Exhibit 10.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made this 25th
day of March, 1997 by and between American Disposal Services of
Missouri, Inc., an Oklahoma corporation (the "Purchaser"), and
Waste Management of Indiana, LLC, a Delaware limited Liability
company (the "Seller").
Recitals
The Seller desires to sell, transfer and assign to the Purchaser
and the Purchaser desires to purchase from the Seller certain of
the assets, properties and business of the Seller, all as
hereinafter provided.
Agreements
In consideration of the premises and the mutual representations,
warranties and covenants and subject to the conditions herein
contained and intending to be legally bound, the parties agree as
follows:
1. Purchase and Sale of Assets; Closing.
Section 1.1 Purchased Assets. The Seller agrees to and
will sell, transfer, assign and deliver to the Purchaser at the
Closing (as hereinafter defined), free and clear of all liens,
claims and encumbrances (except those which the Purchaser has
expressly agreed to assume in Section 1.3(a)(2) hereof), the
following assets used in the Seller's business of providing to
the Customer Accounts (as hereinafter defined) solid waste
collection, hauling and disposal services (the "Business") in the
Evansville, Indiana area (the "Purchased Assets"):
(a) the machinery, equipment, leasehold improvements,
construction in progress, furniture and fixtures, trucks,
automobiles, vehicles, refuse containers, computers and other
operating assets owned or leased by the Seller and used in the
Business and identified on Exhibit 1.1 (a) (the "Operating
Assets");
(b) the tools and supplies of the Seller used solely in
connection with the Business, including any shop tools and
equipment, supplies of fuel, lubricants, tires, spare parts,
office equipment and supplies and other consumable supplies (the
"Supplies");
(c) Seller's right, title and interest in the commercial,
industrial and residential customer accounts, customer account
contracts, and other rights to provide services to the customers
of the Seller's Business identified on Exhibit 1.1 (c) (the
"Customer Accounts");
(d) to the extent transferable, the Business' permits,
licenses, governmental approvals, franchises and franchise
rights, telephone numbers, and other proprietary rights
identified on Exhibit 1.1(d) (the "Proprietary Rights");
(e) the operating data, books, files, documents and records
of the Seller relating to the Business, including without
limitation customer lists, credit records, marketing information,
correspondence, and other similar documents and records (the
"Records");
(f) all of the Seller's right, title and interest in and to
the owned real property (the "Owned Real Property") and the
leased real property (the "Leased Real Property"), as identified
on Exhibit 1.1(f) (collectively, the "Real Property");
(g) all accounts receivable of the Business arising from
service in the ordinary course of Business, as shall be
identified on a receivables aging schedule to be provided to
Purchaser at or about the Time of Closing (the "Receivables");
and
(h) any and all goodwill related to the foregoing.
Section 1.2 Excluded Assets. Anything to the contrary in
Section 1.1 notwithstanding, the Purchased Assets shall exclude
the following assets of the Seller (collectively, the "Excluded
Assets"):
(a) the cash consideration to be paid by the Purchaser and
the Seller's other rights under this Agreement;
(b) any assets of Seller used in businesses other than the
Business;
(c) the corporate minute books, stock records and other
records of the Seller;
(d) all cash and cash equivalents and investments, whether
short term or long term of the Business, including prepaid
expenses, bank accounts, certificates of deposit, treasury bills
and securities;
(e) proprietary rights of the Seller not listed on Exhibit
1.1 (d), including Seller's service marks and proprietary
software; and
(f) any assets of the Seller used in other operations of
the Seller or not specifically described in Section 1. 1.
Section 1.3 Purchase Price; Allocation; Payment. (a) As
consideration for the Purchased Assets and the Covenant Not to
Compete in Section 4.7 herein, the Purchaser agrees, subject to
the terms, conditions and limitations set forth in this
Agreement:
(1) to pay to the Seller in the manner specified
below, the total sum of $28,000,000 plus an amount equal to 100%
of the face value of the Receivables aged 59 days or less at the
Time of Closing, 90% of the face value of Receivables aged 60 89
days at the Time of Closing, 70% of the face value of the
Receivables aged 90 119 days at the Time of Closing and 50% of
the face value of the Receivables aged greater than 120 days (the
"Purchase Price");
(2) to assume and discharge when lawfully due those
liabilities, contracts, commitments and other obligations of the
Seller set forth in Exhibit 1.3(a)(2) (the "Assumed
Liabilities"), if any.
(b) the parties agree that the consideration for the
Purchased Assets shall be allocated as follows:
Buildings $1,130,000
Vehicles $875,000
Containers $800,000
Supplies $100,500
Machinery and Equipment $200,000
Real Property $720,000
Goodwill, Customer Accounts, and
Proprietary Rights $7,075,000
Covenant Not to Compete $100,000
Landfill Permit $17,000,000
(c) Purchaser agrees, subject to the terms, conditions and
limitations set forth in this Agreement, that:
(1) an amount equal to $26,000,000, representing the
cash portion of the base purchase price, excluding Receivables,
plus $1,000,000, representing the estimated purchase price for
the Receivables net of Pre Billed Accounts (as hereinafter
defined), for an aggregate of $27,000,000, shall be paid by wire
transfer from Purchaser to Seller at Mellon Bank, Pittsburgh,
Pennsylvania, ABA No. 000000000, Account No. 0000000, at the Time
of Closing;
(2) the aggregate of all sums billed and collected by
Seller on the Customer Accounts for services to be rendered by
Purchaser after the Time of Closing (the "Pre Billed Accounts"),
as such accounts, Pre Billed amounts and billing periods are
identified on Exhibit 1.3(c)(2), shall be credited against the
cash portion of the Purchase Price in favor of Purchaser, as
contemplated in Section 1.3(c)(1) above;
(3) the Purchaser shall deliver to the Seller at the
Time of Closing a promissory note (the "Note") in the aggregate
principal amount of $2,000,000, payable 18 months after the date
of the definitive written agreement and
(4) the Purchaser shall be responsible for any
transfer, sales or other taxes or levies (including any motor
vehicle transfer taxes) that may be payable as a result of the
transaction contemplated hereby and shall pay to Seller promptly
upon request an amount equal to the amount of any such taxes that
may be payable by Seller as a result of such transaction.
