EXHIBIT 10.68
STOCK PURCHASE AGREEMENT
AMONG
U S LIQUIDS INC.
UNITED WASTE SYSTEMS, INC.
AND
USA WASTE SERVICES, INC.
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE 1. DELIVERY OF SHARES; ENDORSEMENT OF COMPANY
STOCK.............................................................. 2
1.1. Delivery of Shares.................................... 2
1.2. Endorsement of Company Stock.......................... 3
1.3. Non-Assignment of Certain Contracts................... 3
ARTICLE 2. PURCHASE PRICE......................................... 3
2.1. Purchase Price........................................ 3
2.2. Adjustment to Purchase Price.......................... 3
ARTICLE 3. CLOSING................................................ 4
3.1. Time and Place of Closing............................. 4
3.2. Deliveries by Seller and Parent....................... 5
3.3. Deliveries by Buyer................................... 5
3.4. Title Policies........................................ 5
3.5. Permitted Encumbrances................................ 5
3.6. Surveys............................................... 6
ARTICLE 4. POST CLOSING COVENANTS................................. 6
4.1. Change of Name; Removal of Identification............. 6
4.2. Further Assurance..................................... 7
4.3. Transition............................................ 7
4.4. Taxes................................................. 8
4.5. 338(h)(10) Election................................... 8
4.6. Post Closing Balance Sheet............................ 9
4.7. Closing Date Actions.................................. 10
4.8. Transfer Facility Hauling Agreement................... 10
4.9. Resignations.......................................... 10
4.10. Delivery of Disclosure Schedules..................... 10
4.11. Other Transfer Documents............................. 10
4.12. Survival............................................. 10
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER, PARENT
AND COMPANY........................................................ 11
5.1. Organization; Authority............................... 11
5.2. Stock Ownership; Absence of Adverse Claims............ 12
5.3. Capitalization........................................ 12
5.4. Accounts Receivable................................... 13
5.5. Proprietary Rights; Environmental Documents........... 13
5.6. Real Property; Reporting.............................. 14
5.7. Personal Property..................................... 16
5.8. Contracts............................................. 17
5.9. Insurance Policies.................................... 17
5.10. Employees; Compensation.............................. 18
5.11. Employee Plans....................................... 18
5.12. Compliance with ERISA................................ 18
5.13. Compliance with Law; No Conflicts.................... 21
5.14. Taxes................................................ 22
5.15. Litigation........................................... 22
5.16. Conduct of Business.................................. 23
SECTION PAGE
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5.17. Bank Accounts; Depositories.......................... 23
5.18. Hazardous Materials.................................. 23
5.19. Storage Tanks........................................ 24
5.20. Absence of Certain Business Practices................ 24
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BUYER................ 24
6.1. Corporate Organization................................ 25
6.2. Authority............................................. 25
6.3. No Conflicts.......................................... 25
6.4. Binding Agreement..................................... 26
ARTICLE 7. COVENANTS OF PARENT AND SELLER PRIOR TO CLOSING........ 27
ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND
SELLER............................................................. 27
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER........... 27
ARTICLE 10. ASSUMPTION OF LIABILITIES............................. 27
10.1. Non-Assumption of Liabilities........................ 27
10.2. Assumption of Obligations............................ 27
ARTICLE 11. INDEMNIFICATION....................................... 27
11.1. Survival of Representations, Warranties and
Covenants................................................... 27
11.2. Indemnification by Parent and Seller................. 27
11.3. Indemnification by Buyer............................. 28
11.4. Limitation on Liability.............................. 29
11.5. Procedure for Indemnification with Respect to
Third Party Claims.......................................... 30
ARTICLE 12. EXCLUSIVITY........................................... 33
ARTICLE 13. TERMINATION OF AGREEMENT.............................. 33
13.1. Termination by Buyer................................. 33
13.2. Termination by Seller................................ 33
ARTICLE 14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION............. 34
14.1. Nondisclosure by Seller and Parent................... 34
14.2. Nondisclosure by Buyer............................... 34
ARTICLE 15. GENERAL............................................... 35
15.1. Assignment; Binding Effect; Amendment................ 35
15.2. Entire Agreement..................................... 35
15.3. Counterparts......................................... 36
15.4. No Brokers........................................... 36
15.5. Expenses of Transaction.............................. 36
15.6. Notices.............................................. 37
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15.7. Governing Law........................................ 38
15.8. No Waiver............................................ 38
15.9. Time of the Essence.................................. 38
15.10. Captions............................................. 38
15.11. Severability......................................... 38
15.12. Construction......................................... 38
15.13. Standstill Agreement................................. 39
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is executed and
delivered as of May 8, 1998, among U S LIQUIDS INC., a Delaware corporation
("Buyer"); UNITED WASTE SYSTEMS, INC., a Delaware corporation ("Seller"); and
USA WASTE SERVICES, INC., a Delaware corporation ("Parent").
WHEREAS, Seller is the sole shareholder of Northern A-1
Sanitation Services, Inc., a Michigan corporation (the "Company");
WHEREAS, Company operates a non-hazardous commercial liquid waste
transportation, storage, treatment, processing and disposal business in the
Kalkaska, Michigan area (the "Business");
WHEREAS, in connection with operating the Business, Company owns
the real property in Kalkaska, Michigan upon which its liquid waste treatment
plant operation (the "Treatment Facility") is located (the "Treatment Facility
Land"), which land is more fully described on Exhibit A attached hereto and made
a part hereof;
WHEREAS, also in connection with operating the Business Company
owns the real property in Kalkaska, Michigan consisting of approximately 9 acres
upon which its solidification pit (the "Solidification Facility"), a municipal
solid waste transfer station (the "MSW Facility"), and the office, shop and
storage yard ("Shop Facility") are located (collectively, the "Solidification
Land"), which land is more fully described on Exhibit B;
WHEREAS, also in connection with operating the Business Company
leases certain real property in Manistee, Michigan that it uses as an office and
for truck parking (the "Office Land") pursuant to a written lease with Asciome
Development Company (the "Office Lease"), which land is more fully described on
Exhibit C;
WHEREAS, also in connection with operating the Business Company
owns certain real property in Kalkaska, Michigan
consisting of approximately 10 acres upon which the septage disposal field (the
"Septage Disposal Field") is located (the Septage Disposal Field Land) which
land is more fully described on Exhibit D;
WHEREAS, also in connection with operating the Business Company
owns the real property located in Montague, Michigan consisting of approximately
0 xxxx (xxx "Xxxxxxxx Xxxx") that it uses as a dispatch office and for truck
parking (the "Montague Facility"), which land is more fully described on Exhibit
E (the Treatment Facility Land, Solidification Land, Office Land, Septage
Disposal Field Land and Montague Land are sometimes hereinafter collectively
referred to as the "Land");.
WHEREAS, Parent owns (directly or indirectly) all of the
issued and outstanding shares of the capital stock of Seller;
WHEREAS, Buyer desires to acquire all of the issued and
outstanding shares of the capital stock of Company from Seller;
WHEREAS, Buyer is unwilling to enter into this Agreement without
the covenants and promises of Parent herein set forth; and
WHEREAS, Parent desires that Buyer acquire all of the issued and
outstanding shares of the capital stock of Company upon the terms and subject to
the conditions set forth in this Agreement and, in order to induce Buyer to
enter into this Agreement, is willing to make the covenants and promises herein
set forth;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and other good and valuable consideration, received
to the full satisfaction of each of them, the parties hereby agree as follows:
ARTICLE 1. DELIVERY OF SHARES; ENDORSEMENT OF COMPANY STOCK
1.1. DELIVERY OF SHARES. Upon the terms and subject to the
conditions set forth in this Agreement, Seller shall, at the Closing
(hereinafter defined), sell, assign, transfer and
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deliver to Buyer certificates representing 100 shares of Company (the "Company
Stock"), which certificates represent all of the issued and outstanding capital
stock of Company. Seller shall transfer the Company Stock to Buyer free and
clear of all liens, security interests, encumbrances, adverse claims, pledges,
charges, voting trusts, equities and other restrictions on transfer of any
nature whatsoever (collectively, "Adverse Claims") other than restrictions
imposed by Applicable Law.
