors arising under statute, and other liens, claims and encumbrance or
charges that do not in any material respect detract from the value of the
Machinery and Equipment or interfere with any material way with the present use
thereof) to the Machinery and Equipment shown on Schedule 4.26 as owned by it
and to all the machinery, equipment, furniture, fixtures, inventory,
receivables and other tangible or intangible personal property reflected on
the Financial Statements and Interim Financial Statements and all such property
acquired since the date thereof, except for sales and dispositions in the
ordinary course of business since such date. None of the title defects,
objections, security interests, liens, charges or encumbrances (if any) listed
on Schedule 4.26 adversely affects the value of any of the items of personal
property to which it relates or interferes with its use in the conduct of
business of the Companies. Except as set forth in Schedule 4.27 the Companies
hold good and transferable leaseholds in all of the Machinery and Equipment as
leased by it, in each case under valid and enforceable leases. The Companies
are not in breach of or default (and no event has occurred which, with due
notice or lapse of time or both, may constitute such a lapse or default) under
any lease of any material items of Machinery and Equipment purported to be
leased by it. The Machinery and Equipment and other personal property now
owned, leased or used by the Companies are sufficient and adequate to carry
on its businesses as presently conducted and all items thereof are in good
operating condition and repair, reasonable wear and tear excepted. The
Companies do not hold any personal property of any other person, firm or
corporation pursuant to any consignment or similar arrangement.
5. Representations of Aquagenix.
As a material inducement to GPI and Selling Shareholders to enter into and
perform this Agreement, Aquagenix makes the representations and warranties set
forth in this Section 5.
5.1 Organization of Aquagenix and Corporate Authority. Aquagenix is a
corporation duly organized,validly existing and in good standing under the laws
of the State of Delaware, with full corporate power and authority to own or
lease and use its properties and assets, to carry on its business as such
business is now conducted,to execute and deliver this Agreement and any related
agreements to which it is or will become a party at the Closing, and to carry
out the transactions contemplated hereby and thereby.
5.2 Aquagenix's Authority. This Agreement and any related agreements
to which Aquagenix is a party and the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of Aquagenix. This Agreement and any related
agreements to which it is a party have been duly executed and delivered and
constitute, valid and legally binding obligations of Aquagenix, enforceable
in accordance with their respective terms.
5.3 No Violation. Neither the execution and delivery by Aquagenix of
this Agreement or any of the related agreements to which Aquagenix is a party,
nor consummation of the transactions herein or therein contemplated, nor
compliance with the terms, conditions and provisions hereof or thereof,conflict
with or violate any provision of law applicable to Aquagenix, or the charter or
By-Laws of Aquagenix or result in a violation or default in any provision of
any law, regulation, order, writ, injunction or decree of any court or
governmental agency or authority or of any agreement or instrument to which
Aquagenix is a party or by which Aquagenix is bound or to which Aquagenix is
subject,or constitute a default thereunder or result in the imposition of any
lien, charge, encumbrance or security interest of any nature whatsoever upon
any of Aquagenix's assets pursuant to the terms of any such agreement or
instrument.
5.4 Approvals. No approval, waiver, authorization, order, license or
consent of or registration, qualification or filing with or notice to any
governmental or regulatory authorities, agency or other person or entity is
required in connection with or as a condition of the execution, delivery or
performance by Aquagenix of this Agreement and the related agreements to which
it is a party.
6. Expenses.
The parties to this Agreement shall bear their respective direct and
indirect expenses incurred with the preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby, whether
or not the transactions contemplated hereby are consummated, including without
limitation all fees and expenses of agents, representative's counsel and
accountants.
7. Survival of Representations and Warranties.
The respective representative warranties of the parties contained herein
or any certificates delivered prior to at the Closing shall have been deemed
represented and made by GPI and the Selling Shareholders at the Closing and
shall not be deemed waived or otherwise affected by any investigation made by
any other party hereto. Each and every such representation, warranty,
covenant and agreement shall survive the execution and delivery hereof and the
Closing hereunder for a period of two (2) years.