(d) Except as otherwise specifically provided in this
Agreement, all expenses, taxes and obligations relating to the
ownership and operation of the Business, including without
limitation, real and personal property taxes and utilities costs,
shall be pro rated between Purchaser and Seller as of midnight of
the day preceding the Closing Date, and the cash portion of the
Purchase Price payable at the Time of Closing shall be adjusted
by such apportionment. Whether amounts are allocable for the
above purposes for the period before or after Closing shall be
determined in accordance with generally accepted accounting
principles using the accrual method. It is anticipated that
Purchaser will pay certain invoices to be delivered to Purchaser
at Closing for additional capital equipment ordered by Seller for
the Business prior to the Time of Closing, as previously
disclosed to Purchaser. On or before the date 10 business days
after the Time of Closing the Seller shall provide to Purchaser a
receivables aging schedule. Within five days of such date the
Seller shall pay to Purchaser (if the Purchaser has overpaid) or
Purchaser shall pay to Seller (if the Purchaser has underpaid),
as appropriate, an amount equal to the difference between the
value of the Receivables and the estimated value of Receivables.
Section 1.4 Excluded Liabilities. Anything to the
contrary in Section 1.3 notwithstanding, Purchaser shall have no
responsibility whatsoever with respect to the following
liabilities, contracts, commitments and other obligations of the
Seller (the "Excluded Liabilities"):
(a) any obligations or liabilities of the Seller arising
under this Agreement;
(b) any obligation of the Seller for federal, state or
local income tax liability (including interest and penalties)
arising from the operations of the Seller up to the Time of
Closing or arising out of the sale by the Seller of the Purchased
Assets pursuant hereto;
(c) any obligation of the Seller for expenses incurred in
connection with the sale of the Purchased Assets pursuant hereto;
or
(d) any other liability or obligation of the Seller which
is not assumed by the Purchaser pursuant to Section 1. 3 (a)(2).
Without limiting the generality of the foregoing statement,
Purchaser shall not assume any CERCLA or other environmental
liability of any nature, including without limitation, the
remediation of any real property or groundwater which relates to
the generation, collection, transportation or disposal of any
materials, relating to Seller's operation and ownership of the
Business prior to the Time of Closing. Anything herein to the
contrary notwithstanding, Purchaser shall be responsible for
closure and post closure liabilities for the Blackfoot landfill.
Section 1.5 Time and Place of the Closing. (a) The
Closing of the sale of the Purchased Assets (the "Closing") shall
take place at the offices of the Seller in Oak Brook, Illinois at
10:00 A.M., local time, on the later of March 31, 1997 and the
date five business days after all of the conditions precedent set
forth in Sections 5 and 6 have been satisfied or waived (the
"Time of Closing"); provided further, however, that if the
Closing shall not have occurred on or before April 30, 1997, then
any party hereto may terminate this agreement upon five days
written notice to the other party.
(b) To the extent that any of the transactions contemplated
hereby constitutes or would be deemed to be the sale, assignment,
transfer, conveyance or delivery, or attempted sale, assignment,
transfer, conveyance or delivery, to the Purchaser of any permit,
contract or agreement and such transaction would be prohibited by
any applicable law or would require any governmental or third
party authorizations, approvals, consents or waivers and such
authorizations, approvals, consents or waivers shall not have
been obtained prior to the Closing, this Agreement shall not
constitute a sale, assignment, transfer, conveyance or delivery,
or an attempted sale, assignment, transfer, conveyance or
delivery thereof. Following the Closing, the parties shall use
reasonable efforts, and cooperate with each other, to obtain
promptly such authorizations, approvals, consents or waivers, to
obtain novations or other agreements if appropriate and, after
obtaining such, to complete the transactions contemplated hereby.
Pending such authorization, approval, novation, consent or
waiver, the parties shall cooperate with each other in any
reasonable and lawful arrangement designed to provide the
economic benefits and burdens of use of such permits, contracts
and agreements to the Purchaser. To the extent possible,
performance obligations of the Seller with respect to any such
permits, contracts, or agreements shall be deemed to be
subcontracted to the Purchaser. To the extent that any contract
or agreement cannot be transferred following the Closing pursuant
to this Section 1.5(b), Seller and Purchaser agree to negotiate
in good faith a mutually acceptable resolution with respect to
such contract or agreement.