1.2. ENDORSEMENT OF COMPANY STOCK. Seller shall deliver at
Closing the certificates representing the Company Stock, duly endorsed in blank
by Seller or accompanied by stock powers duly endorsed in blank and with all
necessary transfer tax and other revenue stamps (if any), acquired at Seller's
expense, affixed and cancelled. Seller, at its sole expense, agrees to cure
(both before and after Closing) any deficiencies with respect to the endorsement
of the certificates or other documents of conveyance with respect to the Company
Stock or with respect to the stock powers accompanying the Company Stock.
1.3. NON-ASSIGNMENT OF CERTAIN CONTRACTS. Notwithstanding
anything to the contrary in this Agreement, to the extent that the sale of the
Company Stock hereunder shall constitute an indirect assignment of a contract,
lease or other agreement of Company, if any, requiring the consent of any third
party to the sale of Company Stock to Buyer, neither this Agreement nor any
action taken pursuant to its provisions shall constitute an indirect assignment
or an agreement to assign if such indirect assignment or attempted assignment
would constitute a breach thereof or result in the loss or diminution thereof;
provided, however, that in each such case, Seller, without incurring
out-of-pocket expenses, shall use reasonable efforts to assist Buyer to obtain
the consent of such other party to such indirect assignment to Buyer. If such
consent is not obtained, however, Seller have no liability or obligation to
Buyer related thereto.
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ARTICLE 2. PURCHASE PRICE
2.1. PURCHASE PRICE. Subject to Section 2.2, at the Closing,
Buyer shall pay to Seller for the Company Stock the sum of $10,300,000.
2.2. ADJUSTMENT TO PURCHASE PRICE. The parties agree that the
purchase price was determined as if the net working capital of Company was going
to be $1.00 at the close of business on the Closing Date. Accordingly, the
parties agree that the purchase price set forth in this Article 2 shall be
adjusted (up or down) on the Adjustment Date (as defined in Section 4.6) to
reflect the actual net working capital of Company on the Closing Date (the
"Actual Net Working Capital"), as shown on the balance sheet to be prepared in
accordance with Section 4.6 hereof. If the Actual Net Working Capital of Company
so reflected is greater than $1.00 on the Closing Date, then the purchase price
paid pursuant to Section 2.1 shall be increased dollar for dollar for each
dollar the Actual Net Working Capital exceeds $1.00 on the Closing Date. If the
Actual Net Working Capital of Company so reflected is less than $1.00 on the
Closing Date, then the purchase price paid pursuant to Section 2.1 shall be
decreased dollar for dollar for each dollar the Actual Net Working Capital falls
below $1.00 on the Closing Date. For purposes of this Agreement, Actual Net
Working Capital shall mean the aggregate current assets of Company on the
Closing Date minus the aggregate of all current liabilities of Company on the
Closing Date, calculated in accordance with generally accepted accounting
principles ("GAAP"). In computing the adjustment amounts provided for in this
Section, the party owing payment to the other pursuant to this Section shall
make such payment in cash.
In the event of a dispute between the parties as to the Actual
Net Working Capital, the parties will have 30 days to resolve the dispute among
themselves. If the parties have not resolved such dispute within such 30-day
period, then the parties shall select an arbitrator who shall decide the dispute
within 30 days after being selected. If the parties cannot agree on an
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arbitrator, then Buyer and Seller shall each select an arbitrator and the two
arbitrators so selected shall select a third arbitrator. The parties hereto each
agree to be bound by the decision of the arbitrator(s). In the event that three
arbitrators are chosen, a majority decision will be required. Each arbitrator
can be any natural person above the age of 18 and need not have any specific
qualifications. All costs of the arbitration shall be split equally between
Buyer and Parent.
ARTICLE 3. CLOSING
3.1. TIME AND PLACE OF CLOSING. Unless otherwise agreed to by the
parties hereto, this transaction shall be closed upon the date hereof (the
"Closing"). The Closing shall take place at a time and location mutually
agreeable to Buyer and Seller. The date on which the Closing occurs shall be
referred to as the "Closing Date."
3.2. DELIVERIES BY SELLER AND PARENT. At the Closing, Seller and
Parent shall deliver to Buyer, all duly executed:
(a) the Company Stock as required by Section 1.1 hereof.
3.3. DELIVERIES BY BUYER. At the Closing, Buyer shall deliver to
Seller, all duly and properly executed (where applicable):
(a) the purchase price provided in Section 2.1; and
(b) a certified copy of resolutions of the director(s)
and shareholder(s) (if required) of Buyer authorizing the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein.
3.4. TITLE POLICIES. Buyer shall obtain one or more extended
coverage policies of title insurance from a title company selected by Buyer and
reasonably acceptable to Seller (the "Title Company") in the amount to be agreed
upon between Buyer and Seller with each of the Title Company's standard printed
exceptions deleted and including such endorsements reasonably requested by Buyer
(including, but not limited to,
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comprehensive, access, contiguity, non-arbitration, going concern,
non-imputation and zoning endorsements) and that are available in the state
where the Land is located, insuring leasehold or fee simple title, whichever is
applicable, to the Land subject only to the exceptions permitted by Section 3.5
hereof (the "Title Policies"). Such Title Policies shall be obtained by Buyer
post-Closing.
3.5. PERMITTED ENCUMBRANCES. The Title Policies shall insure
Buyer's interest in the Land to be free and clear of all encumbrances whatsoever
except the Permitted Encumbrances. For purposes hereof, "Permitted Encumbrances"
shall mean and include: (i) zoning ordinances and regulations and building and
use restrictions; (ii) real estate taxes and assessments, both general and
special, which are a lien but which are not yet due and payable at the Closing
Date; (iii) easements, encumbrances, covenants, conditions, reservations,
restrictions and any other matters of record; and (iv) any matter which would be
disclosed by an accurate survey. Buyer and Seller shall each pay one-half of the
costs associated with the delivery of the Title Policies to Buyer. In addition,
Seller shall pay to remove any mortgages or liens of a monetary nature that are
of record against any portion of the Land.
3.6. SURVEYS. Buyer shall obtain for its use and for the use of
the Title Company in connection with the issuance of the Title Policies, one or
more current and complete surveys of the Land, made on the ground by a competent
registered surveyor, showing: (a) the exact boundary lines of the Land; (b) the
location thereon of all, if any, buildings, improvements, roads, and easements
now existing; (c) the number of acres in the Land; (d) the location of any
buildings, fences or other improvements which encroach on the Land; (e) the
location of any improvements on the Land which encroach on any neighboring
property; (f) all building lines established in respect of the Land; (g) all
public access to the Land, and representing that the boundaries of the Land are
contiguous with the boundaries of all adjoining parcels (the "Surveys"). The
Surveys shall be obtained by Buyer post-
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Closing, and shall be delivered to Buyer and the Title Company, together with
certification to each entity by the surveyor, and also together with such
additional supporting reports and other certificates as the Title Company may
require to enable the Title Company to delete its standard survey exceptions
from the Title Policies. Buyer and Seller shall each pay one-half of the costs
of the Surveys. In no event shall the failure of the Title Company to deliver
any title work, or the Title Policies or of any surveyor to deliver any Survey
delay Closing.
ARTICLE 4. POST CLOSING COVENANTS
4.1. CHANGE OF NAME; REMOVAL OF IDENTIFICATION.
(a) Within 30 days after Closing, Buyer shall take all
necessary action to cause Company to discontinue use of any business
name that includes the name of the Parent, Seller or any of their
affiliated companies.
(b) Within six months after the Closing, Buyer shall remove from
the assets all visible names, symbols, trade names, service marks and
logos of Parent.
4.2. FURTHER ASSURANCE. From time to time on and after the
Closing and without further consideration, the parties hereto shall each deliver
or cause to be delivered to any other party at such times and places as shall be
reasonably requested, such additional instruments as any of the others may
reasonably request for the purpose of carrying out this Agreement and the
transaction contemplated hereby. Seller also without further consideration,
agrees to cooperate with Buyer and to use its reasonable efforts to have the
present officers and employees of Company cooperate on and after the Closing
Date in furnishing to Buyer information, evidence, testimony, and other
assistance in connection with obtaining all necessary permits and approvals and
in connection with any actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to the Closing
Date. Seller shall not be obligated in any event to incur out-of-pocket expenses
in connection with
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its performance under this Section 4.2. Seller acknowledges and agrees that,
from and after the Closing, Buyer shall be entitled to possession of all
documents, books, records (including tax records), agreements and financial and
operating data of any sort of Company; provided, however, that per Seller's
written request Buyer shall promptly provide Seller with copies of any of such
documents, books, records (including tax records), agreements and financial and
operating data of the Company that Seller may reasonably require.
