Exhibit 2.3
Asset Purchase Agreement For the Purchase of Assets
Of
Miners Oil Company, Inc.
Miners Oil Company, Inc.
Asset Purchase Agreement
PHOENIX WASTE SERVICES COMPANY, INC.
Buyer
- and -
MINERS OIL COMPANY, INC.
Seller
Dated: JULY 13, 2001
TABLE OF CONTENTS
1. Sale of Assets 2
2. Purchase Price 3
3. Payment of Purchase Price 3
4. Representations and Warranties of the Seller 5
5. Representations and Warranties of the Buyer 12
6. Covenants of the Seller 12
7. Covenants of the Buyer 15
8. Mutual Covenants of the Parties 15
9. Conditions Precedent 16
10. The Closing 17
11. Survival of Representations, Warranties and Covenants 19
12. Indemnification 19
13. Brokers 22
14. Notices 22
15. Entire Agreement 22
16. Successors and Assigns 23
17. Paragraph Headings 23
18. Expenses 23
19. Further Assurances 23
20. Termination of Agreement 23
21. Applicable Law 23
22. Counterparts 24
23. Severability 24
24. Variations in Pronouns 24
25. Waiver 24
26. Further Covenants and Agreements 24
SCHEDULE 1(a) 27
SCHEDULE 1(b) 28
SCHEDULE 1(c) 29
SCHEDULE 1(e) 30
SCHEDULE 1(f) 31
SCHEDULE 1(g)-1 32
SCHEDULE 1(g)-2 33
SCHEDULE 1(g)-3 34
SCHEDULE 1(g)-4 35
SCHEDULE 4(c) 36
SCHEDULE 4(e) 37
SCHEDULE 4(g) 38
SCHEDULE 4(i) 40
SCHEDULE 4(j) 41
SCHEDULE 4(l) 42
SCHEDULE 4(m) 43
SCHEDULE 6(b 44
SCHEDULE 6(f) 45
SCHEDULE 8(a) 46
SCHEDULE 10(a)(i) 47
SCHEDULE 10(a)(ii) 48
SCHEDULE 10(a)(iii) 49
SCHEDULE 10(b)(ii) 50
SCHEDULE 10(b)(ii) 51
SCHEDULE 10(b)(iv) 52
Miners Oil Company, Inc.
Asset Purchase Agreement
This Asset Purchase Agreement (Agreement) is made and entered into on
this 13th day of July, 2001, by and between PHOENIX WASTE SERVICES COMPANY,
INC., a Delaware corporation, with its principal offices located at 00 Xxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxx Xxxxxx 00000, (Company), on behalf of a
corporation to be formed by Company in the State of Delawares named MINERS OIL
COMPANY, INC. (Buyer), and MINERS OIL COMPANY, INC., the legal owner of all of
the assets of MINERS OIL COMPANY, INC., with its principal offices located at
Xxxxx 000 xxx Xxxxxxxxxx 00, Xxxxxxx, Xxxxxxxxxxxx, 00000 (Seller).
BE IT RESOLVED AS FOLLOWS:
WHEREAS, Seller operates an oil and fuel transporting and supply
business from the above named location, (the Business); and
WHEREAS, Seller owns contracts with respect to the Business,
and improved land in Pennsylvania; and
WHEREAS, Seller owns certain motorized hauling equipment, leasehold
interest(s), accounts receivables, cash on hand, a trade name, sundry office
equipment, written and non-written intellectual property, contracts, operating
permits and licenses, employment contracts and goodwill; and
WHEREAS, Seller desires to sell, and deliver to Buyer, and Buyer
desires to purchase from Seller, all of the assets of Seller;
WHEREAS, pursuant to that certain Miners Fuel Company, Inc. Stock
Purchase Agreement of even date, a copy of which is attached hereto as Exhibit
1, Buyer is purchasing from Sellers, as are defined in Exhibit 1, all of the
outstanding stock of Miners Fuel Company, Inc. (Waste Company); and
WHEREAS, pursuant to that certain Miners Environmental, Inc. Stock
Purchase Agreement of even date, a copy of which is attached hereto as Exhibit
2, Buyer is purchasing from Sellers, as are defined in Exhibit 2, all of the
outstanding stock of Miners Environmental Company, Inc. (Environmental Company);
and
WHEREAS, Seller, the Environmental Company and the Waste Company, shall
hereinafter be collectively referred to in this Agreement as the Miners
Entities; and
WHEREAS, this Agreement, Exhibit 1 and Exhibit 2, shall be collectively
referred to herein as The Agreements, and
WHEREAS, the Closing Date for each of The Agreements shall be the same
date and is further discussed below at (paragraph) 10.
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein, the parties agree as follows:
1. Sale of Assets: Upon the terms and subject to the conditions as set
forth in this Agreement, the Seller hereby agrees to transfer to the Buyer and
the Buyer hereby agrees to purchase from the Seller, on the Closing Date, all of
the right, title and interest of the Seller in and to all of the properties,
assets and business of the Seller of every kind or description, tangible and
intangible, personal or mixed, and wherever located, as the same shall exist on
the Closing Date of the Seller (the Assets), and all obligations, liabilities,
judgments, liens, claims, prior assignments, mortgages, security interests,
pledges, transfer restrictions, charges, and encumbrances whatsoever of the
Seller known or unknown, fixed or contingent (collectively Liabilities);
provided, however, that all such Liabilities have been properly disclosed
pursuant to the terms hereof; except the life insurance policies on Xxxxx Xxxxx
and Xxxxxxx X. Xxxxxx are excluded from the Assets. The Assets shall
specifically include:
(a) All inventory, equipment and supplies on the Closing Date
(the Inventory). A complete list of the same is annexed hereto as Schedule
1(a);
(b) All customer contracts or orders (as set forth on Schedule
1(b) annexed hereto) that have not been fully performed by the Closing Date
(Service Orders);
(c) The Seller's goodwill and going concern value and similar
intangible assets and its customer lists, contacts and account information
(Information), as are set forth on Schedule 1(c);
(d) The name MINERS OIL Company, INC. and the corporate and
alternative names of the Seller, and all of its Business telephone numbers and
any and all logos, trade names, trademarks and registrations and applications
therefor;
(e) All of the Seller's contracts with its suppliers and
others with whom it is doing business, as are set forth on Schedule 1(e);
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(f) All of the motor vehicles and motorized equipment used by
the Seller in the Business. A complete list is of the same is annexed hereto as
Schedule 1(f); and
(g) All of Seller's ownership interests and leasehold interest
in and to the real property from which the Business is operated, hereinafter
referred to as the Real Property. A description of the ownership interests is
attached hereto as Schedule 1(g)-1 and a true, accurate and complete copy of
Seller's deeds for such real property is attached hereto as Schedule 1(g)-2. A
description of sellers leasehold interests is attached hereto as Schedule 1(g)-3
and a true, accurate and complete copy of Seller's lease(s) for such real
property is attached hereto as Schedule 1(g)-4.
