STOCK PURCHASE AGREEMENT
BETWEEN
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
AND
WASTE MANAGEMENT HOLDINGS, INC.
May 16, 2000
DIVERSIFIED SCIENTIFIC SERVICES, INC.
STOCK PURCHASE AGREEMENT
THIS AGREEMENT entered into this 16th day of May, 2000, by
and between Perma-Fix Environmental Services, Inc., a Delaware
corporation, with its principal place of business located at 0000
XX 00xx Xxxxx, Xxxxx X, Xxxxxxxxxxx, XX 00000, (the "Buyer") and
Waste Management of Holdings, Inc., a Delaware corporation, with
a principal place of business located at 0000 X. Xxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 (the "Seller").
The Buyer and the Seller are referred to collectively herein as
the "Parties."
WHEREAS, the Seller is the sole and exclusive owner of all
of the issued and outstanding capital stock of Diversified
Scientific Services, Inc. a Tennessee corporation, ("DSSI"); and
WHEREAS, the Seller desires to sell, convey, transfer,
assign and deliver to Buyer, and Buyer desires to purchase from
Seller, all of the issued and outstanding capital stock of DSSI
for cash and Buyer's Stock (as defined below); and
WHEREAS, the Board of Directors of Buyer and Seller,
respectively, have approved and adopted this Agreement.
Now, therefore, in consideration of the premises and mutual
promises herein made, and in consideration of the
representations, warranties and covenants herein contained, the
Parties agree as follows:
1. Definitions.
(a) "Adverse Consequences" means all actions, suits
proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, penalties, fines, costs, liabilities,
obligations,, taxes, liens, losses, expenses, and fees, including
court costs and reasonable attorneys' fees and expenses.
(b) "Affiliates" has the meaning set forth in Rule 405
promulgated under the Securities act (as defined below), whether
or not such is an affiliate now or becomes an Affiliate after the
date hereof.
(c) "Buyer" has the meaning set forth in the preface
above.
(d) "Buyer's Note" has the meaning set forth in
Article 2(b) below.
(e) "Cash" means any cash and cash equivalents
(including marketable securities and short term investments)
calculated in accordance with GAAP applied on a basis consistent
with the preparation of the Financial Statements.
(f) "Closing" has the meaning set forth in Article
2(d) below.
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(g) "Closing Date" has the meaning set forth in
Article 2(d) below.
(h) Intentionally left blank.
(i) "Environmental Laws" mean all federal, state, and
local environmental, radioactive, health and safety Laws, codes,
ordinances and all rules and regulations promulgated thereunder,
including without limitation, Laws relating to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic, radioactive or
hazardous substances or wastes into the environment (including,
without limitation, air, surface water, groundwater, land surface
or subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals, or
industrial, solid, toxic, hazardous or radioactive substances or
wastes.
(j) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
(k) "Financial Statement" has the meaning set forth in
Article 6(f) below.
(l) "GAAP" means United States generally accepted
accounting principles as in effect from time to time.
(m) "Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx
Xxxxxx Antitrust Improvements Act of 1976, as amended.
(n) "Knowledge" means the knowledge of the following
officers of DSSI, the Seller, or any of their Affiliates, Xxxx
Xxxxxx, Xxxxx Xxxxxxxx, Xxxx Xxxxxxx, Xxx Xxxxxx and Xxxxxx
Xxxxxxx.
(o) "Laws" mean any and all Laws, rules, regulations,
codes, ordinances, judgments, injunctions, decrees and policies.
(p) "Liens" mean all security interests, liens,
mortgages, claims, charges, pledges, restrictions, equitable
interests, easements, property rights or encumbrances of any
nature.
(q) "Ordinary Course of Business" means the ordinary
course of business of a party consistent with such party's custom
and practice including with respect to quantity and frequency.
(r) "Party" has the meaning set forth in the preface
above.
(s) "Proprietary Right" means any trade name,
trademark, service xxxx, patent or copyright and any application
for any of the foregoing owned or used by DSSI
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(t) "Purchase Price" has the meaning set forth in
Article 2(b) below.
(u) "Real Property" means all real property, land,
buildings, improvements and structures owned or leased by DSSI
and all mineral rights thereunder owned by DSSI.
(v) "Returns" mean all returns, declaration, reports,
estimates, information returns and statements required to be
filed with or supplied to any taxing authorities in connection
with any Taxes.
(w) "Securities Act" means the Securities Act of 1933,
as amended.
(x) "Securities Exchange Act" means the Securities
Exchange Act of 1934, as amended.
(y) "Seller" has the meaning set forth in the preface
above.
(z) "Shares" mean all of the issued and outstanding
shares of capital stock of DSSI of whatsoever character and
description.
(aa) "Subsidiaries" means all corporations or other
entities fifty percent (50%) or more of the common stock or other
form of equity of which shall be owned, directly or indirectly
through one or more intermediaries, by another corporation.
(bb) "Taxes" mean all taxes, charges, fees, levies or
other assessments, including, without limitation, income, gross
receipts, excise real and personal property, sales, transfer,
license, payroll and franchise taxes, imposed by any governmental
authority and shall include any interest, penalties or additions
to tax attributable to any of the foregoing.
(cc) "Tennessee EPA" means the Tennessee Department of
Environment and Conversation.
2. Purchase and Sale of DSSI Shares.
(a) Basic Transaction. On and subject to the terms
and conditions of this Agreement, at the Closing, the Buyer
agrees to purchase from the Seller, and the Seller agrees to
sell, transfer and convey to the Buyer, all of the issued and
outstanding Shares, free and clear of any and all Liens, for the
consideration specified below in this Article 2.
(b) Purchase Price. The Buyer agrees to pay to
the Seller at the Closing $8,500,000 (the "Purchase Price") by
delivery of
(1) its promissory note (the "Buyer's Note") in
the form of Exhibit A attached hereto in the aggregate principal
amount of $3,500,000 (plus or minus the adjustments to be made to
the Purchase Price pursuant to this agreement) and bearing
interest at a rate of 7% per annum on any unpaid principal
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balance and having a term of five years from the Closing Date,
with interest payable annually and principal due in lump sum at
the end of the five year term; and
(2) $5,000,000 in cash payable by wire transfer
to Seller at Closing.
(c) Adjustments to Purchase Price.
(1) At the Closing, the Purchase Price shall be
adjusted as follows: The Seller and the Buyer shall jointly
prepare an unaudited balance sheet of DSSI as of the end of the
month immediately preceding the Closing Date ("Balance Sheet of
DSSI"), which Balance Sheet of DSSI shall be prepared in
accordance with GAAP applied on a consistent basis with the
December Balance Sheet. If the Net Assets (as defined below) of
DSSI calculated pursuant to the Balance Sheet of DSSI is greater
than the Net Assets of DSSI calculated pursuant to the December
Balance Sheet (as defined I subsection 5(f) hereof), then the
Purchase Price shall be increased by the exact amount of such
difference. If the Net Assets of DSSI calculated pursuant to the
Balance Sheet of DSSI is less than the Net Assets of DSSI
calculated pursuant to the December Balance Sheet, then the
Purchase Price shall be reduced by the exact amount of such
difference. For the purposes of this Agreement, "Net Assets"
means the amount by which the total assets (less goodwill,
general intangibles, receivables due from Seller and/or any other
Affiliates of DSSI and any investments in Subsidiaries) of DSSI
exceeds the total liabilities (less payables or other amounts due
to Seller or any other Affiliates of DSSI, any investments in
Subsidiaries and accrued income taxes) of DSSI as determined
under GAAP and consistently applied; and
(2) Within 30 days after the Closing, Seller and
Buyer shall jointly prepare an unaudited balance sheet of DSSI as
of the end of the day immediately preceding the Closing ("Closing
Balance Sheet"), which balance sheet shall be prepared in
accordance with GAAP applied on a consistent basis with the
Balance Sheet of DSSI. If the Net Assets (as defined in
subsection 2(b) above) of DSSI calculated pursuant to the Balance
Sheet of DSSI is greater than the Net Assets of DSSI used for
calculating the Purchase Price under subsection 2(c)(1) above,
then the Buyer shall pay such difference to the Seller within 45
days from the date of the Closing. If the Net Assets of DSSI
calculated pursuant to the Closing Balance Sheet is less than the
Net Assets of DSSI used for calculating the Purchase Price under
subsection 2(c)(1) above, then the Seller shall pay such
difference to the Buyer within 45 days from the date of the
Closing.
