STOCK PURCHASE AGREEMENT
between
WESTINGHOUSE ELECTRIC CORPORATION
(Seller)
and
XXXXXXX ENVIRONMENTAL SERVICES, INC.
(Buyer)
for
NATIONAL ELECTRIC, INC.
A MINNESOTA CORPORATION
Dated as of this 7th day of March, 1995
ARTICLE 1
SALE OF APTUS.................................................................1
1.1 The Sale...........................................................1
1.1.1 The Sale of the Shares...................................1
ARTICLE 2
PRICE..........................................................................1
2.1 Purchase Price.....................................................2
2.2 Payment of Purchase Price..........................................2
2.2.1 Closing Date Payment.....................................2
2.2.2 Issuance of Securities...................................2
2.2.3 Assumption of IDB Loan Agreement.........................2
2.3 Purchase Price Adjustment..........................................2
2.3.1 Post Closing Adjustment of Purchase Price................2
2.3.2 Adjustments Procedure....................................3
2.4 Interest Payment on Cash...........................................3
ARTICLE 3
PRESENTATIONS AND WARRANTIES OF SELLER.........................................4
3.1 Organization; Power and Authority..................................4
3.2 Authorization, Execution and Validity of Agreement...............4
3.3 Capitalization.....................................................4
3.3.1 NEI......................................................4
3.3.2 Aptus....................................................4
3.4 Organizational Records.............................................5
3.5 Financial Statements...............................................5
3.6 Absence of Undisclosed Liabilities.................................5
3.7 Absence of Certain Changes.........................................6
3.8 No Conflict; Seller Consents.......................................7
3.9 Real Property......................................................7
3.9.1 Owned Real Property......................................7
3.9.2 Leased Real Property.....................................7
3.10 Personal Property..................................................8
3.10.1 Owned Personal Property..................................8
3.10.2 Leased Personal Property.................................8
3.10.3 Computer and Telecommunications
Equipment and Software...................................8
3.10.3.1 Equipment........................................9
3.10.3.2 Software.........................................8
3.10.4 NEI Property.............................................9
3.11 Condition of Assets................................................9
3.12 Insurance..........................................................9
3.13 Contracts.........................................................10
3.14 Inventory.........................................................11
3.15 Accounts Receivable...............................................11
3.16 Litigation........................................................11
3.17 Laws and Permits..................................................12
3.17.1 Compliance with Laws....................................12
3.17.2 Permits and Licenses....................................12
3.18 Environmental Matters.............................................12
3.19 Patents, Trademarks and Similar Rights............................13
3.19.1 Intellectual Property...................................13
3.19.2 Licenses; Infringement..................................13
3.20 Employees.........................................................14
3.20.1 Employees...............................................14
3.20.2 Unions..................................................14
3.20.3 Employee and Consulting Contracts.......................14
3.20.4 NLRB....................................................14
3.21 Employee Benefits.................................................14
3.21.1 Plans...................................................14
3.21.2 Records.................................................15
3.21.3 Actions.................................................15
3.21.4 Funding.................................................15
3.21.5 Multiemployer Plans.....................................16
3.21.6 Acceleration of Benefits................................16
3.22 Taxes.............................................................16
3.22.1 Returns.................................................16
3.22.2 Extensions..............................................16
3.22.3 Affiliated Groups.......................................17
3.22.4 Audits..................................................17
3.23 Brokers...........................................................17
3.24 No Subsidiaries or Investments....................................17
3.25 Sufficiency of Assets.............................................17
3.26 Bank Accounts.....................................................17
3.27 Certain Relationships.............................................17
3.28 Full Disclosure...................................................17
3.29 Sophisticated Seller..............................................18
3.30 Schedule References...............................................18
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER.......................................18
4.1 Organization; Power and Authority.................................18
4.2 Authorization, Execution and Validity.............................18
4.3 No Conflict; Buyer Consents.......................................18
4.4 Brokers...........................................................18
4.5 Purchase for Investment...........................................19
ARTICLE 5
COVENANTS OF SELLER...........................................................19
5.1 Cooperation by Seller.............................................19
5.2 Pre-Closing Access to Information.................................19
5.3 Conduct of Business...............................................20
5.3.1 Business in Ordinary Course.............................20
5.3.2 Buyer's Consent.........................................21
5.3.3 Representations and Warranties..........................21
5.4 Further Assurances................................................21
5.4.1 Additional Documents....................................21
5.4.2 Certain Consents........................................21
5.5 Supplements to Schedules..........................................22
5.6 Certain Financial Covenants.......................................22
5.7 Exclusive Dealing.................................................23
5.8 Closure and Post Closure Costs and Financial Assurances...........23
5.8.1 Closing Date Closure and Post-Closure Costs
Defined.................................................23
5.8.2 Financial Assurances Defined............................23
5.8.3 Increases in Costs or Required Assurances...............23
5.8.4 Insurance Premium Payments..............................23
5.8.5 Letters of Credit.......................................23
5.9 Right to Seller Business Post Closing.............................25
5.10 Right to Seller Intellectual Property Post Closing................25
5.11 MIS and Telecommunications Services Post Closing..................25
5.12 Intercompany Accounts.............................................26
5.13 Preparation of Financial Statements...............................26
5.14 ..................................................................26
5.15 Leased Real Property..............................................26
5.16 Certain Environmental Clean-ups...................................26
ARTICLE 6
COVENANTS OF BUYER...........................................................27
6.1 Cooperation by Buyer..............................................27
6.2 Due Diligence Activities..........................................27
6.3 Further Assurances................................................27
6.4 HSR Act Compliance................................................27
6.5 Release from Guarantees...........................................27
6.6 Due Diligence - Post-Signing......................................28
6.7 Repayment of Working Capital Advance..............................28
ARTICLE 7
MUTUAL COVENANTS..............................................................28
7.1 Employee Matters..................................................28
7.1.1 Employment..............................................28
7.1.2 Union Representation....................................29
7.1.3 Termination of Coverage Under Seller's
Employee Benefit Plans
and Coverage Under Buyer's Employee Benefit Plans.......30
7.1.4 Pension Plans...........................................30
7.1.5 Savings Program.........................................30
7.1.6 Welfare and Fringe Benefits.............................31
7.2 Tax Covenants.....................................................31
7.2.1 Apportionment of Income Taxes Between Pre-
Closing and Post-Closing Periods........................31
7.2.2 Payment of Income Taxes.................................31
7.2.3 Preparation and Filing of Income Tax Returns............32
7.2.4 Cooperation.............................................32
7.2.5 Refund Claims...........................................33
7.2.6 Tax Sharing Agreements..................................33
7.2.7 Notice of Audit.........................................33
7.2.8 Audits Controlled by Seller.............................33
7.2.9 Audits Controlled by Buyer..............................33
7.2.10 338(h)(10) Election.....................................33
7.2.11 Net Operating Loss......................................34
7.2.12 Carrybacks..............................................34
7.3 Books and Records.................................................34
7.3.1 Access..................................................34
7.3.2 Destruction.............................................34
7.3.3 Confidentiality.........................................34
7.3.4 Assistance..............................................34
7.4 Non-Competition...................................................35
7.5 Access to Information.............................................38
7.6 Non-Solicitation of Employees.....................................38
7.7 Rights Agreement..................................................38
7.8 Remarketing of IDBs and Cost Sharing..............................38
7.8.1 Initial Remarketing.....................................38
7.8.2 Remarketing of IDBs.....................................38
7.8.3 Effective Conversion Date...............................38
7.8.3.1 Option of Buyer.................................39
7.8.3.2 Option of Seller................................39
7.8.4 IDB Cost Sharing........................................40
7.8.4.1 Calculation and Payment.........................40
7.8.5 Cooperation.............................................40
7.8.5.1 Remarketing Agent...............................41
7.8.5.2 Interest Rate Cap...............................41
7.8.6 Underwriting Costs......................................41
7.8.7 Conversion..............................................41
7.8.8 Rebate Obligation.......................................41
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING..............................................41
8.1 Conditions Precedent to Buyer's Obligations.......................41
8.1.1 Accuracy of Representations and Warranties..............41
8.1.2 Litigation..............................................42
8.1.3 Covenants...............................................42
8.1.4 Deliveries..............................................42
8.1.5 Consents................................................42
8.1.6 Customers...............................................42
8.1.7 No Material Adverse Effect..............................42
8.2 Conditions Precedent to Seller's Obligations......................42
8.2.1 Truth of Representations and Warranties.................42
8.2.2 Litigation..............................................42
8.2.3 Covenants...............................................42
8.2.4 Deliveries..............................................42
8.2.5 [Intentionally Left Blank]..............................42
8.2.6 Permits.................................................43
ARTICLE 9
CLOSING......................................................................43
9.1 Time and Place....................................................43
9.2 Deliveries by Seller..............................................43
9.3 Deliveries by Buyer...............................................44
ARTICLE 10
TERMINATION PRIOR TO CLOSING DATE.............................................45
10.1 Termination.......................................................45
10.2 Effect of Termination.............................................46
10.2.1 General.................................................46
ARTICLE 11
INDEMNIFICATION AND PROCEDURES................................................46
11.1 Indemnification by Seller.........................................46
11.2 Indemnification by Buyer..........................................47
11.3 Notice and Resolution of Claim....................................48
11.3.1 Notice..................................................48
11.3.2 Right to Assume Defense.................................48
11.3.3 Failure to Assume Defense...............................48
11.4 Limits on Indemnification.........................................48
11.5 Survival..........................................................49
11.6 Exclusive Remedy..................................................49
11.7 No Mitigation.....................................................49
11.8 Indemnity Payments................................................50
11.9 Buyer's Cooperation...............................................50
11.10 Payment and Assignment of Claim...................................50
11.10.1 Payment.................................................50
11.10.2 Assignment..............................................50
11.11 Other Beneficiaries...............................................50
11.12 Consequential Damages; Other Limitations..........................50
ARTICLE 12
CERTAIN ENVIRONMENTAL MATTERS.................................................51
12.1 Seller's Environmental Responsibility.............................51
12.1.1 Seller Indemnity........................................51
12.2 Buyer Environmental Responsibility................................51
12.3 Identified Environmental Concerns.................................52
12.4 Off-Site Disposal.................................................52
12.5 Environmental Violations..........................................52
12.6 Third Party Environmental Claim...................................52
12.7 Government Remediation Claim......................................53
12.8 Limitations and Deductibles.......................................53
12.9 Miscellaneous.....................................................54
12.10 Certain Remediation Activities....................................54
12.10.1 Coffeyville Contamination...............................54
12.10.1.1 Responsibility of Seller...........................54
12.10.1.2 TCE Cost Sharing...................................55
12.10.1.3 Survival...........................................55
12.10.2 Control.................................................55
12.10.3 Access..................................................55
12.10.4 Cooperation.............................................56
12.10.5 Monitoring and Sampling.................................56
12.10.6 Conduct.................................................56
ARTICLE 13
DEFINITIONS...................................................................57
ARTICLE 14
MISCELLANEOUS.................................................................65
14.1 Severability......................................................65
14.2 Successors and Assigns............................................65
14.3 Counterparts......................................................65
14.4 Headings..........................................................65
14.5 Waiver............................................................65
14.6 No Third-Party Beneficiaries......................................65
14.7 Sales and Transfer Taxes..........................................66
14.8 Other Expenses....................................................66
14.9 Notices...........................................................66
14.10 Governing Law; Interpretation.....................................67
14.11 Public Announcements..............................................67
14.12 Arbitration.......................................................67
14.13 Financial Projections.............................................68
14.14 Confidentiality...................................................68
14.15 Entire Agreement; Amendment.......................................69
14.16 Further Assurances................................................69
14.17 Exclusive Jurisdiction and Consent to Service of Process..........69
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of this 7th day of
March, 1995 by and between WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania
corporation ("Seller"), and XXXXXXX ENVIRONMENTAL SERVICES, INC., a Delaware
corporation ("Buyer").
R E C I T A L S
A. Seller through Aptus, Inc., a Delaware Corporation ("Aptus") is engaged
in the sale of services related to the transportation, storage, laboratory
analysis and incineration of certain types of hazardous waste. Seller's
transportation, storage, laboratory analysis, incineration and certain of its
sales functions are conducted through Aptus. The major facilities are located in
Aragonite, Utah; Coffeyville, Kansas; Denver, Colorado; Houston, Texas; and
Lakeville, Minnesota. Seller also conducts certain related sales functions and
provides related administrative support and information technology through
facilities owned or leased directly by the Seller which are located in
Pittsburgh, Pennsylvania. The foregoing business and operations shall
collectively be referred to as "the Business."
B. Aptus is a wholly owned subsidiary of National Electric, Inc., a
Minnesota corporation ("NEI"), which is a wholly owned subsidiary of Seller.
C. Buyer wishes to acquire from the Seller, and Seller wishes to sell to
the Buyer all of the issued and outstanding shares of capital stock of NEI in
the manner, for the consideration, and subject to the terms and conditions set
forth herein;
NOW, THEREFORE, Buyer and Seller, intending to be legally bound, hereby
agree as follows:
ARTICLE 1
SALE OF APTUS
1.1 The Sale.
1.1.1 The Sale of the Shares. On the terms and
subject to the conditions of this Agreement, on the Closing,
Seller shall sell and assign to Buyer and Buyer shall purchase
and acquire all of the Shares.
ARTICLE 2
PRICE
1
2.1 Purchase Price. The total consideration for the
purchase of the Business as set forth in Article 1 hereof shall
be One Hundred Thirty-Five Million Dollars ($135,000,000)
("Purchase Price"). The Purchase Price shall be composed of:
(a) Six Million, Five Hundred Thousand Dollars
($6,500,000) (the "Cash"); plus
(b) The assumption by Buyer of all of Seller's
obligations and duties under that certain Loan Agreement, dated
as of June 1, 1990, between Tooele County, Utah (the "Issuer")
and the Seller (the "IDB Loan Agreement") entered into in
connection with the issuance by the Issuer of in the aggregate
Forty-Five Million Seven Hundred Thousand Dollars ($45,700,000)
principal amount of its Variable Rate Hazardous Waste Treatment
Revenue Bonds (Westinghouse Electric Corporation Project), Series
A (the "IDBs"); plus
(c) The issuance by Buyer to Seller of Senior
Unsecured Debentures (the "Senior Unsecured Debentures") having
an aggregate principal amount of Sixteen Million Eight Hundred
Thousand Dollars ($16,800,000) and having terms and conditions
set forth in the form of indenture on Exhibit 2.1 (c), as the
same may be adjusted by an amendment to such indenture pursuant
to Section 2.4; plus
(d) The issuance by Buyer to Seller of Subordinated
Convertible Debentures (the "Subordinated Debentures") having an
aggregate principal amount of Sixty-Six Million Dollars
($66,000,000) and having terms and conditions set forth in the
form of indenture on Exhibit 2.1 (d).
2.2 Payment of Purchase Price.
2.2.1 Closing Date Payment. At the Closing,
Buyer shall pay the Cash to Seller by wire transfer in
immediately available funds.
Payment shall be made to a bank designated by
Seller in writing not less than one business day prior to the
Closing.
2.2.2 Issuance of Securities. At the Closing,
Buyer shall issue to Seller the Senior Unsecured Debentures and
the Subordinated Convertible Debentures (collectively the
"Securities") pursuant to the Debenture Purchase Agreement in the
form attached as Exhibit 2.2.2.
2.2.3 Assumption of IDB Loan Agreement. At
the Closing, Buyer shall assume all of the obligations and duties
of Seller under the IDB Loan Agreement and will deliver the
Assignment and Assumption Agreement in the form attached as
Exhibit 2.2.3.
2
2.3 Purchase Price Adjustment. The Purchase Price
will be adjusted based on changes in the amount of Net Worth
between the date of the December 1994 Balance Sheet and the
Closing Date as follows:
2.3.1 Post Closing Adjustment of Purchase Price.
As soon as practicable, but not later than sixty (60) days after
the Closing Date, Seller shall deliver to Buyer (i) the balance
sheet of Aptus and NEI for the Date of Closing and related
statements of income and cash flows for the period from December
31, 1994 to the Date of Closing, prepared in accordance with GAAP
applied on a basis consistent with that used by Price Waterhouse
in the preparation of the FYE 1993 and 1994 Financial Statements,
(ii) the Financial Statements required by Section 3.5 but not
available at the execution hereof, and (iii) Seller's calculation
of net worth which shall be calculated as of December 31, 1994
and adjusted in accordance with Schedule 2.3.1 (the "December
1994 Adjusted Net Worth") and at the Closing Date, also adjusted
in accordance with Schedule 2.3.1 (the "Final Adjusted Net
Worth"). Within thirty (30) days after receipt of the
aforementioned items, Buyer shall either inform Seller in writing
that the calculation of Final Adjusted Net Worth is acceptable or
object to the calculation of Final Adjusted Net Worth in writing
setting forth in reasonable detail Buyer's objections and the
basis for those objections. If Buyer so objects and the Parties
do not resolve such objections on a mutually agreeable basis
within thirty (30) days after Seller's receipt thereof, the
disagreement shall be resolved within an additional sixty (60)
day period by a "Big 6" accounting firm jointly selected by the
Parties (the "Independent Firm"). The decision of the
Independent Firm shall be final and binding upon the Parties.
Upon the agreement of the Parties or the decision of the
Independent Firm, or if Buyer fails to deliver an objection to
Seller within the thirty (30) day period provided above, the
calculation of Final Adjusted Net Worth shall be deemed final.
Each Party shall bear the fees, costs and expenses of its own
accountants and shall share equally the fees, costs and expenses
of the Independent Firm.
2.3.2 Adjustments Procedure. If Final Adjusted
Net Worth is equal to the December 1994 Adjusted Net Worth, no
adjustment shall be made to the amount of outstanding Senior
Unsecured Debentures. If Final Adjusted Net Worth is greater
than the December 1994 Adjusted Net Worth, the amount of then
outstanding Senior Unsecured Debentures shall be increased on a
dollar-for-dollar basis to reflect such increase in the Final
Adjusted Net Worth in excess of December 1994 Adjusted Net Worth.
If Final Adjusted Net Worth is less than the December 1994
Adjusted Net Worth, the amount of the then outstanding Senior
Unsecured Debentures shall be decreased on a dollar-for-dollar
basis to reflect such decrease in the Final Adjusted Net Worth
below the December 1994 Adjusted Net Worth.
2.4 Interest Payment on Cash. At Closing, Buyer shall
make an additional payment to Seller of Sixteen Thousand Dollars
($16,000.00) representing accrued interest on the Cash. This
payment is to be made since no down payment was made in
connection with this Agreement.
3
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and
warranties to Buyer:
3.1 Organization; Power and Authority.
3.1.1 NEI is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Minnesota. Aptus is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. The jurisdictions in which NEI and Aptus are qualified
to conduct business as foreign corporations are set forth in
Schedule 3.1.1, listed separately for each company. NEI and
Aptus are duly qualified to transact business in each
jurisdiction in which such qualification is required by Law,
except where failure to be qualified would not have a Material
Adverse Effect. NEI and Aptus have all corporate power needed to
own or lease their respective assets and to carry on their
respective business as they are now being conducted.
3.1.2 The Seller is a corporation duly
organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania. The Seller has all
corporate power needed to execute, deliver and perform its
obligations under this Agreement and to consummate the sale of
the Shares.
3.1.3 Schedule 3.1.3 sets forth a brief
description of the corporate history and ownership of Aptus and
NEI, identifying all corporate or partnership predecessors of NEI
and Aptus, all Persons merged into NEI or Aptus, and all Persons
whose liabilities were assumed by NEI or Aptus as a result of an
acquisition, divestiture or reorganization, whether by operation
of law or contract.
3.2 Authorization, Execution and Validity of
Agreement. The execution, delivery and performance by Seller of
this Agreement and the consummation by Seller of the sale of the
Shares of Aptus and the Transferred Assets have been duly
authorized by all necessary corporate action. This Agreement has
been duly and validly executed by Seller, constitutes its valid
and binding obligation and is enforceable against Seller in
accordance with its terms.
3.3 Capitalization.
3.3.1 NEI. The authorized capital stock of NEI
consists of the Shares, all of which are issued and outstanding.
All of the Shares have been duly authorized and validly issued
and are fully-paid and non-assessable. Seller is the beneficial
and record owner of all of the Shares. The Shares are not
subject to Liens or restrictions on transfer, other than
restrictions imposed by applicable securities Laws. There is no
authorized or outstanding option, subscription, warrant, call,
right, commitment or other agreement
4
obligating NEI to issue or transfer any shares of its capital stock or any
securities convertible into or exercisable for any shares of its capital stock.
3.3.2 Aptus. The authorized capital stock of
Aptus consists of the Aptus Shares, all of which are issued and
outstanding. All of the Shares have been duly authorized and
validly issued and are fully-paid and non-assessable. NEI is the
beneficial and record owner of all of the Aptus Shares. The
Aptus Shares are not subject to Liens or restrictions on
transfer, other than restrictions imposed by applicable
securities Laws. There is no authorized or outstanding option,
subscription, warrant, call, right, commitment or other agreement
obligating NEI to issue or transfer any shares of its capital
stock or any securities convertible into or exercisable for any
shares of its capital stock.
3.4 Organizational Records. Neither NEI or Aptus has
violated its articles of incorporation or its by-laws. Copies of
the articles of incorporation of Aptus and all amendments
thereto, and of the by-laws of NEI and Aptus and all amendments
thereto, certified to be complete and correct are attached as
Schedule 3.4 hereto.
3.5 Financial Statements.
3.5.1 Schedule 3.5 hereto includes all of the
Financial Statements. The Financial Statements have been
prepared in connection with the sale of the Business and are
prepared in accordance with GAAP applied on a basis consistent
with that used by Price Waterhouse in connection with preparation
of the FYE 1993 and 1994 Financial Statements. The Financial
Statements are correct and complete and in accordance with the
books and records of NEI and Aptus. The balance sheets included
in the Financial Statements in each case fairly present in all
material respects and in reasonable detail the financial
condition, assets and liabilities of NEI and Aptus as at the
respective dates specified therein, and the related statements of
income and cash flows, for each of the periods then ended, fairly
present in all material respects the results of the operations
for the periods then ended.
3.5.2 "Financial Statements" shall mean the
"Audited Financial Statements" and the "Unaudited Financial
Statements." "Audited Financial Statements" shall mean the
following: (i) audited balance sheets of Aptus and NEI as of
December 31, 1993 and December 31, 1994; and (ii) audited
statements of income and cash flows of Aptus and NEI for the
periods ended December 31, 1993 and December 31, 1994. The
Audited Financial Statements shall be prepared by Price
Waterhouse. "Unaudited Financial Statements" shall mean the
unaudited balance sheet of Aptus and NEI as of March 31, 1995
(the "March 1995 Balance Sheet") and the related statements of
income and cash flows for the period then ended.
3.6 Absence of Undisclosed Liabilities. Neither NEI
nor Aptus have any debts, liabilities or obligations of any
nature whatsoever, whether absolute, accrued, contingent or
otherwise (collectively, the "Undisclosed Liabilities") except:
5
(a) liabilities that are referred to or reflected or
reserved against on the December 1994 Balance Sheet or the March
1995 Balance Sheet or the notes thereto to the extent that the
applicable accounting principles require such action, including
matters relating to deferred tax accounts;
(b) Retained Liabilities or other liabilities that
were not required to be referred to or reflected or reserved
against on the December 1994 Balance Sheet or the March 1995
Balance Sheet; and
(c) liabilities, not referred to or reflected or
reserved against on the December 1994 Balance Sheet or the March
1995 Balance Sheet, incurred in the ordinary course of business
and consistent with past practices, none of which, individually
or in the aggregate has a Material Adverse Effect.
3.7 Absence of Certain Changes. Except as set forth
in Schedule 3.7 or as contemplated by Section 5.12 hereto
(Intercompany Accounts) or other provisions of this Agreement,
the business of Aptus has been conducted, since December 31,
1994, in the ordinary course, and Aptus has not entered into any
transaction (or committed to enter into any such transaction)
other than in the ordinary course of its business. NEI is not
conducting any business operations, and has not entered into any
transactions since December 31, 1994, except those transactions
necessary to vest title to the Owned Real Property in Aptus. In
particular, without limiting the generality of the foregoing,
Aptus has not since that date:
3.7.1 purchased or redeemed directly or
indirectly any shares of its capital stock;
3.7.2 issued or sold or agreed to issue or
sell any shares of its capital stock or any option, warrant,
conversion or other right to acquire any such share or any
securities convertible into or exchangeable for such shares, or
amended its articles or by-laws;
3.7.3 declared or paid any dividend or
declared or made any other distribution on any of the shares of
any class of their capital stock or on any other of their
securities;
3.7.4 acquired or sold, assigned, transferred,
licensed, terminated, leased or disposed of any intangible
assets;
3.7.5 suffered or incurred any damage,
destruction or liability (whether or not covered by any
insurance), or any strike or work stoppage, that either by itself
or in the aggregate has resulted in a Material Adverse Effect;
3.7.6 incurred any obligations or liabilities
for money borrowed (except for obligations to be discharged on or
before Closing);
6
3.7.7 mortgaged or pledged or subjected to any
Lien, any of its material assets, tangible or intangible
(excepting statutory liens of landlords, carriers, warehousemen,
mechanics, materialmen and similar Persons incurred in the
ordinary course of business for sums not yet due);
3.7.8 sold, transferred or disposed of any of
its assets except assets used or consumed in the ordinary course
of business and obsolete equipment and equipment which has been
replaced in the ordinary course of business;
3.7.9 made any individual capital expenditures
or commitments therefor in excess of $50,000.00;
3.7.10 altered or revised in any material way any
of its accounting principles, procedures, methods or practices;
3.7.11 made any material amendment to any
Contracts, other than in the ordinary course of business and
consistent with past practices; or
3.7.12 increased the compensation of any
employees, except for normal periodic increases in the ordinary
course of business and consistent with past practices, or entered
into any employment or consulting agreement not terminable at
will without penalty or continuing obligation.