4.3. TRANSITION. Neither Seller nor Parent will take any action
that is designed or intended to have the effect of discouraging any customer or
business associate of Company from maintaining the same business relationships
with Buyer after the Closing that it maintained with Company before the Closing.
Seller and Parent will refer all customer inquiries relating to the Business to
Buyer from and after the Closing. Further, Seller and Parent agree that for a
period of 90 days following the Closing Date, they will, without additional
consideration, assist Buyer with the orderly transition of the operations of the
Business from Seller to Buyer. Seller shall not be obligated in any event to
incur out-of-pocket expenses in connection with performance under this Section
4.3.
4.4. TAXES. (i) Seller irrevocably agrees to indemnify
Buyer against, and to hold Buyer harmless from:
(a) any and all federal, state, local, and other taxes of
Company arising from the audit, examination, review or other
adjustment of tax liabilities for periods ending on or prior to
the Closing Date;
(b) any and all taxes, interest, penalties, additions to
tax (or additional amounts imposed with respect to any such
interest, penalties, or additions to tax) imposed with respect to
any federal, state, local, or other taxes of Company for periods
ending on or before the Closing Date; and
(c) any and all federal, state, local, or other taxes of
Buyer arising as the result of any payment by
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the Seller to Buyer in fulfillment of its obligation pursuant to
this Section 4.4(i).
(ii) Seller agrees that it shall be responsible, at its sole
expense, for the preparation of Company's federal, state, local and
other income and franchise tax returns for the tax periods beginning
January 1, 1998 and ending on the Closing Date. Buyer agrees to
cooperate with Seller in the preparation of such returns. Seller further
agrees that it shall pay all taxes (including all penalties and
interest, if any) due for such tax period. Prior to filing the returns
provided for in this paragraph, Seller agrees to allow Buyer a
reasonable period of time to review and comment upon such returns and
Seller will make reasonable business efforts to accommodate Buyer's
comments.
4.5. 338(H)(10) ELECTION. (i) Parent, Seller, Buyer and Company
shall treat this transaction in accordance with Section 338(h)(10) of
the Internal Revenue Code of 1986 (the "Code"), as amended (the
"Election").
(ii) In connection with the election, not later than 90 days after
the closing date, Seller and Buyer shall act together in good faith to
(a) determine and agree upon the "Modified Aggregate deemed Sale Price"
of the assets of the company deemed attributable to "Section 751
Property" within the meaning of Section 751 of the code (within that
meaning of, and in accordance with, Treasury Regulation Section
1.338(h)(10)-1(f)), and (b) determine and agree upon the property
allocations (the "Allocations") of the "Modified aggregate Deemed Sale
Price" among such assets (in accordance with section 338(b)(5) of the
code and the Treasury Regulations promulgated thereunder). Seller and
Buyer shall (A) be bound by such determination and such Allocations for
purposes of determining any taxes, (B) prepare and file their tax
returns on a basis consistent with such determination of the "Modified
Aggregate deemed Sale Price" and such Allocations, and (C) take no
position inconsistent with such determination and Allocations on any
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applicable tax return, in any proceeding before any taxing authority or
otherwise. In the event that any such Allocations are disputed by any
taxing authority, the party receiving notice of the dispute shall
promptly notify the other party hereto concerning resolution of the
dispute.
4.6. POST CLOSING BALANCE SHEET. On the date which is 120 days
after the Closing Date (the "Adjustment Date") the parties shall adjust the
purchase price in accordance with Section 2.2 based on a balance sheet of
Company for the period ending on the close of business on the Closing Date,
prepared by Buyer in accordance with GAAP and delivered to Seller, together with
the supporting documentation for all current assets and liabilities used to
prepare such balance sheet, at least seven days prior to the Adjustment Date.
Buyer shall use its best efforts to collect accounts receivable that are due and
owing for work performed prior to the Closing Date. On or before the Adjustment
Date, Buyer shall remit to Seller all amounts received with respect to such
accounts receivable. Any payments received by Buyer from account debtors
which had accounts receivable outstanding on the Closing Date shall be first
applied to the oldest outstanding accounts receivable of such account debtor.
Any accounts receivable that have not been collected within 120 days of the
Closing Date shall be assigned by Buyer to Seller. Any dispute between the
parties as to this Section 4.6 shall be resolved in accordance with the
procedure set forth in Section 2.2.
4.7. CLOSING DATE ACTIONS. Buyer, Parent and Seller mutually
agree that they shall not, and shall cause Company not to, engage in an
transaction outside the normal course of business on the Closing Date.
4.8. TRANSFER FACILITY HAULING AGREEMENT. The parties will
negotiate and enter into a written agreement whereby Company will provide
specified loading and hauling services to Seller related to the operation by
Company of the MSW Facility. Such agreement shall be on terms mutually agreeable
to the parties.
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4.9. RESIGNATIONS. Each officer and director of Company
shall deliver to Buyer their written resignation.
4.10. DELIVERY OF DISCLOSURE SCHEDULES. Seller shall deliver to
Buyer complete and final Disclosure Schedules as soon as possible after Closing.
4.11. OTHER TRANSFER DOCUMENTS. Reasonably promptly after the
Closing Date, Seller and Parent shall deliver to Buyer all duly executed:
(a) certified copies of resolutions of the shareholder(s) (if
required) and director(s) of Seller and Parent authorizing the execution
of this Agreement, the sale of the Company Stock to Buyer, and the
consummation of the transactions contemplated herein; and
(b) such other separate instruments of sale, assignment, or
transfer reasonably required by Buyer.
4.12. SURVIVAL. The covenants in this Article 4 shall
survive the Closing in accordance with Article 11 hereof.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER, PARENT AND COMPANY.
Company, as to the time period before Closing only, and Seller and Parent,
jointly and severally, and only with respect to the period of time since August
26, 1997, represent and warrant to Buyer that, to the best of Parent's and
Seller's knowledge, the statements contained in this Section 5 except as set
forth in the schedules to the subsections of this Section 5 to be delivered by
Seller to Buyer on the date hereof (such schedules hereinafter collectively
referred to as the "Disclosure Schedules" and, individually, as a "Disclosure
Schedule"): (i) are correct and complete in all material respects as of the date
of this Agreement; (ii) will be correct and complete in all material respects as
of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 5); and (iii)
shall survive the Closing in accordance with Article 11 hereof. The
representations and warranties in this Article 5 do not apply
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with respect to facts or circumstances first arising before August 26, 1997, or
to any facts of which Buyer becomes aware prior to Closing if Buyer proceeds to
Closing.
Wherever a representation or warranty herein is qualified as
having been made "to the best of Seller's or Parent's knowledge", such phrase
shall mean the actual knowledge of the officers, directors, and senior and
regional management of Seller and Parent actively responsible for the operation
of the Business.
5.1. ORGANIZATION; AUTHORITY.
(a) Company is a Michigan corporation duly incorporated, validly
existing and in good standing under the laws of the State of Michigan
and is now and has been at all times since its incorporation, duly
authorized, qualified and licensed under all laws, regulations,
ordinances and orders of public authorities to carry on its businesses
in the places and in the manner as conducted at the time such activities
were conducted except for where failure to be so authorized, qualified
or licensed would not have a material adverse affect on the Business.
(b) Seller and Parent each has full legal right, power and
authority (corporate and otherwise) to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. On or before
the Closing, all corporate action of Seller and Parent necessary to
approve the sale of the Company Stock by Seller will have been taken,
including director and shareholder approvals, if necessary.
5.2. STOCK OWNERSHIP; ABSENCE OF ADVERSE CLAIMS. All of the
issued and outstanding shares of Company Stock are owned of record and
beneficially by Seller as set forth below and are free and clear of all Adverse
Claims. This Agreement is the valid and binding obligation of Company, Seller
and Parent, enforceable against each of them in accordance with its terms.