8. Covenants of Selling Shareholders. Selling Shareholders hereby covenant
and agree with Aquagenix:
8.1 Access to Information. The Selling Shareholders shall until the
earlier to occur of the Closing or the termination of this Agreement pursuant
to Section 12 hereof, cause GPI to afford Aquagenix, its counsel, accountants
and other representatives and advisors full access to the operations, offices,
properties, books and records of GPI, including but not limited to all books of
account, corporate and tax records, material contracts and agreements, filings
with any regulatory authority, litigation files (except for any files that may
be the subject of privilege), patent and trademark records, engineering
and technology reports. Aquagenix shall have the right to review any and all
papers of GPI's accountants, and shall have full opportunity to make such
investigations as it shall desire to make of the affairs of GPI; and the
Selling Shareholders will cause the officers, accountants and representatives
of GPI to furnish such additional financial, operating and other information
as Aquagenix shall from time to time reasonably request.
8.2 Obtaining Consents. Selling Shareholders shall use their best
efforts, and shall cause GPI to use its best efforts, to obtain prior to the
Closing all consents,approvals and authorizations necessary to the consummation
of the transactions contemplated hereby and will delivery (or cause GPI to
deliver) to Aquagenix copies of such consents promptly after it is obtained.
8.3 Covenant to Satisfy Conditions. The Selling Shareholders shall use
their best efforts to ensure that the conditions set forth in Section 8 hereof
are satisfied.
8.4 Provide Information. The Selling Shareholders agree promptly to
inform and advise Aquagenix of any fact or situation which, is or could be
reasonably expected to result in a violation of any representation and
warranty contained in herein.
8.5 Investment Intent. The Selling Shareholders represent and covenant
herein that the Aquagenix Shares are being acquired hereby solely for the
account of the Selling Shareholders for investment purposes and not with a view
toward resale or distribution and such Aquagenix Shares may not be transferred,
sold assigned or distributed unless they are registered or an exemption from
registration is available which shall be substantiated by an opinion of the
Selling Shareholders' counsel satisfactory to Aquagenix. Further, the Selling
Shareholders understand and agree that the Aquagenix Shares are not registered
and Aquagenix has no obligation nor intention to register the
Aquagenix Shares, and that the following legend will be placed on the
certificates representing the Aquagenix Shares:
"These securities have not been registered under the Securities Act of
1933, as amended (the "Act") or any state securities laws and may not be
sold or otherwise transferred or disposed of except pursuant to an
effective registration statement under the Act and any applicable state
securities laws, or an opinion of counsel satisfactory to counsel to the
Company that an exemption from registration under the Act and any
applicable state securities laws is available."
8.6 Right of First Refusal. If the Selling Shareholders receive or
negotiate any "Bona Fide Offer" (as hereinafter defined) to purchase any or all
of the Aquagenix Shares and is willing to accept such Bona Fide Offer or
designs to sell the Aquagenix shares, the Selling Shareholders shall promptly
send a "BFO Notice" (as hereinafter defined), in the case of a Bona Fide Offer,
to Aquagenix offering to sell his Aquagenix Shares to Aquagenix at the same
price and upon the same terms and conditions as are contained in the Bona Fide
Offer or Notice of Offer offering to sell its Aquagenix Shares, indicating
the price, terms and conditions of such offer. The price in the Notice of
Offer shall be based upon the five (5) day trading average closing price
immediately prior to the proposed sale as reported by the National Association
of Securities Dealers Automative Quotation Systems, National Market System
("NASDAQ/NMS"), as quoted by The Wall Street Journal. Aquagenix shall then
have such rights and privileges, for the prescribed time periods as are set
forth below.
a. In the case of any Bona Fide Offer, prior to accepting an offer
for the Aquagenix Shares, the Selling Shareholders must offer such shares to
Aquagenix by BFO Notice, as defined herein. "Bona Fide Offer" shall mean an
offer in writing, signed by an offeror or offerors, who is not related to or
affiliated with the Selling Shareholders, in a form legally enforceable
against such offeror or offerors.
b. When notice is sent with respect to a Bona Fide Offer (by a
method provided for herein), such notice ("BFO Notice") shall contain a true
and complete copy of the Bona Fide Offer setting forth the price and all terms
and conditions of the proposed transaction, with the name(s), address(es)
(both home and office) and business(es), or occupation(s), of the offeror or
offerors. Any purported notice which does not contain all such requisite
information shall not be considered a BFO Notice for the purposes of this
Agreement.
c. When the BFO Notice or Notice of Offer has been sent by the
recipient (the "Offering Shareholder") to Aquagenix, the following procedures
shall be complied with:
(1) for a period of sixty (60) days from receipt of the BFO
Notice or Notice of Offer as the case may be, Aquagenix shall have the right,
at its sole option, to purchase all, and no less than all, of the Aquagenix
Shares so offered or direct the sale to a third party.