(3) Any adjustment to the Purchase Price made
pursuant to this section 2(c) shall be made by adjustment to the
principal amount due under the Buyer's Note.
(d) The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place
at the offices of Xxxxx, Figa & Will, P.C. 0000 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx, 00000, commencing
at 10:00 a.m. Mountain Time on the second business day following
satisfaction or waiver of all conditions to the obligations of
the Parties to consummate the transactions contemplated hereby or
such other date as the Buyer and Seller may mutually determine
(the "Closing Date"). If the Closing has not occurred on or
before the later of 90 days from the date of this Agreement or
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such longer period as is necessary to obtain the approvals of the
applicable government authorities relating to the permits and
licenses of DSSI as necessary to consummate the transaction
contemplated hereunder, then either of the Parties may terminate
this agreement by giving of written notice of such termination;
except that a Party may not terminate this Agreement if the
Closing has not occurred by the later of 90 days from the date of
this Agreement or such longer period as is necessary to obtain
the approvals of the applicable government authorities relating
to the permits and licenses of DSSI as necessary to consummate
the transaction contemplated hereunder due to such Party's breach
of its representations, warranties and covenants contained
herein.
(e) Deliveries at the Closing. At the Closing,
(1) the Seller will deliver to the Buyer the
various certificates, instruments and documents referred to in
Articles 7 & 9 below required to be delivered by Seller;
(2) the Buyer will deliver to the Seller the
various certificates, instruments and documents referred to in
Articles 7 & 9below required to be delivered by Buyer;
(3) the Seller will deliver to the Buyer stock
certificates representing all of the issued and outstanding
Shares, duly and validly endorsed in the name of Buyer, free and
clear of any and all Liens; and
(4) the Buyer will deliver to the Seller the
consideration specified in Article 2(b) above.
3. Representations and Warranties of the Seller.
The Seller represents and warrants to the Buyer that the
statements contained in this Article 3 are correct and complete
in all material respects as of the date of this Agreement and
will be correct and complete as of the Closing Date.
(a) Organization of Seller. The Seller is a duly
organized, validly existing corporation, and is in good standing
under the Laws of the state of Delaware.
(b) Authorization of Transactions. The Seller has
full power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the
Seller, enforceable against the Seller in accordance with its
terms and conditions. Except as set forth in Schedule 3(b)
hereof, or the terms of this Agreement, Seller need not give any
notice to, make any filing with, or obtain any authorization,
consent or approval of any government or governmental agency in
order to consummate the transactions contemplated by this
Agreement.
(c) Non-contravention. To the best knowledge of
Seller, neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, permit,
agreement, injunction, judgment, order, decree, ruling, charge,
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or other restriction of any government, governmental agency, or
court to which Seller is subject, or any provision of its
articles of incorporation or bylaws.
(d) Brokers' Fees. The Seller has no liability or
obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this
Agreement for which Buyer could become liable or obligated.
(e) Investment. The Seller
(1) understands that the Buyer's Note has not
been, and will not be registered under the Securities Act, or
under any applicable state securities Laws, and is being offered
and sold in reliance upon federal and state exemptions fro
transactions not involving any public offering ;
(2) is acquiring the Buyer's Note solely for its
own account for investment purposes, and not with a view to
distribution thereof;
(3) is a sophisticated investor with knowledge
and experience in business and financial matters;
(4) is an accredited investor (as such term is
defined in Rule 501 of Regulation D promulgated under the
Securities act), as the Seller is a corporation with total assets
in excess of $5,000,000;
(5) has received true and correct copies of the
following documents which have been filed with the Securities and
Exchange Commission ("Commission");
(i) the Annual Report on Form 10-K for the
year ended December 31, 1999;
(ii) Form 10-Q for the quarter ended March 31,
1999;
(iii) Form 10-Q for the quarter ended June 30,
1999;
(iv) Form 10-Q from the quarter ended
September 30, 1999, as amended by form 10-Q/A dated January 18,
2000;
(v) Forms 8-K, dated April 21, 1999, June 16,
1999 (as amended by form 8-K/A, dated August 16, 1999, and
February 15, 2000; and
(vi) Proxy Statement for 1999 annual
shareholders' meeting.
(6) is able to bear the economic risk and lack of
liquidity inherent in holding the Buyer's Note; and
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(7) Agrees that the Buyer's Note will bear a
legend stating in substance:
This Note has been acquired for investment
and has not been registered under the
Securities Act of 1933, as amended
("Securities Act"), in reliance on an
exception contained in the Securities Act.
This Note may only be transferred pursuant to
an effective registration statement under the
Securities Act and any applicable state
securities laws unless there is furnished to
the Buyer an opinion of counsel or other
evidence satisfactory to Buyer to the effect
that such registration is not required. This
Note is subject to the terms and conditions
of that certain Stock Purchase Agreement,
dated May 16, 2000, between the Maker and the
Payee of this Note.
(f) DSSI Shares. Seller owns of record and
beneficially all of the Shares free and clear of any and all
Liens or restrictions on transfer, taxes, options, warrants,
purchase rights, contracts, commitments, equities, claims, or
demands. The Seller is not, directly or indirectly, a party to
any option, warrant purchase right, or other contract or
commitment that could require the Seller to sell, transfer, or
otherwise dispose of any capital stock of DSSI. The Seller is
not a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any capital stock of
DSSI.
4. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller that the
statements contained in this Article 4 are correct and complete
in all material respects as of the date of this Agreement and
will be correct and complete as of the Closing Date.
(a) Organization of Buyer. The Buyer is a duly
organized, validly existing corporation, and is in good standing
under the Laws of the state of its incorporation.
(b) Authorization of Transactions. The Buyer has full
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of the Buyer,
enforceable against the Buyer in accordance with its terms and
conditions, subject to bankruptcy, insolvency and other law of
similar import. Except as set forth in Schedule 4(b) hereof or
the terms of this Agreement or as may be required under DSSI
permit, license or under any environmental laws relating to DSSI
or the acquisition of DSSI, Buyer need not give any notice to,
make any filing with, or obtain any authorization, consent or
approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(c) Non-contravention. To the best knowledge of
Buyer, neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
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any government, governmental agency, or court to which Buyer is
subject, or any provision of its articles of incorporation or
bylaws, provided however, this provision shall not apply to any
limitations, restrictions, or conditions contained in any of the
DSSI permits or licenses, or on any of the Environmental Laws
relating to DSSI or the acquisition of DSSI.
(d) Brokers' Fees. The Buyer has no liability or
obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this
Agreement for which Seller could become liable or obligated.
(e) Investment. The Buyer is not acquiring the Shares
with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act.
(f) Financial Statements. Buyer has previously
delivered to the Seller the following financial statements
(collectively the "Buyer Financial Statements"):
(1) audited balance sheet and statement of income
for the fiscal years ended December 31, 1997, December 31, 1998
and December 31, 1999 for Buyer; and
(2) unaudited balance sheets and statements of
income for the three (3) month period ended March 31, 2000 for
the Buyer.
The above referenced financial statements of the Buyer have
been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby and present fairly
the financial condition of Buyer as of such dates and the results
of operations of Buyer for such periods.
5. Representations and Warranties Concerning DSSI.
The Seller represents and warrants to the Buyer that to its
Knowledge the statements contained in this Article 5 are correct
and complete in all material respects as of the date of this
Agreement and will be correct and complete as of the Closing
Date,
(a) Organization, Qualification and Corporate Power.
DSSI is a corporation duly organized, validly existing and in
good standing under the Laws of the state of its incorporation.
DSSI is duly authorized to conduct business and is in good
standing under the Laws of each jurisdiction where such
qualification is required, except where the lack of such
qualification would not have a material adverse effect on the
financial condition or operation of DSSI. DSSI has full
corporate power and authority to carry on the business in which
it is engaged and to own and use the properties owned and used by
it. Schedule 5 (a) lists the officers and directors of DSSI.
(b) Capitalization. The authorized capital stock of
DSSI consists of 2,000,000 shares of common stock, no par value
(DSSI Common Stock) of which 1,800,000 shares are issued and
outstanding. All of the issued and outstanding shares of capital
stock of DSSI have been duly authorized, are validly issued,
fully paid and non-assessable free and clear of any and all
liens, and are all owned of record and beneficially by the
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Seller. There are no outstanding or authorized options warrants,
purchase rights, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require DSSI
to issue, sell or otherwise cause to become outstanding any of
its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation or similar
rights with respect to DSSI.