2. Purchase Price: The amount to be paid by the Buyer to the Seller for
the Assets (the Purchase Price), shall be the net book value of the Oil Company
as of Closing Date, and is set out below. The Purchase Price is allocated among
the Assets, less the Liabilities, in the following manner, which the parties
agree fairly represents the fair market value of the Assets:
Inventory $206,166.00
Accounts Receivable $1,621,937.00
Cash $253,653.00
Land, Buildings & Equipment $1,026,374.00
Prepaid Expenses $68,151.00
-------------
$3,176,281.00
Liabilities ($1,962,720.00)
=============
Purchase Price $1,213,561.00
3. Payment of Purchase Price: At the Closing, as is defined below at
(paragraph) 10, Buyer shall deliver to Sellers, by wire transfer or by bank,
cashier's or certified check made payable to the order of Seller, the full
amount of the Purchase Price.
(a) Payment of the Deferred Amount: Buyer shall pay to all of
the Sellers named in The Agreements collectively, not individually, and
according to the allocations contained below (paragraph) 3(b), up to TWO (2)
additional payments not to exceed THREE HUNDRED THOUSAND DOLLARS ($300,000)
each, and the total thereof, therefore, not to exceed SIX HUNDRED THOUSAND
DOLLARS ($600,000) (the Deferred Amount), each payment to be made on the first
and
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second anniversary of the Closing Date, said payments conditioned upon the
Miners Entities collectively achieving an annual (EBITDA) of FOUR MILLION
DOLLARS ($4,000,000) in each or either of fiscal years 2001 and 2002, as same is
adjusted for inter-company charges. The Deferred Amount earned shall bear simple
interest at EIGHT PERCENT (8%) per annum from the Closing Date until paid.
Payments pursuant to this (paragraph) 3(a) shall include the Deferred Amount
due, plus accrued interest.
(b) Allocation of the Deferred Amount Payments Among Sellers:
For each of the up to TWO (2) payments of the Deferred Amount, the Sellers named
in The Agreements shall receive the following percentages of Deferred Amount
earned, with accrued interest thereon:
(i) Xxxxxxx Xxxxxx - 50%;
(ii) Xxxxx Xxxxxx - 20%;
(iii) Xxxxx Xxxxxx - 20%;
(iv) Xxxxxxx Xxxxxxxx - 10%;
(v) The Oil Company - 0%;
(c) Notices to Sellers Concerning the Deferred Amount: For
purposes of this (paragraph) 3, all notices to Sellers with respect to any
determinations by Buyer of the EBITDA, the Deferred Amount, or with respect to
any issue reasonably relevant to either determinations of the EBITDA or the
Deferred Amount, shall be deemed properly given, if supplied to Xxxxxxx Xxxxxx,
in writing, within the time set out herein for same.
(d) Disputes Concerning The EBITDA Determination: Upon the
written notice to Sellers of the determination of the EBITDA by Buyer's
certified auditors, if Sellers disagree with the determination, Sellers shall
notify Buyer in writing within FOURTEEN (14) calendar days of the receipt of
said notice of the nature and extent of Sellers' disagreement. Thereafter, the
parties shall follow the procedure set out below in (paragraphs) 3(d)(i)-(iii)
to resolve the dispute concerning the EBITDA determination of Buyer:
(i) Following the receipt by Seller of Buyer's
written notice described in (paragraph) 3(c), in the FOURTEEN (14) calendar days
following receipt of the said notice by Buyer, Sellers and
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Buyer shall attempt to negotiate a good faith settlement of the dispute.
(ii) If the dispute is not resolved within said
FOURTEEN (14) calendar days of good faith negotiation, as may be extended by the
mutual agreement of Buyer and Sellers, Sellers may file for arbitration of the
dispute pursuant to the rules of the American Arbitration Association, utilizing
three arbitrators, one arbitrator chosen by Sellers, one arbitrator chosen by
Buyer, and the third arbitrator chosen by the other two arbitrators.
(iii) During the time required to resolve any dispute
with respect to the EBITDA amount, Sellers shall continue to accrue interest as
is provided for above in (paragraph) 3(a) until such time as the dispute is
resolved and payment of the Deferred Amount is made by Buyer.
(e) Seller's Debt on the Closing Date: All obligations of
Seller, properly disclosed to Buyer pursuant to the requirements of this
Agreement, shall become the obligations of Buyer after the Closing Date.
4. Representations and Warranties of the Seller: The Seller hereby
represents and warrants to the Buyer as of the date hereof and as of the Closing
Date as follows, except as may be set forth in Schedules annexed hereto:
(a) Organization and Good Standing of the Seller: The Seller
is a corporation duly organized and validly existing under the laws of the State
of Pennsylvania. Seller further represents that it is qualified to do business
and is in good standing in any and all other states (and the District of
Columbia) in which it does business. The Seller has full corporate power and
authority to own its properties, to carry on the Business, and to sell and
convey the Assets to the Buyer.
(b) Authorization and Effect of Agreement: This Agreement and
all other agreements and instruments to be executed in connection herewith or
pursuant hereto have been duly authorized and approved by all requisite
corporate action of the Seller and when executed and delivered by the Seller
shall constitute the legal, valid and binding obligations of the Seller,
enforceable against Seller in accordance with its respective terms, except as
limited by bankruptcy, insolvency or other laws affecting generally the
enforcement of creditors' rights. The execution, delivery and performance of
this Agreement will not violate any provision of any law, rule or regulation
applicable to the Seller, or any order, judgment or decree of any court or other
governmental agency binding on the
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Seller or any agreement or instrument to which the Seller is a party or by which
it may be bound.