5.3. CAPITALIZATION. The authorized capital stock of Company
consists solely of 60,000 shares of voting common stock, without par value, of
which 100 shares are issued and
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outstanding. All of the issued and outstanding shares of Company Stock have been
duly authorized and validly issued, are fully paid and nonassessable, were
offered, issued, sold and delivered by Company in compliance with all state and
federal laws concerning the issuance of securities and none of such shares were
issued pursuant to awards, grants or bonuses nor in violation of the preemptive
rights of any past or present stockholder. The stock transfer records provided
by Seller and Parent to Buyer correctly set forth all issuances, acquisitions
and retirements of Company Stock since the inception of Company. Company has
never acquired any treasury stock. No subscriptions, options, warrants, puts,
calls, conversion rights or other commitments of any kind exist which obligate
Company to issue any of its authorized but unissued capital stock or otherwise
relate to the sale or transfer by Company of any securities of Company (whether
debt or equity). In addition, Company has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any distribution in
respect thereof. Company has not agreed to register any securities under the
Securities Act of 1933, as amended (the "Act"), or under any state securities
law.
5.4. ACCOUNTS RECEIVABLE. Attached as Schedule 5.4 is a complete
and accurate list of all accounts and notes receivable of Company as of May 8,
1998, including receivables from and advances to employees and also including
all such accounts and notes receivable which are not reflected in the financial
statements, if any. Also attached as Schedule 5.4 is an aging of all accounts
and notes receivable showing amounts due in 30 day aging categories.
5.5. PROPRIETARY RIGHTS; ENVIRONMENTAL DOCUMENTS. (i) Attached as
Schedule 5.5(i) is a complete and accurate list and summary description
as of the date hereof of all material permits, licenses and franchises,
currently owned or held by Company, none of which permits, licenses, and
franchises, have been claimed to or, to the best of Seller's
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or Parent's knowledge, infringe on the rights of others and all of which
are now valid, in good standing and in full force and effect. Except as
set forth on Schedule 5.5(i), such permits, licenses, and franchises,
are adequate for the operation of the Business as presently constituted;
and
(ii) Company and Seller have, as of the date of this Agreement, made
available to Buyer for its inspection all presently held records,
correspondence, reports, notifications, permits, pending permit
applications, licenses and pending license applications, environmental
impact studies, assessments and audits and all notifications from
governmental agencies and any other person or entity and any other
documents of Company in its possession relating to: (a) each material
violation of Applicable Laws (hereinafter defined) by Company relating
to the Land and all, if any, claims thereof; (b) the present or past
environmental compliance by Company relating to the Land; (c) the
present or past environmental condition of the Land; (d) the discharge,
leakage, spillage, transport, disposal or release of any Hazardous
Material (as hereinafter defined) into the environment by Company on or
at the Land; and (e) land use and access approvals relative to any
portion of the Land (collectively, the "Environmental Documents").
5.6. REAL PROPERTY; REPORTING.
(i) Company has good, fee simple or leasehold title, as
applicable, to the Land except as permitted under Article 3 hereof.
Except as set forth on Schedule 5.6(i):
(a) At all times since August 26, 1997, the Treatment
Facility Land has been fully licensed,
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permitted and authorized for the operation of the Treatment
Facility as currently conducted, in all material respects under
all applicable zoning and land use requirements (the "Zoning
Laws").
(b) At all times during operation of the Solidification
Facility and MSW Facility, the Solidification Facility Land has
been, fully licensed, permitted and authorized for the operation
of the Solidification Facility and MSW Facility under all Zoning
Laws.
(c) The Land is usable for its current uses and can be
used by Buyer after the Closing for such uses without materially
violating any Zoning Law, and such uses are legal conforming
uses. To the best of Seller's and Parent's knowledge, there are
no proceedings or amendments pending and brought by or threatened
by, any third party which would result in a material change in
the allowable uses of the Land or which would modify the right of
Company to use the Land for its current uses after the Closing
Date.
(d) The Company has made available to Buyer all
engineering, geologic and other similar reports, documentation
and maps relating to the Land in the possession or control of
Seller, Parent or Company.
(e) Since August 26, 1997, neither Company, Parent nor
Seller has been involved in any litigation or administrative
proceeding relating to Company seeking to impose fines,
penalties or other liabilities or seeking injunctive relief for
violation of any Applicable Laws relating to the environment.
(f) No third party has a present or future right to
possession of all or any material part of the Land, except the
respective lands under the Office Lease.
(g) There are no pending or, to the best of Seller's and
Parent's knowledge, threatened condemnation or eminent domain
proceedings affecting all or any part of the Land.
(ii) To the best of Seller's knowledge, Company has provided to the
government agencies requiring the same, all material reports, notices,
filings and other disclosures required by Applicable Laws and all such
reports, notices, filings and other documents were complete and accurate
in
-15-
all material respects at the time provided to said government agencies.
(iii) Except for the Office Lease, Company does not lease any real
property necessary for the operation of the Business as currently
operated. Set forth on Schedule 5.6 are correct and complete copies of
the Office Lease. With respect to such lease:
(a) such lease is legal, valid, binding, enforceable and
in full force and effect and represents the entire agreement
between the respective lessor and lessee with respect to such
property;
(b) neither Company, Seller nor Parent has: (A) received
any notice of cancellation or termination under such lease and no
lessor has any right of termination or cancellation under such
lease, or (B) received any notice of a breach or default under
such lease, which breach or default has not been cured; and
(c) neither Company, Seller nor Parent nor (to the best
knowledge of Company, Seller and Parent) any other party to such
lease, is in breach or default in any material respect, and, to
the best knowledge of Company, Seller and Parent, no event has
occurred that, with notice or lapse of time would constitute such
a breach or default or permit termination, modification or
acceleration under the such lease.
(iv) Seller presently enjoys peaceful and quiet possession of the
Office Land.
5.7. PERSONAL PROPERTY. (i) Attached as Schedule 5.7(i) is a
complete and accurate list and a complete description as of the date
hereof of all personal property of Company with a value in excess of
$5,000, including true and correct copies of leases for equipment and
other personal property, if any, used in the operation of the Business.
All of the vehicles, machinery and other equipment of Company are in
good working order and repair;
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(ii) all leases set forth on Schedule 5.7(i) are in full force and
effect and constitute valid and binding agreements of the parties
thereto (and their successors) in accordance with their respective
terms. No material default by Company, or, to the best of Seller's and
Parent's knowledge, any other party to any of such leases, exists or
would exist except for the passage of time or delivery of a notice or
both;
(iii) all fixed assets used by Company in the operation of the
Business are either owned by Company or leased by Company under an
agreement indicated on Schedule 5.7(i). Company's combined fixed assets
(together with the real property assets) constitute all of the real and
personal property necessary for the operation of the Business by Company
as currently conducted and include all of the permits, licenses,
franchises, consents and other approvals necessary to operate the
Business as currently conducted; and
(iv) at the Closing, Company shall have good and merchantable title
to all personal property, free and clear of all debts and capital lease
payments (including lease end buy-out payments).
5.8. CONTRACTS. Attached as Schedule 5.8 is a complete and
accurate list as of the date hereof of all of the following types of contracts,
commitments and other agreements to which Company is a party or by which Company
or its properties are bound, which list shall include, at a minimum, the full
names of each party to each agreement and the date of execution thereof,
including without limitation, waste transportation, treatment and processing
contracts, joint venture or partnership agreements, contracts or collective
bargaining arrangements with any labor organizations, loan agreements, powers of
attorney (each of which shall be cancelled at the Closing), indemnity or
guaranty agreements, bonds, mortgages, options to purchase land, liens, pledges
or other security agreements, agreements for the employment of any individual,
agreements under which Company has
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advanced or loaned any amount to any employee, officer or director of Company,
any guaranties by Company, any agreement concerning confidentiality or
noncompetition and any other agreement under which the consequences of a default
or termination could have a material and adverse effect on the business,
financial condition, operations or prospects of Company. To the best of Seller's
and Parent's knowledge none of the agreements listed on Schedule 5.8 have been
modified, altered, terminated or otherwise amended and there have been no
waivers, oral agreements, representations or other statements with relation to
any such agreements except as described in Schedule 5.8. Company has complied
with all obligations pertaining to it contained in such contracts, commitments
and other agreements, is not in default thereunder and no notice of default has
been received nor will the consummation of the transactions contemplated by this
Agreement result in such a default. To the best of Seller's or Parent's
knowledge, there is no default by any other party to any contract, commitment or
other agreement attached as Schedule 5.8.