3.8 No Conflict; Seller Consents. Except as set forth
on Schedule 3.8 or as would not have a Material Adverse Effect,
the execution, delivery and performance by Seller of this
Agreement will not (a) violate any Law, (b) violate any Charter
Document of Seller, (c) require any Consent from any Governmental
Authority, (d) breach any Charter Document, Material Contract,
Material Lease, or Material Permit of Aptus, or (e) result in the
creation of any Lien on any assets of Aptus, including
Transferred Assets. No governmental authorization, approval,
order, permission, license, permit, certificate, franchise or
consent, and no registration, declaration or filing with any
court, governmental department, commission, authority, board,
bureau, agency or other instrumentality, is required in
connection with the execution, delivery and performance of this
Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby, other than (a) those that have
already been obtained (and copies provided to Buyer), (b) the
transfer of certain FCC licenses identified on Schedule 3.8 from
Seller to Aptus and (c) the transfer of certain Financial
Assurances.
3.9 Real Property.
3.9.1 Owned Real Property.
(a) Schedule 3.9.1 lists and sets forth the full legal description
for all of the real property owned by Aptus (the "Owned Real Property"). Aptus
has good and
7
marketable title to the Owned Real Property subject to no Liens, except
Permitted Liens and except as disclosed on Schedule 3.9.1. Aptus owns no
other real property and has no options or other interests in real
property, except as disclosed on Schedule 3.9.1.
(b) Aptus has not received any written notice for
assessments for public improvements against any of the Owned Real
Property which remains unpaid (nor is it negotiating any such
assessments) and, to the best of Seller's knowledge, no such
assessment has been proposed. There is no pending condemnation,
expropriation, eminent domain or similar proceeding affecting all
or any portion of any of such properties and, to the best of
Seller's knowledge, no such proceeding is contemplated.
3.9.2 Leased Real Property. Schedule 3.9.2 lists
all of the real property leased by Aptus (as landlord or tenant)
as of the date hereof (the "Leased Real Property"). All Leases
relating to the Leased Real Property (the "Real Property Leases")
and all amendments thereto are identified and described on
Schedule 3.9.2 and true and correct copies have been delivered or
made available to Buyer. All Leases are valid, binding and
enforceable and in full force and effect, except as would not
have a Material Adverse Effect. There has been no breach of any
Real Property Lease by Aptus that would have a Material Adverse
Effect which has not been cured or waived.
3.9.3 NEI does not own, lease or have any
interest in any real property.
3.10 Personal Property.
3.10.1 Owned Personal Property. Except as set
forth on Schedule 3.10.1 and except for Permitted Liens, Aptus
has good and marketable title, subject to no Liens, to all
personal property owned by Aptus, including property reflected on
the books and records of Aptus and all personal property acquired
or leased by Aptus since the date thereof, including the
Transferred Assets, other than (a) property that has been
disposed of in the ordinary course of business, (b) as
contemplated by Schedule 5.3 hereto and (c) Leased Personal
Property.
3.10.2 Leased Personal Property. Schedule 3.10.2
lists all of the personal property leased to Aptus pursuant to a
Material Personal Property Lease as of the date hereof ("Leased
Personal Property"). All.Material Personal Property Leases and
all amendments thereto are identified and described on Schedule
3.10.2 and true and correct copies have been delivered or made
available to Buyer. All Material Personal Property Leases are
valid, binding and enforceable and in full force and effect,
except as would not have a Material Adverse Effect. There has
been no material breach of any such Material Personal Property
Lease by Aptus that would have a Material Adverse Effect which
has not been cured or waived.
3.10.3 Computer and Telecommunications Equipment
and Software.
8
3.10.3.1 Equipment. Schedule 3.10.3.1
sets forth a complete listing and description of all computer or
telecommunications equipment owned by Aptus or used by Aptus in
the Business (the "MIS Equipment") indicating for each item of
MIS Equipment whether it is owned by Aptus, owned by Seller,
leased by Aptus or leased by Seller. Leased MIS Equipment is
further identified by applicable lease and maintenance agreements
(including date and vendor), remaining term and amount of monthly
or yearly payments. If any MIS Equipment is leased by Seller,
the lease shall be transferred to Aptus on or prior to Closing
without modification and with no increase in the lease payments
for the then existing term. Certain MIS Equipment is identified
by Buyer on Schedule 3.10.3.1 as MIS Equipment not required by
Buyer past the MIS and Telecommunications Transition Period
identified in Section 5.11 and shall be retained by Seller, or if
leased equipment, the lease obligations shall be retained or
assumed by Seller.
3.10.3.2 Software. Schedule 3.10.3.2
sets forth a complete listing and description of all computer or
telecommunications software owned by Aptus or used by Aptus in
the Business (the "MIS Software") indicating for each item of MIS
Software whether it is proprietary to Aptus, proprietary to
Seller, licensed by Aptus or licensed by Seller. Licensed MIS
Software is further identified by applicable license and support
agreements (including date and vendor), whether fully paid and if
not, remaining term and amount of monthly or yearly payments. if
any MIS Software is licensed by Seller, the license shall be
transferred to Aptus (or to Buyer and all of its Subsidiaries) on
or prior to Closing without modification and with no increase in
the license fee for the then existing term of the license until
the next renewal or change in license fees. Certain MIS Software
is identified by Buyer on Schedule 3.10.3.2 as MIS Software not
required by Buyer past the MIS and Telecommunications Transition
Period identified in Section 5.11 and shall be retained by
Seller, or if licensed software, the license obligations shall be
retained or assumed by Seller.
3.10.4 NEI Property. NEI does not own, lease or
have any interest in any personal property.
3.11 Condition of Assets. The personal property owned
or leased by Aptus, including the Transferred Assets, and the
improvements and structures located on the Real Property and the
fixtures and appurtenances thereto are in working order,
reasonable wear and tear excepted, are reasonably suitable for
the uses for which they are intended and conform to the
requirements of applicable law in all material respects. Except
as specifically set forth in this Agreement, Seller makes no
express or implied warranty of merchantability or fitness for a
particular purpose, or any other warranty as to the condition or
operation of the assets.
3.12 Insurance.
3.12.1 NEI, Aptus and its businesses and
properties are insured as provided for in and by the policies and
contracts of insurance fully described in Schedule
9
3.12.2. Schedule 3.12.2 also sets forth a three (3) year history of all
claims made under such policies and the status or disposition of
such claims. Such policies and contracts of insurance cover
risks and are in such amounts as are required by applicable laws,
permits, regulations, certificates, agreements and other
instruments.
3.12.2 All such policies are in full force and
effect, all premiums with respect thereto have been paid to the
extent due and no notice of cancellation or termination has been
received with respect to any such policy (other than policies
that have been replaced or are intended to be replaced prior to
expiration by policies providing substantially the same
coverage).
3.13 Contracts. As of the date hereof, Schedule 3.13
sets forth a listing of all written material leases, contracts or
commitments of any kind, or, to Seller's knowledge, all unwritten
material leases, contracts or commitments of Aptus (the "Material
Contracts"), including:
(i) Contracts pertaining to the borrowing of money,
including any letters of credit;
(ii) Contracts creating Liens;
(iii) Contracts creating Guarantees;
(iv) Contracts relating to material employment or
consulting services which are not cancellable
within sixty (60) days or are in excess of Fifty
Thousand Dollars ($50,000.00);
(v) Contracts relating to capital expenditures in
excess of Fifty Thousand Dollars ($50,000.00);
(vi) Contracts limiting the freedom of Aptus to engage
in or compete with any business;
(vii) Contracts not yet fully performed for the
purchase, lease or sale of real property or any
business or line of business or for any merger or
consolidation;
(viii) Joint venture or partnership agreements;
(ix) Contracts or orders for future purchase or
delivery of goods or rendition of services
involving the payment by any party of more than
Fifty Thousand Dollars ($50,000.00) or having a
term greater than one year;
10
(x) Powers of Attorney;
(xi) Performance Bonds; and
(xii) Contracts which commit Aptus to a volume guarantee
or price level and are not terminable within six
(6) months.
All Material Contracts are valid and binding and in
full force and effect, except as would not have a Material
Adverse Effect. There has been no breach of any Material
Contract by Aptus, that would have a Material Adverse Effect
which has not been cured or waived. True and correct copies of
all Material Contracts and all material amendments thereto have
been delivered or made available to Buyer.
NEI is not a party to any lease, contract or commitment
of any kind.
3.14 Inventory.
3.14.1 Schedule 3.14 lists the amount of
inventory held by Aptus for incineration or disposal by other
means. The list indicates inventory levels at the end of each
calendar month for the past twelve (12) months and is categorized
by type of waste. All inventory conforms to its corresponding
waste profile, except to the extent that nonconformance would not
have a Material Adverse Effect.
3.14.2 Inventory on the December 1994 Balance
Sheet, other than inventory held for incineration or other
disposal as described in 3.14.1 above, is of such a quantity that
is historically usable in the ordinary course of business, and it
has not been consigned to third parties.
3.15 Accounts Receivable. All of the accounts and
notes receivable of Aptus represent amounts receivable for
merchandise actually delivered or services actually provided (or,
in the case of non-trade accounts or notes represent amounts
receivable in respect of other bona-fide business transactions),
have arisen in the ordinary course of business, are not subject
to any counterclaims or offsets and have been billed and are
generally due within 30 days after such billing. All such
receivables are fully collectible in the normal and ordinary
course of business, except to the extent of a reserve in an
amount not in excess of the reserve for doubtful accounts
reflected on the balance sheet of Aptus. Schedule 3.15 hereto
sets forth (a) the total amount of accounts receivable of Aptus
outstanding as of the last day of the month immediately preceding
the present month and (b) the agings of such receivables based on
the following schedule: 0-30 days, 31-60 days, 61-90 days, and
over 90 days, from the date of the invoice therefor.
3.16 Litigation. Except as set forth on
Schedule 3.16, there is no Action by any Person by or before any
Governmental Authority that is pending or, to Seller's Knowledge,
threatened in writing against NEI, Aptus or Seller dealing with
the conduct or
11
operation of the Business that involves an amount in excess of Fifty Thousand
Dollars ($50,000.00). Except as set forth on Schedule 3.16, NEI, Aptus and
Seller are not subject to any Order dealing with the conduct or operation of
the Business.
3.17 Laws and Permits.
3.17.1 Compliance with Laws. Except as disclosed
on Schedule 3.17.1, Aptus is in compliance with all federal,
state and local laws, statutes, rules and regulations in effect
as of the Closing Date that are applicable to Aptus, except where
such noncompliance would not have a Material Adverse Effect.
3.17.2 Permits and Licenses. All Permits
required by any federal, state, local or foreign law, rule or
regulation and necessary for the operation of Aptus as of the
Closing Date have been obtained. Aptus is in compliance with all
Permits in connection with the operation of the Business as of
the Closing Date, except where noncompliance would not have a
Material Adverse Effect. All Permits are current, valid and in
full force and effect and will not be terminated by the
consummation of the transactions contemplated by this Agreement.
A listing of all Permits is set forth on Schedule 3.17.2 and
complete and correct copies of each have been made available to
the Buyer. Except as set forth in Schedule 3.17.2, neither NEI
or Aptus has received from any Governmental Authority any claim
or notice of any violation or possible violation, of any
building, zoning, fire, health, employment, environmental or
other laws, ordinances, rules or regulations relating to its
properties, premises, business or employees, within the past five
(5) years with respect to environmental matters or within the
past three (3) years with respect to other matters, nor has
either received any notice that any revocation or limitation of
any license, permit, certificate, approval or other authorization
is threatened or pending. Aptus has complied or, with respect to
any such claim or notice received within the prior 60 days, will
resolve such claims or notices disclosed in Schedule 3.17.2 and
there are no outstanding issues resulting from any environmental,
health and safety inspections conducted by federal, state or
local regulatory bodies except as listed on Schedule 3.17.2 which
would have a Material Adverse Effect.
3.18 Environmental Matters.
3.18.1 Except as set forth in Schedule 3.18.1,
neither NEI nor Aptus has received written notice from any third
party including, without limitation any Governmental Authority,
(i) that any Hazardous Substance which it has generated,
transported or disposed of, has been found at any site at which
a Governmental Authority or other Person has conducted, plans to
conduct, or has demanded that NEI or Aptus conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (ii) that it is or shall be a named party
to any claim, action, cause of action, complaint, legal or
administrative proceeding arising out of any Person's incurrence
of costs, expenses, losses or damages of any kind whatsoever in
connection with the presence or release of Hazardous Substances.
12
3.18.2 Except as set forth in Schedule 3.18.2:
(i) no portion of the real property or other assets of NEI or
Aptus has been used by NEI or Aptus for the handling, processing,
storage or disposal of Hazardous Substances except in compliance
with applicable Environmental Laws, Permits, and Real Property
Leases, unless any such non-compliance would not have, or not be
reasonably expected to have, a Material Adverse Effect; (ii) in
the course of any activities conducted by NEI or Aptus, no
Hazardous Substances have been generated or are being used on
such properties except in compliance with applicable
Environmental Laws, Permits, and Real Property Leases unless any
such non-compliance would not have, and would not be reasonably
expected to have, a Material Adverse Effect; and (iii) to the
best of Seller's knowledge, (I) there have been no releases of
Hazardous Substances on, upon, from or into any real property
owned or leased by NE I or Aptus which would have, or would be
reasonably expected to have, a Material Adverse Effect; (II) no
underground tank or other underground storage receptacle for
Hazardous Substances is located on such properties; and (III) no
friable asbestos is located on such properties.
3.18.3 Schedule 3.18.3 hereto lists by category
or individual item all environmental inspections, investigations,
studies, audits, tests, data, reviews or other analysis conducted
by or on behalf of NEI or Aptus in the past five (5) years in
relation to compliance with Environmental Laws at any property or
business now or previously owned, operated or leased by NEI or
Aptus which have been submitted to a Governmental Authority or
conducted by or on behalf of any Governmental Authority and
submitted by such Governmental Authority to NEI or Aptus, true
and correct copies of which have been provided or made available
to Buyer.
3.18.4 To the best of Seller's knowledge,
neither NEI nor Aptus has disposed of any Hazardous Waste or PCBs
generated by Aptus or its customers (or under applicable
Environmental Laws deemed to have been generated by Aptus or its
customers) at any facility, except these set forth on Schedule
3.18.4.
3.19 Patents, Trademarks and Similar Rights.
3.19.1 Intellectual Property. Schedule 3.19
sets forth a true and complete list of all patents, patent
applications, customized software, trade names, registered
trademarks, registered copyrights and registered service marks
and all applications therefor that are owned, licensed or used by
Aptus (the "Intellectual Property") on the date of this
Agreement. Except as set forth on Schedule 3.19, Aptus owns all
right, title and interest in and to all Intellectual Property
necessary to the conduct of its business as presently conducted,
subject to no Lien or restriction (including confidentiality
agreements). To Seller's knowledge, Aptus has not suffered any
infringement or misappropriation of any Intellectual Property.
No Action is pending or, to Seller's Knowledge, threatened
asserting any such infringement or misappropriation by Aptus.
3.19.2 Licenses; Infringement. Schedule 3.19
sets forth a true and
13
complete list, as of the date of this Agreement, of all licenses for
Intellectual Property between Aptus and any other entity. All such licenses
are valid and in full force and effect. Except as set forth on Schedule 3.19,
there is no pending or, to Seller's Knowledge, threatened, Action
against Aptus contesting, its rights to or the validity of any
Intellectual Property that it owns or licenses.
3.20 Employees.
3.20.1 Employees. Schedule 3.20.1 lists all of
the employees who perform the majority of their work for Aptus as
of the most recent date for which such information is available
("Employees") and sets forth the position and job classification
of each such Employee as of that date, together with the
following additional information: employer (if other than Aptus),
location employed, date of hire, accrued vacation, and status
(active, union/nonunion, on worker's compensation, disability,
lay-off or leave). Seller has separately provided to Buyer
information relating to the compensation of all Employees.
3.20.2 Unions. Except as set forth on
Schedule 3.20.2, there are no collective bargaining agreements or
other union agreements applicable to any Aptus location. Since
January 1, 1994, there has not been and there is not presently
pending or existing any strike, slowdown, picketing, work
stoppage, labor arbitration or proceeding in respect of the
grievance of any employee or other labor dispute against or
affecting Aptus or threatened against Aptus. No application for
certification of a collective bargaining unit has been instituted
or is pending or, to the best knowledge of Seller, has been
threatened. Seller has not received any written notification or
threat of any work stoppage or other labor dispute. There is no
lock-out of any employee by Aptus nor is Seller contemplating or
threatening a lock-out. Aptus has complied and is in compliance
with all laws relating to the employment of labor, including,
without limitation, any provisions thereof relating to wages,
hours and collective bargaining except where failure to comply
with such laws would not have a Material Adverse Effect.
3.20.3 Employee and Consulting Contracts. Except
as listed and described in Schedule 3.20.3, the directors,
officers, employees and agents of Aptus are not covered by any
written contract, agreement, indenture, instrument or commitment
providing for a specified notice of termination or fixed term of
employment. Schedule 3.20.3 hereto contains list of all written
employment, service, agency, consulting, termination and
severance contracts and agreements currently in effect entered
into by Aptus with or for any or all of its directors, officers,
employees, agents, consultants or independent contractors.
3.20.4 NLRB. Except as set forth in
Schedule 3.20.4, to Seller's Knowledge, no Aptus location is
engaged in, nor has it received any written notice of any unfair
labor practice, and no such complaints are pending before the
National Labor Relations Board or any other Governmental
Authority.
3.21 Employee Benefits.
14
3.21.1 Plans. Schedule 3.21.1 lists, as of the
date of this Agreement, each written pension, retirement, profit-
sharing, deferred compensation, bonus, incentive, performance,
stock option, stock appreciation, phantom stock, stock purchase,
restricted stock, medical, hospitalization, vision, dental or
other health, life, disability, severance, termination or other
employee benefit plan, program, arrangement, agreement or policy
(including each ERISA Plan) (collectively, "Plans") which
currently covers any Employee and to which Aptus or Seller on
behalf of Aptus currently contributes (each, an "Employee Benefit
Plan"). Except as set forth in Schedule 3.21.1, on the date of
this Agreement each Employee Benefit Plan complies in all
material respects, and has been operated and administered in all
material respects, in accordance with all applicable requirements
of all Laws, including ERISA and the Code, and no "reportable
event", "prohibited transaction" (as such terms are defined in
ERISA and the Code, as applicable) or termination has occurred
with respect to any Employee Benefit Plan. Each ERISA Plan
intended to qualify under Section 401(a) of the Code has received
a ruling or determination letter or will file for such
determination letter within the applicable period, concluding
that such ERISA Plan so qualifies, and to Seller's Knowledge, no
event has occurred, amendment been adopted or action been taken
that would cause such ERISA Plan to lose its qualified status.
3.21.2 Records. Seller has delivered or made
available to Buyer, on or before the date of this Agreement,
copies of each Employee Benefit Plan and any amendments thereto
and any related trust agreement, and, if applicable (a) the most
recent actuarial valuation report, (b) the last filed Form 5500
or 5500-C, (c) the summary plan description currently in effect
for each Employee Benefit Plan and all material modifications
thereto, (d) the last financial statements for each Employee
Benefit Plan and its related trust, if any, (e) the most recent
determination letter issued with respect to each Employee Benefit
Plan, and (f) a sample form of loan document under the Savings
Program.
3.21.3 Actions. Except as set forth on
Schedule 3.21.3, on the date of this Agreement, there are no
Actions pending (other than routine claims for benefits) or, to
Seller's Knowledge, threatened, with respect to any Employee
Benefit Plan.
3.21.4 Funding. All contributions required under
applicable Law or the terms of any Plan to be made by Seller on
behalf of Aptus or Aptus to an Employee Benefit Plan have been
made within the time prescribed by the applicable Law or Plan.
There does not exist, on the date of this Agreement, any
accumulated funding deficiency as to any ERISA Plan, nor has any
waiver of the minimum funding standards been issued with respect
to any ERISA Plan. On the date of this Agreement the fair market
value of the assets of the Pension Plan does not equal or exceed
the actuarial present value of all accrued benefits under such
ERISA Plan, including early retirement subsidies, plant closing
benefits and all other amounts considered to be benefit
liabilities upon a standard termination of a defined benefit plan
subject to Title IV of ERISA, with the said actuarial present
value being determined by application of the actuarial methods
and assumptions applied by such ERISA Plan's enrolled actuary at
the most recent annual valuation of such ERISA Plan.
15
3.21.5 Multiemployer Plans. On the date of this
Agreement:
(a) Schedule 3.21.5 sets forth the ERISA Plans
which are "multiple employer" plan within the meaning of
Section 4063 or 4064 of ERISA;
(b) no ERISA Plan is a "multiemployer plan" within
the meaning of Section 4001(a)(3) of ERISA or other applicable
employee benefit legislation;
(c) Aptus has no primary or secondary liability
under the provisions of Section 4204 of ERISA or any agreement
entered into in accordance with the provisions of that Section;
and
(d) neither Seller nor Aptus has (i) engaged in
any transaction that could result in the imposition of any
material liability pursuant to Section 4069 or 4212 of ERISA or
(ii) incurred any material liability under or pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, and no event or
condition exists with respect to Seller or Aptus that may result
in the imposition of any material liability with respect to
Buyer, Seller or Aptus or pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
Employee Benefit Plans.
3.21.6 Acceleration of Benefits. Except as set
forth on Schedule 3.21.6, on the date of this Agreement, the
consummation of the transactions contemplated by this Agreement
will not result in any increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any
benefits payable to or in respect of any Employee or former
Employee or the beneficiary or dependent of any Employee or
former Employee.
3.22 Taxes.
3.22.1 Returns. All Covered Returns relating to
NEI or Aptus that were required to be filed on or before the
Closing have or will be timely filed. All Covered Taxes shown on
such Covered Returns that are payable on or before the Closing
Date by NEI or Aptus or are chargeable as a Lien upon any of
their assets have been paid to the extent due and payable on or
before the Closing Date. All Covered Taxes required to be
withheld by or on behalf of NEI or Aptus have been withheld, and
such withheld Covered Taxes have been duly and timely paid to the
proper Governmental Authorities or are being properly held by NEI
or Aptus for such payment.
3.22.2 Extensions. Except as set forth on
Schedule 3.22.2, no Contract extending the period of assessment
or collection of any Covered Taxes for which NEI or Aptus would
be held liable has been executed or filed, on or before the date
of this Agreement, with the Internal Revenue Service or any other
Governmental Authority.
16
3.22.3 Affiliated Groups. Except as set forth on
Schedule 3.22.3, neither NEI nor Aptus is (a) a member of any
combined, consolidated, affiliated or unitary tax group (an
"Affiliated Group") for purposes of filing Covered Returns or
paying Covered Taxes or (b) a party to or bound by any tax
sharing or similar Contract with respect to Covered Taxes.
3.22.4 Audits. Except as set forth on
Schedule 3.22.4, to Seller's Knowledge, (a) no unresolved issue
has been raised in writing by any Governmental Authority in the
course of any audit with respect to Covered Taxes for which NEI
or Aptus would be held liable and (b) no taxing authority is now
asserting or threatening to assert against NEI or Aptus any
deficiency or claim for additional Covered Taxes or any
adjustment of Covered Taxes. To Seller's Knowledge, there is no
reasonable basis for any such assertion.
3.23 Brokers. Except as set forth on Schedule 3.23,
as to which Seller agrees to indemnify Buyer, no Person is or
will become entitled to receive any brokerage or finder's fee,
advisory fee or other similar payment for the transactions
contemplated by this Agreement because it was engaged by or acted
on behalf of Seller.
3.24 No Subsidiaries or Investments. Aptus has no
Subsidiary nor any investment or participation in any other
Person. NEI has no Subsidiary other than Aptus nor any
investment or participation in any other Person.
3.25 Sufficiency of Assets. The assets of Aptus,
including the Transferred Assets, together with the rights and
interests of Aptus under the Material Contracts and the Material
Leases, constitute all of the assets, rights and/or interests
which are used in, and are sufficient for, the operation of the
Business as it is currently being conducted in all material
respects.