(c) Non-contravention. Except as set forth in
Schedule 5(c), neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will
(1) violate any constitution, statute,
regulation, rule, license, permit, agreement, injunction,
judgment, order, decree, ruling charge or other restriction of
any government, governmental agency or court to which DSSI is
subject or any provision of its articles of incorporation or
bylaws; or
(2) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, permit,
contract, lease, license, instrument, or other arrangement to
which DSSI is a party or by which it is bound or to which any of
its assets is subject, except where the violation, conflict,
breach, default, acceleration, termination, modification,
cancellation, or failure to give notice would not have a material
adverse effect on the financial condition of DSSI or on the
ability of the parties to consummate the transactions
contemplated by this Agreement. DSSI is required to obtain
approval or provide notice to the governmental agencies that
issued the permits and/or licenses set forth in Schedule 5(o).
(d) Brokers' Fees. DSSI has no liability or
obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this
Agreement.
(e) Title to Tangible Assets. Except as disclosed in
Schedule 5(e), DSSI has good and marketable title to, or a valid
leasehold interest in, the material tangible assets used in the
conduct of its business free and clear of any and all Liens.
(f) Financial Statements. Seller shall prior to
Closing furnish Buyer with the following financial statements:
(1) audited balance sheet and statement of income
of DSSI for the fiscal year ended December 31, 1999 ("December
Balance Sheet") and the audited balance sheet and statement of
income of DSSI for the fiscal years ended December 31, 1997 and
December 31, 1998;
(2) unaudited balance sheet and statement of
income of DSSI for the three months ended March 31, 2000; and
(3) audited statement of cash flow for the fiscal
years ended December 31, 1997, December 31, 1998 and December 31,
1999.
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The above-referenced financial statements of DSSI are true,
correct and complete in all material respects and correctly
present the financial conditions and results of operations of
DSSI as of the date thereof. The audited financial statements of
DSSI for the fiscal year ended December 31, 1999 are hereinafter
referred to as the "December Financial Statements." The
financial statements for the three months ended March 31, 2000
are herein after referred to as "March Financial Statements". The
December Financial Statements and the March Financial Statements
are together referred to as the "Financial Statements". For the
purposes of this Agreement, the Unaudited Financial Statements
shall be deemed to include any notes to such financial
statements. The Unaudited Financial Statements have been
prepared in conformity with GAAP, consistently applied throughout
the periods indicated and on a basis consistent with prior
periods.
(g) Liabilities. Except as set forth in the Schedule
5(g) attached hereto, DSSI does not have any liabilities or
obligations either accrued, absolute, contingent, matured or
unmatured or otherwise which have not been:
(1) reflected on the December Financial
Statements; or
(2) incurred consistent with past practices of
DSSI in the ordinary and normal course of DSSI's
business since the date of the December Financial
Statements.
(h) Events Subsequent to December
Financial Statements. Since the December Financial Statements,
there has not been any material adverse change in the financial
condition of DSSI. Without limiting the generality of the
foregoing, since that date DSSI has not engaged in any practice,
taken any action or entered into any transaction outside the
ordinary course of business the primary purpose or effect of
which has been to generate or preserve cash.
(i) Legal Compliance. Except as disclosed in Schedule
5(i), in all material respects DSSI has complied with all
applicable permits, laws, statutes, ordinances rules and
regulations of all federal, state and local government or
governmental agency with jurisdiction over DSSI operations or
real property. DSSI has and is operating the incinerator located
on the Xxxxxxxx Road property in Xxxxx County, Tennessee in
accordance with the incinerator permits. Neither DSSI nor Seller
is aware of any threatened claim or litigation, which could
materially and adversely affect the financial condition, results
of operations or business, assets or properties of DSSI or the
conduct of business of DSSI
(j) Real Property.
(1) Schedule 5(j)(1) lists all Real Property
owned by DSSI. With respect to each such parcel of owned Real
Property:
(i) DSSI has good and marketable title to
the parcel of Real Property and all mineral rights thereunder,
free and clear of any and all Liens except for installments of
special assessments not yet delinquent and or, recorded
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easements, covenants and other restrictions which do not
materially affect the value of the Real Property or materially
interfere with the present use of such Real Property;
(ii) there are no leases, subleases,
concessions or other agreements granting to any party or parties
the right to use or occupy any portion of the real property; and
(iii) there are no outstanding options or
rights of first refusal to purchase the parcel of Real Property
or any mineral rights contained therunder, or any portion thereof
or interest therein.
(2) Schedule 5(j)(2) lists all of the Real
Property leased or subleased to DSSI. The Seller has made
available to the Buyer for inspection correct and complete copies
of the leases and subleases listed in Schedule 5(j)(2). Each of
the leases and subleases listed is legal, valid, binding,
enforceable and in full force and effect, except where the
illegality, invalidity, nonbinding nature, unenforceability or
ineffectiveness would not have a material adverse effect on
DSSI.
Seller will at its sole cost and expense provide Buyer with
a title guarantee or policy and an ALTA survey to all Real
Property described in 5(j)(1) above meeting the requirements of
Section 5(j)(1) and the requirements of 7(i) hereof.
(3) Except as set forth on Schedule 5(j)(3), none
of the Real Property owned or Real Property leased by DSSI is
contaminated or requires remediation of any kind under any
Environmental Law as a result of being contaminated.
(k) Patents and Trademarks.
(1) Schedule 5(k) attached hereto is a true and
complete list of all patents and applications, trade names,
trademark registrations and applications, common law trademarks,
copyrights and copyright registrations and applications, which
DSSI owns, uses or has the right to use that are necessary to the
conduct of DSSI's business. Schedule 5(k) also correctly sets
forth all patents and applications, trade names, trademark
registrations and applications, common law trademarks, copyrights
and copyright registrations and applications, which relate to the
business of DSSI and which are directly or indirectly owned or
controlled by any director, officer, shareholder, employee or
Affiliate of DSSI and used by DSSI. There are no claims or
demands from any other person, firm or corporation pertaining to
any of such patents and applications, trade names, trademark
registrations and applications, common law trademarks, copyrights
or copyright registrations and applications and no proceedings
have been instituted or are pending or to the knowledge of
Seller, threatened, which challenge the rights of DSSI, in
respect thereof, except as shown on Schedule "5(k)." None of
such patents and applications, trade names, trademark
registrations and applications, common law trademarks, copyrights
or copyright registrations and applications, as the case may be,
is subject to any outstanding order, judgment, decree,
stipulation, or agreement restricting the use of such patents,
trade names, trademarks or copyrights, and to Seller's knowledge
none infringes on, or is being infringed by, other patents, trade
names, trademarks or copyrights. DSSI has not given and is not
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bound by an agreement indemnification for patent, trade name,
trademark or copyright infringement as to any property produced,
used or sold by DSSI.
(2) DSSI is not, or will as a result of the
execution and delivery of this Agreement or the performance by
Seller of its obligations under this Agreement or otherwise, be
in breach of any license, sublicense or other agreement relating
to the DSSI's Intellectual Property Rights, or any material
licenses, sublicenses and other agreements as to which DSSI is a
party and pursuant to which DSSI is authorized to use any third
party patents, trademarks or copyrights ("DSSI Third Party
Intellectual Property rights"), including software which is sued
in the manufacture of, incorporated in, or forms a part of any
product sold or services rendered by or expected to be sold or
services rendered by DSSI, except as disclosed in Schedule "5(j)"
hereof.
(l) Contracts.
(1) Schedule 5(l) lists all written contracts and
other written agreements to which DSSI is a party the performance
of which will involve consideration in excess of $25,000.00. The
Seller has made copies of each contract or other agreement listed
in schedule 5(l) available to Buyer for inspection.
(2) except as set forth in Schedule 5(l), DSSI is
not a party to or bound by:
(i) any collective bargaining agreements or
any agreements that contain any severance pay liabilities or
obligations;
(ii) any bonus, deferred compensation,
pension, profit-sharing or retirement plans, programs or other
similar arrangements;
(iii) any employment agreement, contract
or commitment with an employee;
(iv) any agreement of guaranty or
indemnification running from DSSI to any person or entity,
including, but not limited to, any of its Affiliates;
(v) any agreement, contract or commitment
which would reasonably be expected to have a material adverse
impact on the business of DSSI;
(vi) any agreement, indenture or other
instrument which contains restrictions with respect to payment of
dividends or any other distribution in respect of DSSI or any
other outstanding securities of DSSI;
(vii) any agreement, contract or
commitment containing any covenant limiting the freedom of DSSI
to engage in any line of business or compete with any person;
13
(viii) any agreement, contract or
commitment relating to capital expenditures in excess of twenty
five thousand dollars ($25,000.00) and involving future payments;
(ix) any agreement, contract or commitment
relating to the acquisition of assets or capital stock of any
business enterprise;
(x) any contract with the Department of
Defense or any other department or agency of the United States
Government, or to any subcontract under any such contract, which
is subject to renegotiation under the Renegotiation Act of 1951,
as amended;
(xi) any agreement, contract or commitment
not made in the ordinary course of business which involves Twenty
Five Thousand Dollars ($25,000.00) or more or has a remaining
term of one (1) year or more from December 31, 1999, or is not
cancelable on thirty (30) days or less notice without penalty.