(c) Financial Statements: Seller has delivered it Financial
Statements to Buyer, attached as Schedule 4(c). The Financial Statements fairly
present the financial position of the Seller for the periods covered thereby and
have been prepared in accordance with GAAP consistently applied throughout the
periods covered, or if not prepared in accordance with GAAP, the Financial
Statements do not reflect a materially different financial position or results
of operations than if the Financial Statements had been prepared in accordance
with GAAP. The Financial Statements fully and fairly reflect all the
transactions, properties, assets and liabilities of the Seller. There are no
extraordinary or material non-recurring items of income or expense during the
periods covered by the Financial Statements and the balance sheets included in
the Financial Statements do not reflect any write-up or revaluation increasing
the book value of any assets, except the EIGHT HUNDRED THOUSAND AND NO/100
DOLLAR ($800,000) bad debt expense referenced below in (paragraph) 4(aa). The
Financial Statements reflect all adjustments necessary for a fair presentation
of financial information contained therein. All related party transactions have
been entered into and are reflected in the Financial Statements. There are no
loans between the Seller and its shareholders or any parties related to them.
(d) No Adverse Change: Since December 31, 2000, the Business
of the Seller has been operated in the ordinary course and there has not
occurred any material adverse change in the Business, properties, prospects or
operations of the Seller, in Seller's ability to operate the Business on an
ongoing basis in the future, or in the quality and character of Seller's
customers and relations therewith or in the aggregate business volume done with
customers.
(e) Absence of Undisclosed Liability: There are no liabilities
related to the Business or properties or Assets of the Seller other than as
reflected in the Financial Statements and listed on Schedule 4(e).
(f) Title to Assets and Assumption of Liabilities: The Seller
has, and the delivery to the Buyer of the instruments of transfer as provided
for herein will vest the Buyer with, good and marketable title to all of the
Assets, free and clear of all Liabilities except as properly disclosed herein.
The Assets constitute all of the rights, titles, or interests which are used in
the operation of the Business, and no other assets are reasonably necessary to
operate the Business. All material contracts, oral and written, with customers
and suppliers of the
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Seller, including contracts for the purchase of fuel, are listed on or are
annexed hereto as Schedule 1(b), 1(e), 4(l).
(g) Inventory and Equipment: Schedule 4(g) annexed hereto
lists the inventory and equipment of the Seller. The inventory and equipment of
the Seller is in good, useable condition, except as is noted on Schedule 4(g).
(h) Information: The Seller has no customers other than those
on the customer list forming part of the Information and annexed as Schedule
1(c). The Seller has used reasonable efforts to maintain the confidentiality of
the Information and has not made it available to any third party other than
pursuant to non-disclosure agreements. All customer contracts that could be
located by the Seller upon a reasonably diligent search are annexed to Schedule
1(c).
(i) Permits: The Seller holds all licenses, permits and
franchises which are required to permit it to conduct the Business and all such
licenses, permits and franchises are valid and in full force and effect and
annexed as Schedule 4(i).
(j) Litigation: Other than as set forth in Schedule 4(j),
there is no action, suit, proceeding or claim pending, or, to the knowledge of
the Seller threatened, against the Seller by any person, including without
limitation, by any government or governmental agency, and there is no
outstanding order, writ, injunction, decree, judgment or award of any court,
government or governmental agency against or affecting the Seller, which would
have a material adverse affect on the value to the Buyer of the Assets, or the
utilization thereof in the Buyer's business, or on the Seller's ability to
consummate this transaction. Seller represents and warrants that all such
pending or threatened claims will be satisfied, in full, on the Closing Date,
with proceeds of this sale and that the proceeds of this sale are sufficient to
pay all such pending or threatened claims.
(k) Compliance with Laws. To the best of Seller's knowledge,
the Seller has complied in all material respects with all laws, regulations and
orders applicable to the Business, and there is no governmental law or
regulation in effect or other event which would have a material adverse affect
on the value to the Buyer of the Assets, or the utilization thereof in the
Buyer's business, or on the Seller's ability to consummate the transaction.
(l) Labor, ERISA: Schedule 4(l) sets forth a list of all
employees of the Seller and their duties, current compensation and employee
benefits. The Seller is not a party to any collective bargaining agreement with
any union and the Seller
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has no knowledge or information that there is currently pending or threatened
any petition by employees of the Seller for a union representative election,
except as described on Schedule 4(l). The Seller does not maintain any employee
benefit plan in respect of which the Buyer would become liable as a consequence
of its purchase of the Assets or that would affect the Seller's ability to
consummate this transaction. The Seller is not a participant in any
multi-employer pension or employee welfare benefit plan. All of Seller's
employees shall be available for re-hire by Buyer after the Closing Date at the
same wage and benefit package that existed for each employee prior to the
Closing Date.
(m) Taxes: The Seller duly and timely has filed or will file
all tax returns and tax information reports required to be filed by it and has
timely paid or will pay in full all taxes owed by it, including but not limited
to, income, real estate, franchise, sales, social security trust fund and state
unemployment trust fund contributions, that have accrued and become payable on
or before the Closing Date or with respect to tax periods ending on, after and
including the Closing Date. There are no tax liens or determinations by any
taxing authority against the Seller or the Assets that would have a material
adverse affect on the value to the Buyer of the Assets, on the utilization
thereof in the Buyer's business, or on the Seller's ability to consummate this
transaction. There are no tax audits or determinations pending, or, to the best
knowledge of the Seller, threatened against the Seller or with respect to the
Assets, except as listed on Schedule 4(m).
(n) No Restrictions: The execution and delivery of this
Agreement and all other agreements and instruments to be executed in connection
herewith, the consummation of the transactions provided for herein and therein,
and the fulfillment of the terms hereof and thereof, will not result in a breach
of or constitute a default under, or conflict with: (i) any agreement, or other
instrument to which the Seller is a party or by which it may be bound; (ii) the
Certificate of Incorporation, By-Laws of the Seller; (iii) any judgment, decree,
order or award of any court, government, governmental agency or arbitrator; or
(iv) any law, rule or regulation applicable to the Seller, its Business, or the
Assets.
