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EXHIBIT 2.2
SHARE PURCHASE AGREEMENT made the 13th day of June, 1997.
AMONG:
XXXXXX ENVIRONMENTAL (DELAWARE), INC., a corporation incorporated
under the laws of the State of Delaware
("PURCHASER")
- and -
REPUBLIC ENVIRONMENTAL SYSTEMS, INC., a corporation incorporated
under the laws of the State of Delaware
("VENDOR")
- and -
REPUBLIC ENVIRONMENTAL RECYCLING (NEW JERSEY), INC., a corporation
incorporated under the laws of the State of New Jersey, REPUBLIC
ENVIRONMENTAL SYSTEMS (TECHNICAL SERVICES GROUP), INC., a corporation
incorporated under the laws of the State of New Jersey, REPUBLIC
ENVIRONMENTAL SYSTEMS (PENNSYLVANIA), INC., a corporation incorporated
under the laws of the Commonwealth of Pennsylvania, REPUBLIC
ENVIRONMENTAL SYSTEMS (TRANSPORTATION GROUP), INC., a corporation
incorporated under the laws of the Commonwealth of Pennsylvania, and
CHEM-FREIGHT, INC., a corporation incorporated under the laws of the
State of Ohio
(collectively, the "COMPANIES")
WHEREAS:
A. The Vendor is the registered and beneficial owner of all of the issued
and outstanding shares in the capital of the Companies; and
B. The Vendor has agreed to sell to the Purchaser and the Purchaser, in
reliance upon the representations and warranties of the Vendor contained
herein, has agreed to purchase from the Vendor all of the issued and
outstanding shares in the capital of the Companies, in accordance with
the terms of this Agreement.
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NOW THEREFORE, in consideration of the premises and the mutual
agreements contained in this Agreement and other valuable consideration (the
receipt and adequacy of this consideration by each of the Parties is hereby
acknowledged), the Parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS. As used in this Agreement, the following terms have the
following meanings:
(a) "ADVERSE EFFECT" means one or more of: (i) impairment of the
quality of the Natural Environment for any use that can be made of it;
(ii) injury or damage to property or to plant or animal life; (iii) harm
or material discomfort to any person; (iv) an adverse effect on the
health of any person; (v) impairment of the safety of any person; (vi)
rendering any property or plant or animal life unfit for human use;
(vii) loss of enjoyment of normal use of property; and (viii)
interference with the normal conduct of business;
(b) "ACCOUNTS RECEIVABLE" means all accounts receivable, notes
receivable and other debts due or accruing due to the Companies net of
any allowance for doubtful accounts, as of the Closing Date in
connection with the Business;
(c) "AGREEMENT" means this share purchase agreement and all schedules
and instruments in amendment or confirmation of it; "HEREOF", "HERETO"
and "HEREUNDER" and similar expressions mean and refer to this Agreement
and not to any particular Article, Section, Subsection or other
subdivision; "ARTICLE", "SECTION", "SUBSECTION" or other subdivision of
this Agreement followed by a number means and refers to the specified
Article, Section, Subsection or other subdivision of this Agreement;
(d) "ANCILLARY AGREEMENTS" means all agreements, certificates and
other instruments delivered or given pursuant to this Agreement
including the First Note and the Second Note, as hereinafter defined;
and "ANCILLARY AGREEMENT" means any one of such agreements, certificates
or other instruments;
(e) "ARTICLES" means the articles of incorporation of the Companies,
as in force on the date hereof;
(f) "ASSETS" means all of the property, rights and assets owned,
leased or used by the Companies in the Business, including, without
limitation: (i) the right, title, interest and benefit of the Companies
in and to the Owned Properties, the Leased Properties, the Owned
Equipment and the Inventories; (ii) the right, title, interest and
benefit of the Companies in the Easements; (iii) the right, title,
interest and benefit of the Companies in, to and under the equipment
leases relating to the Leased Equipment and the Contracts, including all
customer
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contracts and customer lists; (iv) the goodwill of the Business; (v) all
shares or rights of any nature whatsoever in the capital of any other
company, partnership or joint venture owned by the Companies, if any;
(vi) the right, title, interest and benefit of the Companies in the
Authorizations; and (vii) the right, title, interest and benefit of the
Companies in and to all registered and unregistered trade marks, trade
and brand names, service marks, copyrights, designs, inventions, patents
and patent applications (including any patents issuing on such
applications), licenses, sublicenses, technology and other industrial
property of or pertaining to the Business or owned or used by the
Companies in the Business;
(g) "AUTHORIZATION" means any authorization, order, permit, approval,
grant, license, consent, right, franchise, privilege, certificate,
judgment, writ, injunction, award, determination, direction, decree, or
by-law, rule or regulation of any Governmental Entity other than a
License;
(h) "BENEFIT PLANS" means all employee benefit plans, policies and
practices relating to the employees of the Companies, including profit
sharing, deferred compensation, phantom stock option, stock option,
employee stock purchase, bonus, retirement, health or insurance plans
(oral or written) which are disclosed on Schedule 1.1(h);
(i) "BOOKS AND RECORDS" means all technical, business and financial
records, financial books and records of account, books, data, reports,
files, lists, drawings, plans, logs, briefs, customer and supplier
lists, deeds, certificates, contracts, surveys, title opinions or any
other documentation and information in any form whatsoever (including
written, printed, electronic or computer printout form) relating to the
Business;
(j) "BUILDINGS AND FIXTURES" means all plant, buildings, structures,
erections, improvements, appurtenances and fixtures (including fixed
machinery and fixed equipment) situate on the Leased Property;
(k) "BUSINESS" means the business presently and heretofore carried on
by the Companies in the states of New Jersey, Pennsylvania and Ohio and
elsewhere and consisting of a the provision of liquid and solid
hazardous and non-hazardous waste treatment, storage, disposal and
transport services;
(l) "BUSINESS DAY" means any day of the year, other than a Saturday,
Sunday or any day on which banks are required or authorized by Law to
close in Philadelphia, Pennsylvania;
(m) "CLAIM" means any claim of any nature whatsoever, including any
demand, liability, obligation, debt, cause of action, suit, proceeding,
judgment, award, assessment, and reassessment;
(n) "CLOSING" means the completion of the transaction of purchase and
sale contemplated in this Agreement;
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(o) "CLOSING DATE" means the 7th day of July, 1997, or such earlier
or later date as the parties may agree in writing but in any event, no
later than the 31st day of July, 1997;
(p) "CLOSING TIME" means 10:00 a.m. local time or such other time on
the Closing Date as the completion of the transaction of purchase and
sale contemplated herein may occur;
(q) "CONSENTS" has the meaning ascribed in Section 7.1(c);
(r) "CONTAMINANT" means any solid, liquid, gas, odour, heat, sound,
vibration, radiation, or combination of any of them resulting directly
or indirectly from human activities that may cause an Adverse Effect;
(s) "CONTRACTS" means all written contracts (but specifically
excluding contracts cancelable upon thirty (30) days notice without
penalty or payment or providing for the payment of money of less than
Twenty Five Thousand Dollars ($25,000.00)) to which any of the Companies
is a party including all contracts, leases of personal property,
licenses, undertakings, engagements or commitments of any nature, to
which any of the Companies is entitled in connection with the Business
(the "Contracts"), including: (i) unfilled purchase orders received by
the Companies; (ii) forward commitments by the Companies for supplies or
materials entered into in the ordinary course of the Business; (iii) all
restrictive agreements and negative covenant agreements which the
Companies may have with its employees, past or present; and (iv) the
Contracts listed in Schedule 1.1(s);
(t) "CORPORATE RECORDS" means the corporate records of the Companies,
including: (i) all articles, by-laws, any unanimous shareholders
agreement and any amendments thereto; (ii) all minutes of meetings and
resolutions of shareholders, directors and any committee thereof; (iii)
the share certificate books, register of shareholders, register of
transfers and register of directors; and (iv) all accounting records
excepting, however, accounting records in the possession of the Vendor
which also reflect the results of operations or financial condition of
entities other than the Companies;
(u) "EASEMENTS" means any rights or interests that the Companies has
in the lands or properties which the Companies uses to carry on the
Business;
(v) "ENCUMBRANCES" means negative covenants, liens, charges,
mortgages, pledges, security interests, claims, defects of title,
restrictions and any other rights of third parties relating to any
property, including rights of set-off and voting trusts, and other
encumbrances of any kind;
(w) "ENVIRONMENTAL ACTIVITY" means any past, present or future
activity, event or circumstance in respect of a Contaminant, including,
without limitation, its storage, use,
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holding, collection, purchase, accumulation, assessment, generation,
manufacture, construction, processing, treatment, stabilization,
disposition, handling or transportation, or its Release, escape,
leaching, dispersal or migration into or movement through the Natural
Environment;
(x) "ENVIRONMENTAL LAWS" means at any time any and all of the then
applicable international, federal, provincial, state, municipal or local
laws, statutes, regulations, codes, rules, treaties, orders, judgments,
decrees, ordinances, official directives and all authorizations relating
to the Natural Environment or any Environmental Activity;
(y) "FINANCIAL STATEMENTS" means the unaudited combined statement of
assets, liabilities and stockholders' equity for the fiscal period ended
December 31, 1996 and the accompanying statement of revenue, expenses
and retained earnings and statement of cashflows for the period then
ended as reported on by the Companies and prepared in accordance with
GAAP;
(z) "FISCAL YEAR" means the twelve calendar month fiscal period of
the Companies commencing on the 1st day of January of each year and
ending on the 31st day of December of the same year as such Fiscal Year
may from time to time be changed in accordance with applicable law;
(aa) "GAAP" means at any time, generally accepted accounting
principles in the United States at such time;
(ab) "GOVERNMENTAL ENTITY" means: (i) any multinational, federal,
state, municipal, local or other governmental or public department,
court, commission, board, bureau, agency or instrumentality, domestic or
foreign; (ii) any subdivision, agent, commission, board, or authority of
any of the foregoing; or (iii) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under or
for the account of any of the foregoing;
(ac) "HAZARDOUS SUBSTANCE" means: (i) any flammable explosives; (ii)
radioactive materials; (iii) substances included within the definitions
of "hazardous substances", "hazardous materials", or "toxic substances"
in the Environmental Laws or any regulations or rules promulgated
pursuant to the Environmental Laws, all as enacted, promulgated and
published and as enforced by authorities of competent jurisdiction as at
the Closing; (iv) asbestos; (v) polychlorinated biphenyls, (vi) radon
and (vii) gasoline, waste oil and other petroleum products;
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(ad) INTENTIONALLY BLANK
(ae) "INTERIM PERIOD" means the period between the close of business
on the date hereof and the Closing Time on the Closing Date;
(af) "INTELLECTUAL PROPERTIES" means all right, title, interest and
benefit of the Companies in and to any registered and unregistered word
marks, trade and brand names, service marks, copyrights, copyright
applications, designs, inventions, patents, patent applications, patent
rights (including any patents issuing on such applications or rights),
licenses, sub-licenses, franchises, formulas, processes, know-how,
technology, computer rights and other intellectual or industrial
property of the Companies or pertaining to the Business, including the
property listed in Schedule 1.1(af);
(ag) "INVENTORIES" means all inventories of, parts, accessories and
miscellaneous items of the Companies whether or not related to the Owned
Equipment or the Leased Equipment and used by the Companies in the
Business;
(ah) "LAWS" means all statutes, codes, ordinances, decrees, rules,
regulations, municipal by-laws, judicial or arbitral or administrative
or ministerial or departmental or regulatory judgments, orders,
decisions, rulings or awards, policies, voluntary restraints,
guidelines, or any provisions of the foregoing, including general
principles of common and civil law and equity, binding on or affecting
the Person referred to in the context in which such word is used; and
"LAW" means any one of them;
(ai) "LEASED PROPERTIES" means the real property forming the subject
matter of the Leases;
(aj) "LEASED EQUIPMENT" means all personal property leased by the
Companies as listed in Schedule 1.1(aj);
(ak) "LEASES" means the leases and subleases of real property to which
the Companies are a party, as listed and described in Schedule 1.1(ak);
(al) "LICENSE" means any permit, license, certificate, approval or
authorization required under applicable Environmental Laws;
(am) "LOSS" means any loss whatsoever, including expenses, costs,
damages, penalties, fines, charges, claims, demands, liabilities,
interest and any and all legal fees and disbursements;
(an) "NATURAL ENVIRONMENT" means the air, land, subsoil, surface water
and ground water, or any combination or part thereof in any jurisdiction
in which the Companies carries on business;
(ao) INTENTIONALLY BLANK
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(ap) "NON-COMPETITION AGREEMENT" means the non-competition agreement
substantially in the same form as Schedule 1.1(ap) between the Vendor
and the Purchaser;
(aq) "OWNED EQUIPMENT" means all equipment owned by the Companies and
used in connection with the Business;
(ar) "OWNED PROPERTIES" means all real property the registered and
beneficial ownership of which is held by the Companies, a complete list
and a summary description of which is provided in Schedule 1.1(ar);
(as) "PARTIES" means the Vendor, the Purchaser and the Companies and
any other person who may become a party to this Agreement; and "PARTY"
means any one of them;
(at) "PERMITTED ENCUMBRANCES" means the Encumbrances disclosed in
Schedule 1.1(at);
(au) "PERSON" means an individual, partnership, corporation, trust,
unincorporated association, joint venture or other entity or
Governmental Entity, and pronouns have a similarly extended meaning;
(av) "PURCHASE PRICE" has the meaning ascribed in Section 2.2;
(aw) "PURCHASED SHARES" has the meaning ascribed in Section 2.1;
(ax) "RELEASE" means, without limitation, to deposit, leak, emit, add,
spray, inject, inoculate, abandon, spill, seep, pour, empty, throw,
dump, place and exhaust, and when used as a noun has a similar meaning;
and
(ay) "SPECIAL INDEMNIFIED MATTERS" means the matters set forth in
Schedule 1.1(ay) which are the subject of the special environmental
indemnification pursuant to Section 9.4; and
(az) "UNCOLLECTIBLE RECEIVABLES" has the meaning ascribed in Section
3.20.