(c) The parties acknowledge that at the Closing the Seller
will not be transferring to Purchaser the applicable permits for
the ownership and operation of the Blackfoot landfill, as such
transfer will require the prior written consent of the Indiana
Department of Environmental Management (or reissuance of the
permits), which is expected to occur on or about the date 60 days
after the date hereof. Pending such transfer, the Purchaser
shall operate the landfill as a Subcontractor under Seller's
permits, in full compliance with such permits and all applicable
laws, regulations, orders, ordinances or other applicable
regulatory requirements. Seller shall have the right (but not
the obligation) to require the Purchaser to take whatever action
Seller may reasonably request to comply with such permits and
applicable regulatory requirements. With respect to the period
after Closing, Purchaser shall be entitled to all benefits and
responsible for all burdens of ownership of such landfill pending
such transfer. Upon transfer or reissuance of applicable
permits, the Purchaser shall record the deeds for the landfill
property. If the Indiana Department of Environmental Management
does not approve the transfer on or before December 31, 1997
(unless the parties agree to extend such period), the Purchaser
shall reconvey the Purchased Assets to Seller and Seller shall
refund the Purchase Price to Purchaser, and the parties shall
negotiate in good faith all necessary and proper arrangements to
unwind the transactions contemplated hereby and put each party in
the same position they would have been in had the transactions
not taken place, except that Purchaser shall continue to be
responsible for its actions during the period it operated the
Business and shall be entitled to the benefit of operations
thereof, as well as the burdens thereof for such period.
Section 1.6 Procedure at the Closing. At the Closing,
the following actions will be taken by the parties and the
completion of each action shall be a further condition to the
Closing:
(a) the Seller shall deliver to the Purchaser, in form
satisfactory to the Purchaser, such deeds, bills of sale,
endorsements, assignments, receipts and other instruments, as
shall be sufficient to vest in the Purchaser good and marketable
title to the Purchased Assets, free and clear of all liens,
claims and encumbrances, except as otherwise permitted by this
Agreement; and
(b) the Purchaser shall deliver to the Seller by wire
transfer of immediately available funds the cash portion of the
Purchase Price less the amount of the Prebilled Accounts, if any,
and other prorations, plus the estimated value of the
Receivables, the Note and an assignment and assumption agreement
in form reasonably satisfactory to Seller.
2. Representations and Warranties of the Seller. The
Seller makes the following representations and warranties:
Section 2.1 Organization, Power and Authority. The
Seller is a limited liability company duly organized and legally
existing in good standing under the laws of the State of
Delaware, and has full corporate power and authority (a) to own
or lease its properties and to carry on its business as it is now
being conducted, (b) to enter into this Agreement and to sell,
convey, assist, transfer and deliver the Purchased Assets to the
Purchaser as provided herein, and (c) to carry out the other
transactions and agreements contemplated hereby.
Section 2.2 Financial Statements. Attached as Exhibit
2.2 are the following financial statements with respect to the
Business:
(a) Balance Sheet as of December 31, 1996; and
(b) Income Statement for the 12 month period ended December
31, 1996;
(c) Balance Sheet as of February 28, 1997; and
(d) Income Statement for the 2 month period ended February
28, 1997.
Such financial statements present fairly in all material
respects the financial position of the Business as of the date of
such balance sheet and the results of its operations for the
period covered, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis, except that such financial statements do not contain
footnote disclosure and are subject to normal recurring year end
adjustments.
Section 2.3 Real Property. (a) With respect to the
Owned Real Property, if any, Exhibit 1.1(f) accurately describes
the location, approximate area and recording data for the
relevant deed or assignment to the Seller and applicable title
insurance policy numbers and dates. With respect to the Leased
Real Property, if any, Exhibit 1.1(f) accurately sets forth the
name of the lessor, the approximate area covered by the lease,
the duration of the lease and any renewals, the current annual
rent and the amount of any security deposits. True and complete
copies of all deeds, surveys and title insurance policies (and
any recorded documents postdating said title insurance policies)
relating to the Owned Real Property and of all leases relating to
the Leased Real Property have been delivered to the Purchaser.
The leases described in Exhibit 1.1(f) are in full force and
effect and to Seller's knowledge there are no defaults
thereunder.
(b) Seller has not received any written or, to Seller's
knowledge, oral notice that any structures or improvements on the
Real Property fail in any material respect to conform to any
applicable laws, use restrictions, building ordinances or health
and safety ordinances of any governmental entity.
(c) No work for municipal improvements has been commenced
on or in connection with the Real Property or any street adjacent
thereto and no assessment for public improvements has been made
against the Real Property which remains unpaid. No written or,
to Seller's knowledge, oral notice from any governmental entity
has been served upon the Real Property or received by Seller
requiring any work, repair, construction, alteration or
installation on or in connection with the Real Property, except
for notices with which Seller has fully complied and completed.
(d) Seller has received no written, or to Seller's
knowledge oral, notice, from any governmental entity that the
assessed value of the Real Property has been determined to be
greater than that upon which county, township or school tax was
paid for the most recent tax year applicable to each such tax,
and none of the Real Property or any portion thereof is subject
to any assessment which is payable and has not been paid.
(e) Seller has received no written or, to Seller's
knowledge, oral notices that any governmental entity having the
power of eminent domain over the Real Property has commenced or
intends to exercise the power of eminent domain or a similar
power with respect to all or any part of the Real Property.
Section 2.4 Ownership of Purchased Assets. The Seller
has good and marketable title to, or a valid leasehold interest
in, all of the Purchased Assets, free and clear of all title
defects, liens, claims or other encumbrances of any kind or
character, except liabilities set forth in Exhibit 1.3(a)(2);
and
(a) liens for current taxes, assessments and governmental
charges not yet due and payable;
and
(b) liens, imperfections of title and easements referenced
in title insurance policies reflected on Exhibit 1.1(f) or which
do not, either individually or in the aggregate, materially
detract from the value of, or interfere with the present use of,
properties subject thereto.