(2) if Aquagenix does not elect, within the prescribed time
period, to purchase the Aquagenix Shares covered by the Bona Fide Offer or
Notice of Offer as the case may be, the Offering Shareholder shall have the
right to accept the Bona Fide Offer, subject to the provisions and restrictions
of this Agreement, in strict accordance with the terms of the Bona Fide Offer
or sell the Aquagenix Shares to a third party on the same terms as are
contained in the Notice of Offer, as the case may be and only if the sale is
fully consumated within one hundred and twenty (120) days after the original
mailing of the Bona Fide Offer or Notice of Offer.
8.7 Piggy-Back Registration Rights. If at any time after the second
anniversary of the effective date of this Agreement but prior to the fifth
anniversary of the effective date of this Agreement, the Company shall propose
the registration on an appropriate form under the Act of any shares of Common
Stock (other than in connection with a merger or acquisition or an employee
benefit plan), the Company shall at least 30 days prior to the filing of such
registration statement give you written notice of such proposed registration
and, upon written notice given to the Company within 10 business
days after your receipt of such notice from the Company, shall include or
cause to be included in any such registration statement all or such portion of
the Aquagenix Shares, as you may request, provided, however, that the Company
may at any time withdraw or cease proceeding with any such registration if it
shall at the same time withdraw or cease proceeding with the registration of
such Common Stock originally proposed to be registered.
9. Conditions Precedent to the Obligations of Aquagenix.
The obligations of Aquagenix to consummate this Agreement and the
transactions contemplated hereby are subject to the satisfaction at or before
the Closing of those conditions imposed upon GPI and the Selling Shareholders,
any of which Aquagenix may in its sole discretion waive.
9.1 Representations and Warranties True. All of the representations
and warranties of GPI and the Selling Shareholders contained in herein shall be
true as of the date of this Agreement, and shall be deemed to have been made
again at and as of the Closing, and shall be true at and as of the Closing.
GPI and the Selling Shareholders shall have performed or complied in all
material respects with all covenants and conditions required by this Agreement
to be performed or complied with prior to or at the Closing.
9.2 No Obstructive Proceedings. No action or proceedings shall have
been instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against GPI or the
Selling Shareholders which seek, to, or would, render it unlawful as of the
Closing to effect the transactions set forth herein in accordance with the
terms hereof, and no such action shall seek damages in a material amount by
reason of the transactions contemplated hereby. Also, no legal objection to
the transactions contemplated by this Agreement shall have been received
from or threatened by any governmental department or agency.
9.3 Certificates, Documents, Financial Statements and Due Diligence
Inspection Satisfactory. All certificates, Financial Statements and documents
delivered by GPI and the Selling Shareholders pursuant to this Agreement shall
be satisfactory in form and substance to Aquagenix and its counsel acting
reasonably and in good faith. GPI shall deliver to Aquagenix an unaudited
balance sheet and related financial statements as of a date 30 days prior to
Closing, which shall be in form and substance satisfactory to Aquagenix.
Aquagenix shall be satisfied, as determined in its sole discretion, that its
due diligence inspection of GPI and the Selling Shareholders have revealed no
reason why Aquagenix should not consummate the transactions contemplated by
this Agreement.
9.4 Performance. The Selling Shareholders shall have performed and
complied with all covenants, obligations and conditions required by this
Agreement to be performed or complied with either prior to or at the Closing.
9.5 Opinion of Counsel. The Selling Shareholders have furnished to
Aquagenix an opinion of its counsel, acceptable to Aquagenix, dated the date of
the Closing, substantially in the form set forth in Exhibit C hereto which
will set forth that:.
(a) GPI is duly organized, validly existing and in good standing
is under the laws of the State of Georgia, and has all requisite corporate
power and authority to own its properties and assets and to conduct its
business as now conducted.
(b) The authorized capital stock of GPI is as set forth in Section
4.7(f). ll the shares have been duly authorized and validly issued, and are
fully paid and non-assessable and no personal liability attaches to the
ownership thereof. The GPI Shares are the sole outstanding shares of capital
stock of GPI, to the best of such counsel's knowledge after due inquiry, except
as specifically provided in this Agreement there are no outstanding options,
warrants, agreements, conversion rights, preemptive rights, or other rights to
subscribe for, purchase or otherwise acquire any of the GPI Shares
or any unissued or treasury shares of capital stock of the Companies. To the
best of counsel's knowledge, the transfer and delivery of the GPI Shares by the
Selling Shareholders to Aquagenix as contemplated by this Agreement will
transfer to Aquagenix good, marketable title to all the GPI Shares, free and
clear of any liens, claims, charges, security interests or other legal or
equitable encumbrances, limitations or restrictions.