DSSI has not breached, and there is not any claim, or, to the
best of Seller's or DSSI's knowledge, any claim that DSSI has
breached any of the terms or conditions of any agreement,
contract or commitment set forth in this Agreement or in any of
the Schedules attached hereto or of any other agreement, contract
or commitment, of any such breach or breaches in the aggregate
could result in the imposition of damages or the loss of benefits
in an amount or a kind material to DSSI.
(xii) contractors, and other arrangements
of any kind, whether oral or written, with any directors,
officer, employee, trustee stockholder or Affiliate of DSSI;
(xiii) contracts, purchase orders and
other arrangements of any nature involving an expenditure of
Twenty Five Thousand Dollars ($25,000.00) or more not made in the
ordinary course of business or which involve an unperformed
commitment, under contracts not otherwise disclosed hereunder, in
excess of Twenty-Five Thousand Dollars ($25,000.00); or
(xv) indentures, loan agreements, notes,
mortgages, conditional sales contracts, and other agreements for
financing.
(m) Litigation. Schedule 5(m) sets forth each
instance in which DSSI
(1) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; or
(2) is a party to any action, suit, proceeding,
hearing or investigation of, in, or before any court or quasi-
judicial or administrative agency of any federal, state or local
jurisdiction, except where the injunction, judgment, order,
decree, ruling, action, suit, proceeding, hearing or
investigation would not have a material adverse effect on the
financial condition of DSSI.
14
(n) Employee Benefits.
(1) Attached hereto as Schedule 5(n) is a list of
all Plans (as defined in Section 3(3) of ERISA) and other
retirement, profit-sharing, deferred compensation, bonus, stock
option, stock purchase and Plans and arrangements (individually,
a "Plan", and collectively, the "Plans") in which DSSI employees
participate. Seller has furnished Buyer current copies of all
such Plans. None of the Plans is sponsored or maintained by
DSSI.
(2) None of the Plans is a
"multiemployer Plan," as defined in Section 414(f) of the
Internal Revenue Code (the "Code") or Section 3(37) of ERISA.
DSSI has not completely or partially withdrawn from any
multiemployer Plan so as to incur any partial or full withdrawal
liability under Section 4201 of ERISA (without regard to
subsequent reduction or waiver of such liability under section
4207 or 4208 of ERISA). Consummation of this Agreement will not
result in either a complete or partial withdrawal from any
multi-
employer Plan.
(3) Except as set forth in
Schedule 5(n) the provisions and operation of each of the Plans
do not violate in any respect any provision of ERISA, the Code
or any other statute, rule, regulation, agreement or instrument
which governs the Plans. Seller and its Affiliates have or will
comply in all respects with all applicable ERISA reporting and
disclosure requirements with the Department of Labor ("DOL"),
Internal Revenue Service ("IRS"), participants and
beneficiaries, whether due before or after Closing Date. Seller
and its Affiliates have paid all premiums required by the
Pension Benefit Guaranty Corporation ("PBGC"). The information
supplied to the actuary by the Seller, DSSI or their Affiliates
for use in preparing those reports was complete and accurate and
neither Seller, DSSI nor any of their Affiliates has any reason
to believe that the conclusions expressed in such reports are
incorrect.
(4) Seller has paid to all the Plans all
contributions (including employer and employee) and premiums due
on or before the Closing Date. There are no unpaid premiums or
contributions, which are due or not provided for by Seller or its
Affiliates as of the Closing Date. Neither the Seller, DSSI, nor
any of their Affiliates has any accumulated funding deficiencies,
as such term is defined in ERISA and in the Code, with respect to
any Plan maintained or established for employees of DSSI.
Neither Seller, DSSI nor any of their Affiliates has incurred any
material liability to the PBGC (other than for payment of
insurance premiums, all of which have been paid, when due), the
IRS or the DOL with respect to any Plans that affect, or might
affect, DSSI.
(5) Except as set forth in Schedule 5(n) there
are no pending investigations by any governmental entity
involving any Plans relating to DSSI or any of the employees of
DSSI, no deficiency or termination proceedings involving such
Plans, and no threatened or pending claims (except for claims for
benefits payable in the normal operation of the Plans), suits or
proceedings against any Plan or asserting any rights or claims to
benefits under any such Plan (except for claims for benefits in
the ordinary course) nor are there any facts which would give
rise to any material liability in the event of any such
investigation, claim, suit or proceeding. Neither the Plans nor
any trusts created thereunder relating to DSSI or to any of the
DSSI employees, nor any trustee or administrator or other
fiduciary thereof, has engaged in a "prohibited transaction" (as
such term is defined in Section 4975 of the Code or section 406
of ERISA) which would could give rise to any material liability
to DSSI; and has not experienced any reportable event within the
meaning of ERISA or other event or condition which presents a
material risk of termination of any such Plan by the PBGC, has
15
had any tax imposed upon it by the IRS for any alleged violation
under Section 4975 of the Code, or has engaged in any transaction
which might subject DSSI or any such employee benefit to any
material liability for such tax. All employees of DSSI
participating in the Plan can be terminated from participation in
all such Plans by DSSI without DSSI incurring any liability or
obligations in any manner under the Plans to its employees or
otherwise.
(6) With respect to any of the Plans that the
Seller, DSSI, or any of their Affiliates is or intends to be a
qualified Plan under Section 401(a) of the Internal Revenue Code,
the Seller, DSSI or any of their Affiliates has received a
determination letter from the IRS to the effect that the Plan is
qualified under section 401 of the Code and the related trust is
exempt form federal income tax under Section 501 of the Code.
Nothing has occurred to cause the Loss of such qualification or
exemption.
(7) As of the Closing Date, certain employees of
DSSI that are employed by DSSI as of the Closing Date are
entitled to accrued vacation and sick time, the exact amounts of
which are set forth in Schedule 5(m) attached hereto and included
in the financial statements, subject to the provisions of Section
7 (f) hereof.
(o) Permits and Licenses.
(1) Schedule 5(o) attached hereto is a list of
all permits and licenses presently held by, or used in connection
with the normal and ordinary business of, DSSI and all
applications for any and all of the foregoing filed by DSSI under
any and all Environmental Laws. All permits held by or used by
DSSI to conduct its business or operations are in the name of
DSSI and none are in the name of any other party.
(2) DSSI is in material compliance with all the
terms and conditions of all permits and licenses listed in
Schedule 5(o) and with all other limitations, restrictions,
conditions, standards requirements or obligations contained in
such permits or licenses. Except as disclosed in schedule 5(o),
neither DSSI, Seller nor any of their Affiliates has received any
notice from any governmental entity that DSSI is in violation of
any permit, license or authorization held by DSSI or under which
it is conducting its business as currently being conducted or has
received notice of any violations of any Environmental Laws
(p) Closure and Post Closure. In connection with DSSI
meeting its closure and post closure financial assurance
requirements, Seller or DSSI has had issued through Frontier
Insurance company, Bond # 119932 in the sum of $12,732,834
("Closure and Post Closure Bond"). At the Closing, Buyer shall be
responsible to provide a replacement bond in similar sum at or
prior to Closing. Neither Seller nor DSSI makes any warranty
express or implied as to the sufficiency of such Closure and Post
Closure Bond to meet the financial assurance requirements
required by any Environmental Laws.
(q) Taxes. All federal, state and local taxes
(including interest and penalties), due from DSSI (i) have been
fully paid, or (ii) have been adequately accrued for in the DSSI
December Financial Statements.
16
(r) Assets. Except as disclosed on Schedule 5(q)
attached hereto, DSSI owns and has good and marketable title in
and to all of the material assets used by it in the operation or
conduct of its business, or required by DSSI from the normal and
ordinary conduct of its business free and clear of any and all
Liens.