Section 2.5 Condition of the Purchased Assets. (a) The
Purchased Assets are being sold AS IS, WHERE IS, and, except as
expressly set forth herein, Seller makes no representations or
warranties with respect to the Purchased Assets. Seller
expressly disclaims any warranties of merchantability or fitness
for any particular purpose, whether express or implied.
Section 2.6 Proprietary Rights. The Seller possesses all
of the Proprietary Rights listed on Exhibit 1.1 (d). The
Proprietary Rights are sufficient to conduct such business
substantially as it is now or heretofore has been conducted, are
in good standing with no known conflict with or infringement of
the asserted or actual rights of others, default or violations.
To Seller's knowledge, no third party has infringed on, asserted
rights in or threatened loss of any of the Proprietary Rights nor
to Seller's knowledge has Seller not taken or omitted to take
action which would have the effect of waiving or releasing a
Proprietary Right and Seller has not received any written notice
of the foregoing.
Section 2.7 Adequacy of the Purchased Assets. The
Purchased Assets constitute, in the aggregate, substantially all
of the property necessary for the conduct of the Business in the
manner in which and to the extent to which it is currently being
conducted.
Section 2.8 Material Contracts. (a) Exhibit 2.8
attached hereto contains a list of each agreement, contract or
commitment to witch the Seller is a party or by which it is bound
and which is material to the operation of the Business.
(b) Neither the Seller nor to Seller's knowledge any party
thereto or bound thereby is in default under any of the
contracts, agreements or instruments comprising Exhibit 2.8, and
to Seller's knowledge no act or event has occurred which with a
notice or lapse of time, or both, would constitute such a
default.
Section 2.9 Performance Bonds. Exhibit 2.9 lists all
performance bonds, guarantys and letters of credit securing any
obligations of the Seller with respect to the Customer Accounts.
All such performance bonds and letters of credit are in good
standing, have not been threatened with withdrawal or termination
and no amounts have been collected by protected parties under the
performance bonds, guarantys and letters of credit.
Section 2.10 Litigation. Except as set forth in Exhibit
2.10, there are no actions, suits, claims, governmental
investigations or arbitration proceedings pending or to the
knowledge of the Seller threatened against or affecting the
Business or any of the Purchased Assets. Except as set forth on
Exhibit 2.10, there are no orders, decrees, judgments or
stipulations currently in effect issued by any local, state or
federal governmental authority in any proceeding relating to the
Business to which the Seller is or was a party or by which the
Seller is bound.
Section 2.11 Compliance with Laws. (a) The Seller has
operated the Business, legally and in substantial compliance with
all applicable laws, regulations, permits, franchises, licenses
and orders. Without limiting the generality of the foregoing, in
the conduct of the Business, the Seller has not transported,
stored, treated or disposed, nor has it allowed or arranged for
any third persons to transport, store, treat or dispose regulated
quantities of waste to or at any location other than a site
lawfully permitted to receive such waste for such purposes; nor
has it performed, arranged for or allowed by any method or
procedure such transportation or disposal in contravention of any
laws or regulations or in any other manner which may result in
material liability for contamination of the environment; nor are
there any underground storage tanks at the Real Property or the
Leased Property.
(b) Except as set forth on Exhibit 2.11, with respect to
the conduct of the Business, the Seller has not received any
notification of any past or present failure by the Seller to
comply in any material respect with any laws, regulations,
permits, franchises, licenses or orders applicable to it or the
Purchased Assets. Except as set forth on Exhibit 2.11, with
respect to the operation of the Business, the Seller has not
received any notification (including requests for information
directed to the Seller) from any governmental agency asserting
that Seller is or may be a "potentially responsible person" for a
remedial action at a waste storage, treatment or disposal
facility, pursuant to the provisions of CERCLA, or any federal,
state or local statute or ordinance assigning responsibility for
the costs of investigating or remediating releases of
contaminants into the environment.
Section 2.12 Due Authorization; Binding Obligation. The
execution, delivery and performance of this Agreement and each of
the other agreements contemplated hereby and the consummation of
the transactions contemplated hereby have been duly authorized by
all necessary corporate action of the Seller. This Agreement has
been duly executed and delivered by the Seller and is a valid and
binding obligation of the Seller, enforceable in accordance with
its terms. Assuming that all requisite consents are obtained
with respect to the permits required for the Business, neither
the execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will: (a) conflict with
or violate any provision of the Seller's articles of
incorporation or bylaws, or of any law, ordinance or regulation
or any decree or order of any court or administrative or other
governmental body which is either applicable to, binding upon or
enforceable against the Seller; or (b) result in any breach of or
default under any material mortgage, contract, agreement,
indenture, will, trust or other instrument which is either
binding upon or enforceable against the Seller or the Purchased
Assets.
Section 2.14 Employee Matters. (a) Set forth on Exhibit
2.14 is a list of the name, residence, address, social security
number, years of service, present position, and rate of
compensation of the employees of the Business. To the knowledge
of the Seller, such employees will be available for employment by
the Purchaser after the Time of Closing.
(b) Except as set forth in Exhibit 2.14, the Seller is not
a party to or bound by any employment agreement, any collective
bargaining agreement or any other agreement with a labor union,
and there has been no effort by any labor union during the 24
months prior to the date hereof to organize any employees of the
Business into one or more collective bargaining units. There is
not pending or, to the best of the knowledge of the Seller,
threatened, any labor dispute, strike or work stoppage which may
affect the Business or which may interfere with its continued
operation. No collective bargaining or union agreement is
currently being negotiated by the Seller with respect to the
Business.