5.9. INSURANCE POLICIES. Attached as Schedule 5.9 are complete
and accurate certificates evidencing insurance policies carried by Company and
an accurate list of all insurance loss runs and workers' compensation claims
received for the past three policy years relating to such policies. All
insurance policies are in full force and effect and shall remain in full force
and effect through the Closing Date. With respect to the Business and the Land
during Seller's ownership of the Company, Company's insurance has never been
cancelled and Company has never been denied coverage.
5.10. EMPLOYEES; COMPENSATION. Attached as Schedule 5.10 is a
complete and accurate list of all employees of Company and the rate of
compensation of each as of the date hereof (including a breakdown of the portion
thereof attributable to salary, bonus and other compensation, respectively).
There is no pending or, to the best of Seller's or Parent's knowledge,
threatened labor dispute involving Company and any group of its
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employees nor has Company experienced any labor interruptions during Seller's
ownership of the Company.
5.11. EMPLOYEE PLANS. Attached as Schedule 5.11 are complete and
accurate descriptions of all plans subject to Sections 3(3), (1), (2), (37) and
(40), respectively, of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) which are currently maintained and/or sponsored by Company,
or to which Company currently contributes, or has an obligation to contribute in
the future (including, without limitation, employment agreements and any other
agreements containing "golden parachute" provisions and deferred compensation
agreements), together with copies of any trusts related thereto and a
classification of employees covered thereby (collectively, the "Plans"). Also
listed on Schedule 5.11 are all of the Plans that have been terminated within
the past three years. Seller shall provide copies of the Plans to Buyer
post-Closing.
5.12. COMPLIANCE WITH ERISA. None of the Company, any Controlled
Group Member (as defined in Code Section 414(n)(6)(B)), nor any business,
subsidiary, division or operation acquired by Company or a Controlled Group
Member in the last five years, ever have maintained or sponsored, or contributed
to, an employee pension benefit plan (as defined in ERISA Section 3(2)) which is
subject to the provisions of Title IV of ERISA. Except for the Plans, Company
does not maintain or sponsor, nor is a contributing employer to, a pension,
profit-sharing, deferred compensation, stock option, employee stock purchase or
other employee benefit plan, employee welfare benefit plan, or any other
arrangement with its employees. All Plans are in substantial compliance with all
applicable provisions of ERISA and the regulations issued thereunder, as well as
with all other laws applicable to such Plans, and, in all material respects,
have been administered, operated and managed in substantial accordance with the
governing documents. All Plans that are intended to qualify (the "Qualified
Plans") under Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code")
-19-
have been determined by the Internal Revenue Service to be so qualified, and
copies of the current plan determination letters, most recent Form 5500, or, as
applicable, Form 5500-C/R filed with respect to each such Qualified Plan or
employee welfare benefit plan and most recent trustee or custodian report, are
included as part of Schedule 5.12 hereof. To the extent that any Qualified Plans
have not been amended to comply with the laws and regulations applicable to such
Plan, the remedial amendment period permitting retroactive amendment of such
Qualified Plans has not expired and will not expire within 120 days after the
Closing Date. All reports and other documents required to be filed with any
governmental agency or distributed to plan participants or beneficiaries
(including, but not limited to, annual reports, summary annual reports,
actuarial reports, PBGC-1 Forms, audits or tax returns) have been timely filed
or distributed. None of: (i) Seller; (ii) any Plan; or (iii) Company, has
engaged in any transaction prohibited under the provisions of Section 4975 of
the Code or Section 406 of ERISA. No Plan has incurred an accumulated funding
deficiency, as defined in Section 412(a) of the Code and Section 302(1) of
ERISA. Further:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan without notice to
and approval by the Internal Revenue Service;
(ii) with respect to Plans which qualify as "group health plans"
under Section 4980B of the Internal Revenue Code and Section 607(1) of
ERISA and related regulations (relating to the benefit continuation
rights imposed by "COBRA"), Company and Seller have complied (and on the
Closing Date will have complied), in all respects with all reporting,
disclosure, notice, election and other benefit continuation requirements
imposed thereunder as and when applicable to such plans, and Company has
no (and will not incur any) direct or indirect liability and Company is
not (and will not be) subject to any loss, assessment, excise
-20-
tax penalty, loss of federal income tax deduction or other sanction,
arising on account of or in respect of any direct or indirect failure by
Company or Seller or any of them, any time prior to the Closing Date to
comply with any such federal or state benefit continuation requirement,
which is capable of being assessed or asserted before or after the
Closing Date directly or indirectly against Company or Seller, or any of
them with respect to such group health plans;
(iii) the Financial Statements reflect the approximate total pension,
medical and other benefit expense for all Plans for the periods covered
by the applicable Financial Statement, and no material funding changes
or irregularities are reflected thereon which would cause such Financial
Statements to be not representative of most prior periods;
(iv) attached hereto as Schedule 5.12(iv) is a copy of the claims
history under Company's group health plan for the past three years;
(v) Company has no (and will not incur any) retiree health care
obligations to its employees; and
(vi) with respect to any Plan which qualifies as a group health
plan, such plan is fully insured and all premiums have been paid on a
timely basis and are paid in full as of the Closing Date or, to the
extent such plan is not fully insured, all self insured obligations have
been met as of the Closing Date and are fully reflected in the plan's
financial statements. To the extent that any of Company's group health
plans are retrospectively rated, there are no liabilities capable of
assertion against Company in respect of claims already incurred and
present.
5.13. COMPLIANCE WITH LAW; NO CONFLICTS.
(i) To the best of Parent's and Seller's knowledge, except as
set forth on Schedule 5.6(i), Company has complied in all material
respects with, and is now in material compliance with, all federal,
state and local statutes, laws, rules, regulations, orders, licenses,
permits
-21-
(including, without limitation, zoning restrictions and land use
requirements) and all administrative and judicial judgments, rulings,
decisions and orders of any body having jurisdiction over Company, the
Business or the Land (the "Applicable Laws"). Neither Company, Seller
nor Parent have received any written notice that Company is under
investigation or other form of review with respect to any Applicable Law
materially adversely affecting the Business; and
(ii) The execution, delivery and performance of this Agreement, the
consummation of any transactions herein referred to or contemplated
hereby and the fulfillment of the terms hereof and thereof will not in
any material respect:
(a) conflict with, or result in a breach or violation of
the Articles of Incorporation or Bylaws of Company;
(b) conflict with, or result in a breach under any
document, agreement or other instrument to which Company, or
Seller is a party, or result in the creation or imposition of any
lien, charge or encumbrance on any properties of Company or
Seller pursuant to: (A) any law or regulation to which Company or
Seller, or any of their respective properties are subject, or (B)
any judgment, order or decree to which Company or Seller is bound
or any of their respective properties are subject;
(c) result in termination or any impairment of any permit,
license, franchise, contractual right or other authorization of
Company; or
(d) except for the filings by Seller and Buyer required by
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and any consents or filings required
under any permit or customer contract, require the consent of, or
the filing with any governmental authority or agency or any
-22-
other third party in order to remain in full force and effect.
5.14. TAXES. Company has filed, or will file, in a
timely manner all requisite federal, state, local and other tax returns due for
all fiscal periods ended on or before the date hereof and, as of the Closing,
shall have filed or will file in a timely manner all such returns due for all
periods ended on or before the Closing Date. No federal, state, local or other
tax returns or reports filed by Seller (whether filed prior to, on or after the
date hereof) with respect to the Company will result in any taxes, assessments,
fees or other governmental charges upon the assets of Buyer, whether as a
transferee of the assets or otherwise. All federal, state and local taxes due
and payable with respect to the Company or the assets have been paid, including,
without limiting the generality of the foregoing, all federal, state and local
income, sales, use, franchise, excise and property taxes. Except as set forth in
Schedule 5.14, no notice of any claim for taxes, whether pending or threatened,
has been received.