3.26 Bank Accounts. Schedule 3.26 hereto sets forth
the name of each bank in which Aptus has an account or safe
deposit box, the identifying numbers or symbols thereof and the
names of all persons authorized to draw thereon or to have access
thereto. NEI has no bank accounts.
3.27 Certain Relationships. Seller has provided to
Buyer access to the conflicts of interest forms required to be
completed by all Employees. Except as disclosed on Schedule
3.27, neither Seller nor any Affiliate is a party to any
agreement with Aptus that will extend past Closing.
3.28 Full Disclosure.
Section 3.28.1 To Seller's Knowledge, this
Agreement, including the representations and warranties and
schedules, does not contain any untrue statement of material fact
or omit to state a material fact necessary to make the statements
herein not
17
misleading in light of the circumstances under which they were made.
Section 3.28.2 There is no fact known to the
persons listed on Schedule 13 and not disclosed to Buyer which
has a Material Adverse Effect or could reasonably be expected to
have a Material Adverse Effect.
3.29 Sophisticated Seller. Seller is an "accredited
investor" as that term is used in Section 4.5 hereto and has
sufficient knowledge and experience in financial and business
matters so as to enable it to evaluate the risks and merits
inherent in the Securities which comprise the Purchase Price.
Seller acknowledges receipt and review of copies of Buyer's most
recent Annual Report to Shareholders, Proxy Statement, Form 10-K
and other filings with the Securities Exchange Commission and has
had access to such information concerning Buyer as it has felt
necessary or appropriate for its evaluation.
3.30 Schedule References. Any item disclosed in one
Section or Schedule shall be deemed to be disclosed in any other
Section or Schedule where such disclosure is relevant, even if
there is no express cross-reference, provided that the relevance
of the disclosure is reasonably apparent. Disclosure of items
that may or may not be required to be disclosed by this Agreement
does not mean that such items are material or create a standard
of materiality.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and
warranties to Seller:
4.1 Organization; Power and Authority. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware. Buyer has all corporate power needed
to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
4.2 Authorization, Execution and Validity. The
execution, delivery and performance by Buyer of this Agreement
and the consummation by Buyer of the purchase of the Shares have
been duly authorized by all necessary corporate action. This
Agreement has been duly and validly executed and delivered by
Buyer, constitutes its valid and binding obligation and is
enforceable against Buyer in accordance with its terms.
4.3 No Conflict; Buyer Consents. The execution,
delivery and performance by Buyer of this Agreement will not (a)
violate any Law, (b) violate any Charter Document of Buyer, (c)
require any Consent from any Governmental Authority, or (d)
breach any material Contract to which Buyer is a party or by
which it is bound.
4.4 Brokers. No Person is or will become entitled to
receive any brokerage
18
or finder's fee, advisory fee or other similar payment for the transactions
contemplated by this Agreement because it was engaged by or acted on behalf
of Buyer.
4.5 Purchase for Investment. Buyer is acquiring the
Shares for its own account for investment and not with a view to
their sale or distribution. Buyer understands that the Shares
have not been registered under the Securities Act of 1933, as
amended, or under relevant state securities laws (the "Acts").
Buyer further understands that the Shares cannot be sold except
pursuant to an effective registration statement, an exemption
from such registration requirements and in compliance with the
Acts. Buyer is an accredited investor or institutional investor
under the Acts, and Buyer has sufficient knowledge and experience
in financial and business matters so as to enable it to evaluate
the risks and merits of purchasing the Shares and is capable of
bearing the economic risks of such investment. Buyer has had
access to such information concerning NEI and Aptus as Buyer has
felt necessary or appropriate for its evaluation.
ARTICLE 5
COVENANTS OF SELLER
Seller hereby covenants and agrees with Buyer as
follows:
5.1 Cooperation by Seller. Subject to its rights
under Article 10, prior to the Closing, Seller will use all
reasonable efforts to take all actions and to do all things
necessary or advisable to consummate the transactions
contemplated by this Agreement and to cooperate with Buyer in
connection with the foregoing, including using reasonable efforts
to obtain any Consents contemplated by Section 3.8. However,
Seller shall have no obligation to change any Permit or make any
payment to obtain any Consent.
5.2 Pre-Closing Access to Information. From the date
hereof through the Closing Date, Seller shall, subject to
applicable contractual obligations, afford to Buyer, its
accountants and its counsel reasonable access, upon reasonable
notice, to all of the relevant properties, books and records of
NEI and Aptus that Buyer needs to complete its due diligence.
Buyer's representatives shall be permitted to make and remove
photocopies of any documents. Seller shall cause the
representatives of NEI and Aptus to give to the Buyer the fullest
cooperation with the object of providing access to the assets and
to all information as the Buyer may deem necessary. The above
described access shall not extend to books and records or self-
evaluative audits subject to attorney-client privilege. In
addition to the foregoing, upon prior written notice to Seller,
and in the company of Aptus's representative, if Seller so
requests, the Buyer shall have access to the customers of Aptus.
Buyer shall direct all requests for information to:
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Xxxxx X. Xxxxxxxxxxx, Esquire
Westinghouse Electric Corporation
Room 1750
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
5.3 Conduct of Business.
5.3.1 Business in Ordinary Course. From the date
hereof through the Closing Date, Seller shall use all reasonable
efforts to cause Aptus to: (a) preserve its relationships with
suppliers, customers, Employees, creditors and Governmental
Authorities, (b) maintain their existing insurance coverage in
all material respects, (c) perform their obligations under the
Material Contracts and Material Permits in all material respects,
(d) comply with all applicable Laws in all material respects and
(e) conduct its business in the ordinary course and consistent
with past practice. Except as contemplated by Section 5.14
hereto (Intercompany Accounts) or unless otherwise required by
this Agreement, without the consent of Buyer, Seller will not
permit Aptus to:
(i) amend its Charter Documents in any material
respect;
(ii) issue, sell or transfer any equity securities;
(iii) incur any debt for borrowed money, or guaranty any
debt;
(iv) sell, assign, transfer or permit the creation of
any Lien (other than Permitted Liens) on any of
its (x) assets, or (y) real property, provided
that the sale of assets entered into in the
ordinary course of business and involving the
payment by any party of less than Fifty Thousand
Dollars ($50,000.00) shall be permitted;
(v) enter into (x) any Material Contract outside the
ordinary course of business or (y) any customer
contract which commits Aptus to a volume guarantee
or price level and is not terminable within six
(6) months, provided that (z) contracts or orders
for future purchase or delivery of goods or
rendition of services entered into in the ordinary
course of business and involving the payment by
any party of less than Fifty Thousand Dollars
($50,000.00) shall be permitted;
(vi) amend or terminate any Material Contract or
Material Permit outside the ordinary course of
business;
(vii) waive any right, forgive any debt (other than
intercompany debt) or release any claim, except in
the ordinary course of business, if such waiver,
forgiveness or release would have a Material
Adverse Effect;
20
(viii) change its current practices with respect to
the payment of accounts payable at forty-five
(45) days (or as otherwise agreed to with the
vendor); or
(ix) agree to take any of the actions described in
Sections 5.3(i) through 5.3(viii).
5.3.2 Buyer's Consent. If Seller gives written
notice to Buyer that Aptus proposes to take any action for which
Buyer's consent is required under Section 5.3.1 and if Buyer has
not delivered within five (5) business days of Seller's notice
Buyer's written objection to the proposed action, Buyer shall be
deemed to have consented to the action described in Seller's
notice. Buyer shall not unreasonably withhold its consent under
Section 5.3.1 to any action taken or to-be taken by Aptus.
5.3.3 Representations and Warranties. Seller
shall use reasonable efforts, and shall cause Aptus to use
reasonable efforts, to conduct its business in such a manner that
at the Closing the representations and warranties of Seller
contained in this Agreement shall be true and correct as though
such representations and warranties were made on, as of, and with
reference to such date. Seller will promptly notify the Buyer in
writing of (i) any event or fact which causes a breach of any of
its representations, warranties, covenants or agreements, or (ii)
the occurrence of any condition or development (exclusive of
general economic factors affecting business in general) of a
nature that is or may be reasonably expected to have a Material
Adverse Effect.
5.4 Further Assurances.
5.4.1 Additional Documents. Subject to the other
terms and conditions of this Agreement, at any time and from time
to time, whether before or after the Closing, Seller shall
execute and deliver all instruments and documents and take all
other action that Buyer may reasonably request to consummate or
to evidence the consummation of the transactions contemplated by
this Agreement.
5.4.2 Certain Consents. Notwithstanding anything
to the contrary in this Agreement, this Agreement shall not
constitute an agreement to assign or transfer any interest in any
Contract, Lease, Agreement or other instrument or arrangement or
any claim, right or benefit, or an agreement to assume any
liability, obligation or commitment arising thereunder or
resulting therefrom, if an assignment or transfer or an attempt
to make such an assignment or transfer without the Consent of a
third party would constitute a breach or violation thereof or a
breach of Law, or affect adversely the rights of the Buyer or the
Seller, or Aptus thereunder; and,any transfer or assignment to,
or any assumption by, Buyer of any interest in, or liability,
obligation or commitment under, any such Contract, Lease,
Agreement or other instrument or arrangement that requires the
Consent of a third party shall be made subject to such Consent
being obtained. Prior to the Closing, each party will use all
21
reasonable efforts and cooperate in obtaining all Consents
necessary to effect the transfer of all such Contracts, Leases,
Agreements and other instruments and arrangements as contemplated
hereby, provided that, neither party shall be required to pay or
commit to pay any amount to (or incur any obligation in favor of)
any Person from whom any such Consent may be required (other than
nominal governmental filing fees payable to any governmental
authority or any fees which may be imposed under Section 3.10.3).
In the event any such Consent is not obtained on or prior to the
Closing Date, the parties will cooperate in any lawful and
reasonable arrangement to provide that the Buyer shall receive
the benefits under any Contract, Lease, Agreement or other
instrument or arrangement not assigned and transferred at the
Closing by reason of the failure to obtain such Consent (a "Non-
Transferred Instrument"), including, if necessary, at the request
and expense of Buyer, enforcing performance by any third party of
its obligations in respect of such Non-Transferred Instrument;
provided that Seller shall bear the expense of such enforcement
to the extent it relates to Seller's failure to obtain such
consent prior to Closing; and provided that, to the extent the
parties are successful in providing the benefits of such Non-
Transferred Instruments to the Buyer, the Buyer will pay, honor
and discharge when due all liabilities, obligations and
commitments of the Seller or Aptus related thereto to the extent
due to the operations of Aptus conducted after the Closing Date.
Seller shall use reasonable efforts to obtain any consents
necessary with respect to the transfer of Permits. Primary
responsibility shall rest with Seller and Buyer agrees to fully
cooperate.
5.5 Supplements to Schedules. If prior to Closing, to
Seller's Knowledge, any event occurs or condition changes that
causes any of its representations or warranties in this Agreement
to be inaccurate as of any date that is relevant for the
particular representation or warranty, Seller shall notify Buyer
in writing. With Buyer's consent, Seller may supplement the
Schedules to account for such event or change. Buyer need not
consent if the change discloses an item that is material or is in
violation of Seller's covenants under this Agreement. The
supplemental Schedules will cure and correct any breach of any
representation or warranty that otherwise would have existed.
5.6 Certain Financial Covenants. At Closing, Seller
shall have (i) satisfied all long-term liabilities required to be
disclosed as such on the balance sheet of NEI or Aptus (other
than capitalized leases); (ii) contributed sufficient cash to
Aptus such that at Closing, Aptus shall have a cash account of
not less than One Million Dollars ($1,000,000) (the "Working
Capital Advance"); and (iii) canceled any indebtedness or amounts
owing from NEI or Aptus to Seller or any Affiliate of Seller by
classifying such indebtedness as additional capital provided by
parent company and reflected as such in shareholder's equity (if
not already so classified). The Working Capital Advance is (a)
not to be used by Seller or Aptus prior to Closing to satisfy any
liabilities or obligations of Aptus and must be available in full
to Buyer immediately after Closing; (b) not to be included as
part of the assets of Aptus for purposes of calculating the Final
Adjusted Net Worth; and (c) to be treated as an interest free
advance by Seller to Buyer. Aptus or Buyer shall repay this
advance in accordance with Section 6.7.
22
5.7 Exclusive Dealing. Seller agrees not to enter
into or continue any discussions or negotiations relating to the
sale of Aptus or the Business prior to March 31, 1995 or, in the
event this Agreement is extended, prior to the date this
Agreement terminates.
5.8 Closure and Post Closure Costs and Financial
Assurances.
5.8.1 Closing Date Closure and Post-Closure Costs
Defined. Closure and post-closure costs with respect to the
three primary facilities of Aptus (Aragonite, Utah; Coffeyville,
Kansas; and Lakeville, Minnesota) pursuant to 40 C.F.R. Section
265.110 et seq and as implemented by applicable state and federal
regulatory agencies as of the date of Closing, shall be referred
to herein as "Closing Date Closure and Post-Closure Costs."
5.8.2 Financial Assurances Defined. Statutorily
imposed financial assurances provided to various state and
federal regulatory agencies with respect to Closing Date Closure
and Post-Closure Costs, pursuant to 40 C.F.R., Section 265.140 et
seq, shall be referred to herein as "Financial Assurances."
5.8.3 Increases in Costs or Required Assurances.
For purposes of this Section 5.8, the amount of Closing Date
Closure and Post-Closure Costs and Financial Assurances shall be
fixed at the date of Closing. Any increases in Closing Date
Closure and Post-Closure Costs or Financial Assurances, whether
brought about by inflation factors, facility changes or
additions, or changes in applicable law, shall be the
responsibility of Buyer and Aptus.
5.8.4 Insurance Premium Payments. At Closing,
Seller shall pay to an insurance company designated by Buyer a
premium payment on behalf of Buyer in the amount of One Million,
Five Hundred Thousand Dollars ($1,500,000.00). Buyer agrees make
a similar premium payment in the amount of One Million, Seven
Hundred and Fifty Thousand Dollars ($1,750,000.00). The total
amount of Three Million, Two Hundred and Fifty Thousand Dollars
($3,250,000.00) shall be applied to Buyer's insurance program for
the purpose of satisfying a portion of the Financial Assurances.
5.8.5 Letters of Credit.
5.8.5.1 For the period beginning on the
date of Closing and ending on the third anniversary thereof,
Seller shall procure and/or maintain in effect letters of credit
in an amount equal to the Financial Assurances less the Three
Million, Two Hundred and Fifty Thousand Dollars ($3,250,000.00)
provided for in Section 5.8.4 above, provided that Seller's
obligation with respect to such letters of credit shall not
exceed an aggregate of Twenty-five Million Dollars
($25,000,000.00). Buyer shall reimburse Seller for the amount
charged to Seller by its lender or lenders for providing the
letters of credit. For letters of credit in effect prior to the
date of Closing, this reimbursement shall be limited to a
reimbursement for the prorated cost relative to the period the
letters of credit are in effect
23
after the date of Closing. Payment shall be made in cash, without
deduction or offset, within ten (10) business days of Buyer's receipt
of proof of payment by Seller. The letters of credit shall be provided
by Seller without recourse, except as provided below. In the event
that all or a portion of the letters of credit are collected upon
for any reason, Seller shall have no right of indemnity or other
claim against Buyer arising therefrom; provided that Buyer agrees
to indemnify and hold harmless Seller from and against Damages
relative to its providing the letters of credit to the extent
arising from (a) any Increases in Costs or Required Assurances
set forth in Section 5.8.3; (b) any failure of Buyer to replace
the letters of credit with alternative financial assurances at
the end of the three (3) year period specified herein; (c) any
voluntary facility closure initiated by Buyer; or (d) any
violation of a permit by Buyer or its Subsidiaries, or any
negligent acts or omissions of Buyer or its Subsidiaries, that
result in the closure of a facility.
5.8.5.2 For the period beginning on the
third anniversary of the date of Closing and ending on the fifth
anniversary of the date of Closing, responsibility for satisfying
the Financial Assurances and obtaining letters of credit shall
rest with Buyer. Seller shall reimburse Buyer for the amount
charged to Buyer by its lender or lenders for providing letters
of credit in an amount equal to the Financial Assurances less the
Three Million, Two Hundred and Fifty Thousand Dollars
($3,250,000.00) provided for in Section 5.8.4 above, provided
that Seller's obligation with respect to such reimbursement shall
be limited to letters of credit in the aggregate amount of Twenty
Five Million Dollars ($25,000,000.00). Payment shall be made in
cash, without deduction or offset, within ten (10) business days
of Seller's receipt of proof of payment by Buyer. Should Buyer
choose to satisfy its obligation to provide Financial Assurances
by some alternative method, it may, upon presenting proof that
the alternative method is acceptable to the applicable federal
and state regulatory agencies, require that Seller reimburse it
for the amount that its lender or lenders would have charged for
the letters of credit.
5.8.5.3 This Section 5.8 contemplates that
a portion of the letters of credit already being provided by
Seller immediately prior to the date of Closing in order to
satisfy the Financial Assurances will be replaced by an insurance
certificate issued by the insurance company of Buyer designated
in Section 5.8.4. The parties recognize that there may be some
delay in accomplishing this replacement. Accordingly, and
notwithstanding Section 5.8.5.1, for a period of time equal to
the lesser of thirty (30) days or the date on which said
insurance certificate is issued, Seller agrees to maintain in
effect all letters of credit already being provided by Seller
immediately prior to the date of Closing to satisfy the Financial
Assurances. Buyer shall be obligated to reimburse Seller for the
cost of the letters of credit in accordance with Section 5.8.5.1.
5.8.5.4 The letters of credit provided by
Seller in 5.8.5.1 above shall be issued by a lender chosen by
Seller, shall designate Aptus as the applicant and shall
designate the relevant governmental authorities as the
beneficiaries. Notwithstanding the designation of Aptus as the
applicant, Seller's lender shall issue the letters of credit
based solely on the credit of Seller and shall have no recourse
against Aptus.
24
5.9 Right to Seller Business Post Closing. For a
period of five (5) years from the Closing Date, Seller shall
include Buyer on its approved list of vendors that provide off-
site Hazardous Waste incineration disposal services. Buyer will
remain on the Approved Vendor list during this time to the extent
Buyer's facilities maintain their permitted status and are not
barred by any governmental agency from accepting waste in
accordance with U.S. EPA's CERCLA off-site rule found at 40 CFR
300.440 et seq. or under imminent threat of being so barred by
any governmental agency. Seller will send a notice to its
operating divisions and facilities informing them of Buyer's
inclusion on such Approved Vendor list. In addition, Buyer will
be afforded the opportunity to bid on any project work
originating with the Seller's corporate Environmental Affairs
group during this five (5) year period, that requires Hazardous
Waste incineration services. For purposes of this Section, Buyer
shall include any Subsidiary of Buyer.
5.10 Right to Seller Intellectual Property Post
Closing. For five (5) years after Closing, Seller, to the extent
legally and contractually possible, shall provide technology
directly relating to the incineration of Hazardous Waste to Buyer
for Buyer's review. If Buyer desires, Seller will grant Buyer a
nonexclusive, nonassignable, nontransferable, royalty-free
license in perpetuity to use the technology for the incineration
of Hazardous Waste and for no other purpose. Seller will not be
liable to Buyer for the accurac or commercial usefulness of the
technology. Seller will offer to Buyer access to its technical
personnel, if available, for a period not to exceed forty (40)
man hours per year. Buyer, to the exclusion of Seller, is liable
for all damages from the use of the technology by Buyer. These
terms and conditions will be set forth in a license agreement
between Seller and Buyer. For purposes of this Section, Buyer
shall include any Subsidiary of Buyer. None of the technologies
listed in Section 7.4.1 (j) (i) shall be considered to be
incineration technology.
5.11 MIS and Telecommunications Services Post Closing.
5.11.1 Seller provides to Aptus: (i) certain MIS
services, including payroll, accounts receivable and collections,
general ledger and fixed assets applications (the "Seller MIS
Services"); and (ii) certain telecommunications services,
including long distance, 800 service and voice communications
(the "Seller Telecommunications Services"). Seller agrees to
continue to provide the Seller MIS Services and the Seller
Telecommunications Services to Aptus after Closing (collectively,
the "Post Closing Services") in substantially the same manner as
provided prior to Closing, and agrees to cooperate with Buyer in
transferring such services to applications to be provided by
Buyer.
5.11.2 Seller's obligations under this Section
shall continue until the transition to Buyer's applications is
completed, but not longer than six (6) months after Closing
unless extended by mutual agreement (the "MIS and
Telecommunications Transition Period"). Seller and Buyer agree
to use reasonable efforts to effect the transfer of the Post
Closing Services to applications to be provided by Buyer as
promptly as practicable.
25
5.11.3 During the MIS and Telecommunications
Transition Period, Seller shall provide the Seller MIS Services
pursuant to the terms of the agreement attached as Exhibit 5.11.3
(1) hereto. During the MIS and Telecommunications Transition
Period, Seller shall provide personnel to assist Buyer in
transferring the Post Closing Services at no cost to Buyer or
Aptus. During the MIS and Telecommunications Transition Period,
Seller shall provide the Seller Telecommunications Services to
Aptus pursuant to the terms of the agreement attached as Exhibit
5.11.3 (2) hereto. Buyer shall be entitled to cancel either
agreement on thirty (30) days advance written notice with no
further liability or obligation, except for charges which may
have accrued up to the date of termination.
5.11.4 Seller's obligation under Section 3.10.3.2
to transfer to Buyer or Aptus software presently licensed to
Seller shall not require that Seller obtain the written consent
to a software license transfer if the software is what is
commonly understood in the industry to be "shrink wrap" software,
provided that the "shrink wrap" software license is not part of
a master license with Seller that prohibits a transfer to a third
party without consent or payment of a fee. For a period of three
(3) years after Closing, Seller will indemnify Buyer against any
Actions for license fees or infringement made by the licensors of
such "shrink wrap" software arising out of the transfer of the
software to Buyer or Aptus hereunder.
5.12 Intercompany Accounts. Between execution hereof
and Closing, intercompany accounts shall be handled substantially
in the manner prior to Closing. At the Closing Date,
intercompany receivables, payables and loans then existing
between Seller, NEI or Aptus shall be terminated in accordance
with Section 5.6.
5.13 Preparation of Financial Statements. The
Financial Statements referred to in Section 3.5 shall include
such detail as is required by Form 8-K of the Securities Act of
1934 and be prepared at Seller's expense, except that Buyer
agrees to pay one-half of the fees of Seller's outside auditors
up to a maximum of Thirty Thousand and 00/100 Dollars
($30,000.00). Buyer shall, at its expense, prepare any pro forma
financial statements required in connection with its Form 8-K
filing. To the extent additional audited or unaudited financial
information relating to the operations of NEI or Aptus prior to
the Closing is necessary or desirable in connection with the
remarketing of the Bonds or the registration rights set forth in
the Senior Unsecured Debentures or Subordinated Convertible
Debentures, the preparation of such financial information shall
be at Seller's cost.
5.14 [Intentionally Left Blank]
5.15 Leased Real Property. On or prior to Closing,
Seller shall assume all obligations under certain Real Property
Leases that have been identified by notation on Schedule 3.9.2 as
Leases that Buyer does not require.
5.16 Certain Environmental Clean-ups.
26
5.16.1 Prior to Closing, or as soon thereafter as
is reasonably practicable, Seller shall clean up and properly
dispose of the construction debris presently stockpiled on the
southeast corner of the Coffeyville Facility.
ARTICLE 6
COVENANTS OF BUYER
Buyer hereby covenants and agrees with Seller as
follows:
6.1 Cooperation by Buyer. Subject to its rights under
Article 10, prior to the Closing, Buyer will use all reasonable
efforts to take all actions and to do all things necessary or
advisable to consummate the transactions contemplated by this
Agreement and to cooperate with Seller in connection with the
foregoing, including using reasonable efforts to obtain any
Consents contemplated by Section 4.3.
6.2 Due Diligence Activities. Each party shall comply
with the limitations on the disclosure and use of information set
forth in the Confidentiality Agreement with respect to
information that the other party provides in and pursuant to this
Agreement. Buyer shall coordinate its contacts with Employees
with officers of Seller and shall not conduct any soil,
groundwater or other environmental sampling in connection with
the transactions contemplated hereby without the prior written
consent of Seller. Buyer shall refrain from imposing any undue
burden upon Aptus and from interfering with its operations while
conducting due diligence activities and preparing for the
Closing. Buyer has concluded its due diligence investigation of
the Business.
6.3 Further Assurances. Subject to the other terms
and conditions of this Agreement, at any time and from time to
time, whether before or after the Closing, Buyer shall execute
and deliver all instruments and documents and take all other
action that Seller may reasonably request to consummate or to
evidence the consummation of the transactions contemplated by
this Agreement.
6.4 HSR Act Compliance. Buyer shall file any
notification required to be filed under the HSR Act to consummate
the transactions contemplated hereby. Buyer shall use all
reasonable efforts to comply as promptly as practicable with any
request made pursuant to the HSR Act for additional information.
Buyer shall cooperate with Seller in such compliance and shall
pay the statutory filing fees required by the HSR Act.