1.2 GENDER AND NUMBER. Any reference in this Agreement to gender shall
include all genders, and words importing the singular number only shall include
the plural and vice versa.
1.3 HEADINGS, ETC. The provision of a table of contents, the division of
this Agreement into Articles, Sections, Subsections and other subdivisions and
the insertion of headings are for convenience of reference only and shall not
affect or be utilized in the construction or interpretation of this Agreement.
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1.4 CURRENCY. All references in this Agreement or in any Ancillary
Agreement to dollars or cents, including the Purchase Price, are expressed in
United States currency, unless otherwise specifically stated.
1.5 SEVERABILITY. Any Article, Section, Subsection or other subdivision of
this Agreement or any other provision of this Agreement or any Ancillary
Agreement which is, or becomes, illegal, invalid or unenforceable shall be
severed from this Agreement or any Ancillary Agreement and be ineffective to
the extent of such illegality, invalidity or unenforceability and shall not
affect or impair the remaining provisions hereof or thereof.
1.6 ENTIRE AGREEMENT. This Agreement together with the Ancillary Agreements
and the confidentiality agreement dated November 11, 1996 constitute the entire
agreement between the Parties pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties including without limitation the Letter
Agreement dated February 14, 1997, and all subsequent extension letters, if
any, relating thereto among the Purchaser, the Vendor and the Companies. There
are no representations, warranties, conditions or other agreements, express or
implied, statutory or otherwise, between the Parties in connection with the
subject matter of this Agreement, except as specifically set forth herein and
in the Ancillary Agreements.
1.7 AMENDMENTS. This Agreement and any Ancillary Agreement may only be
amended, modified or supplemented by a written agreement signed by all of the
Parties to such agreement.
1.8 WAIVER. No waiver of any of the provisions of this Agreement or any
Ancillary Agreement shall be deemed to constitute a waiver of any other
provision (whether or not similar), nor shall such waiver constitute a waiver
or continuing waiver unless otherwise expressly provided in writing duly
executed by the Party to be bound thereby.
1.9 GOVERNING LAW. This Agreement and any Ancillary Agreements shall be
governed by and interpreted and enforced in accordance with the laws of the
Commonwealth of Pennsylvania and the laws of the United States applicable
therein which apply to contracts made and to be performed entirely in
Pennsylvania.
1.10 INCLUSION. Where the word "including" or "includes" is used in this
Agreement it means "including (or includes) without limitation".
1.11 ACCOUNTING TERMS. All accounting terms not specifically defined in this
Agreement shall be construed in accordance with GAAP.
1.12 INCORPORATION OF SCHEDULES. All of the schedules attached hereto are
hereby incorporated in and shall be deemed a part of this Agreement.
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ARTICLE 2
PURCHASED SHARES AND PURCHASE PRICE
2.1 PURCHASE AND SALE. Subject to the terms and conditions hereof, the
Vendor agrees to sell, assign, transfer and deliver to the Purchaser free and
clear of all mortgages, liens, charges, security interest, adverse claims,
pledges, encumbrances, restrictions and claims of every kind and the Purchaser
agrees to purchase from the Vendor at the Closing Time on the Closing Date,
100% of the issued and outstanding shares in the capital of the Companies (the
"PURCHASED SHARES").
2.2 PURCHASE PRICE. Subject to the adjustments referred to in Section 2.3,
the aggregate purchase price (the "PURCHASE PRICE") payable by the Purchaser to
the Vendor for the Purchased Shares shall be Seventeen Million Dollars
($17,000,000), to be satisfied by (i) payment on Closing to the Vendor of a
cash amount of Eight Million Dollars ($8,000,000), (ii) delivery to the Vendor
on Closing of a note in the principal amount of Eight Million Dollars
($8,000,000) (hereinafter the "First Note") in substantially the form set out
in Schedule 2.2(ii); and (iii) delivery to the Vendor on Closing of a note in
the principal amount of One Million Dollars ($1,000,000) (hereinafter the
"Second Note") in substantially the form set out in Schedule 2.2(iii).
2.3 EXCLUDED LIABILITIES. Subject to the terms and conditions hereof, the
Purchaser shall not assume or in any way be liable or responsible for any of
the following liabilities of the Companies, which liabilities shall remain the
sole and exclusive responsibility of the Vendor:
(a) severance costs or expenses associated with the termination of
any of the corporate personnel of the Companies presently located at the
corporate offices in Blue Xxxx, Pennsylvania, as more particularly set
out in Schedule 2.3(a) who are not engaged by the Purchaser as at
Closing; and
(b) the Special Indemnified Matters.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE VENDOR. The Vendor represents and
warrants as follows to the Purchaser and acknowledges and confirms that the
Purchaser is relying upon such representations and warranties in connection
with the purchase by the Purchaser of the Purchased Shares:
CORPORATE MATTERS RELATING TO THE VENDOR AND THE COMPANIES
3.2 DUE INCORPORATION AND EXISTENCE OF THE COMPANIES. Each of the Companies
is a corporation incorporated and existing under the laws of the jurisdiction
of its incorporation, in good standing and qualified to do business in such
jurisdiction.
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3.3 CORPORATE POWER. Each of the Companies has the corporate power to own
its property and to carry on the Business as now being conducted by it. The
Companies are duly qualified, licensed or registered to carry on business in
all jurisdictions in which the nature of the Assets or the Business makes such
qualification necessary and where failure to be so qualified would have an
adverse effect on the affairs, assets, liabilities, business or prospects,
operations or conditions of the Companies or the Business, financial or
otherwise, or where the Companies own or lease any material properties or
assets or conducts any material business.
3.4 AUTHORIZED CAPITAL. The authorized capital of the Companies is as
follows:
Authorized Issued
---------- ------
Republic Environmental Recycling, Inc. 200 common shares, 100
no par value
Republic Environmental Systems (Technical 1,000 common shares, 100
Services Group), Inc. no par value
Republic Environmental Systems 10,000 common shares, 1,000
(Pennsylvania), Inc. $1.00 par value
Republic Environmental Systems 10,000 common shares, 1,000
(Transportation Group), Inc. no par value
Chem-Freight, Inc. 750 common shares, 750
no par value
All of the issued shares in the capital of the Companies are outstanding as
fully paid and non-assessable shares.
3.5 OPTIONS, ETC. No Person has any option, warrant, right, call,
commitment, conversion right, right of exchange or other agreement or any right
or privilege (whether by law, preemptive or contractual) capable of becoming an
option, warrant, right, call, commitment, conversion right, right of exchange
or other agreement (i) for the purchase from the Vendor of any shares of the
Companies; or (ii) for the purchase, subscription, allotment or issuance of any
of the unissued shares in the capital of the Companies or of any securities of
the Companies or any right capable of becoming any of the foregoing.
3.6 TITLE TO PURCHASED SHARES. The Vendor is the registered and beneficial
owner of all of the Purchased Shares with good title thereto, free and clear of
all Encumbrances. The Vendor has the right, power and authority to enter into
this Agreement and to sell such Purchased Shares
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owned by it. The delivery of the Purchased Shares to the Purchaser pursuant to
the provisions hereof will transfer to the Purchaser valid title thereto, free
and clear of all Encumbrances.
3.7 CHANGE OF CONTROL. The change of control in the shareholdings of the
Companies in favor of the Purchaser will not in any respect invalidate or
vitiate any permit, license or other Authorization currently held by the
Companies.
3.8 DIVIDENDS AND DISTRIBUTIONS. Since December 31, 1996, the Companies
have not, directly or indirectly, declared or paid any dividends or declared or
made any other distribution on any of its shares of any class and has not,
directly or indirectly, redeemed, purchased or otherwise acquired any of its
shares of any class or agreed to do so.
3.9 CORPORATE RECORDS. The Corporate Records of the Companies are complete
and accurate in all material respects and all corporate proceedings and actions
reflected therein have been conducted or taken in material compliance with all
applicable Laws and with the articles and by-laws of the Companies, and without
limiting the generality of the foregoing, (i) the minute books contain complete
and accurate minutes of all meetings of the directors and shareholders of the
Companies held since the incorporation of such Company, and all such meetings
were duly called and held; (ii) the minute books contain all written
resolutions passed by the directors and shareholders of the Companies and all
such resolutions were duly passed; (iii) the share certificate books, register
of shareholders and register of transfers of the Companies are complete and
accurate, and all such transfers have been duly completed and approved and any
required tax payable in connection with the transfer of any securities of the
Companies has been duly paid; and (iv) the registers of directors and officers
are complete and accurate and all former and present directors and officers of
the Companies were duly elected or appointed as the case may be.
3.10 VALIDITY OF AGREEMENT.
(a) The Vendor has all the necessary capacity and power to enter into
and perform its obligations under this Agreement and any Ancillary
Agreements to which it is a party.
(b) Each of the Companies has all necessary corporate power to enter
into and perform its obligations under this Agreement and any Ancillary
Agreements to which it is a party. The execution, and delivery and
performance by each of the Companies of this Agreement and any Ancillary
Agreements to which it is a party and the consummation of the
transactions contemplated thereby:
(i) have been duly authorized by all necessary corporate
action on the part of each of the Companies; and
(ii) would not, as a result of the execution and delivery and
performance by each of the Companies of this Agreement, with the
giving of notice, the lapse of time or the happening of any other
event or condition result in a violation or a breach of, or a
default under or give rise to a right of termination, amendment
or cancellation or the
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acceleration of any obligation under (1) any contracts or
instruments to which any of the Companies is a party or by which
any of the Companies is bound; (2) any of the Companies' Articles
or by-laws; or (3) any Laws applicable to them.
(c) This Agreement and any Ancillary Agreements to which it is a
party constitute legal, valid and binding obligations of the Vendor and
the Companies, enforceable against them or it in accordance with their
respective terms.
3.11 RESTRICTIVE DOCUMENTS. The Companies are not subject to, or a party to,
any charter or by-law restriction, any Law, any Claim, any contract or
instrument, any Encumbrance or any other restriction of any kind or character
which would prevent the consummation of this Agreement or compliance by the
Companies with the terms, conditions and provisions hereof or the continued
operation of the Business by the Companies after the date hereof or the Closing
Date on substantially the same basis as heretofore operated or which would
restrict the ability of the Purchaser to acquire any of the Purchased Shares or
would impair the Companies' ability to conduct the Business in any area.
GENERAL MATTERS RELATING TO THE BUSINESS
3.12 CONDUCT OF BUSINESS IN ORDINARY COURSE. Except as disclosed in Schedule
3.12, since December 31, 1996, the Business has been carried on in the ordinary
course and none of the Companies has:
(a) incurred any liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise), which individually
exceeded Two Hundred and Fifty Thousand Dollars ($250,000);
(b) sold, transferred or otherwise disposed of any of the Assets except
for the sale of Inventories in the ordinary course of the Business which
individually or in the aggregate exceeds One Hundred Thousand Dollars
($100,000);
(c) made any capital expenditure or commitment therefor which
individually or in the aggregate exceeds Two Hundred and Fifty Thousand
Dollars ($250,000);
(d) increased its indebtedness for borrowed money, except current
borrowings from banks in the ordinary course of the Business, or made
any loan to any Person;
(e) written off as uncollectible any notes or Accounts Receivable,
except write-offs in the ordinary course of the Business, none of which
individually or in the aggregate is material to any of the Companies;
(f) cancelled or waived any material claims or rights;
(g) made any change in any method of accounting or auditing practice;
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(h) amended the articles or by-laws of any of the Companies, except as
agreed with the Purchaser; or
(i) agreed, whether or not in writing, to do any of the foregoing.
3.13 NO MATERIAL ADVERSE CHANGE. Since December 31, 1996, there has been no
change in the affairs, assets, liabilities, business, operations or conditions
of the Companies or the Business, financial or otherwise, whether arising as a
result of any revocation of any license or right to do business, fire,
explosion, accident, casualty, labor trouble, flood, drought, riot, storm,
condemnation, act of God or otherwise, which has materially adversely affected
the Companies or the Business.
3.14 COMPLIANCE WITH LAWS. To the best of the Vendor's knowledge, the
Companies are conducting their Business in substantial compliance with all
applicable Laws other than Environmental Laws.