(c) This Agreement has been duly executed by the Selling
Shareholders and constitutes the legal, valid and binding obligation of the
Selling Shareholders, enforceable against them in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting the enforceability of creditors' rights
generally and except that the remedy of specific performance or similar
equitable relief may be subject to equitable defenses and to the discretion of
the court before which enforcement is sought.
(d) Neither the execution or delivery of the Agreement and the
performance by the Selling Shareholders thereby will not: (i) violate any
provision of the Certificate of Incorporation GPI; (ii) violate, or be in
conflict with, or result in a violation by GPI or Selling Shareholders of any
state or federal law, which, in our experience, is normally applicable to
general business corporations which are not engaged in regulated
business activities, and applicable in general to business transactions of
the type contemplated by the Agreement, except we express no opinion as to any
law, the violation of which would not have a materially adverse effect on GPI,
which might be violated by any misrepresentation or omission or a fraudulent
act or to which GPI may be subject as a result of Aquagenix's legal or
regulatory status or its involvement in the transactions contemplated by the
Agreement.
(e) To the best of such counsel's knowledge after inquiry of the
Selling Shareholders and the appropriate officers of GPI, neither the Selling
Shareholders nor GPI (i) has received notice of any violation of any such law,
regulation, order or other legal requirement,or (ii) is in default with respect
to any order, writ, judgment, award, injunction or decree of any federal, state
or local court or governmental or regulatory authority or
arbitrator, domestic or foreign, applicable to GPI or any of its assets,
properties or operations.
9.6 Governmental Permits and Approvals Corporate Resolutions. Any and
all permits and approvals from any governmental or regulatory body required for
the lawful consummation of the Closing shall have been obtained.
9.7 Third Party Consents. All necessary consents, permits and approvals,
which may be required in connection with the performance by GPI and Selling
Shareholders of their obligations under this Agreement or the continuation of
any agreements by GPI after the Closing shall be obtained.
9.8 Compliance Certificate. Aquagenix shall have received a certificate
signed by the President or a Vice President and the Secretary of GPI dated as
of the Closing and satisfactory in form and substance to Aquagenix.
9.9 Resignation of Officers and Directors. The directors and officers of
GPI shall have tendered their resignations and gpi shall have appointed such
directors and officers as directed by Aquagenix.
10. Conditions Precedent to the Obligations of Selling Shareholders.
The obligations of Selling Shareholders to consummate this Agreement and
the transactions contemplated hereby are subject to the satisfaction at or
before the Closing of each and every one of the following conditions, any of
which the Selling Shareholders may, in their sole discretion waive.
10.1 Representations and Warranties True. All of the representations and
warranties made by Aquagenix contained herein shall be true as of the date of
this Agreement, shall be deemed to have been made again at and as of the date
of Closing; and shall be true at and as of the date of Closing; Aquagenix shall
have performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing.
10.2 No Obstructive Proceeding. No action or proceedings shall have been
instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against Aquagenix
which seeks to, or would, render it unlawful as of the Closing to affect the
transactions set forth herein in accordance with the terms hereof, and no such
action shall seek damages in a material amount by reason of the transactions
contemplated hereby. Also, no legal objection to the transactions contemplated
by this Agreement shall have been received from or threatened by any
governmental department or agency.
10.3 Performance by Aquagenix. Aquagenix shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by them either prior to or at the Closing.
10.4 Compliance Certificate. The Selling Shareholders shall have received
a certificate signed by the President or a Vice President and the Secretary of
Aquagenix dated as of the Closing, reasonably satisfactory in form and
substance to GPI.
11. Conduct of GPI's Business Pending the Closing.
Pending the Closing, and except as otherwise expressly consented to or
approved by Aquagenix in writing:
11.1 Regular Course of Business. GPI will carry on its business in the
ordinary course of business consistent with past practice.
11.2 Amendments. No change or amendment shall be made in the certificate
of incorporation or bylaws of GPI.
11.3 Capital Changes; Dividends; Redemptions. GPI will not issue or sell
any shares of capital stock or other securities acquired directly or
indirectly, by redemption or otherwise, any such capital stock; reclassify or
split up any such capital stock, declare or pay any dividends thereon in cash,
securities or other property or make any other distribution with respect
thereto; or grant or enter into any options, warrants, calls or commitments
of any kind with respect thereto.