6.5 Release from Guarantees. Seller has not
guaranteed any obligations of Aptus, except for the Guarantees
listed on Schedule 6.5. Seller shall maintain the Guarantees in
effect until the Closing Date, but shall be entitled to terminate
the Guarantees effective after the Closing Date with respect to
operations of Aptus conducted after the Closing Date. After the
Closing Date, Buyer shall indemnify and hold Seller harmless from
and against all Damage attributable to any claims made under such
Guarantees, but only to
27
the extent that they relate to operations of Aptus conducted after the
Closing Date.
6.6 Due Diligence - Post-Signing. Buyer agrees that
during the period from the signing of this Agreement through
Closing, Seller shall have reasonable access to senior management
of Buyer, the books and records of the Buyer, subject to any
attorney-client privilege so as to permit continued due diligence
by Seller of Buyer.
6.7 Repayment of Working Capital Advance. The Working
Capital Advance identified in Section 5.6 shall be repaid by
Aptus or Buyer, without deduction or offset, in accordance with
the following repayment schedule:
Number of Days Amount of
After Closing Payment
60 $200,000.00
90 $200,000.00
120 $200,000.00
150 $200,000.00
180 $200,000.00
ARTICLE 7
MUTUAL COVENANTS
7.1 Employee Matters.
7.1.1 Employment.
7.1.1.1 From the Employees designated on
Schedule 3.20.1, Buyer shall provide a list to Seller placing the
Employees into three (3) categories: (a) Employees that Buyer
shall offer employment to at Closing (the "Continuing
Employees"); (b) Employees that do not fall into category (c)
below and that Buyer shall not offer employment to at Closing
(the "Terminating Employees"); and (c) Employees that Buyer shall
not offer employment to at Closing but whose services Buyer
desires to retain on a contract basis for a limited transition
period (the "Transition Employees"). The parties acknowledge
that each category may be comprised of both exempt and non-exempt
Employees. Buyer shall provide this list to Seller as soon as
practicable, but in any event no later than ten (10) days prior
to the Closing Date. Seller shall have provided Buyer access to
the Employees and their personnel files in order to assist Buyer
in this process, subject to the terms of the December 12, 1994
Letter Agreement between Buyer and Seller.
7.1.1.2 Buyer agrees that the sum of the
number of Terminating Employees and Transition Employees shall
not exceed One Hundred (100). Buyer agrees that the number of
Transition Employees shall not exceed Twenty (20). To the
28
extent that Employees are hired or replaced by Seller or Aptus prior
to Closing, Buyer agrees to include such Employees on one of the
lists referred to in Section 7.1.1.1 above; provided that if the
number of Employees on Schedule 3.20.1 increases, Buyer reserves
the right to a corresponding increase in the number of
Terminating Employees or Transition Employees, provided that no
adjustment shall be allowed to Buyer with respect to the hiring
by Aptus of one personnel manager at its Coffeyville facility.
7.1.1.3 Buyer shall offer employment to the
Continuing Employees with (a) wages or salaries equal to such
wages and salaries as such Employees are now paid by Aptus or
Seller, and (b) benefits, including a defined benefit pension
plan, as set forth on Schedule 7.1.1.3. With respect to
Transition Employees, Seller agrees to continue the employment of
or hire such Employees as employees of Seller upon the same terms
and conditions as their present employment, except that such
Employees shall be leased to Aptus as contract employees of Aptus
for a period of time determined by Buyer but not to exceed one
hundred and twenty (120) days after the date of Closing (the
"Transition Period"). Buyer shall provide to Seller thirty (30)
days notice prior to terminating the contract with Seller for any
Transition Employee. Seller makes no guarantee that any
Transition Employee will choose to continue as an employee of
Seller under this Section 7.1.1.3 and Seller shall have no
obligation to replace any Transition Employee that leaves
Seller's employment. Employees whose services may be separately
provided post Closing pursuant to the MIS Services Agreement will
be included in the number of Terminating Employees, but will not
be deemed Transition Employees. Seller's wage and benefits costs
for such employees will be reimbursed pursuant to the MIS
Services Agreement. Seller shall be required to maintain
sufficient agreed upon staffing levels under the MIS Services
Agreement whether or not employees terminate their employment
with Seller. Buyer shall indemnify Seller against its out-of-
pocket costs for wages and benefits for Transition Employees to
the extent applicable to the Transition Period. Buyer reserves
the right to offer employment to any Transition Employee in the
manner and upon the same terms, conditions, wages and benefits
prescribed herein for Continuing Employees.
7.1.1.4 Any liability to an Employee that is
not designated as a Continuing Employee for severance pay or
other separation benefits that arises out of such Employee's
termination and any liability that arises out of any breach by
Seller of any of the provisions of the Benefits Sections, shall
be a Retained Liability. Buyer agrees to assume responsibility
for and retain any liability associated with these reductions in
employment levels to the extent that they trigger compliance with
the federal Worker Adjustment and Retraining Notification Act.
With respect to any claims, proceedings or lawsuits brought
against Buyer, Seller or Aptus alleging that Buyer's listing of
employees under Section 7.1.1.1 violates Title VII of the Civil
Rights Act, the Americans with Disabilities Act or the Family
Medical Leave Act or discriminates against an Employee in
violation of any applicable state or federal laws, each party
shall bear its own respective defense costs and expenses
(including attorneys' fees) and afford reasonable cooperation to
the other parties. In the event that Buyer is ultimately found
liable in any such proceeding, it shall indemnify Seller against
the judgment or settlement and also reimburse Seller's reasonable
defense costs and expenses (including attorneys' fees).
7.1.2 Union Representation. With respect to the
collective bargaining agreement identified on Schedule 3.20 which
expired by its terms on October 31, 1994, the
29
parties agree as follows: (i) Seller has postponed negotiations o
n a new collective bargaining agreement by extending the existing
agreement until March 15, 1995 or thirty (30) days after Closing
and by agreeing that any wage increases will be effective
retroactively to October 31, 1994; (ii) Buyer agrees to cause
Aptus to assume the obligations under the collective bargaining
agreement and its extension and to continue to recognize the
union signatory thereto as the collective bargaining
representative of the employees covered by the agreement post
Closing, provided that Aptus will not be able to continue
providing any Westinghouse benefits but will instead provide the
Xxxxxxx benefits outlined on Schedule 7.1.1.3; and (iii) Seller
shall promptly reimburse Aptus within five (5) business days
after written notification (with documentation) to Seller of
payment by Aptus for any compensation paid to covered employees,
for the period between October 31, 1994 and Closing, provided
that this reimbursement by Seller shall be limited to not more
than three (3) percent of the prior regular hourly wages of the
covered employee for the period between October 31, 1994 and
Closing.
7.1.3 Termination of Coverage Under Seller's
Employee Benefit Plans and Coverage Under Buyer's Employee
Benefit Plans.
7.1.3.1 Effective as of the Closing, each
Continuing Employee who is a participant in an Employee Benefit
Plan sponsored by Seller (a "Seller's Plan") shall cease to be a
participant in each such Seller's Plan, and all of the Continuing
Employees (including Transition Employees hired by Buyer pursuant
to Section 7.1.1.3) effective as of the date of hire of such
Continuing Employee by Buyer shall become eligible to participate
in the employee benefit plans of Buyer in accordance with the
applicable provisions of this Agreement and the terms and
conditions of each such plan. Effective as of the Closing, if
Aptus has adopted any of Seller's Plans, Aptus shall withdraw as
an employer thereunder.
7.1.3.2 Employees of Aptus shall be entitled
to the accrued and vested benefits due to them as a result of
Aptus's termination of participation as described in Section
7.1.3.1 above or their termination of employment, under all
employee benefit plans, programs, practices or arrangements of
Seller, and Seller shall retain liability for the payment of such
accrued and vested benefits under and in accordance with such
plans, programs, practices and arrangements and shall indemnify
and hold Buyer and Aptus harmless from and against same.
7.1.4 Pension Plans. Buyer shall grant to each
Continuing Employee covered by the Pension Plan immediately
before the Closing credit for his or her period of employment
with Aptus and Seller prior to the Closing Date for the purpose
of eligibility and vesting under any defined benefit pension plan
maintained by Buyer ("Buyer's Pension Plan") for the benefit of
such Employees following the Closing, but not for the purpose of
benefit accrual, it being understood that the Buyer's pension
plan is a defined benefit plan based on salary earned with the
Buyer (beginning on Closing) and that no credit will be provided
for any earnings prior to the Closing Date.
7.1.5 Savings Program. As of the Closing Date,
the Savings Program of Seller shall not accept contributions from
Employees. Buyer shall grant to each Continuing Employee covered
by the Savings Plan immediately before the Closing credit for his
or her period of employment with Aptus and Seller prior to the
Closing Date for the
30
purpose of eligibility and vesting under Buyer's defined contribution
plan (the "Buyer's Savings Plan"), but not for the purpose of benefit
accrual. The Buyer's Savings Plan will accept "rollovers" of account
balances of Continuing Employees from the Savings Program with respect to
before tax contributions only, in accordance with the terms and
administrative policies of the Seller's Plan. Outstanding loans
under the Savings Program will not be transferable to the Buyer's
Savings Plan.
7.1.6 Welfare and Fringe Benefits.
(a) Buyer shall grant to each Continuing Employee who
is covered immediately before the Closing under Employee Welfare
Benefit Plans sponsored by Seller ("Seller's Employee Welfare
Benefit Plans") credit for his or her period of employment prior
to the Closing with Seller and Aptus under any Employee Welfare
Benefit Plan maintained by Buyer for the benefit of such
Employees following the Closing (a "Buyer's Employee Welfare
Benefit Plan") (including but not limited to arrangements
providing disability, vacation, severance and sick time benefits)
and shall grant credit for deductibles and co-payments previously
paid under any Seller's Employee Welfare Benefit Plan for the
year in which Closing occurs. Buyer's Employee Welfare Benefit
Plans shall not exclude from coverage or limit coverage for any
pre-existing condition of any of the Employees.
(b) All claims of Employees described in Section
7.1.6(a) which are made against Employee Welfare Benefit Plans
and which are incurred prior to the Closing (treating for this
purpose costs for hospital confinements that begin before the
Closing and continue after the Closing as having been incurred
before the Closing) shall be paid in accordance with the
provisions and administrative policies of Seller's Employee
Welfare Benefit Plans. All claims of Employees described in
Section 7.1.6(a) which are made against Employee Welfare Benefit
Plans and which are incurred after the Closing shall be paid
under Buyer's Employee Welfare Benefit Plans.
7.2 Tax Covenants.
7.2.1 Apportionment of Income Taxes Between Pre-
Closing and Post-Closing Periods. In order to appropriately
apportion any Income Tax relating to any taxable year or any
other period that is treated as a taxable year (a "Period") that
includes (but that would not, but for this Section, close on) the
Closing Date, the Parties will, unless specifically prohibited by
applicable law, elect with the relevant taxing authority to treat
for all purposes the Closing Date as the last day of a taxable
period of NEI or Aptus, and such Period shall be treated as a
Short Period and a Pre-Closing Period for purposes of this
Agreement. In any case where applicable law specifically
prohibits NEI or Aptus from treating the Closing Date as the last
day of a Short Period, then for purposes of this Agreement, the
portion of such Income Tax that is attributable to the
operations of NEI or Aptus for such Interim Period shall be the
Income Tax that would be due with respect to the Interim Period
if such Interim Period were a Short Period.
7.2.2 Payment of Income Taxes. In furtherance of
the foregoing, any Income Tax in respect of any Short Period
shall, except to the extent accrued or reserved for in the
aggregate on the balance sheet of NEI or Aptus at Closing, be
borne by Seller, and any refunds or credits in respect of such
Income Tax for any such Short Period or any Pre-
31
Closing period,
in excess of the amount reflected on the balance sheet of NEI or
Aptus at Closing, shall be the property of Seller. Any Income
Tax in respect of any Interim Period (including amounts payable
as a result of an audit or other adjustment), to the extent not
paid on or before the Closing Date or accrued or reserved for on
the balance sheet of NEI or Aptus at Closing, shall be paid by
Seller to Buyer, which shall pay such Income Tax to the relevant
Governmental Authority, no later than fifteen (15) days prior to
the date such payment is due, and any refunds or credits received
by Buyer, NEI or Aptus in respect of such Income Tax for such
Interim Period, in excess of the amount reflected on the balance
sheet of NEI or Aptus at Closing, shall be the property of
Seller. Any Income Tax attributable to the operations of Buyer,
NEI or Aptus for any Post-Closing Period shall be borne by Buyer,
NEI or Aptus, as the case may be. Any refunds or credits in
respect of such Income Tax for any such Post-Closing Period
shall be the property of Buyer, NEI or Aptus, as the case may be.
7.2.3 Preparation and Filing of Income Tax
Returns. Seller shall be responsible, at its expense, for the
preparation and filing of all Income Tax Returns for any Short
Period. Seller shall prepare such Income Tax Returns in a manner
consistent with prior years and shall, in respect of such Income
Tax Returns, determine the income, gain, expenses, losses,
deductions and credits of NEI or Aptus in a manner consistent
with prior practice. The results of operations of NEI or Aptus
from the first day of the taxable year through the Closing Date
shall be included in Seller's consolidated federal income tax
return and in any consolidated, combined or unitary Income Tax
Returns required to be filed by Seller after the Closing Date.
The results of operations of NEI or Aptus from the first day of
the taxable year through the Closing Date shall be included in
any separate Income Tax Returns filed by NEI or Aptus after the
Closing Date; provided, however, that Seller shall prepare
(without cost to Buyer, NEI or Aptus) all such separate Income
Tax Returns for any Short Period (but not for any Period which
includes or ends after the Closing Date) and submit them to
Buyer, and Buyer shall have all such separate Income Tax Returns
appropriately executed and filed on a timely basis. With respect
to any Income Tax Return to be prepared by Seller, Buyer shall,
and shall cause NEI or Aptus to, provide to Seller information in
a manner consistent with past practice for use in preparation of
such Income Tax Returns, in each case, no later than sixty days
(60) after the relevant Period ends. Notwithstanding the
foregoing, Buyer shall be responsible for preparing and filing
all Income Tax Returns of NEI or Aptus for Periods not ending on
or before the Closing Date, even if such Income Tax Returns cover
Periods prior to the Closing Date.
7.2.4 Cooperation. Seller and Buyer shall, and
shall cause NEI or Aptus to, provide each other with such
assistance as may reasonably be requested by them in connection
with the preparation of any Income Tax Return, any Income Tax
audit or other examination by any Governmental Authority, or any
judicial or administrative proceedings related to liability for
Income Taxes. Seller and Buyer shall, and shall cause NEI or
Aptus to, retain and provide each other with any records or
information which may be relevant to such preparation, audit,
examination, proceeding or determination. Such assistance shall
include making employees available on a mutually convenient basis
to provide and explain such records and information and shall
include providing copies of any relevant Income Tax Returns and
supporting work schedules. The Party requesting assistance
hereunder shall reimburse the other for reasonable out-of-pocket
expenses incurred in providing such assistance.
32
7.2.5 Refund Claims. Subject to Section 7.2.11,
Seller will provide Buyer, NEI and Aptus with such assistance as
it may reasonably request to prepare any refund claim
attributable to the carryback of any tax losses or tax credits
incurred by Buyer, NEI or Aptus in any Pre-Closing Period to any
consolidated, combined or unitary Income Tax Return of Seller or
to any separate Income Tax Return of NEI or Aptus for any Pre-
Closing Period, and Seller shall receive and retain the amount of
any resulting refunds together with any interest thereon upon
receipt by any party.
7.2.6 Tax Sharing Agreements. Any and all Tax
(or similar) agreements, arrangements or undertaking among
Seller, NEI and Aptus that relate to any liability of NEI or
Aptus for the Taxes of Seller shall terminate as of the Closing
Date and any rights or obligations resulting from such agreements
shall be eliminated as of the Closing Date.
7.2.7 Notice of Audit. If, in connection with
any examination, investigation, audit or other proceeding
concerning any Income Tax Return covering the operations of NEI
or Aptus through the Closing Date, any Governmental Authority
issues to any of the Parties, NEI or Aptus a notice of
deficiency, a proposed adjustment, an assertion of claim or a
demand concerning the Period covered by such Income Tax Return,
the recipient shall notify the other Party that it has received
the same within twenty (20) days of its receipt.
7.2.8 Audits Controlled by Seller. Seller shall
have the sole and exclusive right, power and authority to
negotiate, resolve, settle or contest any such notice of
deficiency, proposed adjustment or assertion of claim or demand
and to represent and act for and on behalf of NEI or Aptus in
connection with any such examination, investigation, audit or
other proceeding, including refund claims of any Income Tax
Return of NEI or Aptus for Periods ending on or before the
Closing Date. Seller agrees to keep Buyer informed of the
progress of any such proceedings.
7.2.9 Audits Controlled by Buyer. Buyer shall
have the sole and exclusive right, power and authority to
negotiate, resolve, settle or contest any such notice of
deficiency, proposed adjustment or assertion of claim or demand
in connection with any such examination, investigation, audit or
other proceeding of any Income Tax Return of Buyer, NEI or Aptus
for Periods ending after the Closing Date. To the extent that
Seller has indemnified Buyer, NEI and Aptus with respect to any
such notice of deficiency, proposed adjustment or assertion or
claim or demand herein, Buyer shall not, and shall not permit NEI
or Aptus to, resolve, settle, compromise, or abandon any issue or
claim without the prior written consent of Seller if such action
would materially and adversely affect the Income Tax of Seller
for any Period. Such consent shall not be unreasonably delayed
or withheld, and shall not be necessary to the extent that Buyer
notifies Seller that Buyer will forego any obligation of Seller
to indemnify Buyer, NEI and Aptus against the effects of any such
settlement. Buyer shall keep, and shall cause NEI or Aptus to
keep, Seller informed of the progress of any such proceedings and
to consult with Seller in good faith in connection therewith.
7.2.10 338(h)(10) Election. Buyer and Seller
agree that no election under Code Section 338(h)(10) shall be made as
a result of this transaction.
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7.2.11 Net Operating Loss. NEI and Aptus
presently have a net operating loss ("NOL") for fiscal year ended
December 31, 1993 equal to or greater than $16,200,000,
representing their apportioned share of Seller's NOL for that
year. Seller agrees that the amount of the NOL shall equal or
exceed $16,200,000. To the extent that it does not, Seller shall
provide to Buyer thirty-five percent (35%) of the difference in
cash within thirty (30) days of its determination. Buyer and
Seller acknowledge that all NOL amounts are subject to adjustment
by the IRS and will not be final until the audit covering the
relevant period has been completed by the IRS. To the extent
that the NOL is less than or equal to $19,200,000, Buyer shall be
entitled to retain the full amount. To the extent that the NOL
exceeds $19,200,000, Seller shall be entitled to make,the
appropriate election under the Code to enable it to utilize any
amount in excess of $19,200,000, provided that if Seller is
unable to utilize such amount, it shall be retained by Buyer, if
possible. There shall be no adjustments to Final Adjusted Net
Worth under Section 2.3.1 due to any payments by Seller under
this Section.
7.2.12 Carrybacks. Buyer agrees that it shall
make any election or exercise any option available to it under
the Code (or similar provisions, if any, under state, local or
foreign Tax laws) to waive the carryback of any post-Closing net
operating loss, net capital loss, foreign tax credit or other tax
benefit to a pre-Closing Period.
7.3 Books and Records.
7.3.1 Access. Each Party shall provide the other
Party with reasonable access during normal business hours to its
books and records and the books and records of NEI or Aptus
(other than books and records protected by the attorney-client
privilege) to the extent that they relate to the condition or
operation of NET or Aptus prior to the Closing and are requested
by such Party to prepare its Income Tax Returns, to respond to
Third Party Claims, or for any other legitimate purpose specified
in writing. Each Party shall have the right, at its own expense,
to make copies of any such books and records.
7.3.2 Destruction. For a period of ten (10)
years, or the expiration of any longer period if required under
applicable law, neither Party shall dispose of or destroy any
books and records of NET or Aptus to the extent that they relate
to the condition or operation of NEI or Aptus prior to Closing or
any facility operated by NET or Aptus prior to Closing and any
records dealing with the personal medical records of any present
or former Employees prior to the Closing without first offering
to turn over possession thereof to the other Party by written
notice at least thirty (30) days prior to the proposed date of
disposition or destruction, provided however that this section
shall not be applicable to records required under applicable law
to be preserved longer than ten (10) years.
7.3.3 Confidentiality. Each Party may take such
action as it deems reasonably appropriate to separate or redact
information unrelated to NET or Aptus from documents and other
materials requested and made available pursuant to this Section
and to condition access to materials that it deems confidential
to the execution and delivery of an Agreement by the other Party
not to disclose or misuse such information.
7.3.4 Assistance. Each Party shall, upon written
request and at the requesting Party's expense, make personnel available
to assist in locating and obtaining any
34
books and records of NEI or Aptus to the extent that they relate
to Retained Liabilities or the condition or operation of NEI or
Aptus prior to the Closing (or after the Closing with respect to
information relating to Identified Environmental Concerns) and
make personnel available whose assistance, participation or
testimony is reasonably required in anticipation of, preparation
for or the prosecution or defense of any Third Party Action in
which the other Party does not have any adverse interest.
7.4 Non-Competition.
7.4.1 Seller covenants that upon Closing and
until the expiration of five (5) years from the Closing Date,
Seller shall not, and shall not allow any Affiliate to i) engage
in the commercial business of fixed based incineration of
Hazardous Waste (as now defined under RCRA or TSCA) or ii) engage
in the commercial business of mobile incineration by treating a
stream of active industrial Hazardous Waste (as now defined under
RCRA or TSCA) at its manufacturing or processing point of origin
of such stream, (For purpose of this Section, the Business shall
mean those activities described in (i) and (ii).) within the
continental United States; provided, however, that the covenants
contained within this Section 7.4 shall not prevent Seller or any
Affiliate from:
(a) Maintaining and continuing existing
standard business operations in accordance with current and past
practice;
(b) Continuing to own its current shares of
capital stock, partnership or other equity interests in the
entities identified on Schedule 7.4;
(c) Acquiring shares of capital stock,
partnership or other equity interests in any Person as
investments of Seller's pension funds or funds of any other
employee benefit plan of Seller whether or not such Person is
engaged in the same business as the Business;
(d) Acquiring no more than five percent (5%)
of the outstanding capital stock, partnership or other equity
interests in any Person;
(e) Acquiring up to one hundred percent
(100%) of the outstanding capital stock, partnership or other
equity interests in any Person for which the annual revenues
derived directly from the operations of such Person from any
business that competes with the Business are not more than the
lesser of (i) ten percent (10%) of such Person's total annual
revenues or (ii) $10,000,000;
(f) Acquiring less than fifteen percent
(15%) but more than five percent (5%) of the outstanding capital
stock, partnership or other equity interests in any Person for
which the annual revenues derived directly from the operations of
such Person from any business that competes with the Business are
more than the lesser of (i) ten percent (10%) but less than
twenty-five percent (25%) of such Person's total annual revenues
or (ii) $10,000,000;
(g) Acquiring more than fifty percent (50%)
of the outstanding capital stock, partnership or other equity
interests (which includes debt which is
35
convertible into an equity interest) in any Person for which the
annual revenues derived directly from the operations of such Person
from any business that competes with the Business are more than ten
percent (10%) but less than twenty-five percent (25%) of such
Person's total annual revenues; provided, however, that Seller
shall use all commercially reasonable efforts to divest that
portion of such Person which competes with the Business on
commercially reasonable terms within three hundred sixty-five
(365) days after the acquisition of such ownership or interest;
and provided further if such divestiture cannot occur within this
period then Seller shall pay to Buyer a sum equal to five percent
(5%) of the annual gross revenues of the Person attributed to the
Business and prorated for Seller ownership interest but never
more than operating profits prorated for Seller's ownership
interest for the Business until the earlier of divestiture of
such Business or the expiration of this Agreement;
(h) Acquiring no more than fifty percent
(50%) but more than fifteen percent (15%) of the outstanding
capital stock, partnership or other equity interests (I) in any
Equity for which the annual revenues derived directly from the
operations of such Person from any business that competes with
the Business are more than ten percent (10%) but less than
twenty-five percent (25%) of such Person's total annual revenues;
provided, however, that Seller, directly or indirectly, will have
control of such Person sufficient to cause such Person to use all
commercially reasonable efforts to divest that portion of such
Person which competes with the Business on commercially
reasonable terms within three hundred sixty-five (365) days after
the acquisition of such ownership or interest; and provided, that
Seller shall, directly or indirectly, so cause such Person to so
divest; and provided further if such divestiture cannot occur
within this period then Seller shall pay to Buyer a sum equal to
five percent (5%) of the annual gross revenues of the Person
attributable to the Business and prorated for the Seller's
ownership interest but never more than operating profits prorated
for the Seller's ownership interest for the Business until the
earlier of divestiture of such Business or the expiration of this
Agreement;
(i) Performing any act or conducting any
business contemplated by this Agreement or the agreements
attached hereto or contemplated thereby; or
(j) Any business currently or in the future:
(i) involving the processing or
disposing of mixed / hazardous
radioactive waste, Hazardous Waste
or radioactive waste, including but
not limited to the following
technologies:
(a) Plasma Torch technology and
(b) Thermal Desorption technology
and its applications;
(c) Catalytic Extraction
Processing (CEP) and Quantum
CEP Technology, both
36
proprietary technologies of
Molten Metal Technology, Inc.;
(d) Soil Washing technology and
its applications; and
(e) Metal Melting technology and
its applications;
(f) Steam Reformation technology
and its applications;
(g) Wet Oxidation technology and
its applications; and
(h) Electro-Magnetic or beam type
processing technology such as
ultra violet (UV), radio
frequency (RF), laser, or
electron beam and their
applications.