3.15 ENVIRONMENTAL MATTERS.
(a) COMPLIANCE. The Companies are conducting their Business in
material compliance with all applicable Environmental Laws. Except as
disclosed in Schedule 3.15, the Companies have not engaged in the
generation, manufacture, refinement, treatment, transportation, storage,
handling, incineration, disposal, transferring, production or processing
of Hazardous Substances, except in material compliance with all
Environmental Laws and there are no outstanding complaints, orders,
citations, notices or orders of violation or non-compliance issued to
the Companies under any applicable Environmental Laws, nor does the
Vendor, to the best of its knowledge, know or have reasonable grounds to
know of any facts which could give rise to a notice of non-compliance
with any applicable Environmental Laws. To the best of the Vendor's
knowledge, a full and complete listing of any and all violations or
alleged violations of any applicable Environmental Laws which have
occurred within a period of two (2) years prior to Closing is set out in
Schedule 3.15.
(b) LICENSES. The Companies possess all Licenses required for the
operation of the Business as presently conducted by it. All such
Licenses are valid and in full force and effect without conditions other
than such conditions which are generally applicable to such Licenses.
To the best of the Vendor's knowledge, a full and complete listing of
any and all violations thereof which have occurred or been noted within
a period of two (2) years prior to Closing is set out in Schedule 3.15.
To the best knowledge of the Vendor, no proceeding is pending or
threatened to revoke or limit any of such Licenses. The Licenses were
not obtained by a misrepresentation or false statement and all relevant
material facts were disclosed in obtaining the Licenses.
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(c) OFF-SITE REMEDIAL ACTION. Except as set forth in Schedule 3.15,
there are no locations to which the Companies have ever transported, or
ever caused to be transported, or allowed or authorized any third party
to transport on behalf of the Companies, any Hazardous Substances
generated by the Companies for storage, treatment, processing,
recycling, burning or disposal which have been designated for remedial
action pursuant to any Environmental Laws.
(d) ON-SITE RELEASE OF HAZARDOUS SUBSTANCES OR CONTAMINANTS. Except
as set forth in Schedule 3.15, the Companies have not caused or
permitted and does not have any knowledge of, the Release of any
Hazardous Substance on any property owned, leased or used by them or of
any Release (with respect to which the Companies would be held liable)
from a facility owned or operated by third parties.
(e) HAZARDOUS SUBSTANCE SPILLS. Except as provided in Schedule 3.15,
to the best of the Vendor's knowledge there are no underground storage
tanks containing Hazardous Substances situated on the Owned Properties
or the Leased Properties of the Companies, no Hazardous Substance from
any underground storage tank has been spilled, leaked, discharged or
deposited on or in the Owned Properties or the Leased Properties of the
Companies in an amount which would constitute a reportable spill, leak,
discharge or deposit under any applicable Environmental Laws, and there
have been no violations or alleged violations of any Environmental Laws
related to underground storage tanks owned or operated by the Companies.
(f) DOCUMENTS AND RECORDS. The Companies have maintained all
material environmental records and reports substantially in the manner
and for the time period required by applicable Environmental Laws.
3.16 AUTHORIZATIONS. The Companies possesses all Authorizations,
other than Licenses, which are necessary for them to conduct the Business as
presently conducted and are in compliance with all Laws applicable thereto.
The Companies are not in default, nor have they received any notice of any
claim of default, with respect to any such Authorizations. All such
Authorizations are renewable by their terms or in the ordinary course of
business without the need for the Companies to comply with any special
qualification or procedures or to pay any amounts other than routine filing
fees. No such Authorizations will be adversely affected by the consummation of
the transactions contemplated hereby.
MATTERS RELATING TO THE ASSETS
3.17 TITLE TO THE ASSETS. The Companies have good title, free and clear of
any and all Encumbrances, to all of the Owned Equipment and, subject to zoning,
occupancy and similar laws and regulations pertaining to use of the Owned
Properties, easements and restrictions of record, and the Permitted
Encumbrances, has good title to the Owned Properties. The Assets include all
rights and property reasonably necessary to the conduct of the Business by the
Companies.
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3.18 EQUIPMENT. The list of equipment attached hereto as Schedule 3.18
contains an accurate and complete list and description in all material respects
of the vehicles, equipment and machinery owned or leased by the Companies in
the Business. The Owned Equipment and the Leased Equipment is in substantially
the same state of repair as when viewed and examined during the Purchaser's due
diligence, subject to reasonable wear and tear thereafter.
3.19 NO OPTIONS, ETC. No Person has any written or oral agreement, option,
understanding or commitment, or any right or privilege capable of becoming such
for the purchase from the Companies of any of the Assets, other than in the
ordinary course of the Business.
3.20 ACCOUNTS RECEIVABLE. Except for uncollectible receivables which in the
aggregate shall not exceed Twenty Thousand Dollars ($20,000.00) (the
"Uncollectible Receivables"), all accounts receivable and interest and other
receivables of the Companies shown on its Financial Statements are good and
collectible, none of the foregoing receivables are subject to counterclaim or
set-off or are disputed by the account debtor. The accounts receivable,
interest and other receivables at Closing and as shown on the Companies'
Financial Statements, except for the Uncollectible Receivables, shall be
collected in full within one hundred and twenty (120) days of the Closing Date.
The amount of the Uncollectible Receivables shall be increased by the amount of
any receivables recovered after the Closing Date (net of collection expenses
incurred in relation thereto) which were previously written-off by the
Companies and are not reflected in the Financial Statements.
3.21 PROPERTY.
(a) The Company is the registered and beneficial owner of the Owned
Properties and the Company is not under any agreement or option to own
any other real property or any interest therein or under any agreement
to lease any real property other than pursuant to the Leases.
(b) To the best knowledge of the Vendor, all of the Building and
Fixtures on the Owned Properties and the Leased Properties (i) were
constructed in substantial accordance with all applicable Laws and with
all Authorizations validly issued pursuant thereto: (ii) are in
substantially the same state of maintenance and repair as when viewed
and examined during the Purchaser's due diligence, subject to reasonable
wear and tear thereafter; and (iii) are adequate and suitable for the
purposes for which they are presently used; and with respect to each
(and to the Leased Properties), the Companies have adequate rights of
ingress and egress for the operation of the Business in the ordinary
course. None of the Owned Properties or the Buildings and Fixtures
thereon, nor the use, operation or maintenance thereof for the purpose
of carrying on the Business, violates any restrictive covenant or any
provision of any Law or encroaches on any property owned by any other
Person, which violation has or would have a material adverse effect on
the normal operation of the Business. No condemnation or expropriation
proceeding is pending or, to the best knowledge of the Vendor,
threatened which would preclude or materially impair the use of any such
property or any part thereof for the purposes for which it is currently
used. Except as may occur in the ordinary course of business, there are
no outstanding work orders with respect to any of the Assets from or
required by any municipality, police department, fire department,
sanitation, health or safety authorities or from any other Person.
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3.22 EASEMENTS. All of the Easements obtained by the Companies were obtained
in accordance with all applicable Laws in all material respects and are in full
force and effect as of the date hereof. The Companies are, and were at all
times, in compliance with all material terms, conditions and covenants provided
for in the Easements. Except for the Easements, the Companies do not require,
in order to carry on the Business, any other authorization or permission from
any land owner or lessee of any land involved in the carrying on of the
Business by the Companies.
3.23 LEASES. The Companies are not a party to, or under any agreement or
option to become a party to, any lease with respect to real property used or to
be used in the Business other than the Leases. Each Lease is in good standing,
creates a good and valid leasehold estate in the Leased Properties thereby
demised and, in all material respects, is in full force and effect without
amendment thereto. With respect to each Lease (i) all rents and additional
rents due to the date hereof have been paid; (ii) neither the lessee nor, to
the best knowledge, the lessor, is in material default thereunder; (iii) no
waiver, indulgence or postponement of the lessee's obligations thereunder has
been granted by the lessor; (iv) there exists no material event of default or
event, occurrence, condition or act (including the purchase of the Purchased
Shares hereunder) which, with the giving of notice, the lapse of time or the
happening of any other event or condition, would become a default under such
Lease; (v) the Companies have not violated any of the terms or conditions under
any such Lease in any material respect; and (vi) to the best knowledge of the
Vendor, all of the covenants to be performed by any other party under any such
Lease have been fully performed. Each of the Leased Properties is in a state
of good maintenance and repair, normal wear and tear excepted, and is adequate
and suitable for the purposes for which it is presently used. True, correct
and complete copies of the Leases have been provided or made available to the
Purchaser. Schedule 1.1(ak) contains a true, correct and complete list of all
of the Leases.
3.24 LIABILITIES. Except for those liabilities set forth on the Financial
Statements, the Companies are not subject to any liabilities, absolute or
contingent, and whether or not required in accordance with GAAP to be disclosed
on a balance sheet.
3.25 MATERIAL CONTRACTS. Except as disclosed on the Financial Statements or
in Schedule 3.25, and except for contracts of employment and contracts entered
into in the ordinary course of business which require expenditures of not
greater than Fifty Thousand Dollars ($50,000.00) individually or One Hundred
Thousand Dollars ($100,000.00) in the aggregate, or which are cancelable upon
thirty (30) days prior notice without penalty or payment, the Companies are not
a party to or bound by:
(a) any bonus, deferred compensation, pension, profit sharing, stock
option, phantom stock plan, employee stock purchase, health, insurance,
retirement or other employee benefit plan, any collective bargaining
agreements or any agreement (oral or written) providing for compensation
to be paid to any employee consequent upon the sale of any substantial
portion of outstanding shares in the capital of the Companies;
(b) any agreement or commitment relating to the borrowing of money;
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(c) any agreement or commitment relating to capital expenditures;
(d) any loan or advance to, or investment in, any other Person or any
agreement or commitment relating to the making of any such loan, advance
or investment;
(e) any bonds, debentures, mortgages, notes or other similar
indebtedness or liabilities whatsoever or any agreement to create or
issue any bonds, debentures, mortgages, notes or other similar
indebtedness;
(f) any guarantee or other contingent liability in respect of any
indebtedness or obligation of any other Person (other than the
endorsement of negotiable instruments for collection in the ordinary
course of business);
(g) any management, consulting or any other similar agreement or
commitment;
(h) any agreement or commitment limiting the freedom of the Companies
or the owner of the Assets or the Business to engage in any line of
business or to compete with any other Person;
(i) any licensing or other agreement or commitment relating to
intellectual property used by the Companies in the conduct of the
Business;
(j) any agreement or arrangement with any Person with whom the
Companies (or its present or former directors, officers and employees)
or the Vendor does not deal at arm's length;
(k) any agreement or commitment not entered into in the ordinary
course of the Business;
(l) any oral or verbal agreement or commitment which has not been
memorialized in or otherwise reduced to written form, irrespective of
the amount of expenditures required thereunder; and
(m) any agreement, arrangement, commitment or understanding with any
Person whether written or oral, that is not in the Books and Records of
the Companies,
except the Companies' debt and except for the Contracts, the insurance policies
and the Benefit Plans described in Schedules 3.31, 1.1(s), 3.35 and 1.1(h).
3.26 NO BREACH OF CONTRACTS. Except as set forth in Schedule 3.26, each of
the Contracts is in full force and effect, unamended, and there exists no
default or event of default or event, occurrence, condition or act (including
the purchase of the Purchased Shares hereunder) which, with the giving of
notice, the lapse of time or the happening of any other event or condition,
would become a material default or an event of default thereunder, except for
the necessity of obtaining the Consents. The Companies have not violated or
breached, in any material respect, any of the terms or conditions of any
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Contract, and to the best of the knowledge of the Vendor, all the covenants to
be performed by any other party thereto have been performed in all material
respects. True, correct and complete copies of all written Contracts have been
delivered or made available to the Purchaser.
3.27 SUBSIDIARIES. None of the Companies has any subsidiaries or agreements
of any nature to acquire any subsidiary or to acquire or lease any other
business operations.
3.28 CONDITION OF EQUIPMENT AND VEHICLES. All tangible personal property
forming part of the Assets which are used regularly in the Business, including
furniture, machinery and equipment and motor vehicles, whether owned or leased,
are in substantially the same state of repair and maintenance as when viewed
and examined during the Purchaser's due diligence, subject to reasonable wear
and tear thereafter.
3.29 INVENTORIES. All Inventories of the Companies reflected in the
Financial Statements or acquired after the date thereof and not subsequently
disposed of in the ordinary course of the Business are in good condition and
not obsolete.
FINANCIAL MATTERS
3.30 BOOKS AND RECORDS. All Books and Records of the Companies have been
fully, properly and accurately kept and completed, and there are no material
inaccuracies or discrepancies of any kind contained or reflected therein. The
Companies' records, systems, controls, data or information are not recorded,
stored, maintained, operated or otherwise wholly or partly dependent upon or
held by any means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all means of access
thereto and therefrom) are not under the exclusive ownership and direct control
of the Companies or the Vendor.
3.31 FINANCIAL STATEMENTS. The financial position as at, and the results of
the operations for the year ended December 31, 1996 of the Companies are fairly
set forth in the Companies' Financial Statements attached hereto as Schedule
3.31. As of the date of such statements, the Companies had no liabilities,
contingent or otherwise, which were not disclosed by the said statements and
which were required to be disclosed by GAAP or otherwise. The said statements
are correct and complete in all respects. The Companies' Financial Statements
have been prepared in accordance with GAAP applied on a basis consistent with
past practices.