(s) No Breach of Status or Contract. Neither the
execution and delivery of this agreement by the Seller, nor the
performance or compliance by the Seller or DSSI with any of the
terms and conditions of this Agreement, will violate any Laws or
any rules or regulations promulgated thereunder or will at
Closing conflict with or result in a breach of any of the terms,
conditions or provisions of any judgment, order, injunction,
decree or ruling of any court or governmental entity or
authority, to which Seller or DSSI is subject to or bound by, or
of any agreement or instrument to which Seller or DSSI is a party
or by which any of them is bound, or constitute a default
thereunder, or result in the creation of any Liens upon the
Shares or any of the property or assets of DSSI, or cause any
acceleration of maturity of any loan or obligation, or give to
others any interest or rights, including rights of termination or
cancellation, in or with respect to any of the properties,
assets, agreements, contracts, or business of DSSI, or cause any
acceleration or termination or cancellation, in or with respect
to any of the properties, assets, agreements, contracts, business
or operations of DSSI.
(t) Violation of Law and Contamination of Real
Property. Except as disclosed in the Schedule 5(t) to this
Agreement, there are no violations of any Laws, (including but
not limited to, Environmental Laws) which violation might have a
material adverse effect on DSSI or the business of DSSI or the
financial condition or operations of DSSI and the Real Property
owned by DSSI is not contaminated and does not require
remediation of any kind as a result of being contaminated.
(u) Disclaimer of Other Representations and
Warranties. Except as expressly set forth in Articles 3 and 5,
the Seller makes no representation or warranty, express or
implied, at law or in equity, in respect to DSSI, or any of its
assets, liabilities, or operations, including, without
limitation, with respect to merchantability or fitness for a
particular purpose, and any other representations or warranties
are expressly disclaimed. Buyer hereby acknowledges that, except
to the extent specifically set forth in Articles 3 and 5, the
Buyer is purchasing the assets of DSSI on an "as-is, where-is"
basis.
6. Remedies for Breach of this Agreement.
(a) All of the representations, warranties and
covenants of the Seller contained in Section 5 above shall
survive the Closing Date hereunder (unless the Buyer knew any
misrepresentation or breach of warranty at the Closing Date) and
continue in full force and effect for a period of three years
thereafter. All of the representations, warranties and covenants
contained in Sections 3, 4 and 7 herein shall survive the Closing
Date (unless the damaged party knew of any misrepresentation or
breach of warranty at the time of Closing) and continue in full
force and effect forever thereafter (subject to any applicable
statute of limitations).
17
(b) In the event Seller breaches any of its
warranties, representations or covenants contained herein, and,
if there is an applicable survival period pursuant to Section
6(a) above and that Buyer makes a written claim for
indemnification against the Seller pursuant to Section 10(g)
below within such survival period, then the Seller agrees to
indemnify the Buyer and DSSI from and against any and all Adverse
Consequences the Buyer and/or DSSI shall suffer or may suffer
through and after the date of the claim for indemnification (but
excluding any and all Adverse Consequences the Buyer or DSSI
shall or may suffer after the end of the applicable survival
period as to a breach of the representations and warranties
contained in section 5 hereof) caused proximately by the breach.
Seller shall not have any obligation to indemnify the Buyer from
and against any Adverse Consequences caused by the breach of any
representation or warranty of the Seller contained in Article 5
above;
(1) until Buyer and/or DSSI has suffered Adverse
Consequences by reason of all such breaches in excess of
$250,000.00 at which point the Seller will be obligated to
indemnify the Buyer and/or DSSI from and against any and all such
Adverse Consequences from the first dollar of all such Adverse
Consequences by the Buyer and /or DSSI. No event or breach shall
be considered in determining such $250,000.00 unless and until
the Adverse Consequences from any singular event or breach
equals or exceeds $10,000.
(2) to the extent Adverse Consequences the Buyer
has suffered by reason of all such breaches exceeds $3,500,000
after which point Seller will have no obligation to indemnify
Buyer from and against further such Adverse Consequences.
(3) for any claim relating to (i) the ultimate
disposal of waste generated by DSSI that is stored on the Real
Property owned by DSSI located in Kingston, Tennessee ("Tennessee
Real Property") on the Closing Date for which there is no current
disposal alternatives under the Environmental Laws ("Legacy
Waste"), including any closure and post closure obligations of
DSSI relating to the Legacy Waste located on the Tennessee Real
Property on the Closing Date, and (ii) any on-site contamination
of the Tennessee Real Property as of the Closing Date; provided,
however, nothing contained in this clause (3) shall limit or
restrict Seller's indemnification under this Article 6 or
Seller's liability and/or obligations under this Article 6: (a)
as a result of or in connection with any Adverse Consequences
relating to or in connection with DSSI under, or claims made
against DSSI that DSSI is a responsible party or a potentially
responsible party under, any Environmental Laws or otherwise as a
result of DSSI having arranged by contract, agreement or
otherwise for disposal or treatment, or arranged for the
transportation for disposal or treatment, of any waste or
substance (hazardous, radioactive, petroleum or otherwise) at any
facility or site for which a release (as defined in the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended) or threatened release has occurred or
may occur other than the Tennessee Real Property, or (b) any
violation or breach of any Environmental Laws by DSSI or permits
held by DSSI on or prior to the Closing Date, except for any
violation or breach of any Environmental Laws due to the Legacy
Waste being stored on the Tennessee Real Property on the Closing
Date or any on-site contamination of the Tennessee Real Property
as of the Closing Date.
(c) Buyer and Seller acknowledge and agree that the
foregoing indemnification provisions in this Article 6 shall be
the exclusive remedy of the Buyer and Seller with respect to DSSI
18
and the transaction contemplated by this Agreement, except for
any remedy available to Seller at law or in equity, to collect on
the Buyers Note; provided, however, in addition to any other
rights and remedies Buyer and DSSI may have, at law or in equity,
in the event Buyer or DSSI has a claim for indemnification
against Seller under this Article 6 and Buyer has obtained an
award or judgment against the Seller from an arbitrator or
arbitrators or a court of competent jurisdiction in connection
with or relating to such claim for indemnification, Buyer may
offset the amount of such award or judgment against the Buyer's
Note.
7. Pre-Closing Covenants.
The parties agree as follows with respect to the period
between execution of this Agreement and the Closing Date.
(a) Each of the parties will use its reasonable best
efforts to take all action and to do all things necessary, proper
or advisable in order to consummate and make effective the
transactions contemplated by this Agreement including
satisfaction of the Closing conditions set forth elsewhere in
this Agreement.
(b) Each of the Parties will, and the Seller will
cause DSSI to, give any notices to, make any filings with and use
its reasonable best efforts to obtain any authorizations,
consents, and approvals of government's and government agencies
in connection with the transfer of ownership of permits and
approvals held by DSSI all as set forth in Schedule 7(b).
(c) The Seller will not cause or permit DSSI to engage
in any practice, take any action, or enter into any transaction
outside the Ordinary Course of Business. , nor will it accept for
treatment any additional material which will generate secondary
waste from which there is no outlet for disposal.
(d) The Seller will permit and Seller will cause DSSI
to permit, representatives of the Buyer to have full access at
all reasonable times, in a manner so as not to interfere with the
normal business operations of DSSI, to all premises, properties,
personnel, books, records, contracts and documentation of or
pertaining to DSSI. The Buyer will treat and hold as such any
Confidential Information it receives from the seller or DSSI in
the course of reviews contemplated by this Article 7(d), will not
use the Confidential Information except in connection with this
Agreement, and if this Agreement is terminated for any reason
whatsoever, will return to Seller and DSSI all tangible
embodiments and all copies of the Confidential Information which
are in its possession.