(ii) involving the incineration of
Hazardous Waste as part of a
contract involving environmental
remediation of either a Superfund
or non-Superfund site.
The provisions of (e), (f), (g), and (h) do not
apply to any partnership, joint venture, corporation or limited
liability company that is using the technologies listed in (j)
above.
7.4.2 In the event that any part of this Section
7.4 (including any subparagraphs hereto) is declared invalid or
unenforceable by a court of competent jurisdiction, the validity
or enforceability of the remainder of this Section 7.4 shall
nevertheless continue to be valid and enforceable as though the
invalid or unenforceable portions had not been a part hereof.
The territory and time limitations set forth in this Section 7.4
are reasonable and properly required for the adequate protection
of the Buyer and Aptus. In addition, the parties acknowledge
that the nature of the business of hazardous waste incineration
and laboratory analysis is such that competitive activities could
be conducted effectively regardless of the geographic distance
between Aptus's place of business and the place of any
competitive business. In the event that the territorial or time
restrictions, or both, are determined by a court of competent
jurisdiction to be unenforceable, Seller hereby requests and
authorizes such court to modify said area or periods of duration
to the extent necessary to render them enforceable; and Seller
shall accept and submit to such modification(s).
7.4.3 Seller recognizes that immediate and
irreparable damage will result to Aptus or Buyer if Seller
breaches any of the terms and conditions of this Section 7.4 and
accordingly, Seller acknowledges that Buyer may be entitled under
applicable law to an injunction against Seller to restrain any
such breach, in addition to any other remedies or
37
claims for money damages which Aptus or Buyer may otherwise have.
7.5 Access to Information. The parties shall
cooperate in any environmental due diligence and Buyer shall not
engage in any environmental due diligence investigation other
than so-called "Phase I" (i.e., documentary review and walk-
through inspection) preliminary environmental evaluations without
the prior written consent of Seller.
7.6 Non-Solicitation of Employees.
(a) For a period of two (2) years after the
Closing, Seller shall not, without the prior written consent of
Buyer, solicit the employment of, or employ or offer to employ,
any Continuing Employees or any employees of Buyer that Seller
had significant contact with during the negotiation of this
Agreement.
(b) For a period of two (2) years after the
Closing, Buyer shall not, without the prior written consent of
Seller, solicit the employment of, or employ or offer to employ,
any employee listed on Schedule 3.20.1 not employed by Buyer as
a Continuing Employee or any employee of Seller that Buyer had
significant contact with during the negotiation of this
Agreement.
(c) This Section shall apply to employees in
senior management, operations, regulatory, financial, marketing
and sales, or permitting aspects of each Party's business. This
Section shall not apply to any employee ninety (90) days after
such employee has left the employ of either Party.
7.7 Rights Agreement. If necessary, Buyer shall take
such action as it determines is warranted to amend the Rights
Agreement dated as of June 14, 1989, between Buyer and Registrar
and Transfer Company (the "Rights Agreement"), to ensure that the
issuance of the Subordinated Debentures shall not cause a
"Triggering Event" under and as defined in the Rights Agreement.
7.8 Remarketing of IDBs and Cost Sharing.
7.8.1 Initial Remarketing. In connection with
the initial remarketing: (i) within four to six weeks from the
date of Closing (or as soon thereafter as is reasonably
practicable), Buyer shall use all reasonable efforts to cooperate
in good faith with the Remarketing Agent and Seller to effect the
remarketing of the IDBs to one or more third parties, including,
without limitation, entering into an underwriting agreement on
customary terms and conditions, obtaining a rating for the IDBS,
assisting in the preparation of an offering memorandum and
participating in any sales efforts (including any road shows).
7.8.2 Remarketing of IDBS. From and after the
Closing Date and until the IDB Backstop Expiry Date, (i) Seller
shall either, at its option, maintain a Letter of Credit enabling
the IDBs to be remarketed to one or more third parties at the
principal amount thereof, or hold the IDBS, and (ii) Buyer shall
take all action necessary to permit the Remarketing Agent to
remarket the IDBs pursuant to Section 3.03 of the IDB Indenture
at Weekly Rates or Flexible Rates as determined by Buyer (subject
to the consent of Seller, which consent shall not be unreasonably
withheld). Seller is to ensure that the Remarketing
38
Agent's total fees and expenses for remarketing the IDBs after the
Closing Date and prior to the Effective Conversion Date shall not
exceed a rate of one-eighth (1/8) of one (1) percent per annum of
the average daily outstanding principal amount of the IDBs (or
such higher rate which is then the prevailing industry rate).
7.8.3 Effective Conversion Date.
7.8.3.1 Option of Buyer. On any Mandatory
Tender Date prior to the IDB Backstop Expiry Date, Buyer shall
have the right to convert the Rate Period for the IDBs to a Term
Period with a term expiring on the maturity date for the IDB;
provided, that in the event of such a conversion, from and after
such Mandatory Tender Date (the "Effective Conversion Date"):
(a) For purposes of Section 7.8.4, the
IDB Interest Rate shall be the lesser of (i)
the actual IDB Interest Rate and (ii) 10% per
annum.
(b) On the Effective Conversion Date,
the remarketing proceeds shall be paid to the
Letter of Credit issuer in immediately
available funds in an amount equal to the sum
drawn related to principal on the IDBs under
the Letter of Credit in connection with such
Mandatory Tender Date, and any interest on
the IDBs drawn under the Letter of Credit
shall be reimbursed to the Letter of Credit
issuer and shall be treated as any other IDB
Costs.
(c) The obligation of Seller to either
cause the Letter of Credit to remain
outstanding or hold the IDBs shall
automatically and without further action
terminate.
7.8.3.2 Option of Seller. At any time
prior to the IDB Backstop Expiry Date, in the event Seller
delivers to Buyer a written notice from the Remarketing Agent to
the effect that at the time of such notice, a Term Rate could be
established pursuant to Section 2.03 (b) (iii) of the IDB
Indenture for a Term Period expiring on the maturity date for the
IDBs equal to or less than 10% per annum, unless there shall be
an IDB Remarketing Exception, (i) Buyer shall promptly give all
notices required pursuant to Section 2,.04 of the IDB Indenture of
its election to convert on a date specified by Seller occurring
no earlier than sixteen (16) days thereafter the Rate Period to
a Term Period expiring on the maturity date for the IDBS, (ii)
Buyer shall cooperate with the Remarketing Agent and Seller to
enable the IDBs to be sold on such Mandatory Tender Date at a
price equal to the principal amount thereof, including, without
limitation, furnishing information and making representations to
the Remarketing Agent and agreeing to such other terms and
conditions, including indemnification obligations, as are
customary or otherwise reasonably requested by the Remarketing
Agent in connection with the remarketing of the IDBs for a Term
Period expiring on the maturity date for the TDBS, and (iii)
unless either (a) when the Remarketing Agent determines that the
Term Rate described in Section 2.03 (b) (iii) of the IDB
Indenture, would be likely to exceed 10% per annum were the rate
period to be converted to a Term Period or (b) Seller gives
notice to Buyer prior to the time required on
39
the Mandatory Tender Date to effect the conversion that it does not
consent to the conversion of the Rate Period to a Term Period expiring
on the maturity date for the IDBS, Buyer shall arrange for and
comply with its delivery obligations under Section 2.04 (d) of
the IDB Indenture in order to cause such conversion to be
effected on such Mandatory Tender Date; provided, that in the
event of such a conversion, from and after such Mandatory Tender
Date (the "Effective Conversion Date"):
(a) For purposes of Section 7.8.4, the
amount of IDB Costs shall be the actual IDB
Costs.
(b) On the Effective Conversion Date,
the remarketing proceeds shall be paid to the
Letter of Credit issuer in immediately
available funds in an amount equal to the sum
drawn related to principal on the IDBs under
the Letter of Credit in connection with such
Mandatory Tender Date, and any interest on
the IDBs drawn under the Letter of Credit
shall be reimbursed to the Letter of Credit
issuer and shall be treated as any other IDB
Costs.
(c) The obligation of Seller to either
cause the Letter of Credit to remain
outstanding or hold the IDBs shall
automatically and without further action
terminate.
7.8.4 IDB Cost Sharing. If the IDB Costs
for any 12-month period following the Closing Date shall be (i)
greater than an amount equal to the interest on the aggregate
principal amount of the IDBS, calculated at a rate of 7-1/2 per
annum, based on the actual number of days in the year (the "IDB
Cost Base"), Seller shall pay Buyer one-half of the difference
between (a) the Effective Annual IDB Costs and (b) the IDB Cost
Base, or (ii) less than the IDB Cost Base, Buyer shall pay Seller
one-half of the difference between (a) the Effective Annual IDB
Costs and (b) the IDB Cost Base (in either event, the "IDB Cost
Spread"). Notwithstanding the foregoing, if the IDBs shall have
been converted at the option of Seller pursuant to Section
7.8.3.2 and the IDB Costs exceed 10% per annum, then IDB Costs
under 10% shall be addressed by the foregoing and IDB Costs in
excess of 10% shall be borne exclusively by Seller and reimbursed
to Buyer in accordance with 7.8.4.1.
7.8.4.1 Calculation and Payment.
Within ten business days after the end of each quarter during the
term of the IDBS, each of the parties shall provide the other
with a statement of each of the IDB Costs incurred by it for the
prior quarter. If there is an IDB Cost Spread, calculated on an
annual (360 days) cost basis, then the party having
responsibility for such IDB Cost Spread shall pay that amount
within 30 days after the end of each quarter to the party
entitled to such payment.
7.8.5 Cooperation. Each of the parties
shall use all reasonable efforts in good faith to take, or cause
to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable (other than to fund any
payment obligations of the other party as provided in this
Section 7.8) to cooperate with the other party in connection with
the foregoing.
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7.8.5.1 Remarketing Agent. Until the
IDB Backstop Expiry Date, notwithstanding any provision herein or
in the IDB Indenture or the Remarketing Agreement entered into in
connection therewith to the contrary, Seller shall have the
exclusive right to remove the Remarketing Agent and to select a
successor Remarketing Agent, subject in the case of the selection
of a successor Remarketing,Agent, to the consent of Buyer, which
consent shall not be unreasonably withheld.
7.8.5.2 Interest Rate Cap. From time
to time until the IDB Backstop Expiry Date, Buyer shall have the
right, subject to the reasonable consent of the Seller, which
consent shall not be unreasonably withheld, to obtain an Interest
Rate Cap and the cost of which shall be subject to the provisions
of Section 7.8.4.
7.8.6 Underwriting Costs. All
Underwriting Costs will be shared equally by Seller and Buyer;
provided that in no event will Buyer's share of the Underwriting
Costs exceed $400,000 in the initial remarketing or $600,000 in
the aggregate for both the initial remarketing and the conversion
to a fixed term.
7.8.7 Conversion. Any conversion of the
IDBs under 7.8.3.1 (Option of Buyer) or 7.8.3.2 (Option of
Seller) shall be accomplished such that the IDBs be sold without
a discount, with a term expiring on the current maturity date for
the IDB (2020), and with semi-annual interest payments.
7.8.8 Rebate Obligation. Seller shall
take all steps necessary to comply with the rebate provisions of
Article IV of the Tax Exemption Certificate and Agreement,
including, without limitation, making the calculations, transfers
and payments that may be necessary to comply with the rebate
requirements contained in Section 148(f) of the Code. Seller
shall prepare the I.R.S. Form 8038-T required to be filed in 1995
on the fifth anniversary of the Bond issue and Seller shall
deposit in the Rebate Fund an amount equal to the total rebate
payment, if any, then due. Buyer and Seller shall direct the
Trustee to make the required payment from the Rebate Fund to the
U.S. Government. Any subsequent filing obligations shall be the
responsibility of Buyer.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Buyer's Obligations. The
obligation of Buyer to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction of the
following conditions, any of which may be waived by Buyer:
8.1.1 Accuracy of Representations and Warranties.
The representations and warranties made by Seller in this
Agreement shall be true and correct as of the Closing Date except
for (a) representations and warranties made as of a specified
date, which shall be true and correct as of the specified date,
(b) breaches and inaccuracies that do not have a Material Adverse
Effect and (c) breaches and inaccuracies that Seller is working
diligently to cure or remedy at its cost or expense, provided
that Seller agrees to either cure or remedy such breaches or
inaccuracies as soon as practicable or indemnify Buyer against
41
any Damages relating thereto.
8.1.2 Litigation. No Order shall be in effect
forbidding or enjoining the consummation of the transactions
contemplated hereby and no Action shall be pending or threatened
which, if adversely determined, would result in any such Order.
8.1.3 Covenants. Seller shall have performed and
complied in all material respects with all covenants and
agreements required by this Agreement to be performed by Seller
prior to or at the Closing.
8.1.4 Deliveries. Seller shall have delivered to
Buyer the documents required by Section 9.2.
8.1.5 Consents. The execution, delivery and
performance of this Agreement by Seller shall not conflict with
any Law or result in the creation of any Lien (other than
Permitted Liens) on any assets of Aptus. Seller and Aptus shall
have obtained the Consents, if any, set forth on Schedule 3.8.
Such consents shall be in form and content reasonably
satisfactory to Buyer and shall have been reviewed with Buyer in
final (but unexecuted) form no less than fifteen (15) days prior
to Closing.
8.1.6 Customers. Aptus shall not have
suffered the loss of customers that would have a Material Adverse
Effect.
8.1.7 No Material Adverse Effect. There shall
have been no event or occurrence since December 31, 1994 that has
had a Material Adverse Effect on NEI or Aptus.
8.2 Conditions Precedent to Seller's Obligations. The
obligation of Seller to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction of the
following conditions, any of which may be waived by Seller:
8.2.1 Truth of Representations and Warranties.
The representations and warranties made by Buyer in this
Agreement shall be true and correct in all material respects as
of the Closing Date.
8.2.2 Litigation. No Order shall be in effect
forbidding or enjoining the consummation of the transactions
contemplated hereby and no Action shall be pending or threatened
which, if adversely determined, would result in any such Order.
8.2.3 Covenants. Buyer shall have performed and
complied in all material respects with all covenants and
agreements required by this Agreement to be performed by Buyer
prior to or at the Closing.
8.2.4 Deliveries. Buyer shall have delivered to
Seller the payment and documents required by Section 9.3.
8.2.5 [Intentionally Left Blank]
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8.2.6 Permits. Seller shall have been able to
obtain any consents necessary to transfer the Permits.
ARTICLE 9
CLOSING
9.1 Time and Place. Subject to the terms and
conditions of this Agreement, the Closing shall take place at the
offices of Seller in Pittsburgh, Pennsylvania at 10:00 a.m., on
Friday, March 31, 1995 or at such other time and place as the
Parties shall agree upon in writing (the "Closing Date"). The
Closing shall be deemed effective at 11:59 p.m. Pittsburgh time
on the Closing Date.
9.2 Deliveries by Seller. At the Closing, Seller
shall deliver the following to Buyer:
9.2.1 Certificates representing all of the
Shares, together with duly executed stock transfer powers in
favor of Buyer.
9.2.2 The stock books, stock ledgers, minute
books and corporate seal of NEI and Aptus.
9.2.3 The recorded Charter Documents of NEI and
Aptus recently certified by the Delaware Secretary of State.
9.2.4 Certificates of the Secretary or Assistant
Secretary of Seller concerning (a) its good standing, (b) the
adoption of resolutions by its board of directors authorizing the
transactions contemplated by this Agreement and (c) the
incumbency of its officers, all in form and substance
satisfactory to Buyer.
9.2.5 Certificates of the Secretaries or
Assistant Secretaries (or the comparable officials) of NEI and
Aptus, or a certificate of an executive officer of Seller,
concerning the Charter Documents and good standing of NEI and
Aptus.
9.2.6 Recent (dated within thirty (30) days of
the Closing) good standing certificates (or the comparable
documents) for NEI and Aptus issued by the Secretary of State or
(the comparable officials) of each of the jurisdictions in which
NEI is incorporated, Aptus is incorporated, or either is
qualified to do business as a foreign corporation.
9.2.7 A certificate signed by an executive
officer of Seller and dated the Closing Date certifying that (a)
each of the representations and warranties made by Seller in this
Agreement is true and correct as of the Closing Date in all
material respects and (b) all of the terms, covenants and
conditions of this Agreement to be complied with and performed by
Seller on or before the Closing Date have been complied with and
performed in all material respects.
9.2.8 Copies of the Consents obtained by Seller
and Aptus pursuant to Section 3.8.
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9.2.9 A receipt for the payment made as
contemplated by Section 2.2.1.
9.2.10 A written opinion addressed to Buyer from
counsel for Seller, in the form attached as Exhibit 9.2.10.
9.2.11 The written resignation of each director
and officer of Aptus and NEI. A complete list of all such
officers and directors is set forth on Schedule 9.2.11 hereto.
9.2.12 An executed Patent Assignment to Aptus in
the form of Exhibit 9.2.12 relating to the patent identified in
Schedule 3.19 as registered in the name of Seller.
9.2.13 An executed Assignment and Assumption
Agreement relating to the IDB Bonds in the form of Exhibit 2.2.3.
9.2.14 An opinion of Counsel to Seller (or
counsel to the IDB Issuer) addressed to Buyer to the effect that
the Assignment and Assumption Agreement relating to the IDB Bonds
will not adversely affect the excludability of interest on the
IDB Bonds from the gross income of the owners thereof for
purposes of federal income taxation.
9.2.15 An executed Assignment of Software License
Agreement in the form of Exhibit 9.2.15 relating to Seller's CORE
System.
9.2.16 An executed Debenture Purchase Agreement
in the form of Exhibit 2.2.2.
9.2.17 Such other documents, instruments and
certificates as Buyer may reasonably request for the transactions
contemplated by this Agreement.
9.3 Deliveries by Buyer. At the Closing, Buyer shall
deliver the following to Seller:
9.3.1 The payment of the Cash required under
Section 2.2.1.
9.3.2 The issuance of the Senior Unsecured
Debentures and Subordinated Convertible Debentures.
9.3.3 An executed Assignment and Assumption
Agreement relating to the IDB Bonds in the form of Exhibit 2.2.3.
9.3.4 An opinion of counsel to Buyer addressed to
Security Pacific National Trust Company (New York), as Trustee or
its successor, to the effect that Buyer has expressly assumed in
a writing delivered to such Trustee the obligations of Seller
under the IDB Loan Agreement, satisfying the requirements of
Section 6.1(b)(i) of the IDB Loan
44
Agreement.
9.3.5 The recorded Charter Documents of Buyer,
recently certified by the Delaware Secretary of State.
9.3.6 A certificate of the Secretary or Assistant
Secretary of Buyer (or the comparable official) concerning (a)
Buyer's Charter Documents and good standing, (b) the adoption of
resolutions by its board of directors authorizing the
transactions contemplated by this Agreement and (c) the
incumbency of its officers, all in form and substance
satisfactory to Seller.
9.3.7 A recent good standing certificate for
Buyer issued by the Delaware Secretary of State.
9.3.8 A certificate signed by an executive
officer (or the comparable official) of Buyer and dated the
Closing Date certifying that (a) each of the representations and
warranties made by Buyer in this Agreement is true and correct as
of the Closing Date in all material respects and (b) all of the
terms, covenants and conditions of this Agreement to be complied
with and performed by Buyer on or before the Closing Date have
been complied with and performed in all material respects.
9.3.9 A written opinion addressed to Seller from
counsel for Buyer, in the form attached as Exhibit 9.3.9.
9.3.10 An executed Assignment or Assignments of
Software License Agreement in the form of Exhibit 9.2.15 relating
to Seller's CORE System and Seller's WISHES System.
9.3.11 An executed Debenture Purchase Agreement
in the form of Exhibit 2.2.2.
9.3.12 Such other documents, instruments and
certificates as Seller may reasonably request for the
transactions contemplated by this Agreement.
ARTICLE 10
TERMINATION PRIOR TO CLOSING DATE
10.1 Termination. This Agreement may be terminated
prior to the Closing Date only as follows:
10.1.1 By the mutual written consent of the
Parties;
10.1.2 By either Party immediately upon written
notice to the other Party, if the Closing has not occurred on or
before March 31, 1995 and the failure to close is not
attributable to the fault of the party terminating; or
10.1.3 By either Party immediately upon written
notice to the other
45
Party if (a) a preliminary injunction is issued at the request of any
Governmental Authority that enjoins or prohibits the Closing or (b) a
permanent injunction is issued by a Governmental Authority that enjoins
or prohibits the Closing and becomes final and non-appealable.
10.2 Effect of Termination.
10.2.1 General. If this Agreement terminates
pursuant to Section 10.1, no Party shall have any liability or
obligation to the other Party hereunder, other than the
confidentiality obligation set forth in Section 6.2. However,
such termination shall not relieve any Party of liability for any
willful, material breach of this Agreement. Without limiting the
foregoing, if Closing does not occur due to a breach by Seller of
its obligations under this Agreement, then Seller shall promptly
reimburse Buyer in full for the Forty-Five Thousand Dollar
($45,000.00) HSR filing fee previously paid by Buyer.
ARTICLE 11
INDEMNIFICATION AND PROCEDURES
11.1 Indemnification by Seller. Subject to the other
provisions of this Article 11 and Article 12 relating to certain
environmental indemnities, Seller shall indemnify and hold Buyer,
its Affiliates and their respective employees, representatives,
officers, directors and agents (the "Buyer Indemnitees") harmless
from and against any and all Damages suffered by any Buyer
Indemnitee arising out of:
(a) the breach of any representation or warranty made
by Seller in this Agreement or in any other agreement or
certificate delivered by Seller at the Closing;
(b) the breach of any covenant, undertaking or
agreement by Seller in this Agreement or in any other
agreement executed and delivered at the Closing;
(c) in addition to and without limiting the scope of
paragraphs (a) and (b) above:
(I) any claim against Aptus or NEI for xxxxxxx'x
compensation pending as of the Closing or any
such claim made after the Closing based upon
or alleging an incident occurring entirely
prior to Closing, including any unsatisfied
judgments or other final awards or
settlements reached, whether or not scheduled
in this Agreement, except to the extent
properly reserved for on the December 1994
Balance Sheet;
(II) any litigation instituted or threatened
against Aptus or NEI as of the Closing,
including any unsatisfied judgments or other
final awards or settlements reached, whether
or not scheduled in this Agreement, except to
the extent properly reserved for on the
December 1994 Balance Sheet;
46
(III) any litigation instituted or threatened
against Aptus or NEI after the Closing
based upon or alleging an incident
occurring entirely prior to Closing;
(IV) any litigation instituted or threatened
against Aptus or NEI, other than litigation
addressed by items (II) and (III) above, but
only to the extent attributable to the
business of Aptus or NEI prior to the
Closing;
(V) any liability of any kind whatsoever (i)
arising from any incident or occurrence prior
to July 1985 and relating in any way to the
business operations of NEI, any predecessor
of NEI, any Person merged into NEI or Aptus,
or any Person whose liabilities were assumed
by NEI or Aptus as a result of an
acquisition, divestiture or reorganizations
whether by operation of law or otherwise, or
(ii) relating in any way to the business
operations of National Oil Processing, Inc.,
Coffeyville Truck Center, Inc., National
Investment Company, or any Person required to
be identified on Schedule 3.1.3 but omitted
therefrom. This section is intended to
extend to any claims made against Aptus with
regard to the one (1) acre parcel of property
owned by Hawks and Xxxxxx and located at the
Coffeyville Facility.
(VI) any Undisclosed Liabilities.
The foregoing items (a), (b) and (c) being collectively
referred to as the "Retained Liabilities."
11.2 Indemnification by Buyer. Subject to the other
provisions of this Article 11 and Article 12 relating to certain
environmental indemnities, Buyer shall indemnify and hold Seller,
its Affiliates and their respective employees, representatives,
officers, directors and agents (the "Seller Indemnitees")
harmless from and against any Damages suffered by any Seller
Indemnitee arising out of:
(a) the breach of any representation or warranty made
by Buyer in this Agreement or in any other agreement or
certificate delivered by Buyer at the Closing;
(b) the breach of any covenant by Buyer in this
Agreement or in any other agreement executed and delivered
at the Closing;
(c) any claim made against Aptus or NEI for xxxxxxx'x
compensation made after the Closing, except to the extent
such claim constitutes a Retained Liability;
(d) any litigation instituted or threatened against
Aptus or NEI after the Closing, except to the extent such
claim constitutes a Retained Liability;
(e) after the Closing Date, the failure by Buyer, NEI
or Aptus to perform
47
any of its obligations, except to the extent that such obligations
arise from events or conditions that entitle any Buyer Indemnitee to
indemnification pursuant to this Agreement; or
(f) the operation of the Business after the Closing
Date, including any liability of Seller as surety or
indemnitor for NEI or Aptus under any performance or surety
bond or letter of credit (other than those referred to and
specifically handled pursuant to Section 5.8.5) relating to
post closing operations of NEI or Aptus, except to the
extent that such Damages constitute a Retained Liability.