(o) Insurance: The Seller has in effect workers compensation
insurance, vehicle insurance and general comprehensive liability insurance that
is adequate and customary for the Business engaged in by the Seller. Premiums
for all such insurance have been and will be timely paid by the Seller. No
notice of policy termination has been delivered to the Seller.
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(p) Contamination. To the best of Sellers knowledge, Seller
represents and warrants that Seller has not sent, had sent on its behalf, or
allowed to be sent by any action or omission, any hazardous, toxic or
deleterious substance or waste, as defined by any applicable law (defined to
include, without limitation, all applicable statutory law and common law),
hereinafter referred to as Hazardous Materials, for treatment, storage, handling
or disposal to any facility or property which is: (1) listed, proposed for
listing, or considered for listing on the National Priorities List, the
Comprehensive Environmental Response Compensation and Liability Information
System List or any other hazardous site list published, promulgated or adopted
by any governmental authority; (2) the subject of any environmental
investigation, remediation or cost recovery action; or (3) any facility or
property from which such Hazardous Materials have been transhipped to another
facility or property which meets criteria (1) or (2) above.
(q) Disposal or Release of Hazardous Materials. To the best of
Sellers knowledge, Sellers represent and warrant that Seller has not disposed
of, released or discharged any Hazardous Materials, as such term is defined in
the Pennsylvania Solid Waste Management Act (35 P.S. ss.6018-101 et. seq.) and
the Pennsylvania Hazardous Sites Clean Up Act (35 P.S. ss.6020.101 et seq.) or
any other applicable statutory law and common law, at or onto or arising from
the real estate upon which Seller operates the Business (the Real Property), or
into the subsurface soils or groundwater beneath the Real Property, that Seller
has not disposed of, released or discharged any Hazardous Materials from, at or
onto the Real Property or surrounding properties or into the subsurface soils or
groundwater beneath the Real Property or surrounding properties, including
surface waters, sediments or environmentally sensitive areas and any other
potential areas of concern and receptors, and that Seller has not received any
notice or claim asserting or claiming that it is or may in any way be liable for
any adverse environmental condition existing on or under the Real Property or
arising out of the disposal, release or discharge of any Hazardous Materials.
(r) Exposure to Hazardous Substances. Seller represents and
warrant that Seller has not received any notice or claim asserting or claiming
that it is or may in any way be liable for any condition arising out of or
resulting from any exposure to Hazardous Materials. Seller represents and
warrants that Sellers is not aware of any pending or threatened claim that
Seller is or may in any way be liable for any condition arising out of or
resulting from any exposure to Hazardous Materials.
(s) Real Property: Schedule 1(g) et. seq. sets forth a full
description of all real property with respect to which the
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Seller is owner, lessor or lessee. All agreements affecting such Real Property
are annexed on Schedules 1(g)-2 and 1(g)-4. The Seller has not received any
notice for assessments for public improvements against the Real Property 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
concerning all or any portion of the Real Property, and to the best of the
Seller's knowledge, no such proceeding is proposed.
(t) Relationships: The Seller's relationship with its
customers, suppliers and others with whom the Seller has business dealings are
satisfactory, and the Seller has no knowledge of any contemplated termination or
other adverse change in any such relationships.
(u) Health Care Claims: No health-related claim material in
amount is pending, or to the knowledge of the Seller, is threatened, by any
employee, his or her spouse or dependants not covered by insurance or otherwise
provided for by Seller.
(v) Reasonable Equivalent Value: The Seller represents and
warrants that the Purchase Price is a reasonably equivalent value for the
transfer of the Assets to the Buyer and that the transfer of the Assets to the
Buyer is intended to be a contemporaneous exchange for new value given to the
Seller by the Buyer.
(w) Liens. Other than as are disclosed on Schedule 4(e), there
are no liens, chattel mortgages or other encumbrances on any of the assets of
Sellers. (x) Full Disclosure. All information provided or to be provided to
Buyer by Sellers in connection with the transactions contemplated by this
Agreement is true and correct in all material respects as of the date given to
Buyer and as of the Closing Date, and Sellers have exercised best efforts to
provide Buyer with complete information. As of the date given and as of the
Closing Date, no representation or warranty of Sellers contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained therein not misleading.
(y) Improper or Unauthorized Dumping: To the best of Seller's
knowledge, Seller represents and warrants that Seller is free of any and all
liability arising from the improper or unauthorized dumping or disposal of waste
material.
(z) Total Sales: The total sales of the Miners Entities is
approximately FIFTY FOUR MILLION DOLLARS ($54,000,000) annually, as is reflected
on the Financial Statements, as said Financial
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Statements are adjusted for inter-company sales and attached hereto as Schedule
4(c).
(aa) Annual EBITDA: The Miners Entities produce annual
earnings before interest, taxes, depreciation and amortization (EBITDA) of
approximately FOUR MILLION DOLLARS ($4,000,000), adjusted for a one-time bad
debt expense of the Waste Company of approximately EIGHT HUNDRED THOUSAND
DOLLARS ($800,000), as is reflected on the Financial Statements.
(bb) Loans Payable: The Miners Entities are obligated for
loans payable in the approximate amount of NINE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($9,500,000), including chattel mortgages with respect to certain pieces
of its equipment in the approximate amount of EIGHT MILLION DOLLARS
($8,000,000), as is reflected on the Financial Statements, as adjusted for
increases in debt resulting from a waste hauling contract between the Waste
Company and Waste Management, Inc. (WMI) to provide hauling services to WMI be
performed in and around the State of Maryland.
(cc) Accounts Receivable: The Miners Entities own accounts
receivable totaling approximately FIVE MILLION DOLLARS ($5,000,000), net of any
reserves, as is reflected on the Financial Statements, and all such accounts
receivable are collectable in the ordinary course of business.
(dd) Net Worth: The Miners Entities net worth is approximately
TWO MILLION SIX HUNDRED THOUSAND DOLLARS ($2,600,000), as is reflected on the
Financial Statements.