(e) From the date of this Agreement until Closing,
Seller shall not and shall cause DSSI to not perform any of the
following acts relating to DSSI:
(f) issue any DSSI capital stock or make any changes
to DSSI authorized, issued or outstanding capital stock, grant
any stock options or rights to acquire shares of any of DSSI
capital stock or any security convertible into any class of DSSI
capital stock or agree to do any of the foregoing; or
19
(ii) declare, set aside, or pay any dividend or
distribution with respect to any DSSI capital stock or any other
securities convertible into any class of capital stock; or
(iii) directly or indirectly redeem, purchase
or otherwise acquire any DSSI capital stock or enter into any
agreement to purchase or redeem any DSSI capital stock; or
(iv) effect a split or reclassification of any
DSSI capital stock or security convertible into any class of DSSI
capital stock, purchase, redeem, retire or otherwise acquire any
shares of any class of DSSI capital stock or any security
convertible into any class of DSSI capital stock or agree to do
any of the foregoing; or
(v) change its charter or bylaws; or
(vi) except consistent with past practices, grant
any increase in the compensation payable or to become payable by
it to DSSI officers or employees or any increase, regardless of
amount, in any bonus, insurance, pension or other benefit plan,
program, payment or arrangement made to, for, or with any
officers or employees; or
(vii) engage in any transaction not in the
Ordinary Course of Business; or
(viii) borrow or agree to borrow any funds or
assume, endorse, guarantee or agree to guarantee or otherwise as
an accommodation become liable or responsible for obligations of
any other individual, firm, corporation; or
(ix) acquire any real property; or
(x) enter into any agreement with Affiliates,
officers or directors of Seller or DSSI; or
(xi) adopt, enter into, or amend materially any
employment contract or any bonus, stock option, profit-sharing,
pension, retirement, incentive, or similar employee benefit
program; or
(xii) pay or incur any material obligation or
liability, absolute or contingent, other than liabilities
incurred in the ordinary and usual course of its business; or
(xiii) mortgage, pledge, or subject to Lien or
other encumbrance any of DSSI properties or assets; or
(xiv) except for transactions in the Ordinary
Course of DSSI Business, sell or transfer any of DSSI properties
or assets or cancel, release or assign any indebtedness owed to
DSSI or any claims held by DSSI; or
(xv) make any investment of a capital nature in
excess of Fifty Thousand Dollars ($50,000.00) for any one item or
group of similar items, contributions to capital, property
transfers, or otherwise, or by the purchase of any property or
assets of any other individual, firm, or corporation; or
20
(xvi) enter into any other agreement not in
the Ordinary Course of Business; or
(xvii) merge or consolidate with any other
corporation, acquire any of DSSI's assets or capital stock,
solicit any offers for or negotiate with any third party to sell
any of its assets or capital stock, or, except in the Ordinary
Course of Business, acquire any assets of any other person,
corporation, or other business organization, or enter into any
discussions with any person concerning, or agree to do, any of
the foregoing; or
(xviii) enter into any transaction or take any
action which would, if effected prior to the Closing, constitute
a breach of any of the representations, warranties or covenants
contained in this Agreement.
(g) Employees. Seller shall cause DSSI to terminate
those employees of DSSI prior to the Closing which Buyer shall
request Seller or DSSI to terminate. Seller shall be liable and
responsible for, and shall pay, all obligations and liabilities
to those employees of DSSI which were terminated (voluntarily or
involuntarily) on or prior to the Closing (including, but not
limited, accrued vacation, sick time, medical claims and
termination pay). Seller shall be liable and responsible for
providing to all of the employees of DSSI terminated (voluntarily
or involuntarily) on or the prior to the Closing coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"). Seller shall be liable for all group medical claims
relating to employees of DSSI resulting from medical treatment
conducted prior to the Closing.
(h) Directors and Officers. On or prior to the
Closing, Seller shall cause all of the directors of DSSI to
resign as a director of DSSI and shall cause those officers of
DSSI to resign as requested by the Buyer, and at the Closing
shall deliver to Buyer executed resignations of such directors
and officers.
(i) Governmental Reports. Between the date of this
Agreement and the Closing, Seller shall furnish, make available
to, and shall cause DSSI to furnish and make available to, Buyer
any and all reports, not heretofore delivered to Buyer under this
Agreement or which are filed subsequent to the date of this
Agreement, to any state, federal or local Government, agency or
department, including, but not limited to, the Commission, the
IRS, the United States Environmental Protection Agency, the
United States Federal Trade Commission, the PBGC and the
Tennessee EPA.
(j) Title Policies and Survey. Seller shall deliver
to Buyer, at Seller's sole cost and expense, a fully paid policy
or policies of title insurance, dated as of the Closing Date,
issued to DSSI by a title company of nationally-recognized
standing, reasonably satisfactory to Buyer, on a standard ALTA's
owner title insurance policy form, insuring that DSSI has good
and marketable fee simple title in and to all of the Real
Property and mineral rights in at least the amount of the fair
market value to all of DSSI's Real Property, free and clear of
any and all Liens except for installments of special assessments
not yet delinquent and recorded easements, covenants and other
21
restrictions which do not materially affect the value of the Real
Property or materially interfere with the present use of such
Real Property. In addition, Seller shall deliver to Buyer, at
Seller's cost and expense, a survey of each tract of DSSI's Real
Property prepared by a duly-licensed surveyor, certified in a
manner reasonably acceptable to Buyer with the "Minimum Standard
Detail Requiremetns for ALTA/ACSM Land Title Survey," jointly
established and adopted by ALTA and ACSM in 1992 and includes
items 1, 2, 3, 4, 6, 7(a), 7(b)(i), 8, 9, 10, 11 and 13 of Table
A thereto and pursuant to the accuracy standards (as adopted by
ATLA and ACSM and in effect on the date of the certification of
an Urban Survey.
(k) Insurance. The Seller shall maintain, or cause
DSSI to maintain, all of the insurance relating to DSSI in such
amounts and insuring such risks as in effect as of the date of
this Agreement.
(l) Litigation. The Seller shall give the Buyer
prompt notice of the institution of any litigation with respect
to DSSI or any other litigation which would have a material
adverse effect on DSSI.
(m) Violations. Seller shall furnish to Buyer any
required authorization necessary in order for Buyer to make
investigations of any violation of Law or any permits or licenses
that would have a material adverse effect on DSSI's business or
operations. Further, if Seller or DSSI shall receive any notice
of such violations prior to Closing, it shall furnish a true and
correct copy of the same to Buyer promptly upon receipt thereof.
If any such violation would, in the good-faith and reasonable
opinion of Buyer, have a material adverse effect on the business
or operations of DSSI, Seller shall use reasonable efforts,
promptly after written request by Buyer, to perform such work as
shall be reasonably required to cure such violations prior to the
Closing. If Seller fails or refuses for any reason to cure such
violations, Buyer may terminate this Agreement and, upon such
termination, neither party hereto shall have any liability to the
other parties
8. Post-Closing Covenants.
The parties agree as follows with respect to the period
following the Closing Date.
(a) In the case at any time after the Closing Date any
further action is necessary to carry out the purposes of this
Agreement, each of the Parties will take such further action
(including execution and delivery of such further instruments and
documents) as any other Party reasonably may request, all at the
sole cost and expense of the requesting Party.
(b) In the event and for so long as any party actively
is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand in
connection with
(1) any transaction contemplated under this
Agreement or
(2) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction on or prior to the Closing
22
Date involving DSSI, the other Party shall cooperate with it and
its counsel in the defense or contest, make available its
personnel, and provide such testimony and access to its books and
records as shall be necessary in connection with the defense or
contest, all at the sole cost and expense of the Party contesting
or defending.
(c) The Seller will not, and shall cause its
employees, agents, representatives and Affiliates to not, take
any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier, or other
business associate of DSSI from maintaining the same business
relationships with DSSI after the Closing Date as it maintained
with DSSI prior to the Closing Date.
(d) Covenant Not to Compete. Seller shall not, and
shall cause its employees, agents, representatives and Affiliates
to not, for a period of twenty-four (24) months after the Closing
Date, in the Untied States, directly or indirectly, by or for
itself, or as an agent, representative or employee of another, or
through others as their agent, representative or employee or by
and through any joint venture, partnership, corporation, limited
liability company or other business entity in which Seller or its
Affiliates has a direct or indirect interest, own, manage,
operate, control, or be engaged in any business that competes,
directly or indirectly, with DSSI.
(e) Agreement Not to Solicit Employees and Customers.
Seller shall not, and shall cause its employees, agents,
representatives and Affiliates to not, for a period of twenty-
four (24) months after the Closing Date, directly or indirectly,
by or for themselves, or as an agent, representative or employee
of another, or through others as their agent, representative or
employee, or by and through any joint venture, partnership,
corporation, limited liability company or other business entity
in which he has a direct or indirect interest:
(1) to use or disclose for the benefit of any
person or entity, other than Buyer or any of its subsidiaries,
any customer lists, or identify any of the customers of DSSI; or,
(2) to solicit, induce or in any manner attempt
to solicit or induce any customer or supplier of DSSI to cease
being a supplier or customer of DSSI; or
(3) to solicit or induce, or in any manner
attempt to solicit or induce, any person employed by, or as an
agent of DSSI, to terminate his or her employment or agency with
DSSI.