11.3 Notice and Resolution of Claims.
11.3.1 Notice. Each indemnified party (a
"Beneficiary") shall promptly give written notice to the
indemnifying Party after obtaining knowledge of any claim that it
may have pursuant to this Article 11. Such notice shall set
forth in reasonable detail the claim and the basis for
indemnification.
11.3.2 Right to Assume Defense. If such claim
for indemnity shall arise from a claim or Action involving a
third party (a "Third Party Claim"), the Beneficiary shall permit
the indemnifying Party to assume its defense. If the
indemnifying Party assumes the defense of such Third Party Claim,
it shall take all steps necessary to investigate, defend or
settle such Action and shall, subject to Section 11.4, hold the
Beneficiary harmless from and against any and all Damages caused
by or arising out of any settlement approved by the indemnifying
Party or any judgment in connection with such Third Party Claim.
Without the written consent of the Beneficiary, the indemnifying
Party shall not consent to entry of any judgment or enter into
any settlement that does not include an unconditional and
complete release of the Beneficiary by the claimant or plaintiff
making the Third Party Claim (except in the case of an Action
involving a Governmental Authority where the Governmental
Authority does not typically provide an unconditional and
complete release, in which case the indemnifying Party shall not
consent to entry of any judgment or enter into any settlement
that does not contain customary nonadmissions and settlement
terms peculiar to that Governmental Authority). The Beneficiary
may participate in such defense or settlement through its own
counsel, but at its own expense.
11.3.3 Failure to Assume Defense. Failure by the
indemnifying Party to notify the Beneficiary of its election to
assume the defense of any Third Party Claim within thirty (30)
days after its receipt of notice thereof shall be deemed a waiver
by the indemnifying Party of its right to assume the defense of
such Third Party Claim. In such event, the Beneficiary may
defend against such Third Party Claim in any manner it deems
appropriate, at the cost and expense of the Indemnifying Party.
The Beneficiary may settle such Third Party Claim or consent to
the entry of any judgment with respect thereto, provided that it
acts reasonably and in good faith.
11.4 Limits on Indemnification.
11.4.1 Seller shall not be liable to defend,
indemnify and hold harmless Buyer against any Damages under this
Article 11 unless and until the aggregate Damages exceed Five
Hundred Thousand ($500,000.00) Dollars (the "Basket"), and then
48
shall be liable only for Damages in excess of the Basket.
Furthermore, neither Party shall be liable to indemnify, defend
and hold harmless an Indemnitee against Damages in respect of
which indemnification may be available in excess of $135,000,000
(the "Cap"); provided, however, that the breach or non-
fulfillment of any covenant, undertaking or agreement (as
distinguished from a breach of a representation or warranty)
shall not be subject to, nor apply in calculating, the Basket or
the Cap. For purposes of determining the Basket, any breach by
Seller of a representation or warranty hereunder shall be
determined without regard to whether the breach resulted in a
Material Adverse Effect. Notwithstanding the foregoing, the
liability of Seller with respect to the following items shall not
be subject to, nor apply in calculating, the Basket or the Cap:
Section 3.22 (Taxes); Section 7.2 (Tax Covenants); Section 7.1
(Employee Matters); Section 11.1 (c) (I) (relating to Xxxxxxx'x
Compensation); Section 11.1 (c) (II) (relating to pending
litigation); Section 11.1 (c) (V) (relating to certain potential
predecessor liabilities); and Section 3.15 (Accounts Receivable).
In addition, the limitations period provided in Section 11.5
shall not apply to the items enumerated in the immediately
preceding sentence and Seller's representations and warranties
and indemnification obligations related to such items shall
survive indefinitely (subject only to applicable statutes of
limitations and any extensions thereto), with the exception of
Section 11.1 (c) (V) which shall survive for twenty-five (25)
years.
11.4.2 The determination of Final Adjusted Net
Worth and the post Closing adjustment of the Purchase Price in
accordance with Section 2.4 hereto shall not affect Buyer's
ability to seek indemnification for a breach of a representation
or warranty relating to the Financial Statements. Buyer may not
make a claim against Seller for breach of Section 3.15 relating
to accounts receivable, unless it has attempted to collect same
in accordance with its normal collection procedures. Buyer shall
also be required to apply amounts which it collects on
receivables in the order in which the accounts receivable were
created, except with respect to disputed receivables.
11.5 Survival. With the exception of those items
identified in Article 12 or Section 11.4, Seller's
representations and warranties and indemnification obligations
under this Agreement shall terminate three (3) years from the
Closing Date. Representations and warranties that are made as of
a specified date or are remade as of the Closing Date are not
intended to be deemed to be remade effective as of a date
subsequent to the Closing Date.
11.6 Exclusive Remedy. The remedies of Buyer and
Seller provided for in this Agreement shall be the exclusive
remedies of the Parties with respect to the matters covered by
this Agreement, the events giving rise to this Agreement, the
Purchased Assets and the Business. Without limiting the
generality or effect of the foregoing, as a material inducement
to the other party entering into this Agreement, except for the
remedies set forth in this Agreement, each of the Parties hereby
waives any claim or cause of action which it might assert,
including, without limitation, under the common law, federal,
state or foreign securities, trade regulation, or other law, by
reason of this Agreement, the matters covered hereby, the events
giving rise to this Agreement, the Purchased Assets or the
Business. Buyer shall not be entitled to a rescission of this
Agreement.
11.7 No Mitigation. The representations and
warranties of either Party shall not be mitigated by any
investigation conducted by the other Party or its representatives
prior to Closing.
49
11.8 Indemnity Payments. All payments made pursuant
to Section 11.1 (other than interest payments) will be treated by
the Parties on all Returns as an adjustment to the Purchase
Price.
11.9 Buyer's Cooperation.
11.9.1 Buyer shall promptly provide Seller with
(a) copies of all notices concerning the Retained Liabilities and
any indemnifiable claims that Buyer or Aptus receives after the
Closing Date, (b) the assistance, at Seller's cost, of all
directors, officers, employees, representatives and agents of
Aptus, and (c) all other information concerning the Retained
Liabilities that Seller needs or requests to manage and defend
the Retained Liabilities.
11.10 Payment and Assignment of Claims.
11.10.1 Payment. Upon final determination by
agreement of the Parties or pursuant to arbitration as set forth
in Section 14.12 that a Party is entitled to indemnification
under this Article, the indemnifying Party shall promptly pay or
reimburse, as appropriate, the Beneficiary for any Damages to
which it is entitled to be indemnified hereunder. Neither Party
shall permit any exercise of any right of set-off against the
other Party until such final determination is made.
11.10.2 Assignment. If any of the Damages for
which an indemnifying Party is responsible or allegedly
responsible under this Article 11 are recoverable or potentially
recoverable against any third party, other than a Beneficiary's
insurer, at the time when payment is due hereunder, the
Beneficiary shall assign any and all rights that it may have to
recover such Damages to the indemnifying Party or, if such rights
are not assignable for any reason, the Beneficiary hereunder
shall attempt in good faith, at the other party's cost and
expense, to collect any and all damages and losses on account
thereof from such third party for the benefit of the indemnifying
Party.
11.11 Other Beneficiaries. Buyer shall cause the
Buyer Indemnitees, and Seller shall cause the Seller Indemnitees,
to comply with the provisions and to abide by the limitations set
forth in this Article 11.
11.12 Consequential Damages; Other Limitations.
11.12.1 Seller shall have no obligation to
indemnify any of the Buyer Indemnitees against any Consequential
Damages suffered or alleged by any of the Buyer Indemnitees.
Buyer shall have no obligation to indemnify any of the Seller
Indemnitees against any Consequential Damages suffered or alleged
by any of the Seller Indemnitees. This restriction shall not
apply to a party's obligation to indemnify an Indemnitee against
Consequential Damages suffered or alleged by a Person other than
the Indemnitee.
11.12.2 Neither party shall have any obligation
to indemnify the other party or its Indemnitees to the extent
that Damages (including Retained Liabilities) are caused,
contributed to or exacerbated by the actions of the party seeking
indemnification or its contractors, subcontractors or agents.
50
ARTICLE 12
CERTAIN ENVIRONMENTAL MATTERS
12.1 Seller's Environmental Responsibility.
12.1.1 Seller Indemnity. Subject to the other
provisions of this Article 12, Seller shall indemnify and hold
harmless the Buyer Indemnitees from and against any and all
Damages suffered by any Buyer Indemnitee arising out of
(collectively, the "Seller's Environmental Responsibility"):
(a) Identified Environmental Concerns;
(b) Off-Site Disposal to the extent attributable to
the Business prior to Closing;
(c) Existing Environmental Violations, except to the
extent reserved for on the December 1994 Balance
Sheet;
(d) Environmental Violations discovered after Closing,
to the extent attributable to the Business prior
to Closing;
(e) Existing Third Party Environmental Claims;
(f) Third Party Environmental Claims to the extent
attributable to an Identified Environmental
Concern; and
(g) Third Party Environmental Claims (excluding those
under Sections 12.1 (e) and 12.1 (f) above) to the
extent attributable to the Business prior to
Closing.
(h) Government Remediation Claims to the extent
attributable to the Business prior to Closing.
12.1.2 For purposes of this Article 12, the
"Business" shall refer to any business conducted by NEI, Aptus or
any Person identified or required to be identified on Schedule
3.1.3.
12.2 Buyer Environmental Responsibility. Subject to
the other provisions of this Article 12, Buyer shall indemnify
and hold harmless the Seller Indemnitees from and against any and
all Damages suffered by any Seller Indemnitee arising out of
(collectively, the "Buyer's Environmental Responsibility"):
(a) Off-Site Disposal to the extent attributable to
Buyer, Aptus or NEI post Closing;
(b) Environmental Violations to the extent
attributable to Buyer, Aptus or NEI post Closing;
and
51
(c) Third Party Environmental Claims to the extent
attributable to Buyer, Aptus or NEI post Closing.
12.3 Identified Environmental Concerns. "Identified
Environmental Concerns" shall refer to the following items and
Seller's responsibility therefor shall be as set forth in Section
12.10:
(a) "Coffeyville Contamination". The identified
groundwater contamination and other sources of
contamination at the Coffeyville, Kansas facility
(the "Coffeyville Facility") identified on
Schedule 12.3 hereto.
12.4 Off-Site Disposal. "Off-Site Disposal" shall
refer to the disposal off-site of Hazardous Wastes or PCBS,
provided that the off-site migration of Hazardous Substances from
on-site disposal at a facility being transferred hereunder to
Buyer shall be treated as a Third Party Environmental Claim. In
the case of Seller's Environmental Responsibility, Seller's
indemnity shall extend to disposal sites whether or not listed by
Seller on Schedule 3.18 hereto, but shall not extend to (a) any
sites ever owned or operated by Buyer or its Subsidiaries, or (b)
sites identified on Schedule 3.18 which Buyer, in its sole
discretion, shall have identified prior to the execution hereof,
as acceptable facilities.
12.5 Environmental Violations. "Environmental
Violations" shall mean any violation, as of the Closing Date, of
Environmental Laws (as such laws exist as of the Closing Date) in
the operation of the Business, or the failure to have any Permit,
as of the Closing Date, required by Environmental Laws (as such
laws exist as of the Closing Date) which are imposed on or
incurred by Buyer as a result of an affirmative obligation
imposed upon Buyer by the actions of a Governmental Authority,
except to the extent reserved for on the December 1994 Balance
Sheet. "Existing Environmental Violations" shall be those that
are scheduled or required to be scheduled in this Agreement.
12.6 Third Party Environmental Claim.
12.6.1 "Third Party Environmental Claim" means
any claim for Damages, including those for personal injury or
property damage, resulting from or alleged to result from
exposure to any Hazardous Substance as a result of the operation
of the Business asserted by any Person other than a party
entitled to indemnification under this Agreement, whether or not
caused by an Environmental Violation. Third Party Environmental
Claims shall include (a) any claims made under performance or
surety bonds issued in connection with the Business prior to
Closing and (b) any claims that any Hazardous Substance
generated, transported or disposed of in connection with the
Business, has been found at a site at which any Person (other
than a party entitled to indemnification under this Agreement)
has conducted, plans to conduct, or has demanded that the
receiver of the notice conduct a remedial investigation, removal
or other response action pursuant to any Environmental Law. An
"Existing Third Party Environmental Claim" shall be one which has
been made in writing prior to Closing, whether or not scheduled
in this Agreement.
12.6.2 With respect to Third Party Environmental
Claims based upon or alleging Damages as a result of exposure
occurring or condition existing from or on any
52
Real Property both before and after the Closing, responsibility shall
be borne pro rata by Seller and Buyer in proportion to the relative
lengths of third party exposure during their respective periods of
occupancy of the Real Property; provided that, for purposes of this
allocation, (A) the respective periods of occupancy for any claim
shall be determined as of the date such claim is first presented
or filed and (B) subject to its right to pursue contribution or
indemnity from any other third party, Seller's occupancy shall
include any period of occupancy by its predecessors-in-interest
during which exposure is alleged.
12.7 Government Remediation Claim. "Government
Remediation Claim" means a Thirty Party Claim brought by a
Governmental Authority (other than an Identified Environmental
Concern) relative to the remediation of any contaminated property
and shall extend to any investigation, remediation or corrective
action mandated by such Government Authority (including
inspections, monitoring, sampling and removal of contaminated
property).
12.8 Limitations and Deductibles.
12.8.1 Seller's Environmental Responsibility
shall be limited in accordance with the following table which
identifies by cross reference the items in Section 12.1:
Category Limitations Period Deductible
12.1(a) (Identified Until remediated None
Environmental as set forth in
Concerns) Section 12.10
12.1(b) (Off-Site 15 years after Closing None
Disposal)
12.1(e) (Existing 30 months after Closing None
Environmental
Violations)
12.1(d) (Environmental 30 months after Closing $150,000
Violations in the
Discovered aggregate
after Closing)
12.1(e) (Existing Third 10 years after Closing None
Party Environ-
mental Claims)
12.1(f) (Third Party The later of 10 years None
Environmental after Closing or until
Claims the Identified Environmental
attributable to Concern is remediated as
an Identified set forth in Section 12.10
Environmental
Concern)
12.1(g) (Third Party 10 years after Closing $1,000,000
Environmental in the
Claims) aggregate
12.1(h) (Government 5 years after Closing $400,000
Remediation in the
Claims) aggregate
53
12.8.2 With respect to the items set forth in
Section 12.8.1 above: (a) Seller's Environmental Responsibility
shall expire at the end of the Limitations Period specified
unless Buyer has made a written claim for Damages prior to the
expiration of such period or upon Seller's completion of a
scheduled or specific item; and (b) Buyer shall assume
responsibility for Damages up to the amount of the Deductible
therein specified.
12.8.3 The responsibilities for Deductibles and
Damages set forth in this Article 12 shall be distinct from those
in Article 11 and not be subject to nor apply in calculating any
Baskets set forth in Article 11. To the extent that the recovery
of Damages is addressed by one of the categories set forth in
Section 12.1.1, Article 12 shall govern to the exclusion of
Article 11; provided that to the extent any Damages are
recoverable by any Buyer Indemnitee under Section 11.1 (c) (V)
(relating to certain potential predecessor liabilities), it shall
also be entitled to indemnification under such Section; provided
further that the exclusive remedy of any Buyer Indemnitee for
Damages with respect to Identified Environmental Concerns
recoverable under Section 12.10 shall be as set forth in that
Section.
12.8.4 Seller shall have no obligation to
indemnify and hold harmless the Buyer Indemnitees under this
Article 12 in excess of the $135,000,000 cap set forth in Section
11.4; provided that (a) for purposes of calculating this
limitation, Seller shall be afforded a dollar for dollar credit
for Damages it has indemnified Buyer against under Article 11 to
the extent that such Damages are governed by the cap; and (b) the
liability of Seller with respect to Off-Site Disposal shall not
be subject to, nor apply in calculating any deductibles or cap.
12.9 Miscellaneous. The following Sections of Article
11 shall apply equally to Article 12 and the obligations of
Seller under this Article 12 shall be deemed Retained
Liabilities.
11.3 Notice and Resolution of Claims
11.6 Exclusive Remedy
11.7 Mitigation
11.8 Indemnity Payments
11.9 Buyer's Cooperation
11.10 Payment and Assignment of Claims
11.11 Other Beneficiaries
11.12 Consequential Damages; Other Limitations
12.10 Certain Remediation Activities.
12.10.1 Coffeyville Contamination.
12.10.1.1 Responsibility of Seller. In the
case of the remediation of the Coffeyville Contamination, Seller
shall, at Seller's sole cost and expense, perform such
investigation, remediation or corrective action, in full
compliance with the requirements of any Governmental Authority
(whether or not pursuant to Environmental Laws in effect on or
prior to Closing) including inspections, monitoring, sampling and
the removal of any groundwater and associated soils and any other
materials mandated by an affirmative action of a Governmental
Authority. Seller's obligation under this Section shall
54
extend
to (a) the ongoing RCRA corrective action (the "RCRA Action") and
(b) any other investigation, remediation or corrective action
initiated within ten (10) years after Closing by any Governmental
Authority in connection with the Coffeyville Contamination or the
items identified on Schedule 12.3 as sources or potential sources
of contamination. Seller shall also be responsible for
maintaining any financial assurances required by any Governmental
Authority in connection with the above, whether required under a
RCRA corrective action order or as part of the Coffeyville
Facility's RCRA or TSCA permits; provided that this obligation
shall not extend to any Financial Assurances otherwise required
of Buyer as part of the Coffeyville Facility's RCRA or TSCA
permits.
12.10.1.2 TCE Cost Sharing. Buyer shall not
be restricted by this Agreement in its ability post Closing to
transport, store, handle, incinerate or otherwise dispose of
waste streams containing trichloroethylene (TCE) at the
Coffeyville Facility. However, in the event the Coffeyville
Facility engages in any of the foregoing activities or otherwise
begins to use TCE in its operations post Closing, Buyer and
Seller agree that remediation costs under the RCRA Action shall
be borne by both Buyer and Seller in a ratio such that Seller's
percentage of liability decreases by five (5) percent for each
100,000 pounds of TCE, if any, brought onto the Coffeyville
Facility for use in Buyer's operations post Closing or spilled by
Buyer at the Coffeyville Facility post Closing.
12.10.1.3 Survival. Seller's responsibility
and liability under this Agreement with respect to the RCRA
Action shall terminate when the remediation has achieved to the
satisfaction of the Governmental Authority the established
remediation clean up levels required by the final remediation
plan and such levels have been sustained for one (1) year. After
this has been achieved, any post remediation monitoring of the
Coffeyville Facility required as a result of the facility's RCRA
permit or the groundwater contamination shall be the sole
responsibility of Buyer.
12.10.2 Control. With respect to Identified
Environmental Concerns or Government Remediation Claims, Seller
shall have full control in dealing and negotiating with the
cognizant regulatory authorities; provided that (a) Buyer shall
have the right to attend, at its own expense, any meetings with
the regulatory authorities and shall be provided copies of all
correspondence, reports, or other documents (including
inspections, monitoring, sampling and analytical results)
submitted or received by or on behalf of Seller, and (b) Seller
shall not, without the prior written consent of Buyer (which
shall not be unreasonably withheld), take any measure or step
that imposes any unreasonable burden or encumbrance upon the
operation or conduct of Buyer's business unless mandated to do so
by a Governmental Authority. In this regard, Seller agrees to
coordinate its activities with Buyer's plant manager and safety
manager at the facility in question. In the event that Buyer
shares liability due to its actions post Closing as provided
herein, Buyer shall have equal responsibility in proportion to
its liability in dealing with the regulatory agency(ies). In any
event, Buyer shall have the right to review all submissions or
proposals to the cognizant regulatory agency(ies) reasonably in
advance of such submissions or proposals being offered to such
agency(ies).
12.10.3 Access. Buyer hereby grants to Seller
and its consultants a right of reasonable access to its
facilities (and those of its tenants, if required) in order to
meet its obligations under this Article 12; provided that Seller
shall conduct any such
55
remediation or corrective action in a manner so as to assure no unreasonable
interference with the ongoing operations or conduct of Buyer's business
unless mandated to do so by a Governmental Authority. Any dispute under
this Section as to the reasonableness of Seller's actions may be
submitted for resolution to arbitration as set forth in Section
14.12. Buyer shall allow Seller and its representatives and
agents to store all equipment and materials that are necessary or
desirable for undertaking remediation or corrective actions
required.
12.10.4 Cooperation. With respect to Identified
Environmental Concerns or Government Remediation Claims, each
party shall reasonably cooperate with the other towards effecting
any remediation or corrective action required and shall provide
the other with copies of any studies, analytical test results or
reports which may come into its possession or control, including
consultants retained by or on its behalf with respect to
environmental conditions. As long as Seller's Environmental
Responsibility at a facility is in effect, (a) each party shall
provide notice and documentation to the other of any spill
incidents, whether or not reportable, occurring after the Closing
Date in, on or around the Coffeyville Facility, Lakeville
facility or Utah facility within ten (10) days of such incident
and (b) each party shall also promptly provide to the other a
copy of any written statement, report, notice, registration,
application, permit, license, claim, action or proceeding given
to or received from any Person entering or occupying the
Coffeyville Facility, Lakeville facility or Utah facility
concerning the spill, release, discharge of or exposure to any
Hazardous Substance or contamination in, on, or about the
Coffeyville Facility, Lakeville facility or Utah facility
including but not limited to all such documents as may be
involved in any air and water discharges from the site. Further,
the Buyer shall provide to Seller reasonable access to its
purchasing and disposal records and shall provide timely notice
of any material change in type or volume of product used in its
operations at the Coffeyville Facility greater than thirty-three
and one-third (33 1/3%) percent of the preceding year's annual
inventory.
12.10.5 Monitoring and Sampling. Buyer agrees
that Seller may for the purposes of (a) complying with government
ordered remediation; or (b) establishing baseline assessments of
contamination; or (c) monitoring of any new, preexisting or
suspected contamination; take soil samples or install additional
groundwater monitoring xxxxx and sample such xxxxx and soils as
needed in specific areas of concern; provided that Seller shall
conduct any such remediation or corrective action in a manner so
as to assure no unreasonable interference with the ongoing
operations or conduct of Buyer's business unless mandated to do
so by a Governmental Authority. Any disputes under this Section
as to the reasonableness of Seller's actions may be submitted for
resolution to arbitration as set forth in Section 14.12 with the
exception of government mandated actions. Buyer shall be given
advance notice of such testing and sampling and shall be entitled
to split samples, if requested, at its expense. Buyer may also
choose to conduct its own testing and sampling (including
sampling of groundwater xxxxx installed by Seller). Buyer and
Seller agree, at Seller's sole cost and expense (except as noted
below) to the establishment and permanent location, if necessary,
of a Westinghouse representative on the Coffeyville site and
further agree to provide such representative with office space to
perform the remediation, monitoring and oversight of planned
remediation activities at the site as well as baseline monitoring
of activities at site. Buyer agrees to absorb the costs of
office space for such full time representative over the lifetime
of the remedial action.
12.10.6 Conduct. If Seller or its officers, employees,
agents or
56
representatives enter any properties of Aptus, pursuant to this Agreement
after the Closing, each Party shall indemnify and save harmless the other
and its Indemnitees from and against any Damages arising therefrom to the
extent resulting from the negligence or willful misconduct of the
Indemnifying Party or its contractors, subcontractors or agents.
ARTICLE 13
DEFINITIONS
For purposes of this Agreement, the terms set forth
below shall have the following meanings:
"AAA" shall have the meaning set forth in Section
14.12.
"Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental
Authority.
"Affiliate" means, for any Person, any other Person
controlling, controlled by, or under common control with such
Person. The term "control" means the possession, directly or
indirectly, of the power to direct the management and policies of
such Person, whether through ownership of voting securities, by
contract or otherwise.
"Agreement" means this Purchase Agreement, together
with the Schedules and Exhibits.
"Aptus" shall have the meaning set forth in the
recitals to this Agreement.
"Aptus Shares" means 1,000 shares of Common Stock of
Aptus, constituting all of the issued and outstanding shares of
capital stock of Aptus.
"Assignment and Assumption Agreement" shall have the
meaning set forth in Section 2.2.3.
"Audited Financial Statements" shall have the meaning
set forth in Section 3.5.
"Authenticating Agent" shall have the meaning set forth
in the IDB Indenture.
"Basket" shall have the meaning set forth in Section
11.4 hereto.
"Beneficiary" shall have the meaning set forth in
Section 11.3.1.
"Business" shall have the meaning set forth in the
Recitals Section.