3.32 DEBT. The total long and short term debt and notes payable and capital
lease obligations of the Companies as of the Closing Date shall be no greater
than Three Hundred and Sixty-Five Thousand Dollars ($365,000).
3.33 CAPITAL EXPENDITURES. No capital expenditures exceeding, in the
aggregate Two Hundred and Fifty Thousand Dollars ($250,000) have been made or
authorized by the Companies since December 31, 1996, except with the express
written consent of the Purchaser.
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PARTICULAR MATTERS RELATING TO THE BUSINESS
3.34 EMPLOYEES.
(a) To the best knowledge of Vendor, the Companies are in substantial
compliance in all respects with all Laws respecting employment and
employment practices, terms and conditions of employment, pay equity and
wages and hours and have not and are not engaged in any unfair labor
practice.
(b) Except as disclosed in Schedule 3.34, no unfair labour practice,
complaint or grievance against the Companies is pending or, to the best
of the knowledge of the Vendor, threatened before any labour relations
board or similar Governmental Entity with respect to the Business.
(c) There is no labour strike, dispute, slowdown or stoppage actually
pending or involving or, to the best of the knowledge of the Vendor,
threatened against the Companies with respect to the Business.
(d) Except as disclosed in Schedule 3.34, no union represents the
Companies' employees in connection with the Business.
(e) No grievance which would have an adverse effect upon any of the
Companies or the conduct of the Business has been filed, or to the
knowledge of Vendor threatened; no arbitration proceeding arising out of
or under any collective bargaining agreement is pending, and no Claim
therefor has been asserted.
(f) Except as disclosed in Schedule 3.34, no collective bargaining
agreement is currently being negotiated by the Companies with respect to
any employees of the Companies and there are no collective bargaining
agreements in force with respect to its employees.
(g) The Vendor has made available to Purchaser a complete list of all
employees of the Companies, their salaries and wage rates, bonus
arrangements, benefits, positions and length of service.
(h) Except as disclosed in Schedule 3.34, no employee of any of the
Companies has any agreement as to length of notice required to terminate
his or her employment, other than such as results by law from the
employment of an employee without agreement as to such notice or as to
length of employment.
(i) To the extent requested, true, correct and complete copies of
each of the Benefit Plans have been delivered to the Purchaser and any
oral plan is accurately described in Schedule 1.1(h). The Companies
have made all required contributions and premiums under each Benefit
Plan for all periods through and including the fiscal year ended
December 31, 1996, and for the period thereafter adequate accruals
therefore have been provided. There is no requirement to
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provide post-retirement pension or profit sharing benefits or medical or
health benefits to employees of the Companies other than those disclosed
under Schedule 1.1(h). The respective fund or funds established under
the Benefit Plans are funded in accordance with applicable Laws, and no
past service funding liabilities exist thereunder. All multi-employer
pension plans to which the Companies have made contributions on behalf
of any of its employees have no unfunded vested liabilities.
(j) Except as disclosed in Schedule 3.34, no pension plans relating
to the employees of the Companies presently exist, nor have any such
plans existed in the past.
(k) No payments have been made or authorized by the Companies since
the Financial Statements dated December 31, 1996 to their officers,
directors, former directors, shareholders or employees or to any Person
not dealing at arm's length with any of the foregoing, except in the
ordinary course of the Business and at the regular rates payable to them
of salary, pension, bonuses, rents or other remuneration of any nature.
3.35 INSURANCE. The Companies' current policies of insurance coverage are in
full force and effect and are accurately described (together with any pending
Claims thereunder) in Schedule 3.35, which policies shall remain in effect to
the day following the Closing Date. The Companies are not in default with
respect to any of the provisions contained in any such insurance policy and
have not failed to give any notice or present any Claim under any such
insurance policy in due and timely fashion, the failure of which would have a
adverse effect on the Companies. The Companies are not in any technical or
non-material breach or default with respect to any of the provisions contained
in any such insurance policy which could result in the cancellation of any
policy of insurance. True, correct and complete copies of all current
insurance policies and prior insurance policies of the Companies for the last
two (2) years have been delivered or made available to the Purchaser.
3.36 LITIGATION. Except as set forth in Schedule 3.36, there is no action,
suit or proceeding, at law or in equity, by any Person, nor any arbitration,
administrative or other proceeding by or before (or to the best knowledge of
each of the officers of the Companies and the Vendor) any investigation by any
Governmental Entity pending, or, to the best of the knowledge of the Vendor,
threatened against or affecting the Companies or any of their properties or
rights or any of the Assets, and neither the Companies nor the Vendor knows of
any valid basis for any such action, suit, proceeding, arbitration or
investigation. The Companies are not subject to any judgment, order or decree
entered in any lawsuit or proceeding. Schedule 3.36 herewith provides a
summary of the nature and the outcome of any and all material actions, suit,
proceeding, arbitration, investigation, claim or complaint formulated against
or received by the Companies within the last two (2) years from the date
hereof.
3.37 TAXES. The Companies have filed or caused to be filed, within the times
and within the manner prescribed by Law, all federal, state, local and foreign
tax returns and tax reports which are required to be filed by or with respect
to the Companies. The information contained in such returns and reports is
correct and complete in all material respects and such returns and reports
reflect accurately in all material respects all liability for taxes of the
Companies for the periods covered thereby. All federal, state, local and
foreign income, profits, franchise, sales, use, occupancy, excise and other
taxes and
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assessments (including interest and penalties) that are payable by or due from
the Companies have been fully paid or fully disclosed in the Books and Records
and the Financial Statements. The federal income tax liability of the
Companies has been assessed for all fiscal years to and including its fiscal
year ended on the date of the Financial Statements. Except as disclosed in
Schedule 3.37, no examination of any tax return of the Companies is currently
in progress, there are no outstanding agreements or waivers extending the
statutory period providing for an extension of time with respect to the
assessment or re-assessment of tax or the filing of any tax return by, or any
payment of any tax by the Companies, and there are no Claims now threatened or
pending against the Companies in respect of taxes or any matters under
discussion with any Governmental Entity relating to taxes.
3.38 BANK ACCOUNTS AND POWERS OF ATTORNEY. Schedule 3.38 is a correct and
complete list showing (i) the name of each bank in which the Companies have an
account or safe deposit box and the names of all persons authorized to draw
thereon or to have access thereto; and (ii) the names of any persons holding
powers of attorney from the Companies and a summary statement of the terms
thereof.
3.39 FULL DISCLOSURE. None of this Agreement or any certificate or statement
in writing which has been supplied by or on behalf of the Vendor or the
Companies or by any of the directors, officers or employees of in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact, or intentionally omits any statement of a material fact
necessary in order to make the statements contained herein or therein not
materially misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants as follows to the Vendor and acknowledges and confirms
that the Vendor is relying on such representations and warranties in connection
with the sale by the Vendor of the Purchased Shares:
4.2 DUE INCORPORATION AND EXISTENCE OF THE PURCHASER. The Purchaser is a
corporation incorporated and existing under the laws of the State of Delaware.
4.3 VALIDITY OF AGREEMENT.
(a) The Purchaser has all necessary corporate power to enter into and
to perform its obligations under this Agreement.
(b) The execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated thereby
have been duly authorized by all necessary corporate action on the part
of the Purchaser.
(c) This Agreement constitutes the legal, valid and binding
obligations of the Purchaser, enforceable against it in accordance with
the terms hereof.
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4.4 AUTHORITY. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein violates, conflicts with
or results in, or will violate, conflict with or result in a breach by the
Purchaser of, the terms, conditions or provisions, as applicable, of the
Purchaser's articles or by-laws or of any deed of trust, debt instrument or
loan agreement, or any other agreement affecting its assets or operations
generally or its undertaking, to which it is a party or by which it is bound.
4.5 CORPORATE ACTION. All necessary action on the part of the Purchaser has
been taken to authorize and approve the execution and delivery of this
Agreement and the performance of its obligations hereunder. The Agreement has
been duly executed and delivered by, and constitutes valid and binding
obligations of the Purchaser, enforceable against it in accordance with its
terms provided that enforcement may be limited by bankruptcy, insolvency,
liquidations, reorganization, reconstruction and other similar laws generally
affecting the enforceability of creditors' rights and that equitable remedies
such as specific performance and injunction are in the discretion of the court
from which they are sought.
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ARTICLE 5
COVENANT OF THE VENDOR
5.1 NON-COMPETITION COVENANT. As more particularly described in the Non-
Competition Agreement and subject to the terms and conditions of the
environmental alliance agreement referred to in Section 7.1(g), the Vendor
hereby agrees, for a period of five (5) years following the date hereof, not,
on their own behalf or on behalf of or in connection with any Person, directly
or indirectly, in any capacity whatsoever including as an employer, employee,
mandatary, principal, agent, joint venturer, partner, shareholder or other
equity holder, independent contractor, licensor, licensee, franchiser,
franchisee, distributor, consultant, supplier, trustee or by and through any
corporation, company, cooperative, partnership, trust, entity with juridical
personality, unincorporated association or otherwise carry on, be engaged in,
have any financial or other interest in or be otherwise commercially involved
in any endeavor, activity or business anywhere in the United States of America
which is in competition with the Business. The foregoing shall not be deemed
to limit or prohibit Vendor's ownership of not more than five percent (5%) of
the capital stock of a company which is publicly traded which may also be in
competition with the Business.
ARTICLE 6
PRE-CLOSING COVENANTS OF THE PARTIES
6.1 CONDUCT OF BUSINESS PRIOR TO CLOSING. During the Interim Period, the
Vendor will cause the Companies to and the Companies will conduct the Business
in the ordinary course thereof, subject to the provisions below. Without
limiting the generality of the foregoing the Vendor will cause the Companies to
and the Companies shall use reasonable efforts to:
(a) maintain adequate levels of Inventories to carry on the Business
in the ordinary course;
(b) maintain and service the physical Assets used in the conduct of
the Business in the same manner as has been its consistent past practice
and ensure that all of the insurance policies of the Companies shall
continue in full force and effect and be in good standing up to the
Closing;
(c) keep available the services of the present employees and agents
of the Business and maintain the relations and goodwill with the
suppliers, customers, distributors and any others having business
relations with the Companies;
(d) consistent with past practice, preserve the possession and
control of its properties and Assets and preserve the confidentiality of
any confidential or proprietary information of the Business; and
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(e) conduct the Business in such a manner that on Closing Date the
representations and warranties of the Companies or the Vendor contained
in this Agreement are true, correct and complete as if such
representations and warranties were made on and as of such date.
6.2 ACCESS FOR INVESTIGATION OF ASSETS, ETC.
(a) The Companies and the Vendor (i) shall permit the Purchaser and
its employees, agents, counsel, accountants or other representatives,
between the date hereof and the Closing Time, without undue interference
to the ordinary conduct of the Business, to have reasonable access
during normal business hours and upon reasonable notice (1) to the
premises of the Companies, (2) to the Companies, all the Assets and to
the Business, including without limitation, accounting records,
corporate records and tax records and returns whether retained by the
Vendor, the Companies or otherwise, and (3) to the senior personnel of
the Business; and (ii) shall furnish to the Purchaser or its employees,
agents counsel, accountants, or other representatives such financial and
operating data and other information with respect to the Assets and the
Business as the Purchaser shall from time to time reasonably request.
(b) Subject to the provisions of Section 6.7 or unless otherwise
noted herein, no investigations made by or on behalf of the Purchaser,
whether under this Section 6.2 or any other provision of this Agreement
shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty made in this Agreement.
6.3 ACTIONS TO SATISFY CLOSING CONDITIONS. Each of the Parties hereby
agrees to take all such actions as are reasonable so as to ensure compliance
with all of the conditions set forth in Article 6.
6.4 TRANSFER OF THE PURCHASED SHARES. The Vendor shall take all necessary
and reasonable steps and proceedings to permit good title to the Purchased
Shares to be duly and validly transferred and assigned to the Purchaser at the
Closing Time, free of all Encumbrances.
6.5 FILINGS AND AUTHORIZATIONS. The Vendor, the Purchaser and the Companies
as promptly as practicable after the execution hereof, (i) will make, or cause
to be made, all such filings and submissions under all Laws applicable to it,
as may be required for it to consummate the purchase and sale of the Purchased
Shares in accordance with the terms of this Agreement; (ii) will use all
reasonable efforts to obtain, or cause to be obtained, all Authorizations,
approvals, consents and waivers from all Persons and Governmental Entities
necessary or advisable to be obtained by it in order to consummate such
transfer; and (iii) will use all reasonable efforts to take, or cause to be
taken, all other actions necessary, proper or advisable in order for it to
fulfill its obligations hereunder. The Vendor and the Purchaser will
coordinate and cooperate with one another in exchanging such information and
supplying such assistance as may be reasonably requested by each in connection
with the foregoing.
6.6 NOTICE OF UNTRUE REPRESENTATION OR WARRANTY. The Companies and/or the
Vendor shall promptly notify the Purchaser upon any representation or warranty
of the Companies or the Vendor contained in this Agreement becoming untrue or
incorrect in any material respect during the Interim Period, and for the
purposes of this Section each such representation and warranty shall be deemed
to
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be given at and as of all times during the Interim Period. The Purchaser shall
promptly notify the Vendor upon any representation or warranty of the Purchaser
contained in this Agreement becoming untrue or incorrect in any material
respect during the Interim Period, and for the purposes of this Section each
such representation and warranty shall be deemed to be given at and as of all
times during the Interim Period.