(ee) Certain Payments: Neither the Seller nor any officer,
director or employee of Seller has paid or received or caused to be paid or
received, directly or indirectly, in connection with the Business (i) any bribe,
kickback or other similar payment to or from any domestic or foreign government
or agency thereof or any other person, or (ii) any contribution to any domestic
or foreign political party or candidate, other than from personal funds of such
officer, director or employee not reimbursed by Seller or as permitted by
applicable law.
5. Representations and Warranties of the Buyer: The Buyer represents
and warrants to the Seller as follows:
(a) Organization and Good Standing: The Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
(b) Authorization and Effect of Agreement: This Agreement and
all other agreements and instruments to be executed in connection herewith or
pursuant hereto have been duly
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authorized and approved by all requisite corporate action of the Buyer, and when
executed and delivered by the Buyer shall constitute the legal, valid and
binding obligations of the Buyer enforceable against it in accordance with their
respective terms, except as limited by bankruptcy, insolvency or other laws
affecting generally the enforcement of creditors rights. The execution, delivery
and performance of this Agreement will not violate any provision of any law,
rule or regulation applicable to the Buyer, or any order, judgment or decree of
any court or other governmental agency binding on the Buyer or any agreement or
instrument to which the Buyer is a party of by which it may be bound.
6. Covenants of the Seller: At or before or after the Closing, as the
context requires, the Seller covenants and agrees that:
(a) Access: The Seller shall make available for inspection by
the Buyer or its representatives during normal business hours, the Seller's
books and records and all other documents reasonably requested by the Buyer or
its representatives that relate to the transactions contemplated hereunder. The
Seller shall further cause its managerial employees, its counsel and accountants
to be available upon reasonable notice to answer questions of the Buyer and its
representatives concerning the Business and Assets of the Seller. The Seller and
its executive officers shall cooperate with the Buyer in approaching customers
and other third parties designated by the Buyer.
(b) Maintenance of Insurance: The Seller shall provide to the
Buyer copies of all policies of insurance of whatever kind or description
maintained in effect by the Seller, and such policies are attached as Schedule
6(b). The Seller shall maintain in full force and effect all of its presently
existing insurance coverage through the Closing Date; provided, however, the
Seller shall maintain in full force and effect all present insurance coverage
for each vehicle used in the Seller's Business that is bought by the Buyer at
Closing until the later of Closing or such time as title to the vehicle is
registered in the name of the Buyer.
(c) Conduct of Business: The Seller shall conduct its Business
in the ordinary course, consistent with the manner in which the Business is
presently conducted and will use its best efforts to maintain, preserve and
protect the Assets, the goodwill of the Seller and the relationships with its
customers. During such period of time, except upon the prior written consent of
the Buyer, the Seller shall not: (i) incur any Liabilities except current
obligations and liabilities incurred in the
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ordinary course of business; (ii) sell, transfer or acquire any properties or
assets, tangible or intangible, other than in the ordinary course of business;
(iii) make any material change in its customary method of operations, including
marketing and pricing policies; (iv) modify, amend or cancel any of its
customers' orders or enter into any contracts, agreements, leases or
understandings other than in the ordinary course of business; (v) enter into any
contract with new or existing customers the period of performance of which
extends beyond sixty (60) days from the date entered into or which is on terms
more favorable than offered by Seller to its customers in 2000; (vi) solicit,
encourage or negotiate with any third party as to any disposition of the Assets
or the Business or any shares of stock in the Seller; (vii) make any
distribution to shareholders prior to the Closing Date; (viii) take any other
action (A) that would cause any of the representations and warranties made by
the Seller in this Agreement not to be true and correct in all material respects
on and as of the Closing Date; or (B) that would materially adversely affect the
value of the Assets, their utilization in the Buyer's business or the ability of
the Seller to consummate the transactions contemplated by this Agreement.
(d) Confidentiality: The Seller shall take all steps
reasonably necessary to preserve, protect, and maintain the confidentiality of
information which is proprietary to it or which is not generally known in the
industry, and shall not disclose the same or permit the disclosure thereof to
any individual, corporation or other entity who is not presently in possession
thereof. If the Closing shall occur, then the obligations of the Seller under
this subparagraph shall continue until August 1, 2002.
(e) Permits: The Seller shall have obtained all
authorizations, consents and permits, of any and all persons required to permit
the consummation of the transactions contemplated by this Agreement.
(f) Environmental Review. Seller shall obtain a Phase I and
Phase II Environmental Review, demonstrating the right to the continued
unrestricted use of the entire Real Property and shall reflect the satisfactory
completion of remediation of the Real Property (including, without limitation,
soil, groundwater, surface water, sediments, environmentally sensitive areas,
and any other potential areas of concern and receptors. The Phase I
Environmental Review shall be paid for by Seller and the Phase II Environmental
Review shall be paid for by Buyer, although any and all remediation costs shall
be paid for by Seller. The Environmental Reports are attached hereto as Schedule
6(f).
Page 13
(g) Hazardous Substances: No hazardous substances have been
released or spilled by any of the Miners Entities on the land owned by Seller or
on any site where the Business is conducted, other than minor fuel spillages
occurring in the normal course of business, the latter not sufficient to warrant
a site cleanup or site remediation.
(h) Sales Tax. Sellers shall cooperate with Buyer in providing
the notice to the Director of the Pennsylvania Division of Taxation required by
appropriate law and/or regulation at least ten (10) days prior to Closing and
shall cooperate with the Director in promptly satisfying or making adequate
provisions to ensure the satisfaction of any tax liabilities.
(i) Name Change: The Seller shall file with the Secretary of
State of Pennsylvania an Amended Certificate of Incorporation and/or such other
instruments with any Pennsylvania governmental authority as are necessary to
change the corporate name of the Seller from MINERS Oil COMPANY, INC. to any
dissimilar name. The Seller will similarly change its corporate and alternative
names in all other jurisdictions in which it may have qualified to do business.
From and after the Closing Date, the Seller shall cease to use the names MINERS
OIL COMPANY, INC., or any variations thereof or names similar thereto.