(c) The Seller has no unfunded liability to, and is not
delinquent in any contribution to, any pension or employee
benefit plan (as defined in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended). After the Time of
Closing, the Purchaser will have no liability with respect to any
of the Seller's pension or employee benefit plans.
Section 2.15 Conduct of Business. Since December 31,1996,
the Seller has conducted the Business and operations in
substantially the same manner in which they have traditionally
been conducted, there has been no material adverse change in the
Purchased Assets, and the Seller has not entered into any
material agreements relating to the Business which extend beyond
the Time of Closing.
3. Representations and Warranties of Purchaser. The
Purchaser makes the following representations and warranties:
Section 3.1 Organization, Power and Authority. The
Purchaser is a corporation duly organized and validly existing
under the laws of the State of Oklahoma, with full corporate
power and authority to enter into this Agreement and perform its
obligations hereunder.
Section 3.2 Due Authorization; Binding Obligation. The
execution, delivery and performance of this Agreement and all
other agreements contemplated hereby and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser
and is a valid and binding obligation of the Purchaser
enforceable in accordance with its terms. Assuming that all
requisite consents are obtained with respect to the permits
required for the Business, neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby will: (a) conflict with or violate any
provision of the Purchaser's articles of incorporation or bylaws,
or of any law, ordinance or regulation or any decree or order of
any court or administrative or other governmental body which is
either applicable to, binding upon or enforceable against the
Purchaser; (b) result in any breach of or default under any
material mortgage, contract, agreement, indenture, will, trust or
other instrument which is either binding upon or enforceable
against the Purchaser.
Section 3.3 Investigation. Purchaser has been afforded
an opportunity to conduct its investigation of the Purchased
Assets. Except as disclosed to Seller by Purchaser in writing,
Purchaser has no actual knowledge of any breach by Seller of any
of its representations or warranties contained herein.
Section 3.4 Solvency. Purchaser anticipates that it will
obtain the necessary financing to consummate the transactions
contemplated herein. Purchaser is not, and immediately after
consummation of the transactions contemplated hereunder will not
be "insolvent" within the meaning of the United States Bankruptcy
Code as in effect on the date hereof. The assets of the
Purchaser are not, and immediately following the closing will not
be, unreasonably small in relation to the business in which the
Purchaser shall be engaged. Purchaser does not intend to, or
believe that it will, incur debts beyond its ability to pay such
debts as they mature.
4. Additional Agreements.
Section 4.1 Conduct of Business Pending the Closing.
From and after the date hereof, and until the Time of Closing,
except as otherwise provided by the prior written consent of the
Purchaser, the Seller will conduct its business and operations in
substantially the same manner in which the same have
traditionally been conducted, and it will use reasonable
commercial efforts to (a) preserve its business organization
intact, (b) keep available to the Purchaser the services of its
officers, employees, agents and distributors, and (c) preserve
its relationships with its customers and suppliers.
Section 4.2 Access to the Seller's Plants, Properties and
Records. From and after the execution and delivery of this
Agreement, the Seller will afford to the representatives of the
Purchaser, including Purchaser's lenders, access, during normal
business hours and upon reasonable notice, to the Seller's
premises sufficient to enable the Purchaser to inspect the
Purchased Assets, and the Seller will furnish to such
representatives during such period all such information relating
to the foregoing investigation as the Purchaser may reasonably
request. Seller will cooperate with Purchaser to enable
Purchaser to audit the Business for the years ended December 31,
1995 and 1996. Purchaser will provide a copy thereof to Seller.
After the Time of Closing the Purchaser will provide to Seller
reasonable access to the Records and will not dispose of such
Records without giving Seller an opportunity to copy such
Records.
Section 4.3 Liability for Expenses. The Purchaser will
pay all expenses incurred by the Purchaser, in connection with
the negotiation, execution and performance of this Agreement,
whether or not the transactions contemplated hereby are
consummated, including the fees and expenses of agents,
representatives, accountants and counsel for the Purchaser. The
Seller will pay all expenses incurred by it in connection with
the negotiation, execution and performance of this Agreement,
whether or not the transaction contemplated hereby is
consummated, including the fees and expenses of its counsel and
auditors.
Section 4.4 Indemnification. (a) From and after the
Time of Closing, the Seller agrees to defend, indemnify and hold
the Purchaser and its affiliates harmless from and against all
indemnifiable damages of the Purchaser. For this purpose,
"indemnifiable damages" of the Purchaser means the aggregate of
all expenses, losses, costs, deficiencies, liabilities and
damages (including attorneys' fees and court costs) incurred or
suffered by the Purchaser, or any of its directors, agents,
employees or affiliates or its affiliates' directors, agents or
employees, as a result of or in connection with: (i) any
inaccurate representation or warranty made by the Seller in or
pursuant to this Agreement, (ii) any default in the performance
of any of the covenants or agreements made by the Seller in this
Agreement, (iii) any failure of the Seller to pay, discharge or
perform any of the Excluded Liabilities, or any asserted
liability resulting from any dispute or claim against Purchaser
concerning any of the Excluded Liabilities, or (iv) any third
parry claim which relates to or arises out of the operation of
the Business or the use of the Purchased Assets prior to the
Closing.