5.15. LITIGATION. Except as set forth on Schedule 5.15, there is
no material claim, litigation, action, suit or proceeding, investigation, formal
arbitration, informal arbitration or mediation, administrative, judicial or
other review, pending or, to the best of Seller's or Parent's knowledge,
threatened against Company or Seller, or relating to the business or affairs of
Company, at law or in equity, before any federal, state or local court or
regulatory agency, or other governmental or private authority; no written notice
of any of the above has been received by Parent, Company or Seller. Also listed
on Schedule 5.15 are all instances where Company is the plaintiff, or
complaining or moving party, under any of the above types of proceedings or
otherwise.
5.16. CONDUCT OF BUSINESS. (INTENTIONALLY DELETED)
-23-
5.17. BANK ACCOUNTS; DEPOSITORIES. Attached as Schedule
5.17 is a complete and accurate list as of the date of this Agreement, of:
(i) the name of each financial institution in which Company has
any account or safe deposit box;
(ii) the names in which each account or box is held;
(iii) the type of each account; and
(iv) the name of each person authorized to draw on or have access to
each account or box.
5.18. HAZARDOUS MATERIALS. To the best of Parent's knowledge
specifically with respect to the Business, except as set forth on
Schedule 5.18, (i) Company has generated, transported, stored, handled,
recycled, reclaimed, disposed of, or contracted for the disposal of,
hazardous materials, hazardous wastes, hazardous substances, toxic
wastes or substances as those terms are defined by the Resource
Conservation and Recovery Act of 1976; the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"); the Clean Water
Act; the Toxic Substances Control Act; any comparable or similar state
statute applicable to the Business; or the rules and regulations
promulgated under any of the foregoing, as each of the foregoing may
have been amended (collectively, "Hazardous Materials") in substantial
compliance with all Applicable Laws.
(ii) No liens with respect to environmental liability have been
imposed against Company or the Land under CERCLA, any comparable state
statute affecting the Business or other Applicable Law, and, to the best
of Parent's knowledge, no facts or circumstances exist which may
reasonably be expected to give rise to the same. No portion of the Land
is listed on the CERCLIS list or the National Priorities List of
Hazardous Waste Sites or any similar list maintained by the State of
Michigan. Neither Company nor Seller is listed as a potentially
responsible party under CERCLA in connection with the Company, any
comparable state statute or
-24-
other Applicable Law, and neither Company nor Seller has received a
notice of such a listing.
(iii) Set forth on Schedule 5.18 is a complete list of the names and
addresses of all disposal sites utilized by Company, none of which sites
is listed on the CERCLIS list or the National Priorities List of
hazardous waste sites or any comparable state list.
(iv) There have been no spills, leaks, deposits or other releases
into the environment or onto the Land by Company of any Hazardous
Materials.
5.19. STORAGE TANKS. Except as set forth on Schedule 5.19, the
Land does not contain any underground or above-ground storage tanks containing
Hazardous Materials. All above and below ground tanks currently in use on the
Land are being used and maintained in accordance with all Applicable Laws.
5.20. ABSENCE OF CERTAIN BUSINESS PRACTICES. To the best of
Seller's or Parent's knowledge neither Company, Seller nor Parent has ever made,
offered or agreed to offer anything of value to any employees of any customers
of Company for the purpose of attracting business to Company or any foreign or
domestic governmental official, political party or candidate for government
office or any of their respective employees or representatives, nor have they
otherwise taken any action which would cause it to be in violation of the
Foreign Corrupt Practices Act of 1977, as amended.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants that the statements
contained in this Section 6: (i) are correct and complete in all material
respects as of the date of this Agreement; (ii) will be correct and complete in
all material respects as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Article 6); and (iii) shall survive the Closing in accordance with Article 11.
-25-
6.1. CORPORATE ORGANIZATION. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Michigan. Buyer is duly authorized, qualified and licensed under all
applicable laws, regulations and ordinances of public authorities to carry on
its businesses in the places and in the manner as now conducted except for where
the failure to be so authorized, qualified or licensed would not have a material
adverse affect on such businesses.
6.2. AUTHORITY. The officers of Buyer executing this Agreement
have the corporate authority to enter into and bind Buyer to the terms of this
Agreement. On or before the Closing, all corporate action by Buyer necessary to
approve the transaction, including both shareholder and director approvals (if
required), shall have been taken.
6.3. NO CONFLICTS. The execution, delivery and performance of
this Agreement, the consummation of any transactions herein referred to or
contemplated hereby and the fulfillment of the terms hereof and thereof will
not:
(i) conflict with, or result in a breach or violation of
the Articles of Incorporation or Bylaws of Buyer;
(ii) conflict with, or result in a material breach under any
document, agreement or other instrument to which Buyer is a party, or
result in the creation or imposition of any lien, charge or encumbrance
on any properties of Buyer pursuant to: (A) any law or regulation to
which Buyer or any of its property is subject, or (B) any judgment,
order or decree to which Buyer is bound or any of its property is
subject;
(iii) result in termination or any impairment of any material permit,
license, franchise, contractual right or other authorization of Buyer;
or
(iv) except for the filings by Seller and Buyer required by the HSR
Act and any consents or filings required under any permit or customer
contract, require the consent of, or the filing with any governmental
authority or agency
-26-
or any other third party in order to remain in full force and effect.
6.4. BINDING AGREEMENT. This Agreement is the binding
and valid obligation of Buyer, enforceable against it in accordance
with its terms.
6.5. CONDITION OF ASSETS. (i) Buyer acknowledges, warrants and
agrees that, prior to the Closing Date, it has had the opportunity to
and has examined and investigated the nature, environmental condition
and compliance status of the Company and its assets, including, but not
limited to, the Land and the Business. Except as set forth in Article 5,
neither Seller, nor any agent, attorney, employee, or representative of
Seller, has made any representation whatsoever regarding the nature,
environmental condition or compliance status of the Assets, the Land or
the Business by Seller to Buyer or any part thereof and that Buyer in
executing, delivering and/or performing this Agreement has not relied
upon any statement and/or information (including, but not limited to,
any environmental report), to whomsoever made or given directly, orally
or in writing, by any individual, firm or corporation. Buyer has entered
into this Agreement based solely upon its own inspection, evaluation,
review and analysis.
(ii) Buyer acknowledges, warrants and agrees that the materials,
records, reports and documents provided by Seller to Buyer as of the
Closing Date of the Closing adequately, lawfully and sufficiently
disclose to Buyer all environmental matters relevant to the Company, its
assets, Business, and Land, such as to comply in form and substance with
Section 20116 of Part 201 of the Natural Resources and Environmental
Protection Act ("Part 201") (MCLA 324.20116). The parties agree that to
the extent any obligation exists to record any such information or
notice thereof under Section 20116 of Part 201, such obligation will be
Buyer's, provided, however, that Buyer will not record any such
-27-
information or notice without providing Seller with prior written
notice.
ARTICLE 7. COVENANTS OF PARENT AND SELLER PRIOR TO CLOSING
(INTENTIONALLY DELETED)
ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND
SELLER (INTENTIONALLY DELETED)
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
(INTENTIONALLY DELETED)
ARTICLE 10. ASSUMPTION OF LIABILITIES
10.1. NON-ASSUMPTION OF LIABILITIES. (INTENTIONALLY
DELETED).
10.2. ASSUMPTION OF OBLIGATIONS. Buyer agrees to
perform all of Company's obligations and pay its liabilities.
ARTICLE 11. INDEMNIFICATION
11.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
of the representations, warranties and covenants of any party hereto contained
in this Agreement and the liabilities and obligations of the parties with
respect thereto shall survive the Closing hereunder for a period of two years
after the Closing Date; provided, however, that the representations and
warranties in Sections 5.6, 5.18 and 5.19 shall survive for a period of three
years, the representations and warranties in Sections 5.1, 5.2, 5.14, 6.1 and
6.2 shall survive until the expiration of the applicable statute of limitations
period, and the rights set forth in Section 4.9 shall survive in accordance with
the time periods set forth in the Predecessor Contract.