(j) Contracts: With respect to any and all contracts being
assigned, transferred or conveyed hereunder, there are no restrictions or
impediments to such assignment, transfer or conveyance.
7. Covenants of the Buyer: At or before or after the Closing, as the
context requires, the Buyer covenants and agrees that:
(a) Confidentiality: The Buyer shall maintain the
confidentiality of all proprietary and confidential information it receives or
has received from the Seller and shall disclose and use the same only in
connection with the transactions contemplated hereby. If the Closing does not
occur for any reason whatsoever, the Buyer shall promptly return to the Seller
all copies of any confidential written information provided by the Seller then
in the Buyer's possession or control and shall continue to maintain the
confidentiality required by this subparagraph until any item of such information
becomes generally available in the industry through no fault of the Buyer or of
any officer, director or shareholder of the Buyer.
(b) Payment of Deferred Amount: If it is reasonably determined
that Deferred Amounts are due to Sellers, Buyer shall make all such payments
fully and when due.
Page 14
8. Mutual Covenants of the Parties: At or before or after the Closing,
as the context requires, the Seller and Buyer mutually covenant and agree that:
(a) Collections for Billed Services and Work in Process: At
least three (3) days before the Closing Date, the Seller shall deliver to the
Buyer a schedule identified as Schedule 8(a) to this Agreement listing by
customer name the amounts that as of __________ __, 2001 are owed to the Seller
in respect of all uncollected bills for services completed or products sold and
for unbilled work in process. From and after the Closing Date, Buyer shall own
and hold title to all of the accounts receivable set out on Schedule 8(a) and
Seller agrees to co-operate with the Buyer in its efforts to collect said
accounts.
(b) Reasonable Efforts: Subject to the terms and conditions
provided in this Agreement, each of the parties hereto shall cooperate with the
other in good faith and shall use commercially reasonable efforts to take
promptly, or cause to be taken, all actions, and to do promptly, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated hereby, to obtain all necessary approvals, and to
remove and impediments or delays, legal or otherwise, in order to consummate and
make effective the transactions contemplated by this Agreement for the purpose
of securing to the parties hereto the benefits contemplated by this Agreement.
9. Conditions Precedent. (a)The obligations of Seller under the
Agreement to consummate the transaction contemplated hereby are subject to the
following conditions precedent:
(i) The representations and warranties made by Buyer herein
shall be true and correct in all material respects on and as of the Closing.
(ii) All of the provisions of this Agreement to be complied
with and performed by Buyer at or before the Closing shall have been duly
complied with and performed in all material respects.
(iii) On or before the Closing, no action or proceeding shall
have been instituted before any court, governmental agency or arbitrator to
restrain or prohibit or to obtain material damages from Seller in respect to
this Agreement or the consummation of the transaction contemplated herein,
which, in the opinion of Buyer or its counsel, makes it inadvisable to
consummate such transaction.
Page 15
(iv) Buyers shall have executed and delivered all of the
documents and instruments referred to herein as exhibits to this Agreement.
(v) Buyer shall have completed all tasks and delivered all
documents required by the Agreements.
(b) The obligations of Buyer under the Agreement to consummate
the transaction contemplated hereby are subject to the following conditions
precedent:
(i) Buyer shall have completed to its sole satisfaction a due
diligence review of the Business.
(ii) Since the date of the Financial Statements there shall
have occurred no material adverse change in the properties, prospects or
operations of Seller or in the quality and character of its customers and
relations therewith or in the aggregate business volume done with customers of
the Business.
(iii) Seller shall have obtained all consents required to be
obtained by Seller and have obtained all consents required in order to execute,
deliver and perform Seller's obligations under this Agreement.
(iv) Any and all liens and other encumbrances on the Assets
shall have been duly disclosed to Buyer on Schedule 4(e) attached hereto.
(v) Seller shall have executed and delivered all of the
documents and instruments referred to herein as Schedules to this Agreement on
terms mutually agreeable to the parties hereto and thereto.
(vi) Buyer shall have obtained all permits and approvals
necessary, in Buyer's sole discretion, in form and substance satisfactory to
Buyer in Buyer's sole discretion, to own and operate the Business.
(vii) All required governmental approvals with respect to this
transaction, Buyer's ownership of the Assets and Seller's operation of the
Business shall have been obtained and shall not be subject to any condition(s)
which, in the sole discretion of Buyer, is/are not acceptable.
(viii) Seller shall supply all information and documents
required to be attached hereto as Schedules.
(xi) Seller shall have completed all tasks required by the
Agreements.
Page 16
10. The Closing: The closing of the transactions contemplated by this
Agreement (the Closing) shall take place at the offices of Buyer on or about
August 15, 2001, at 10:00 AM, or at such other place and/or time as shall be
fixed by mutual agreement of the parties hereto. The time and date of the
Closing is referred to in this Agreement as the Closing Date. The Closing shall
be effective as of the time on the Closing Date that the parties shall have
performed all the acts and executed and delivered all documents, payments and
instruments to be performed and executed and delivered at or before the Closing,
as described herein. Sellers assume all risk of loss due to fire or other
casualty up to the Closing. In the event the Closing does not occur on the
Closing Date, and the Closing Date has not been extended, in writing signed by
both parties, then this Agreement shall become null and void, and be deemed
terminated pursuant to (paragraph) 20 herein.
(a) At the Closing, the Seller shall deliver, or cause to be
delivered, to the Buyer, as appropriate, the following:
(i) Such bills of sale, assignments, and other
instruments that shall convey to the Buyer good and marketable title to the
Assets, free and clear of Liabilities;
(ii) All original documents relating to the Assets;
(iii) All Information;
(iv) All necessary certificates or other instruments
that shall have been filed with the appropriate governmental offices of the
State of New Jersey, the Commonwealth of Pennsylvania, and/or all other
governmental authorities changing the corporate name of the Seller from MINERS
OIL COMPANY, INC.