6.7 KNOWLEDGE OF PARTIES. In the event that the Vendor on the one hand, or
the Purchaser on the other hand (the "Knowing Party"), has actual knowledge at
the time of the Closing that a representation or warranty made by the other
Party is false or the other Party has violated a covenant made by it under this
Agreement, and the Knowing Party proceeds to the Closing notwithstanding such
knowledge, the Knowing Party shall be deemed to have waived any rights it may
have for indemnification or damages against the other Party to the extent that
any damages result from such breach of representation or warranty or failure to
perform such covenant.
6.8 EXCLUSIVE DEALING. During the Interim Period and save and except in
accordance with the provisions of Section 11.2, the Vendor shall take no action
directly or indirectly, to encourage, initiate or engage in discussions or
negotiations with, or provide any information to, any Person, other than the
Purchaser and the attorneys, accountants and advisors of Vendor and the
Companies concerning any purchase of any shares in the capital of the
Companies, the Assets, a controlling interest in the Companies or any merger,
sale of substantial assets or similar transaction involving the Companies or
the Business.
6.9 LETTERS OF CREDIT AND BONDS. The Purchaser shall, at or before the
Closing Time, take such action as is necessary in order to replace the letters
of credit and bonds set forth in Schedule 6.9 which the Vendor has in place in
relation to the Business with suitable replacement financial assurances
arranged by the Purchaser and shall indemnify and hold harmless the Vendor from
any liabilities arising therefrom.
ARTICLE 7
CONDITIONS OF CLOSING
7.1 CONDITIONS FOR THE BENEFIT OF THE PURCHASER. The purchase and sale of
the Purchased Shares is subject to the following conditions to be fulfilled or
performed at or prior to the Closing Time, which conditions are for the
exclusive benefit of the Purchaser and may be waived in whole or in part by the
Purchaser in its sole discretion:
(a) TRUTH OF REPRESENTATIONS AND WARRANTIES OF THE VENDOR. The
representations and warranties of the Companies and the Vendor contained
in this Agreement shall be true and correct as of the Closing Date with
the same force and effect as if such representations and warranties had
been made on and as of such date and the Companies and the Vendor shall
also have executed and delivered a certificate to that effect. Except as
otherwise specifically agreed to in writing by and between the parties,
the receipt of such evidence and the Closing shall not be a waiver of
the representations and warranties of the Vendor which are contained in
this
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Agreement, except to the extent that any such representations or
warranties have been modified by the information disclosed in the
certificate so delivered and accepted by the Purchaser. Upon the
delivery of such certificates, the representations and warranties of the
Vendor in Article 3, except for changes which are not material and which
may have occurred in the ordinary course of business, shall be deemed to
have been made on and as of the Closing Date with the same force and
effect as if made on and as of such date.
(b) PERFORMANCE OF COVENANTS BY THE VENDOR. The Companies and the
Vendor shall have fulfilled or complied in all respects with all
covenants herein contained to be performed or caused to be performed by
them at or prior to the Closing Time, and the Companies and the Vendor
shall each have delivered a certificate to that effect. Except as
otherwise specifically agreed to in writing by and between the Parties,
receipt of such certificates and the Closing shall not be a waiver of
the covenants of the Companies and the Vendor which are contained in
this Agreement, except to the extent that any such covenants have been
modified by the information disclosed in the certificate so delivered
and accepted by the Purchaser.
(c) CONSENTS. All consents and authorizations material to the
Business which are necessary in order to permit the Closing of the sale
of the Purchased Shares on the terms and conditions set out in this
Agreement (the "Consents") shall have been obtained on terms acceptable
to the Purchaser acting reasonably.
(d) APPROVALS. The board of directors of the Purchaser and Xxxxxx
shall have approved of the transaction contemplated herein. All
regulatory approvals or consents required pursuant to the Licenses or
otherwise and all waiting periods applicable under the Xxxx-Xxxxx-Xxxxxx
Act or any other laws applicable to the transactions herein contemplated
shall have been obtained or shall have expired, as the case may be.
(e) DELIVERIES. The Vendor shall have delivered or caused to be
delivered to the Purchaser the following in form and substance
reasonably satisfactory to the Purchaser:
(i) share certificates representing the Purchased Shares duly
endorsed in blank for transfer to the Purchaser, or accompanied
by irrevocable security transfer powers of attorney duly executed
in blank, in either case by the holders of record thereof;
(ii) copies certified by the Secretaries of the Companies of
(i) all resolutions of the shareholders, the board of directors
or any duly authorized committee thereof, of the Companies,
approving the entering into of this Agreement and the completion
of all transactions contemplated hereunder; and (ii) all other
instruments evidencing necessary corporate action of the
Companies and of Authorizations, if any, with respect to such
matters;
(iii) the certificates referred to in Sections 7.1(a) and (b);
(iv) an opinion of counsel to the Vendor in substantially the
form as set forth in Schedule 7.1(e)(iv);
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(v) the Non-Competition Agreement duly executed by the Vendor
and the Purchaser in substantially the form as set forth in
Schedule 1.1(ap);
(vi) all the originals of the Books and Records and the
Corporate Records of the Companies, except for such copies of
Books and Records as are required to be maintained by the Vendor
for legitimate reporting or other business purposes;
(vii) evidence that all necessary steps and proceedings have
been taken to permit all of the Purchased Shares to be fully
transferred to the Purchaser or its nominee(s);
(viii) a duly executed resignation effective as at the Closing
Time of each director and officer of the Companies as the
Purchaser may specify;
(ix) a release in favor of the Companies by the Vendor and such
officers and directors of the Companies as may be required by the
Purchaser in substantially the form as set forth in Schedule
7.1(e)(ix);
(x) a duly executed resignation of the present auditors of
each of the Companies effective as at the Closing Time;
(xi) evidence that at the Closing Time there are no arrears of
or liabilities for taxes (including taxes on income), rates,
assessments or other charges adversely affecting the Assets not
shown as accruals or allowances on the Financial Statements,
except taxes, rates, assessments or other charges accruing in the
ordinary course of business since the date of the Financial
Statements; and
(xii) all necessary assurances, transfers, assignments and
consents, including all necessary Consents, and any other
instruments necessary or reasonably required to effectively carry
out the intent of this Agreement and any Ancillary Agreements and
to transfer the Purchased Shares to the Purchaser, free and clear
of all Encumbrances.
(f) ENVIRONMENTAL ALLIANCE AGREEMENT. Xxxxxx Services Corp.
("Xxxxxx") and International Alliance Services Inc. shall have entered
into an environmental alliance agreement for a term of not less than
three (3) years providing for the provision of remediation waste
services, technical consulting services, insurance product development
and joint marketing and sales activities.
(g) OPTION AGREEMENT. The Purchaser and the Vendor shall have
entered into an option agreement, in substantially the form as is set
forth in Schedule 7.1(g), outlining the terms pursuant to which Xxxxxx
shall be entitled to acquire all of the outstanding capital stock of
Republic Environmental Systems (Cleveland), Inc.
(h) ISRA COMPLIANCE. The Vendor shall file the General Information
Notice and obtain approval from the State of New Jersey Department of
Environmental Protection ("NJDEP") in order to proceed to Closing. The
Purchaser shall post such financial assurances as may be required by
NJDEP, if any, in order to effect the Closing and to complete ISRA
compliance
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after the Closing Date. In the event any investigation or remediation
work is required pursuant to ISRA, the cost of such work shall be
allocated between the Parties pursuant to Article 9 of this Agreement.
(i) CLOSING OF CANADIAN TRANSACTION. The transaction contemplated in
and by the asset purchase agreement between Republic Environmental
Systems (Fort Erie) Ltd., Republic Environmental Systems (Brantford)
Ltd. and Republic Environmental Systems (Xxxxxxxxx) Ltd., as vendors,
and Xxxxxx Enterprises Inc., as purchaser, shall have been completed.
If any condition, obligation or covenant of the Companies or the
Vendor to be performed at or prior to the Closing Time shall not have been
fulfilled or performed by such time, the Purchaser may terminate this Agreement
by fifteen (15) days prior notice in writing to the Vendor. If Vendor fails to
cure such condition, obligation or covenant within such fifteen (15) days, the
Purchaser shall be entitled to terminate this Agreement, and the Parties shall
thereafter be released from all obligations hereunder. Notwithstanding the
foregoing, the Purchaser shall be entitled to waive compliance with any of such
conditions, obligations or covenants in whole or in part if it sees fit to do
so without prejudice to any of its rights of termination in the event of
non-performance of any other condition, obligation, or covenant in whole or in
part.
If Closing fails to occur on or prior to the Closing Date, the Vendor or
the Purchaser shall be entitled, in its sole discretion, to terminate this
Agreement, and thereafter the Parties shall have no further obligations
hereunder. If Closing fails to occur for any reason, all documents,
information and other materials of the Companies or the Vendor which are in the
possession of the Purchaser or its agents shall be immediately returned to the
Companies. In such event, the Purchaser agrees to keep all information and
knowledge about the Companies and the Vendor strictly confidential, other than
any such information or knowledge about the Companies which may be required to
be disclosed by law or which may become publicly available without fault of the
Purchaser.
7.2 CONDITIONS FOR THE BENEFIT OF THE VENDOR. The purchase and sale of the
Purchased Shares is subject to the following conditions to be fulfilled or
performed at or prior to the Closing Time, which conditions are for the
exclusive benefit of the Vendor and may be waived by the Vendor in its sole
discretion:
(a) TRUTH OF REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
representations and warranties of the Purchaser contained in this
Agreement shall be true and correct as of the Closing Date with the same
force and effect as if such representations and warranties had been made
on and as of such date, and the Purchaser shall also have executed and
delivered a certificate of a senior officer to that effect. The receipt
of such evidence and the Closing shall not be a waiver of the
representations and warranties of the Purchaser which are contained in
this Agreement, except to the extent that any such representation or
warranties have been modified by the information disclosed in the
certificate so delivered and accepted by the Vendor. Upon the delivery
of such certificates, the representations and warranties of the
Purchaser in Article 4, except for changes which are not material, shall
be deemed to have been made on and as of the Closing Date with the same
force and effect as if made on and as of such date.
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(b) PERFORMANCE OF COVENANTS BY THE PURCHASER. The Purchaser shall
have fulfilled or complied with all covenants herein contained to be
performed or caused to be performed by it at or prior to the Closing
Time, and the Purchaser shall have executed and delivered a certificate
of a senior officer to that effect. Except as otherwise specifically
agreed to in writing by and between the Parties, receipt of such
certificates and the Closing shall not be a waiver of the covenants of
the Purchaser which are contained in this Agreement, except to the
extent that any such covenants have been modified by the information
disclosed in the certificate so delivered and accepted by the Vendor.
(c) DELIVERIES. Purchaser shall have delivered or caused to be
delivered to the Vendor the following in form and substance reasonably
satisfactory to the Vendor:
(i) copies certified by the appropriate officers of Purchaser
evidencing the authority of the individual signing the Agreement
on behalf of Purchaser to bind each respectively;
(ii) an opinion of counsel to the Purchaser in substantially
the form as set forth in Schedule 7.2(c)(ii);
(iii) all necessary assurances, transfers, assignments and
consents, including all necessary Consents, and any other
instruments necessary or reasonably required to effectively carry
out the intent of this Agreement and any Ancillary Agreements;
(iv) a certified cheque/wire transfer in the amount of
$8,000,000;
(v) the First and Second Notes; and
(vi) the Guaranty Agreement entered into between Xxxxxx and the
Vendor in substantially the form as set forth in Schedule
7.2(c)(vi).
(d) CONSENTS. All consents and authorizations material to the
Business which are necessary in order to permit the Closing of the sale
of the Purchased Shares on the terms and conditions set out in this
Agreement (the "Consents") shall have been obtained on terms acceptable
to the Vendor acting reasonably.
(e) APPROVALS. All regulatory approvals or consents required
pursuant to the Licenses or otherwise and all waiting periods applicable
under the Xxxx-Xxxxx-Xxxxxx Act or any other laws applicable to the
transactions herein contemplated shall have been obtained or shall have
expired, as the case may be.
(f) ENVIRONMENTAL ALLIANCE AGREEMENT. Xxxxxx and International
Alliance Services Inc. shall have entered into an environmental alliance
agreement for a term of not less than three (3) years providing for the
provision of remediation waste services, technical consulting services,
insurance product development and joint marketing and sales activities.
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(g) OPTION AGREEMENT. The Purchaser and the Vendor shall have
entered into an option agreement, in substantially the form as is set
forth in Schedule 7.1(g), outlining the terms pursuant to which Xxxxxx
shall be entitled to acquire all of the outstanding capital stock of
Republic Environmental Systems (Cleveland), Inc.
(h) ISRA COMPLIANCE. The Vendor shall file the General Information
Notice and obtain approval from the State of New Jersey Department of
Environmental Protection ("NJDEP") in order to proceed to Closing. The
Purchaser shall post such financial assurances as may be required by
NJDEP, if any, in order to effect the Closing and to complete ISRA
compliance after the Closing Date. In the event any investigation or
remediation work is required pursuant to ISRA, the cost of such work
shall be allocated between the Parties pursuant to Article 9 of this
Agreement.