11.4 Subsidiaries. GPI will not organize any new subsidiary, acquire any
capital stock or other equity securities of any other corporation or acquire
any entity or ownership interest in any business.
11.5 Organization. GPI shall use its best efforts to preserve its
corporate existence and business organization substantially intact, including
his present relationship with the material customers.
11.6 Certain Changes. Except as may be expressly provided in writing or
elsewhere in this Agreement, GPI will not: (i) borrow any funds or incur, or
assume or become subject to, whether directly or by way of guarantee or
otherwise, any obligation or liability (absolute or contingent); (ii) discharge
or satisfy any claim, liability or obligation (absolute, accrued, contingent or
otherwise), in excess of $5,000; (iii) prepay any obligation having a fixed
maturity of more than 60 days from the date such obligation was issued or
incurred; (iv) permit or allow any of its property or assets(personal or mixed,
tangible or intangible) to be subject to any pledge, lien or encumbrance;
(v)cancel any debts or waive any claims or rights of substantial value or sell,
transfer or otherwise dispose of any of its properties or assets;
(vi) (A) grant any general increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension, profit
sharing or other plan, or commitment or fringe benefit) or (B) any increase in
the compensation payable or to become payable to any employee other than
increases required by an existing agreement which is set forth in the schedules
to this Agreement; (vii) make any single capital expenditure commitment in
excess of $5,000 for additions to its property, plant or equipment or make
aggregate capital expenditures and commitments in excess of $5,000 for
additions to its property, plant or equipment; (viii) pay, loan or advance any
amount to, or sell, transfer or lease its properties or assets to, or enter
into an agreement or arrangement with or for the benefit of, any of its
officers, directors,or shareholders or any affiliate or associate of any of its
officers, directors or shareholders; (ix) agree, whether in writing or
otherwise to do any of the foregoing; and (x) compromise any claim
or lawsuit or institute any action or proceeding involving GPI or any of its
properties or assets in excess of $5,000.
11.7 Insurance/Properties. GPI shall continue to insure, at individual
and aggregate limits and scope of coverage not less than those contained in
GPI's current insurance policies, its business and operations and all property,
real, personal and mixed, owned or leased by GPI, with financial responsible
insurance companies against all ordinary and insurable risks consistent with
past practice up until the end of business on December 31, 1996. All such
property shall be used, operated, maintained and repairs in a customary manner.
11.8 Chemicals and Other Inventories. GPI shall maintain sufficient
chemical and other inventories as historically maintained in the ordinary
course of business.
11.9 Compliance with the Laws. GPI shall duly comply with all laws
applicable to it and its properties, operations, business and employees.
11.10 Wrongful Action. GPI shall neither enter into any transaction,
take any action or fail to take any action which results in,or could reasonably
expect it to result in a breach of any of the representations, warranties,
disclosure agreements or covenants of the Selling Shareholders or GPI contained
in this Agreement, the exhibits hereto or any document delivered pursuant to
this Agreement.
12. Termination.
12.1 Termination. This Agreement and the transactions contemplated hereby
may be terminated prior to the Closing by mutual consent of Aquagenix and the
Selling Shareholders.
12.2 Effect of Termination. In the event of termination pursuant to
Section 12.1, the transactions contemplated by this Agreement shall be
terminated without further action by Aquagenix or the Selling Shareholders.
If the transactions contemplated by this Agreement are terminated as provided
herein:
(a) Each party will redeliver all documents, work papers and other
material of any other party relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof to the party
furnishing the same;
(b) All confidential information received by any party hereto with
respect to the business of any other party shall be treated as confidential
in accordance with Section 3.4 of this Agreement; and
(c) No party hereto shall have any liability or further obligation
to any other party to this Agreement (i) except as stated in Sections 3.4, 6.1
and Section 12 and (ii)except that if such termination results from the willful
failure of any party to fulfill a condition to performance of any other party
or to perform a covenant contained in this Agreement or from a material or
willful breach by any party to this Agreement, such party shall be fully liable
for any and all damages, costs and expenses (including but not limited
to reasonable counsel fees) sustained or incurred by the other parties hereto.