11.2. INDEMNIFICATION BY PARENT AND SELLER. Seller and Parent
agree that they will each, jointly and severally, indemnify, defend (as to third
party claims only), protect and hold harmless
-28-
Buyer, its officers, shareholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parent, agents, members, managers, employees,
successors and assigns at all times from and after the date of this Agreement
from and against all liabilities, claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, penalties, losses, costs and expenses
whatsoever (including specifically, but without limitation, court costs,
reasonable attorneys' fees and expenses and expenses of investigation) whether
equitable or legal, matured or contingent, known or unknown, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, whether arising out of
occurrences prior to, at or after the date of this Agreement, incurred as a
result of or incident to: (a) any material breach of, misrepresentation in,
untruth in or inaccuracy in the representations and warranties by Seller or
Parent (including, without limitation, those relating to Company's environmental
compliance), set forth herein or in the Schedules, Exhibits or certificates
attached hereto or delivered pursuant hereto; (b) nonfulfillment or
nonperformance in any material respect of any agreement, covenant or condition
on the part of Parent or Seller made in this Agreement; or (c) any claim by a
third party that, if true, would mean that a condition for indemnification set
forth in subsections (a) and (b) of this Section 11.2 had been satisfied.
11.3. INDEMNIFICATION BY BUYER. Buyer agrees that it will
indemnify, defend (as to third party claims only), protect and hold harmless
Seller and Parent at all times from and after the Closing Date from and against
all liabilities, claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, penalties, losses, costs and expenses whatsoever
(including specifically, but without limitation, court costs, reasonable
attorneys' fees and expenses and expenses of investigation) whether equitable or
legal, matured or contingent, known or unknown, foreseen or unforeseen, ordinary
or extra-ordinary, patent or latent, incurred by Seller or Parent as a result of
or incident to: (i) any material breach of, misrepresentation in, untruth in or
inaccuracy in the representations and warranties set forth herein,
-29-
or in the Schedules or certificates attached hereto or delivered pursuant hereto
by Buyer; (ii) nonfulfillment or nonperformance in any material respect of any
agreement, covenant or condition on the part of Buyer made in this Agreement
(including, without limitation, the covenant to perform post-Closing obligations
as set forth in Section 10.2); (iii) any liability or obligation relating to the
operation of the Business after the Closing; (iv) any claim by a third party
that, if true, would mean that a condition for indemnification set forth in
subsections (i) or (ii) of this Section 11.3 had been satisfied; (v) any matter
as to which Parent or Seller does not have an indemnification obligation to
Buyer under Section 11.2 hereof; and (vi) any loss suffered by Seller or Parent
relating to the fact that the Permits were not transferred on or before the
Closing Date.
11.4. LIMITATION ON LIABILITY. (a) The indemnification
obligations set forth in this Article 11 shall apply only if a Closing
occurs and then only after the aggregate amount of such obligations
exceeds $250,000, at which time the indemnification obligations shall be
effective as to all amounts, including the initial $250,000. Further,
the indemnification obligations set forth in this Article 11 shall be
limited to an aggregate amount of $10,300,000. Notwithstanding the
foregoing Buyer's obligation for indemnity in Sections 11.3(iii) and
(vi) apply without regard to the cap or the basket contained in this
Section 11.4.
(b) Notwithstanding anything else to the contrary in this
Agreement, the indemnification obligations set forth in this Article
shall be limited to claims as to which the Indemnified Party has given
the Indemnifying Party written notice thereof, stating in reasonable
detail the basis for indemnification hereunder, on or prior to the
expiration of the applicable survival period set forth in Section 11.1.
(c) Notwithstanding anything else in this Agreement, in no event
shall the indemnification obligations under this Article 11 with respect
to any environmental matter exceed the cost reasonably necessary to
comply with the least stringent
-30-
remediation standard necessary to satisfy the governmental agency
requiring the remediation consistent with the subject Land's current
use.
(d) Notwithstanding anything else to the contrary in this
Agreement, no claim shall give rise to an indemnification obligation of
Seller unless it exceeds $5,000.
11.5. PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO THIRD PARTY
CLAIMS. (a) If any third party shall notify a party to this Agreement
(the "Indemnified Party") with respect to any matter (a "Third Party
Claim") that may give rise to a claim for indemnification against any
other party to this Agreement (the "Indemnifying Party") or if any party
who may make a claim for indemnification under this Agreement otherwise
becomes aware of any matter that may give rise to such a claim or wishes
to make such a claim (whether or not related to a Third Party Claim),
then the Indemnified Party shall promptly notify each Indemnifying party
thereof in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely
to the extent) the Indemnifying Party is thereby prejudiced.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against a Third Party Claim with counsel of its choice
satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party notifies the Indemnified Party in writing within a reasonable time
after the Indemnified Party has given notice of the Third Party Claim
that the Indemnifying Party will indemnify the Indemnified Party from
and against the entirety (except for applicable baskets and deductibles)
of any adverse consequences (which will include, without limitation, all
losses, claims, liens, and attorneys' fees and related expenses) the
Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim, (ii) the
Indemnifying Party provides the Indemnified Party with evidence
acceptable
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to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill
its indemnification obligations hereunder,
(iii) the Third Party Claim involves only monetary damages and does not
seek an injunction or equitable relief or involve the possibility of
criminal penalties, and (iv) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with Section 11.5(b) above, (i)
the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim,
(ii) the Indemnified Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (which will
not be unreasonably withheld) and (iii) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party (which will not be unreasonably withheld) unless
there is a complete discharge of the claim.
(d) In the event or to the extent that any of the conditions set
forth in Section 11.5(b) above is or becomes unsatisfied, however, (i)
the Indemnified Party may defend against, and consent to the entry of
any judgment or enter into any settlement with respect to, the Third
Party Claim and any matter it may deem appropriate in its sole
discretion and the Indemnified Party need not consult with, or obtain
any consent from, any Indemnifying Party in connection therewith (but
will keep the Indemnifying Party reasonably informed regarding the
progress and anticipated cost thereof), (ii) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the cost
of defending against the Third Party Claim (including attorneys' fees
and expenses), (iii) the Indemnifying Party will remain
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responsible for any adverse consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim to the fullest extent provided in this
Section 11, and (iv) the Indemnifying Party shall be deemed to have
waived any claim that its indemnification obligation should be reduced
because of the manner in which the counsel for the Indemnified Party
handled the Third Party Claim.
11.6. ADDITIONAL PROCEDURES. (i) In the event indemnification is
requested, the Indemnifying Party and its representatives and agents
will have access to the premises, books and records of the indemnified
party or parties seeking such indemnification to the extent reasonably
necessary to assist it in assessing, addressing or otherwise resolving
the matter for which indemnification is sought.
(ii) Buyer agrees to retain all documents with respect to all
matters as to which indemnity may be sought under Section 11.2. Before
disposing of or otherwise destroying any such documents, Buyer will give
reasonable notice to such effect and deliver to Seller, upon its
request, a copy of any such documents. In addition, each party to this
Agreement agrees to use its reasonable efforts to cause its employees to
cooperate with and assist Seller in connection with any matter for which
indemnity is sought by Buyer hereunder.
(iii) (a) Except if and to the extent required by Applicable Laws and
subject to this Section 11.6(iii), Buyer and Seller each acknowledges,
warrants and agrees that it will not initiate any action with any third
party, including any governmental agency, which could reasonably be
expected to lead to a Third Party Claim against the other; and (b) if
either party believes that a disclosure, communication, or report is
required to be made under any Applicable Law relating to any matter for
which indemnification has been or may be sought under Section 11.2, it
will give the other party prior written notice of the basis for that
belief, including a reference to the specific Applicable Law which the
party
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believes requires such disclosure, communication or report, and the
nature and content of the proposed disclosure, communication or report
which the party believes is required to be made.
(iv) Buyer agrees that it will, as soon as practical, notify Seller
of any contact, whether written, verbal, or in person, by or with any
governmental agency, agency representative, or any other party regarding
Seller's activities at or any other issues related to the environmental
condition or compliance status of the Land, the Assets or the Business.
This provision will be effective through the end of the third year after
the Closing Date.
ARTICLE 12. EXCLUSIVITY
This Agreement contains the exclusive agreement of Seller
and Buyer with respect to the matters covered under this Agreement and will be
in lieu of, and not in addition to, all other remedies which may exist at law,
in equity or under any other contract or agreement and neither Party may assert
any claim with respect to any matter against the other which is not authorized
in this Agreement as to the subject matter thereof.