(i) CLOSING OF CANADIAN TRANSACTION. The transaction contemplated in
and by the asset purchase agreement between Republic Environmental
Systems (Fort Erie) Ltd., Republic Environmental Systems (Brantford)
Ltd. and Republic Environmental Systems (Xxxxxxxxx) Ltd., as vendors,
and Xxxxxx Enterprises Inc., as purchaser, shall have been completed.
If any condition, obligation or covenant of the Purchaser to be
performed at or prior to the Closing Time shall not have been fulfilled or
performed by such time, the Vendor may terminate this Agreement by fifteen (15)
days prior notice in writing to the Purchaser. If the Purchaser fails to cure
such condition obligation or covenant within fifteen (15) days, the Vendor
shall be entitled to terminate this Agreement, and the Parties shall thereafter
be released from all obligations hereunder. Notwithstanding the foregoing, the
Vendor shall be entitled to waive compliance with any of such conditions,
obligations or covenants in whole or in part if it sees fit to do so without
prejudice to any of its rights of termination in the event of non-performance
of any other condition, obligation or covenant in whole or in part.
7.3 CONDITIONS PRECEDENT. The purchase and sale of the Purchased Shares is
subject to the condition to be fulfilled at or prior to the Closing Time, which
condition is a true condition precedent, namely that no action or proceeding
shall be pending or threatened by any Person in any jurisdiction, to enjoin,
restrict or prohibit any of the transactions contemplated hereby or the right
of the Companies to conduct the Business after the Closing Time on
substantially the same basis as heretofore operated.
ARTICLE 8
CLOSING
8.1 DATE, TIME AND PLACE OF CLOSING. The completion of the transactions
contemplated by this Agreement shall take place at the offices of the
Purchaser, 000 Xxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx, X0X 0X0 on the Closing Date
at the Closing Time, or at such other place, on such other date, and at such
other time as may be agreed upon in writing between the Vendor and the
Purchaser.
8.2 CLOSING PROCEDURES. Subject to satisfaction or waiver by the relevant
Party of the conditions of Closing set forth herein, at the Closing Time the
Vendor shall deliver actual possession of the Purchased Shares and upon such
delivery the Purchaser shall pay or satisfy the Purchase Price in
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accordance with Section 2.2. The transfer of possession of the Purchased
Shares shall be deemed to take effect as at the Closing Time on the Closing
Date.
8.3 RISK OF LOSS. If, prior to the date of Closing, all or substantially
all of the Assets are destroyed or damaged by fire or any other casualty or
shall be seized by any Governmental Entity or other lawful authority, the
Purchaser shall have the option, exercisable by notice in writing given within
ten (10) Business Days of the Purchaser receiving notice in writing from the
Vendor of such destruction, damage, expropriation or seizure:
(a) to reduce the Purchase Price by an amount equal to the cost of
repair, or, if destroyed or damaged beyond repair, by an amount equal to
the book value of the assets forming part of the Assets so damaged or
destroyed and to complete the purchase provided that any insurance
proceeds payable in respect of such loss shall be paid to the Vendor;
(b) to complete the purchase without reduction of the Purchase Price,
in which event all proceeds of any insurance or compensation for
expropriation or seizure shall be payable to the Companies and any right
and claim of the Vendor to any such amounts not paid by the Closing Date
shall be assigned to the Companies; or
(c) to terminate this Agreement and not complete the purchase, in
which case all obligations of the Vendor and the Purchaser shall
terminate forthwith upon the Purchaser giving notice as required herein.
ARTICLE 9
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITIES
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties of the Vendor contained in
this Agreement shall survive the Closing for a period of one (1) year,
save and except those representations made pursuant to Section 3.15(c)
and Section 3.37, which shall survive for a period of five (5) years,
and, notwithstanding such or any investigation made by or on behalf of
the Purchaser, shall continue in full force and effect for such survival
period for the benefit of the Purchaser. Any claim for indemnification
shall be made in writing and shall specifically detail the basis for and
nature of any alleged breach.
(b) All representations and warranties of the Purchaser contained in
this Agreement shall survive the Closing for a period of one (1) year,
and, notwithstanding such Closing or any investigation made by or on
behalf of the Vendor, shall continue in full force and effect for such
survival period for the benefit of the Vendor. Any claim for
indemnification shall be made in writing and shall specifically detail
the basis for and nature of any alleged breach.
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9.2 INDEMNIFICATION IN FAVOR OF THE PURCHASER. The Vendor shall, subject to
the "Environmental Indemnification Threshold" and the "General Indemnification
Threshold" defined hereunder, indemnify and save the Purchaser and its
shareholders and their directors, officers, employees, agents and
representatives (in respect of whom the Purchaser hereby acts as agent and
trustee with respect thereto) harmless of and from any Claim or Loss suffered
by, imposed upon or asserted against the Purchaser as a result of, in respect
of, connected with or arising out of, under or pursuant to:
(a) any failure of the Companies or the Vendor, as the case
may be, to perform or fulfill any covenant of it under this Agreement;
(b) any breach or inaccuracy of any representation or warranty
given by the Companies or the Vendor contained in this Agreement; and
(c) any remedial activity necessary in order to comply with
any complaint, order, citation, notice or order of violation or non-
compliance issued to the Companies under any applicable Environmental
Laws relating to:
(i) concentrations of beryllium, cadmium, chromium,
lead or benzo(a)pyrene in the soil or groundwater at the
Owned Property located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxxx which are in excess of any clean-up criteria
under any Environmental Laws; or
(ii) concentrations of benzene, bis(2-
ethylhexyl)phthalate, methylene chloride, arsenic,
beryllium, cadmium or lead in the soil or groundwater at
the Owned Property located on Cenco Boulevard, Clayton,
New Jersey which are in excess of any clean-up criteria
under any Environmental Laws.
Notwithstanding anything herein contained to the contrary, the
indemnification by the Vendor in favor of the Purchaser in respect of
those matters set forth in Section 9.2(c) shall survive the Closing for
a period of three (3) years thereafter.
The Vendor shall have no obligation to indemnify an indemnified party
under Section 9.2 until the Purchaser has suffered (i) Claims relating to or
arising from a breach of the Vendor's representations and warranties made
pursuant to Section 3.15 for which the Vendor is responsible hereunder in
excess of an aggregate of Five Hundred Thousand Dollars ($500,000) (the
"Environmental Indemnification Threshold"), (ii) Claims relating to or arising
from the indemnification given by the Vendor in favor of the Purchaser pursuant
to Section 9.2(c) above for which the Vendor is responsible in excess of One
Hundred Thousand Dollars ($100,000) (the "Limited Indemnification Threshold")
or (iii) Claims for which the Vendor is responsible hereunder other than those
relating to the matters set forth in (i) or (ii) above in excess of an
aggregate of Two Hundred and Fifty Thousand Dollars ($250,000) (the "General
Indemnification Threshold"), and then only to the extent such Claims exceed the
respective indemnification threshold. The Vendor shall not be liable for any
Claims once the aggregate amount of all such Claims paid, or due to be paid, by
the Vendors shall have reached
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Seventeen Million Dollars ($17,000,000). The Vendor shall be entitled to
reduce the principal amount due under the First Note (and, if thereafter
necessary, under the Second Note) in satisfaction of any Claims in respect of
which it is obligated to indemnify the Purchaser pursuant hereto.
9.3 INDEMNIFICATION IN FAVOR OF THE VENDOR. The Purchaser shall indemnify
and save the Vendor and its shareholders and their directors, officers,
employees, agents and representatives (in respect of whom the Vendor hereby
acts as agent and trustee with respect thereto) harmless of and from any Claim
or Loss suffered by, imposed upon or asserted against the Vendor as a result
of, in respect of, connected with or arising out of, under or pursuant to:
(a) any failure by the Purchaser to perform and fulfill any covenant
of the Purchaser under this Agreement;
(b) any breach or inaccuracy of any representation or warranty given
by the Purchaser contained in this Agreement; and
(c) any Claims relating to any events or occurrences arising
subsequent to the Closing Date, provided such Claims do not result from
a failure of the Vendor to fulfill its covenants hereunder or from a
breach of representation or warranty of the Vendor given hereunder.
(d) any Claims arising directly or indirectly from breaches of
Environmental Laws by the Companies, Environmental Activity of the
Companies or the Release of Hazardous Substances to the Natural
Environment by the Companies, except to the extent such Claims (i)
result from a breach of any of the representations or warranties given
by the Vendor hereunder within the respective survival period, (ii)
result from a failure of the Vendor to fulfill any of its covenants
hereunder, (iii) relate to matters in respect of which the Vendor has
indemnified the Purchaser pursuant to Section 9.2(c), or (iv) are
Special Indemnified Matters.
9.4 SPECIAL ENVIRONMENTAL INDEMNIFICATION. The Vendor shall, irrespective
of and without reference to the survival and monetary limitations set forth in
Section 9.1 or 9.2, indemnify the Purchaser and its shareholders and their
directors and officers, employees, agents and representatives (in respect of
whom the Purchaser hereby acts as agent and trustee with respect thereto)
against, and hold them harmless from, any and all expenses, claims, demands,
losses, costs, deficiencies, actions, suits, proceedings, judgments,
liabilities and damages (including related counsel fees and expenses) of any
nature whatsoever ("Special Indemnified Losses") incurred or suffered by the
Purchaser in connection with or as a result of the Special Indemnified
Matters, it being understood by the Parties that the term "Special Indemnified
Losses" as used in this Section 9.4 shall have the same meaning as the term
"Losses" as set forth in sections 6.2 and 7.1 of the Agreement of Merger dated
March 5, 1992, between, among others, Republic Waste Industries, Inc. and Xxxxx
Environmental, Inc.
9.5 INDEMNIFICATION PROCEEDINGS.
(a) Any Party seeking indemnification under this Article (the
"indemnified party") shall forthwith and in any case within sixty (60)
days of all facts giving rise to the right of indemnification becoming
known to the indemnified party or, in the case of third party claim,
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by the earlier of twenty (20) days after notice of such claim is
received or ten (10) days prior to the date that a responsive pleading
or court appearance is required, notify the Party against whom a claim
for indemnification is sought hereunder (the "indemnifying party") in
writing, which notice shall specify, in reasonable detail, the nature
and estimated amount of the claim. If a claim by a third party is made
against an indemnified party, and if the indemnified party intends to
seek indemnity with respect thereto under this Article, the indemnified
party shall promptly (and in any case within 30 days of such claim being
made) notify the indemnifying party of such with reasonable particulars.
The indemnifying party shall have 30 days after receipt of such notice
to undertake, conduct and control, through counsel of its own choosing
and at its expense, the settlement or defense thereof, and the
indemnified party shall cooperate with it in connection therewith;
except that with respect to settlements entered into by the indemnifying
party (i) the consent of the indemnified party shall be required if the
settlement provides for equitable relief against the indemnified party,
which consent shall not be unreasonably withheld or delayed; and (ii)
the indemnifying party shall obtain the release of the indemnified
party. If the indemnifying party undertakes, conducts and controls the
settlement or defense of such claim (i) the indemnifying party shall
permit the indemnified party to participate in such settlement or
defense through counsel chosen by the indemnified party, provided that
the fees and expenses of such counsel shall be borne by the indemnified
party; and (ii) the indemnifying party shall promptly reimburse the
indemnified party for the full amount of any loss resulting from any
claim and all related expenses (other than the fees and expenses of
counsel as aforesaid) incurred by the indemnified party. The
indemnified party shall not pay or settle any claim so long as the
indemnifying party is reasonably contesting any such claim in good faith
on a timely basis. Notwithstanding the two immediately preceding
sentences, the indemnified party shall have the right to pay or settle
any such claim, provided that in such event it shall waive any right to
indemnity therefor by the indemnifying party.
(b) With respect to third party claims, if the indemnifying party
does not notify the indemnified party by the earlier of twenty (20) days
after notice of such claim is received or ten (10) days prior to the
date that a days after the receipt of the indemnified party's notice of
a claim of indemnity hereunder that it elects to undertake the defense
thereof, the indemnified party shall have the right, but not the
obligation, to contest, settle or compromise the claim in the exercise
of its reasonable judgment at the expense of the indemnifying party.
(c) In the event of any claim by a third party against an indemnified
party, the defense of which is being undertaken and controlled by the
indemnifying party, the indemnified party will use all reasonable
efforts to make available to the indemnifying party those employees
whose assistance, testimony or presence is necessary to assist the
indemnifying party in evaluating and in defending any such claims;
provided that the indemnifying party shall be responsible for the
expense associated with any employees made available by the indemnified
party to the indemnifying party hereunder, which expense shall be equal
to an amount to be mutually agreed upon per person per hour or per day
for each day or portion thereof that such employees are assisting the
indemnifying party and which expenses shall not exceed the actual cost
to the indemnified party associated with such employees.
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(d) With respect to third party claims, the indemnified party shall
make available to the indemnifying party or its representatives on a
timely basis all documents, invoices and financial ledgers, records and
other materials in the possession of the indemnified party, at the
expense of the indemnifying party, reasonably required by the
indemnifying party for its use in defending any claim and shall
otherwise cooperate on a timely basis with the indemnifying party in the
defense of such claim.