13 Additional Agreements.
13.1 Agreement Not to Compete.
(a) During the period commencing on the date hereof and ending eight
(8) years therefrom, the Selling Shareholders' individually, hereby covenants
and agree that they will not, directly or indirectly: (i) as an individual
proprietor, partner, stockholder, officer, employee, director, consultant,
agent, joint venturer, investor, lender, or in any other capacity whatsoever,
alone or in association with others, own, manage, operate, control or
participate in the ownership, management, operation or control of, or work for
or permit the use of his name by, or be connected in any manner with, any
"Prohibited Activities" (which shall mean industrial vegetation management,
further defined as weed, brush, and tree control, growth regulation of grasses,
weeds and plants along roadsides, right of ways, airports, industrial sites and
along safety guardrails (GPI's activities in pursuing the
business of providing industrial vegetation management, roadside and right of
way maintenance are herein referred to as the "Business") in the states of
Georgia and Tennessee and in any other county and state where the Company
conducts business during the restricted period, or (ii) otherwise solicit or
attempt to solicit any customers or employees or Aquagenix or GPI.
(b) The restrictions against competition set forth in subsection
(a) above are considered by the parties to be reasonable for the purposes of
protecting the legitimate business interests of Aquagenix and to ensure
Aquagenix obtains the benefit of its bargain hereunder. Accordingly, it is the
desire and intent of the parties that the provisions of subsection (a) be
enforced to the fullest extent permissible under the laws and public
policies of each jurisdiction in which enforcement is sought. If any provisions
of subsection (a) are adjudicated to be invalid, void or unenforceable, the
invalid, void or unenforceable provisions shall be deemed amended (with respect
only to the jurisdiction in which such adjudication is made) in such manner as
to render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties. In the event of any
breach of the covenants set forth in subsection (a), the running of the
non-compete period described therein shall be tolled for so long as such breach
continues.
(c) The Selling Shareholders acknowledge that Aquagenix would be
irreparably injured and that monetary damages would not provide an adequate
remedy to Aquagenix in the event of a breach or threatened breach of the
provisions of subsection (a). Accordingly, the Selling Shareholders agree that,
in addition to any other remedy available to Aquagenix, Aquagenix shall be
entitled to seek injunctive, specific performance and other equitable relief
to prevent or restrain the breach or threatened breach of subsection (a), and
Aquagenix shall be entitled to receive reimbursement from the Selling
Shareholders for all reasonable attorneys' fees and expenses incurred by
Aquagenix in enforcing these provisions if it is the prevailing party. If
the Selling Shareholders are the prevailing party, the Selling Shareholders
shall be entitled to receive reimbursement from the Company for all reasonable
attorneys' fees and expenses incurred by the Selling Shareholders.
(d) If Aquagenix takes any action at law or in equity to enforce the
provisions of this Section 13, the prevailing party shall be entitled to all
fees, costs and expenses, including attorneys' fees, trial and appellate level,
in connection with such enforcement from the non-prevailing party.
(e) In the event that any Selling Shareholders shall be in violation
of the aforementioned restrictive covenants, then the time limitation thereof
with respect to the defaulting party shall be extended for a period of time
equal to the period of time during which breach or breaches should occur; and
in the event Aquagenix should be required to seek relief from a court of
competent jurisdiction, then the covenant shall be extended
for a period of time equal to the pendency of such proceeding, including
appeals.
13.2 Non-Competition Agreements. GPI and Selling Shareholders shall use
their best efforts cause to be delivered within thirty (30) days after Closing
non-compete agreements for all employees in the form as used by the Company in
the normal course of its business.
13.3 Liabilities Assumed. Subject to the terms and conditions set forth
in this Agreement, Aquagenix hereby agrees to assume and perform and pay when
due, all of the debts, liabilities, claims, obligations and contracts, of every
kind, character or description, whether accrued, absolute, contingent or
otherwise existing at the Closing Date of GPI set forth and represented by the
Financial Statements appearing as Exhibit B hereto.
14. Indemnification by Selling Shareholders.
14.1 Obligation of Selling Shareholders to Indemnify. The Selling
Shareholders agree to indemnify, defend and hold harmless Aquagenix and its
directors, officers, employees, affiliates and assigns ("Aquagenix
Indemnitees")from and against any losses, liabilities, damages, deficiencies,
all suits, proceedings, investigations, claims, charges, assessments, costs
or expenses (including, but not limited to interest, penalties and reasonable
attorneys' fees and disbursements) incurred or suffered by the Aquagenix
Indemnitees or any of them, whether suit is instituted or not, and, if
instituted, whether at any trial and appellate level, and whether raised by
the parties hereto or any third party ("Loss") based upon, arising out of or
otherwise due to:
(a) any false and inaccurate representation or warranty made by
or on behalf of the Selling Shareholders contained in this Agreement or in any
document or other writing delivered pursuant to this Agreement;
(b) Any breach or default in the performance, covenant or agreement
of Selling Shareholders contained in this Agreement or in any document or other
writing delivered pursuant to this Agreement;
(c) Facts or circumstances existing on or prior to the Closing Date
which give rise to claims by any third parties against Aquagenix, Aquagenix
Indemnitees or GPI, including (but not limited to) any claims arising from any
service rendered by GPI.