(v) Titles to the motor vehicles used by the Seller
as per annexed Schedule 1(f);
(vi) Any and all leases and deeds representing
Seller's interest in the Real Estate, as same is listed on Schedule 1(g) et.
sec., properly conveying Seller's interest in said Real Estate to Buyer; and
(vii) The Phase I and Phase II Environmental Reports
for portions of the Real Property situated in Pennsylvania, attached hereto as
Schedule 6(f); and
Page 17
(viii) Seller shall have supplied all information and
documents required to be attached hereto as Schedules; and
(ix) Seller shall have completed all tasks required
by the Agreements; and
(x) Such further documentation or instruments as the
Buyer or its counsel may reasonably request to effectuate their terms of this
Agreement.
(b) At the Closing, Buyer shall deliver the following to
Seller:
(i) The Purchase Price by either certified check or
wire transfer; and
(ii) The Good Standing Certificate of Buyer; and
(iii) A letter from the New Jersey Department of
Environmental Protection (NJDEP) approving the Stock Purchase Agreement.
(iv) Properly executed originals of the Employment
and Covenant Not To Compete Agreements by and between Buyer and Xxxxxxx Xxxxxx,
Buyer and Xxxxx Xxxxxx, and Buyer and Xxxxx Xxxxxx.
(v) Such further documentation or instruments as
Sellers or its counsel may reasonably request to effectuate the terms of this
Agreement.
11. Survival of Representations, Warranties and Covenants: The
representations, warranties and covenants contained herein shall survive the
Closing hereof for a period of Five (5) years to protect the party in whose
favor they run, irrespective of and unaffected by any investigation made or
knowledge obtained by any of the parties hereto, including, without limitation,
the participation of the Buyer's accountants or counsel on behalf of the Buyer
in any examination or review of the business, affairs, financial condition, or
Assets of the Seller; provided however, that in the case of all such
representations, warranties, covenants and agreements, there shall be no such
termination with respect to any such representation, warranty, covenant or
agreement to the extent a bona fide claim has been asserted by written notice of
such claim delivered to the party or parties making such representation,
warranty, covenant or agreement prior to the expiration of the survival period.
Page 18
12. Indemnification: (a) Excluding consequential, special or punitive
damages, Buyer shall, and hereby does, indemnify and hold the Seller harmless
from and against, and in respect of:
(i) any and all losses, liabilities, damages,
deficiencies and obligations resulting from any misrepresentations or breach of
warranty by the Buyer or nonfulfillment of any covenant or condition to be
performed or complied with by the Buyer under the terms of this Agreement; and
(ii) all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable
attorneys' fees and disbursements, incident to the items set forth in Section
12(a)(i) above.
(b) Excluding consequential, special or punitive damages,
Seller shall indemnify and hold the Buyer harmless from and against and in
respect of:
(i) for a period of Five (5) years from the Closing
Date, any and all single Liabilities exceeding Fifty Thousand and No/100 Dollars
($50,000) or Liabilities in the aggregate exceeding One Hundred Thousand and
No/100 Dollars ($100,000) of the Seller which are not expressly assumed by the
Buyer at the Closing, including, without limitations, any and all such
liabilities or obligations of the Seller in respect of which claims are asserted
against the Assets or the Buyer (A) as an alleged transferee of or successor to
the Seller; or (B) involving any Federal, state, local or foreign tax liability
of the Seller, including any interest or penalties thereon;
(ii) any and all losses, liabilities, damages or
deficiencies resulting from any misrepresentation or breach of warranty or
nonfulfillment of any covenant or condition to be performed or complied with by
the Seller under the terms of this Agreement; and
(iii) all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable
attorneys' fees and disbursements, incident to the foregoing.
(c) In addition to and without limiting the foregoing in any
way, for a period of Five (5) years from the Closing Date, the Seller strictly
shall defend, indemnify and hold harmless Buyer from and against any and all
fines, penalties, costs, liabilities, damages, losses or expenses (including
without limitation, sampling, monitoring or remediation costs, reasonable
attorneys', consultants' and engineering fees and disbursements,
Page 19
costs of defense and interest) (hereinafter referred to in this (paragraph)
12(c) as Claims) (i) incurred by Buyer; or (ii) for which Buyer is liable or
obligated pursuant to any judicial or administrative judgment, order, directive
or decree or any settlement or compromise of any claim, arising from or relating
to any breach or violation of any applicable environmental law including the
release or discharge of any Hazardous Material or from or relating to any breach
or violation of any representation or warranty by Seller set forth in Section
4(p), (q), or (r) of this Agreement; except that, Seller's liability pursuant to
this (paragraph) 12(c) shall be limited to the amount of such a Claim exceeding
Fifty Thousand and No/100 Dollars ($50,000) or the amount of such Claims in the
aggregate exceeding One Hundred Thousand and No/100 Dollars ($100,000).
(d) If any legal proceeding shall be instituted or any claim
or demand shall be asserted by any legal person in respect of which indemnity
may be sought by one party hereto (Indemnitee) from the other party hereto
(Indemnitor), then the Indemnitee shall send written notice to the Indemnitor of
the assertion of such claim or legal proceeding promptly after the Indemnitee
obtains knowledge thereof. The Indemnitor shall have the option, at its own
expense, to be represented by counsel of its choice, and to defend against,
negotiate, settle or otherwise deal with such claim and/or proceeding; provided,
however, that no settlement shall be made without the prior written consent of
the Indemnitee (which shall not be unreasonably withheld) unless the settlement
provides for no liability for and no payment by Indemnitee and acknowledges no
fault by Indemnitee. The Indemnitee may participate in any such proceeding with
counsel of its choice, but at its own expense. To the extent the Indemnitor
elects not to or fails to defend such proceeding, claim or demand, the
Indemnitee may defend against, settle or otherwise deal with any such
proceeding, claim or demand without the consent of the Indemnitor, provided that
the Indemnitee acts in good faith. The parties agree to cooperate fully with
each other in connection with the defense, negotiation or settlement of any such
legal proceeding, claim or demand. The amount of indemnifiable claims due an
Indemnitee shall be paid by the Indemnitor to the Indemnitee on demand. If a
claim shall be made wherein Sellers could be obligated to indemnify and hold
Buyer harmless pursuant to the terms of this Agreement, and if any of the
Deferred Amount remains unpaid, in addition to all other remedies to which Buyer
shall be entitled, Buyer may suspend payments of the Deferred Amount and offset
dollar-for-dollar against any or all the Deferred Amount due to Sellers under
this paragraph. Any amount offset shall first be applied against accrued and
unpaid interest before any amounts are offset against principal. Buyer shall
exercise its right of offset by providing
Page 20
notice of exercise to Sellers at any time before payment in full of the said
notes.