(e) With respect to the General Indemnification Threshold, the
Environmental Indemnification Threshold and the Limited Indemnification
Threshold, the Purchaser shall provide to the Vendor an accounting at
three (3) month intervals, commencing with the first three (3) month
period after the Closing Date, summarizing the costs which the Purchaser
claims are being assessed to the respective threshold amounts. Upon
request of the Vendor, the Purchaser shall submit to the Vendor all
documentation supporting such costs, including consultant and contractor
invoices.
(f) With respect to any re-assessment for income, corporate, sales,
excise, or other tax or other liability enforceable by Encumbrance
against the property of the indemnified party, the indemnifying party's
right to so contest shall only apply after such payment of such
re-assessment or the provision of such security as is necessary to avoid
the imminent filing or recording of an Encumbrance being placed on the
property of the indemnified party.
9.6 REMEDIATION REQUIREMENTS. The Purchaser agrees that any remediation
performed by the Purchaser or the Vendor shall be consistent with the
industrial use of the Owned Properties and shall make maximum benefit, to the
extent commercially reasonable to do so, of institutional controls, engineering
controls and natural remediation pursuant to Environmental Laws in order to
minimize investigation and remediation costs to the extent feasible.
9.7 VENDOR'S RIGHT TO ASSERT CLAIMS. Nothing in this Agreement shall
prevent the Vendor from asserting any Claim which it or the Companies may have
against any person, corporation, partnership or other entity (other than the
Purchaser or any of its affiliated companies) related to matters which are the
subject of the Vendor's indemnification obligations pursuant to Section 9.2;
provided, however, that in no case shall the Vendor's obligation to indemnify
the Purchaser hereunder be conditional upon the assertion or ultimate success
of any such Claim. The Purchaser and the Companies, as the case may be, agree
to assign to the Vendor any Claim in respect of such indemnified matters which
the Purchaser or the Companies may have against any Person, other than Claims
against any Persons the assertion of which, in the reasonable judgment of the
Purchaser, would interfere with the on-going business relations of the
Purchaser or the Companies, as the case may be, with such Persons. The
Purchaser and the Companies, as the case may be, agree that any amounts
recovered by the Vendor regarding any Claims asserted by it in accordance with
the terms hereof shall be retained solely by the Vendor.
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ARTICLE 10
POST-CLOSING COVENANTS
10.1 FURTHER ASSURANCES. From time to time subsequent to the Closing Date,
each Party shall at the request of any other Party execute and deliver such
additional conveyances, transfers and other assurances and take such further
action as may be reasonably required effectively to carry out the intent of
this Agreement and to transfer the Purchased Shares.
10.2 OTHER LETTERS OF CREDIT AND BONDS. The Purchaser shall, as soon as is
reasonably practicable, and in any case within 90 days after the Closing Date,
replace all outstanding letters of credit, bonds, financial assurances,
guarantees and security interests, other than those set forth in Schedule 6.9,
which the Vendor has in place in relation to the Business and shall indemnify
and hold harmless the Vendor from any liabilities arising therefrom.
10.3 SECTION 338(h)(10) ELECTION.
(a) No later than December 31, 1997, the Purchaser may deliver to the
Vendor a proposed schedule as required by section 338(h)(10) of the
United States Internal Revenue Code of 1986 and the Treasury Regulations
promulgated thereunder (the "Section 338 Election") setting forth the
allocation of the Purchase Price (the "Allocation Schedule"). The
Allocation Schedule shall be final and binding on the Parties unless,
within thirty (30) days after delivery to the Vendor, the Vendor shall
give notice to the Purchaser of the Vendor's good faith objection to the
Allocation Schedule.
(b) Should the Purchaser and the Vendor be unable to reach agreement
within fifteen (15) days following receipt of the notice of objection,
the dispute shall be referred for resolution to Coopers & Xxxxxxx,
L.L.P. (the "Accountants") as promptly as practicable. The Accountants
shall make a determination regarding each of the items in dispute and
shall promptly deliver a written report to the Purchaser and the Vendor.
The Accountants' determination shall be final and binding on the
Parties. The fees and expenses of the Accountants shall be borne
equally by the Purchaser and the Vendor.
ARTICLE 11
MISCELLANEOUS
11.1 NOTICES. Any notice, direction or other instrument required or
permitted to be given hereunder shall be in writing and given by delivering or
sending it by certified mail, return receipt requested addressed:
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(a) to the Purchaser at:
Xxxxxx Environmental (Delaware), Inc.
000 Xxxx Xxxxxx Xxxx, X.X. Xxx 0000, LCD 1
Xxxxxxxx, Xxxxxxx
X0X 0X0
Attention: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) to the Vendor at:
0000 Xxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(c) to the Companies at:
c/o 0000 Xxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Any such notice, direction or other instrument given as aforesaid shall
be deemed to have been effectively given on the next Business Day following the
date of such delivery. Any Party may change its address for service from time
to time by notice given in accordance with the foregoing and any subsequent
notice shall be sent to the party at its changed address.
11.2 PUBLICITY. Save as required by Law or by any stock exchange, none of
the Parties shall issue any press release or make any other public statement or
announcement relating to or connected with or arising out of this Agreement or
the matters contained herein, without obtaining the prior written approval of
the other Parties to the contents and the manner of presentation and
publication thereof. If disclosure is required by Law or by any stock
exchange, the disclosing Party shall consult in advance with the other Parties
and attempt in good faith to reflect such other Parties' concerns in the
required disclosure.
11.3 TIME OF THE ESSENCE. Time shall be of the essence of this Agreement.
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11.4 BROKER'S FEES. It is understood and agreed that any fees, commissions,
expenses or other remuneration of any broker, agent or other intermediary shall
be the responsibility of the Party who engaged such broker, agent or other
intermediary. Each Party agrees to indemnify and save harmless the others from
and against any Claims whatsoever for any fees, commission, expenses or other
remuneration payable or alleged to be payable to any broker, agent or other
intermediary.
11.5 THIRD PARTY BENEFICIARIES. Each Party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person, other than the Parties hereto, and no Person, other than
the Parties hereto, shall be entitled to rely on the provisions hereof in any
action, suit, proceeding, hearing or other forum.
11.6 EXPENSES. All costs and expenses (including the fees and disbursements
of legal counsel, investment advisers and auditors) incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
Party incurring such expenses.
11.7 INUREMENT. This Agreement shall inure to the benefit of and be binding
upon the Parties, their successors and any permitted assigns.
11.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute one and the same instrument.
11.9 JOINT AND SEVERAL LIABILITY. In the event that there is no Closing
under any circumstance in which the Vendor is not excused from its obligations
hereunder, each of the Companies shall be jointly and severally liable with the
Vendor, as a principal and not as a surety, with respect to all of the
representations, warranties, covenants, indemnities and agreements made by the
Vendor hereunder.
11.10 ASSIGNMENT. Except as provided in this Section, none of the rights or
obligations hereunder shall be assignable or transferable by any Party without
the prior written consent of the other Parties. Notwithstanding the foregoing,
the Purchaser shall be entitled, prior to the Closing Date, to assign the
benefits of this Agreement to any affiliated company, subject to the following
two conditions:
(a) the Purchaser's assignee shall become jointly and severally
liable with the Purchaser with respect to all of the representations,
warranties, covenants, indemnities and agreements of the Purchaser; and
(b) such assignee shall execute an agreement confirming such
assignment and the assumption by the assignee of all obligations of the
Purchaser under this Agreement.
11.11 NON-MERGER. Except as otherwise expressly provided in this Agreement,
the covenants, representations and warranties of the Parties contained in this
Agreement and the Ancillary Agreements shall not merge on and shall survive the
Closing and, notwithstanding such Closing, or any investigation made by or on
behalf of any Party, shall continue in full force and effect. The Closing
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39
shall not prejudice any right of one Party against any other Party in respect
of anything done or omitted hereunder or in respect of any right to damages or
other remedies.
[SIGNATURE PAGES FOLLOW]
39
40
IN WITNESS WHEREOF this Agreement has been executed by the Parties as of
the date first above written.
XXXXXX ENVIRONMENTAL (DELAWARE), INC.
Per: c/s
Authorized Signing Officer
REPUBLIC ENVIRONMENTAL SYSTEMS, INC.
Per: c/s
Authorized Signing Officer
REPUBLIC ENVIRONMENTAL
RECYCLING, INC.
Per: c/s
Authorized Signing Officer
REPUBLIC ENVIRONMENTAL SYSTEMS
(TECHNICAL SERVICES GROUP), INC.
Per: c/s
Authorized Signing Officer
REPUBLIC ENVIRONMENTAL SYSTEMS
(PENNSYLVANIA), INC.
Per: c/s
Authorized Signing Officer
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41
REPUBLIC ENVIRONMENTAL SYSTEMS
(TRANSPORTATION GROUP), INC.
Per: c/s
Authorized Signing Officer
CHEM-FREIGHT, INC.
Per: c/s
Authorized Signing Officer
41
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SCHEDULE 7.1(g)
OPTION AGREEMENT
This Option Agreement is dated July 23rd, 1997, and is
Between RESI ACQUISITION (DELAWARE) CORPORATION, a
corporation incorporated under the laws of the State
of Delaware ("Purchaser")
And REPUBLIC ENVIRONMENTAL SYSTEMS, INC., a corporation
incorporated under the laws of the State of Delaware
("Vendor").
RECITALS
A. Purchase and Vendor are parties to a Share Purchase Agreement
dated June 13,1997 (the "Purchase Agreement").
B. Section 7.1(g) of the Purchase Agreement requires that
Purchaser and Vendor execute and deliver this Agreement.
C. Vendor is the owner of 2,000 shares of the common capital
stock (the "Stock") of Republic Environmental Systems (Cleveland), Inc.
("Cleveland"), which is all of the issued and outstanding capital stock of
Cleveland.
NOW, THEREFORE, in consideration of the foregoing and for good and
valuable consideration, Purchaser and Vendor agree as follows:
1. OPTION. Vendor hereby grants to Purchaser the right
("Option") to purchase the Stock for consideration of US$1,00.
2. TERM. The Option shall expire on the later of August 17, 1997
or the "Closing Date" as defined in the Purchase Agreement, unless sooner
exercised by Purchaser; provided, however, that the Option and all other rights
of Purchaser under this Agreement shall immediately expire without notice if
there is any breach by Purchaser in the performance of any of its obligations
under the Purchase Agreement or either promissory notes delivered pursuant to
the Purchase Agreement or if there is any breach by Xxxxxx Enterprises, Inc. in
the performance of any of its obligations under the Asset Purchase Agreement to
which it and Vendor are parties dated July 7, 1997 or the promissory note
delivered pursuant to that agreement.
3. EXERCISE, CLOSING.
(a) The Option may be exercised at any time during its
term by written notice to Vendor.
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(b) Notice of exercise of the Option must actually be
received by Vendor on or prior to the expiration date specified in paragraph 2
and is to be delivered to Vendor at 000 Xxxx Xxxxxx, Xxxxx Xxxxx, X.X. Xxx 000,
Xxxxxxxxxx, XX, 00000, XXX.
(c) Within 10 days after giving of notice of the exercise
of the Option, Purchaser and Vendor shall jointly submit any documentation
required by the State of Ohio Environmental Protection Agency for approval of
the transfer of the Stock from Vendor to Purchaser. Each party shall bear its
own expenses with respect to such submissions, and if there is any appeal from
any denial of the approval the costs of such appeal shall be borne by the party
prosecuting the appeal.
(d) The closing on the exercise of the Option and the
transfer of the Stock shall occur five business days after the State of Ohio
Environmental Protection Agency approves the transfer of the Stock from Vendor
to Purchaser (the "Closing Date"). If such approval is formally denied
(without right of further appeal) or otherwise is not obtained within 190 days
after the date the Option is exercised and such failure does not result from
Vendor's failure to take such reasonable action in furtherance of such approval
as may be requested by Purchaser, then this Agreement shall terminate and
neither party shall have any rights against the other.
4. INTERIM PERIOD. During the time from the date hereof
until the Closing Date:
(a) Vendor shall continue to own the Stock
and shall not grant any other options or rights to acquire all or any of the
Stock;
(b) Vendor shall cause Cleveland not to issue any capital
stock or securities convertible into capital stock, grant any options to
purchase its capital stock or securities convertible into capital stock, or
issue any warrants entitling the holder to purchase or otherwise acquire any of
its capital stock or securities convertible into capital stock; and
(c) Vendor shall cause Cleveland to conduct its business
in the usual and ordinary course consistent with past practices and shall not
allow Cleveland to sell any of its assets in one or any series of transactions.
5. REPRESENTATIONS AND WARRANTIES.
(a) Vendor shall, in the event Purchaser exercises the
Option, make such representations and warranties regarding title to the stock
and tax issues as are customary for similar transactions. No other
representations and warranties shall be made, except with respect to
environmental matters, which shall be in substantially the same form as in the
Purchase Agreement.
(b) The definitive purchase agreement shall provide,
inter alia
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(i) That Vendor, shall be responsible for all
on-site environmental clean-up liabilities in
excess of $2,000,000, provided that no
remediation shall be done without Vendors'
prior written consent, not to be unreasonably
withhold.
(ii) That them will be a basket for off-site
environmental liabilities of $150,000.