14.2 Claims by Third Parties. Promptly after receipt by Aquagenix of any
demand, claim or circumstances which, with the lapse of time, would give rise
to a claim or the commencement (or threatened commencement) of any action,
proceeding or investigation (an "Asserted Liability")that may result in a Loss,
Aquagenix shall properly give written notice thereof (the "Claims Notice") to
the Selling Shareholders. The Claims Notice shall describe the Asserted
Liability in reasonable detail, and shall indicate the amount (if stated) of
the Loss that has been or may be suffered by Aquagenix. If no written
objection is received or, if received or agreement is reached as to the amount
of such loss, Aquagenix shall thereupon have the right to recover the amount of
such claim, from the Selling Shareholders.
14.3 Defensive Claims by Third Parties.If a third party claim is asserted
which might result in a Loss giving rise to payment or indemnification under
Section 14.1, Aquagenix shall, with reasonable promptness, provide the Selling
Shareholders notice of any such claim, make available to the Selling
Shareholders all information (within Aquagenix's knowledge or control) relevant
material to such claim and otherwise keep the Selling Shareholders informed of
the progress of any defense, settlement or the disposition of the claim. The
Selling Shareholders shall fully cooperate in the defense, settlement or
other disposition of such claim; provided that any failure on the part of
Aquagenix to comply with this section shall not affect Aquagenix's right to
receive indemnification or payment under this Section 14, unless such failure
shall cause material prejudice to the Selling Shareholders. The Selling
Shareholders shall have the right to participate in the
defense, settlement or other disposition of any claim in which one or more
Selling Shareholders is named as a party and to be represented in the
proceedings related to such claim by their own legal counsel; provided that
such counsel is approved by Aquagenix (which approval shall not be unreasonably
withheld) and all costs and expenses of such counsel are born by the Selling
Shareholders.
15. Indemnification by Aquagenix
15.1 Obligation of Aquagenix to Indemnify. Aquagenix hereby agrees to
indemnify, defend and hold harmless Selling Shareholders from and against any
losses, liabilities, damages, deficiencies, lawsuits, proceedings,
investigations, claims, charges, assessments, costs or expenses, including
interest, penalties and reasonable attorneys fees and disbursements incurred
or suffered by the Selling Shareholders, whether a suit is instituted or not,
and if instituted, whether any trial at appellate level and whether raised
by the parties hereto or any third party loss based upon, rising out of, or
otherwise due to (a) any false or inaccurate representation or warranty made
by or on behalf of Aquagenix contained in this Agreement or in any document or
otherwise pursuant to this Agreement; (b) any breach or default in the
performance, covenant or agreement of Aquagenix contained in this Agreement or
in any document or other writing delivered pursuant to this Agreement; (c)
facts or circumstances existing on or prior to the closing date which give
rise to claims by any third parties against Aquagenix, including, but not
limited to, any claims arising from any service rendered by Aquagenix.
15.2 Claims by Third Parties. Promptly after receipt by Selling
Shareholders of any demand, claim or circumstances which the lapse of time
would give rise to a claim with a commencement (or threatened commencement) of
any action, proceeding or investigation (and asserted liability), that may
result in a loss, Selling Shareholders shall promptly give written notice there
of (of claims notice) to Aquagenix. The claims notice
shall describe the asserted liability in reasonable detail, shall indicate the
amount, if stated, of the loss that has been or may be suffered by Selling
Shareholders. If no written objection is received, or if received agreement
is reached as to the amount of such loss, Selling Shareholder shall thereon
have the right to recover the amount of such claim from Aquagenix.