(b) From and after the Time of Closing, the Purchaser
agrees to defend, indemnify and hold the Seller and its
affiliates harmless from and against all indemnifiable damages of
the Seller. For this purpose, "indemnifiable damages" of the
Seller means the aggregate of all expenses, losses, costs,
deficiencies, liabilities and damages (including attorneys' fees
and court costs) incurred or suffered by the Seller, or any of
its directors, agents, employees or affiliates or its affiliates'
directors, agents or employees, as a result of or in connection
with: (i) any inaccurate representation or warranty made by the
Purchaser in or pursuant to this Agreement, (ii) any default in
the performance of any of the covenants or agreements made by the
Purchaser in this Agreement, (iii) any failure of the Purchaser
to pay, discharge or perform any of the Assumed Liabilities, or
any asserted liability resulting from any dispute or claim
against Seller concerning any of the Assumed Liabilities, or (iv)
any third party claim which relates to or arises out of the
operation of the Business or the use of the Purchased Assets at
or after the Closing.
(c) Anything herein to the contrary notwithstanding, the
Purchaser and the Seller shall have no obligation to provide
indemnification hereunder (i) until the indemnifiable damages of
the other party exceed $250,000, in which event the indemnifying
party shall be liable for the full amount of such indemnifiable
damages, (ii) in excess of $2,500,000 or (iii) after the date one
year from the date hereto, at which time all obligation to
provide indemnification hereunder shall cease, provided that the
obligation to provide indemnification shall not terminate with
respect to claims brought before the expiration of the applicable
period. Except for actions to specifically enforce covenants
contained herein, the indemnification contemplated hereby shall
be the parties' sole remedy for any breach of this Agreement.
Section 4.5 Covenant Not to Compete. The Seller agrees
that for a period of five (5) years from and after the Time of
Closing, (a) the Seller and its affiliates that are wholly owned
subsidiaries of WMX Technologies, Inc. will not engage (as an
individual or as a stockholder, trustee, partner, financier,
agent, employee or representative of any person, firm,
corporation or association), or have any interest, direct or
indirect, in any business in competition with the Business, as
that business is constituted at the Time of Closing (whether or
not such business is subsequently carried on by the Purchaser or
by any successor or subsequent purchaser of such business), in
any area in the state of Indiana or Illinois within a 50 mile
radius of the Evansville facility or within a 50 mile radius in
Indiana to the West of the Huntingberg facility and (b) the
Seller and its affiliates will not directly or indirectly solicit
the Customer Accounts to provide services in competition with the
Business or intentionally work with a broker to solicit specific
Customer Accounts to provide services in competition with the
Business; provided that this Covenant Not to Compete Agreement
shall not prevent the Seller or the Owner from (i) acquiring and
holding not to exceed two percent (2%) of the outstanding shares
of any corporation engaged in such a competitive business if such
shares are available to the general public on a national
securities exchange, (ii) from providing disposal services, not
including collection or transportation, for wastes generated in
such area; or (iii) from providing services in competition with
the Business in the area marked on the map attached as Exhibit
4.5, which is the area serviced by an affiliate of Seller.
Section 4.6 Title Policies. With respect to each parcel
of Owned Real Estate, or real estate under option or contract to
be purchased by the Seller (all of which are fisted on Exhibit
1.1(f) hereto), the Seller will, at Seller's cost and expense, at
the Time of Closing, deliver or cause to be delivered to
Purchaser, title insurance policies of a reasonably current date
or binding commitments with extended coverage over general
exceptions (except as to matters as may be approved in writing by
Purchaser) to issue such policies in the name of Purchaser or its
nominee as may be appropriate considering the party to ultimately
hold the subject fee title or option rights. Such policies or
commitments shall be issued by a title insurance company
acceptable to Purchaser in an amount equal to the fair market
value of such real property interest as reasonably determined by
Purchaser.
Section 4.7 Surety Bonds. The Purchaser agrees to obtain
the release of all of the Surety bonds, guaranties and letters of
credit listed on Exhibit 2.9 promptly after the Closing and shall
indemnify, defend and hold the Seller harmless from any
liability, loss, cost or expense that may arise under or in
connection with such surety bonds, guaranties and letters of
credit.
Section 4.8 Arbitration of Disputes. (a) It is
acknowledged by the parties that a quick and efficient resolution
of all claims, disputes and other matters in question under this
Agreement after the Closing ("Dispute") is critical to the
implementation of the terms of this Agreement. In order to
effectuate such intent, the parties hereby establish this Dispute
resolution procedure. All Disputes arising under this Agreement
shall be subject to this Section 4.8. Prior to submission of any
Dispute for resolution in accordance with this Section 4.8, the
parties will negotiate in good faith to resolve such Dispute. If
such parties cannot reach agreement within thirty (30) days of
written notice by any party to the other party that a Dispute
exists, the Dispute shall be submitted for resolution in
accordance with this Section 4.8. Any such dispute shall be
arbitrated upon the filing by either party of a written demand,
with notice to the other party, to and under the rules of a
provider of dispute resolution services (the "Arbitration
Service" acceptable to the parties (to the extent such rules are
not inconsistent with this Section 4.8) in Chicago, Illinois
before a panel of three arbitrators. One arbitrator shall be
appointed by each party with each being appointed within ten days
after the Arbitration Service has given notice of the filing of
the demand for arbitration. The two arbitrators so selected, or
if such arbitrators are unable to select another arbitrator, the
Arbitration Service, shall select a third arbitrator within five
days after the date the latter of the first two arbitrators is
selected. Within ten (10) days after receipt of written notice
of the Dispute being brought to the arbitrators, each party shall
submit to the arbitrators a best and final offer with respect to
each issue submitted to the arbitrators and an accompanying
statement of position containing supporting facts and data. Upon
such Dispute being submitted to the arbitrators for resolution,
the arbitrators shall assume exclusive jurisdiction over the
Dispute, and shall utilize such consultants or experts as they
shall deem appropriate under the circumstances, to assist in the
resolution of the dispute and will be required to authorize a
final, binding determinations not, subject to appeal within
fifteen (15) days of the date of submission. For each issue
decided by the arbitrators, they shall choose the best and final
offer of one party with respect to the issue decided, and the
arbitrators shall not have discretion to modify said best and
final offer. For each issue decided by the arbitrators, they
shall award the expenses of the proceeding, including reasonable
attorneys' fees, to the prevailing party with respect to such
issue. In arriving at their decision, the arbitrators shall
consider the pertinent facts and circumstances as presented in
evidence and be guided by the terms and provisions of this
Agreement and applicable law.