"Buyer" shall have the meaning set forth in the heading
to this Agreement.
"Buyer Indemnitees" shall have the meaning set forth
in Section 11.1.
"Buyer's Employee Welfare Benefit Plan" shall have the
meaning set forth in
57
Section 7.1.6.
"Buyer's Environmental Responsibility" shall have the
meaning set forth in Section 12.2.
"Buyer's Pension Plan" shall have the meaning set forth
in Section 7.1.4(a).
"Cap" shall have the meaning set forth in Section 11.4
hereto.
"Charter Documents" means the articles or certificate
of incorporation and its by-laws, as each has been amended or
supplemented from time to time.
"Closing" shall have the meaning set forth in
Section 2.2.1.
"Closing Date" shall have the meaning set forth in
Section 9.1.
"Closing Date Closure and Post Closure Costs" shall
have the meaning set forth in Section 5.8 hereto.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Coffeyville Facility" shall have the meaning set forth
in Section 12.3.
"Coffeyville Contamination" shall have the meaning set
forth in Section 12.3.
"Confidentiality Agreement" means the Confidentiality
Agreement dated as of November 30, 1993 between Seller and Buyer.
"Consent" means a consent, approval, authorization,
waiver or notification from any Person, including any
Governmental Authority.
"Consequential Damages" are Damages that arise out of
any interruption of business, loss of profits, loss of use of the
facilities, claims of customers or other indirect damages.
Consequential Damages shall exclude compensatory or actual
damages and incidental damages (as that term is used in the
Uniform Commercial Code).
"Continuing Employees" shall have the meaning set forth
in Section 7.1.1.
"Covered Returns" means Returns with respect to Covered
Taxes.
"Covered Taxes" means any Taxes.
"Damages" means all losses, claims, damages, costs,
fines, penalties, obligations, payments and liabilities
(including those arising out of any Action), together with all
reasonable costs and expenses (including reasonable outside
attorneys' fees and reasonable out-of-pocket expenses) incurred
in connection with any of the foregoing. Damages shall include
any costs of actions within the definition of "response action"
under CERCLA
58
Section 101(25) or any similar or successor legislation, including the
installation of equipment at a facility required to address an Environmental
Violation.
"December 1994 Adjusted Net Worth" shall have the
meaning set forth in Section 2.3.2.
"December 1994 Balance Sheet" means the Balance Sheet
dated December 31, 1994 and attached to Schedule 3.5 hereto.
"Dollars" or "$" means lawful currency of the United
States.
"Effective Conversion Date" shall have the meaning set
forth in either Section 7.8.3.1 or Section 7.8.3.2, as
applicable.
"Employee" shall have the meaning set forth in Section
3.20.1.
"Employee Benefit Plans" shall have the meaning set
forth in Section 3.21.1.
"Employee Welfare Benefit Plans" shall have the meaning
set forth in Section 3(l) of ERISA, whether or not such plans are
subject to ERISA.
"Environmental Laws" means any of the following in
effect and as interpreted as of the Closing Date: the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601 et seq.; the
Toxic Substance Control Act, as amended, 15 U.S.C. Section 2601
et seq.; the Hazardous Materials Transportation Act, as amended
49 U.S.C. Section 1802 et seq.; the Resource Conservation
Recovery Act, as amended, 42 U.S.C. Section 9601, et seq.; the
Clean Water Act, as amended, 33 U.S.C. Section 1251 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 7401 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et
seq.; and all applicable U.S. federal, state,
municipal, local and foreign laws, principles of common law
ordinances, codes, as well as orders, decrees, judgments,
seizures or injunctions issued, promulgated, approved or entered
on or before the Closing Date thereunder relating to pollution,
protection of the environment, or protection of the public from
pollution or employee health and safety, including, but not
limited to the release or threatened release of Hazardous
Substances into the environment or otherwise relating to the
presence, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances.
"Environmental Violations" shall have the meaning set
forth in Section 12.5.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Plan" shall have the meaning set forth in
Section 3(3) of ERISA with respect to employee benefit plans
maintained or contributed to by Seller on behalf of Aptus or
Aptus that currently cover Employees and are subject to ERISA.
"Existing Environmental Violations" shall have the
meaning set forth in Section 12.5.
59
"Existing Third Party Environmental Claim" shall have
the meaning set forth in Section 12.6.
"Final Adjusted Net Worth" shall have the meaning set
forth in Section 2.4.1.
"Financial Assurances" shall have the meaning set forth
in Section 5.8.
"Financial Statements" shall have the meaning set forth
in Section 3.5.
"Flexible Period" shall have the meaning set forth in
the IDB Indenture.
"Flexible Rate" shall have the meaning set forth in the
IDB Indenture.
"GAAP" means generally accepted accounting principles.
"Governmental Authority" means any federal, state or
local government, any of its subdivisions, agencies, authorities,
commissions, boards or bureaus, any special improvement district,
any federal, state or local court or tribunal of competent
jurisdiction.
"Governmental Remediation Claim" shall have the meaning
set forth in Section 12.7.
"Guarantee" means any guarantee, any indemnification
obligation and any other contingent obligation to purchase, to
provide funds for payment, to supply funds to invest in any
Person or otherwise to assure a creditor against loss including
performance bonds and letters of credit.
"Hazardous Substance" means any of the following in
effect and as interpreted as of the Closing Date: any "hazardous
substance" as defined under CERCLA or the rules and regulations
promulgated thereunder, any Hazardous Waste, radioactive
materials, petroleum or petroleum-derived substance or waste,
PCB, asbestos, or any constituent or combination of any of the
above.
Hazardous Waste" means "hazardous waste" as defined in
RCRA or the rules and regulations promulgated thereunder (as in
effect and as interpreted as of the Closing Date).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the regulations
promulgated thereunder.
"IDB Backstop Expiry Date" means the earliest to occur
of (i) the discharge of the lien of the IDB Indenture pursuant to
Section 12.01 thereof, (ii) June 1, 2020, and (iii) the Effective
Conversion Date.
"IDB Costs" whether incurred by Buyer or Seller, shall
consist of (i) any annual or other periodic fees and expenses
relating to a Letter of Credit, (ii) any fees or premium payable
with respect to an IDB Interest Rate Cap, (iii) any annual or
other periodic fees and expenses payable to the Remarketing Agent
(subject to Section 7.8.2 hereof), (iv)
60
any annual or other periodic fees and any expenses payable to any
rating agency, (v) the interest payable on the aggregate principal
amount of the IDBs at the IDB Interest Rate, but shall not include any
Underwriting Costs.
"IDB Indenture" means the Indenture of Trust between
Tooele County, Utah and Security Pacific National Trust Company
(New York), as Trustee, dated as of June 1, 1990, as amended.
"IDB Interest Rate" means at any time the actual
interest payable (without giving effect to any penalty charges)
on the IDBs by the Company (after giving effect to the Interest
Rate Cap but before giving effect to the cost sharing provision
of this Agreement), as it may be adjusted pursuant to Section
7.8.3.2 (a).
"IDB Interest Rate Cap" means a policy or contract
allocating to the provider thereof the obligation to pay a
portion of the interest which Buyer obligated to pay with respect
to the IDBS, issued in accordance with Section 7.8.5.2, as the
same may from time to time be reissued or extended in accordance
with its terms, or any substitute therefor which, in any case
shall be issued by a provider and be on terms and subject to
conditions reasonably acceptable to Seller.
"IDB Loan Agreement" shall have the meaning set forth
in Section 2.1.
"IDBS" means the industrial development bonds defined
in Section 2.1(b).
"Identified Environmental Concerns" shall have the
meaning set forth in Section 12.3.
"Immediate Notices" shall have the meaning set forth in
the IDB Indenture.
"Income Tax" means any federal, state or local income,
alternative minimum and franchise or other similar tax, duty,
governmental charge or assessment imposed by or on behalf of any
Governmental Authority that is based on or measured by income
(including, interest and penalties on any of the forgoing).
"Income Tax Returns" means any Returns with respect to
Income Tax.
"Independent Firm" shall have the meaning set forth in
Section 2.3.1.
"Intellectual Property" shall have the meaning set
forth in Section 3.19.1.
"Interim Period" means, with respect to any Tax,
imposed on NEI or Aptus on a periodic basis for which the
Closing Date is not the last day of a Short Period, the period of
time beginning on the first day of the actual taxable period that
includes (but does not end on) the Closing Date and ending on the
Closing Date.
"Issuer" shall have the meaning set forth in the IDB
Indenture.
"Law" means any statute, rule, regulation or ordinance.
61
"Lease" means any lease or sublease of real or personal
property to Aptus.
"Leased Personal Property" shall have the meaning set
forth in Section 3.10.2.
"Leased Real Property" shall have the meaning set forth
in Section 3.9.2.
"Letter of Credit" shall mean an irrevocable letter of
credit to be dated the Closing Date from a bank in favor of the
trustee under the IDB Indenture, issued at the request of Seller,
as the same may from time to time be reissued or extended in
accordance with its terms, or any substitute therefor.
"Letter of Intent" shall mean the Letter of Intent
entered into on August 22, 1994 between Buyer and Seller.
"Lien" means any lien, mortgage, deed of trust,
security interest, charge, pledge, retention of title agreement,
easement, encroachment, condition, reservation, covenant or other
encumbrance affecting title.
"Mandatory Tender Date" shall have the meaning set
forth in the IDB Indenture.
"Material Adverse Effect" means a material adverse
effect on (a) the Business, financial condition or results of
operations of the Business, taken as a whole (without giving
effect to any effect in the Retained Liabilities), or (b) the
ability of Seller to consummate the transactions contemplated by
this Agreement.
"Material Contracts" means the Contracts identified on
Schedule 3.13.
"Material Lease" means any Real Property Lease or
Material Personal Property Lease.
"Material Personal Property Lease" means any lease of
personal property involving one (1) year or rental obligations
exceeding Fifty Thousand Dollars ($50,000.00).
"NEI" shall have the meaning set forth in the recitals
to this Agreement.
"Non-Transferred Instrument" shall have the meaning set
forth in Section 5.4.2.
"Off-Site Disposal" shall have the meaning set forth in
Section 12.4.
"Order" means any order, judgment, injunction, decree
or award of any Governmental Authority.
"Owned Real Property" shall have the meaning set forth
in Section 3.9.1.
"Party" means Buyer or Seller.
62
"PCB" means PolyChlorinated Biphenyl.
"Pension Plan" means the Westinghouse Pension Plan.
"Period" has the meaning set forth in Section 7.2.1.
"Permit" means any permit, license, certificate
(including a certificate of occupancy) registration,
authorization or approval issued by a Governmental Authority.
"Permitted Liens" means (a) Liens for Taxes that are
not yet due and payable or that are being contested in good faith
by appropriate proceedings and as to which reserves have been
established consistent with GAAP, (b) landlords' and similar
Liens imposed by Law that have been incurred in the ordinary
course of business, and (c) other title defects, easements,
encroachments and encumbrances that do not, individually or i-n
the aggregate, materially impair the value or continued use of
the property to which they relate, assuming that Aptus uses such
property for commercial purposes.
"Person" means an individual, partnership, joint
venture, association, corporation, trust or any Governmental
Authority.
"Plan" shall have the meaning set forth in Section
3.21.1.
"Post-Closing Period" means any Period that begins
after the Closing Date and, with respect to any Period beginning
before and ending after the Closing Date, the portion of such
Period commencing on the day following the Closing Date.
"Purchase Price" shall have the meaning set forth in
Section 2.1.
"Rate Period" shall have the meaning set forth in the
IDB Indenture.
"Real Property" means the Owned Real Property and the
Leased Real Property.
"Real Property Lease" shall have the meaning set forth
in Section 3.9.2.
"Remarketing Agent" shall have the meaning set forth in
the IDB Indenture.
"Retained Liabilities" shall have the meaning set forth
in Section 11.1 hereto.
"Returns" means any federal, state or local tax
Returns, reports, declarations and forms with respect to Taxes.
"Savings Program" means the Westinghouse Savings
Program.
"Seller" shall have the meaning set forth in the
heading to this Agreement.
"Seller Indemnitees" shall have the meaning set forth
in Section 11.2.
63
"Seller's Employee Welfare Benefit Plan" shall have the
meaning set forth in Section 7.1.6.
"Seller's Environmental Responsibility" shall have the
meaning set forth in Section 12.1.
"Seller's Knowledge" or "to the knowledge of Seller"
shall mean the actual knowledge, after due and appropriate
inquiry of the person identified on Schedule 13.
"Seller's Plan" shall have the meaning set forth in
Section 7.1.3.
"Senior Unsecured Debentures" shall have the meaning
set forth in Section 2.1.
"Shares" means 3,000 shares of Common Stock of NEI,
constituting all of the issued and outstanding shares of capital
stock of NEI.
"Short-Period" means any Period ending on the Closing
Date.
"Subordinated Debentures" shall have the meaning set
forth in Section 2.1.
"Subsidiary" of any Person means any corporation of
which 50% or more of its shares of stock having general voting
power under ordinary circumstances to elect a majority of the
board of directors, managers, or trustees of such corporation,
irrespective of whether or not at the time, stock of any other
class or classes shall have or might have voting power by reason
of the happening of any contingency, are owned or controlled
directly or indirectly by such Person or by any other Subsidiary
of such Person.
"Tax" or "Taxes" means all income, profits, franchise,
gross receipts, capital, sales, use, withholding, value added, ad
valorem, transfer, employment, social security, disability,
occupation, property, severance, production, waste, excise and
other taxes, duties and similar governmental charges and
assessments imposed by or on behalf of any Governmental
Authority (including interest and penalties thereon).
"Tax Exemption Certificate and Agreement" shall mean
such document dated June 26, 1990 among Seller, Issuer and
Trustee.
"Tax Laws" means the Code and all other Laws relating
to Taxes.
"Tender Agent" shall have the meaning set forth in the
IDB Indenture.
"Term Period" shall have the meaning set forth in the
IDB Indenture.
"Terminating Employees" shall have the meaning set
forth in Section 7.1.1.
"Third Party Claim" shall have the meaning set forth in
Section 11.3.2.
"Third Party Environmental Claim" shall have the
meaning set forth in Section
64
12.6.
"Transition Employees" shall have the meaning set forth
in Section 7.1.1.
"Trustee" shall have the meaning set forth in the IDB
Indenture.
"Unaudited Financial Statements" shall have the meaning
set forth in Section 3.5.
"Underwriting Costs" shall mean the underwriting fees
and expenses of the Remarketing Agent in connection with the
remarketing of the IDBs at the Closing Date and at the Effective
Conversion Date, and all related underwriting costs, including,
without limitation, the fees and expenses of accountants and bond
counsel, fees and expenses in connection with the delivery of
other legal opinions or required in connection with obtaining a
rating on the IDBS, fees and expenses relating to any feasibility
study required in connection with remarketing the IDBS, fees and
expenses incurred in connection with the initial issuance of the
Letter of Credit and the initial rating agency fees, and printing
and mailing fees, but shall not include any IDB Costs.
"Undisclosed Liabilities" shall have the meaning set
forth in Section 3.6.
ARTICLE 14
MISCELLANEOUS
14.1 Severability. If any provision of this Agreement
shall be held invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this
Agreement will not be affected or impaired thereby.
14.2 Successors and Assigns. The terms and conditions
of this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Parties; provided,
however, that this Agreement may not be assigned by any Party
without the express written consent of the other Party.
14.3 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be
deemed to be an original and all of which when taken together
shall constitute the same instrument.
14.4 Headings. The headings of the Sections are
inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction
hereof.
14.5 Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the Party which
is entitled to the benefits thereof. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute
a waiver of such provision at any time in the future or a waiver
of any other provision hereof.
14.6 No Third-Party Beneficiaries. Nothing in this
Agreement shall create
65
any third-party beneficiary rights in any Person other than the
Beneficiaries.
14.7 Sales and Transfer Taxes. Seller shall pay all
sales, transfer, deed, duties, stamp, notary public and other
similar taxes, duties and transfer fees applicable to the
transactions contemplated by this Agreement, if any, including
fees to record assignments.
14.8 Other Expenses. Except as otherwise expressly
provided for herein or in any agreement entered into on the date
hereof, Seller and Buyer shall each pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement
and the transactions contemplated hereby, including fees and
expenses of its own financial consultants, accountants and legal
counsel. Costs or expenses of Seller shall be paid by Seller and
not by Aptus or from the assets of Aptus. Any and all fees,
costs and expenses for title or survey work related to any of the
Real Property shall be paid by Buyer. Any further or additional
environmental investigations, studies or analyses relating to any
of the Real Property shall be paid by Buyer.
14.9 Notices. Any notice, request, instruction,
consent or other document to be given hereunder by either party
hereto to the other party shall be in writing and delivered
personally, by nationally recognized overnight courier service,
or sent by registered or certified mail, postage prepaid, as
follows:
If to Seller:
Office of the Chairman
Westinghouse Electric Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Fax Number:
With a copy to:
Office of General Counsel
Westinghouse Electric Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Fax Number:
If to Buyer:
Office of the Vice Chairman
Xxxxxxx Environmental Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
66
With a copy to:
Xxxxx X. Xxxxxxxxxx, Esquire
Xxxxxxx Environmental Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
or at such other address for a Party as shall be specified in
writing by that Party. Any notice which is delivered personally
or by nationally recognized overnight courier service to the
addresses provided herein shall be deemed to have been duly given
to the Party to whom it is directed upon actual receipt by such
Party. Any notice which is addressed and mailed in the manner
herein provided shall be deemed given to the Party to which it is
addressed when received.
14.10 Governing Law; Interpretation. This Agreement
shall be construed in accordance with and governed by the Laws of
Pennsylvania applicable to agreements made and to be performed
wholly within the Commonwealth. Unless specifically stated,
otherwise, references to Articles, Sections, Exhibits and
Schedules refer to Articles, Sections, Exhibits and Schedules in
this Agreement. References to "includes" and "including" mean
"includes without limitation" and "including without limitation."
14.11 Public Announcements. Seller and Buyer shall
agree on the terms of the press releases to be issued upon the
execution of this Agreement and shall consult with each other
before issuing any other press releases with respect to this
Agreement and the transactions contemplated hereby, including any
termination of this Agreement for any reason.
14.12 Arbitration.
14.12.1 In the event of any dispute arising
between the parties hereto, regarding any of the terms or
provisions or breach of this Agreement, such disputes shall be
resolved by submitting same to arbitration, the results of which
shall be final and binding upon the parties and in accordance
with the Commercial Arbitration Rules of the American Association
of Arbitrators ("AAA"). Such arbitration shall be held in
Pittsburgh, Pennsylvania or Wilmington, Delaware, as determined
in the sole discretion of the arbitrators, before a three person
arbitration panel consisting of practicing attorneys familiar
with environmental law if the dispute involves environmental
issues. The arbitrators shall not reside in Pittsburgh or
Wilmington and shall be subject to the AAA's no conflict rules.
The arbitration panel shall be selected from a list of
arbitrators supplied by AAA as follows: one arbitrator by
Seller, one arbitrator by Buyer, and the third arbitrator
selected by the arbitrators appointed by Seller and Buyer:
(a) Upon the written or telexed demand for arbitration
by any of the parties hereto, Buyer and Seller shall appoint
their respective selection as arbitrator not later than ten days
following receipt of the list supplied by AAA.
(b) The two arbitrators so selected by Buyer and
Seller, shall appoint a
67
third arbitrator not later than ten (10) days thereafter and the three
man arbitration panel so constituted shall call for an arbitration hearing
not later than thirty (30) days thereafter. The period of arbitration,
from the time of the first hearing, shall not exceed ninety (90) days
unless such period be extended by the arbitrators for good cause
shown.
(c) The final decision of the arbitrators shall be a
written decision setting forth the findings of fact and
conclusions reached by the arbitrators, shall be rendered not
more than thirty (30) days following the final hearing and shall
be sent to the parties by registered mail forthwith, thereafter.
(d) The prevailing party in any such arbitration shall
be entitled to interest on amounts due and to reimbursement of
fees and expenses (including reasonable attorneys' fees) as
determined by the arbitrators.
(e) The decision of the arbitrators shall be final and
nonappealable in accordance with AAA rules, except as follows: to
the extent that either the claim for damages or the amount of
damages awarded exceeds Ten Million and 00/100 Dollars
($10,000,000.00), then the arbitrators shall be required to
include in their decision both the factual and the legal
conclusions reached in support of the decision and either party
shall be entitled to appeal the decision to a court of competent
jurisdiction based on error in the application of governing legal
principles only. In this regard, the arbitrators shall be
required to observe Section 11.6 to this Agreement (Exclusive
Remedy). The findings of fact shall remain undisturbed unless
manifestly in error. The prevailing party in any such litigation
shall be entitled to interest on amounts due and to reimbursement
of fees and expenses (including reasonable attorneys' fees) as
determined by the court. For purposes of this Section, the
parties consent to the jurisdiction of federal and state courts
within Pennsylvania and Delaware.
14.12.2 This Section, with the exception of the
last sentence of 14.1.2.1, shall not apply to disputes under
Section 7.4 (Non-Competition). In addition, any disputes brought
under the Indentures governing the Senior Unsecured Debentures or
the Subordinated Debentures shall be governed by such Indentures
and not by this Section.
14.13 Financial Projections. Buyer and Seller may
have shared with each other certain financial projections
relating to their respective businesses or the combined business
of Buyer and Aptus post Closing. Buyer and Seller acknowledge
that such financial projections should not be relied upon as
accurate or reliable since they are based on various estimates
and assumptions that may be unwarranted or speculative.
Accordingly, neither Party shall have any liability to the other
based on the sharing of such financial projections.
14.14 Confidentiality. The terms of the
Confidentiality Agreement shall be extended for a period of five
(5) years post Closing. Without limiting the generality of the
foregoing, the terms of the Confidentiality Agreement shall
extend to the Parties ongoing business and contractual
relationships under this Agreement as long as such relationships
continue (whether or not beyond the five (5) year period),
including without limitation Section 5.9 (Right to Seller
Business Post Closing), Section 5.10 (Right to Seller
Intellectual Property Post Closing), and Articles 11 and 12
(relating to Indemnification Post Closing).
68
14.15 Entire Agreement; Amendment. This Agreement,
the Confidentiality Agreement and the other written agreements,
if any, entered into on the date hereof constitute the sole
understanding of the Parties with respect to the matters
contemplated hereby and thereby and supersede all prior
agreements and understandings, including the Letter of Intent,
between the Parties with respect to such matters. No amendment,
modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing
and duly executed by the Party against whom it would apply.
14.16 Further Assurances. At any time and from time
to time prior to and after the Closing Date, each party shall, at
the reasonable request of the other, execute and deliver any
further instruments or documents and take all such further action
as such party may reasonably request in order to consummate more
effectively the transactions contemplated by this Agreement.
14.17 Exclusive Jurisdiction and Consent to Service of
Process. Subject to Section 14.12, the Parties agree that any
legal action, suit or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby, shall be
instituted in a Federal or state court sitting in either
Pennsylvania or Delaware. Such courts shall be the exclusive
jurisdiction and venue of said legal proceedings and each Party
hereto waives any objection which such party may now or hereafter
have to the laying of venue of any such action, suit or
proceeding, and irrevocably submits to the jurisdiction of any
such court in any such action, suit or proceeding. Any and all
service of process and any other notice in any such action, suit
or proceeding shall be effective against such Party when
transmitted in accordance with this Agreement. Nothing contained
herein shall be deemed to affect the right of any Party hereto to
serve process in any manner permitted by law.
IN WITNESS WHEREOF, the Parties have executed this
Agreement as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------
Title: EVP, Chief Financial Officer
XXXXXXX ENVIRONMENTAL
SERVICES, INC.