15.3 Defensive Claims by Third Parties. If a third party claim is
asserted which might result in a loss giving rise to payment or indemnification
under Section 15.1, Selling Shareholder shall, with reasonable promptness,
provide Aquagenix notice of any such claim, make available to Aquagenix all
information, within Selling Shareholder knowledge or control, relevant material
to such claim and otherwise keep Aquagenix informed of the
progress of any defense, settlement or disposition of the claim. Aquagenix
shall fully cooperate in defense, settlement, or other disposition of such
claim; provided that any failure on the part of Selling Shareholder to comply
with this section shall not effect Selling Shareholders' right to receive
indemnification or payment under this Section 15 unless such failure shall
cause material prejudice to Aquagenix. Aquagenix shall have the right
to participate in the defense, settlement or other disposition of any claim
in which Aquagenix or its related company is named as a party to be represented
in the proceedings related to such claim by its own legal counsel, provided
that such counsel is approved by the Selling Shareholders (which approval
shall not be unreasonably withheld) and all costs and expenses for such
counsel are borne by Aquagenix.
16. General
16.1 Entire Agreement. All Exhibits and Schedules hereto shall be deemed
to be incorporated into and made a part of this Agreement. This Agreement,
together with the Exhibits and Schedules hereto, and any related agreements
contain the entire agreement among the parties and there are no agreements,
representations, or warranties by any of the parties hereto which are not set
forth herein. This Agreement may not be amended or revised except by a writing
signed by all parties hereto.
16.2 Separate Counterparts. This Agreement may be executed in several
identical counterparts, all of which when taken together shall constitute but
one instrument.
16.3 Parties in Interest. This Agreement is binding on and shall inure
to the benefit of the parties and their respective heirs and permitted
successors and assigns. Nothing in this Agreement is intended to confer any
right or remedy or by reason of this Agreement on any person other than the
Selling Shareholders or Aquagenix and their respective heirs, successors and
permitted assigns.
16.4 Assignment. This Agreement may not be assigned by the Selling
Shareholders. Aquagenix may assign this Agreement to Aquagenix or any affiliate
wholly owned by Aquagenix without consent of the Selling Shareholders and such
assignment shall not in any way effect the terms, conditions or enforceability
of this Agreement.
16.5 Notices. All notices hereunder shall be in writing and shall be
delivered or mailed by registered or certified mail, postage and fees prepaid,
to the party to be notified at the party's address shown below. Notices which
are hand delivered shall be effective on delivery. Notices which are mailed
shall be effective on the fifth day after mailing.
Aquagenix, Inc.
6500 N.W. 15th Avenue
Fort Lauderdale, Florida 33309
Attention: Andrew Chesler
With a copy to:
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard
Suite 1900
Fort Lauderdale, Florida 33301
Attn: Charles B. Pearlman
Selling Shareholders:
Garry Seitz
4310 Southeast 51st Place
Ocala, Florida 34480
Jan P. Seitz
4310 Southeast 51st Place
Ocala, Florida 34480
With a copy to:
Stan Durden, P.C.
1496 Prince Ave.
Athens, GA 30606
16.6 Gender. All pronouns used herein shall include the masculine,
feminine and neuter gender, as the context requires.
16.7 Governing Law. The execution, interpretation, and performance of
this Agreement shall be governed by the laws of the State of Florida, including
its law of conflict of laws, which apply to contracts executed and performed
solely in Florida.
16.8 Jurisdiction.
(a) Jurisdiction. Any suit, action or proceeding, whether claim or
counterclaim, arising out of or relating to this Agreement or any related
agreement or which in any way relates, directly or indirectly, to the Sale or
the dealings of the parties with respect thereto, shall be instituted solely in
the Circuit Court for the 17th Judicial Circuit in and for Broward County,
Florida, or the United States District Court for the Southern
District of Florida, and each party irrevocably consents and submits to the
jurisdiction and venue of such courts. Each party also irrevocably appoints
and constitutes the Secretary of the State of Florida as its agent to accept
and acknowledge on its or his behalf all service of process in connection with
any such matter and irrevocably waives any objection which it may now or
hereinafter have to the venue of any suit, action or proceeding brought
in such court and any claim that such court is an inconvenient forum. Each
party further agrees that service of process in accordance with this paragraph
shall be deemed in every respect effective and valid personal service of
process upon it or him.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
AQUAGENIX, INC.
By: /s/ Andrew Chesler
Name: Andrew Chesler
Title: President
Selling Shareholders:
/s/ Garry Seitz
Garry Seitz
/s/ Garry Seitz
Garry Seitz, Attorney in Fact for
Jan P. Seitz
GOOD SHEPHERD, INC. D/B/A
GREEN PASTURES, INC.
By: /s/ Garry Seitz
Name: Garry Seitz
Title: President