(b) Any arbitration award may be entered as a judgment in
the Federal courts or the courts of the State of Illinois. A
printed transcript of any such arbitration proceeding shall be
kept and each of the parties shall have the right to request a
copy of such transcript.
(c) The parties shall continue to perform their respective
obligations under this Agreement, including payment, during any
Dispute proceeding, unless otherwise agreed in writing by the
parties.
(d) This Section 4.8 shall survive the termination of this
Agreement for a period of three years.
Section 4.9 Transitional Matters. Purchaser agrees to
remove all marks, tradenames, logos and other evidence of
ownership by Seller or any division of Seller from the Purchased
Assets promptly upon request by Seller and in any event within 45
days after the Time of Closing.
Section 4.10 Employees. Prior to the Closing, the
Purchaser shall provide the Seller with a list of all employees
of the Business to be hired by the Purchaser. Purchaser shall
have no liability relating to employees of the Business prior to
the Time of Closing, including liabilities for compensation,
benefits, accrued vacation, workers compensation, disability or
pension benefits, or severance benefits for employees not hired
by Purchaser.
Section 4.11 WARN Act. Purchaser shall not, at any time
prior to the date ninety (90) days after the Time of Closing,
implement any employment terminations, layoffs or hours
reductions of 50% or more that result in a "plant closing" or
"mass layoff' as those terms are defined in The Worker Adjustment
and Retraining Notification Act of 1988 ("WARN") affecting in
whole or in part any facility, site of employment, operating unit
or any employee employed by the conduct of the Business without
complying in all material respects with the requirements of WARN.
Section 4.12 National Accounts. Purchaser acknowledges
that Seller is not transferring to Purchaser Seller's National
Account or regional account customers identified in Exhibit
1.1(c) as part of the Purchased Assets. Seller agrees to notify
National Account customers with locations heretofore serviced by
the Business that Seller has sold the Purchased Assets to the
Purchaser and suggest that such customers contact Purchaser to
arrange for continued service. In any event, neither Seller nor
any affiliate or subcontractor (other than Purchaser) shall
service any of such customers at a location heretofore serviced
by the Business for the duration of the period contemplated in
Section 4.5.
Section 4.13 Billing Assistance. Seller shall mail bills
on behalf of Purchaser to Customer Accounts (residential and
commercial) scheduled to be billed in March and April for
services to be performed by Purchaser, and Purchaser shall
reimburse Seller at a rate of $.50 per invoice.
5. Conditions to the Obligations of the Purchaser. The
obligation of the Purchaser to purchase the Purchased Assets
shall be subject to the fulfillment at or prior to the Time of
Closing of each of the following conditions:
Section 5.1 Closing Certificate. The representations and
warranties of the Seller contained in this Agreement and the
Exhibits hereto shall have been true, complete and correct in all
respects as of the date hereof and they shall be true and correct
in all respects as of the Time of Closing. The Seller shall have
performed and complied in all respects with all of its
obligations required by this Agreement to be performed or
complied with at or prior to the Time of Closing. The Seller
shall have delivered to the Purchaser a certificate, dated as of
the date of the Closing, certifying that such representations and
warranties are true, complete and correct in all respects and
that all such obligations have been performed and complied with
in all respects.
Section 5.2 Certified Resolutions. The Seller shall have
delivered to the Purchaser copies of resolutions adopted by the
board of directors of the Seller authorizing the transactions
contemplated by this Agreement, certified as of the Time of
Closing by the Secretary or Assistant Secretary of the Seller.
Section 5.3 Receipt of Necessary Consents. Except as
contemplated by Section 1.5(c), all necessary pre closing
consents or approvals of any regulatory agency, Grey Farms, Inc.
to any of the transactions contemplated hereby, the absence of
which would adversely affect the Purchaser's rights hereunder
shall have been obtained and evidenced by written documentation
satisfactory to the Purchaser.
Section 5.4 No Adverse Litigation. There shall not be
pending or threatened any action or proceeding by or before any
court or other governmental body which shall seek to restrict,
prohibit or invalidate the sale of the Purchased Assets to the
Purchaser or any other transaction contemplated hereby, and
which, in the reasonable judgment of the Purchaser, makes it
inadvisable to proceed with the transaction contemplated hereby.
Section 5.5 Xxxx Xxxxx Xxxxxx Requirements. The waiting
period, if any, under the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976 applicable to the acquisition of the
Purchased Assets shall have expired or been terminated.