(f) Injunctive Relief. Seller acknowledges that the
provisions of this Section 8 are reasonable and necessary for the
protection of the Buyer and that regarding the covenants and
provisions in Section 8(c), 8(d) and 8(e) hereof ("Protective
Clauses"), Buyer will be irrevocably damaged if such Protective
Clauses are not specifically enforced. Seller agrees that the
remedy at law for any breach or threatened breach of the
Protective Clauses will be inadequate, and that the Buyer may, in
addition to such other remedies as may be available to it in law
or in equity, shall be entitled to injunctive relief without bond
or other security. If it becomes necessary for the Buyer to
bring legal action against the Seller as a result of its breach
of any of the Protective Clauses, the Buyer and Seller agree that
the prevailing party shall be entitled to recover its costs and
expenses in connection with such legal action (including, but not
23
limited to, reasonable attorney's fees) from and against the
other party.
9. Conditions to Obligation to Close.
(a) Conditions to Obligations of the Buyer. The
obligation of the Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to the
satisfaction of the following conditions:
(1) the representations and warranties of the
Seller set forth in this Agreement shall be true and correct in
all material respects at and as of the Closing Date;
(2) The Seller and DSSI shall have performed and
complied with all of their covenants, obligations and agreements
contained herein in all material respects through the Closing;
(3) There shall not be any injunction, judgment,
order, decree, ruling or charge in effect preventing, or any
action or lawsuit pending which could prevent the consummation of
any of the transactions contemplated by this Agreement;
(4) The Seller shall have furnished to the Buyer,
in form and substance satisfactory to the Buyer, certified copies
of resolutions of the Board of Directors of the Seller, duly
adopted by the Board of Directors of Seller, authorizing the
execution, delivery and performance of this Agreement by Seller,
and an incumbency certificate for the officers of the Seller;
(5) The Seller shall have delivered to the Buyer
a certificate, duly executed by an executive officer of the
Seller, in form and substance satisfactory to Buyer, dated as of
the Closing Date, to the effect that each of the conditions
specified in (1), (2) and (3) above of this Article 9(a) has been
satisfied in all respects;
(6) All applicable waiting periods, if any, under
the Xxxx-Xxxxx Xxxxxx Act shall have expired or otherwise been
terminated and the Parties and DSSI shall have received all other
authorizations, consents, and approvals of Governments and
Governmental Authorities required hereunder;
(7) All actions to be taken by the Seller
pursuant to the terms of this Agreement and in connection with
the consummation of the transactions contemplated hereby, and all
certificates, consents, opinions, instruments and other documents
require to effect the transactions contemplated hereby, have been
taken and will be reasonably satisfactory inform and substance to
the Buyer;
(8) Seller shall, at its sole cost and expense,
have prepared, and deliver to Buyer, true, correct and complete
copies of the 1997, 1998 and 1999 audited financial statements
of DSSI, consisting of:
24
1) balance sheet;
2) statement of income and related
earnings;
3) statement of stockholders' equity and
statement of changes
in financial position;
4) statement of cash flows; and
5) notes thereto, with auditors' report
thereon being unqualified, all of which shall have been examined
by Xxxxxx Xxxxxxxx, DSSI's independent certified public accountants,
and be in accordance with Regulation S-X (17 C.F.R. Part 210) and GAAP,
consistently applied. Seller covenants and agrees that there
shall be no material change in the 1999 audited financial
statements of DSSI from the Financial Statements;
(9) all statutory requirements for the valid
consummation by Seller of the transactions contemplated by this
Agreement shall have been fulfilled; all authorizations, consents
and approvals of the Governmental Authorities required to be
obtained in order to permit consummation by Seller of the
transactions contemplated by this Agreement and to permit the
business presently conducted by DSSI to continue unimpaired
immediately following the Closing shall have been obtained;
(10) all applications for, or modifications to,
permits and licenses shall have been approved by the appropriate
Governmental Authorities and all authorizations and approvals
relating to all permits and licenses held by DSSI shall have been
obtained from the appropriate Governmental Authorities under any
and all of the Environmental Laws (including, but not limited to,
the appropriate Environmental Laws of the State of Tennessee) as
a result of the change in ownership of DSSI, pursuant to the
terms of this Agreement, with such permits, approvals and
authorizations to be in form and substance satisfactory to the
Buyer, so that DSSI is permitted to continue unimpaired
immediately following the Closing Date the same business
operations that DSSI carried on as of the date of this Agreement
and the Closing Date. Between the date of this Agreement and the
Closing, no Governmental Authority, whether federal, state or
local, shall have instituted (or threatened to institute either
or all or in a writing directed to Seller or DSSI or any of their
subsidiaries) an investigation which is pending on the Closing
relating to this Agreement and the transactions contemplated
hereby, no action or proceeding shall have been instituted or, to
the knowledge of Buyer, shall have been threatened before a court
or other Governmental body or by any public authority to restrain
or prohibit the transactions contemplated by this Agreement or to
obtain damages in respect thereof;
(11) Buyer shall have conducted and completed an
environmental audit of DSSI, and shall have determined to the
satisfaction of Buyer that
(i) DSSI has been and is currently in
compliance in all material respects with all applicable
Environmental Laws;
25
(ii) none of the assets (including, but not
limited to, the soils and groundwater on or under any of the Real
Properties) owned, leased, operated or used by DSSI are
contaminated with any radioactive waste, hazardous substance (as
defined in Section 101(14) of CERCLA or any analogous state or
local Laws) or petroleum (as defined in Subtitle I of RCRA or any
analogous state or local Laws) in a manner that might have a
material adverse effect on DSSI, and
(iii) DSSI is not or would be subject to
any liability in any material amount under any provision, or as a
result of any past or present violations, of any applicable
Environmental Laws;
(12) DSSI shall have obtained consents to all
transactions contemplated by this Agreement from the parties to
all contracts, permits, agreements, debt instruments and other
documents referred to in the Schedules delivered by Seller to
Buyer in accordance with this Agreement or otherwise, which
require such consents and consents from, or notification to, all
Governmental Authorities which require such consents or
notifications;
(13) There shall not have occurred
(i) any material adverse change since
December 31, 1999, in the business, properties, assets, results
of operations or financial condition of DSSI, or
(ii) any Loss or damage to any of the
properties or assets (whether or not covered by insurance) of
DSSI which will materially affect or impair the ability of DSSI
to conduct, after consummation of the transactions contemplated
hereby, the business of DSSI as now being conducted by DSSI;
(14) Buyer shall have received from Xxxxx, Figa &
Will, P.C., counsel to Seller, an opinion or opinions addressed
to Buyer and dated the Closing Date, with the form and contents
thereof reasonably satisfactory to Buyer and its counsel;
(15) Buyer shall have completed its financial due
diligence of DSSI, with the results thereof satisfactory to
Buyer;
(16) Seller shall have delivered to Buyer the
minute books and stock ledgers for DSSI, which minute books shall
be current, in all material respects;
(17) Buyer shall have received from Seller good
standing and tax certificates (or analogous documents), dated as
close as practicable to the Closing, from the appropriate
authorities in each jurisdiction of incorporation of DSSI and in
each jurisdiction in which DSSI is qualified to do business,
showing DSSI to be in good standing and to have paid all taxes
due in the applicable jurisdiction;
(18) Seller and its Affiliates shall have
delivered to Buyer, in form and substance satisfactory to Buyer,
a release releasing DSSI from any and all known or unknown,
absolute or contingent, debts, liabilities and obligations that
DSSI may have to Seller and any and all Affiliates of Seller, and
26
Buyer shall have received, in form and substance satisfactory to
Buyer, appropriate tax opinions from Seller that such release or
releases shall have not tax effect or tax consequence on DSSI;
(19) Buyer shall have
obtained, on terms satisfactory to Buyer, a bond in the principal
sum of not less than $12,732,834 covering DSSI's closure and post
closure financial assurance requirements under the Environmental
Laws; and
(20) Seller shall, immediately
prior to the Closing, terminate or cause DSSI to terminate DSSI
employees from participation under any and all Plans, without
such termination resulting in any liability or obligation on the
part of DSSI or the Buyer under any such Plans or to any of the
DSSI employees, the Seller, any Affiliate of the Seller, any
governmental agency or otherwise.
The Buyer may waive any condition specified in this Article
9(a) if it executes a writing so stating at or prior to the
Closing.