By: /s/ Xxxxxxxx Xxxxxx
---------------------------------
Title: President
69
LIST OF SCHEDULES / EXHIBITS
SCHEDULES DESCRIPTION
2.3.1 Final Adjusted Net Worth Calculation
3.1.1 Foreign Jurisdiction Qualifications
3.1.3 Corporate History
3.4 Charter and By-laws of NEI and Aptus
3.5 Financial Statements
3.7 Absence of Certain Changes
3.8 No Conflict; Seller Consents
3.9.1 Owned Real Property / Liens
3.9.2 Leased Real Property
3.10.1 Owned Personal Property
3.10.2 Leased Personal Property
3.10.3.1 MIS Equipment
3.10.3.2 MIS Software
3.12.2 Insurance
3.13 Material Contracts
3.14 Inventory
3.15 Accounts Receivable
3.16 Litigation
3.17.1 Compliance with Laws
3.17.2 Permits
3.18.1 Environmental Matters - Notices
3.18.2 Environmental Matters - Violations, Releases, USTs
3.18.3 Environmental Matters - Inspections
3.18.4 Environmental Matters - Disposal Sites
3.19 Intellectual Property
3.20.1 Employees
3.20.2 Collective Bargaining
3.20.3 Employee and Consulting Contracts
3.20.4 NLRB Notices/Complaints
3.21.1 Employee Benefit Plans
SCHEDULES DESCRIPTION
3.21.3 Actions Pending With Respect to Employee
Benefit Plans
3.21.5 ERISA Plans
3.21.6 Acceleration of Benefits
3.22.2 Tax Extensions
3.22.3 Affiliated Tax Groups
3.22.4 Tax Audits
3.23 Brokers
3.26 Bank Accounts
3.27 Certain Relationships
7.1.1.3 Summary of Benefits of Buyer
7.4 Exceptions to Non-Competition Covenant
9.2.11 Aptus Officers and Directors
12.3 Certain Identified Environmental Concerns
13 Certain Senior Management
EXHIBITS
2.1 (c) Senior Unsecured Debentures
2.1 (d) Subordinated Convertible Debentures
2.2.2 Debenture Purchase Agreement
2.2.3 Assignment and Assumption Agreement (IDB)
5.11.3 (1) Services Agreement - MIS Services Post Closing
5.11.3 (2) Services Agreement - Telecommunications
Services Post Closing
9.2.10 Opinion to Buyer from Counsel to Seller
9.2.12 Patent Assignment
9.2.15 Assignments of Software License Agreement (CORE)
9.3.9 Opinion to Seller from Counsel to Buyer
SCHEDULE 2.3.1
Net worth shall include: (1) total assets, comprising current
assets net of valuation reserves, property, plant and equipment
net of accumulated depreciation, goodwill net of accumulated
amortization and other assets, less (2) total liabilities
comprising current liabilities, deferred income taxes, long-term
portion of capital lease obligations, post employment benefits
reserve, plant closure reserve and other long-term liabilities
excluding any indebtedness or amounts owing from NEI or Aptus to
seller or any affiliate of seller.
For purposes of calculating the December 1994 Adjusted Net Worth
and the Final Adjusted Net Worth, net worth as of December 31,
1994 financial statements and as of the closing date balance
sheet shall both be adjusted to reflect the exclusion of
following liabilities and reserve accounts:
1.) Reserve for Ground Water Remediation
2.) Accrued Medical Costs
3.) Post Employment Benefits
4.) Notes Payable
5.) Restructuring Reserve
6.) Deferred Income Taxes and Deferred Tax Liabilities
7.) Drixin Discount Accrual
8.) Bonus Accrual
9.) Consent Agreement
10.) Plant Closure Reserve
Page 1 of 2
SCHEDULE 3.9.2
(BUYER'S SUPPLEMENT TO SCHEDULE 3.9.2 AS REQUIRED BY SECTION
5.15)
Real property leases at:
Pittsburgh
Houston
Littleton
SCHEDULE 12.3
CERTAIN IDENTIFIED ENVIRONMENTAL CONCERNS
Coffeyville
- Aircraft engine cleaning area
- Halliburton soil pile
- Residuals management building
SCHEDULE 13
CERTAIN SENIOR MANAGEMENT
Xx Xxxxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxx
Xxxx Xxx
Xxxxx Xxxxxxxxx
Xxx Xxxxxx
Xxx Xxxxxxxxx
Xxxx Xxxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxxxx
EXHIBIT 5.11.3 (1)
SERVICES AGREEMENT - MIS SERVICES POST CLOSING
ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN WESTINGHOUSE ELECTRIC CORPORATION
AND XXXXXXX ENVIRONMENTAL SERVICES, INC.
This Administrative Services Agreement ("Services Agreement")is
entered into as of this 31st day of March, 1995 by and between
WESTINGHOUSE ELECTRIC CORPORATION, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania ("WEC")
and XXXXXXX ENVIRONMENTAL SERVICES, INC., a corporation organized
and existing under the laws of the State of Delaware ("BUYER").
BUYER and WEC are sometimes hereinafter collectively referred to
as the "Parties."
W I T N E S S E T H:
WHEREAS, BUYER is purchasing the stock of NATIONAL ELECTRIC,
INC. ("NEI") pursuant to a Stock Purchase Agreement dated as of
the 7th day of March, 1995 ("Agreement"); and
WHEREAS, pursuant to Section 5.11 to the Agreement, BUYER is
interested in purchasing certain services from WEC during a
transition period from the date hereof;
NOW, THEREFORE, the Parties, intending to become legally bound,
hereby agree as follows:
SECTION 1.
DEFINITIONS
For the purposes of this Services Agreement, the following
terms shall have the definitions hereinafter specified:
1.1 "Agreement" shall mean the Stock Purchase Agreement entered
into as of the 7th day of March, 1995 by and between WEC and
BUYER.
1.2 "BUYER" shall mean XXXXXXX ENVIRONMENTAL SERVICES, INC.
1.3 "Parties" shall mean WEC and BUYER, collectively.
1.4 "Premises" shall mean the locations of the Business listed
on Schedule D where the Services shall be rendered hereunder.
1.5 "Service" or "Services" shall mean those services described
on Schedules A, B and C attached hereto to be provided on a
temporary basis.
1.6 "Services Agreement" shall mean this contract between the
Parties and all exhibits hereto.
1.7 "WEC" shall mean Westinghouse Electric Corporation.
1.8 "NEI" shall refer to NEI and the business conducted by its
wholly-owned subsidiary, Aptus, Inc.
Except as otherwise defined in this Section 1, all terms, the
first letters of which are capitalized, shall have the meanings
assigned to them in the Agreement.
SECTION 2
AGREEMENT TO SELL AND BUY
2.1 Provision of Services: WEC shall sell to Buyer, and BUYER
shall purchase from WEC, the Services listed and described, for
the periods of time and at the prices set forth, with respect to each
such Service, on Schedule A hereto. In every case, all of the
aforesaid Services shall be provided in accordance with the
terms, limitations and conditions hereinafter set forth.
SECTION 3
SERVICES; PAYMENT; INDEPENDENT CONTRACTOR
3.1 Services to be Provided. Unless otherwise agreed by the
Parties, the Services shall be performed by WEC for BUYER in a
manner that is substantially the same as the manner in which such
Services were performed by WEC for NEI immediately prior to the
date of this Services Agreement and BUYER shall use such Services
for substantially the same purposes and in substantially the same
manner as NEI had used such Services prior to the date hereof.
WEC shall act under this Services Agreement solely as an independent
contractor and not as an agent of BUYER.
3.2 Payment.
(a) Statements will be rendered each month by WEC to BUYER
for Services delivered during the preceding month, and each such
statement shall be payable net thirty (30) days after the date
thereof. Statements not paid within such 30-day period shall be
subject to late charges for each month the statement is overdue,
calculated as the greater of the following:
(i) in the event WEC is entitled to a late charge by virtue of
its provision to BUYER of such Service, said late charge,
or
(ii) the then current prime rate offered by Mellon Bank, N.A.
of Pittsburgh, Pennsylvania, plus one percentage point.
In either event, the late charge shall be calculated to a rate no
higher than that allowed by applicable law.
3.3 Disclaimer of Warranty. EXCEPT AS PROVIDED FOR HEREIN, THE
SERVICES AND GOODS TO BE PURCHASED UNDER THIS SERVICES AGREEMENT
ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. WEC DOES
NOT MAKE ANY WARRANTY THAT ANY SERVICE COMPLIES WITH ANY LAW,
DOMESTIC OR FOREIGN.
SECTION 4
TERM
The term is as set forth in the Agreement.
SECTION 5
FORCE MAJEURE
WEC shall not be liable for any interruption of Service, delay
or failure to perform under this Services Agreement when such
interruption, delay or failure results from causes beyond its
reasonable control or from any act or failure to act of the BUYER
or any governmental authority, or as the result of strikes, lock-
outs or other labor difficulties; riot, insurrection or other
hostilities; embargo, fuel or energy shortage, fire, flood, acts
of God, wrecks or transportation delays; or inability to obtain
necessary labor, materials or utilities from usual sources. In
such event, WEC's obligations hereunder shall be postponed for
such time as its performance is suspended or delayed on account thereof.
WEC will use reasonable efforts to promptly notify BUYER, either
orally or in writing, upon learning of the occurrence of such
event of force majeure. Upon the cessation of the force majeure event,
WEC will use reasonable efforts to resume its performance with
the least possible delay.
SECTION 6
INJURY TO PERSONS OR PROPERTY
6.1 Consequential and Other Damages. WEC shall not be liable,
whether in contract, in tort (including negligence and strict
liability), or otherwise, for any special, indirect, incidental
or consequential damages whatsoever, including, but not limited to,
loss of profits or revenue, loss of use of equipment or facilities,
business interruptions, costs of capital and claims of customers
which in any way arise out of, relate to, or are a consequence
of, its performance or nonperformance hereunder, or the provision of
or failure to provide any Service hereunder.
6.2 Limitation of Liability. In any event, the liability of
WEC with respect to this Services Agreement or anything done in
connection herewith, including but not limited to the performance
or breach hereof, or from the sale, delivery, provision or use of
any Service or product provided under or covered by this Services
Agreement, whether in contract, tort (including negligence or
strict liability) or otherwise, shall not exceed the monthly
price of the Service, or the price of the product., whichever is
applicable, from which such liability flows; provided that WEC
uses reasonable efforts to meet its obligations hereunder.
SECTION 7
TERMINATION
7.1 Breach of Services Agreement. If either party shall cause
or suffer to exist any breach of any of its obligations under
this Services Agreement, including but not limited to any failure to
make payments when due, and said party does not cure such default
within thirty (30) days after receiving written notice thereof
from the non-breaching party, the non-breaching party may terminate
this Services Agreement, including the provision of Services pursuant
hereto, immediately by providing written notice of termination.
7.2 Sums Due. In the event of a termination of this Services
Agreement, WEC shall be entitled to all outstanding amounts due
from the BUYER up to the date of termination under Sections 3 and
4 hereof.
SECTION 8
MISCELLANEOUS
8.1 Ingress and Egress. WEC shall at all times during the
continuance of this Services Agreement have the right of ingress
to and egress from the Premises for any purposes connected with the
delivery of Services hereunder or the exercise of any right under
this Services Agreement or the performance of any obligations
required by this Services Agreement.
8.2 Integration. This Services Agreement embodies the entire
understanding of the Parties with respect to the subject matter
hereof and, with the exception of the Agreement (and the
transactions contemplated thereby), there are no further agreements
or understandings, written or oral, between the Parties with
respect thereto. This Services Agreement supersedes all previous
negotiations, discussions and commitments with respect to the
subject matter hereof. The Parties agree that the terms of this
Services Agreement shall have priority and control over the terms
of any order form, invoice or other document which relates to this
Services Agreement or the Services unless said document is signed
by both Parties, refers to this Services Agreement and
unambiguously indicates that it is an amendment of this Services
Agreement.
8.3 Buyer's Obligation to Cooperate. WEC's obligations under
this Services Agreement are conditioned upon Buyer's obligation to
provide WEC with all information and service WEC deems necessary
in order to provide the services, including but not limited to, the
provision by Buyer of operating procedures that Buyer will
utilize for any service provided under this Services Agreement.
8.4 Miscellaneous. The following provisions of the Agreement
are incorporated herein by reference:
14.1 Severability
14.2 Successors and Assigns
14.3 Counterparts
14.4 Headings
14.5 Waiver
14.6 No Third Party Beneficiaries
14.9 Notices
14.10 Governing Law; Interpretation
14.12 Arbitration
IN WITNESS WHEREOF, the Parties have executed this Services
Agreement as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION
By
Its
XXXXXXX ENVIRONMENTAL SERVICES, INC.
By
Its
EXHIBIT 9.2.15
ASSIGNMENT OF
SOFTWARE LICENSE AGREEMENT
This Assignment entered into this 31st day of March, 1995
between and among Westinghouse Electric Corporation
("Westinghouse"), Xxxxxxx Environmental Services, Inc. ("Xxxxxxx"),
and Aptus, Inc. ("Aptus")
WHEREAS, Xxxxxxx and Westinghouse have entered into a Stock
Purchase Agreement dated March 7, 1995 (the "Purchase Agreement")
pursuant to which Xxxxxxx is to acquire all of the outstanding
stock of National Electric, Inc., which in turn owns all of the
outstanding stock of Aptus; and
WHEREAS, Westinghouse and Aptus have entered into a
Software License Agreement dated the 3rd day of October, 1994 (the
"License Agreement") relating to the Westinghouse "CORE System"
(as defined in the License Agreement);
NOW THEREFORE, in consideration of the covenants and
premises contained herein and in the Purchase Agreement, the
parties agree as follows:
1. Aptus hereby assigns all of its right, title and
interest in and to the License Agreement to Xxxxxxx.
2. Xxxxxxx hereby agrees to assume all of the obligations
under the License Agreement. Without limiting the foregoing,
Xxxxxxx agrees that Revisions, Modifications and Enhancements (as
defined in the License Agreement) made by Aptus or Xxxxxxx after
the date of execution of the License Agreement will not be sold
or licensed to third parties.
3. The license grant under Section 2 to the License
Agreement shall extend to Xxxxxxx and any of its Affiliates (as
defined in the Purchase Agreement).
4. Section 14 to the License Agreement shall be revised
so that both references to "within ninety (90) days of the date of
execution of this Agreement" shall read "within ninety (90) days
of the date of execution of the Purchase Agreement."
5. The training and maintenance responsibilities under
Section 5 to the License Agreement and the provision of updates
under Section 14 to the License Agreement shall be modified by the
MIS Services Agreement attached to and executed pursuant to the
Purchase Agreement, but only for the term of the MIS Services
Agreement.
6. Westinghouse hereby consents to the terms of this
Assignment.
Executed by the parties' duly authorized representatives
as of the date first above written.
Westinghouse Electric Corporation
By:
Xxxxxxx Environmental Services, Inc.
By:
Aptus, Inc.
By:
EXHIBIT 9.2.10
OPINION TO BUYER FROM COUNSEL TO SELLER
Xxxxxxx Environmental Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
I am Counsel of Westinghouse Electric Corporation, a
Pennsylvania corporation ("Seller") and have acted in such capacity
in connection with the execution and delivery of a Stock Purchase
Agreement dated as of March 7, 1995 ("Agreement") between
Westinghouse Electric Corporation and Xxxxxxx Environmental
Services, Inc., a Delaware corporation ("Buyer") in connection
with the acquisition of the stock of National Electric, Inc., a
Minnesota corporation ("NEI") and the business of Aptus, Inc., a
Delaware corporation ("Aptus"), and the Debenture Purchase
Agreement between Westinghouse and Xxxxxxx dated as of
, 1995 ("Debenture Agreement").
Capitalized terms used herein and not otherwise defined herein
have the respective meanings given in the Agreement.
In so acting, I or members of my staff have participated in the
preparation of the Agreement.
I or members of my staff have examined and relied upon the
representations and warranties as to factual matters contained in
or made pursuant to the Agreement and have examined and relied
upon originals or copies, certified or otherwise identified to my
satisfaction, of such other agreements, instruments, certificates
of public officials, certificates of offices or other
representatives of Westinghouse and others, and such other
documents, certificates, corporate or other records,
authorizations, proceedings and other instruments, and have made
such additional examinations and conducted such other
investigations of fact and laws, as I have deemed necessary or
appropriate for the purposes of rendering the opinions expressed
below. I have assumed the genuineness of all signatures of, and
the authority of, persons signing the Agreement on behalf of
parties thereto other than Westinghouse, and the authenticity of
all documents submitted to me as originals, the conformity to
original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such
copies.
This Opinion Letter is governed by and shall be interpreted in
accordance with the Legal Opinion Accord ("Accord") of the ABA
Section of Business Law (1991).
Based upon the foregoing, I am of the opinion that:
1. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Pennsylvania. Seller has all requisite corporate power and
authority to enter into the Agreement and the Debenture Agreement
and to carry out its obligations thereunder.
2. NEI's authorized capital stock consists solely of
shares of common stock, all of which are presently issued and
outstanding. All NEI Shares have been duly authorized, validly
issued and fully paid and non-assessable. There are no outstanding
options, warrants, rights, agreements, calls, relating to the
unissued stock of NEI and no securities convertible into or
exchangeable for any NEI stock. Seller is the record owner of
all of the issued and outstanding capital stock of NEI.
3. Aptus' authorized capital stock consists solely of
shares of common stock, all of which are presently
issued and outstanding. All Aptus Shares have been duly
authorized, validly issued and fully paid and non-assessable.
There are no outstanding options, warrants, rights, agreements,
calls, relating to the unissued stock of Aptus and no securities
convertible into or exchangeable for any Aptus stock. NEI is the
record owner of all of the issued and outstanding capital stock
of Aptus.
4. NEI is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Minnesota.
Aptus is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. NEI and
Aptus each has all requisite corporate power and authority to
own, lease, occupy or otherwise hold the property and rights now
owned, leased, occupied or otherwise held by it and to carry on its
business as presently conducted. NEI and Aptus are duly authorized
to do business in all jurisdictions wherein the character of the
properties owned or leased or the nature of activities conducted
by either of them makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not have
a Material Adverse Effect.
5. The Agreement and the Debenture Agreement have been duly
authorized, executed and delivered by the Seller and constitutes
the legal, valid and binding obligation of the Seller enforceable
in accordance with their terms, except (a) that such enforceability
may be subject to bankruptcy, insolvency, reorganization,
moratorium or other laws, decisions or equitable principles now
or hereafter in effect relating to or affecting the enforcement of
creditors' rights or debtors' obligations generally, and (b)
general principles of equity including the remedy of specific
performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
6. The execution and delivery of the Agreement and the
Debenture Agreement do not, and the consummation of the
transactions contemplated by the Agreement and the Debenture
Agreement and the compliance with the terms, conditions and
provisions of the Agreement and the Debenture Agreement by the
Seller, will not (a) contravene any provision of the articles of
incorporation or bylaws of Seller, NEI or Aptus; or (b) conflict
with or result in a breach of or constitute a default (or an
event which might, with the passage of time or the giving of notice or
both, constitute a default) under, under any indenture, mortgage,
loan or credit agreement, license, contract or any other agreement
or commitment to which Aptus or NEI is a party or by which either
of them or any of their assets may be bound or affected and which
is known to me after due inquiry, or any judgment or order of any
court or governmental department, commission, board, agency or
instrumentality, domestic or foreign, which is known to me after
due inquiry, or any applicable law, rule or regulation except in
the case of clause (b) for violations and defaults that will not
have a result in a Material Adverse Effect or will not materially
impair the ability of Seller to perform its obligations under the
Agreement.
7. To the best of my knowledge, except as scheduled in the
Agreement, there are no actions, suits, investigations or
proceedings pending or threatened against or affecting NEI or
Aptus or any of their assets or affecting the NEI Shares or any of
Seller's rights thereto, at law or in equity, by or before any
court or governmental department, agency or instrumentality. To
the best of my knowledge, except as scheduled in the Agreement,
there are presently no outstanding judgments, decrees or orders
of any court or any governmental or administrative agency against or
affecting NEI or Aptus, or any of its assets or businesses or
affecting the NEI and Aptus Shares or any of the Seller's rights
thereto.
8. The waiting period under HSR Act with respect to the
transaction contemplated by the Agreement has been terminated.
No consent, approval or authorization of, or registration or filing
with any governmental authority or other regulatory agency, is
required in connection with the execution and delivery of the
Agreement or the consummation of the transactions contemplated
thereby, except such as have been made or obtained except where
the failure to make or obtain such governmental or regulatory agency
consent individually or in the aggregate will not result in a
Material Adverse Effect or materially impair the ability of
Seller to perform its obligations under the Agreement.
I am licensed to practice law only in the Commonwealth of
Pennsylvania, and accordingly, the foregoing opinion is based on
and is limited to the present law of the Commonwealth of
Pennsylvania and the present federal law of the United States of
America, and I express no opinion with respect to the law of any
other jurisdiction.
This opinion is for the sole benefit of the addressee and may
not be relied upon by any other person other than the addressee
without the express prior written consent of the undersigned.
The opinions expressed herein are as of the date hereof and I make no
undertaking to amend or supplement such opinions if facts come to
my attention or changes in the present law of the jurisdictions
mentioned herein occur which could affect such opinions.
The opinions expressed herein are based on states of facts and
law as they exist on the date hereof.
Nothing contained herein shall create any obligation or right
to look to me individually for any claim, liability, damage, loss or
expense whatsoever whether arising in contract, in tort (including
negligence and strict liability) or otherwise in connection with
this opinion, or otherwise in connection with the transactions
contemplated therein.
Sincerely,
EXHIBIT 9.3.9
OPINION TO SELLER FROM COUNSEL TO BUYER
March 31, 1995
Westinghouse Electric Corporation
Westinghouse Building
0 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
RE: Acquisition of National Electric, Inc.
Ladies and Gentlemen:
I am Counsel of Xxxxxxx Environmental Services, Inc. ("Buyer").
I have acted as counsel to Buyer in connection with its acquisition
of National Electric, Inc. pursuant to a Stock Purchase Agreement
between Buyer and Westinghouse Electric Corporation entered into
on the 7th of March, 1995 (the "Agreement"); Buyer's issuance of the
Senior Unsecured Debentures dated to
Westinghouse ("Senior Debentures") and the Subordinated Convertible
Debentures issued to Westinghouse and dated
("Convertible Debentures"); and the obligations under the
Debenture Purchase Agreement between Buyer and Westinghouse dated
("Debenture Agreement"). The Senior
Debentures, Convertible Debentures and Debenture Agreement are
herein after referred to as the Collateral Agreements.
In so acting, I have considered such matters of law and of
fact, and relied upon such certificates and other information furnished
to me, as I have deemed appropriate as a basis for the opinions
set forth below.
This Opinion Letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the
ABA Section of Business Law (1991).
Based upon the foregoing, I am of the opinion that:
1. Buyer is a corporation duly organized validly existing and
in good standing under the laws of the State of Delaware. Buyer
has all requisite corporate power and authority to enter into the
Agreement and the Collateral Agreements and to carry out its
obligations thereunder.
2. The Agreement and the Collateral Agreements have been duly
authorized, executed and delivered by the Buyer and constitute
the legal, valid and binding obligations of Buyer enforceable in
accordance with their terms, except (a) that such enforceability
may be subject to bankruptcy, insolvency, reorganization,
moratorium or other laws, decisions or equitable principles now
or hereafter in effect relating to or affecting the enforcement of
creditors' rights or debtors' obligations generally, and (b)
general principles of equity including the remedy of specific
performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
3. The execution and deliver of the Agreement and the
Collateral Agreements do not, and the consummation of the
transactions contemplated by the Agreement and the Collateral
Agreements and the compliance with the terms, conditions and
provisions of the Agreement and the Collateral Agreement by the
Buyer, will not (a) contravene any provision of the articles of
incorporation or by-laws of the Buyer; or (b) conflict with or
result in a breach of or constitute a default (or an event which
might, with the passage of time or the giving of notice or both,
constitute a default) under any indenture, mortgage, loan or
credit agreement, license, contract or any other agreement or commitment
to which the Buyer is a party or any other agreement or
commitment to which the Buyer is a party or by which its assets may be bound
or affected and which is known to me after due inquiry, or any
judgment or order of any court or governmental department,
commission, board, agency or instrumentality, domestic or
foreign, which is known to me after due inquiry, or any applicable law,
rule or regulation except in the case of clause (b) for violations and
defaults that will not have or result in a Material Adverse Effect
or will not materially impair the ability of Buyer to perform its
obligations under the Agreement and the Collateral Agreements.
4. To the best of my knowledge, after due inquiry, there are
no actions, suits, investigations or proceedings pending or
threatened against or affecting the Buyer or any of its assets at
law or in equity, by or before any court or governmental
department, agency or instrumentality affecting, challenging or
contesting Buyer's execution and performance of the Agreement or
the Collateral Agreements.
5. The waiting period under HSR Act with respect to the
transaction contemplated by the Agreement has been terminated.
No consent, approval or authorization of, or registration or filing
with any governmental authority or other regulatory agency, is
required in connection with the Buyer's execution and delivery of
the Agreement or the Collateral Agreements or the consummation of
the transactions contemplated thereby, except such as have been
made or obtained except where the failure to make or obtain such
governmental or regulatory agency consent individually or in the
aggregate will not result in a Material Adverse Effect or
materially impair the ability of Buyer to perform its obligations
under the Agreement or the Collateral Agreements.
I am licensed to practice law only in the Commonwealth of
Pennsylvania, and accordingly, the foregoing opinion is based on
and is limited to the present law of the Commonwealth of
Pennsylvania and the present federal law of the United States of
America, and I express no opinion with respect to the law of any
other jurisdiction.
This opinion is for the sole benefit of the addressee and may
not be relied upon by any other person other than the addressee
without the express prior written consent of the undersigned.
The opinions expressed herein are as of the date hereof and I make no
undertaking to amend or supplement such opinions if facts come to
my attention or changes in the present law of the jurisdictions
mentioned herein occur which could affect such opinions.
The opinions expressed herein are based on states of facts and
law as they exist on the date hereof.
Nothing contained herein shall create any obligation or right
to look to me individually for any claim, liability, damage, loss or
expense whatsoever whether arising in contract, in tort (including
negligence and strict liability) or otherwise in connection with
this opinion, or otherwise in connection with the transactions
contemplated therein.
Very truly yours,
Xxxxx X. Xxxxxxxxxx
Assistant Secretary