(iii) From the date of this Option Agreement,
Purchaser will provide consulting and
technical assistance with respect to
operations of the Cleveland facility for no
consideration and profits and losses from the
facility will be for Purchaser's account from
the date of this Option Agreement provided it
exercises the Option and the transaction
closes.
(iv) Vendor will transfer to Purchaser the Digital
mainframe computers used by Vendor which run
the waste management and financial
proprietary software and subject software,
subject to the continued right of Vendor to
use said software in perpetuity and without
consideration. The transfer of the computers
and software is absolutely "as is", without
any representations and warranties.
(c) Purchaser represents that acquisition of the Stock
pursuant to the Option will be for investment purposes only and not with a view
to the distribution or sale of the Stock in any manner which is contrary to the
laws, regulations or rules enforced or promulgated by the Securities and
Exchange Commission.
6. BINDING EFFECT. This Agreement is binding on and inures to
the benefit of Purchaser and Vendor and their respective successors and
assigns.
7. ENTIRE AGREEMENT. This Agreement supersedes all prior
agreements and constitutes the entire agreement of the parties regarding the
subject matter of this Agreement. This Agreement may be amended or modified
only by a writing signed by both parties.
8. HEADINGS. The paragraph headings in this Agreement are for
convenient reference and do not affect the provisions of this Agreement.
9. GOVERNING LAW. This Agreement is governed by the laws of the
State of Pennsylvania.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute the same document.
11. TIME OF THE ESSENCE. Time is of the essence with respect to
all times set forth in this Agreement.
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45
IN WITNESS WHEREOF, Purchaser and Vendor have caused this Agreement to
be executed and delivered on the date first above written.
RESI ACQUISITION
(DELAWARE) CORPORATION
By:
--------------------------------
Name:
Title:
REPUBLIC ENVIRONMENTAL
SYSTEMS, INC.
By:
--------------------------------
Name:
Title:
4
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SCHEDULE 7.2(c)(iv)
GUARANTY AGREEMENT
This Guaranty Agreement ("Guaranty") is made on July 23, 1997, by
XXXXXX SERVICES CORP., an Ontario corporation (the "Guarantor") (which term
shall be deemed to include its distributees, successors and assigns).
RECITALS
A. RESI Acquisition (Delaware) Corporation ("Purchaser"),
Republic Environmental Systems, Inc. ("Vendor"), and certain subsidiaries of
Vendor are parties to a Share Purchase Agreement dated June 13, 1997 (the
"Agreement").
B. Pursuant to the Agreement, Purchaser has substantial
obligations to Vendor and is delivering to Vendor two promissory notes, called
the First Note and the Second Note in the Agreement (the "Notes").
C. Execution and delivery of this Guaranty is required pursuant
to Section 7.2(c)(vi) of the Agreement.
D. Guarantor is executing and delivering this Guaranty in
consideration of and as inducement for Vendor closing the transactions under
the Agreement.
E. Guarantor is the parent company of Purchaser and will derive a
substantial and direct benefit from the consummation of the transactions under
the Agreement.
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Guarantor agrees as follows:
1. GUARANTY. Guarantor, intending to be legally bound,
hereby guarantees, absolutely and unconditionally, to Vendor the full and
prompt payment of and any and all amounts (including, without limitation,
Vendor's legal expenses and reasonable attorneys' fees and disbursements)
payable by Purchaser under the Agreement and the Notes, and hereby further
guarantees the full and timely performance and observance of all of the
covenants, terms, indemnities, conditions and agreements therein provided to be
performed and observed by Purchaser; and Guarantor hereby covenants and agrees
to and with Vendor that if default shall at any time be made by Purchaser in
the payment of any amounts due under the Agreement or the Notes, or if
Purchaser should default in the performance and observance of any of the terms,
covenants, agreements, indemnities and conditions contained in the Agreement or
the Notes, Guarantor shall and will forthwith pay amounts and will faithfully
perform, observe and fulfill all of such terms, covenants,
47
indemnities, agreements and conditions and will forthwith pay to Vendor all
damages that may arise in consequence of any default by Purchaser under the
Agreement or the Notes, including, without limitation, all reasonable
attorneys' fees, and disbursements incurred by Vendor or caused by any such
default or the enforcement of this Guaranty.
2. EFFECTIVENESS. This Guaranty is an absolute and
unconditional guaranty of payment (and not of collection) and of performance.
The liability of Guarantor is co-extensive with that of Purchaser. Guarantor
hereby expressly agrees that the validity of this Guaranty and the obligations
of Guarantor hereunder shall in no way be terminated, affected, diminished or
impaired by reason of: (a) the assertion or the failure to assert by Vendor
against Purchaser of any of the rights or remedies reserved to Vendor pursuant
to the terms, covenants and conditions of the Agreement or the Notes, or (b) by
non-liability of Purchaser under the Agreement or the Notes by reason of
Purchaser's insolvency or discharge in bankruptcy.
3. CONTINUING GUARANTY. This Guaranty is a continuing
guaranty, and the liability of Guarantor hereunder shall in no way be affected,
modified or diminished by reason of: (a) any assignment of the Agreement or
the Notes, or (b) any extension of time that may be granted by Vendor to
Purchaser, or (c) any consent, indulgence or other action, inaction or omission
under or in respect of the Agreement or the Notes, or (d) any bankruptcy,
insolvency, reorganization, liquidation, arrangement, assignment for the
benefit of creditors, receivership, trusteeship or similar proceeding affecting
Purchaser, whether or not notice thereof is given to Guarantor.
4. BANKRUPTCY, ETC. Should Vendor be obligated by any
bankruptcy or other law to repay to Purchaser or to Guarantor or to any
trustee, receiver or other representative of either of them, any amounts
previously paid, this Guaranty shall be reinstated in the amount of any such
repayment. Vendor shall not be required to litigate or otherwise dispute its
obligations to make such repayments if Vendor, in good faith, believes that
such obligation exists.
5. NO WAIVER. No delay on the part of Vendor in exercising
any right, power or privilege under this Guaranty or failure to exercise the
same shall operate as a waiver of or otherwise affect any such right, power or
privilege, nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. No waiver or modification of any provision of this Guaranty nor any
release or termination of this Guaranty shall be effective unless in writing,
signed by Vendor; nor shall any such waiver be applicable except in the
specific instance for which given.
6. EXERCISE OF RIGHTS. All of Vendor's rights and remedies
under the Agreement, the Notes and under this Guaranty, now or hereafter
existing at law or in
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48
equity or by statute or otherwise, are intended to be distinct, separate and
cumulative, and no exercise or partial exercise of any such right or remedy
therein or herein mentioned is intended to be in exclusion of or a waiver of
any of the others.
7. PAYMENTS. Guarantor agrees that whenever at any time or
from time to time Guarantor shall make any payment to Vendor or perform or
fulfill any term, covenant or condition hereunder or under the Agreement or the
Notes on account of the liability of Guarantor hereunder, Guarantor will notify
Vendor in writing that such payment or performance, as the case may be, is for
such purpose. No such payment or performance by Guarantor pursuant to any
provision hereof shall entitle Guarantor, by subrogation or otherwise, to the
rights of Vendor to any payment by Purchaser or out of the property of
Purchaser, except after payment of all sums or fulfillment of all covenants,
terms, conditions or agreements to be paid or performed by Purchaser.
8. ESTOPPEL. Guarantor agrees that Guarantor will at any
time and from time to time, within ten business days following written request
by Vendor, execute, acknowledge and deliver to Vendor a statement certifying
that this Guaranty is unmodified and in full force and effect (or if there has
been any modification, that the same is in full force and effect as modified
and stating such modification). Guarantor agrees that such certificate may be
relied on by anyone holding or proposing to acquire any interest in Vendor.
9. WAIVER OF JURY TRIAL. AS A FURTHER INDUCEMENT TO VENDOR TO
CLOSE UNDER THE AGREEMENT AND IN CONSIDERATION THEREOF, GUARANTOR COVENANTS AND
AGREES THAT IN ANY ACTION OR PROCEEDING BROUGHT ON, UNDER OR BY VIRTUE OF THIS
GUARANTY, GUARANTOR SHALL AND DOES HEREBY WAIVE TRIAL BY JURY.
10. GOVERNING LAW. Without regard to principles of conflicts of
laws, the validity, interpretation, performance and enforcement of this
Guaranty shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
11. LEGAL CAPACITY. Guarantor warrants and represents to Vendor
that Guarantor has the legal right and capacity to execute this Guaranty. In
the event that this Guaranty shall be held ineffective or unenforceable by any
court of competent jurisdiction, then Guarantor shall be deemed to be Purchaser
under the Agreement and the Notes with the same force and effect as if
Guarantor were expressly named as Purchaser therein.
12. NUMBER; GENDER. All terms and words in this Guaranty,
regardless of the number or gender in which they are used, shall be deemed to
include any other number or any other gender as the context may require.
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13. DEFAULT. If Guarantor fails to pay any amount payable
under this Guaranty when due, interest on such amount shall accrue from the
date such amount was due until paid at the prime rate per annum (or substitute
similar rate) quoted by Citibank, N.A., plus 4% on the basis of a 360-day year
for the actual number of days elapsed.
14. JURISDICTION; SERVICE OF PROCESS. Guarantor irrevocably
submits to the jurisdiction of any Pennsylvania State or Federal court sitting
in the Commonwealth of Pennsylvania over any suit, action or proceeding arising
out of or relating to this Guaranty. Guarantor hereby agrees that Vendor shall
have the option in its sole discretion to lay the venue of any such suit,
action or proceeding in the courts of the Commonwealth of Pennsylvania or the
United States of America for the District of Pennsylvania. Guarantor
irrevocably waives to the fullest extent permitted by law any objection which
Guarantor may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in such court and any claim that any suit,
action or proceeding brought in such court has been brought in an inconvenient
forum. Guarantor agrees that a final judgment in any such suit, action or
proceeding brought in such court shall be conclusive and binding upon
Guarantor. Guarantor hereby irrevocably appoints Purchaser as authorized agent
to accept, on behalf of Guarantor, service of any and all process which may be
served in any suit, action or proceeding of the nature referred to above.
Process may be served in any suit, action or proceeding of the nature referred
to above by any method permitted by law or by registered or certified mail,
postage prepaid, return receipt requested, to Purchaser. Guarantor agrees that
such service shall be deemed in every respect effective service of process upon
Guarantor in any such suit, action or proceeding and shall, to the fullest
extent permitted by law be taken and held to be a valid personal service upon
and personal delivery to Guarantor.
IN WITNESS WHEREOF, the undersigned has duly executed this Guaranty as
of the date first above written.
ATTEST: XXXXXX SERVICES CORP.
By By
------------------------------- ------------------------------
Name: Name:
Title: Title:
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SCHEDULE 11.10
ASSIGNMENT OF SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the 21st day of July, 1997.
B E T W E E N:
XXXXXX ENVIRONMENTAL (DELAWARE) INC.
a corporation incorporated pursuant to the laws
of the State of Delaware
(hereinafter referred to as the "Assignor")
- and -
RESI ACQUISITION (DELAWARE)
CORPORATION,
a corporation incorporated pursuant to the laws
of the State of Delaware
(hereinafter referred to as the "Assignee")
WHEREAS the Assignor has entered into a Share Purchase Agreement dated
June 13, 1997 as Purchaser with Republic Environmental Systems, Inc. (the
"Vendor") providing for the sale by the Vendor to the Assignor of all of the
issued and outstanding shares in Republic Environmental Recycling (New Jersey),
Inc., Republic Environmental Systems (Technical Services Group), Inc., Republic
Environmental Systems (Pennsylvania), Inc., Republic Environmental Systems
(Transportation Group), Inc. and Chem-Freight, Inc., which Share Purchase
Agreement is attached hereto as Schedule "A";
AND WHEREAS, pursuant to Section 11.10 of the Share Purchase
Agreement, the Assignor is entitled to assign all of its right, title and
interest thereunder;
AND WHEREAS, the Assignor wishes to assign all of its right, title and
interest in the Share Purchase Agreement to the Assignee.
NOW, THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
sum of TWO DOLLARS ($2.00) and other good and valuable consideration and in
consideration of the Assignee accepting the within assignment and assuming the
Assigner's obligations thereunder, the Assignor does hereby set over, assign,
transfer, release and quit claim unto the Assignee all of its right, title and
interest whatsoever in and to the Share Purchase Agreement attached hereto in
Schedule "A";
TO HAVE AND TO HOLD unto the Assignee, its successors and assigns, all
benefits and advantages accruing thereon under the Share Purchase Agreement.
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THE ASSIGNEE covenants that it is jointly and severally liable with
the Assignor with respect to all of the representations, warranties, covenants,
indemnities and agreements of the Purchaser under the Share Purchase Agreement.
THE ASSIGNOR covenants, represents and warrants that it has full
corporate power and authority to set over the aforesaid Share Purchase
Agreement.
THIS AGREEMENT shall ensure to and be binding upon the parties hereto,
their respective successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed by the parties as
of the date first written above.
XXXXXX ENVIRONMENTAL (DELAWARE), INC.
Per:
------------------------------------
ASO
RESI ACQUISITION (DELAWARE) CORPORATION
Per:
------------------------------------
ASO