(e) In the event of a legal proceeding brought by Buyer to
enforce the terms of the Employment and Covenant Not to Compete Agreements, in
addition to all other remedies to which Buyer shall be entitled, Buyer may
suspend payments of the Deferred Amount due and offset dollar-for-dollar against
any or all amounts due Sellers under this paragraph. Buyer shall exercise its
right of offset by providing notice of exercise to Sellers at any time before
payment in full of any Deferred Amount.
(f) All rights and remedies granted in this Paragraph 12 are
not exclusive of all other rights and remedies which the parties may have at law
or in equity.
13. Brokers: Each party represents and warrants to the other that it
has had no dealings with any broker or finder in connection with the
transactions contemplated by this Agreement.
14. Notices: Any notices or other communications required or permitted
hereunder shall be sufficiently given in writing and personally delivered or
delivered via any courier service or sent by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows or to such other
address as either party may hereafter designate by notice given pursuant hereto:
In the case of Buyer:
Phoenix Waste Services Company, Inc.
00 Xxxx Xxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
In the case of Sellers:
Miners Oil Company, Inc.
Xxxxx 000 xx Xxxxxxxxxx 00
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
15. Entire Agreement: This Agreement, including the exhibits and
schedules hereto, contains the entire agreements and understandings between the
parties hereto, and no agreements, representations or warranties, oral or
written, express or implied, have been made by the parties which are not set
forth or referred to expressly in this Agreement. No alteration,
Page 21
amendment or modification of this Agreement shall be valid unless made in a
written instrument signed by the parties hereto.
16. Successors and Assigns: This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns, but no other third party shall be a beneficiary of this Agreement
or any of its terms or provisions.
17. Paragraph Headings: The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
18. Expenses: Whether or not this transaction shall close, each party
hereto shall pay its own expenses, incurred in connection with this Agreement
and the transactions contemplated hereby, including without limitation, any
legal and accounting fees.
19. Further Assurances: The parties agree to execute and deliver such
further instruments and documents and to take such further actions as are
necessary or desirable to consummate the transactions contemplated hereby.
20. Termination of Agreement: (a) This Agreement may be terminated
prior to Closing by Seller, if Buyer is unable to comply with the Conditions
President described in (paragraph) 9(b). This Agreement may be terminated by
Buyer for any reason prior to Closing, including Buyer's convenience. In the
event of a termination of this Agreement, the confidentiality obligations
described in (paragraphs) 6(d) and 7(a) shall survive said termination for a
period of One (1) years from said termination date.
(b) In the event of termination of this Agreement as set forth
above (paragraph) 20(a), this Agreement shall forthwith become null and void and
there shall be no obligations on the part of either party to this Agreement to
consummate the transactions contemplated hereby and neither party shall have any
liability to the other party, except that, the obligations described in
(paragraph) 11 shall survive said termination for a period of Five (5) years
from said termination date, and the confidentiality obligations referenced above
in (paragraph) 20(a) shall survive said termination for a period of One (1)
year.
21. Applicable Law: This Agreement shall be governed by, and be
construed and enforced in accordance with, the laws of the State of Delaware
applicable to agreements to be performed wholly within that state. The parties
designate the courts situated in the State of New Jersey as the forum of choice
to hear and
Page 22
determine any claim, controversy or disagreement arising under this Agreement.
22. Counterparts: This Agreement may be executed in two or more
counterparts each of which shall constitute an original instrument but all of
which shall constitute one and the same instrument.
23. Severability: Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions of this Agreement, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
24. Variations in Pronouns: All pronouns and variations thereof shall
be deemed to refer to the masculine, feminine or neutral as the identity of the
person or persons may require, and wherever necessary or appropriate in the
context of this Agreement, the singular shall include the plural and vice versa.
25. Waiver: The failure of a party to insist on the performance of any
provision of this Agreement or to exercise any right, power or remedy upon a
breach hereof shall not constitute a waiver of any provision of this Agreement
that will limit the party's right thereafter to enforce any provision or
exercise any right relating to this Agreement.
26. Further Covenants and Agreements: The parties expressly acknowledge
and further covenant and agree as follows:
(a) Each party to this Agreement has read, understood, and had
the option to obtain qualified legal counsel to interpret its legal effect.
Accordingly, it is agreed that the usual rule of contract interpretation causing
ambiguities to be resolved in favor of the non-drafting party shall not apply to
the interpretation of this Agreement.
(b) That entering into this Agreement, the respective parties
are not relying upon any information, data, predictions, projections, opinion,
statement or promise furnished or made by or on behalf of the other party,
except as may be expressly and specifically set forth herein, and that each
party expressly relieves the other party of any duty whatsoever to disclose,
furnish, explain or correct any information, data, prediction, projection,
opinion, statement or promise that the other party has made in any discussions
or negotiations prior to or contemporaneously with the execution and delivery of
the Agreement.
Page 23
(c) That each party has carefully reviewed this Agreement and
is entering into it freely and not under any compulsion or duress.
(d) That the parties expressly and especially agree that this
Agreement shall be binding and enforceable in accordance with its terms and that
each party waives any claim or contention, now or in the future, that this
Agreement is or should be void, voidable, unenforceable or not binding upon them
for any reason whatsoever, and further expressly and especially waive any such
contention which would or could be based upon any judicial decisions denying
enforceability or any such provisions.
(e) That the person signing this Agreement has all of the
requisite authority to bind the party for whom he is signing.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, on the day and year first above written.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
Page 24
Buyer
PHOENIX WASTE SERVICES COMPANY, INC.
By /s/ Xxxxxxx X. Xxxxxx
___________________________
Xxxxxxx X. Xxxxxx
Vice President/Secretary
Sellers
MINERS OIL COMPANY, INC.
By /s/ Xxxxxxx Xxxxxx
___________________________
Xxxxxxx Xxxxxx
President
Page 25