ARTICLE 13. TERMINATION OF AGREEMENT
13.1. TERMINATION BY BUYER. Buyer, by notice in the
manner hereinafter provided on or before the Closing Date, may terminate this
Agreement in the event of a breach by Parent or Seller in the observance or in
the due and timely performance of any of the agreements or conditions contained
herein on their part to be performed, and such breach shall not have been cured
on or before the Closing Date.
13.2. TERMINATION BY SELLER. Seller may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement in
the event of a breach by Buyer in the observance or in the due and timely
performance of any of the covenants, agreements or conditions contained herein
on its part to
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be performed, and such breach shall not have been cured on or before the Closing
Date.
13.3. REMEDIES IN THE EVENT OF BREACH. In addition to the
termination rights provided in this Article 13, if either party breaches this
Agreement prior to Closing, the other party shall have all other remedies
available at law or under this Agreement.
ARTICLE 14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
14.1. NONDISCLOSURE BY SELLER AND PARENT. Seller and Parent
recognize and acknowledge that they had in the past, currently have, and in the
future may possibly have, access to certain confidential information of Buyer,
such as lists of customers, operational policies, and pricing and cost policies
that are valuable, special and unique assets of Buyer and its businesses. Seller
and Parent each agree that they will not, except as may be required by
Applicable Laws or other legal process, disclose such confidential information
to any person, firm, corporation, association or other entity for any purpose or
reason whatsoever, except to authorized representatives of Buyer, unless such
information becomes known to the public generally through no fault of Seller or
Parent. In the event of a breach or threatened breach by Seller or Parent of the
provisions of this Section, Buyer shall be entitled to an injunction restraining
such party from disclosing, in whole or in part, such confidential information.
Nothing herein shall be construed as prohibiting Buyer from pursuing any other
available remedy for such breach or threatened breach, including, without
limitation, the recovery of damages. The provisions of this Section shall apply
at all times prior to the Closing Date and for a period of one year following
the termination of this Agreement without a Closing having occurred.
14.2. NONDISCLOSURE BY BUYER. Buyer recognizes and acknowledges
that it has in the past, currently has, and prior to the Closing Date, will have
access to certain confidential information of Seller, such as lists of
customers, operational
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policies, and pricing and cost policies that are valuable, special and unique
assets of Seller. Buyer agrees that it will not, except as may be required by
Applicable Laws or valid legal process, disclose such confidential information
to any person, firm, corporation, association, or other entity for any purpose
or reason whatsoever, prior to the Closing Date, except to authorized
representatives of Seller, unless such information becomes known to the public
generally through no fault of Buyer. In the event of a breach or threatened
breach by Buyer of the provisions of this Section, Seller shall be entitled to
an injunction restraining such party from disclosing, in whole or in part, such
confidential information. Nothing contained herein shall be construed as
prohibiting Seller from pursuing any other available remedy for such breach or
threatened breach, including, without limitation, the recovery of damages. The
provisions of this Section shall apply at all times prior to the Closing Date
and for a period of one year following the termination of this Agreement without
a Closing having occurred.
ARTICLE 15. GENERAL
15.1. ASSIGNMENT; BINDING EFFECT; AMENDMENT. This Agreement and
the rights of the parties hereunder may not be assigned (except by operation of
law) and shall be binding upon and shall inure to the benefit of the parties
hereto, and the successors of Buyer, Seller and Parent. This Agreement, upon
execution and delivery, constitutes a valid and binding agreement of the parties
hereto enforceable in accordance with its terms and may be modified or amended
only by a written instrument executed by all parties hereto.
15.2. ENTIRE AGREEMENT. This Agreement is the final, complete and
exclusive statement and expression of the agreement among the parties hereto
with relation to the subject matter of this Agreement, it being understood that
there are no oral representations, understandings or agreements covering the
same subject matter as this Agreement. This Agreement supersedes, and
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cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous discussions, correspondence, or oral or written agreements of
any kind.
15.3. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
15.4. NO BROKERS. Seller and Parent represent and warrant to
Buyer and Buyer represents to Seller and Parent that the warranting party has
had no dealings with any broker or agent so as to entitle such broker or agent
to a commission or fee in connection with the within transaction. If for any
reason a commission or fee shall become due, the party dealing with such agent
or broker shall pay such commission or fee and agrees to indemnify and save
harmless each of the other parties from all claims for such commission or fee
and from all attorneys' fees, litigation costs and other expenses relating to
such claim.
15.5. EXPENSES OF TRANSACTION. Whether or not the transactions
herein contemplated shall be consummated: (i) Buyer will pay the fees, expenses
and disbursements of Buyer and its agents, representatives, accountants and
counsel incurred in connection with the subject matter of this Agreement and any
amendments hereto and all other costs and expenses incurred in the performance
and compliance with all conditions to be performed by Buyer under this
Agreement; and (ii) Seller will pay the fees, expenses and disbursements of
Company, Seller and Parent and their respective agents, representatives,
accountants and counsel incurred in connection with the subject matter of this
Agreement and any amendments hereto and all other costs and expenses incurred in
the performance and compliance with all conditions to be performed by Parent and
Seller under this Agreement. All such fees, expenses and disbursements of Parent
and Seller shall be paid by Seller prior to the Closing so that the Assets will
not be charged with or diminished by any such fee, cost or expense. Parent and
Seller represent and warrant to Buyer that Parent and Seller have relied on
their own advisors for all legal, accounting,
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tax or other advice whatsoever with respect to this Agreement and the
transactions contemplated hereby.
15.6. NOTICES. All notices or other communications required or
permitted hereunder shall be in writing and may be given by depositing the same
in United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, by overnight courier
or by delivering the same in person to such party.
(a) If to Buyer, addressed to it at:
U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
ATTN: Xxxxx Xxxxxx
with a copy to:
U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
ATTN: W. Xxxxxxx Xxx
(b) If to Seller, addressed to it at:
USA Waste Services, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: General Counsel
with a copy to:
USA Waste Services, Inc.
Park West Two
Suite 420
0000 Xxxxx Xxxx Xx.
Xxxxxxxxxx, XX 00000
ATTN: Regional Vice President
Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier, subject to signature verification, and
three business days after the deposit in the U.S. mail of a writing addressed as
above and sent first class mail, certified, return receipt requested, or when
actually received, if earlier. Any party may change the address
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for notice by notifying the other parties of such change in accordance with this
Section.
15.7. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Michigan, without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Michigan or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Michigan.
15.8. NO WAIVER. No delay of or omission in the exercise of any
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in any
such breach or default, or of or in any similar breach or default occurring
later; nor shall any waiver of any single breach or default be deemed a waiver
of any other breach of default occurring before or after that waiver.
15.9. TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
15.10. CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
15.11. SEVERABILITY. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as most
nearly to retain the intent of the parties. If such modification is not
possible, such provision shall be severed from this Agreement. In either case
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
15.12. CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the
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provisions of this Agreement. Any reference to any federal, state, local or
foreign statute shall be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" means including, without limitation. The parties intend that
representations, warranties and covenants contained herein shall have
independent significance. If any party has breached any representation, warranty
or covenant contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party has not
breached shall not detract from or mitigate the fact the party is in breach of
the first representation, warranty or covenant.
15.13. STANDSTILL AGREEMENT. Unless and until this Agreement is
terminated pursuant to Article 12 hereof without the Closing having taken place,
Seller will not directly or indirectly solicit offers for the Stock or the
assets of Company or for a merger or consolidation involving Company, or respond
to inquiries from, share information with, negotiate with or in any way
facilitate inquiries or offers from, third parties who express or who have
heretofore expressed an interest in acquiring the Company by merger,
consolidation or other combination or acquiring any of the Assets or stock of
Company ("Transaction Discussions"); nor will Parent permit Seller or Company to
do any of the foregoing. Buyer shall not engage in any Transaction Discussions
with any person or entity that operates in any aspect of the Business.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
BUYER:
U S LIQUIDS INC.
BY:___________________________
ITS:__________________________
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SELLER:
UNITED WASTE SYSTEMS, INC.
BY:___________________________
ITS:__________________________
PARENT:
USA WASTE SERVICES, INC.
BY:___________________________
ITS:__________________________
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