(b) Conditions to the Obligations of the Seller. The
obligation of the Seller to consummate the transactions to be
performed by it in connection with the Closing is subject to the
following conditions:
(1) the representations and warranties set forth
in Article 4 above shall be true and correct in all material
respects at and as of the Closing Date;
(2) the Buyer shall have performed and complied
with all of its covenants hereunder in all material respects
through the Closing;
(3) there shall not be any injunction, judgment,
order, decree, ruling or charge in effect preventing consummation
of any of the transactions contemplated by this Agreement;
(4) the Buyer shall have delivered to the Seller
a certificate to the effect that each of the conditions specified
above in Article 10(b)(1)-(3) is satisfied in all respects;
(5) all applicable waiting periods, if any, under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated and the Parties and DSSI shall have received all other
authorizations, consents, and approvals of agencies referred to
hereunder;
(6) the Seller shall have received from Xxxxxx &
Xxxxxxx, A Professional Corporation, counsel to the Buyer, an
opinion in form and substance reasonably satisfactory to Seller and its
counsel, addressed to the Seller and dated as of the Closing Date;
The Seller may waive any condition specified in this
Article 9(b) if it executes a writing so stating at or prior to
the Closing.
27
10. Miscellaneous.
(a) Press Releases and Public Announcements. No Party
shall issue any press release or make any public announcement
relating to the subject matter of this Agreement without the
prior written approval of the Buyer and the Seller; provided,
however, that any Party may make any public disclosure it
believes in good faith is required by applicable Law or any
listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will use its
reasonable best efforts to advise the other Parties prior to
making the disclosure). The above restrictions shall not apply to
any (1) information available to either party from public records
or from other sources in accordance with the Law, (2) information
which is in the public domain or subsequent to the date of this
agreement enters the public domain otherwise than through
disclosure by Buyer or Seller, or (3) information which is
capable of being independently developed by or on behalf of the
party wishing to disclose without reference to the confidential
information.
(b) No Third-Party Beneficiaries. This Agreement
shall not confer any rights or remedies upon any Person other
than the Parties and their respective successors and permitted
assigns.
(c) Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement
among the Parties and merges and supersedes any prior
discussions, understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they have
related in any way to the subject matter hereof. No party shall
be bound by any condition, definition, warranty or representation
other than as expressly provided for in this Agreement or as may
be on a date on or subsequent to the date hereof duly set forth
in writing signed by each party which is to be bound thereby.
Unless otherwise expressly defined, terms defined in this
Agreement shall have the same meanings when used in any exhibit
or schedule and terms defined in any exhibit or schedule shall
have the same meanings when used in the Agreement or any other
exhibit or schedule. This Agreement (including the exhibits and
schedules hereto) shall not be changed, modified, or amended
except by a writing signed each Party hereto, and this Agreement
not be discharged except by performance in accordance with its
terms or by a writing signed by each party to be charged.
(d) Succession and Assignment. This Agreement shall
be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written
approval of the Buyer and the Seller.
(e) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the
same instrument.
(f) Notices. All notices, requests, demands, claims,
and other communications hereunder will be in writing. Any
notice, request, demand, claim, or other communication hereunder
28
shall be deemed duly given if (and then two business days after)
it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to the Seller: Copy to:
Waste Management, Inc. Xxxxx, Figa & Will, P.C.
0000 X., Xxxxxxxxx Xxxx. 6400 S. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000 Xxxxx 0000
Xxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx Attn: Xxxxxxx X. Xxxxxx
If to the Buyer: Copy to:
Perma-Fix Environmental Xxxxxx & Xxxxxxx, A Professional
Services, Inc. Corporation
0000 Xxxxxxxxx 00xx Xxxxx Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000 000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxx: Xx. Xxxxx X. Xxxxxxxxxx, Oklahoma City, OK 73102
President Attn: Xxxxx X. Xxxxxxxxx
Any Party may send any notice, request, demand, claim,
or other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), and any such notice, or
communication shall be deemed to have been given as of three (3)
days after posting, one (1) day after next day delivery service
or upon actual delivery. Any Party may change the address to
which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(g) Governing Law. This Agreement shall be construed
in accordance with and governed by
(1) the applicable Laws of Tennessee only with
respect to the transfer of those permits issued by the State of
Tennessee and the applicable Laws of the Untied States only with
respect to the transfer of those permits issued by the EPA; and
(2) in accordance with the Laws of Delaware in
all other respects, without regarding to the principles of
conflicts of Laws thereof.
(h) Amendments and Waivers. No amendment of any
provision of this Agreement shall be valid unless the same shall
be in writing and signed by the Buyer and Seller. No waiver by
any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder,
or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
29
(i) Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(j) Expenses. The Buyer and Seller will each bear its
own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions
contemplated hereby. Any Taxes in the nature of Income Tax or
any gain resulting from the sale of Shares hereunder and any
transfer or sales tax and any stock transfer tax payable on the
consummation of any other transaction contemplated by this
Agreement shall be paid by Seller.
(k) Construction. The Parties have participated
jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any
federal, state, local or foreign statute or Law shall be deemed
also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation.
(l) Incorporation of Exhibits, Annexes, and Schedules.
The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
(m) Headings. The heading in the sections,
paragraphs, Schedules, and Exhibits of this Agreement are
inserted for convenience of reference only and shall not
constitute a part hereof. The words "herein," "hereof,"
"hereto," and "hereunder," and other words of similar import,
refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(n) Time. Time is of the essence of this Agreement.
(o) Dispute Resolution. Any controversy or claim
arising out of or relating to this Agreement, or the breach thereof
(other than controversies or claims regarding enforcement of the
Protective Clauses, all of which shall be settled by a court of
competent jurisdiction) shall be settled in binding arbitration
to be held, and the award made, in Nashville, Tennessee, in accordance
with the then-existing rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. If any party's
claim exceeds $1,000,000, exclusive of interest and attorneys'
fees, the dispute shall be heard and determined by three
arbitrators. In any arbitration involving one arbitrator, the
arbitrator shall be: (i) any person selected by the parties if
they are able to so agree within ten (10) days after any party
requests the other party to so agree; or, if not, (ii) the
selection shall be made pursuant to the rules of the American
Arbitration Association. In any arbitration involving three
arbitrators, the Seller and Buyer shall each, within fifteen days
of the commencement of arbitration, select one person to act as
arbitrator and the two selected shall select a third arbitrator
within ten (10) days of their appointment. If the arbitrator
selected by the parties are unable or fail to agree upon the
third arbitrator, the third arbitrator shall be selected by the
American Arbitration Association. Within thirty (30) days of the
30
hearing, the arbitrator(s) shall render a decision concerning all
contested issues considered during the arbitration and the
arbitrator(s) shall notify the parties in writing of their
decision, setting forth the dollar amount, if any, awarded. In
the event that there shall be more than one dispute to be
arbitrated, the parties agree that all pending disputes shall be
consolidated to the extent feasible. The nonprevailing party in
the arbitration shall pay to the prevailing party the prevailing
party's reasonable attorney's fees and expenses. The amount of
the dollar award, if any, plus all reasonable attorney's fees of
the prevailing party, shall be paid by the non-prevailing party.
IN WITNESS WHEREOF, the Parties have caused this Agreement
to be executed by their duly authorized representatives as of the
date first above written.
"SELLER" "BUYER"
WASTE MANAGEMENT HOLDINGS, INC. PERMA-FIX ENVIRONMENTAL
INC. SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxxxxx
_______________________ ________________________
Xxxxx X. Xxxxxx Xx. Xxxxx X. Xxxxxxxxxx
Title: Vice President, Chief Title: President
Financial Officer and
Controller
_______________________
31
EXHIBIT AND SCHEDULES
_____________________
Exhibit A - Form of Promissory Note
Schedule 3(b) - Consents and authorizations of governmental
agencies
Schedule 4(b) - Permits and licenses required under
environmental laws
Schedule 5(a) - List of the officers and directors of
DSSI
Schedule5(c) - Non-contravention
Schedule 5(e) - Title to tangible assets
Schedule 5(g) - Liabilities
Schedule 5(i) - Compliance with laws
Schedule (j)(1) - Real Property owned by DSSI
Schedule (j)(2) - Real Property leased or subleased to
DSSI
Schedule (j)(3) - Real Property owned or leased by DSSI
Schedule 5(k) - Patents, Applications, Trade Names,
Trademark Registrations
Schedule 5(l) - Written Contracts and Agreements in
excess of $25,000
Schedule 5(m) - Litigation
Schedule 5(n) - Employee benefit plans
Schedule 5(o) - Permits and Licenses
Schedule 5(q) - Assets
Schedule 5(t) - Compliance with environmental laws
Schedule 7(b) - Consents and approvals of governmental
agencies in connection with the transfer
of ownership of permits and approvals
held by DSSI