6. Conditions to Obligations of the Seller. The obligations of
the Seller to sell the Purchased Assets shall be subject to the
fulfillment at or prior to the Time of Closing of each of the
following conditions:
Section 6.1 Closing Certificate. The representations
and warranties of the Purchaser contained in this Agreement shall
have been true and correct in all respects as of the date hereof,
and they shall be true and correct in all respects as of the Time
of Closing. The Purchaser shall have performed and compiled in
all respects with all of its obligations required by this
Agreement to be performed or complied with at or prior to the
Time of Closing. The Purchaser shall have delivered to the
Seller a certificate, dated as of the date of the Closing,
certifying that such representations and warranties are true and
correct in all respects and that all such obligations have been
performed and compiled with in all respects.
Section 6.2 Certified Resolutions. The Purchaser shall
have delivered to the Seller copies of resolutions adopted by the
board of directors and the shareholders of the Purchaser
authorizing the transactions contemplated by this Agreement,
certified in each case as of the Time of Closing by the Secretary
or Assistant Secretary of the Seller.
Section 6.3 Receipt of Necessary Consents. Except as
contemplated by Section 1.5(c), all necessary pre closing
consents or approvals of any regulatory agency to any of the
transactions contemplated hereby, the absence of which would
adversely affect the Seller's rights hereunder shall have been
obtained and evidenced by written documentation satisfactory to
the Seller.
Section 6.4 No Adverse Litigation. There shall not be
pending or threatened any action or proceeding by or before any
court or other governmental body which shall seek to restrain,
prohibit or invalidate the sale of the Purchased Assets to the
Purchaser or any other transaction contemplated hereby, and
which, in the reasonable judgment of the Seller, makes it
inadvisable to proceed with the transaction contemplated hereby.
Section 6.5 Xxxx Xxxxx Xxxxxx Requirements. The waiting
period, if any, under the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976 applicable to the acquisition of the
Purchased Assets shall have expired or been terminated.
7. Additional Agreements of the Parties.
Section 7.1 [Intentionally left blank].
Section 7.2 Execution of Further Documents. From and
after the Time of Closing, upon the reasonable request of any
party hereto, the other party hereto shall execute, acknowledge
and deliver all such further documents as may be required to
convey and transfer to and vest in the Purchaser and protect its
right, title and interest in all of the Purchased Assets, and as
may be appropriate otherwise to carry out the transactions
contemplated by this Agreement. Following the Closing the
parties shall cooperate with each other and provide reasonable
access to such information as either party may reasonably
request.
8. General Provisions.
Section 8.1 Survival of Representations and Warranties.
All of the respective representations and warranties of the
parties to this Agreement shall survive the consummation of the
transactions contemplated hereby for the periods contemplated by
Section 4.4(c)(iii).
Section 8.2 Brokers' Commission. Each party hereto will
indemnify and hold harmless each other party from any commission,
fee or claim of any person, firm or corporation employed or
retained or claiming to be employed or retained by the
indemnifying party to bring about, or to represent it in, the
transactions contemplated hereby.
Section 8.3 Amendment and Modification. The parties
hereto may amend, modify and supplement this Agreement in such
manner as may be agreed upon by them in writing.
Section 8.4 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors, assigns, heirs and legal
representatives.
Section 8.5 Entire Agreement. This instrument and the
Exhibits attached hereto contain the entire agreement of the
parties hereto with respect to the purchase of the Purchased
Assets and the other transactions contemplated herein, and
supersede all prior understandings and agreements of the parties
with respect to the subject matter hereof. Any reference herein
to this Agreement shall be deemed to include the Exhibits
attached hereto.
Section 8.6 Headings. The descriptive headings in this
Agreement are inserted for convenience only and do not constitute
a part of this Agreement.
Section 8.7 Execution in Counterparts. This Agreement
may be executed in any number of counterparts, each of which
shall be deemed an original.
Section 8.8 Notices. Any notice, request, information or
other document to be given hereunder to any of the parties by any
other party shall be in writing and shall be hand delivered or
sent by certified or registered mail, postage prepaid, or by
overnight courier service requesting evidence of receipt as part
of its service, as follows:
(a) If to the Seller, addressed to:
Waste Management of Indiana, LLC
Two Xxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Facsimile No. 7084090773
Attention: General Counsel
Copy to: Waste Management, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Facsimile No. 6306847061
Attention: General Counsel
(b) If to the Purchaser, addressed to:
American Disposal Services of Missouri, Inc
000 XxXxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Facsimile No.6306551455
Attention: General Counsel
Copy to: Waste Management, Inc
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
Any party may change the address to which notices hereunder are
to be sent to it by giving written notice of such change of
address as herein provided. Any notice given hereunder shall be
deemed given on the date of mailing.
Section 8.9 Severability. If any provision of this
Agreement is determined to be illegal or unenforceable, such
provision will be deemed amended to the extent necessary to
conform to applicable law or, if it cannot be so amended without
materially altering the intention of the parties, it will be
deemed stricken and the remainder of the Agreement will remain in
full force and effect.
Section 8.10 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Illinois applicable to contracts made and to be
performed therein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
American Disposal Services of Missouri, Inc.
("Purchaser")
By: /s/Xxxxxxx Xx Xxxxx
Name Xxxxxxx Xx Xxxxx
Title President
Waste Management of Indiana, LLC ("Seller")
By: /s/Xxxxxxx X. Xxxxx
Name Xxxxxxx X. Xxxxx
Title President
Seller's FEIN:
